================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D. C. 20549


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


                                    FORM 10-Q


(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, 2002

   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
 Incorporation or Organization)                              Identification No.)


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 November 12, 2002 there were 5,288,437 shares of Common Stock outstanding.
================================================================================
<PAGE>
                     ADMIRALTY BANCORP, INC. AND SUBSIDIARY

                                TABLE OF CONTENTS




PART I   FINANCIAL INFORMATION................................................ 3

         ITEM 1.  FINANCIAL STATEMENTS........................................ 3

                  CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
                  At September 30, 2002 and at December 31, 2001.............. 3

                  CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
                  Three months ended September 30, 2002 and 2001.............. 4

                  CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
                  Nine months ended September 30, 2002 and 2001............... 5

                  CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
                  Nine months ended September 30, 2002 and 2001............... 6

                  NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                  (unaudited)................................................. 7


         ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                  CONDITION AND RESULTS OF OPERATIONS.........................14


         ITEM 3.  QUANTATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK....30


         ITEM 4.  CONTROLS AND PROCEDURES.....................................31




PART II OTHER INFORMATION.....................................................32

         Item 1.  Legal Proceedings...........................................32

         Item 2.  Changes in Securities and Use of Proceeds...................32

         Item 3.  Defaults Upon Senior Securities.............................32

         Item 4.  Submission of Matters to a Vote of Security Holders.........32

         Item 5.  Other Information...........................................32

         Item 6.  Exhibits and Reports on Form 8-K............................32



                  SIGNATURE PAGE..............................................33






                                        2
<PAGE>
PART I   FINANCIAL INFORMATION

         ITEM 1.  FINANCIAL STATEMENTS

                     ADMIRALTY BANCORP, INC. AND SUBSIDIARY
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                             (dollars in thousands)
                                   (unaudited)
<TABLE><CAPTION>
                                                  SEPTEMBER 30,    DECEMBER 31,
                                                      2002             2001
                                                   ----------       ----------
<S>                                                <C>              <C>
ASSETS

Cash and cash equivalents
    Cash and due from banks.....................   $   20,503       $   15,930
    Interest bearing due from banks.............           60              345
    Federal funds sold..........................       60,767           21,217
                                                   ----------       ----------
          Total cash and cash equivalents.......       81,330           37,492
Investment securities available for sale,
    at fair value...............................       14,397           17,969
Investment securities held to maturity,
    at cost (fair value of $37.7
    million at September 30, 2002 and
    $36.1 million at December 31, 2001).........       36,574           35,589
Loans, net......................................      447,534          390,457
Accrued interest receivable.....................        1,862            1,928
Federal Reserve Bank and FHLB stock.............        2,099            2,007
Premises and equipment, net.....................        5,259            5,422
Deferred tax asset, net.........................        1,647            1,714
Goodwill, net...................................        3,234            3,234
Other assets....................................        1,606            1,770
                                                   ----------       ----------
          Total assets                             $  595,542       $  497,582
                                                   ==========       ==========

LIABILITIES AND SHAREHOLDERS' EQUITY

LIABILITIES
Deposits........................................   $  542,635       $  449,144
Securities sold under agreement to repurchase...        2,900            2,900
Other borrowings................................          750            1,000
Accrued interest payable........................          447              496
Other liabilities...............................          714              756
                                                   ----------       ----------
          Total liabilities.....................      547,446          454,296
                                                   ----------       ----------
SHAREHOLDERS' EQUITY
Preferred stock, no par value, 2,000,000
    shares authorized, no shares issued or
    outstanding.................................           --               --
Common stock, no par value, 8,500,000 shares
    authorized, 5,288,437 issued and
    outstanding.................................       44,661           44,596
Retained earnings (accumulated deficit).........        3,093           (1,407)
Accumulated other comprehensive income, net.....          342               97
                                                   ----------       ----------
          Total shareholders' equity............       48,096           43,286
                                                   ----------       ----------
          Total liabilities and shareholders'
          equity................................   $  595,542       $  497,582
                                                   ==========       ==========
</TABLE>

