##### Table of Contents



SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

(Mark one)

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

For the quarterly period ended June 30, 2001

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

For the transition period from _________ to ___________

Commission file number 0-27652

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

|                                        |  |                    
|--------------------------------------- |  | -------------------
|FLORIDA                                 |  | 59-3347653         
|(State or other jurisdiction of         |  | (IRS Employer      
|incorporation or organization)          |  | 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)

N/A

---

Former Name, Former Address and Former Fiscal
Year, if Changed Since Last Report


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 [   ]

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. Yes [   ] No [   ]

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuers classes of
common stock, as of the latest practicable date:

|                                       |  |                                               
|-------------------------------------- |  | ----------------------------------------------
|Common stock par value $2.00 per share |  | 11,327,719 shares outstanding at July 31, 2001
|                                       |  |                                               



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TABLE OF CONTENTS



|                                                                                              |                                                                                                                             |  |  |  |  |  |  | 
|--------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|                                                                                              | CONSOLIDATED BALANCE SHEETS  June 30, 2001 and December 31, 2000                                                          
|                                                                                              | CONSOLIDATED STATEMENTS OF OPERATIONS                                                                                      
|                                                                                              | CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
FOR THE YEAR ENDED DECEMBER 31, 2000 AND THE SIX MONTHS ENDED
JUNE 30, 2001
|                                                                                              | CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME                                                                            
|                                                                                              | CONSOLIDATED STATEMENTS OF CASH FLOWS                                                                                      
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                                                   
|                                                                                              | SELECTED QUARTERLY FINANCIAL INFORMATION (Page 1 of 3)                                                                     
|Item 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|Part II. Other Information                                                                   
|Item 1. Legal Proceedings                                                                    
|Item 5. Other Information                                                                    
|Signatures                                                                                   



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##### Table of Contents



REPUBLIC BANCSHARES, INC.

INDEX

|           |  |                                                                                       |  |                                                         |                                                             |  |      |   | 
|---------- |  | ------------------------------------------------------------------------------------- |  | ------------------------------------------------------- | ----------------------------------------------------------- |  | ---- | - | 
|           |  |                                                                                       |  |                                                         |                                                             |  | Page
|Part I.    |  | FINANCIAL INFORMATION                                                                 |  |                                                         |                                                             | 
|          
|          
|          
|          
|Item 1.    |  | Financial Statements                                                                  |  |                                                         |                                                             | 
|          
|          
|          
|          
|           |  |                                                                                       |  | Consolidated Balance Sheets  June 30, 2001 (unaudited) |                                                             |  |      |  
|          
|          
|          
|          
|           |  |                                                                                       |  |                                                         | and December 31, 2000                                       |  |      | 2 | 
|          
|          
|          
|          
|           |  |                                                                                       |  | Consolidated Statements of Operations -                 |                                                             |  |      |  
|          
|          
|          
|          
|           |  |                                                                                       |  |                                                         | Three and six month periods ended June 30, 2001 (unaudited) |  |      |   | 
|          
|          
|          
|          
|           |  |                                                                                       |  |                                                         | and June 30, 2000                                           |  |      | 3 | 
|          
|          
|          
|          
|           |  |                                                                                       |  | Consolidated Statements of Stockholders Equity -       |                                                             |  |      |  
|          
|          
|          
|          
|           |  |                                                                                       |  |                                                         | Year ended December 31, 2000 and                            |  |      |   | 
|          
|          
|          
|          
|           |  |                                                                                       |  |                                                         | Six months ended June 30, 2001 (unaudited)                  |  |      | 4 | 
|          
|          
|          
|          
|           |  |                                                                                       |  | Consolidated Statements of Comprehensive Income -       |                                                             |  |      |  
|          
|          
|          
|          
|           |  |                                                                                       |  |                                                         | Three and six month periods ended June 30, 2001 (unaudited) |  |      |   | 
|          
|          
|          
|          
|           |  |                                                                                       |  |                                                         | and June 30, 2000                                           |  |      | 4 | 
|          
|          
|          
|          
|           |  |                                                                                       |  | Consolidated Statements of Cash Flows -                 |                                                             |  |      |  
|          
|          
|          
|          
|           |  |                                                                                       |  |                                                         | Three and six month periods ended June 30, 2001 (unaudited) |  |      |   | 
|          
|          
|          
|          
|           |  |                                                                                       |  |                                                         | and June 30, 2000                                           |  |      | 5 | 
|          
|          
|          
|          
|           |  |                                                                                       |  | Notes to Consolidated Financial Statements (unaudited)  |                                                             |  | 6    |  
|          
|          
|          
|          
|           |  |                                                                                       |  | Selected Quarterly Financial and Other Data (unaudited) |                                                             |  | 13   |  
|          
|          
|          
|          
|Item 2.    |  | Managements Discussion and Analysis of Financial Condition
and Results of Operations |  |                                                         | 16                                                          | 
|          
|          
|          
|          
|Part II.   |  | OTHER INFORMATION                                                                     |  |                                                         |                                                             | 
|          
|          
|          
|          
|Item 1.    |  | Legal Proceedings                                                                     |  |                                                         | 24                                                          | 
|          
|          
|          
|          
|Item 5.    |  | Other Information                                                                     |  |                                                         | 24                                                          | 
|          
|          
|          
|          
|SIGNATURES |  |                                                                                       |  |                                                         | 25                                                          | 



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##### Table of Contents



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 wish to 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, 2001, and thereafter include many factors that are
beyond our ability to control or estimate precisely. Some factors include 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 the 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 in light of future events.

1



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##### Table of Contents



REPUBLIC BANCSHARES, INC.




CONSOLIDATED BALANCE SHEETS  June 30, 2001 and December 31, 2000


($ in thousands, except share data)


|                                                                                                                                               |                                                                                                                                                                                         |                                            |                   |           |             |           |              |           |           |           | 
|---------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | ----------------- | --------- | ----------- | --------- | ------------ | --------- | --------- | --------- | 
|                                                                                                                                               |                                                                                                                                                                                         |                                            |                   |           | June 30,    |           | December 31,
|                                                                                                                                               |                                                                                                                                                                                         |                                            |                   |           | 2001        |           | 2000        
|                                                                                                                                               |                                                                                                                                                                                         |                                            |                   |           |             |           |             
|                                                                                                                                               |                                                                                                                                                                                         |                                            |                   |           | (unaudited) |           |              |           |          
|ASSETS                                                                                                                                         |                                                                                                                                                                                         |                                            |                   |           |             |           |              |          
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                              
|Cash and due from banks                                                                                                                        |                                                                                                                                                                                         | $                                          | 50,456            |           |             | $         | 52,540       |          
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                              
|Interest bearing deposits in banks                                                                                                             |                                                                                                                                                                                         |                                            | 8,048             |           |             |           | 6,910        |          
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                              
|Federal funds sold                                                                                                                             |                                                                                                                                                                                         |                                            | 58,551            |           |             |           | 150,212      |          
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                              
|Securities:
(Note 4)                                                                                                                          
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                               | Available for sale                                                                                                                                                                      |                                            |                   | 550,967   |             |           |              | 348,535   |          
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                               | Held to maturity                                                                                                                                                                        |                                            |                   | 27,937    |             |           |              | 33,844    |          
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                               | Trading                                                                                                                                                                                 |                                            |                   | 24,648    |             |           |              | 24,578    |          
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                              
|FHLB stock                                                                                                                                     |                                                                                                                                                                                         |                                            | 13,168            |           |             |           | 13,816       |          
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                              
|Loans (Note 5)                                                                                                                                 |                                                                                                                                                                                         |                                            | 1,518,263         |           |             |           | 1,711,342    |          
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                              
|Allowance for loan losses (Note 6)                                                                                                             |                                                                                                                                                                                         |                                            | 34,925            |           |             |           | 33,462       |          
|                                                                                                                                               |                                                                                                                                                                                         |                                            |                   |           |             |           |              |          
|Net loans                                                                                                                                      |                                                                                                                                                                                         |                                            | 1,483,338         |           |             |           | 1,677,880    |          
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                              
|Premises and equipment, net                                                                                                                    |                                                                                                                                                                                         |                                            | 44,424            |           |             |           | 47,223       |          
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                              
|Other real estate owned                                                                                                                        |                                                                                                                                                                                         |                                            | 4,381             |           |             |           | 5,729        |          
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                              
|Accrued interest receivable                                                                                                                    |                                                                                                                                                                                         |                                            | 12,283            |           |             |           | 13,950       |          
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                              
|Goodwill and premium on deposits                                                                                                               |                                                                                                                                                                                         |                                            | 22,746            |           |             |           | 28,969       |          
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                              
|Other assets                                                                                                                                   |                                                                                                                                                                                         |                                            | 36,073            |           |             |           | 36,418       |          
|                                                                                                                                               |                                                                                                                                                                                         |                                            |                   |           |             |           |              |          
|                                                                                                                                               | Total assets                                                                                                                                                                            |                                            | $                 | 2,337,020 |             |           | $            | 2,440,604 |          
|                                                                                                                                               |                                                                                                                                                                                         |                                            |                   |           |             |           |              |          
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                           |                                                                                                                                                                                         |                                            |                   |           |             |           |              |          
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                              
|Liabilities:                                                                                                                                   |                                                                                                                                                                                         |                                            |                   |           |             |           |              |          
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                               | Deposits-                                                                                                                                                                              
|                                                                                                                                               |                                                                                                                                                                                         | Noninterest bearing checking               |                   | $         | 139,980     |           |              | $         | 133,950   |          
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                               |                                                                                                                                                                                         | Interest checking                          |                   |           | 162,533     |           |              |           | 178,777   |          
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                               |                                                                                                                                                                                         | Money market                               |                   |           | 338,427     |           |              |           | 295,918   |          
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                               |                                                                                                                                                                                         | Savings                                    |                   |           | 180,985     |           |              |           | 199,875   |          
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                               |                                                                                                                                                                                         | Time deposits                              |                   |           | 1,227,122   |           |              |           | 1,349,297 |          
|                                                                                                                                               |                                                                                                                                                                                         |                                            |                   |           |             |           |              |          
|                                                                                                                                               |                                                                                                                                                                                         |                                            | Total deposits    |           |             | 2,049,047 |              |           |           | 2,157,817 | 
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                               | Securities sold under agreements to repurchase                                                                                                                                          |                                            |                   | 43,033    |             |           |              | 41,581    |          
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                               | FHLB advances                                                                                                                                                                           |                                            |                   | 756       |             |           |              | 761       |          
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                               | Holding company senior debt                                                                                                                                                             |                                            |                   |          |             |           |              | 6,833     |          
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                               | Convertible subordinated debt                                                                                                                                                           |                                            |                   | 29,194    |             |           |              | 14,712    |          
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                               | Term subordinated debt and unsecured notes                                                                                                                                              |                                            |                   |          |             |           |              | 6,250     |          
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                               | Other liabilities                                                                                                                                                                       |                                            |                   | 7,052     |             |           |              | 11,559    |          
|                                                                                                                                               |                                                                                                                                                                                         |                                            |                   |           |             |           |              |          
|                                                                                                                                               |                                                                                                                                                                                         |                                            | Total liabilities |           |             | 2,129,082 |              |           |           | 2,239,513 | 
|                                                                                                                                               |                                                                                                                                                                                         |                                            |                   |           |             |           |              |          
|Company-obligated mandatorily redeemable preferred
securities of subsidiary trust solely holding junior
subordinated debentures of the Company |                                                                                                                                                                                         |                                            | 28,750            |           |             |           | 28,750       |          
|                                                                                                                                               |                                                                                                                                                                                         |                                            |                   |           |             |           |              |          
|Stockholders equity:                                                                                                                          |                                                                                                                                                                                         |                                            |                   |           |             |           |              |          
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                               | Perpetual preferred convertible stock ($20.00 par, 100,000 shares
authorized, none issued and outstanding at June 30, 2001, 75,000
shares issued and outstanding at December 31, 2000.) |                                            |                   |          |             |           |              | 1,500     |          
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                               | Common stock ($2.00 par, 20,000,000 shares authorized, 11,325,119
and 10,555,989 shares issued and outstanding at June 30, 2001
and December 31, 2000, respectively.)                   |                                            |                   | 22,650    |             |           |              | 21,112    |          
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                              
|Capital surplus                                                                                                                                |                                                                                                                                                                                         |                                            | 128,933           |           |             |           | 128,735      |          
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                              
|Retained earnings                                                                                                                              |                                                                                                                                                                                         |                                            | 24,865            |           |             |           | 21,669       |          
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                              
|Net unrealized gain (loss) on available for sale securities, net of tax effect                                                                 |                                                                                                                                                                                         |                                            | 2,740             |           |             |           | (675         | )        
|                                                                                                                                               |                                                                                                                                                                                         |                                            |                   |           |             |           |              |          
|                                                                                                                                               |                                                                                                                                                                                         | Total stockholders equity                 |                   |           | 179,188     |           |              |           | 172,341   |          
|                                                                                                                                               |                                                                                                                                                                                         |                                            |                   |           |             |           |              |          
|                                                                                                                                               |                                                                                                                                                                                         | Total liabilities and stockholders equity |                   | $         | 2,337,020   |           |              | $         | 2,440,604 |          
|                                                                                                                                               |                                                                                                                                                                                         |                                            |                   |           |             |           |              |          

The accompanying notes are an integral part of these consolidated statements

2



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##### Table of Contents



REPUBLIC BANCSHARES, INC.




CONSOLIDATED STATEMENTS OF OPERATIONS


($ in thousands, except share data; unaudited)


