SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D. C. 20549

                               -------------------

                                   FORM 10-QSB
                                   (Mark One)

[X]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
         EXCHANGE ACT OF 1934
         For the quarterly period ended September 30, 2000
or

[ ]      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 0-24891

                             ADMIRALTY BANCORP, INC.

             (Exact Name of Registrant as Specified in its Charter)

            Delaware                                     65-0405207
--------------------------------------------------------------------------------
(State of Other Jurisdiction of             (I.R.S. Employer Identification No.)
Incorporation or Organization)


4400 PGA Boulevard, Palm Beach Gardens, Florida              33410
--------------------------------------------------------------------------------
   (Address of Principal Executive Offices)                (Zip Code)

                                 (561) 624-4701
                                 --------------
                (Issuer's Telephone Number, Including Area Code)

              (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 and 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 [ ]

As of October 31, 2000 there were 2,811,863 shares of common stock, including
both Class A and Class B shares of Common Stock, outstanding.

<PAGE>

                     ADMIRALTY BANCORP, INC. AND SUBSIDIARY

                                TABLE OF CONTENTS

Part I.  Financial Information

Item 1. Financial Statements

                                                                           Page
                                                                           ----
         Condensed Consolidated Balance Sheets (unaudited) -
           At September 30, 2000 and at December 31, 1999..................  3

         Condensed Consolidated Statements of Operations (unaudited) -
           Three months ended September 30, 2000 and 1999..................  4

         Condensed Consolidated Statements of Operations (unaudited) -
           Nine months ended September 30, 2000 and 1999...................  5

         Condensed Consolidated Statements of Cash Flows (unaudited) -
           Nine months ended September 30, 2000 and 1999...................  6

         Notes to Condensed Consolidated Financial Statements (unaudited)..  7

Item 2.  Management's Discussion and Analysis of Financial Condition
           And Results of Operations....................................... 12

Part II.  Other Information

         Item 1.  Legal Proceedings........................................ 27

         Item 2.  Changes in Securities and Use of Proceeds................ 27

         Item 3.  Defaults Upon Senior Securities.......................... 27

         Item 4. Submission of Matters to a Vote of Security Holders....... 27

         Item 5.  Other Information........................................ 27

         Item 6.  Exhibits and Reports on Form 8-K......................... 27

                    Signature Page

                                       2

<PAGE>
                     Admiralty Bancorp, Inc. and subsidiary

                      CONDENSED CONSOLIDATED BALANCE SHEETS
                             (dollars in thousands)
                                   (unaudited)

                                                  September 30,     December 31,
                                                      2000              1999
                                                  -------------     ------------
ASSETS
Cash and cash equivalents
  Cash and due from banks......................     $  6,553             5,115
  Interest bearing due from banks..............          331                21
  Federal funds sold...........................        6,268                --
                                                    --------          --------
    Total cash and cash equivalents............       13,152             5,136
Investment securities available for sale,
  at fair market value.........................       12,674             8,885
Investment securities held to maturity, at cost
  (fair market value of $21,886 and $17,721 at
  September 30, 2000 and December 31, 1999
  respectively)................................       21,863            18,025
Loans, net.....................................      161,529            99,840
Accrued interest receivable....................        1,141               642
Federal Reserve Bank and FHLB stock............        1,321               772
Premises and equipment, net....................        2,634             1,841
Deferred tax asset, net........................          536               464
Goodwill, net..................................        3,425             3,540
Other assets...................................        1,752               817
                                                    --------          --------
    Total Assets...............................     $220,027          $139,962
                                                    ========          ========
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Deposits.......................................     $185,083          $110,273
Federal funds purchased........................           --               571
Securities sold under agreement to repurchase..        9,000             9,000
Advances from FHLB.............................        4,600                --
Accrued interest payable.......................          394               214
Other liabilities..............................          737               330
                                                    --------          --------
    Total liabilities..........................      199,814           120,388
                                                    --------          --------
SHAREHOLDERS' EQUITY
Preferred stock, no par value, 2,000,000 shares
  authorized, no shares issued or outstanding..           --                --
Common stock, Class A, no par value, 1,000,000
  shares authorized, 320,500 and 844,254 shares
  issued and outstanding at September 30, 2000
  and December 31, 1999, respectively..........        2,701             7,114
Common stock, Class B, no par value, 4,000,000
  shares authorized, 2,480,582 and 1,889,205
  shares issued and outstanding at
  September 30, 2000 and December 31, 1999,
  respectively.................................       20,486            16,073
Accumulated deficit............................       (2,881)           (3,437)
Accumulated other comprehensive loss, net......          (93)             (176)
                                                    --------          --------
    Total shareholders' equity.................       20,213            19,574
                                                    --------          --------
    Total liabilities and
      shareholders' equity.....................     $220,027          $139,962
                                                    ========          ========

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

                                       3

<PAGE>
                     Admiralty Bancorp, Inc. and subsidiary

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                  (dollars in thousands, except per-share data)
                                   (unaudited)

                                                  Three Months     Three Months
                                                     Ended            Ended
                                                  September 30,    September 30,
                                                      2000              1999
                                                  -------------    -------------
Interest and dividend income
  Loans........................................    $    3,632        $    1,788
  Mortgage-backed securities...................           506               129
  Other debt securities........................           107               112
  Federal funds sold...........................           190               106
  Dividends from FRB and FHLB stock............            23                13
  Other........................................             4                --
                                                   ----------        ----------
    Total interest and dividend income.........         4,462             2,148
                                                   ----------        ----------
Interest expense
  Deposits.....................................         1,977               657
  Federal funds purchased......................            --                 1
  Securities sold under repurchase agreement...           142                --
  Advances from FHLB...........................           123                --
                                                   ----------        ----------
    Total interest expense.....................         2,242               658
                                                   ----------        ----------
    Net interest and dividend income...........         2,220             1,490
Provision for loan losses......................           370               232
                                                   ----------        ----------
    Net interest and dividend income after
    provision for loan losses..................         1,850             1,258
                                                   ----------        ----------
Non-interest income
  Service charges and fees.....................           231               251
  Income from affiliate........................            12                --
  Gain on sale of securities...................             1                --
  Gain on sale of loans........................            28                23
  Other income.................................            --                 1
                                                   ----------        ----------
    Total non-interest income..................           272               275
                                                   ----------        ----------
Non-interest expense
  Salaries and employee benefits...............         1,000               575
  Occupancy....................................           278               201
  Furniture and equipment......................           123                88
  Amortization of goodwill.....................            38                40
  Other expense................................           525               477
                                                   ----------        ----------
    Total non-interest expense.................         1,964             1,381
                                                   ----------        ----------
    Income before income tax expense...........           158               152
Income tax expense.............................            40                89
                                                   ----------        ----------
  Net income...................................    $      118        $       63
                                                   ==========        ==========
Per share data
 Net income per share - basic and diluted......    $     0.04        $     0.03
                                                   ==========        ==========
 Weighted average shares outstanding basic.....     2,842,455         2,848,214
                                                   ==========        ==========
 Weighted average shares outstanding - diluted.     2,848,361         2,848,214
                                                   ==========        ==========

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

                                       4
<PAGE>
                     Admiralty Bancorp, Inc. and subsidiary

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                  (dollars in thousands, except per-share data)
                                   (unaudited)