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

                                        3
<PAGE>
                     ADMIRALTY BANCORP, INC. AND SUBSIDIARY
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                  (dollars in thousands, except per-share data)
                                   (unaudited)
<TABLE><CAPTION>
                                                  THREE MONTHS     THREE MONTHS
                                                     ENDED            ENDED
                                                  SEPTEMBER 30,    SEPTEMBER 30,
                                                      2002             2001
                                                   ----------       ----------
<S>                                                <C>              <C>
Interest and dividend income
    Loans.......................................   $    7,760       $    6,976
    Mortgage-backed securities..................          548              812
    Other debt securities.......................          143              146
    Federal funds sold..........................          206              256
    Dividends from FRB and FHLB stock...........           30               30
    Other.......................................           --                3
                                                   ----------       ----------
          Total interest and dividend income....        8,687            8,123
                                                   ----------       ----------
Interest expense
    Deposits....................................        2,929            3,856
    Securities sold under repurchase agreement..           47               94
    Other borrowings............................            5               10
                                                   ----------       ----------
          Total interest expense................        2,981            3,960
                                                   ----------       ----------

          Net interest and dividend income .....        5,706            4,163
          Provision for loan losses.............          372              526
                                                   ----------       ----------
          Net interest and dividend income after
          provision for loan losses.............        5,334            3,637
                                                   ----------       ----------
Non-interest income
    Service charges and fees....................          293              274
    Insurance commissions.......................           15              (10)
    Other income................................           19                1
                                                   ----------       ----------
          Total non-interest income.............          327              265
                                                   ----------       ----------
Non-interest expense
    Salaries and employee benefits..............        1,576            1,654
    Occupancy...................................          477              461
    Furniture and equipment.....................          214              187
    Amortization of goodwill....................           --               38
    Other expense...............................          910              788
                                                   ----------       ----------
          Total non-interest expense............        3,177            3,128
                                                   ----------       ----------

          Income before income tax expense......        2,484              774
Income tax expense..............................          896              311
                                                   ----------       ----------
    Net income..................................   $    1,588       $      463
                                                   ==========       ==========
Per share data
    Net income per share - basic................   $     0.30       $     0.09
                                                   ==========       ==========
    Net income per share - diluted..............   $     0.28       $     0.08
                                                   ==========       ==========
    Weighted average shares outstanding - basic.    5,288,437        5,280,599
                                                   ==========       ==========
    Weighted average shares outstanding - diluted   5,641,030        5,523,040
                                                   ==========       ==========
</TABLE>
                 The accompanying notes are an integral part of
               these condensed consolidated financial statements.

                                        4
<PAGE>
                     ADMIRALTY BANCORP, INC. AND SUBSIDIARY
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                  (dollars in thousands, except per-share data)
                                   (unaudited)
<TABLE><CAPTION>
                                                   NINE MONTHS      NINE MONTHS
                                                      ENDED            ENDED
                                                  SEPTEMBER 30,    SEPTEMBER 30,
                                                      2002             2001
                                                   ----------       ----------
<S>                                                <C>              <C>
Interest and dividend income
    Loans.......................................   $   22,076       $   18,991
    Mortgage-backed securities..................        1,830            2,173
    Other debt securities.......................          354              207
    Federal funds sold..........................          601              788
    Dividends from FRB and FHLB stock...........           89               77
    Other.......................................           13               17
                                                   ----------       ----------
          Total interest and dividend income....       24,963           22,253
                                                   ----------       ----------
Interest expense
    Deposits....................................        8,958           10,935
    Securities sold under repurchase agreement..          140              280
    Other borrowings............................           12               95
                                                   ----------       ----------
          Total interest expense................        9,110           11,310
                                                   ----------       ----------