|                                                              |  |                                                                          |                            |                          |            |                                     |        |                                   |            |        |        |      |            |        |        |   |            |         |        | 
|------------------------------------------------------------- |  | ------------------------------------------------------------------------ | -------------------------- | ------------------------ | ---------- | ----------------------------------- | ------ | --------------------------------- | ---------- | ------ | ------ | ---- | ---------- | ------ | ------ | - | ---------- | ------- | ------ | 
|                                                              |  |                                                                          |                            |                          |            | For the Three Months Ended June 30, |        | For the Six Months Ended June 30,
|                                                              |  |                                                                          |                            |                          |            |                                     |        |                                  
|                                                              |  |                                                                          |                            |                          |            | 2001                                |        | 2000                              |            | 2001   |        | 2000
|                                                              |  |                                                                          |                            |                          |            |                                     |        |                                   |            |        |        |     
|INTEREST INCOME:                                              |  |                                                                          |                            |                          |            |                                     |        |                                   |            |        |        |      |            |        |        |  
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              |  | Loans                                                                    |                            | $                        | 32,015     |                                     |        | $                                 | 42,153     |        |        | $    | 67,590     |        |        | $ | 83,484     |        
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              |  | Securities                                                               |                            |                          | 7,757      |                                     |        |                                   | 7,057      |        |        |      | 14,108     |        |        |   | 13,696     |        
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              |  | Federal funds sold & other investments                                   |                            |                          | 1,770      |                                     |        |                                   | 1,636      |        |        |      | 5,201      |        |        |   | 3,252      |        
|                                                              |  |                                                                          |                            |                          |            |                                     |        |                                   |            |        |        |      |            |        |        |  
|                                                              |  |                                                                          | Total interest income      |                          |            | 41,542                              |        |                                   |            | 50,846 |        |      |            | 86,899 |        |   |            | 100,432 |       
|                                                             
|                                                             
|                                                             
|                                                             
|INTEREST EXPENSE:                                             |  |                                                                          |                            |                          |            |                                     |        |                                   |            |        |        |      |            |        |        |  
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              |  | Deposits                                                                 |                            |                          | 24,223     |                                     |        |                                   | 25,725     |        |        |      | 50,407     |        |        |   | 50,592     |        
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              |  | Securities sold under agreement to repurchase                            |                            |                          | 358        |                                     |        |                                   | 571        |        |        |      | 823        |        |        |   | 1,070      |        
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              |  | FHLB advances                                                            |                            |                          | 13         |                                     |        |                                   | 13         |        |        |      | 26         |        |        |   | 26         |        
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              |  | Convertible subordinated debt                                            |                            |                          | 427        |                                     |        |                                   | 265        |        |        |      | 693        |        |        |   | 531        |        
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              |  | Other holding company debt                                               |                            |                          | 189        |                                     |        |                                   | 262        |        |        |      | 454        |        |        |   | 532        |        
|                                                              |  |                                                                          |                            |                          |            |                                     |        |                                   |            |        |        |      |            |        |        |  
|                                                              |  |                                                                          | Total interest expense     |                          |            | 25,210                              |        |                                   |            | 26,836 |        |      |            | 52,403 |        |   |            | 52,751  |       
|                                                              |  |                                                                          |                            |                          |            |                                     |        |                                   |            |        |        |      |            |        |        |  
|                                                              |  |                                                                          |                            | Net interest income      |            |                                     | 16,332 |                                   |            |        | 24,010 |      |            |        | 34,496 |   |            |         | 47,681 | 
|                                                             
|                                                             
|                                                             
|                                                             
|PROVISION FOR LOAN LOSSES                                     |  |                                                                          | 2,750                      |                          |            |                                     | 5,000  |                                   |            |        | 4,550  |      |            |        | 9,400  |  
|                                                              |  |                                                                          |                            |                          |            |                                     |        |                                   |            |        |        |      |            |        |        |  
|                                                             
|                                                             
|                                                             
|                                                             
|NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES           |  |                                                                          | 13,582                     |                          |            |                                     | 19,010 |                                   |            |        | 29,946 |      |            |        | 38,281 |  
|                                                              |  |                                                                          |                            |                          |            |                                     |        |                                   |            |        |        |      |            |        |        |  
|NONINTEREST INCOME:                                           |  |                                                                          |                            |                          |            |                                     |        |                                   |            |        |        |      |            |        |        |  
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              |  | Service charges on deposit accounts                                      |                            |                          | 1,928      |                                     |        |                                   | 1,903      |        |        |      | 3,893      |        |        |   | 3,890      |        
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              |  | Loan service fees                                                        |                            |                          | 627        |                                     |        |                                   | 1,514      |        |        |      | 1,983      |        |        |   | 3,212      |        
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              |  | Other loan fee income                                                    |                            |                          | 1,133      |                                     |        |                                   | 1,011      |        |        |      | 2,163      |        |        |   | 1,978      |        
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              |  | Gains (losses) on loans & securities, net                                |                            |                          | 1,575      |                                     |        |                                   | (798       | )      |        |      | 2,680      |        |        |   | (916       | )      
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              |  | Gain on sale of branches                                                 |                            |                          | 4,483      |                                     |        |                                   |           |        |        |      | 4,483      |        |        |   |           |        
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              |  | Other operating income                                                   |                            |                          | 375        |                                     |        |                                   | 548        |        |        |      | 784        |        |        |   | 945        |        
|                                                              |  |                                                                          |                            |                          |            |                                     |        |                                   |            |        |        |      |            |        |        |  
|                                                              |  |                                                                          | Total noninterest income   |                          |            | 10,121                              |        |                                   |            | 4,178  |        |      |            | 15,986 |        |   |            | 9,109   |       
|                                                             
|                                                             
|                                                             
|                                                             
|NONINTEREST EXPENSES:                                         |  |                                                                          |                            |                          |            |                                     |        |                                   |            |        |        |      |            |        |        |  
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              |  | Salaries and employee benefits                                           |                            |                          | 9,625      |                                     |        |                                   | 9,161      |        |        |      | 19,446     |        |        |   | 18,515     |        
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              |  | Net occupancy expense                                                    |                            |                          | 3,690      |                                     |        |                                   | 4,033      |        |        |      | 7,539      |        |        |   | 8,044      |        
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              |  | Advertising and marketing                                                |                            |                          | 954        |                                     |        |                                   | 251        |        |        |      | 1,179      |        |        |   | 789        |        
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              |  | Data & item processing fees and services                                 |                            |                          | 1,069      |                                     |        |                                   | 1,169      |        |        |      | 2,034      |        |        |   | 2,390      |        
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              |  | Loan collection costs                                                    |                            |                          | 529        |                                     |        |                                   | 278        |        |        |      | 1,010      |        |        |   | 629        |        
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              |  | Other operating expenses                                                 |                            |                          | 3,273      |                                     |        |                                   | 3,720      |        |        |      | 6,045      |        |        |   | 7,589      |        
|                                                              |  |                                                                          |                            |                          |            |                                     |        |                                   |            |        |        |      |            |        |        |  
|                                                              |  |                                                                          |                            | Total operating expenses |            |                                     | 19,140 |                                   |            |        | 18,612 |      |            |        | 37,253 |   |            |         | 37,956 | 
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              |  | ORE expense, net                                                         |                            |                          | 212        |                                     |        |                                   | 30         |        |        |      | 380        |        |        |   | 346        |        
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              |  | Amortization of goodwill & premium on deposits                           |                            |                          | 862        |                                     |        |                                   | 964        |        |        |      | 1,827      |        |        |   | 1,929      |        
|                                                              |  |                                                                          |                            |                          |            |                                     |        |                                   |            |        |        |      |            |        |        |  
|                                                              |  |                                                                          | Total noninterest expenses |                          |            | 20,214                              |        |                                   |            | 19,606 |        |      |            | 39,460 |        |   |            | 40,231  |       
|                                                             
|                                                             
|                                                             
|                                                             
|Income before income taxes & minority interest                |  |                                                                          | 3,489                      |                          |            |                                     | 3,582  |                                   |            |        | 6,472  |      |            |        | 7,159  |  
|                                                             
|                                                             
|                                                             
|                                                             
|Income tax expense                                            |  |                                                                          | (1,377                     | )                        |            |                                     | (1,474 | )                                 |            |        | (2,302 | )    |            |        | (2,981 | )
|                                                              |  |                                                                          |                            |                          |            |                                     |        |                                   |            |        |        |      |            |        |        |  
|Income before minority interest                               |  |                                                                          | 2,112                      |                          |            |                                     | 2,108  |                                   |            |        | 4,170  |      |            |        | 4,178  |  
|                                                             
|                                                             
|                                                             
|                                                             
|Minority interest in income from subsidiary trust, net of tax |  |                                                                          | (421                       | )                        |            |                                     | (421   | )                                 |            |        | (842   | )    |            |        | (842   | )
|                                                              |  |                                                                          |                            |                          |            |                                     |        |                                   |            |        |        |      |            |        |        |  
|                                                              |  |                                                                          | NET INCOME                 |                          | $          | 1,691                               |        |                                   | $          | 1,687  |        |      | $          | 3,328  |        |   | $          | 3,336   |       
|                                                              |  |                                                                          |                            |                          |            |                                     |        |                                   |            |        |        |      |            |        |        |  
|PER SHARE DATA:                                               |  |                                                                          |                            |                          |            |                                     |        |                                   |            |        |        |      |            |        |        |  
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              |  | Net income per common share  basic                                      |                            | $                        | .15        |                                     |        | $                                 | .15        |        |        | $    | .30        |        |        | $ | .30        |        
|                                                              |  |                                                                          |                            |                          |            |                                     |        |                                   |            |        |        |      |            |        |        |  
|                                                              |  | Weighted average common shares outstanding  basic                       |                            |                          | 10,589,284 |                                     |        |                                   | 10,555,897 |        |        |      | 10,573,055 |        |        |   | 10,555,893 |        
|                                                              |  |                                                                          |                            |                          |            |                                     |        |                                   |            |        |        |      |            |        |        |  
|                                                              |  | Net income per common & common equivalent
share  diluted                |                            | $                        | .15        |                                     |        | $                                 | .15        |        |        | $    | .29        |        |        | $ | .29        |        
|                                                              |  |                                                                          |                            |                          |            |                                     |        |                                   |            |        |        |      |            |        |        |  
|                                                              |  | Weighted average common & common equivalent
shares outstanding  diluted |                            |                          | 11,349,785 |                                     |        |                                   | 11,307,494 |        |        |      | 11,337,021 |        |        |   | 11,308,874 |        
|                                                              |  |                                                                          |                            |                          |            |                                     |        |                                   |            |        |        |      |            |        |        |  

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

3



---



##### Table of Contents



REPUBLIC BANCSHARES, INC.




CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY


FOR THE YEAR ENDED DECEMBER 31, 2000 AND


THE SIX MONTHS ENDED JUNE 30, 2001


($ in thousands, except share data; six months ended June 30, 2001, unaudited)


|                                                                          |  |                     |         |              |  |        |        |        |  |         |            |          |  |              |        |          |  |          |         |                |  |   |        |   |  |   |        |   |  |   |         |  
|------------------------------------------------------------------------- |  | ------------------- | ------- | ------------ |  | ------ | ------ | ------ |  | ------- | ---------- | -------- |  | ------------ | ------ | -------- |  | -------- | ------- | -------------- |  | - | ------ | - |  | - | ------ | - |  | - | ------- | -
|                                                                          |  | Perpetual Preferred |         |              |  |        |        |        |  |         |            |          |  |              |        |          |  |          |         | Net Unrealized |  |   |        |  
|                                                                          |  | Convertible Stock   |         | Common Stock |  |        |        |        |  |         |            |          |  | Gain/(Loss)  |        |          |  |         
|                                                                          |  |                     |         |              |  |        |        |        |  |         |            |          |  | on Available |        |          |  |         
|                                                                          |  | Shares              |         |              |  |        |        | Shares |  |         |            |          |  | Capital      |        | Retained |  | for Sale |         |                |  |  
|                                                                          |  | Issued              |         | Amount       |  | Issued |        | Amount |  | Surplus |            | Earnings |  | Securities   |        | Total   
|                                                                          |  |                     |         |              |  |        |        |        |  |         |            |          |  |              |        |         
|Balance, December 31, 1999                                                |  |                     | 75,000  |              |  | $      | 1,500  |        |  |         | 10,555,889 |          |  | $            | 21,112 |          |  | $        | 128,780 |                |  | $ | 26,530 |   |  | $ | (7,677 | ) |  | $ | 170,245 |  
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Net loss for the year
ended Dec. 31, 2000                                 |  |                     |        |              |  |        |       |        |  |         |           |          |  |              |       |          |  |          |        |                |  |   | (4,598 | ) |  |   |       |   |  |   | (4,598  | )
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Net unrealized gains on
available for sale securities,
net of tax effect  |  |                     |        |              |  |        |       |        |  |         |           |          |  |              |       |          |  |          |        |                |  |   |       |   |  |   | 7,002  |   |  |   | 7,002   |  
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Exercise of stock options                                                 |  |                     |        |              |  |        |       |        |  |         | 100        |          |  |              |       |          |  |          | 1       |                |  |   |       |   |  |   |       |   |  |   | 1       |  
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Adjustment to capital surplus
from nonqualified/performance
stock options |  |                     |        |              |  |        |       |        |  |         |           |          |  |              |       |          |  |          | (46     | )              |  |   |       |   |  |   |       |   |  |   | (46     | )
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Dividends on preferred
stock                                              |  |                     |        |              |  |        |       |        |  |         |           |          |  |              |       |          |  |          |        |                |  |   | (263   | ) |  |   |       |   |  |   | (263    | )
|                                                                          |  |                     |         |              |  |        |        |        |  |         |            |          |  |              |        |          |  |          |         |                |  |   |        |   |  |   |        |   |  |   |         |  
|Balance, December 31, 2000                                                |  |                     | 75,000  |              |  |        | 1,500  |        |  |         | 10,555,989 |          |  |              | 21,112 |          |  |          | 128,735 |                |  |   | 21,669 |   |  |   | (675   | ) |  |   | 172,341 |  
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Net income for the six months
ended June 30, 2001                         |  |                     |        |              |  |        |       |        |  |         |           |          |  |              |       |          |  |          |        |                |  |   | 3,328  |   |  |   |       |   |  |   | 3,328   |  
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Net unrealized gains on
available for sale securities,
net of tax effect  |  |                     |        |              |  |        |       |        |  |         |           |          |  |              |       |          |  |          |        |                |  |   |       |   |  |   | 3,415  |   |  |   | 3,415   |  
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Conversion of preferred stock
into common shares                          |  |                     | (75,000 | )            |  |        | (1,500 | )      |  |         | 750,000    |          |  |              | 1,500  |          |  |          |        |                |  |   |       |   |  |   |       |   |  |   |        |  
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Exercise of stock options                                                 |  |                     |        |              |  |        |       |        |  |         | 19,130     |          |  |              | 38     |          |  |          | 198     |                |  |   |       |   |  |   |       |   |  |   | 236     |  
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Dividends on preferred
stock                                              |  |                     |        |              |  |        |       |        |  |         |           |          |  |              |       |          |  |          |        |                |  |   | (132   | ) |  |   |       |   |  |   | (132    | )
|                                                                          |  |                     |         |              |  |        |        |        |  |         |            |          |  |              |        |          |  |          |         |                |  |   |        |   |  |   |        |   |  |   |         |  
|Balance, June 30, 2001                                                    |  |                     |        |              |  | $      |       |        |  |         | 11,325,119 |          |  | $            | 22,650 |          |  | $        | 128,933 |                |  | $ | 24,865 |   |  | $ | 2,740  |   |  | $ | 179,188 |  
|                                                                          |  |                     |         |              |  |        |        |        |  |         |            |          |  |              |        |          |  |          |         |                |  |   |        |   |  |   |        |   |  |   |         |  

REPUBLIC BANCSHARES, INC.




CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME


($ in thousands; unaudited)


|                                                                  |                                                                    |   |                                     |       |                                   |   |       |       |      |   |       |       |  |   |       |       |  
|----------------------------------------------------------------- | ------------------------------------------------------------------ | - | ----------------------------------- | ----- | --------------------------------- | - | ----- | ----- | ---- | - | ----- | ----- |  | - | ----- | ----- | -
|                                                                  |                                                                    |   | For the Three Months Ended June 30, |       | For the Six Months Ended June 30,
|                                                                  |                                                                    |   |                                     |       |                                  
|                                                                  |                                                                    |   | 2001                                |       | 2000                              |   | 2001  |       | 2000
|                                                                  |                                                                    |   |                                     |       |                                   |   |       |       |     
|Net income                                                        |                                                                    | $ | 1,691                               |       |                                   | $ | 1,687 |       |      | $ | 3,328 |       |  | $ | 3,336 |      
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|Unrealized
gains (losses) on available-for-sale
securities:       |                                                                    |   |                                     |       |                                   |   |       |       |      |   |       |       |  |   |       |      
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|                                                                  | Unrealized holding gains (losses),
net of tax effect during period |   |                                     | 1,622 |                                   |   |       | 1,139 |      |   |       | 4,050 |  |   |       | (151  | )
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|Less reclassification adjustment for gains
realized in net income |                                                                    |   | (297                                | )     |                                   |   | 4     |       |      |   | (635  | )     |  |   | 1     |      
|                                                                  |                                                                    |   |                                     |       |                                   |   |       |       |      |   |       |       |  |   |       |      
|                                                                  | Net unrealized gains (losses)                                      |   |                                     | 1,325 |                                   |   |       | 1,143 |      |   |       | 3,415 |  |   |       | (150  | )
|                                                                  |                                                                    |   |                                     |       |                                   |   |       |       |      |   |       |       |  |   |       |      
|                                                                  | Comprehensive income                                               |   | $                                   | 3,016 |                                   |   | $     | 2,830 |      |   | $     | 6,743 |  |   | $     | 3,186 |  
|                                                                  |                                                                    |   |                                     |       |                                   |   |       |       |      |   |       |       |  |   |       |      

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

4



---



##### Table of Contents



REPUBLIC BANCSHARES, INC.




CONSOLIDATED STATEMENTS OF CASH FLOWS


($ in thousands; unaudited)