                                                  Nine Months      Nine Months
                                                     Ended            Ended
                                                  September 30,    September 30,
                                                      2000              1999
                                                  -------------    -------------
Interest and dividend income
  Loans........................................    $    9,023        $    4,321
  Mortgage-backed securities...................         1,442               240
  Other debt securities........................           325               295
  Federal funds sold...........................           283               422
  Dividends from FRB and FHLB stock............            62                36
  Other........................................             6                --
                                                   ----------        ----------
    Total interest and dividend income.........        11,141             5,314
                                                   ----------        ----------
Interest expense
  Deposits.....................................         4,204             1,510
  Federal funds purchased......................            23                 1
  Securities sold under repurchase agreement...           424                --
  Advances from FHLB...........................           335                --
                                                   ----------        ----------
    Total interest expense.....................         4,986             1,511
                                                   ----------        ----------
    Net interest and dividend income...........         6,155             3,803
Provision for loan losses......................           813               304
                                                   ----------        ----------
    Net interest and dividend income after
    provision for loan losses..................         5,342             3,499
                                                   ----------        ----------
Non-interest income
  Service charges and fees.....................           686               667
  Income from affiliate........................            12                --
  Gain on sale of securities...................            17                --
  Gain on sale of loans........................            37                82
  Gain on sale of other real estate............            17                 4
  Other income.................................             4                36
                                                   ----------        ----------
    Total non-interest income..................           773               789
                                                   ----------        ----------
Non-interest expense
  Salaries and employee benefits...............         2,487             1,647
  Occupancy....................................           760               614
  Furniture and equipment......................           304               274
  Amortization of goodwill.....................           115               119
  Other expense................................         1,531             1,315
                                                   ----------        ----------
    Total non-interest expense.................         5,197             3,969
                                                   ----------        ----------
    Income before income tax expense...........           918               319
Income tax expense.............................           362               200
                                                   ----------        ----------
  Net income...................................    $      556        $      119
                                                   ==========        ==========
Per share data
 Net income per share - basic and diluted......    $     0.20        $     0.05
                                                   ==========        ==========
 Weighted average shares outstanding
  basic and diluted............................     2,842,452         2,420,747
                                                   ==========        ==========

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

                                       5

<PAGE>
                     Admiralty Bancorp, Inc. and subsidiary

                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (dollars in thousands)
                                  (unaudited)

                                                  Nine months      Nine months
                                                     ended            ended
                                                  September 30,    September 30,
                                                      2000              1999
                                                  -------------    -------------
Operating activities
  Net income...................................    $      556        $      119
  Adjustments to reconcile net income
    to net cash provided by (used in)
    operating activities
    Provision for loan losses..................           813               304
    Depreciation and amortization..............           170               410
    Gain on sale of securities.................           (17)               --
    Gain on sale of loans......................           (37)              (82)
    Gain on sale of premises and equipment.....            --               (22)
    Gain on sale of other real estate owned....           (17)               (4)
    Increase in accrued interest receivable....          (499)             (352)
    (Increase) decrease in other assets........          (545)              214
    Increase in accrued interest payable.......           180                20
    Increase (decrease) in other liabilities...           407              (107)
                                                   ----------        ----------
      Net cash provided by
        operating activities...................         1,011               500
                                                   ----------        ----------
Investing activities
  Proceeds from maturities of investment
    securities available for sale..............         1,339             2,399
  Proceeds from maturities of investment
    securities held to maturity................         1,152               114
  Proceeds from sale of investment securities
    available for sale.........................            17                --
  Purchase of investment securities available
    for sale...................................        (4,998)           (2,499)
  Purchase of investment securities
    held to maturity...........................        (4,998)           (8,223)
  Purchase of Federal Reserve Bank &
    FHLB stock.................................          (549)              (89)
  Net loan originations and principal
    collections on loans.......................       (64,027)          (43,478)
  Proceeds from loan sales.....................           944             1,299
  Proceeds from sale of premises
    and equipment..............................            --                24
  Proceeds from sale of other
    real estate owned..........................           123                12
  Purchase of premises and equipment, net......          (837)             (798)
                                                   ----------        ----------
    Net cash used in investing activities......       (71,834)          (51,239)
                                                   ----------        ----------
Financing activities
  Net increase in deposits.....................        74,810            45,713
  Net increase in federal funds purchased,
    securities sold under agreements to
    repurchase and advances from FHLB..........         4,029                --
                                                   ----------        ----------
    Net cash provided by financing activities..        78,839            45,713
                                                   ----------        ----------
Net increase (decrease) in cash and
  cash equivalents.............................         8,016            (5,026)
Cash and cash equivalents,
  beginning of period..........................         5,136            17,296
                                                   ----------        ----------
Cash and cash equivalents, end of period.......    $   13,152        $   12,270
                                                   ==========        ==========

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

                                        6

<PAGE>

                     Admiralty Bancorp, Inc. and subsidiary

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - BASIS OF PRESENTATION

The unaudited condensed consolidated interim financial statements of Admiralty
Bancorp, Inc. (the "Company") and its wholly-owned subsidiary, Admiralty Bank
(the "Bank") reflect all adjustments (including normal recurring accruals)
which, in the opinion of management, are necessary to present fairly the
Company's consolidated financial condition and the consolidated results of
operations and the consolidated cash flows for interim periods. Certain prior
year amounts have been reclassified to conform to the 2000 presentation. The
results for interim periods are not necessarily indicative of trends or results
to be expected for the full year. These condensed consolidated interim financial
statements and notes should be read in conjunction with the Company's Annual
Report on Form 10-KSB for the year ended December 31, 1999.

The Company is incorporated in the state of Delaware and is registered with the
Board of Governors of the Federal Reserve Bank as a financial holding company.
The Bank is a Florida state chartered commercial bank, with its main office in
Palm Beach Gardens, Florida, and branches in Boca Raton, Juno Beach, Jupiter,
and Melbourne, Florida. On March 11, 2000, the Company converted from a one bank
holding company to a financial holding company under the Gramm-Leach-Bliley
Financial Modernization Act of 1999 (the "Modernization Act"). This status
permits the Company to undertake financial activities which need not be closely
related to banking, such as insurance brokerage activities. Under the
Modernization Act, the Company's bank subsidiary must remain "well capitalized"
(i.e., have a leveraged capital ratio of 5% or greater and a risk based capital
ratio of 10% or greater) and well managed, or the Company could be required to
divest itself of its non-banking activities. In addition, the Company must
maintain a rating of "satisfactory" or better under the Community Reinvestment
Act. At September 30, 2000, the Bank did not meet the "well capitalized"
requirement with a risk based capital to risk weighted assets ratio of 9.89%.
Under Federal Reserve regulations the Company is required to notify the Federal
Reserve and adopt a plan of remediation. The Company is currently undertaking a
capital offering which is expected to cause the Bank to regain its "well
capitalized" status. The Company has entered into a joint venture to sell
insurance, and may seek alliances with other financial service providers, as a
way to enhance non-interest income.

The Company has formed Admiralty Insurance Services, LLC ("AIS") as a joint
venture with USI Florida ("USI") to offer a wide range of insurance products,
primarily to customers of the Bank. USI and the Company are each 50 percent
owners of AIS. USI and AIS will share equally in commissions on policies sold,
and the Company is entitled to 50 percent of the net income of AIS. Under the
agreement, USI Florida will absorb all costs incurred by AIS for operating
expenses. AIS did minimal business during the nine months ended September 30,
2000 and $12 thousand in income was recognized during the period.

NOTE 2 - RECENT ACCOUNTING PRONOUNCEMENTS

In September 2000, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 140, "Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities," which
replaces SFAS No. 125. This statement provides consistent standards for
distinguishing transfers of financial assets that are sales from transfers that
are secured borrowings. Because SFAS No. 140 focuses on control, after a
transfer of financial assets, an entity is required to recognize the financial
and servicing assets it controls and the liabilities it has incurred,

                                       7
<PAGE>

derecognize financial assets when control has been surrendered, and derecognize
liabilities when extinguished. All measurements and allocations should be based
on fair value. SFAS No. 140 is effective for transfers and servicing of
financial assets and extinguishments of liabilities occurring after March 31,
2001. This statement is effective for recognition and reclassification of
collateral and for disclosures relating to securitization transactions and
collateral for the fiscal years ending after December 15, 2000. The Company is
currently assessing the impact of SFAS No. 140.