          Net interest and dividend income......       15,853           10,943
Provision for loan losses.......................          625            1,629
                                                   ----------       ----------
          Net interest and dividend income
          after provision for loan losses.......       15,228            9,314
                                                   ----------       ----------
Non-interest income
    Service charges and fees....................          867              846
    Insurance commissions.......................           31               31
    Gain on sale of loans.......................           19               10
    Other income................................           21                4
                                                   ----------       ----------
          Total non-interest income.............          938              891
                                                   ----------       ----------
Non-interest expense
    Salaries and employee benefits..............        4,631            4,576
    Occupancy...................................        1,473            1,231
    Furniture and equipment.....................          630              503
    Amortization of goodwill....................           --              116
    Other expense...............................        2,332            2,185
                                                   ----------       ----------
          Total non-interest expense............        9,066            8,611
                                                   ----------       ----------

          Income before income tax expense......        7,100            1,594
Income tax expense..............................        2,600              660
                                                   ----------       ----------
    Net income..................................   $    4,500       $      934
                                                   ==========       ==========
Per share data
    Net income per share - basic................   $     0.85       $     0.20
                                                   ==========       ==========
    Net income per share - diluted..............   $     0.80       $     0.19
                                                   ==========       ==========
    Weighted average shares outstanding - basic.    5,286,125        4,648,138
                                                   ==========       ==========
    Weighted average shares outstanding - diluted   5,616,409        4,808,555
                                                   ==========       ==========
</TABLE>
                 The accompanying notes are an integral part of
               these condensed consolidated financial statements.

                                        5
<PAGE>
                     ADMIRALTY BANCORP, INC. AND SUBSIDIARY
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (dollars in thousands)
                                   (unaudited)

<TABLE><CAPTION>
                                                                NINE MONTHS ENDED  NINE MONTHS ENDED
                                                                   SEPTEMBER 30,     SEPTEMBER 30,
                                                                       2002              2001
                                                                   ------------      ------------
<S>                                                                <C>               <C>
Operating activities
    Net income ...............................................     $      4,500      $        934
    Adjustments to reconcile net income to net cash provided
      by operating activities
      Provision for loan losses ..............................              625             1,629
      Depreciation and amortization ..........................              779               695
      Amortization, net of accretion, of investment securities              122                44
      Gain on sale of loans ..................................              (19)              (10)
      Change in accrued interest receivable ..................               66              (438)
      Change in other assets .................................              202              (436)
      Change in accrued interest payable .....................              (49)              142
      Change in other liabilities ............................              (42)              229
                                                                   ------------      ------------
          Net cash provided by operating activities ..........            6,184             2,789
                                                                   ------------      ------------

Investing activities
    Proceeds from maturities of investment securities
      available for sale .....................................            4,942             9,529
    Proceeds from maturities of investment securities
      held to maturity .......................................           10,523             7,673
    Purchases of investment securities available for sale ....           (1,000)          (16,486)
    Purchases of investment securities held to maturity ......          (11,606)          (18,576)
    Purchase of Federal Reserve Bank & FHLB stock ............              (92)             (655)
    Net loan originations and principal collections on loans .          (58,312)         (141,017)
    Proceeds from loan sales .................................              381               286
    Proceeds from sales of other real estate owned ...........              116                --
    Purchase of premises and equipment, net ..................             (604)           (3,370)
                                                                   ------------      ------------
          Net cash used in investing activities ..............          (55,652)         (162,616)
                                                                   ------------      ------------
Financing activities
    Net increase in deposits .................................           93,491           172,903
    Repayment of FHLB advances ...............................           (1,000)           (3,000)
    Proceeds from other borrowings ...........................              750                --
    Proceeds from issuance of common stock for stock
      options exercised ......................................               65                --
    Proceeds from issuance of common stock -
      net of costs of $21 ....................................               --            13,097
                                                                   ------------      ------------
          Net cash provided by financing activities ..........           93,306           183,000
                                                                   ------------      ------------

Net increase in cash and cash equivalents ....................           43,838            23,173

Cash and cash equivalents, beginning of period ...............           37,492            33,445
                                                                   ------------      ------------
Cash and cash equivalents, end of period .....................     $     81,330      $     56,618
                                                                   ============      ============
</TABLE>


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

                                        6
<PAGE>
                     ADMIRALTY BANCORP, INC. AND SUBSIDIARY
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)


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 (consisting solely of 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. 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, 2001.