|                                                                                     |                                                           |                                                     |          |                                     |         |                                   |         |         |         |      |         |          |         |   |         |         |        |  
|------------------------------------------------------------------------------------ | --------------------------------------------------------- | --------------------------------------------------- | -------- | ----------------------------------- | ------- | --------------------------------- | ------- | ------- | ------- | ---- | ------- | -------- | ------- | - | ------- | ------- | ------ | -
|                                                                                     |                                                           |                                                     |          | For the Three Months Ended June 30, |         | For the Six Months Ended June 30,
|                                                                                     |                                                           |                                                     |          |                                     |         |                                  
|                                                                                     |                                                           |                                                     |          | 2001                                |         | 2000                              |         | 2001    |         | 2000
|                                                                                     |                                                           |                                                     |          |                                     |         |                                   |         |         |         |     
|OPERATING ACTIVITIES:                                                                |                                                           |                                                     |          |                                     |         |                                   |         |         |         |      |         |          |         |   |         |        
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|Net income                                                                           |                                                           | $                                                   | 1,691    |                                     |         | $                                 | 1,687   |         |         | $    | 3,328   |          |         | $ | 3,336   |        
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|Reconciliation of net income to net cash
provided by (used in) operating activities: |                                                           |                                                     |          |                                     |         |                                   |         |         |         |      |         |          |         |   |         |        
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                     | Provision for loan and ORE losses                         |                                                     |          | 2,894                               |         |                                   |         | 5,000   |         |      |         | 4,788    |         |   |         | 9,400   |       
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                     | Depreciation and amortization, net                        |                                                     |          | 3,128                               |         |                                   |         | 5,106   |         |      |         | 5,456    |         |   |         | 8,381   |       
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                     | Amortization of premium (accretion)
of fair value, net    |                                                     |          | 16                                  |         |                                   |         | 242     |         |      |         | (284     | )       |   |         | 1,934   |       
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                     | (Gain) on sale of loans, net                              |                                                     |          | (169                                | )       |                                   |         |        |         |      |         | (354     | )       |   |         | (20     | )     
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                     | (Gain)/loss on sale of securities                         |                                                     |          | (1,405                              | )       |                                   |         | 797     |         |      |         | (2,325   | )       |   |         | 936     |       
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                     | (Gain)/loss on sale of ORE                                |                                                     |          | (17                                 | )       |                                   |         | (85     | )       |      |         | (7       | )       |   |         | 105     |       
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                     | (Capitalization) of mortgage
servicing                    |                                                     |          | (331                                | )       |                                   |         |        |         |      |         | (658     | )       |   |         |        |       
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                     | Loss on disposal of premises & equipment                  |                                                     |          | 61                                  |         |                                   |         |        |         |      |         | 61       |         |   |         |        |       
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                     | Gain on sale of branches                                  |                                                     |          | (4,483                              | )       |                                   |         |        |         |      |         | (4,483   | )       |   |         |        |       
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                     | Net (increase) decrease in deferred tax asset             |                                                     |          | (1,714                              | )       |                                   |         | 1,862   |         |      |         | (2,159   | )       |   |         | 2,255   |       
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                     | Net decrease in value of performance/
unqualified options |                                                     |          |                                    |         |                                   |         |        |         |      |         |         |         |   |         | (46     | )     
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                     | Net (increase) decrease in other assets                   |                                                     |          | (891                                | )       |                                   |         | 935     |         |      |         | 1,337    |         |   |         | 4,158   |       
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                     | Net (decrease) increase in other liabilities              |                                                     |          | (2,781                              | )       |                                   |         | 3,250   |         |      |         | (4,180   | )       |   |         | 3,560   |       
|                                                                                     |                                                           |                                                     |          |                                     |         |                                   |         |         |         |      |         |          |         |   |         |        
|                                                                                     |                                                           | Net cash (used in) provided by operating activities |          |                                     | (4,001  | )                                 |         |         | 18,794  |      |         |          | 520     |   |         |         | 33,999 |  
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|INVESTING ACTIVITIES:                                                                |                                                           |                                                     |          |                                     |         |                                   |         |         |         |      |         |          |         |   |         |        
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                     | Net decrease in loans                                     |                                                     |          | 63,907                              |         |                                   |         | 7,862   |         |      |         | 92,765   |         |   |         | 9,839   |       
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                     | Proceeds from sales and maturities of:                    |                                                     |          |                                     |         |                                   |         |         |         |      |         |          |         |   |         |         |       
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                     |                                                           | Securities available for sale                       |          |                                     | 27,036  |                                   |         |         | 4,832   |      |         |          | 94,465  |   |         |         | 10,317 |  
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                     |                                                           | Trading securities                                  |          |                                     | 51,533  |                                   |         |         |        |      |         |          | 51,533  |   |         |         |       |  
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                     |                                                           | Commercial paper                                    |          |                                     |        |                                   |         |         |        |      |         |          |        |   |         |         | 40,000 |  
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                     |                                                           | Revenue bonds                                       |          |                                     | 155     |                                   |         |         |        |      |         |          | 230     |   |         |         | 75     |  
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                     |                                                           | Sale of FHLB stock                                  |          |                                     | 648     |                                   |         |         |        |      |         |          | 648     |   |         |         |       |  
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                     | Purchase of securities available for sale                 |                                                     |          | (227,803                            | )       |                                   |         | (42,672 | )       |      |         | (357,188 | )       |   |         | (77,572 | )     
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                     | Purchase of securities held to maturity                   |                                                     |          |                                    |         |                                   |         | (2,090  | )       |      |         |         |         |   |         | (16,980 | )     
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                     | Principal repayment on mortgage-backed securities         |                                                     |          | 45,561                              |         |                                   |         | 16,704  |         |      |         | 72,294   |         |   |         | 28,428  |       
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                     | Disposal/(purchase) of premises & equipment, net          |                                                     |          | (910                                | )       |                                   |         | 767     |         |      |         | (1,594   | )       |   |         | 533     |       
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                     | Proceeds from sale of ORE                                 |                                                     |          | 1,449                               |         |                                   |         | 1,159   |         |      |         | 3,510    |         |   |         | 3,151   |       
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                     | Investment in ORE, net                                    |                                                     |          | 246                                 |         |                                   |         | (59     | )       |      |         | 571      |         |   |         | (56     | )     
|                                                                                     |                                                           |                                                     |          |                                     |         |                                   |         |         |         |      |         |          |         |   |         |        
|                                                                                     |                                                           | Net cash (used in) investing activities             |          |                                     | (38,178 | )                                 |         |         | (13,497 | )    |         |          | (42,766 | ) |         |         | (2,265 | )
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|FINANCING ACTIVITIES:                                                                |                                                           |                                                     |          |                                     |         |                                   |         |         |         |      |         |          |         |   |         |        
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                     | Net increase/(decrease) in deposits                       |                                                     |          | (45,004                             | )       |                                   |         | (81,630 | )       |      |         | 8,612    |         |   |         | (29,712 | )     
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                     | Net
cash paid for branch sales                            |                                                     |          | (61,912                             | )       |                                   |         |        |         |      |         | (61,912  | )       |   |         |        |       
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                     | Net increase in repurchase agreements                     |                                                     |          | (1,036                              | )       |                                   |         | 3,704   |         |      |         | 1,452    |         |   |         | 12,563  |       
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                     | Repayment of FHLB advances, net                           |                                                     |          | (2                                  | )       |                                   |         | (2      | )       |      |         | (5       | )       |   |         | (4      | )     
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                     | Proceeds from issuance of common stock                    |                                                     |          | 178                                 |         |                                   |         | 1       |         |      |         | 236      |         |   |         | 1       |       
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                     | Proceeds from subordinated debt                           |                                                     |          | 14,471                              |         |                                   |         | 1,162   |         |      |         | 14,471   |         |   |         | 1,162   |       
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                     | Repayment of holding company debt                         |                                                     |          | (10,281                             | )       |                                   |         | (830    | )       |      |         | (13,083  | )       |   |         | (1,661  | )     
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                     | Dividends on perpetual preferred convertible stock        |                                                     |          | (66                                 | )       |                                   |         | (66     | )       |      |         | (132     | )       |   |         | (132    | )     
|                                                                                     |                                                           |                                                     |          |                                     |         |                                   |         |         |         |      |         |          |         |   |         |        
|                                                                                     | Net cash provided by (used in) financing activities       |                                                     |          | (103,652                            | )       |                                   |         | (77,661 | )       |      |         | (50,361  | )       |   |         | (17,783 | )     
|                                                                                     |                                                           |                                                     |          |                                     |         |                                   |         |         |         |      |         |          |         |   |         |        
|Net increase/(decrease) in cash and cash equivalents                                 |                                                           |                                                     | (145,831 | )                                   |         |                                   | (72,364 | )       |         |      | (92,607 | )        |         |   | 13,951  |        
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|Cash and cash equivalents, beginning of period                                       |                                                           |                                                     | 262,886  |                                     |         |                                   | 179,776 |         |         |      | 209,662 |          |         |   | 93,461  |        
|                                                                                     |                                                           |                                                     |          |                                     |         |                                   |         |         |         |      |         |          |         |   |         |        
|Cash and cash equivalents, end of period                                             |                                                           | $                                                   | 117,055  |                                     |         | $                                 | 107,412 |         |         | $    | 117,055 |          |         | $ | 107,412 |        
|                                                                                     |                                                           |                                                     |          |                                     |         |                                   |         |         |         |      |         |          |         |   |         |        
|SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:                                   |                                                           |                                                     |          |                                     |         |                                   |         |         |         |      |         |          |         |   |         |        
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                     | Cash paid during the period for-                          |                                                     |          |                                     |         |                                   |         |         |         |      |         |          |         |   |         |         |       
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                     |                                                           | Interest                                            |          | $                                   | 26,047  |                                   |         | $       | 26,925  |      |         | $        | 44,133  |   |         | $       | 52,375 |  
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                     |                                                           | Income taxes paid                                   |          |                                     | 4,493   |                                   |         |         | 70      |      |         |          | 7,968   |   |         |         | 185    |  

The accompanying notes are an integral part of these consolidated statements

5



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##### Table of Contents



REPUBLIC BANCSHARES, INC.




NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(unaudited)


1.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Organization

In the opinion of Republic Bancshares, Inc. (the Company or Republic or
We), the accompanying consolidated financial statements (marked unaudited
where applicable) reflect all adjustments necessary to present fairly our
financial position as of June 30, 2001 and the results of operations and cash
flows, for the three and six month periods ended June 30, 2001 and 2000. The
accounting and reporting policies of the Company and its wholly-owned
subsidiaries, Republic Bank (the Bank), including its subsidiary Republic
Insurance Agency and RBI Capital Trust I (RBI), are in conformity with
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, RBI,
the Bank, and the Banks wholly-owned subsidiary, Republic Insurance Agency,
Inc. All significant intercompany accounts and transactions have been
eliminated. Our primary source of income is from the Bank, which operates 70
branches throughout Florida. The Banks primary source of revenue is derived
from net interest income on loans and investments.

These consolidated financial statements should be read in conjunction with the
financial statements and the notes thereto included in our Annual Report on
Form 10-K for the year ended December 31, 2000, filed with the Securities and
Exchange Commission (SEC) on March 5, 2001. The results for the six months
ended June 30, 2001, are not necessarily indicative of the results to be
expected for the fiscal year ending December 31, 2001.

Reclassifications

Certain reclassifications have been made to prior period financial statements
to conform to the June 2001 financial statement presentation. These
reclassifications had no impact on results of operations or financial position.

Recent Accounting Pronouncements

SFAS No. 133  Accounting for Derivative Instruments and Hedging Activities

In June 1998, the Financial Accounting Standards Board (FASB) issued
Statements of Financial Accounting Standards (SFAS) No. 133, Accounting for
Derivative Instruments and Hedging Activities. SFAS No. 133 established
accounting and reporting standards for derivative instruments, including
certain derivative instruments embedded in other contracts, (collectively
referred to as derivatives), and for hedging activities. It requires that
entities recognize all derivatives as either assets or liabilities in the
statement of financial position and measure those instruments at fair value.
In June 1999, the FASB issued SFAS No. 137, Accounting for Derivative
Instruments and Hedging Activities  Deferral of the Effective Date of SFAS No.
133, which delayed the date of implementation to all fiscal quarters of all
fiscal years beginning after June 15, 2000. In June 2000, the FASB issued SFAS
No. 138, Accounting for Certain Derivative Instruments and Certain Hedging
Activities  an amendment of SFAS No. 133, which amended the accounting and
reporting standards of SFAS No. 133 for certain derivative instruments and
certain hedging activities. The adoption of SFAS No. 133, on January 1, 2001,
did not have a material effect upon our results of operations.

6



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##### Table of Contents



SFAS No. 140  Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities (a replacement of SFAS No. 125)

In September 2000, the FASB issued SFAS No. 140, Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities (a replacement
of SFAS No. 125). SFAS No. 140 revised the standards for accounting for
securitizations and other transfers of financial assets and collateral and
requires certain disclosures, but carries over most of SFAS No. 125s
provisions without consideration. SFAS No. 140 is effective for transfers and
servicing of financial assets and extinguishments of liabilities occurring
after March 31, 2001, and requires additional disclosures relating to previous
securitization transactions and related collateral activity for the fiscal
years ending after December 15, 2000. The adoption of SFAS No. 140 did not have
a material effect upon our results of operations.

SFAS No. 141  Business Combinations and SFAS No. 142  Goodwill and Other
Intangible Assets

On July 20, 2001, the 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 at acquisition. 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 of other assets (but not those acquired in a business
combination) at acquisition. 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 tested at
least annually for impairment. It also provides that intangible assets that
have finite useful lives will continue to be amortized over their useful lives,
but those lives will no longer be limited to 40 years. 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. We will adopt
SFAS No. 142 beginning January 1, 2002. We are considering the provisions of
SFAS No. 141 and SFAS No. 142 and at present have not determined the impact of
adopting SFAS No. 141 and SFAS No. 142.

EITF No. 99-20  Recognition of Interest Income and Impairment on Purchased and
Retained Beneficial Interest in Securitized Financial Assets

In January 2001, the Emerging Issues task Force issued EITF 99-20, Recognition
of Interest Income and Impairment on Purchased and Retained Beneficial
Interests in Securitized Financial Assets, which provided guidance on the
method used for the recognition and measurement of interest income and
impairment of those retained interests. EITF 99-20 is effective for quarterly
periods after March 15, 2001. The adoption of EITF 99-20 did not have a
material effect upon our results of operations.

2.    RECENT DEVELOPMENTS

Sales and Closings of Branch Offices

On April 23, 2001, we completed the sale of five branch offices in Miami-Dade
County, Florida to Pointe Bank (Pointe). Pointe purchased the loans assigned
to the branches at par value, purchased the fixtures and improvements and other
assets assigned to four of the branches at their book value and assumed $55.0
million of deposit liabilities of all five offices. We recognized a gain of
$3.1 million on the transaction. There was no unamortized deposit premium
associated with these branches.

7



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##### Table of Contents



On May 11, 2001, we completed the sale of two branch offices located in Lake
City and Live Oak, Florida, to CNB National Bank (CNB). CNB purchased the
loans assigned to the branches at par value, purchased the premises and other
assets assigned to the two branches at their net book value and assumed $62.3
million of deposit liabilities. We recognized a gain of $1.4 million on the
transaction, after deduction of the unamortized deposit premium paid to
purchase the branches in 1998.

In the first quarter of 2001, the regulatory agencies approved our applications
to close three branch offices, one in Pinellas County, one in Marion County and
one in Orange County, Florida. All three branches were closed in the second
quarter of 2001.

Branch Openings

On January 16, 2001, we announced the opening of a new full-service branch in
Sarasota, Florida, which offers personal banking, commercial and real estate
lending, private banking services, including safe deposit boxes, and an
automated teller machine. In the second quarter of 2001, applications were
approved to open a branch office in each of Hillsborough and Monroe Counties,
Florida. The branch in Monroe County was opened on August 6, 2001, and the
Hillsborough County branch is scheduled to open in the fourth quarter of 2001.

Issuance of 7% Convertible Subordinated Debentures Due 2011

On May 8, 2001, we completed the sale of $15.0 million convertible subordinated
debentures due 2011 (the Debentures) with an interest rate of 7%. The
Debentures are convertible by the holder at any time prior to maturity, unless
previously redeemed, into shares of our common stock at a conversion price of
$15.60 per share (equivalent to a conversion rate of 64.1026 shares per $1,000
principal amount of Debentures), subject to adjustment in certain
circumstances. The Debentures may also be redeemed, at our option on not less
than 30 days notice, at any time after April 1, 2003, without payment of any
premium, together with accrued interest to the redemption date, provided the
closing bid price of our common stock for not less than 20 consecutive trading
days equals or exceeds 130% of the conversion price then in effect. Regardless
of the closing bid price of our common stock, the Debentures are redeemable at
any time after April 1, 2006, at our option, in whole or in part, at fixed
redemption prices, together with accrued interest to the redemption date. The
net proceeds from the Debentures were used to repay $10.3 million of
outstanding debt and the balance will be used for general corporate purposes.

3.    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. The weighted average common and common
equivalent shares outstanding has been adjusted to include the number of shares
that would have been outstanding if any stock options had been exercised at the
average market price for the period, with the proceeds being used to buy shares
from the market (i.e., the treasury stock method) and the perpetual preferred
convertible stock had been converted to common stock earlier in the year or the
issue date (i.e., the if converted method). The Companys convertible
subordinated debentures were antidilutive for the period. Basic earnings per
common share was computed by dividing net income less dividends paid on the
perpetual preferred convertible stock by the weighted average number of shares
of common stock outstanding during the year.

In the second quarter of 2001, the holders of the
Company's perpetual preferred stock converted their holdings into the
Company's Common Stock, increasing the number of common shares
outstanding by 750,000. The conversion did not affect the total
amount of stockholder's equity or diluted earnings per share, as the
perpetual preferred stock had previously been included as a common
stock equivalent.