In June 1998, the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standards (SFAS) No. 133, "Accounting for Derivative
Instruments and Hedging Activities" ("Statement 133"). The effective date of
Statement 133 was delayed by Statement 137, "Accounting for Derivative
Instruments and Hedging Activities - Deferral of the Effective Date of FASB No.
133." In June 2000, FASB issued SFAS No. 138, "Accounting for Certain Derivative
Instruments and Certain Hedging Activities, an Amendment of FASB Statement No.
133" (Statement 138). Statement 138 addresses a limited number of issues causing
implementation difficulties for numerous entities that apply Statement 133.
Statement 133 is now effective for all quarters of all fiscal years beginning
after June 15, 2000, with an early adoption permitted. Statement 133 establishes
accounting and reporting standards for derivative instruments, including certain
derivative instruments embedded in other contracts, and for hedging activities.
It requires that an entity recognize all derivatives as either assets or
liabilities in the statement of financial position and measure those instruments
at fair value. It is currently anticipated that the Company will adopt Statement
133 on January 1, 2001, and that Statement 133 will not have a significant
financial statement impact upon adoption.

NOTE 3 - COMPREHENSIVE INCOME


The following table sets forth the components of the Company's comprehensive
income:

                                                   Nine months ended
                 (Unaudited)             ---------------------------------------
                (in thousands)           September 30, 2000   September 30, 1999
                                         ------------------   ------------------
Net income                                     $556                  $ 119
Other comprehensive income (loss),
  net of tax-
  Change in net unrealized gain on
  securities held available for sale,
  net of taxes of $(48) and $71
  in 2000 and 1999, respectively                 83                    (118)
                                               ----                   -----
Comprehensive income                           $639                   $   1
                                               ====                   =====

NOTE 4 - NET INCOME PER SHARE

The Company calculates net income per share in accordance with SFAS No. 128,
"Earnings Per Share." Net income per share is computed by dividing net income by
the weighted average number of shares of common stock outstanding during the
periods presented. Using this method, adjustments are to be made, where
material, to give effect to the shares that would be outstanding, assuming the
exercise of dilutive stock options and warrants, all of which are considered
common stock equivalents.

                                       8
<PAGE>

The following table illustrates the reconciliation of the numerator and
denominator of the basic and diluted earnings per share computations for the
nine months ended September 30, 2000, and 1999:
<TABLE>
<CAPTION>
                                             Three months ended                Nine months ended
                                      -------------------------------   ------------------------------
                                      Sept. 30, 2000   Sept. 30, 1999   Sept. 30, 2000   Sept. 30, 1999
                                      --------------   --------------   --------------   --------------
<S>                                     <C>              <C>              <C>             <C>
Net income............................  $  118,000       $   63,000       $  556,000      $  119,000
                                        ==========       ==========       ==========      ==========
Weighted average shares - basic.......   2,842,455        2,848,214        2,842,452       2,848,214
                                        ==========       ==========       ==========      ==========
Weighted average shares - diluted.....   2,848,361        2,848,214        2,842,452       2,848,214
                                        ==========       ==========       ==========      ==========
Basic and diluted earnings per share..       $0.04            $0.03            $0.20           $0.05
                                        ==========       ==========       ==========      ==========
</TABLE>

On January 22, 1999 the Board of Directors declared a 4.4% dividend paid to
Class A shareholders in shares of the Company's Class B common stock. Due the
different dividend rights of the two classes of stock and the preferential
nature of this dividend, the issuance of the Class B share dividend has been
reflected in earnings per share from the date of issuance.

On December 17, 1999 the Board of Directors declared a dividend of $1.00 per
Class A share, payable in Class B common stock to all shareholders of record of
Class A common stock as of December 31, 1999. In order to treat the holders of
Class B common stock similarly to the holders of the Class A common stock, the
Board of Directors declared a 12.91% stock dividend on the Company's Class B
common stock to be paid to the holders of the Class B common stock as of
December 31, 1999. For purposes of the earnings per share, the issuance of this
Class B stock dividend has been effected as of January 1, 1999. The basic and
diluted weighted average number of shares outstanding and net earnings per share
information for 1999 has been restated to reflect the effects of this stock
dividend.

The basic and diluted weighted average number of shares outstanding and net
earnings per share information for 1999 and 2000 have been restated to reflect a
1:1.1291 conversion ratio for discretionary conversions of Class A shares to
Class B shares, reflecting the change in the Class A conversion ratio caused by
the 1999 stock dividend on the Class B shares. During the three and nine month
periods ended September 30, 2000, 133,750 and 523,754 Class A shares were
converted to 151,021 and 591,378 shares of Class B common stock, respectively.
As of September 30, 2000, 320,500 shares of Class A Common stock remain
outstanding.

                                       9
<PAGE>

NOTE 5 - INVESTMENT AND MORTGAGE BACKED SECURITIES

The amortized cost and fair value of investment securities and mortgage-backed
securities are as follows:

                                              Gross        Gross
                               Amortized   Unrealized    Unrealized      Fair
                                 Cost         Gains        Losses        Value
                                -------      -------      -------       -------

September 30, 2000                              (In thousands)
------------------

AVAILABLE FOR SALE:

U.S. Government and Agency
securities ...............      $ 6,500      $     0         (139)        6,361
Mortgage-backed securities        6,310           37          (48)        6,299
Other  securities ........           14            0            0            14
                                -------      -------      -------       -------
Sub-total ................      $12,824      $    37      $  (187)      $12,674
                                -------      -------      -------       -------

HELD TO MATURITY:

U.S. Government and Agency
securities ...............      $ 1,000      $     0      $   (19)      $   981
Mortgage-backed securities       20,863          132          (90)       20,905
                                -------      -------      -------       -------
Sub-total ................      $21,863      $   132      $  (109)      $21,886
                                -------      -------      -------       -------
TOTAL ....................      $34,687      $   169      $  (296)      $34,560
                                =======      =======      =======       =======

The amortized cost and fair value of investment and mortgage-backed securities
are as follows:

                                              Gross        Gross
                               Amortized   Unrealized    Unrealized      Fair
                                 Cost         Gains        Losses        Value
                                -------      -------      -------       -------

December 31, 1999                               (In thousands)
-----------------

AVAILABLE FOR SALE:

U.S. Government and Agency
securities ...............      $ 6,997      $     0      $  (218)      $ 6,779
Mortgage-backed securities        2,155            0          (63)        2,092
Other securities .........           14            0            0            14
                                -------      -------      -------       -------
Sub-total ................      $ 9,166      $     0      $  (281)      $ 8,885
                                -------      -------      -------       -------

HELD TO MATURITY:

U.S. Government and Agency
securities ...............      $ 1,000      $     0      $   (28)      $   972
Mortgage-backed securities       17,025            0         (276)       16,749
                                -------      -------      -------       -------
Sub-total ................      $18,025      $     0      $  (304)      $17,721
                                -------      -------      -------       -------
TOTAL ....................      $27,191      $     0      $  (585)      $26,606
                                =======      =======      =======       =======


                                       10
<PAGE>

The carrying value of securities pledged to secure deposits and for other
purposes required or permitted by law amounted to approximately $20.8 million
and $10.6 million at September 30, 2000 and December 31, 1999, respectively.