On August 29, 2002, the boards of directors of the Company, RBC Centura Banks,
Inc. ("RBC Centura") and Royal Bank of Canada ("RBC") adopted an Agreement and
Plan of Merger (the "Merger Agreement") that will result in the Company becoming
a wholly owned subsidiary of RBC Centura. RBC Centura is the U.S. banking
subsidiary of Royal Bank of Canada, which is Canada's largest financial
institution as measured by market capitalization and assets, and is one of North
America's leading diversified financial services companies. The full text of the
Merger Agreement is attached to the Proxy Statement for the Special
Shareholders' Meeting to be held on December 13, 2002, which proxy statement was
filed with the Securities and Exchange Commission on November 4, 2002. The
Agreement and Plan of Merger was amended on October 25, 2002 to provide for an
early January 2003 closing date assuming all of the conditions of the merger are
satisfied.

The Company is incorporated in the state of Delaware and is registered with the
Board of Governors of the Federal Reserve System 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 Altamonte Springs, Boca Raton,
Cocoa Beach, Fort Lauderdale, Juno Beach, Jupiter, Orlando 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
leverage 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.

The Company 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 were each 50 percent owners of
AIS. USI and AIS shared equally in commissions on policies sold, and the Company
was entitled to 50 percent of the net income of AIS. Under the agreement, USI
absorbed all costs incurred by AIS for operating expenses. AIS did minimal
business during the nine months ended September 30, 2002 and 2001, and $31
thousand in income was recognized during each period by the Company. In
accordance with a condition of the Merger Agreement, the Company terminated the
AIS joint venture on September 2, 2002.

                                        7
<PAGE>
NOTE 2 - IMPACT OF NEW ACCOUNTING STANDARDS

In July 2001, the Financial Accounting Standards Board (" FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 141, "Business
Combinations", ("Statement 141") and SFAS No. 142, "Goodwill and Other
Intangible Assets," ("Statement 142"). Statement 141 requires that the purchase
method of accounting be used for all business combinations initiated after
September 30, 2001. Statement 142 requires that goodwill and intangible assets
with indefinite useful lives no longer be amortized, but instead tested for
impairment at least annually in accordance with the provisions of Statement 142.
Other intangible assets would continue to be amortized over their estimated
useful lives. In the transition, any impairment losses will be measured as of
the date of adoption and recognized as the cumulative effect of a change in
accounting principle in the first interim period.

The Company was required to adopt the provisions of Statement 141 immediately
and the Company adopted Statement 142 effective January 1, 2002. As of the date
of adoption, the Company had unamortized goodwill in the amount of approximately
$3.2 million that is subject to the transition provisions of Statements 141 and
142. Pursuant to Statement 142, the Company will no longer amortize goodwill.
Amortization expense related to goodwill was $38 thousand and $116 thousand
during the three and nine months ended September 30, 2001, respectively. The
adoption of Statement 142 did not result in a transitional impairment loss. Net
income, basic net income per share and diluted net income per share for the
three months ended September 30, 2001, adjusted to eliminate the amortization of
goodwill, amount to $501 thousand, $0.09 and $0.09 respectively. Net income,
basic net income per share and diluted net income per share for the nine months
ended September 30, 2001, adjusted to eliminate the amortization of goodwill,
amount to $1.1 million, $0.23 and $0.22 respectively.

In June 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement
Obligations" ("Statement 143"), which addresses financial accounting and
reporting for legal obligations associated with the retirement of tangible
long-lived assets and the associated asset retirement costs. Statement 143 is
effective for fiscal years beginning after June 15, 2002. This Statement is not
expected to have a material impact on the Company's financial statements.