8



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##### Table of Contents



The table below reconciles the calculation of the diluted and basic earnings
per share for 2001 and 2000 ($ in thousands, except share data; unaudited):

|                                                                         |  |                                     |       |             |  |          |            |          |  |             |     |       |  |          |       |          |  |  |            |  |  |   |     | 
|------------------------------------------------------------------------ |  | ----------------------------------- | ----- | ----------- |  | -------- | ---------- | -------- |  | ----------- | --- | ----- |  | -------- | ----- | -------- |  |  | ---------- |  |  | - | --- | 
|                                                                         |  | For the Three Months Ended June 30,
|                                                                         |  |                                    
|                                                                         |  | 2001                                |       | 2000       
|                                                                         |  |                                     |       |            
|                                                                         |  |                                     |       |             |  | Weighted |            | Earnings |  |             |     |       |  | Weighted |       | Earnings
|                                                                         |  | Net                                 |       | Shares      |  | Per      |            | Net      |  | Shares      |     | Per  
|                                                                         |  | Income                              |       | Outstanding |  | Share    |            | Income   |  | Outstanding |     | Share
|                                                                         |  |                                     |       |             |  |          |            |          |  |             |     |      
|Net income attributable
to common stockholders                           |  | $                                   | 1,625 |             |  |          |           |          |  |             |    |       |  | $        | 1,621 |          |  |  |            |  |  |   |     | 
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|Basic earnings per share                                                 |  |                                     |      |             |  |          | 10,589,284 |          |  | $           | .15 |       |  |          |      |          |  |  | 10,555,897 |  |  | $ | .15 | 
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|Options exercised during
the period-incremental
effect prior to exercise |  |                                     |       |             |  |          | 725,274    |          |  |             |     |       |  |          |       |          |  |  | 1          |  |  |   |     | 
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|Weighted average options
outstanding (1)                                 |  |                                     |      |             |  |          | 35,227     |          |  |             |    |       |  |          |      |          |  |  | 1,596      |  |  |   |    | 
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|Convertible perpetual
preferred stock                                    |  |                                     | 66    |             |  |          |           |          |  |             |    |       |  |          | 66    |          |  |  | 750,000    |  |  |   |    | 
|                                                                         |  |                                     |       |             |  |          |            |          |  |             |     |       |  |          |       |          |  |  |            |  |  |   |     | 
|Diluted earnings per share                                               |  | $                                   | 1,691 |             |  |          | 11,349,785 |          |  | $           | .15 |       |  | $        | 1,687 |          |  |  | 11,307,494 |  |  | $ | .15 | 
|                                                                         |  |                                     |       |             |  |          |            |          |  |             |     |       |  |          |       |          |  |  |            |  |  |   |     | 

|                                                                         |  |                                   |       |             |  |          |            |          |  |             |     |       |  |          |       |          |  |  |            |  |  |   |     | 
|------------------------------------------------------------------------ |  | --------------------------------- | ----- | ----------- |  | -------- | ---------- | -------- |  | ----------- | --- | ----- |  | -------- | ----- | -------- |  |  | ---------- |  |  | - | --- | 
|                                                                         |  | For the Six Months Ended June 30,
|                                                                         |  |                                  
|                                                                         |  | 2001                              |       | 2000       
|                                                                         |  |                                   |       |            
|                                                                         |  |                                   |       |             |  | Weighted |            | Earnings |  |             |     |       |  | Weighted |       | Earnings
|                                                                         |  | Net                               |       | Shares      |  | Per      |            | Net      |  | Shares      |     | Per  
|                                                                         |  | Income                            |       | Outstanding |  | Share    |            | Income   |  | Outstanding |     | Share
|                                                                         |  |                                   |       |             |  |          |            |          |  |             |     |      
|Net income attributable
to common stockholders                           |  | $                                 | 3,196 |             |  |          |           |          |  |             |    |       |  | $        | 3,204 |          |  |  |            |  |  |   |     | 
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|Basic earnings per share                                                 |  |                                   |      |             |  |          | 10,573,055 |          |  | $           | .30 |       |  |          |      |          |  |  | 10,555,893 |  |  | $ | .30 | 
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|Options exercised during
the period-incremental
effect prior to exercise |  |                                   |       |             |  |          | 737,569    |          |  |             |     |       |  |          |       |          |  |  | 4          |  |  |   |     | 
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|Weighted average options
outstanding (1)                                 |  |                                   |      |             |  |          | 26,397     |          |  |             |    |       |  |          |      |          |  |  | 2,977      |  |  |   |    | 
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|Convertible perpetual
preferred stock                                    |  |                                   | 132   |             |  |          |           |          |  |             |    |       |  |          | 132   |          |  |  | 750,000    |  |  |   |    | 
|                                                                         |  |                                   |       |             |  |          |            |          |  |             |     |       |  |          |       |          |  |  |            |  |  |   |     | 
|Diluted earnings per share                                               |  | $                                 | 3,328 |             |  |          | 11,337,021 |          |  | $           | .29 |       |  | $        | 3,336 |          |  |  | 11,308,874 |  |  | $ | .29 | 
|                                                                         |  |                                   |       |             |  |          |            |          |  |             |     |       |  |          |       |          |  |  |            |  |  |   |     | 



|(1) |  | As of June 30, 2001 and 2000, respectively, there were 352,287 and
664,017 of stock options and 1,794,861 and 833,333 shares from conversion
of convertible subordinated debentures which were antidilutive.
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

4.    SECURITIES

Investments consisting of U.S. Treasury and federal agency securities
(Investment Securities), mortgage-backed securities (MBS) and
mortgage-related securities (Mortgage-Related Securities) were $603.5 million
at June 30, 2001. As of June 30, 2001, $551.0 million of these securities were
classified as available for sale (of which $542.4 million were MBS and $8.5
million were Investment Securities), $27.9 million of MBS were classified as
held to maturity and $24.6 million of Mortgage Related Securities were trading
assets. Included in the trading asset category were: (1) a $10.9 million
subordinate tranche purchased from our securitization of high loan-to-value
loans (High LTV Loans) in June 1998 (the Subordinate Tranche); (2) $10.2
million in overcollateralization and residual interests in cash flows from a
$60.0 million securitization in December 1997 (the 1997-1) and a $240.0
million securitization in June 1998 (the 1998-1 and, collectively with the
1997-1, the Residuals); and (3) $3.6 million of excess servicing interest
only strips on mortgage servicing rights.

The market values assigned to the securities classified as available for sale
were derived using market quotations at June 30, 2001. Trading 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 included in results of operations for the quarter ended
June 30, 2001. Under applicable accounting rules, use of
quoted

9



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##### Table of Contents



market values
is the preferred method for valuing trading assets. However, where the market for
those assets is illiquid and/or price quotations are not readily available,
other methods are permitted, including techniques utilizing the present value
of expected cash flows. We have used present value techniques to value the
trading assets.

The key assumptions used in the valuation of the
Residuals and Excess Spread on Mortgage Servicing Rights were as follows ($
in thousands, at June 30, 2001, unaudited):

|                                     |  |                |        |                |  |                    |         |   |  |   |         |  
|------------------------------------ |  | -------------- | ------ | -------------- |  | ------------------ | ------- | - |  | - | ------- | -
|                                     |  | December 1997  |        | June 1998      |  | Excess Spread-    
|                                     |  | Securitization |        | Securitization |  | Mortgage-Servicing
|                                     |  | ("1997-1")     |        | ("1998-1")     |  | Rights            
|                                     |  |                |        |                |  |                   
|Collateral amount                    |  | $              | 27,741 |                |  | $                  | 137,056 |   |  | $ | 292,707 |  
|                                    
|                                    
|                                    
|                                    
|Market Value                         |  |                | 3,174  |                |  |                    | 7,352   |   |  |   | 3,627   |  
|                                    
|                                    
|                                    
|                                    
|Discount rate                        |  |                | 15.00  | %              |  |                    | 15.00   | % |  |   | 12.00   | %
|                                    
|                                    
|                                    
|                                    
|Wtd. Avg. remaining life (years)     |  |                | 3.78   |                |  |                    | 3.58    |   |  |   | 4.17    |  
|                                    
|                                    
|                                    
|                                    
|Cumulative lifetime default rate (1) |  |                | 21.10  | %              |  |                    | 16.61   | % |  |   | N/A     |  



|(1) |  | Expressed as the percent of total defaults over the
expected life of the collateral to the initial collateral amount.
|--- |  | ---------------------------------------------------------------------------------------------------------------------

5.     LOANS

Loans at June 30, 2001 and December 31, 2000, are summarized as follows ($ in
thousands; June 30, 2001 unaudited):

|                               |                                |                                       |         |             |           |              |         |           |           | 
|------------------------------ | ------------------------------ | ------------------------------------- | ------- | ----------- | --------- | ------------ | ------- | --------- | --------- | 
|                               |                                |                                       |         | June 30,    |           | December 31,
|                               |                                |                                       |         | 2001        |           | 2000        
|                               |                                |                                       |         |             |           |             
|                               |                                |                                       |         | (unaudited) |           |              |         |          
|Real estate mortgage loans:    |                                |                                       |         |             |           |              |         |          
|                              
|                              
|                              
|                              
|                               | One-to-four family residential |                                       | $       | 539,002     |           |              | $       | 638,296   |          
|                              
|                              
|                              
|                              
|                               | Nonconforming mortgages        |                                       |         | 58,218      |           |              |         | 65,662    |          
|                              
|                              
|                              
|                              
|                               | Multifamily residential        |                                       |         | 83,112      |           |              |         | 89,938    |          
|                              
|                              
|                              
|                              
|                               | Warehouse lines of credit      |                                       |         | 11,415      |           |              |         | 39,835    |          
|                              
|                              
|                              
|                              
|                               | Commercial real estate         |                                       |         | 418,399     |           |              |         | 438,092   |          
|                              
|                              
|                              
|                              
|                               | Construction/land development  |                                       |         | 93,542      |           |              |         | 115,650   |          
|                               |                                |                                       |         |             |           |              |         |          
|                               |                                | Mortgage loans secured by first liens |         |             | 1,203,688 |              |         |           | 1,387,473 | 
|                              
|                              
|                              
|                              
|Commercial (business) loans    |                                |                                       | 116,601 |             |           |              | 124,699 |          
|                              
|                              
|                              
|                              
|Consumer loans                 |                                |                                       | 19,616  |             |           |              | 21,624  |          
|                              
|                              
|                              
|                              
|Home equity loans              |                                |                                       | 144,909 |             |           |              | 139,652 |          
|                              
|                              
|                              
|                              
|High LTV Loans                 |                                |                                       | 33,449  |             |           |              | 37,894  |          
|                               |                                |                                       |         |             |           |              |         |          
|                               | Total gross portfolio loans    |                                       |         | 1,518,263   |           |              |         | 1,711,342 |          
|                              
|                              
|                              
|                              
|Less-allowance for loan losses |                                |                                       | (34,925 | )           |           |              | (33,462 | )        
|                               |                                |                                       |         |             |           |              |         |          
|                               | Total loans held for portfolio |                                       | $       | 1,483,338   |           |              | $       | 1,677,880 |          
|                               |                                |                                       |         |             |           |              |         |          

Mortgage loans serviced for others as of June 30, 2001 and December 31, 2000,
were $1.2 billion and $1.3 billion, respectively. Mortgage loan servicing
rights (both purchased and originated) amounted to $17.8 million and $19.6
million at June 30, 2001 and December 31, 2000, respectively. Loans on which
interest was not being accrued at June 30, 2001 and December 31, 2000, totaled
approximately $58.9 million and $49.4 million, respectively. Loans past due 90
days or more and still accruing interest at June 30, 2001 and December 31, 2000
totaled $340,000 and $1.2 million, respectively.

10



---



##### Table of Contents



At June 30, 2001, 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                               |       | $      | 1,160,254 |           |            |  | 76.42 | %     
|                                     
|                                     
|                                     
|                                     
|New England (1)                       |       |        | 81,975    |           |            |  | 5.40  |       
|                                     
|                                     
|                                     
|                                     
|California                            |       |        | 39,023    |           |            |  | 2.57  |       
|                                     
|                                     
|                                     
|                                     
|Texas                                 |       |        | 34,635    |           |            |  | 2.28  |       
|                                     
|                                     
|                                     
|                                     
|Georgia                               |       |        | 33,671    |           |            |  | 2.22  |       
|                                     
|                                     
|                                     
|                                     
|Virginia                              |       |        | 21,326    |           |            |  | 1.40  |       
|                                     
|                                     
|                                     
|                                     
|New Jersey                            |       |        | 18,953    |           |            |  | 1.25  |       
|                                     
|                                     
|                                     
|                                     
|New York                              |       |        | 16,781    |           |            |  | 1.10  |       
|                                     
|                                     
|                                     
|                                     
|Ohio                                  |       |        | 15,070    |           |            |  | 0.99  |       
|                                     
|                                     
|                                     
|                                     
|Illinois                              |       |        | 14,979    |           |            |  | 0.99  |       
|                                     
|                                     
|                                     
|                                     
|North Carolina                        |       |        | 14,256    |           |            |  | 0.94  |       
|                                     
|                                     
|                                     
|                                     
|Missouri                              |       |        | 10,466    |           |            |  | 0.69  |       
|                                     
|                                     
|                                     
|                                     
|All other (none greater than $10,000) |       |        | 56,874    |           |            |  | 3.75  |       
|                                      |       |        |           |           |            |  |       |       
|                                      | Total |        | $         | 1,518,263 |            |  |       | 100.00 | %
|                                      |       |        |           |           |            |  |       |       



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

6.    ALLOWANCES FOR LOAN LOSSES

The allowance for loan losses provides for risks of losses inherent in the
credit extension process. Losses and recoveries are either charged or credited
to the allowance. Our allowance is an amount that we believe will be adequate
to absorb probable losses on existing loans that may become uncollectible,
based on our evaluation of the collectibility of the loans and prior loan loss
experience. The evaluation takes into consideration such factors as changes in
the nature and volume of the loan portfolio, overall portfolio quality, review
of specific problem loans, and current economic conditions that may affect the
borrowers ability to pay. The evaluation is periodically reviewed and
adjustments are recorded in the period in which changes become known.

The allowance for loan losses amounted to $34.9 million and $33.5 million at
June 30, 2001 and December 31, 2000, respectively. As of June 30, 2001,
approximately $626,000 of the allowance remained from the discount allocations
for the March 1995 purchased loans. The portion of the allowance for loan
losses that was created through the allocation of discounts on purchased loans
may only be used to absorb losses on the related acquired loans.

Changes in the allowance for loan losses were as follows ($in thousands; unaudited):

|                                                        |                 |   |                                   |        |      |   |         |        |  
|------------------------------------------------------- | --------------- | - | --------------------------------- | ------ | ---- | - | ------- | ------ | -
|                                                        |                 |   | For the Six Months Ended June 30,
|                                                        |                 |   |                                  
|                                                        |                 |   | 2001                              |        | 2000
|                                                        |                 |   |                                   |        |     
|Balance, beginning of period                            |                 | $ | 33,462                            |        |      | $ | 28,177  |       
|                                                       
|                                                       
|                                                       
|                                                       
|Provision for possible loan losses                      |                 |   | 4,550                             |        |      |   | 9,400   |       
|                                                       
|                                                       
|                                                       
|                                                       
|Loan discount (net) allocated from purchased portfolios |                 |   |                                  |        |      |   | (5      | )     
|                                                       
|                                                       
|                                                       
|                                                       
|Loans charged-off                                       |                 |   | (3,615                            | )      |      |   | (10,199 | )     
|                                                       
|                                                       
|                                                       
|                                                       
|Recoveries of loans charged-off                         |                 |   | 528                               |        |      |   | 900     |       
|                                                        |                 |   |                                   |        |      |   |         |       
|                                                        | Net charge-offs |   |                                   | (3,087 | )    |   |         | (9,299 | )
|                                                        |                 |   |                                   |        |      |   |         |       
|Balance, end of period                                  |                 | $ | 34,925                            |        |      | $ | 28,273  |       
|                                                        |                 |   |                                   |        |      |   |         |       

11



---



##### Table of Contents



7. RELATED PARTY TRANSACTIONS

Mr. William R. Hough, is 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. During 1999, we entered into
an agreement with WRHC whereby they would act as our agent in open-market
purchases and sales of securities. WRHC is compensated under that agreement on
a commission basis. We also have contracted with WRHC to periodically purchase
securities under agreement to repurchase at a rate based on the prevailing
federal funds rate plus one-eighth of one percent, per an agreement entered
into on August 15, 1995. For the six months ended June 30, 2001, we purchased
$341.1 million and sold $115.2 million of securities through WRHC. There were
no securities sold under agreement to repurchase with WRHC in the second
quarter of 2001.

Previously, we had borrowed from Mr. Hough, individually, $3.5 million on an
unsecured, revolving line of credit basis and $1.5 million via term
subordinated debt. The proceeds were used for holding company debt service. On
May 8, 2001, we repaid both obligations in full using the net proceeds from our
issuance of Debentures (see Note 2  Recent Developments). WRHC participated
as a selling agent in the placement of the Debentures and was paid a $89,000
fee for its sales efforts. Mr. Hough, individually, purchased $3.7 million of
the Debentures. No fee was paid on sale of the Debentures to Mr. Hough or to
any other of our directors who purchased the Debentures.

WRHC offers sales of insurance and mutual fund products and investment advisory
services on our premises. Previously, we were paid a commission based on the
net profits earned from sales of investment products on our premises. That
arrangement has been amended such that, in the future, commissions paid to us
will be based on gross revenues. Fee income earned from this relationship was
$3,000 and $153,000 for the six months ended June 30, 2001 and 2000,
respectively.

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. All loans and commitments to lend included in those transactions were made
in the ordinary course of business, upon substantially the same terms.
Features including interest rates and collateral, as those prevailing at the
time for comparable transactions with other persons and, in our opinion, have
not involved more than the normal risk of collectibility or presented other
unfavorable features.

8. 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, 2001, there was a net retained profit
surplus for dividend payment purposes of $3.0 million.

9. LEGAL SETTLEMENT

A lawsuit filed by certain former shareholders of Bankers Savings Bank, F.S.B.
(BSB) was settled with our share of the settlement amount at $300,000. We
had previously acquired all of the outstanding shares of BSB in a
stock-for-stock merger consummated in November 1998.

12



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##### Table of Contents



REPUBLIC BANCSHARES, INC.