NOTE 6 - LOANS

The following schedule presents the components of loans, net of unearned income,
by type, as of September 30, 2000 and December 31, 1999:
<TABLE>
<CAPTION>
                                           September 30, 2000    December 31, 1999
                                           -------------------   ------------------
                                                    (Dollars in thousands)
                                            Amount     Percent    Amount    Percent
                                           --------    -------   --------   -------
<S>                                        <C>          <C>      <C>          <C>
Commercial and Industrial................  $ 30,724      19%       20,380      20%

Real Estate Non-Residential Properties...   107,107      65%       61,416      60%

Residential Properties...................    17,521      11%       10,824      11%

Construction.............................     6,500       4%        7,148       7%

Consumer.................................     1,864       1%        1,534       2%
                                           --------     ---      --------     ---

Gross Loans..............................   163,716     100%      101,302     100%

Less: net deferred fees..................       441                   445
                                           --------              --------
Total loans..............................   163,275               100,857

Loss: allowance for loan losses..........     1,746                 1,017
                                           --------              --------
Net loans................................  $161,529              $ 99,840
                                           ========              ========
</TABLE>


Changes in the allowance for loan losses are as follows:

                                                   Nine months ended
                                       -----------------------------------------
                                       September 30, 2000     September 30, 1999
                                       ------------------     ------------------
                                                (Dollars in thousands)
Balance at beginning of year                 $1,017                $  602
Provision for loan losses                       813                   304
Charge-offs                                     (87)                  (52)
Recoveries                                        3                    68
                                             ------                ------
Ending Balance                               $1,746                $  922
                                             ======                ======
Ratio of net charge-offs to
average loans outstanding                      0.05%                -0.02%
Balance of allowance as a
% of total loans at period end                 1.07%                 1.03%

Loans with unpaid principal balances of $175 and $195 thousand were 90 days or
more contractually delinquent or on nonaccrual status at September 30, 2000 and
December 31, 1999.

                                       11
<PAGE>

Item 2.

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

                                    OVERVIEW

                Special Note Regarding Forward-Looking Statements

This report contains certain "forward-looking statements" as defined under
Section 21E of the Securities Exchange Act of 1934. The Company desires to take
advantage of the "safe harbor" provisions of Section 21E and is including this
statement for the express purpose of availing itself of the protection of the
safe harbor with respect to all such forward-looking statements. These
forward-looking statements, which are included in Management's Discussion and
Analysis, describe future plans or strategies and may include the Company's
expectations of future financial results. The words "believe", "expect",
"anticipate", "estimate", "project", and similar expressions identify
forward-looking statements. The Company's ability to predict results or the
effect of future plans or strategies or qualitative or quantitative changes
based on market risk exposure is inherently uncertain. Factors which could
effect actual results include but are not limited to i) change in general market
interest rates, ii) general economic conditions, both in the United States
generally and in the Company's market area, iii) legislative/regulatory changes,
iv) monetary and fiscal policies of the U.S. Treasury and the Federal Reserve,
v) changes in the quality or composition of the Company's loan and investment
portfolios, vi) demand for loan products, vii) deposit flows, viii) competition,
and ix) demand for financial services in the Company's markets. These factors
should be considered in evaluating the forward-looking statements, and undue
reliance should not be placed on such statements.


                                       12
<PAGE>

                   Expansion into the Orlando, Florida Market

On August 1, 2000 the Company's Board of Directors approved expanding the
Company's market area to include the Orlando, Florida market. The Board viewed
this market as one of the most desirable Florida markets not currently served by
the Company. As a part of this planned expansion, the Board of Directors
approved a sale of $7 million to $11 million of Class B common stock, at a price
of $10 per share, and the addition of three Orlando based members to the Board.
The three Board members were appointed to the Boards of the Bank and the Company
in October 2000.

To undertake our capital offering we have filed a registration statement on Form
SB-2 with the Securities and Exchange Commission that became effective on
November 7, 2000.

The Company opened a full service branch in downtown Orlando on September 7,
2000. The Company has also applied to the regulatory authorities to open two
additional branches in the Orlando area in the first quarter of 2001. The
overhead expenses associated with this expansion will significantly impact net
income in 2001 through increased salary and benefit expenses, increased
occupancy expenses and increased furniture and equipment expenses. We expect
this expansion to become accretive in the third quarter of 2001.

                                       13
<PAGE>

                              RESULTS OF OPERATIONS

          Three Months Ended September 30, 2000 and September 30 1999.

For the quarter ended September 30, 2000, the Company generated net income of
$118 thousand, an increase from net income of $63 thousand for the third quarter
of 1999.

At September 30, 2000, the Company's total assets reached $220.0 million, an
increase of 57.2% over total assets at December 31, 1999. The Company's net
loans totaled $161.5 million, an increase of 61.8% over net loans at December
31, 1999, and the Company's deposits totaled $185.1 million, an increase of
67.8% over total deposits at December 31, 1999. During the nine months ended
September 30, 2000, the Company also instituted a leveraged growth strategy
designed to provide a measure of protection against falling interest rates and
to enhance income. The strategy involved the purchase of a $10 million GNMA II
mortgage-backed security with an 8% coupon funded initially by $9 million in 90
day FHLB advances at an initial rate of 6.10%.

Interest and Dividend Income. Total interest and dividend income increased $2.3
million, or 107.7%, to $4.5 million for the quarter ended September 30, 2000
from $2.2 million for the same period of 1999. This increase in interest income
primarily relates to an increase in the Company's average balance of earning
assets and to a lesser extent to higher yield on the portfolio of interest
earning assets. Average balances increased by $71.7 million for loans, $19.6
million for investment securities and $3.2 million for federal funds sold. The
average yield on the loan portfolio increased to 9.6% in the third quarter of
2000, compared to 9.0% in the third quarter of 1999. The average yield on
federal funds sold increased to 6.5% in 2000 from 5.0% in 1999 reflecting higher
current market rates of interest. The average yield on investment securities,
including Federal Reserve Bank and FHLB stocks increased to 7.0% in 2000 from
6.1% in 1999, primarily as a result of the purchase of longer term,
mortgage-backed securities. During the three months ended September 30, 2000 the
yield on the Company's interest earning assets increased to 8.9% from the 8.2%
earned during the three months ended September 30, 1999. This increase is due
primarily to increased volume in higher yielding loans and investment securities
and to a lesser extent to higher market interest rates.

Interest Expense. The Company's interest expense for the third quarter of 2000
increased $1.6 million, or 240.7%, to $2.2 million from $658 thousand for the
same period last year. The increase in interest expense reflects a 127.2%
increase in average interest bearing liabilities at September 30, 2000, as
compared to the same period in 1999. The average balance of time deposits and
money market deposits increased by $47.3 million, and $25.9 million,
respectively, in the third quarter of 2000 as compared to the same period in
1999. The increase in money market deposit accounts reflects the success of our
tiered-rate money market account which offers competitive rates based upon the
size of the customer's account balance. In addition, the average balance of the
Company's non-interest bearing demand deposits increased by $7.4 million, to
$32.7 million for the three months ended September 30, 2000 from $25.3 million
for the three months ended September 30, 1999. The Company's average cost of
deposits for the three months ended September 30, 2000 increased to 4.5% from
2.8% for the comparable period of 1999. Additionally, the Company borrowed funds
during the third quarter of 2000 while in the same period of 1999 it had no
borrowed funds. The average balance of securities sold under agreement to
repurchase was $9.0 million, and the average balance of advances from the FHLB

                                       14
<PAGE>

was $7.1 million, at average rates of 6.3% and 6.9%, respectively, during the
three months ended September 30, 2000. The funds obtained through the repurchase
agreement and FHLB advances were used to purchase securities under a leveraged
growth and interest rate risk reduction strategy. The Company's average cost of
funds for the three months ended September 30, 2000, increased to 4.7% from 2.8%
in the comparable period of 1999.

Net-Interest and Dividend Income. Net interest and dividend income for the three
months ended September 30, 2000, increased by $730 thousand, or 49.0%, over the
same period last year. The Company's net interest spread decreased 115 basis
points to 3.31% for the three months ended September 30, 2000, from 4.46% for
the comparable period of 1999, reflecting the Company's higher cost of funds for
the current period.