In August 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment of
Long-Lived Assets" ("Statement 144") which supercedes SFAS No. 121, "Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed
Of" ("Statement 121") and the accounting and reporting provisions of APB No. 30,
"Reporting the Results of Operations - Reporting the Effects of Disposal of a
Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring
Events and Transactions," for the disposal of a segment of a business. While
Statement 144 retains many of the fundamental provisions of Statement 121, it
establishes a single accounting model for long-lived assets to be disposed of by
sale, and resolves certain implementation issues not previously addressed by
Statement 121. Statement 144 is effective for fiscal years beginning after
December 15, 2001. This Statement did not have a material impact on the
Company's financial statements.






                                        8
<PAGE>
NOTE 3 - COMPREHENSIVE INCOME

The following table sets forth the components of the Company's comprehensive
income:
<TABLE><CAPTION>
                                                       THREE MONTHS ENDED                          NINE MONTHS ENDED
                                            ---------------------------------------     ---------------------------------------
                  (in thousands)            SEPTEMBER 30, 2002   SEPTEMBER 30, 2001     SEPTEMBER 30, 2002   SEPTEMBER 30, 2001
                                            ------------------   ------------------     ------------------   ------------------
<S>                                         <C>                  <C>                    <C>                  <C>
Net Income ................................ $            1,588   $              463     $            4,500   $              934

Other comprehensive income, net of tax -
   Change in unrealized gain on securities
     held available for sale ..............                131                  268                    393                  388
   Tax effect of unrealized gains .........                (49)                (101)                  (148)                (145)
                                            ------------------   ------------------     ------------------   ------------------
Comprehensive income ...................... $            1,670   $              630     $            4,745   $            1,177
                                            ==================   ==================     ==================   ==================
</TABLE>

NOTE 4 - EARNINGS PER COMMON SHARE

The Company computes basic and diluted net income per share in accordance with
SFAS No. 128, "Earnings Per Share." Basic net income per share is computed by
dividing net income available to common stockholders by the weighted average
number of shares of common stock outstanding during the periods presented.
Diluted net income per share is computed by dividing the net income available to
common stockholders for the period by the weighted average number of common
stock and potential common stock outstanding during the period, to the extent
that such potential common stock is dilutive. Potential common stock consists of
the shares issuable pursuant to the exercise of stock options.

On October 25, 2001, the Board of Directors declared a 5% stock dividend payable
in common stock to all stockholders of record as of November 9, 2001. For the
purpose of net income per share, the issuance of this stock dividend has been
effected as of January 1, 2001. The basic and diluted weighted average number of
shares outstanding and net income per share information for 2001 has been
restated to reflect the effects of this stock dividend.

The following table illustrates the reconciliation of the numerator and
denominator of the basic and diluted net income per share computations for the
nine months ended September 30, 2002 and 2001:
<TABLE><CAPTION>
                                                       THREE MONTHS ENDED                            NINE MONTHS ENDED
                                             ---------------------------------------      ---------------------------------------
                                             SEPTEMBER 30, 2002   SEPTEMBER 30, 2001      SEPTEMBER 30, 2002   SEPTEMBER 30, 2001
                                             ------------------   ------------------      ------------------   ------------------
                                                                 (dollars in thousands, except per share data)
<S>                                          <C>                  <C>                     <C>                  <C>
Net income .............................     $            1,588   $              463      $            4,500   $              934
                                             ==================   ==================      ==================   ==================
Weighted average shares - basic ........              5,288,437            5,280,599               5,286,125            4,648,138
                                             ==================   ==================      ==================   ==================
Weighted average shares - diluted ......              5,641,030            5,523,040               5,616,409            4,808,555
                                             ==================   ==================      ==================   ==================
Basic net income per share .............     $             0.30   $             0.09      $             0.85   $             0.20
                                             ==================   ==================      ==================   ==================
Diluted net income per share ...........     $             0.28   $             0.08      $             0.80   $             0.19
                                             ==================   ==================      ==================   ==================
</TABLE>
There were no options to purchase common stock outstanding, for any period
presented, that were excluded from the computation of diluted earnings per
share, because all outstanding options would be dilutive.