SELECTED QUARTERLY FINANCIAL INFORMATION (Page 1 of 3)

($ in thousands, except share data; unaudited)

|                                                  |  |                |            |           |  |           |            |            |  |           |            |    |  |   |            |   |  |   |            |  
|------------------------------------------------- |  | -------------- | ---------- | --------- |  | --------- | ---------- | ---------- |  | --------- | ---------- | -- |  | - | ---------- | - |  | - | ---------- | -
|                                                  |  | Quarters Ended
|                                                  |  |               
|                                                  |  | June 2001      |            | Mar. 2001 |  | Dec. 2000 |            | Sept. 2000 |  | June 2000
|                                                  |  |                |            |           |  |           |            |            |  |          
|RESULTS OF OPERATIONS:                            |  |                |            |           |  |           |            |            |  |           |            |    |  |   |            |   |  |   |            |  
|                                                 
|                                                 
|                                                 
|                                                 
|Interest income                                   |  | $              | 41,542     |           |  | $         | 45,357     |            |  | $         | 47,605     |    |  | $ | 49,163     |   |  | $ | 50,846     |  
|                                                 
|                                                 
|                                                 
|                                                 
|Interest expense                                  |  |                | 25,210     |           |  |           | 27,193     |            |  |           | 27,509     |    |  |   | 27,217     |   |  |   | 26,836     |  
|                                                  |  |                |            |           |  |           |            |            |  |           |            |    |  |   |            |   |  |   |            |  
|Net interest income                               |  |                | 16,332     |           |  |           | 18,164     |            |  |           | 20,096     |    |  |   | 21,946     |   |  |   | 24,010     |  
|                                                 
|                                                 
|                                                 
|                                                 
|Loan loss provision                               |  |                | 2,750      |           |  |           | 1,800      |            |  |           | 6,300      |    |  |   | 5,000      |   |  |   | 5,000      |  
|                                                  |  |                |            |           |  |           |            |            |  |           |            |    |  |   |            |   |  |   |            |  
|Net interest income after loan loss provision     |  |                | 13,582     |           |  |           | 16,364     |            |  |           | 13,796     |    |  |   | 16,946     |   |  |   | 19,010     |  
|                                                 
|                                                 
|                                                 
|                                                 
|Noninterest income (expense)                      |  |                | 10,121     |           |  |           | 5,866      |            |  |           | (7,088     | )  |  |   | 5,290      |   |  |   | 4,178      |  
|                                                 
|                                                 
|                                                 
|                                                 
|Operating expenses                                |  |                | 19,140     |           |  |           | 18,113     |            |  |           | 19,618     |    |  |   | 17,951     |   |  |   | 18,612     |  
|                                                 
|                                                 
|                                                 
|                                                 
|Other noninterest expense                         |  |                | 1,074      |           |  |           | 1,134      |            |  |           | 1,181      |    |  |   | 1,048      |   |  |   | 994        |  
|                                                  |  |                |            |           |  |           |            |            |  |           |            |    |  |   |            |   |  |   |            |  
|Income before income taxes
and minority interest  |  |                | 3,489      |           |  |           | 2,983      |            |  |           | (14,091    | )  |  |   | 3,237      |   |  |   | 3,582      |  
|                                                 
|                                                 
|                                                 
|                                                 
|Income tax benefit (expense)                      |  |                | (1,377     | )         |  |           | (926       | )          |  |           | 5,063      |    |  |   | (1,295     | ) |  |   | (1,474     | )
|                                                 
|                                                 
|                                                 
|                                                 
|Minority interest in income from
subsidiary trust |  |                | (421       | )         |  |           | (421       | )          |  |           | (421       | )  |  |   | (426       | ) |  |   | (421       | )
|                                                  |  |                |            |           |  |           |            |            |  |           |            |    |  |   |            |   |  |   |            |  
|Net income (loss)                                 |  | $              | 1,691      |           |  | $         | 1,636      |            |  | $         | (9,449     | )  |  | $ | 1,516      |   |  | $ | 1,687      |  
|                                                  |  |                |            |           |  |           |            |            |  |           |            |    |  |   |            |   |  |   |            |  
|Earnings per share  basic                        |  | $              | .15        |           |  | $         | .15        |            |  | $         | (.90       | )  |  | $ | .14        |   |  | $ | .15        |  
|                                                  |  |                |            |           |  |           |            |            |  |           |            |    |  |   |            |   |  |   |            |  
|Weighted average shares outstanding  basic       |  |                | 10,589,284 |           |  |           | 10,557,373 |            |  |           | 10,555,989 |    |  |   | 10,555,989 |   |  |   | 10,555,897 |  
|                                                  |  |                |            |           |  |           |            |            |  |           |            |    |  |   |            |   |  |   |            |  
|Earnings per share  diluted                      |  | $              | .15        |           |  | $         | .14        |            |  | $         | (.90       | )  |  | $ | .13        |   |  | $ | .15        |  
|                                                  |  |                |            |           |  |           |            |            |  |           |            |    |  |   |            |   |  |   |            |  
|Weighted average shares outstanding  diluted     |  |                | 11,349,785 |           |  |           | 11,326,530 |            |  |           | 10,555,989 |    |  |   | 11,311,158 |   |  |   | 11,307,494 |  
|                                                  |  |                |            |           |  |           |            |            |  |           |            |    |  |   |            |   |  |   |            |  
|BALANCE SHEET DATA (at period-end):               |  |                |            |           |  |           |            |            |  |           |            |    |  |   |            |   |  |   |            |  
|                                                 
|                                                 
|                                                 
|                                                 
|Total assets                                      |  | $              | 2,337,020  |           |  | $         | 2,496,181  |            |  | $         | 2,440,604  |    |  | $ | 2,490,181  |   |  | $ | 2,554,828  |  
|                                                 
|                                                 
|                                                 
|                                                 
|Securities                                        |  |                | 603,552    |           |  |           | 469,560    |            |  |           | 406,957    |    |  |   | 440,312    |   |  |   | 466,180    |  
|                                                 
|                                                 
|                                                 
|                                                 
|Loans                                             |  |                | 1,518,263  |           |  |           | 1,656,609  |            |  |           | 1,711,342  |    |  |   | 1,790,143  |   |  |   | 1,864,640  |  
|                                                 
|                                                 
|                                                 
|                                                 
|Nonperforming assets                              |  |                | 64,073     |           |  |           | 56,127     |            |  |           | 56,973     |    |  |   | 60,100     |   |  |   | 36,066     |  
|                                                 
|                                                 
|                                                 
|                                                 
|Allowance for loan losses                         |  |                | 34,925     |           |  |           | 33,183     |            |  |           | 33,462     |    |  |   | 30,441     |   |  |   | 28,273     |  
|                                                 
|                                                 
|                                                 
|                                                 
|Deposits                                          |  |                | 2,049,047  |           |  |           | 2,211,392  |            |  |           | 2,157,817  |    |  |   | 2,195,515  |   |  |   | 2,267,111  |  
|                                                 
|                                                 
|                                                 
|                                                 
|Stockholders equity                              |  |                | 179,188    |           |  |           | 176,059    |            |  |           | 172,341    |    |  |   | 178,109    |   |  |   | 173,254    |  
|                                                 
|                                                 
|                                                 
|                                                 
|Book value per share (dollars)                    |  |                | 15.82      |           |  |           | 15.56      |            |  |           | 15.24      |    |  |   | 15.75      |   |  |   | 15.32      |  
|                                                 
|                                                 
|                                                 
|                                                 
|Tangible book value per share (dollars)           |  |                | 14.47      |           |  |           | 13.92      |            |  |           | 13.54      |    |  |   | 13.99      |   |  |   | 13.50      |  
|                                                 
|                                                 
|                                                 
|                                                 
|SELECTED OPERATING RATIOS:                        |  |                |            |           |  |           |            |            |  |           |            |    |  |   |            |   |  |   |            |  
|                                                 
|                                                 
|                                                 
|                                                 
|Return on average assets                          |  |                | 0.29       | %         |  |           | 0.27       | %          |  |           | (1.53      | )% |  |   | 0.24       | % |  |   | 0.26       | %
|                                                 
|                                                 
|                                                 
|                                                 
|Return on average equity                          |  |                | 3.85       |           |  |           | 3.82       |            |  |           | (21.16     | )  |  |   | 3.44       |   |  |   | 3.96       |  
|                                                 
|                                                 
|                                                 
|                                                 
|Net interest margin                               |  |                | 2.93       |           |  |           | 3.09       |            |  |           | 3.45       |    |  |   | 3.73       |   |  |   | 3.89       |  
|                                                 
|                                                 
|                                                 
|                                                 
|Operating efficiency ratio                        |  |                | 72.35      |           |  |           | 75.38      |            |  |           | 150.81     |    |  |   | 65.91      |   |  |   | 66.03      |  
|                                                 
|                                                 
|                                                 
|                                                 
|Loan loss allowance to portfolio loans            |  |                | 2.30       |           |  |           | 2.00       |            |  |           | 1.96       |    |  |   | 1.70       |   |  |   | 1.52       |  
|                                                 
|                                                 
|                                                 
|                                                 
|Loan loss allowance to nonperforming loans        |  |                | 58.98      |           |  |           | 64.87      |            |  |           | 66.12      |    |  |   | 56.30      |   |  |   | 95.68      |  
|                                                 
|                                                 
|                                                 
|                                                 
|CAPITAL RATIOS:                                   |  |                |            |           |  |           |            |            |  |           |            |    |  |   |            |   |  |   |            |  
|                                                 
|                                                 
|                                                 
|                                                 
|Equity to assets                                  |  |                | 7.67       |           |  |           | 7.05       |            |  |           | 7.06       |    |  |   | 7.15       |   |  |   | 6.78       |  
|                                                 
|                                                 
|                                                 
|                                                 
|Equity & minority interest to assets              |  |                | 8.90       |           |  |           | 8.20       |            |  |           | 8.24       |    |  |   | 8.31       |   |  |   | 7.91       |  
|                                                 
|                                                 
|                                                 
|                                                 
|Regulatory ratios  Bank:                         |  |                |            |           |  |           |            |            |  |           |            |    |  |   |            |   |  |   |            |  
|                                                 
|                                                 
|                                                 
|                                                 
|Tier 1 (leverage)                                 |  |                | 7.85       |           |  |           | 7.02       |            |  |           | 7.18       |    |  |   | 7.25       |   |  |   | 6.95       |  
|                                                 
|                                                 
|                                                 
|                                                 
|Tier 1/risk assets                                |  |                | 12.48      |           |  |           | 11.24      |            |  |           | 11.69      |    |  |   | 11.45      |   |  |   | 11.12      |  
|                                                 
|                                                 
|                                                 
|                                                 
|Risk-based capital                                |  |                | 13.80      |           |  |           | 12.49      |            |  |           | 12.94      |    |  |   | 12.75      |   |  |   | 12.41      |  
|                                                 
|                                                 
|                                                 
|                                                 
|Regulatory ratios  Company:                      |  |                |            |           |  |           |            |            |  |           |            |    |  |   |            |   |  |   |            |  
|                                                 
|                                                 
|                                                 
|                                                 
|Tier 1 (leverage)                                 |  |                | 7.17       |           |  |           | 6.34       |            |  |           | 6.30       |    |  |   | 6.37       |   |  |   | 6.14       |  
|                                                 
|                                                 
|                                                 
|                                                 
|Tier 1/risk-assets                                |  |                | 11.27      |           |  |           | 10.14      |            |  |           | 10.27      |    |  |   | 10.05      |   |  |   | 9.81       |  
|                                                 
|                                                 
|                                                 
|                                                 
|Risk-based capital                                |  |                | 14.55      |           |  |           | 12.55      |            |  |           | 12.69      |    |  |   | 12.48      |   |  |   | 12.20      |  
|                                                 
|                                                 
|                                                 
|                                                 
|OTHER DATA (at period-end):                       |  |                |            |           |  |           |            |            |  |           |            |    |  |   |            |   |  |   |            |  
|                                                 
|                                                 
|                                                 
|                                                 
|Number of branch banking offices                  |  |                | 72         |           |  |           | 80         |            |  |           | 80         |    |  |   | 81         |   |  |   | 81         |  
|                                                 
|                                                 
|                                                 
|                                                 
|Number of full-time equivalent employees          |  |                | 913        |           |  |           | 955        |            |  |           | 995        |    |  |   | 996        |   |  |   | 997        |  

13



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##### Table of Contents



REPUBLIC BANCSHARES, INC.
SELECTED QUARTERLY FINANCIAL INFORMATION (Page 2 of 3)
($ in thousands; unaudited)

|                                         |                                    |   |                |           |           |   |           |           |            |   |           |           |   |   |        |           |   |   |        |           |  
|---------------------------------------- | ---------------------------------- | - | -------------- | --------- | --------- | - | --------- | --------- | ---------- | - | --------- | --------- | - | - | ------ | --------- | - | - | ------ | --------- | -
|                                         |                                    |   | Quarters Ended
|                                         |                                    |   |               
|                                         |                                    |   | June 2001      |           | Mar. 2001 |   | Dec. 2000 |           | Sept. 2000 |   | June 2000
|                                         |                                    |   |                |           |           |   |           |           |            |   |          
|SELECTED AVERAGE BALANCES
& YIELDS/COSTS |                                    |   |                |           |           |   |           |           |            |   |           |           |   |   |        |           |   |   |        |          
|                                        
|                                        
|                                        
|                                        
|Average balances:                        |                                    |   |                |           |           |   |           |           |            |   |           |           |   |   |        |           |   |   |        |          
|                                        
|                                        
|                                        
|                                        
|                                         | Total assets                       |   | $              | 2,365,311 |           |   | $         | 2,461,161 |            |   | $         | 2,461,501 |   |   | $      | 2,493,665 |   |   | $      | 2,582,918 |  
|                                        
|                                        
|                                        
|                                        
|                                         | Earning assets                     |   |                | 2,230,601 |           |   |           | 2,319,727 |            |   |           | 2,322,256 |   |   |        | 2,349,434 |   |   |        | 2,436,185 |  
|                                        
|                                        
|                                        
|                                        
|                                         | Loans                              |   |                | 1,582,080 |           |   |           | 1,689,516 |            |   |           | 1,766,250 |   |   |        | 1,827,556 |   |   |        | 1,886,291 |  
|                                        
|                                        
|                                        
|                                        
|                                         | Securities                         |   |                | 494,170   |           |   |           | 385,839   |            |   |           | 425,030   |   |   |        | 450,488   |   |   |        | 448,142   |  
|                                        
|                                        
|                                        
|                                        
|                                         | Deposits                           |   |                | 1,962,300 |           |   |           | 2,048,552 |            |   |           | 2,038,226 |   |   |        | 2,069,676 |   |   |        | 2,163,245 |  
|                                        
|                                        
|                                        
|                                        
|                                         | Other interest-bearing liabilities |   |                | 71,210    |           |   |           | 68,177    |            |   |           | 71,115    |   |   |        | 72,411    |   |   |        | 68,927    |  
|                                        
|                                        
|                                        
|                                        
|                                         | Stockholders equity               |   |                | 175,986   |           |   |           | 173,728   |            |   |           | 177,655   |   |   |        | 175,225   |   |   |        | 171,364   |  
|                                        
|                                        
|                                        
|                                        
|Average yields/costs:                    |                                    |   |                |           |           |   |           |           |            |   |           |           |   |   |        |           |   |   |        |          
|                                        
|                                        
|                                        
|                                        
|                                         | Earning assets                     |   |                | 7.46      | %         |   |           | 7.84      | %          |   |           | 8.16      | % |   |        | 8.34      | % |   |        | 8.32      | %
|                                        
|                                        
|                                        
|                                        
|                                         | Loans                              |   |                | 8.12      |           |   |           | 8.45      |            |   |           | 8.69      |   |   |        | 8.88      |   |   |        | 8.90      |  
|                                        
|                                        
|                                        
|                                        
|                                         | Securities                         |   |                | 6.28      |           |   |           | 6.58      |            |   |           | 6.44      |   |   |        | 6.41      |   |   |        | 6.30      |  
|                                        
|                                        
|                                        
|                                        
|                                         | Deposits                           |   |                | 4.95      |           |   |           | 5.18      |            |   |           | 5.14      |   |   |        | 5.00      |   |   |        | 4.78      |  
|                                        
|                                        
|                                        
|                                        
|                                         | Other interest-bearing liabilities |   |                | 5.53      |           |   |           | 5.97      |            |   |           | 6.70      |   |   |        | 6.76      |   |   |        | 6.47      |  
|                                        
|                                        
|                                        
|                                        
|NONPERFORMING ASSETS:                    |                                    |   |                |           |           |   |           |           |            |   |           |           |   |   |        |           |   |   |        |          
|                                        
|                                        
|                                        
|                                        
|Nonperforming loans:                     |                                    |   |                |           |           |   |           |           |            |   |           |           |   |   |        |           |   |   |        |          
|                                        
|                                        
|                                        
|                                        
|Residential first lien                   |                                    | $ | 13,864         |           |           | $ | 15,458    |           |            | $ | 14,502    |           |   | $ | 15,178 |           |   | $ | 18,413 |          
|                                        
|                                        
|                                        
|                                        
|Warehouse lines of credit                |                                    |   | 2,421          |           |           |   | 2,421     |           |            |   | 3,029     |           |   |   | 2,467  |           |   |   | 2,867  |          
|                                        
|                                        
|                                        
|                                        
|Commercial real estate and multifamily   |                                    |   | 38,771         |           |           |   | 30,620    |           |            |   | 30,181    |           |   |   | 34,589 |           |   |   | 6,332  |          
|                                        
|                                        
|                                        
|                                        
|Commercial (business)                    |                                    |   | 1,979          |           |           |   | 1,097     |           |            |   | 736       |           |   |   | 650    |           |   |   | 592    |          
|                                        
|                                        
|                                        
|                                        
|Home equity and consumer                 |                                    |   | 1,432          |           |           |   | 1,092     |           |            |   | 1,680     |           |   |   | 766    |           |   |   | 1,009  |          
|                                        
|                                        
|                                        
|                                        
|High LTV                                 |                                    |   | 750            |           |           |   | 466       |           |            |   | 477       |           |   |   | 424    |           |   |   | 336    |          
|                                         |                                    |   |                |           |           |   |           |           |            |   |           |           |   |   |        |           |   |   |        |          
|                                         | Total nonperforming loans(1)       |   |                | 59,217    |           |   |           | 51,154    |            |   |           | 50,605    |   |   |        | 54,074    |   |   |        | 29,549    |  
|                                        
|                                        
|                                        
|                                        
|Other nonperforming receivables          |                                    |   | 475            |           |           |   | 477       |           |            |   | 639       |           |   |   | 653    |           |   |   | 687    |          
|                                        
|                                        
|                                        
|                                        
|Other real estate:                       |                                    |   |                |           |           |   |           |           |            |   |           |           |   |   |        |           |   |   |        |          
|                                        
|                                        
|                                        
|                                        
|Residential                              |                                    |   | 1,513          |           |           |   | 1,679     |           |            |   | 2,559     |           |   |   | 1,737  |           |   |   | 2,508  |          
|                                        
|                                        
|                                        
|                                        
|Commercial                               |                                    |   | 2,868          |           |           |   | 2,817     |           |            |   | 3,170     |           |   |   | 3,636  |           |   |   | 3,322  |          
|                                         |                                    |   |                |           |           |   |           |           |            |   |           |           |   |   |        |           |   |   |        |          
|                                         | Total ORE                          |   |                | 4,381     |           |   |           | 4,496     |            |   |           | 5,729     |   |   |        | 5,373     |   |   |        | 5,830     |  
|                                         |                                    |   |                |           |           |   |           |           |            |   |           |           |   |   |        |           |   |   |        |          
|                                         | Total nonperforming assets         |   | $              | 64,073    |           |   | $         | 56,127    |            |   | $         | 56,973    |   |   | $      | 60,100    |   |   | $      | 36,066    |  
|                                         |                                    |   |                |           |           |   |           |           |            |   |           |           |   |   |        |           |   |   |        |          