Provision for Loan Losses. The increase to $370 thousand from $232 thousand in
the provision for loan losses for the three months ended September 30, 2000,
compared to the comparable period of 1999, reflects the growth in the loan
portfolio in the third quarter of 2000 compared to the same period the prior
year. The Company's expense for provision for loan losses maintained the reserve
at a level management believes appropriate in light of the Company's lending
activities, the quality of the loan portfolio, historical experience, volume and
type of lending conducted by the Company, the status of past due and
non-performing loans, the general economic conditions of the Company's lending
area and other factors affecting collectibility of the Company's loan portfolio.
The provision for the three months ended September 30, 2000 was due to growth
primarily in the commercial and industrial, and non-residential real estate loan
portfolios. The Company had recoveries of $3 thousand and charged $87 thousand
against the reserve to write down the balance of a loan to the value of a
commercial real estate property it took in a foreclosure. The property is now
carried in Other Real Estate at $67 thousand, the value management believes is
realizable upon sale of the property. The Company did not experience any
material change in its level of classified loans during the three month period.
While the Company's management uses available information to recognize losses on
loans, future additions to the allowance may be necessary based on changes in
economic conditions, the financial status of borrowers and regulatory
requirements.

Non-Interest Income. For the third quarter of 2000, total non-interest income
decreased $3 thousand, or 1.1%, from the same period of last year. The decrease
includes $20 thousand less in charges and fees and an increase of $5 thousand on
gain on sale of loans. Also included in non-interest income is $12 thousand in
commissions earned by Admiralty Insurance Services, LLC as the Company's
insurance affiliate began to originate policies.

Non-Interest Expense. For the three month period ended September 30, 2000, the
Company experienced increases in its non-interest expense over non-interest
expense for the comparable period of 1999. For the three month period ended
September 30, 2000, the Company's total non-interest expense was $2.0 million,
compared to total non-interest expense of $1.4 million for the 1999 period. The
increase in non-interest expense in the three month period of 2000 reflects
increased compensation and employee benefit expense as the Company hired
additional staff to administer growth in its loan and deposit portfolios, to
staff its new in-house data processing and items processing departments and to
staff its new full service Melbourne, Florida facility, which opened in March
2000 and to staff its new full-service Orlando, Florida facility which opened in
September, 2000. The increase in salary and benefit expenses also reflects
salary adjustments for the Company's employees. Full time equivalent employees
increased from 51 at September 30 1999, to 85 at September 30, 2000. Occupancy
expense increased $77 thousand, or 38.3%, in

                                       15
<PAGE>

the three months ended September 30, 2000 as compared to the same period in
1999. Rents at the Melbourne office and new operations center were $27 thousand
and $20 thousand, respectively, in the third quarter of 2000 while the Company
did not have these locations in 1999. Increased amortization expense for the
leasehold improvements at the Boca Raton office, which was completed late in
1999, also accounted for $7 thousand of the increase in occupancy expense.
Goodwill amortization totaled $38 thousand and $40 thousand for the three month
periods ended September 30, 2000, and 1999, respectively. The Company also
experienced the following increases in other non-interest expenses related
primarily to its growth: telephone expense increased $25 thousand, or 121.1%,
stationery and supplies expense increased $11 thousand, or 34.1%, business
development expense increased $14 thousand, or 88.6%. Legal expenses decreased
$40 thousand or 80.9% and audit expenses decreased $14.2 thousand or 32.1%.

Income Taxes. Income tax expense decreased to $40 thousand for the quarter ended
September 30, 2000, compared to $89 thousand for the same period last year
despite higher net income in the current quarter. This reduction was primarily
due to a reversal of a portion of the valuation reserve on the deferred tax
asset in the amount of $50 thousand based upon the Company's projected future
profitability. The effective tax rate for the third quarter of 2000 was 25.3%.
The partial reversal of the valuation allowance on the deferred tax asset
contributes to the reduced effective tax rate.

                                       16
<PAGE>

           Nine months Ended September 30, 2000 and September 30 1999.

For the nine months ended September 30, 2000, the Company generated net income
of $556 thousand, an increase from net income $119 thousand for the same period
in 1999.

Interest and Dividend Income. Total interest and dividend income increased $5.8
million, or 109.7%, to $11.1 million for the nine months ended September 30,
2000 from $5.3 million for the same period of 1999. This increase in interest
income primarily relates to an increase in the Company's average balance of
earning assets and to a lesser extent to higher yield on the portfolio of
interest earning assets. Average balances increased by $64.3 million for loans
and $22.0 million for investment securities and the average balance of federal
funds sold decreased $5.9 million. The average yield on the loan portfolio
increased slightly to 9.4% in the first nine months of 2000, compared to 9.0% in
the same period in 1999. The average yield on federal funds sold increased to
6.5% in 2000 from 4.8% in 1999, reflecting higher current market rates of
interest. The average yield on investment securities, including Federal Reserve
Bank and FHLB stocks, increased to 7.0% in 2000 from 5.9% in 1999, primarily as
a result of the purchase of longer term, mortgage-backed securities. During the
nine months ended September 30, 2000 the yield on the Company's interest earning
assets increased to 8.8% from the 8.0% earned during the nine months ended
September 30, 1999. This increase is due to a shift in the mix of the average
earning assets out of federal funds sold and into higher yielding loans and
investment securities and to higher market interest rates.

Interest Expense. The Company's interest expense for the first nine months of
2000 increased $3.5 million, or 230.0%, to $5.0 million from $1.5 million for
the same period last year. The increase in interest expense reflects a 127.4%
increase in average interest bearing liabilities at September 30, 2000, as
compared to the same period in 1999. The average balance of time deposits, money
market deposits and NOW deposits increased by $29.0 million, $26.5 million and
$518 thousand, respectively, for the first nine months of 2000 as compared to
the same period in 1999. The increase in money market deposit accounts reflects
the success of our tiered-rate money market account which offers competitive
rates based upon the size of the customer's account balance. In addition, the
average balance of the Company's non-interest bearing demand deposits increased
by $9.1 million, to $31.6 million for the nine months ended September 30, 2000
from $22.5 million for the nine months ended September 30, 1999. The Company's
average cost of deposits for the nine months ended September 30, 2000, increased
to 5.7% from 3.4% for the comparable period of 1999. Additionally, the Company
borrowed from the Federal Home Loan Bank and sold securities under agreement to
repurchase during the first nine months of 2000 while in the same period of 1999
it did not. The average balance of federal funds purchased was $490 thousand,
the average balance of securities sold under agreement to repurchase was $9.0
million, and the average balance of advances from the FHLB was $6.8 million at
average rates of 6.3%, 6.2% and 6.6%, respectively, during the nine months ended
September 30, 2000. Federal funds purchased were used primarily to fund loan
growth in periods when loan growth out paced deposit growth. The funds obtained
through the repurchase agreement and FHLB advances were used to purchase
securities under a leveraged growth and interest rate risk reduction strategy.
The Company's average cost of funds for the nine months ended September 30,
2000, increased to 4.1% from 2.5% in the comparable period of 1999.

Net-Interest and Dividend Income. Net interest and dividend income for the nine
months ended September 30, 2000, increased by $2.4 million, or 61.8%, over the
same period last year. The

                                       17
<PAGE>

Company's net interest spread decreased 83 basis points to 3.6% for the nine
months ended September 30, 2000, from 4.5% for the comparable period of 1999,
reflecting our higher cost of funds.

Provision for Loan Losses. The increase to $813 thousand from $304 thousand in
the provision for loan losses for the nine months ended September 30, 2000,
compared to the comparable period of 1999 is reflective of the growth in the
loan portfolio in the first nine months of 2000 compared to the same period the
prior year. The Company's expense for provision for loan losses maintained the
reserve at a level management believes appropriate in light of the Company's
lending activities, the quality of the loan portfolio, historical experience,
volume and type of lending conducted by the Company, the status of past due and
non-performing loans, the general economic conditions of the Company's lending
area and other factors affecting collectibility of the Company's loan portfolio.
The provision for the nine months ended September 30, 2000 was due to growth
primarily in the non-residential real estate, residential real estate and
commercial and industrial loan portfolios. The Company had recoveries of $3
thousand and charged $87 thousand against the reserve to write down the balance
of a loan to the value of a commercial real estate property it took in a
foreclosure. The property is carried in Other Real Estate at $67 thousand, the
value management believes is realizable upon sale of the property. The Company
did not experience any material change in its level of classified loans during
the nine month period. While the Company's management uses available information
to recognize losses on loans, future additions to the allowance may be necessary
based on changes in economic conditions, the financial status of borrowers and
regulatory requirements.