                                        9
<PAGE>
NOTE 5 - INVESTMENT AND MORTGAGE BACKED SECURITIES

The amortized cost and fair value of investment securities and mortgage-backed
securities classified available for sale at September 30, 2002 and December 31,
2001 are as follows:


<TABLE><CAPTION>
                                                           GROSS          GROSS
                                          AMORTIZED      UNREALIZED     UNREALIZED
                                             COST          GAINS          LOSSES        FAIR VALUE
                                          ----------     ----------     ----------      ----------
                                                                (In thousands)
<S>                                       <C>            <C>            <C>             <C>
AVAILABLE FOR SALE:
-------------------
September 30, 2002
------------------

U.S. Government and Agency securities..   $    2,000     $       53     $        0      $    2,053

Mortgage-backed securities ............       11,835            495              0          12,330

Other securities ......................           14              0              0              14
                                          ----------     ----------     ----------      ----------
Total .................................   $   13,849     $      548     $        0      $   14,397
                                          ==========     ==========     ==========      ==========



December 31, 2001
-----------------

U.S. Government and Agency securities..   $    1,000     $       29     $        0      $    1,029

Mortgage-backed securities ............       16,800            144            (18)         16,926

Other securities ......................           14              0              0              14
                                          ----------     ----------     ----------      ----------
Total .................................   $   17,814     $      173     $      (18)     $   17,969
                                          ==========     ==========     ==========      ==========
</TABLE>






                                       10
<PAGE>
The amortized cost and fair value of investment securities and mortgage-backed
securities classified held to maturity at September 30, 2002 and December 31,
2001 are as follows:

<TABLE><CAPTION>
                                                           GROSS          GROSS
                                          AMORTIZED      UNREALIZED     UNREALIZED
                                             COST          GAINS          LOSSES        FAIR VALUE
                                          ----------     ----------     ----------      ----------
                                                               (In thousands)
<S>                                       <C>            <C>            <C>             <C>
HELD TO MATURITY
----------------
September 30, 2002
------------------

U.S. Treasury securities...............   $    5,048     $       34     $        0      $    5,082

U.S. Government and Agency securities..       11,038             79              0          11,117

Mortgage-backed securities.............       20,488            963              0          21,451
                                          ----------     ----------     ----------      ----------
Total .................................   $   36,574     $    1,076     $        0      $   37,650
                                          ==========     ==========     ==========      ==========


December 31, 2001
-----------------

U.S. Treasury securities ..............   $    2,037     $        0     $       (6)     $    2,031

U.S. Government and Agency securities..        4,002             45             (8)          4,039

Mortgage-backed securities ............       29,550            489            (26)         30,013
                                          ----------     ----------     ----------      ----------
Total .................................   $   35,589     $      534     $      (40)     $   36,083
                                          ==========     ==========     ==========      ==========
</TABLE>

The carrying value of securities pledged to secure deposits and for other
purposes required or permitted by law amounted to approximately $14.2 million
and $21.4 million at September 30, 2002 and December 31, 2001, respectively.

The Company classifies all of its investment securities as available for sale or
held to maturity; it has no securities held for trading.

                                       11
<PAGE>
NOTE 6 - LOANS

The following schedule presents the components of loans, net of unearned income,
by type, as of September 30, 2002 and December 31, 2001:
<TABLE><CAPTION>
                                           SEPTEMBER 30, 2002         DECEMBER 31, 2001
                                           ------------------        ------------------
                                                       (Dollars in thousands)
                                            AMOUNT    PERCENT         AMOUNT    PERCENT
                                           --------   -------        --------   -------
<S>                                        <C>        <C>            <C>        <C>
Commercial and Industrial ............     $ 44,540      10%         $ 49,846      13%

Real Estate Non-Residential Properties      347,830      77%          297,850      75%

Residential Properties ...............       34,431       8%           24,802       6%

Construction .........................       20,728       4%           17,771       4%

Consumer * ...........................        6,129       1%            6,380       2%
                                           --------   -------        --------   -------

Gross Loans ..........................      453,658     100%          396,649     100%

less:  net deferred fees .............        1,256                     1,348
                                           --------                  --------
Total loans ..........................      452,402                   395,301

less:  allowance for loan losses .....        4,868                     4,844
                                           --------                  --------
Net loans ............................     $447,534                  $390,457
                                           ========                  ========
</TABLE>

*  Includes $835 thousand and $819 thousand in overdrafts at September 30, 2002
   and December 31, 2001, respectively.