---

|(1) |  | Represents all loans on nonaccrual and all loans 90 days and over past due
|--- |  | --------------------------------------------------------------------------

14



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##### Table of Contents



REPUBLIC BANCSHARES, INC.
SELECTED QUARTERLY FINANCIAL INFORMATION (Page 3 of 3)
($ in thousands; unaudited)

|                                                              |                                        |   |                |        |           |   |           |        |            |   |           |        |   |   |        |        |   |   |        |        |  
|------------------------------------------------------------- | -------------------------------------- | - | -------------- | ------ | --------- | - | --------- | ------ | ---------- | - | --------- | ------ | - | - | ------ | ------ | - | - | ------ | ------ | -
|                                                              |                                        |   | Quarters Ended
|                                                              |                                        |   |               
|                                                              |                                        |   | June 2001      |        | Mar. 2001 |   | Dec. 2000 |        | Sept. 2000 |   | June 2000
|                                                              |                                        |   |                |        |           |   |           |        |            |   |          
|Loan loss allowance activity                                  |                                        |   |                |        |           |   |           |        |            |   |           |        |   |   |        |        |   |   |        |       
|                                                             
|                                                             
|                                                             
|                                                             
|Allowance for loan losses at beg. of period                   |                                        | $ | 33,183         |        |           | $ | 33,462    |        |            | $ | 30,441    |        |   | $ | 28,273 |        |   | $ | 30,470 |       
|                                                             
|                                                             
|                                                             
|                                                             
|Loan discount (net) allocated to/
(from) purchased portfolios |                                        |   |               |        |           |   |          |        |            |   | (384      | )      |   |   |       |        |   |   |       |       
|                                                             
|                                                             
|                                                             
|                                                             
|Provision for loan losses                                     |                                        |   | 2,750          |        |           |   | 1,800     |        |            |   | 6,300     |        |   |   | 5,000  |        |   |   | 5,000  |       
|                                                             
|                                                             
|                                                             
|                                                             
|Net (charge-offs) recoveries:                                 |                                        |   |                |        |           |   |           |        |            |   |           |        |   |   |        |        |   |   |        |       
|                                                             
|                                                             
|                                                             
|                                                             
|Residential first lien                                        |                                        |   | (230           | )      |           |   | (162      | )      |            |   | (484      | )      |   |   | (345   | )      |   |   | (343   | )     
|                                                             
|                                                             
|                                                             
|                                                             
|Warehouse lines of credit                                     |                                        |   | 24             |        |           |   | (16       | )      |            |   | (509      | )      |   |   | (49    | )      |   |   | (4,402 | )     
|                                                             
|                                                             
|                                                             
|                                                             
|Nonconforming first lien mortgages                            |                                        |   | (122           | )      |           |   | (153      | )      |            |   | (166      | )      |   |   | (172   | )      |   |   | (286   | )     
|                                                             
|                                                             
|                                                             
|                                                             
|Commercial real estate/multifamily                            |                                        |   | 18             |        |           |   | 15        |        |            |   | (530      | )      |   |   | (54    | )      |   |   | 2      |       
|                                                             
|                                                             
|                                                             
|                                                             
|Commercial (business)                                         |                                        |   |               |        |           |   | 19        |        |            |   | 1         |        |   |   | (41    | )      |   |   | 6      |       
|                                                             
|                                                             
|                                                             
|                                                             
|Home equity                                                   |                                        |   | (180           | )      |           |   | (511      | )      |            |   | (22       | )      |   |   | (198   | )      |   |   | (936   | )     
|                                                             
|                                                             
|                                                             
|                                                             
|Consumer                                                      |                                        |   | (16            | )      |           |   | (123      | )      |            |   | (22       | )      |   |   | (97    | )      |   |   | (32    | )     
|                                                             
|                                                             
|                                                             
|                                                             
|Other                                                         |                                        |   | (44            | )      |           |   | (131      | )      |            |   | (47       | )      |   |   | (41    | )      |   |   | (77    | )     
|                                                             
|                                                             
|                                                             
|                                                             
|High LTV                                                      |                                        |   | (458           | )      |           |   | (1,017    | )      |            |   | (1,116    | )      |   |   | (1,835 | )      |   |   | (1,129 | )     
|                                                              |                                        |   |                |        |           |   |           |        |            |   |           |        |   |   |        |        |   |   |        |       
|                                                              | Net charge-offs                        |   |                | (1,008 | )         |   |           | (2,079 | )          |   |           | (2,895 | ) |   |        | (2,832 | ) |   |        | (7,197 | )
|                                                              |                                        |   |                |        |           |   |           |        |            |   |           |        |   |   |        |        |   |   |        |       
|Allowance for loan losses at end of period                    |                                        | $ | 34,925         |        |           | $ | 33,183    |        |            | $ | 33,462    |        |   | $ | 30,441 |        |   | $ | 28,273 |       
|                                                              |                                        |   |                |        |           |   |           |        |            |   |           |        |   |   |        |        |   |   |        |       
|Net charge-offs (recoveries) to average
loans-annualized:     |                                        |   |                |        |           |   |           |        |            |   |           |        |   |   |        |        |   |   |        |       
|                                                             
|                                                             
|                                                             
|                                                             
|Residential first lien                                        |                                        |   | 0.17           | %      |           |   | 0.11      | %      |            |   | 0.31      | %      |   |   | 0.21   | %      |   |   | 0.21   | %     
|                                                             
|                                                             
|                                                             
|                                                             
|Warehouse lines of credit                                     |                                        |   | (0.46          | )      |           |   | 0.19      |        |            |   | 5.51      |        |   |   | 0.37   |        |   |   | 24.76  |       
|                                                             
|                                                             
|                                                             
|                                                             
|Nonconforming first lien mortgages                            |                                        |   | 0.80           |        |           |   | 0.94      |        |            |   | 0.99      |        |   |   | 0.98   |        |   |   | 1.55   |       
|                                                             
|                                                             
|                                                             
|                                                             
|Commercial real estate/multifamily                            |                                        |   | (0.01          | )      |           |   | (0.01     | )      |            |   | 0.31      |        |   |   | 0.03   |        |   |   |       |       
|                                                             
|                                                             
|                                                             
|                                                             
|Commercial (business)                                         |                                        |   |               |        |           |   | (0.06     | )      |            |   |          |        |   |   | 0.15   |        |   |   | (0.02  | )     
|                                                             
|                                                             
|                                                             
|                                                             
|Home equity                                                   |                                        |   | 0.51           |        |           |   | 1.46      |        |            |   | 0.06      |        |   |   | 0.59   |        |   |   | 2.86   |       
|                                                             
|                                                             
|                                                             
|                                                             
|Consumer                                                      |                                        |   | 0.30           |        |           |   | 2.21      |        |            |   | 0.40      |        |   |   | 1.68   |        |   |   | 0.51   |       
|                                                             
|                                                             
|                                                             
|                                                             
|High LTV                                                      |                                        |   | 5.28           |        |           |   | 11.00     |        |            |   | 6.52      |        |   |   | 8.80   |        |   |   | 5.17   |       
|                                                              |                                        |   |                |        |           |   |           |        |            |   |           |        |   |   |        |        |   |   |        |       
|                                                              | Total net charge-offs to average loans |   |                | 0.25   | %         |   |           | 0.49   | %          |   |           | 0.66   | % |   |        | 0.62   | % |   |        | 1.53   | %
|                                                              |                                        |   |                |        |           |   |           |        |            |   |           |        |   |   |        |        |   |   |        |       

15



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##### Table of Contents






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

Comparison of Balance Sheets at June 30, 2001 and December 31, 2000

Overview

At June 30, 2001, we had total assets of $2.3 billion, stockholders equity of
$179.2 million and a book value per share of $15.82, compared with total assets
of $2.4 billion, stockholders equity of $172.3 million and a book value of
$15.24 at December 31, 2000. Loans, net of allowances for loan losses, were
$1.5 billion at June 30, 2001, a decrease of $194.5 million from $1.7 billion
at December 31, 2000, while total deposits were $2.0 billion, a decrease of
$108.8 million from $2.2 billion at year-end 2000.

Securities

Investments consisting of Investment Securities, MBS, and Mortgage-Related
Securities were $603.5 million as compared to $407.0 million at the end of
last year. The primary reason for the increase was the investment of the
excess cash from reduced loan balances. At June 30, 2001, $551.0 million of
securities were classified as available for sale, $27.9 million of MBS were
classified as held to maturity and $24.6 million of Mortgage-Related
Securities were trading assets. These trading assets consisted of: (1) a
$10.9 million subordinate tranche purchased from our securitization of High
LTV Loans in June 1998; (2) $10.2 million in overcollateralization and
residual interests in cash flows from securitizations in December 1997 and
June 1998; and (3) the excess spread on mortgage servicing rights, which
amounted to $3.6 million at June 30, 2001.

Loans

Total loans declined by $193.1 million from $1.7 billion at the prior year-end
to $1.5 billion at June 30, 2001. Loan payoffs, net of newly originated loans,
reduced the portfolio by $99.5 million, securitizations of residential loans
totaled $50.1 million, and $44.9 million of loans were included in the branch
sales transactions. By category, warehouse lines of credit decreased $28.4
million, nonconforming mortgages decreased $7.4 million and
conventional/government residential loans declined by $99.3 million (including
the loan securitizations in March and June 2001). High LTV Loans decreased by
$4.4 million and commercial and commercial real estate loans decreased $27.8
million. Home equity loans increased $5.3 million.

Allowance for Loan Losses

The allowance for loan losses amounted to $34.9 million (2.30% of portfolio
loans) at June 30, 2001, compared with $33.5 million (1.96% of portfolio loans)
at December 31, 2000. Activity to the allowance in 2001 included provisions
for loan losses of $4.6 million less loan charge-offs (net of recoveries) of
$3.1 million. At June 30, 2001, the ratio of the allowance for loan losses to
nonperforming loans was 58.98% compared to 66.12% at the end of 2000.

Nonperforming Assets

Nonperforming assets amounted to $64.1 million (2.74% of total assets) at June
30, 2001, compared with $57.0 million (2.33% of total assets) at December 31,
2000. In the second quarter of 2001, there were three commercial real estate
loans placed in nonperforming status, the largest of which was a $4.9 million
hotel loan located in Florida. Residential nonperformers declined by $1.2
million and ORE balances decreased $1.3 million to $4.4 million but this
improvement was offset by the additional nonperforming commercial real estate
loans.

16



---



##### Table of Contents



Deposits

Total deposits were $2.0 billion at June 30, 2001, a $108.8 million decrease
from the prior year-end. The branch sales transactions accounted for $117.3
million of the decrease. Excluding the sales, total deposits increased $8.5
million. By category, money market accounts increased by $42.5 million,
certificates of deposit decreased by $122.2 million, checking accounts
(including non-retail deposits such as official checks) decreased by $10.2
million, and savings deposits declined by $18.9 million (primarily from shifts
to the money market product).

Holding Company Debt

Holding company debt increased by $1.4 million to $29.2 million at June 30,
2001 and was comprised of $14.2 million of convertible subordinated debentures
due 2014 and $15.0 million convertible subordinated debentures due 2011. The
previously-existing Senior Debt, term subordinated debt and the unsecured notes
were all repaid on May 8, 2001, using the net proceeds from the issuance of
convertible subordinated debt due 2011 (see Note 2  Recent Developments).

Stockholders Equity

Stockholders equity was $179.2 million at June 30, 2001, or 7.67% of total
assets, compared to $172.3 million or 7.06% of total assets at December 31,
2000. The number of common shares outstanding at June 30, 2001 increased to
11,325,119. In the second quarter of 2001, the holders of the Companys
perpetual preferred stock converted their holdings into the Companys common
stock, increasing the number of common shares outstanding by 750,000. The
conversion did not affect the total amount of stockholders equity or diluted
earnings per share, as the perpetual preferred stock had previously been
included as a common stock equivalent. At June 30, 2001, the Banks tier 1
(leverage) capital ratio was 7.85%, its tier 1 (risk-based) capital ratio was
12.48%, and its total risk-based capital ratio was 13.80%, 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, 2001,
were 7.17%, 11.27%, and 14.55%, respectively.

[Balance of page intentionally left blank]

17



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##### Table of Contents



Comparison of Results of Operations for the Three Months Ended June 30, 2001 and 2000

Overview

Net income for each of the quarters ended June 30, 2001 and 2000 was $1.7
million, or $.15 per share, (on a diluted basis). In the current quarter we
recorded a $2.8 million loan loss provision compared with a $5.0 million loan
loss provision in 2000. Net chargeoffs were $1.0 million for the current
quarter compared to $7.2 million for the same quarter a year ago.

Analysis of Net Interest Income (see table on page 19)

Net interest income for the three months ended June 30, 2001, was $16.3
million compared with $24.0 million for the same period last year, a $7.7
million or 32.0% decrease. The decrease was the result of two major factors,
the largest of which was a $304.2 million decline in the average balance of
loans outstanding. The largest component of this decline was payoffs and
sales of discontinued loan products including warehouse lines of credit and
High LTV Loans, which together accounted for $134.1 million of the decline.
Our exit from out of state lending activities also contributed to the
decrease. Net interest income also was adversely affected by the rapid decline
in market interest rates that occurred in the first half of 2001 which, when
combined with our asset sensitive interest rate position during the first 120
days following a rate change, resulted in a decline in asset yield. Interest
income was $41.5 million for the second quarter of 2001, a decrease of $9.3
million over the same period in 2000. Interest expense decreased by $1.6
million from $26.8 million in 2000 to $25.2 million in 2001. Average asset
yield decreased by 86 basis points from 8.32% for the same period of 2000 to
7.46% for 2001. The average cost of interest-bearing liabilities increased by
13 basis points from 4.84% to 4.97%, largely from the lag in realizing cost
savings on time deposits.