Non-Interest Income. For the first nine months of 2000, total non-interest
income decreased by $16 thousand, or 2.0%, over the same period of last year.
The decrease includes a $19 thousand increase from additional service charges
and fees primarily resulting from growth in the deposit portfolio and a
reduction of $45 thousand on gain on sale of loans due to a lower volume of
loans sold in the nine months ended September 30, 2000 versus the same period in
1999. The Company also gained $17 thousand by selling stock it received in the
de-mutualization of two of its insurance vendors. Other factors affecting
non-interest income include $22 thousand less in gain on sale of assets in 2000
and $13 thousand more in gain on sale of other real estate during the first nine
months of 2000 as compared to the same period in 1999. Also included in
non-interest income is $12 thousand in commissions earned by Admiralty Insurance
Services, LLC as the Company's insurance affiliate began to originate policies.

Non-Interest Expense. For the nine month period ended September 30, 2000, the
Company experienced increases in its non-interest expense over non-interest
expense for the comparable period of 1999. For the nine month period ended
September 30, 2000, the Company's total non-interest expense was $5.2 million,
compared to total non-interest expense of $4.0 million for the same period in
1999. The increase in non-interest expense in the nine month period of 2000
reflects increased compensation and employee benefit expense as the Company
hired additional staff to administer growth in its loan and deposit portfolios,
and to staff its new full service Melbourne, Florida facility which opened in
March 2000 and to staff its new full service Orlando, Florida facility which
opened in September 2000. The increase in salary and benefit expenses also
reflects salary adjustments for the Company's employees. Full time equivalent
employees increased from 51 at September 30 1999, to 85 at September 30, 2000.
Occupancy expense increased $146 thousand, or 23.8%, in the nine months ended
September 30, 2000 as compared to the same period in 1999. Rents at the
Melbourne office and new operations center were $62 thousand and $39 thousand,
respectively, in the first nine months of 2000, while the

                                       18
<PAGE>

Company did not have these locations in 1999. Increased amortization expense for
the leasehold improvements at the Boca Raton office, which was completed late in
1999, also accounted for $23 thousand of the increase in occupancy expense.
Goodwill amortization totaled $115 thousand and $119 thousand for the nine month
periods ended September 30, 2000, and 1999, respectively. The Company
experienced a net increase of $216 thousand, or 16.4%, in other non-interest
expenses in the first nine months of 2000 compared to the same period in 1999.
This increase is related primarily to the Company's growth. The net change in
other non-interest expense includes the following: postage expense increased $18
thousand, or 42.2%, telephone expenses increased $30 thousand or 37.8%,
automobile expenses increased $16 thousand or 100.9%, director fees increased
$17 thousand or 36.6%, stationery and supplies expense increased $37 thousand,
or 43.5%, business development expense increased $45 thousand, or 111.4%, and
State and FDIC assessments increased $21 thousand, or 98.4%. The Company paid
$50 thousand to settle a lawsuit during 2000. Legal expenses decreased $81
thousand, or 70.0%, and insurance expense decreased $29 thousand, or 37.6%.

Income Taxes. Income tax expense increased to $362 thousand for the nine months
ended September 30, 2000, compared to $200 thousand for the same period last
year, primarily due to an increase in pretax income. The effective tax rate for
the nine months ended September 30, 2000 was 39.4%. Non-deductible goodwill
amortization expense contributed to increasing the effective tax rate, and a
partial reversal of the valuation allowance for the deferred tax asset
contributed to the reduced effective tax rate.

                                       19
<PAGE>

                               FINANCIAL CONDITION

                September 30, 2000 compared to December 31, 1999

Total assets increased to $220.0 million, an increase of $80.0 million, or
57.2%, from total assets of $140.0 million at December 31, 1999. Increases in
total assets included increases of $6.3 million in federal funds sold, $61.7
million in net loans, $3.8 million in investment securities held to maturity,
$3.8 million in investment securities available for sale, $549 thousand in
Federal Reserve Bank and Federal Home Loan Bank stock, $793 thousand in net
premises and equipment, $499 thousand in accrued interest receivable and $935
thousand in other assets.

The $61.7 million increase in net loans is comprised primarily of $10.3 million
in commercial loans, $45.7 million in non-residential real estate loans, $6.7
million in residential real estate loans, and a reduction of $648 thousand in
construction loans. The net increase is the result of the management team's
efforts to attract new business and expand relationships with existing
customers. Loans originated in the recently opened Orlando, Florida branch
contributed $8.6 million toward the overall increase in loans.

At September 30, 2000, cash and due from banks increased $1.4 million reflecting
the Company's growth. Federal funds sold increased by $6.3 million from December
31, 1999. The increase is attributable primarily to growth in deposits and
borrowings outpacing loan and investment portfolio growth during the period.
Accrued interest receivable increased $499 thousand as a result of growth in the
loan and investment portfolios. Federal Reserve Bank (FRB) stock and Federal
Home Loan Bank (FHLB) stock increased $549 thousand, primarily as the result of
purchases of additional FHLB stock in compliance with the FHLB's membership
requirements. The Company's net investment in premises and equipment increased
$793 thousand, including $394 thousand for its Melbourne office, $171 thousand
for its Orlando office, $137 thousand spent to build out to the new operations
center, and, $384 thousand spent for data processing equipment. Other assets
increased $935 thousand, including $593 thousand for software primarily for the
in-house operating system, $63 thousand for software maintenance contracts, $54
thousand in prepaid insurance, $35 thousand in security deposits, $48 thousand
in deferred expenses, $107 thousand in Federal income tax receivables and a
decrease of $41 thousand in other real estate owned.

Total deposits increased 67.8%, from $110.3 million at December 31, 1999, to
$185.1 million at September 30, 2000. The recently opened Orlando, Florida
branch contributed $8.3 million toward the total increase in deposits. Deposits
are summarized as follows:


                                     September 30, 2000     December 31, 1999
                                     ------------------     -----------------
                                                   (in thousands)

Non-interest bearing demand..........     $ 32,587                $ 29,235
Savings, NOW and money market........       74,622                  46,884
Time deposits, under $100,000........       44,994                  20,187
Time deposits, $100,000 and over.....       32,880                  13,967
                                          --------                --------
                                          $185,083                $110,273
                                          ========                ========

Money market accounts increased $29.0 million in the first nine months of 2000.
This increase reflects the market's acceptance of two, tiered rate money market
account products, which pay increased rates as the balance in the account
increases. These accounts contributed to an increase

                                       20
<PAGE>

in the average rate paid on money market accounts from 4.34% in December 1999 to
5.24% in September 2000. Of the total increase in money market accounts, $13.4
million was raised in the Company's Boca Raton office.

Time deposits increased $43.7 million in the first nine months of 2000. The
Company subscribes to a deposit listing service on the internet which allows it
to post time deposit rates on a web site which is available to other subscribers
who use the site as an information source for investing in time deposits. The
deposits raised through this program are primarily deposits of credit unions,
savings banks and commercial banks at terms from ninety days to three years. The
Company raised $18.6 million with this program in the first nine months of 2000.
At September 30, 2000 the Company had $28.6 million in deposits raised through
this program compared to $10.0 million at December 31, 1999. The weighted
average rate of the internet portfolio at September 30, 2000 was 7.26% and the
weighted average life was seven months.