Changes in the allowance for loan losses are as follows:

<TABLE><CAPTION>
                                                THREE MONTHS ENDED                              NINE MONTHS ENDED
                                     ----------------------------------------       ----------------------------------------
                                     SEPTEMBER 30, 2002    SEPTEMBER 30, 2001       SEPTEMBER 30, 2002    SEPTEMBER 30, 2001
                                     ------------------    ------------------       ------------------    ------------------
                                                                      (Dollars in thousands)
<S>                                  <C>                   <C>                      <C>                   <C>
Balance at beginning of period ..... $            4,583    $            3,489       $            4,844    $            2,381
Provision for loan losses ..........                372                   526                      625                 1,629
Charge-offs ........................                (87)                  (61)                    (612)                  (61)
Recoveries .........................                 --                    --                       11                     5
                                     ------------------    ------------------       ------------------    ------------------
Ending Balance ..................... $            4,868    $            3,954       $            4,868    $            3,954
                                     ==================    ==================       ==================    ==================
Ratio of net charge-offs to
average loans outstanding ..........               0.02%                 0.02%                    0.14%                 0.02%

Balance of allowance as a % of
total loans at period end ..........               1.08%                 1.09%                    1.08%                 1.09%
</TABLE>

Loans with unpaid principal balances of $723 and $967 thousand were 90 days or
more contractually delinquent or on nonaccrual status at September 30, 2002 and
December 31, 2001.
                                       12
<PAGE>

NOTE 7 - CAPITAL STRUCTURE

The shareholders of the Company approved a resolution to amend the Company's
Certificate of Incorporation at the annual meeting held April 26, 2002. The
amendment eliminated the Company's Class A common stock (1,000,000 shares) and
re-designated the Class B common stock (7,500,000 shares) as Common Stock
(8,500,000 shares).


NOTE 8 - OTHER EXPENSE ITEMS

Other expense for the three month periods ended September 30, 2002 and 2001
includes $142 thousand and $125 thousand in data processing expenses,
respectively. Other expense in the third quarter of 2002 also includes $159
thousand in expenses related to the proposed acquisition of the Company.

Other expense for the nine month periods ended September 30, 2002 and 2001
includes $420 thousand and $336 thousand in data processing expenses,
respectively. Other expense in 2002 also includes $159 thousand in expenses
related to the proposed acquisition of the Company.











                                       13
<PAGE>
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

OVERVIEW

On August 29, 2002, the boards of directors of the Company, RBC Centura Banks,
Inc. ("RBC Centura") and Royal Bank of Canada ("RBC") adopted an Agreement and
Plan of Merger (the "Merger Agreement") that will result in the Company becoming
a wholly owned subsidiary of RBC Centura. RBC Centura is the U.S. banking
subsidiary of Royal Bank of Canada, which is Canada's largest financial
institution as measured by market capitalization and assets, and is one of North
America's leading diversified financial services companies. The full text of the
Merger Agreement is attached to the Proxy Statement for the Special
Shareholders' Meeting to be held on December 13, 2002, which proxy statement was
filed with the Securities and Exchange Commission on November 4, 2002. The
Agreement and Plan of Merger was amended on October 25, 2002 to provide for an
early January 2003 closing date assuming all of the conditions of the merger are
satisfied.


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
affect actual results include but are not limited to i) changes in general
market interest rates, ii) general economic conditions, both in the United
States generally and specifically 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.