Noninterest Income

Noninterest income for the three months ended June 30, 2001, was $10.1 million
compared with $4.2 million for the same period in 2000, an increase of $6.0
million. The gain on sale of branches was $4.5 million and there was a $2.4
million increase in gains on sale of loans and securities, a majority
of which, in 2001, resulted from securitization and subsequent sale
of loans. An $887,000
reduction in loan service fees partially offset these increases. Early
payoffs to the servicing portfolio increased significantly which reduced
service fee revenue 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, 2001, and 2000 ($ in thousands; unaudited):

|                                                    |  |                                     |        |      |  |            |       |   |  |          |       |  
|--------------------------------------------------- |  | ----------------------------------- | ------ | ---- |  | ---------- | ----- | - |  | -------- | ----- | -
|                                                    |  | For the Three Months Ended June 30,
|                                                    |  |                                    
|                                                    |  |                                     |        |      |  |            |       |   |  | Increase
|                                                    |  | 2001                                |        | 2000 |  | (Decrease)
|                                                    |  |                                     |        |      |  |           
|Service charges on deposit accounts                 |  | $                                   | 1,928  |      |  | $          | 1,903 |   |  | $        | 25    |  
|                                                   
|                                                   
|                                                   
|                                                   
|Loan service fees                                   |  |                                     | 627    |      |  |            | 1,514 |   |  |          | (887  | )
|                                                   
|                                                   
|                                                   
|                                                   
|Other loan fee income                               |  |                                     | 1,133  |      |  |            | 1,011 |   |  |          | 122   |  
|                                                   
|                                                   
|                                                   
|                                                   
|Gains (losses) on sale of loans
and securities, net |  |                                     | 1,575  |      |  |            | (798  | ) |  |          | 2,373 |  
|                                                   
|                                                   
|                                                   
|                                                   
|Gain on sale of branches                            |  |                                     | 4,483  |      |  |            |      |   |  |          | 4,483 |  
|                                                   
|                                                   
|                                                   
|                                                   
|Other income                                        |  |                                     | 375    |      |  |            | 548   |   |  |          | (173  | )
|                                                    |  |                                     |        |      |  |            |       |   |  |          |       |  
|Total noninterest income                            |  | $                                   | 10,121 |      |  | $          | 4,178 |   |  | $        | 5,943 |  
|                                                    |  |                                     |        |      |  |            |       |   |  |          |       |  

18



---



##### Table of Contents



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, 2001 and 2000 ($ in thousands; unaudited):

|                                        |                                    |         |                             |            |      |      |        |         |         |          |         |      |   |  |   |           |         |   |        |        |  |  |      |      |  
|--------------------------------------- | ---------------------------------- | ------- | --------------------------- | ---------- | ---- | ---- | ------ | ------- | ------- | -------- | ------- | ---- | - |  | - | --------- | ------- | - | ------ | ------ |  |  | ---- | ---- | -
|                                        |                                    |         | Three Months Ended June 30,
|                                        |                                    |         |                            
|                                        |                                    |         | 2001                        |            | 2000
|                                        |                                    |         |                             |            |     
|                                        |                                    |         | Average                     |            |      |      |        |         | Average |          | Average |      |   |  |   |           | Average
|Summary of Average Rates                |                                    | Balance |                             | Interest   |      | Rate |        | Balance |         | Interest |         | Rate
|                                        |                                    |         |                             |            |      |      |        |         |         |          |         |     
|Interest earning assets:                |                                    |         |                             |            |      |      |        |         |         |          |         |      |   |  |   |           |         |   |        |        |  |  |      |     
|                                       
|                                       
|                                       
|                                       
|                                        | Loans, net                         |         | $                           | 1,582,080  |      |      | $      | 32,015  |         |          |         | 8.12 | % |  | $ | 1,886,291 |         |   | $      | 42,153 |  |  |      | 8.90 | %
|                                       
|                                       
|                                       
|                                       
|                                        | Investment securities              |         |                             | 8,659      |      |      |        | 136     |         |          |         | 6.29 |   |  |   | 19,991    |         |   |        | 301    |  |  |      | 6.04 |  
|                                       
|                                       
|                                       
|                                       
|                                        | Mortgage-backed securities         |         |                             | 455,918    |      |      |        | 7,257   |         |          |         | 6.37 |   |  |   | 389,733   |         |   |        | 6,463  |  |  |      | 6.63 |  
|                                       
|                                       
|                                       
|                                       
|                                        | Trading securities                 |         |                             | 29,593     |      |      |        | 364     |         |          |         | 4.92 |   |  |   | 38,418    |         |   |        | 293    |  |  |      | 3.05 |  
|                                       
|                                       
|                                       
|                                       
|                                        | Interest bearing deposits in banks |         |                             | 7,650      |      |      |        | 85      |         |          |         | 4.45 |   |  |   | 5,316     |         |   |        | 89     |  |  |      | 6.75 |  
|                                       
|                                       
|                                       
|                                       
|                                        | FHLB stock                         |         |                             | 13,203     |      |      |        | 205     |         |          |         | 6.24 |   |  |   | 13,816    |         |   |        | 265    |  |  |      | 7.73 |  
|                                       
|                                       
|                                       
|                                       
|                                        | Federal funds sold                 |         |                             | 133,498    |      |      |        | 1,480   |         |          |         | 4.39 |   |  |   | 82,620    |         |   |        | 1,282  |  |  |      | 6.14 |  
|                                        |                                    |         |                             |            |      |      |        |         |         |          |         |      |   |  |   |           |         |   |        |        |  |  |      |     
|                                        | Total interest earning assets      |         |                             | 2,230,601  |      |      |        | 41,542  |         |          |         | 7.46 |   |  |   | 2,436,185 |         |   |        | 50,846 |  |  |      | 8.32 |  
|                                       
|                                       
|                                       
|                                       
|                                        | Noninterest earning assets         |         |                             | 134,710    |      |      |        |         |         |          |         |      |   |  |   | 146,733   |         |   |        |        |  |  |      |      |  
|                                        |                                    |         |                             |            |      |      |        |         |         |          |         |      |   |  |   |           |         |   |        |        |  |  |      |     
|                                        | Total assets                       |         | $                           | 2,365,311  |      |      |        |         |         |          |         |      |   |  | $ | 2,582,918 |         |   |        |        |  |  |      |      |  
|                                        |                                    |         |                             |            |      |      |        |         |         |          |         |      |   |  |   |           |         |   |        |        |  |  |      |     
|Interest bearing liabilities:           |                                    |         |                             |            |      |      |        |         |         |          |         |      |   |  |   |           |         |   |        |        |  |  |      |     
|                                       
|                                       
|                                       
|                                       
|                                        | Interest checking                  |         | $                           | 168,366    |      |      | $      | 220     |         |          |         | 0.52 | % |  | $ | 184,023   |         |   | $      | 358    |  |  |      | 0.78 | %
|                                       
|                                       
|                                       
|                                       
|                                        | Money market                       |         |                             | 342,004    |      |      |        | 3,282   |         |          |         | 3.85 |   |  |   | 282,095   |         |   |        | 3,060  |  |  |      | 4.36 |  
|                                       
|                                       
|                                       
|                                       
|                                        | Savings                            |         |                             | 54,876 217 |      |      |        |         |         |          |         | 1.58 |   |  |   | 62,501    |         |   |        | 255    |  |  |      | 1.64 |  
|                                       
|                                       
|                                       
|                                       
|                                        | Passbook Gold                      |         |                             | 125,029    |      |      |        | 1,265   |         |          |         | 4.06 |   |  |   | 183,790   |         |   |        | 1,865  |  |  |      | 4.08 |  
|                                       
|                                       
|                                       
|                                       
|                                        | Time deposits                      |         |                             | 1,272,025  |      |      |        | 19,239  |         |          |         | 6.07 |   |  |   | 1,450,836 |         |   |        | 20,187 |  |  |      | 5.60 |  
|                                       
|                                       
|                                       
|                                       
|                                        | FHLB advances                      |         |                             | 757        |      |      |        | 13      |         |          |         | 6.85 |   |  |   | 766       |         |   |        | 13     |  |  |      | 6.85 |  
|                                       
|                                       
|                                       
|                                       
|                                        | Other borrowings                   |         |                             | 70,453     |      |      |        | 974     |         |          |         | 5.53 |   |  |   | 68,161    |         |   |        | 1,098  |  |  |      | 6.46 |  
|                                        |                                    |         |                             |            |      |      |        |         |         |          |         |      |   |  |   |           |         |   |        |        |  |  |      |     
|                                        | Total interest bearing liabilities |         |                             | 2,033,510  |      |      |        | 25,210  |         |          |         | 4.97 |   |  |   | 2,232,172 |         |   |        | 26,836 |  |  |      | 4.84 |  
|                                        |                                    |         |                             |            |      |      |        |         |         |          |         |      |   |  |   |           |         |   |        |        |  |  |      |     
|                                        | Noninterest bearing liabilities    |         |                             | 155,815    |      |      |        |         |         |          |         |      |   |  |   | 179,382   |         |   |        |        |  |  |      |      |  
|                                       
|                                       
|                                       
|                                       
|                                        | Stockholders equity               |         |                             | 175,986    |      |      |        |         |         |          |         |      |   |  |   | 171,364   |         |   |        |        |  |  |      |      |  
|                                        |                                    |         |                             |            |      |      |        |         |         |          |         |      |   |  |   |           |         |   |        |        |  |  |      |     
|                                        | Total liabilities and equity       |         | $                           | 2,365,311  |      |      |        |         |         |          |         |      |   |  | $ | 2,582,918 |         |   |        |        |  |  |      |      |  
|                                        |                                    |         |                             |            |      |      |        |         |         |          |         |      |   |  |   |           |         |   |        |        |  |  |      |     
|Net interest income/net interest spread |                                    |         |                             |            |      | $    | 16,332 |         |         |          | 2.49    | %    |   |  |   |           |         | $ | 24,010 |        |  |  | 3.49 | %   
|                                        |                                    |         |                             |            |      |      |        |         |         |          |         |      |   |  |   |           |         |   |        |        |  |  |      |     
|Net interest margin                     |                                    |         |                             |            |      |      |        |         |         |          | 2.93    | %    |   |  |   |           |         |   |        |        |  |  | 3.89 | %   
|                                        |                                    |         |                             |            |      |      |        |         |         |          |         |      |   |  |   |           |         |   |        |        |  |  |      |     

|                                  |                                    |                                 |        |                            |        |       |        |        |        |   |        |         |        |  
|--------------------------------- | ---------------------------------- | ------------------------------- | ------ | -------------------------- | ------ | ----- | ------ | ------ | ------ | - | ------ | ------- | ------ | -
|                                  |                                    |                                 |        | Increase (Decrease) Due to
|                                  |                                    |                                 |        |                           
|Changes in Net Interest Income    |                                    | Volume                          |        | Rate                       |        | Total
|                                  |                                    |                                 |        |                            |        |      
|Interest earning assets:          |                                    |                                 |        |                            |        |       |        |        |        |   |        |        
|                                 
|                                 
|                                 
|                                 
|                                  | Loans, net                         |                                 | $      | (7,957                     | )      |       | $      | (2,182 | )      |   | $      | (10,139 | )     
|                                 
|                                 
|                                 
|                                 
|                                  | Investment securities              |                                 |        | (74                        | )      |       |        | (90    | )      |   |        | (164    | )     
|                                 
|                                 
|                                 
|                                 
|                                  | Mortgage-backed securities         |                                 |        | 1,042                      |        |       |        | (247   | )      |   |        | 795     |       
|                                 
|                                 
|                                 
|                                 
|                                  | Trading securities                 |                                 |        | (78                        | )      |       |        | 150    |        |   |        | 72      |       
|                                 
|                                 
|                                 
|                                 
|                                  | Interest bearing deposits in banks |                                 |        | 32                         |        |       |        | (36    | )      |   |        | (4      | )     
|                                 
|                                 
|                                 
|                                 
|                                  | FHLB stock                         |                                 |        | (11                        | )      |       |        | (49    | )      |   |        | (60     | )     
|                                 
|                                 
|                                 
|                                 
|                                  | Federal funds sold                 |                                 |        | 635                        |        |       |        | (438   | )      |   |        | 197     |       
|                                  |                                    |                                 |        |                            |        |       |        |        |        |   |        |        
|                                  |                                    | Total change in interest income |        |                            | (6,411 | )     |        |        | (2,892 | ) |        |         | (9,303 | )
|                                 
|                                 
|                                 
|                                 
|Interest bearing liabilities:     |                                    |                                 |        |                            |        |       |        |        |        |   |        |        
|                                 
|                                 
|                                 
|                                 
|                                  | Interest checking                  |                                 |        | (28                        | )      |       |        | (109   | )      |   |        | (137    | )     
|                                 
|                                 
|                                 
|                                 
|                                  | Money market                       |                                 |        | 606                        |        |       |        | (384   | )      |   |        | 222     |       
|                                 
|                                 
|                                 
|                                 
|                                  | Savings                            |                                 |        | (30                        | )      |       |        | (8     | )      |   |        | (38     | )     
|                                 
|                                 
|                                 
|                                 
|                                  | Passbook Gold                      |                                 |        | (589                       | )      |       |        | (11    | )      |   |        | (600    | )     
|                                 
|                                 
|                                 
|                                 
|                                  | Time deposits                      |                                 |        | (2,392                     | )      |       |        | 1,444  |        |   |        | (948    | )     
|                                 
|                                 
|                                 
|                                 
|                                  | FHLB advances                      |                                 |        |                           |        |       |        |       |        |   |        |        |       
|                                 
|                                 
|                                 
|                                 
|                                  | Other borrowings                   |                                 |        | (59                        | )      |       |        | (66    | )      |   |        | (125    | )     
|                                  |                                    |                                 |        |                            |        |       |        |        |        |   |        |        
|Total change in interest expense  |                                    |                                 | (2,492 | )                          |        |       | 866    |        |        |   | (1,626 | )      
|                                  |                                    |                                 |        |                            |        |       |        |        |        |   |        |        
|(Decrease) in net interest income |                                    | $                               | (3,919 | )                          |        | $     | (3,758 | )      |        | $ | (7,677 | )      
|                                  |                                    |                                 |        |                            |        |       |        |        |        |   |        |        

19



---



##### Table of Contents



Noninterest Expense

Operating expenses for the second quarter of 2001 were $19.1 million compared
with $18.6 million for the same period last year, an increase of $528,000 or
2.84%. This included a $703,000 increase in advertising and marketing for
the brand awareness campaign, a $251,000 increase in costs associated with
collecting and resolving nonperforming assets and a $300,000 legal
settlement. Savings from branch sales and closing of underperforming
branches reduced expenses by $508,000, partially offsetting the increases.
Total noninterest expenses, which includes operating expenses, were $20.2
million for the three months ended June 30, 2001 compared with $19.6 million
for the same period last year.

The following table reflects the components of noninterest expense for the
three months ended June 30, 2001 and 2000 ($ in thousands; unaudited):

|                                                 |  |                                     |        |      |  |            |        |  |  |          |      |  
|------------------------------------------------ |  | ----------------------------------- | ------ | ---- |  | ---------- | ------ |  |  | -------- | ---- | -
|                                                 |  | For the Three Months Ended June 30,
|                                                 |  |                                    
|                                                 |  |                                     |        |      |  |            |        |  |  | Increase
|                                                 |  | 2001                                |        | 2000 |  | (Decrease)
|                                                 |  |                                     |        |      |  |           
|Salaries and benefits                            |  | $                                   | 9,625  |      |  | $          | 9,161  |  |  | $        | 464  |  
|                                                
|                                                
|                                                
|                                                
|Net occupancy expense                            |  |                                     | 3,690  |      |  |            | 4,033  |  |  |          | (343 | )
|                                                
|                                                
|                                                
|                                                
|Advertising and marketing                        |  |                                     | 954    |      |  |            | 251    |  |  |          | 703  |  
|                                                
|                                                
|                                                
|                                                
|Data processing fees and services                |  |                                     | 1,069  |      |  |            | 1,169  |  |  |          | (100 | )
|                                                
|                                                
|                                                
|                                                
|Loan collection costs                            |  |                                     | 529    |      |  |            | 278    |  |  |          | 251  |  
|                                                
|                                                
|                                                
|                                                
|Other operating expense                          |  |                                     | 3,273  |      |  |            | 3,720  |  |  |          | (447 | )
|                                                 |  |                                     |        |      |  |            |        |  |  |          |      |  
|Total operating expenses                         |  |                                     | 19,140 |      |  |            | 18,612 |  |  |          | 528  |  
|                                                
|                                                
|                                                
|                                                
|ORE expense, net of ORE income                   |  |                                     | 212    |      |  |            | 30     |  |  |          | 182  |  
|                                                
|                                                
|                                                
|                                                
|Amortization of premium on deposits
and goodwill |  |                                     | 862    |      |  |            | 964    |  |  |          | (102 | )
|                                                 |  |                                     |        |      |  |            |        |  |  |          |      |  
|Total noninterest expense                        |  | $                                   | 20,214 |      |  | $          | 19,606 |  |  | $        | 608  |  
|                                                 |  |                                     |        |      |  |            |        |  |  |          |      |  

[Balance of page intentionally left blank]

20



---



##### Table of Contents



Comparison of Results of Operations for the Six Months Ended June 30, 2001 and 2000

Overview

Net income was essentially unchanged for the quarters ended June 30, 2001
and 2000 at $3.3 million, or $.29 per share (on a diluted basis).

Analysis of Net Interest Income (see table on page 22)

Net interest income for the six months ended June 30, 2001 was $34.5 million,
compared with $47.7 million for the same period last year, a $13.2 million or
a 27.7% decrease. Interest income was $86.9 million for the first six months
of 2001, a decrease of $13.5 million over the same period in 2000. Interest
expense decreased by $348,000. Average asset yield decreased by 59 basis
points from 8.24% for the same period in 2000 to 7.65% for 2001. The average
cost of interest-bearing liabilities increased by 34 basis points from 4.75%
to 5.09%. As a result, net interest margin, which includes the benefit of
noninterest bearing funds, decreased by 88 basis points from 3.88% for 2000 to
3.00% for 2001 and net interest spread decreased 93 basis points from 3.49% in
2000 to 2.56% for the first six months of 2001.

Noninterest Income

Noninterest income for the six months ended June 30, 2001, was $16.0 million
compared with $9.1 million for the same period of 2000, an increase of $6.9
million. In 2001, noninterest income included a $3.6 million increase in net
gains on loans and securities and a $4.5 million increase in gains on sale of
branches. A $1.2 million reduction in loan service fees partially offset
these increases. Early payoffs to the servicing portfolio increased
significantly which reduced service fee revenue and required an accelerated
amortization of capitalized loan servicing rights.