The following table sets forth the average amounts of various types of deposits
for each of the periods indicated:

                                 September 30, 2000      December 31, 1999
                                --------------------    --------------------
                                             Average                 Average
                                 Amount       Yield      Amount       Yield
                                --------     -------    -------      -------
                                            (dollars in thousands)
Non-Interest Bearing Demand...  $ 31,595       0.0%     $23,823        0.0%
Interest-Bearing Demand.......    12,044       0.7%      11,535        0.8%
Money Market Deposits.........    48,380       4.9%      26,107        4.1%
Savings Deposits..............     2,303       2.1%       2,300        1.8%
Time Deposits.................    49,668       6.3%      22,308        5.0%
                                --------                -------
Total.........................  $143,990                $86,073
                                ========                =======

The increased average yield on money market accounts is attributable to
increased volume of higher yielding tiered money market accounts. The increased
average yield on time deposits is primarily attributable to the growth in the
internet deposit portfolio which tends to require higher interest rates than the
local time deposit portfolio. The Company offered these two higher yielding
products to attract deposits to fund the growth in the loan portfolio.

FHLB advances totaled $4.6 million at September 30, 2000. There were no FHLB
advances at December 31, 1999. The funds obtained in this borrowing were used
toward the purchase of a $10 million GNMA II mortgage-backed security, of which
one half is carried available for sale and one half is carried in the held to
maturity portfolio. The security is pledged to secure the borrowing line and the
Company is required to maintain a specified margin between the market value of
the security and the amount advanced under the line.

The following table sets forth information regarding the Company's short-term
borrowing at and for the periods indicated:

                                       21
<PAGE>
                                                      9/30/00     12/31/99
                                                      -------     --------
FHLB advances
  Balance outstanding.............................     $4,600       $  0
  Weighted average interest rate at period end....        6.9%       0.0%
  Maximum balance at any month-end................     $9,400       $  0
  Average amount outstanding during period........     $6,781       $  0
  Weighted average interest rate during period....        6.6%       0.0%

Accrued interest payable increased $180 thousand, or 84.1%, due to an increased
volume of interest paying liabilities, including other borrowings, and a higher
average cost of the interest bearing liabilities. Other liabilities increased
$407 thousand, or 123.3%, due primarily to an $382 thousand dollar increase in
accrued expenses payable related to the Company's growth.

ASSET QUALITY

The Company's principal earning assets are its loans. Inherent in the lending
function is the risk of the borrower's inability to repay their loan under its
existing terms. Risk elements include non-accrual loans, past due and
restructured loans, potential problem loans, loan concentrations and other real
estate.

Non-performing assets include loans that are not accruing interest (non-accrual
loans) as a result of principal or interest being in default for a period of 90
days or more. When a loan is classified as non-accrual, interest accruals
discontinue and all accumulated accrued interest receivable applicable to
periods prior to the current year is charged off to the allowance for loan
losses and all interest accrued applicable to the current year is backed out of
current period income. Until the loan becomes current, any payments received
from the borrower are applied to outstanding principle until such time as
management determines the financial condition of the borrower and other factors
merit recognition of such payments as interest.

The Company attempts to minimize overall credit risk through loan
diversification and its loan approval procedures. The Company's due diligence
begins at the time the borrower and the Company begin to discuss the origination
of the loan. Documentation, including the borrower's credit history, materials
establishing the value and liquidity of potential collateral, the purpose of the
loan, the source and timing of the repayment of the loan, and other factors are
analyzed before a loan is submitted for approval. Loans made are also subject to
periodic review.

Non-accrual loans increased to $175 thousand at September 30, 2000 from $154
thousand at December 31, 1999. The balance represents three loans, one with a
balance of $129 thousand which was placed on non-accrual status during September
2000. The balance of this loan represents the unguaranteed portion of a Small
Business Administration loan. The Bank has initiated foreclosure. Management
believes proper reserves have been established for this loan. The second loan,
with a balance of $41 thousand, was placed on non-accrual status during February
2000. The loan is secured by business equipment and a second mortgage on the
residence of the principal of the company. Management believes that this loan is
adequately reserved. The third loan, with a balance of $5 thousand, was placed
on non-accrual status during May 2000. The loan is secured by business assets of
the company. Management believes that this loan is adequately reserved.

The Company has $67 thousand in other real estate owned at September 30, 2000.
This balance represents one property the Company acquired through foreclosure in
July 2000. The property

                                       22
<PAGE>


was the collateral for a small business administration loan. Management believes
the carrying value represents the Company's proportionate share of the net fair
market value of the property. The one property the Company acquired through
foreclosure in December 1999 that was carried on the books at $108 thousand was
sold during June 2000 at a gain of $17 thousand.

The following table sets forth information concerning risk elements in the
Company's portfolio:

                                             (unaudited)
                                         September 30, 2000   December 31, 1999
                                         -------------------  -----------------
        (Dollars in thousands)            2000         1999          1999
                                         ------       ------        ------

Non-accrual loans                         $ 175        $ 195         $ 154

Other real estate owned                      67            0           108
                                           ----        -----         -----
Total non-performing assets (1)           $ 242        $ 195         $ 262
                                          =====        =====         =====

Non-accrual loans to total loans           0.11%        0.22%         0.15%

Non-performing assets to total assets      0.11%        0.15%         0.19%

Allowance for possible loan losses as
a percentage of non-performing assets    721.49%      472.82%       388.17%

------------
(1)  Excludes loans past due more than 90 days and still accruing interest of
     $41 thousand at December 31, 1999. No loans were past due more than 90 days
     and still accruing interest at the other periods presented.

ALLOWANCE FOR LOAN LOSSES

The Company attempts to maintain an allowance for loan losses at a sufficient
level to provide for potential losses in the loan portfolio. Loan losses are
charged directly to the allowance when they occur and any recovery is credited
to the allowance. Risks within the portfolio are analyzed on an ongoing basis by
our officers, by outside, independent loan review auditors and by our Directors'
Loan Committee. A risk system, consisting of multiple grading categories, is
utilized as an analytical tool to assess the risk and appropriate reserves.
Along with the risk system, management further evaluates risk characteristics of
the loan portfolio under current and anticipated economic conditions and
considers such factors as the financial condition of the borrower, past and
expected loss experience, and other factors management feels deserve recognition
in establishing an appropriate reserve. These estimates are reviewed at least
quarterly, and, as adjustments become necessary, they are realized in the
periods in which they become known. Additions to the allowance are made by
provisions charged to expense and the allowance is reduced by net charge-offs
(i.e., loans judged to be uncollectible and charged against the reserve, less
any recoveries on such loans). Although management attempts to maintain the
allowance at a level deemed adequate, future additions to the allowance may be
necessary based upon changes in market conditions. In addition, various
regulatory agencies periodically review the Company's allowance for loan losses.
These agencies may require the Company to take additional provisions based on
their judgments about information available to them at the time of their
examination.

At September 30, 2000, the allowance for loan losses was $1.7 million, an
increase of $729 thousand from year-end 1999. During the nine months ended
September 30, 2000 the Company had one charge-off of $87 thousand and recoveries
of $3 thousand and provided a loan loss provision of $813 thousand.

                                       23
<PAGE>

INVESTMENT SECURITIES

At September 30, 2000, the Company's investment securities portfolio, both held
to maturity and available for sale, totaled $34.5 million, an increase of $7.6
million, from total investment securities of $26.9 million at December 31, 1999.
This increase included the purchase of a $10 million GNMA II mortgage-backed
security in February 2000 as part of an interest rate risk reduction strategy.
At September 30, 2000, $12.6 million of the Company's investment securities were
classified as available for sale and $21.9 million were classified as held to
maturity. At December 31, 1999 $8.9 million and $18.0 million of securities were
classified as available for sale and held to maturity, respectively. As the
mortgage-backed securities have paid down, the funds have been reinvested
primarily in the loan portfolio.

LIQUIDITY

Net cash provided by the Company's operating activities was $1.0 million in the
first nine months of 2000 compared to $500 thousand for the nine months ended
September 30, 1999.

Net cash used in investing activities was $71.8 million in the period ended
September 30, 2000 compared to $51.2 million in the comparable period of 1999.
The Company used $7.5 million for net investment securities in 2000, while in
1999 it used $8.2 million for its securities portfolio. Additionally, the
Company used $63.1 million and $42.2 million for net loans and loan sales in the
first nine months of 2000 and 1999, respectively.

Net cash provided by the Company's financing activities was $78.8 million in the
first nine months of 2000, and $45.7 million in the comparable period of 1999.
The increase in 2000 was due to a $74.8 million increase in deposits and net
increase of $4.0 million in federal funds purchased and other borrowed money.
Deposits provided the increase of $45.7 million in the nine months ended
September 30, 1999.

As a state chartered commercial bank, the Bank is required to maintain a daily
liquidity position equal to at least 15 percent of its total transaction
accounts and 8 percent of its total nontransaction accounts, less those deposits
of public funds for which security has been pledged. As of September 30, 2000,
the Bank had a liquidity ratio of 18.5 percent which was adequate to meet the
statutory requirement. The primary source of the Bank's liquidity is federal
funds sold - overnight loans to major commercial banks. At September 30, 2000,
federal funds sold totaled $6.3 million. Funds not required to meet loan and
deposit demand were invested primarily in mortgage-backed, U.S. Government and
Agency securities. The Bank considers these investments to be secondary sources
of liquidity. The Bank's investment securities classified as available for sale
had a carrying value of $12.7 million at September 30, 2000.

An additional external source of liquidity is an unsecured $4 million federal
funds overnight borrowing line of credit and a secured line of credit with a
correspondent bank. The Company's unencumbered investment securities are the
collateral for the secured line of credit and serve to determine the total
amount available under the line. At September 30, 2000, no funds were drawn
under either the secured or unsecured line. During the nine months ended
September 30, 2000 the Company drew on the unsecured line to $4 million several
times and drew on the secured line up to $2.8 million when loan growth outpaced
deposit growth. The Company also maintains a line of credit at the Federal Home
Loan Bank of Atlanta secured by first lien

                                       24
<PAGE>

residential mortgages and mortgage-backed securities. The total credit available
under this line is based on the market value of the collateral; at September 30,
2000, $8.1 million was available.

CAPITAL RESOURCES

Total stockholders' equity increased to $20.2 million at September 30, 2000 from
$19.6 million at December 31, 1999. September 30, 2000 equity was affected by
net income of $556 thousand and a decrease of $83 thousand in net unrealized
losses on available for sale securities.

At September 30, 2000, the Company exceeded all regulatory capital requirements
as follows:

                                CAPITAL ADEQUACY
                             (dollars in thousands)
<TABLE>
<CAPTION>
                                                                           To be well
                                                                           capitalized
                                                                           under prompt
                                                       For capital          corrective
                                      Actual        adequacy purposes    action provisions
                                  --------------    -----------------    ----------------
                                  Amount   Ratio     Amount    Ratio     Amount     Ratio
                                  ------   -----     ------    -----     ------     -----
                                                  (Dollars in thousands)
<S>                               <C>      <C>      <C>        <C>       <C>        <C>
Total Capital
  (to risk weighted assets).....  18,129   10.13%   >14,324    >8.00%    >17,904    >10.00%
                                                    -          -         -          -
Tier I Capital
  (to risk weighted assets).....  16,383    9.15%   > 7,162    >4.00%    >10,743    > 6.00%
                                                    -          -         -          -
Tier I Capital
  (to average assets)...........  16,383    7.88%   > 8,319    >4.00%    >10,398    > 5.00%
                                                    -          -         -          -

</TABLE>

On March 11, 2000, the Company converted from a one bank holding company to a
financial holding company under the Gramm-Leach-Bliley Financial Modernization
Act of 1999 (the "Modernization Act"). This status permits the Company to
undertake financial activities which need not be closely related to banking,
such as insurance brokerage activities. Under the Modernization Act, the
Company's bank subsidiary must, among other requirements, remain "well
capitalized" or the Company could be required to divest itself of its
non-banking activities. During the third quarter of 2000, the Company made an
additional investment of $1.3 million in its bank subsidiary to maintain the
"well capialized" status. However, due to the continued growth of the Bank, at
September 30, 2000, the Bank did not meet the "well capitalized" requirement as
demonstrated in the following table. At September 30, 2000, the Bank did not
meet the "well capitalized" requirement as demonstrated in the following table.

                                       25
<PAGE>
                                CAPITAL ADEQUACY
                             (dollars in thousands)
<TABLE>
<CAPTION>
                                                                           To be well
                                                                           capitalized
                                                                           under prompt
                                                       For capital          corrective
                                      Actual        adequacy purposes    action provisions
                                  --------------    -----------------    ----------------
                                  Amount   Ratio     Amount    Ratio     Amount     Ratio
                                  ------   -----     ------    -----     ------     -----
                                                  (Dollars in thousands)
<S>                               <C>      <C>      <C>        <C>       <C>        <C>
Total Capital
  (to risk weighted assets).....  17,704    9.89%   >14,318    >8.00%    >17,898    >10.00%
                                                    -          -         -          -
Tier I Capital
  (to risk weighted assets).....  15,958    8.92%   > 7,159    >4.00%    >10,739    > 6.00%
                                                    -          -         -          -
Tier I Capital
  (to average assets)...........  15,958    7.67%   > 8,319    >4.00%    >10,398    > 5.00%
                                                    -          -         -          -

</TABLE>

Under Federal Reserve regulations the Company is required to notify the Federal
Reserve if it fails to meet the "well capitalized" standard and adopt a plan of
remediation. The Company is currently undertaking a capital offering which is
expected to cause the Bank to regain its "well capitalized" status.


                                       26
<PAGE>

                            Part II Other Information

Item 1    Legal Proceedings

The Company and the Bank are periodically involved in various legal proceedings
as a normal incident to their businesses. In the opinion of management, no
material loss is expected from any such pending lawsuit.

Item 2    Changes in Securities and Use of Proceeds

Not applicable

Item 3    Defaults Upon Senior Securities

Not applicable

Item 4    Submission of Matters to a Vote of Security Holders

No matters were submitted for a vote of shareholders during the period covered
by this report.

Item 5    Other Information

On November 7, 2000, a registration statement the Company filed with the
Securities and Exchange Commission was declared effective. In conjunction with
its planned expansion in the Orlando, Florida market, the Company plans to offer
between 700,000 and 1,100,00 shares of its Class B Common stock at $10 per
share, primarily in the Orlando area. The stock will be sold by directors of the
Company who have long standing business ties in the Orlando market and the
Company does not plan to use an underwriter or broker. The Company expects to
begin offering this stock in mid-November 2000.

Item 6    Exhibits and Report on Form 8-K

  (a)  Exhibits

          Number           Description
          ------           -----------

           27              Financial Data Schedule

  (b)   Reports on Form 8-K

On August 9, 2000 the Company filed a Form 8-K to report its planned expansion
into the Orlando, Florida market and an upcoming offering of its Class B common
stock.

On July 17, 2000 the Company filed a Form 8-K to report its second quarter 2000
earnings.

                                       27
<PAGE>
                                    SIGNATURE

         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 hereunto duly authorized.

                                  ADMIRALTY BANCORP, INC.


Date:   August 11, 2000           By:   /s/ Ward Kellogg
                                        ----------------------------------------
                                        WARD KELLOGG, President


Date:   August 11, 2000           By:   /s/ Kevin M. Sacket
                                        ----------------------------------------
                                        KEVIN M. SACKET, Treasurer
                                        (Principal Financial Officer)


                                       28
<PAGE>

                                 EXHIBIT INDEX

EXHIBIT NO.      EXHIBIT DESCRIPTION
-----------      -------------------

   27            Financial Data Schedule