The following table reflects the components of noninterest income for the six
months ended June 30, 2001, and 2000 ($ in thousands; unaudited):

|                                                    |  |                                   |        |      |  |            |       |   |  |          |        |  
|--------------------------------------------------- |  | --------------------------------- | ------ | ---- |  | ---------- | ----- | - |  | -------- | ------ | -
|                                                    |  | For the Six Months Ended June 30,
|                                                    |  |                                  
|                                                    |  |                                   |        |      |  |            |       |   |  | Increase
|                                                    |  | 2001                              |        | 2000 |  | (Decrease)
|                                                    |  |                                   |        |      |  |           
|Service charges on deposit accounts                 |  | $                                 | 3,893  |      |  | $          | 3,890 |   |  | $        | 3      |  
|                                                   
|                                                   
|                                                   
|                                                   
|Loan service fees                                   |  |                                   | 1,983  |      |  |            | 3,212 |   |  |          | (1,229 | )
|                                                   
|                                                   
|                                                   
|                                                   
|Other loan fee income                               |  |                                   | 2,163  |      |  |            | 1,978 |   |  |          | 185    |  
|                                                   
|                                                   
|                                                   
|                                                   
|Gains (losses) on sale of loans
and securities, net |  |                                   | 2,680  |      |  |            | (916  | ) |  |          | 3,596  |  
|                                                   
|                                                   
|                                                   
|                                                   
|Gain on sale of branches                            |  |                                   | 4,483  |      |  |            |      |   |  |          | 4,483  |  
|                                                   
|                                                   
|                                                   
|                                                   
|Other income                                        |  |                                   | 784    |      |  |            | 945   |   |  |          | (161   | )
|                                                    |  |                                   |        |      |  |            |       |   |  |          |        |  
|Total noninterest income                            |  | $                                 | 15,986 |      |  | $          | 9,109 |   |  | $        | 6,877  |  
|                                                    |  |                                   |        |      |  |            |       |   |  |          |        |  

21



---



##### Table of Contents



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, 2001 and 2000 ($ in thousands; unaudited):

|                                        |                                    |         |   |                           |        |      |        |         |     |          |      |         |      |  |   |           |        |         |        |         |     |  |      |      |      | 
|--------------------------------------- | ---------------------------------- | ------- | - | ------------------------- | ------ | ---- | ------ | ------- | --- | -------- | ---- | ------- | ---- |  | - | --------- | ------ | ------- | ------ | ------- | --- |  | ---- | ---- | ---- | 
|                                        |                                    |         |   | Six Months Ended June 30,
|                                        |                                    |         |   |                          
|                                        |                                    |         |   | 2001                      |        | 2000
|                                        |                                    |         |   |                           |        |     
|                                        |                                    |         |   | Average                   |        |      |        |         |     | Average  |      | Average |      |  |   |           |        | Average
|Summary of Average Rates                |                                    | Balance |   | Interest                  |        | Rate |        | Balance |     | Interest |      | Rate   
|                                        |                                    |         |   |                           |        |      |        |         |     |          |      |        
|Interest earning assets:                |                                    |         |   |                           |        |      |        |         |     |          |      |         |      |  |   |           |        |         |        |         |     |  |      |     
|                                       
|                                       
|                                       
|                                       
|                                        | Loans, net                         |         | $ | 1,635,679                 |        |      | $      | 67,590  |     |          |      | 8.28    | %    |  | $ | 1,883,567 |        |         | $      | 83,484  |     |  |      | 8.83 | %   
|                                       
|                                       
|                                       
|                                       
|                                        | Investment securities              |         |   | 10,339                    |        |      |        | 334     |     |          |      | 6.46    |      |  |   | 22,610    |        |         |        | 654     |     |  |      | 5.80 |     
|                                       
|                                       
|                                       
|                                       
|                                        | Mortgage-backed securities         |         |   | 402,212                   |        |      |        | 13,102  |     |          |      | 6.51    |      |  |   | 380,220   |        |         |        | 12,457  |     |  |      | 6.55 |     
|                                       
|                                       
|                                       
|                                       
|                                        | Trading securities                 |         |   | 27,453                    |        |      |        | 672     |     |          |      | 4.89    |      |  |   | 38,725    |        |         |        | 585     |     |  |      | 3.02 |     
|                                       
|                                       
|                                       
|                                       
|                                        | Commercial paper                   |         |   |                          |        |      |        |        |     |          |      |        |      |  |   | 3,774     |        |         |        | 112     |     |  |      | 5.87 |     
|                                       
|                                       
|                                       
|                                       
|                                        | Interest bearing deposits in banks |         |   | 7,595                     |        |      |        | 193     |     |          |      | 5.14    |      |  |   | 5,530     |        |         |        | 183     |     |  |      | 6.65 |     
|                                       
|                                       
|                                       
|                                       
|                                        | FHLB stock                         |         |   | 13,508                    |        |      |        | 469     |     |          |      | 7.00    |      |  |   | 13,816    |        |         |        | 541     |     |  |      | 7.88 |     
|                                       
|                                       
|                                       
|                                       
|                                        | Federal funds sold                 |         |   | 178,009                   |        |      |        | 4,539   |     |          |      | 5.07    |      |  |   | 81,577    |        |         |        | 2,416   |     |  |      | 5.86 |     
|                                        |                                    |         |   |                           |        |      |        |         |     |          |      |         |      |  |   |           |        |         |        |         |     |  |      |     
|                                        | Total interest earning assets      |         |   | 2,274,795                 |        |      |        | 86,899  |     |          |      | 7.65    |      |  |   | 2,429,819 |        |         |        | 100,432 |     |  |      | 8.24 |     
|                                       
|                                       
|                                       
|                                       
|                                        | Noninterest earning assets         |         |   | 138,176                   |        |      |        |         |     |          |      |         |      |  |   | 149,612   |        |         |        |         |     |  |      |      |     
|                                        |                                    |         |   |                           |        |      |        |         |     |          |      |         |      |  |   |           |        |         |        |         |     |  |      |     
|                                        | Total assets                       |         | $ | 2,412,971                 |        |      |        |         |     |          |      |         |      |  | $ | 2,579,431 |        |         |        |         |     |  |      |      |     
|                                        |                                    |         |   |                           |        |      |        |         |     |          |      |         |      |  |   |           |        |         |        |         |     |  |      |     
|Interest bearing liabilities:           |                                    |         |   |                           |        |      |        |         |     |          |      |         |      |  |   |           |        |         |        |         |     |  |      |     
|                                       
|                                       
|                                       
|                                       
|                                        | Interest checking                  |         | $ | 171,688                   |        |      | $      | 460     |     |          |      | 0.54    | %    |  | $ | 184,857   |        |         | $      | 708     |     |  |      | 0.77 | %   
|                                       
|                                       
|                                       
|                                       
|                                        | Money market                       |         |   | 325,380                   |        |      |        | 6,708   |     |          |      | 4.16    |      |  |   | 264,483   |        |         |        | 5,580   |     |  |      | 4.24 |     
|                                       
|                                       
|                                       
|                                       
|                                        |                                    | Savings |   |                           | 55,940 |      |        |         | 443 |          |      |         | 1.60 |  |   |           | 62,234 |         |        |         | 509 |  |      |      | 1.65 | 
|                                       
|                                       
|                                       
|                                       
|                                        | Passbook Gold                      |         |   | 129,209                   |        |      |        | 2,597   |     |          |      | 4.05    |      |  |   | 202,313   |        |         |        | 4,117   |     |  |      | 4.09 |     
|                                       
|                                       
|                                       
|                                       
|                                        | Time deposits                      |         |   | 1,322,970                 |        |      |        | 40,199  |     |          |      | 6.13    |      |  |   | 1,452,965 |        |         |        | 39,678  |     |  |      | 5.49 |     
|                                       
|                                       
|                                       
|                                       
|                                        | FHLB advances                      |         |   | 758                       |        |      |        | 26      |     |          |      | 6.85    |      |  |   | 767       |        |         |        | 26      |     |  |      | 6.85 |     
|                                       
|                                       
|                                       
|                                       
|                                        | Other borrowings                   |         |   | 68,925                    |        |      |        | 1,970   |     |          |      | 5.74    |      |  |   | 66,655    |        |         |        | 2,133   |     |  |      | 6.43 |     
|                                        |                                    |         |   |                           |        |      |        |         |     |          |      |         |      |  |   |           |        |         |        |         |     |  |      |     
|                                        | Total interest bearing liabilities |         |   | 2,074,870                 |        |      |        | 52,403  |     |          |      | 5.09    |      |  |   | 2,234,274 |        |         |        | 52,751  |     |  |      | 4.75 |     
|                                        |                                    |         |   |                           |        |      |        |         |     |          |      |         |      |  |   |           |        |         |        |         |     |  |      |     
|                                        | Noninterest bearing liabilities    |         |   | 163,238                   |        |      |        |         |     |          |      |         |      |  |   | 175,351   |        |         |        |         |     |  |      |      |     
|                                       
|                                       
|                                       
|                                       
|                                        | Stockholders equity               |         |   | 174,863                   |        |      |        |         |     |          |      |         |      |  |   | 169,806   |        |         |        |         |     |  |      |      |     
|                                        |                                    |         |   |                           |        |      |        |         |     |          |      |         |      |  |   |           |        |         |        |         |     |  |      |     
|                                        | Total liabilities and equity       |         | $ | 2,412,971                 |        |      |        |         |     |          |      |         |      |  | $ | 2,579,431 |        |         |        |         |     |  |      |      |     
|                                        |                                    |         |   |                           |        |      |        |         |     |          |      |         |      |  |   |           |        |         |        |         |     |  |      |     
|Net interest income/net interest spread |                                    |         |   |                           |        | $    | 34,496 |         |     |          | 2.56 | %       |      |  |   |           |        | $       | 47,681 |         |     |  | 3.49 | %   
|                                        |                                    |         |   |                           |        |      |        |         |     |          |      |         |      |  |   |           |        |         |        |         |     |  |      |     
|Net interest margin                     |                                    |         |   |                           |        |      |        |         |     |          | 3.00 | %       |      |  |   |           |        |         |        |         |     |  | 3.88 | %   
|                                        |                                    |         |   |                           |        |      |        |         |     |          |      |         |      |  |   |           |        |         |        |         |     |  |      |     

|                                  |                                    |                                 |        |                            |         |       |        |        |        |   |         |         |         |  
|--------------------------------- | ---------------------------------- | ------------------------------- | ------ | -------------------------- | ------- | ----- | ------ | ------ | ------ | - | ------- | ------- | ------- | -
|                                  |                                    |                                 |        | Increase (Decrease) Due to
|                                  |                                    |                                 |        |                           
|Changes in Net Interest Income    |                                    | Volume                          |        | Rate                       |         | Total
|                                  |                                    |                                 |        |                            |         |      
|Interest earning assets:          |                                    |                                 |        |                            |         |       |        |        |        |   |         |        
|                                 
|                                 
|                                 
|                                 
|                                  | Loans, net                         |                                 | $      | (13,553                    | )       |       | $      | (2,342 | )      |   | $       | (15,895 | )      
|                                 
|                                 
|                                 
|                                 
|                                  | Investment securities              |                                 |        | (316                       | )       |       |        | (4     | )      |   |         | (320    | )      
|                                 
|                                 
|                                 
|                                 
|                                  | Mortgage-backed securities         |                                 |        | 752                        |         |       |        | (108   | )      |   |         | 644     |        
|                                 
|                                 
|                                 
|                                 
|                                  | Trading securities                 |                                 |        | (204                       | )       |       |        | 291    |        |   |         | 87      |        
|                                 
|                                 
|                                 
|                                 
|                                  | Commercial paper                   |                                 |        | (57                        | )       |       |        | (56    | )      |   |         | (113    | )      
|                                 
|                                 
|                                 
|                                 
|                                  | Interest bearing deposits in banks |                                 |        | 58                         |         |       |        | (47    | )      |   |         | 11      |        
|                                 
|                                 
|                                 
|                                 
|                                  | FHLB stock                         |                                 |        | (15                        | )       |       |        | (58    | )      |   |         | (73     | )      
|                                 
|                                 
|                                 
|                                 
|                                  | Federal funds sold                 |                                 |        | 2,489                      |         |       |        | (365   | )      |   |         | 2,124   |        
|                                  |                                    |                                 |        |                            |         |       |        |        |        |   |         |        
|                                  |                                    | Total change in interest income |        |                            | (10,846 | )     |        |        | (2,689 | ) |         |         | (13,535 | )
|                                 
|                                 
|                                 
|                                 
|Interest bearing liabilities:     |                                    |                                 |        |                            |         |       |        |        |        |   |         |        
|                                 
|                                 
|                                 
|                                 
|                                  | Interest checking                  |                                 |        | (51                        | )       |       |        | (197   | )      |   |         | (248    | )      
|                                 
|                                 
|                                 
|                                 
|                                  | Money market                       |                                 |        | 1,241                      |         |       |        | (113   | )      |   |         | 1,128   |        
|                                 
|                                 
|                                 
|                                 
|                                  | Savings                            |                                 |        | (52                        | )       |       |        | (15    | )      |   |         | (67     | )      
|                                 
|                                 
|                                 
|                                 
|                                  | Passbook Gold                      |                                 |        | (1,482                     | )       |       |        | (37    | )      |   |         | (1,519  | )      
|                                 
|                                 
|                                 
|                                 
|                                  | Time deposits                      |                                 |        | (3,533                     | )       |       |        | 4,053  |        |   |         | 520     |        
|                                 
|                                 
|                                 
|                                 
|                                  | FHLB advances                      |                                 |        |                           |         |       |        |       |        |   |         |        |        
|                                 
|                                 
|                                 
|                                 
|                                  | Other borrowings                   |                                 |        | (30                        | )       |       |        | (133   | )      |   |         | (163    | )      
|                                  |                                    |                                 |        |                            |         |       |        |        |        |   |         |        
|Total change in interest expense  |                                    |                                 | (3,907 | )                          |         |       | 3,558  |        |        |   | (349    | )      
|                                  |                                    |                                 |        |                            |         |       |        |        |        |   |         |        
|(Decrease) in net interest income |                                    | $                               | (6,939 | )                          |         | $     | (6,247 | )      |        | $ | (13,186 | )      
|                                  |                                    |                                 |        |                            |         |       |        |        |        |   |         |        

22



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##### Table of Contents



Noninterest Expense

Operating expenses for the first six months of 2001 were $37.3 million
compared with $38.0 million for the same period last year, a decrease of
$703,000 or 1.85%. This improvement includes a $1.6 million decrease in
other operating expenses, and a $505,000 decrease in net occupancy expense.
These improvements were partially offset by a $931,000 or 5.02% increase in
salaries and benefits, largely from adding new loan production staff and
periodic employee salary increases. Total noninterest expenses, which
includes operating expenses, were $39.5 million for the six months ended June
30, 2001, compared with $40.2 million for the same period last year.

The following table reflects the components of noninterest expense for the
six months ended June 30, 2001 and 2000 ($ in thousands; unaudited):

|                                                 |  |                                   |        |      |  |            |        |  |  |          |        |  
|------------------------------------------------ |  | --------------------------------- | ------ | ---- |  | ---------- | ------ |  |  | -------- | ------ | -
|                                                 |  | For the Six Months Ended June 30,
|                                                 |  |                                  
|                                                 |  |                                   |        |      |  |            |        |  |  | Increase
|                                                 |  | 2001                              |        | 2000 |  | (Decrease)
|                                                 |  |                                   |        |      |  |           
|Salaries and benefits                            |  | $                                 | 19,446 |      |  | $          | 18,515 |  |  | $        | 931    |  
|                                                
|                                                
|                                                
|                                                
|Net occupancy expense                            |  |                                   | 7,539  |      |  |            | 8,044  |  |  |          | (505   | )
|                                                
|                                                
|                                                
|                                                
|Advertising and marketing                        |  |                                   | 1,179  |      |  |            | 789    |  |  |          | 390    |  
|                                                
|                                                
|                                                
|                                                
|Data processing fees and services                |  |                                   | 2,034  |      |  |            | 2,359  |  |  |          | (325   | )
|                                                
|                                                
|                                                
|                                                
|Loan collection costs                            |  |                                   | 1,010  |      |  |            | 629    |  |  |          | 381    |  
|                                                
|                                                
|                                                
|                                                
|Other operating expense                          |  |                                   | 6,045  |      |  |            | 7,620  |  |  |          | (1,575 | )
|                                                 |  |                                   |        |      |  |            |        |  |  |          |        |  
|Total operating expenses                         |  |                                   | 37,253 |      |  |            | 37,956 |  |  |          | (703   | )
|                                                
|                                                
|                                                
|                                                
|ORE expense, net                                 |  |                                   | 380    |      |  |            | 346    |  |  |          | 34     |  
|                                                
|                                                
|                                                
|                                                
|Amortization of premium on deposits
and goodwill |  |                                   | 1,827  |      |  |            | 1,929  |  |  |          | (102   | )
|                                                 |  |                                   |        |      |  |            |        |  |  |          |        |  
|Total noninterest expense                        |  | $                                 | 39,460 |      |  | $          | 40,231 |  |  | $        | (771   | )
|                                                 |  |                                   |        |      |  |            |        |  |  |          |        |  

23



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##### Table of Contents






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 5. Other Information

(See Note 2  Recent Developments).

24



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##### Table of Contents






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.

|      |  |  |                 |                           |                     |                                                                    
|----- |  |  | --------------- | ------------------------- | ------------------- | -------------------------------------------------------------------
|      |  |  |                 | REPUBLIC BANCSHARES, INC. |                     |                                                                    
|     
|Date: |  |  | August 14, 2001 | By:                       | /s/William R. Klich
|      |  |  |                 |                           |                    
|      |  |  |                 |                           |                     | William R. Klich                                                   
|     
|     
|     
|     
|      |  |  |                 |                           |                     | President and Chief Executive Officer
(principal executive officer)
|     
|Date: |  |  | August 14, 2001 | By:                       |                     | /s/William R. Falzone                                              
|      |  |  |                 |                           |                    
|      |  |  |                 |                           |                     | William R. Falzone                                                 
|     
|     
|     
|     
|      |  |  |                 |                           |                     | Treasurer (principal financial and
accounting officer)             

25