                                       14
<PAGE>
                              RESULTS OF OPERATIONS


          Three Months Ended September 30, 2002 and September 30, 2001

The Company generated net income of $1.6 million, or $0.30 per share basic and
$0.28 per share diluted, in the third quarter of 2002 compared to net income of
$463 thousand, or $0.09 per share basic and $0.08 per share diluted, in the
third quarter of 2001.

At September 30, 2002, the Company's total assets reached $595.5 million, an
increase of 19.7% over total assets at December 31, 2001. The Company's net
loans totaled $447.5 million, an increase of 14.6% over net loans at December
31, 2001, and the Company's deposits totaled $542.6 million, an increase of
20.8% over total deposits at December 31, 2001.

INTEREST AND DIVIDEND INCOME. The Company's interest and dividend income
increased $564 thousand, or 6.9%, to $8.7 million for the quarter ended
September 30, 2002 from $8.1 million for the same period of 2001. This increase
in interest income primarily relates to an increase in the Company's average
balance of earning assets, partially offset by a lower yield on those interest
earning assets. Average balances increased by $92.5 million for loans and $18.5
million for federal funds sold and the average balance for investment securities
(including Federal Reserve Bank stock and FHLB stock) decreased $1.4 million as
compared to the same quarter in 2001. The average yield on the loan portfolio
decreased to 7.0% in the third quarter of 2002, compared to 8.0% in the third
quarter of 2001. The average yield on federal funds sold decreased to 1.7% in
the third quarter of 2002 from 3.4% for the same period in 2001. The average
yield on investment securities, including Federal Reserve Bank and FHLB stocks,
decreased to 5.4% in the third quarter of 2002 from 6.4% in the third quarter of
2001. During the three months ended September 30, 2002 the yield on the
Company's interest earning assets decreased to 6.4% from 7.5% for the three
months ended September 30, 2001. All decreases are due primarily to lower market
interest rates, as well management's decision to enhance the Company's liquidity
by increasing its investment in federal funds sold. Management believes the
liquidity will be needed both to fund future loan demand and to provide
liquidity as the Company's portfolio of certificates of deposit originated over
the internet continues to run off. The Company does not intend to emphasize this
method of origination of deposits in the future.

INTEREST EXPENSE. The Company's interest expense for the third quarter of 2002
decreased $979 thousand, or 24.7%, to $3.0 million from $4.0 million for the
same period last year. The decrease in interest expense reflects a lower cost of
funds on interest bearing liabilities partially offset by a 22.0% increase in
average interest bearing liabilities at September 30, 2002, as compared to the
same period in 2001. Total average deposits increased $112.5 million in the
third quarter of 2002 as compared to the same period in 2001. The average
balance of non-interest bearing demand deposits and money market deposits
increased by $30.6 million, and $77.3 million, respectively, in the third



                                       15
<PAGE>
quarter of 2002 as compared to the same period in 2001, with the average balance
of non-interest bearing demand deposits reaching $83.0 million for the three
months ended September 30, 2002 from $52.4 million for the three months ended
September 30, 2001. In addition, the average balance of the Company's time
deposits decreased $8.1 million, to $208.8 million for the three months ended
September 30, 2002 from $216.9 million for the three months ended September 30,
2001. The Company's average cost of deposits for the three months ended
September 30, 2002, decreased to 2.3% from 3.8% for the comparable period of
2001, primarily due to the lower rates of interest on deposit accounts. The
average balance of securities sold under agreement to repurchase was $2.9
million, and the average balance of other borrowings was $355 thousand at
average rates of 6.4% and 5.3% respectively, during the three months ended
September 30, 2002. In the quarter ended September 30, 2001 the average balance
of securities sold under agreement to repurchase was $5.9 million and the
average of other borrowings was $1.0 million, at average rates of 6.3% and 3.9%,
respectively. The Company's average cost of funds for the three months ended
September 30, 2002, decreased to 2.3% from 3.8% in the comparable period of 2001
due primarily to lower market interest rates.

NET INTEREST AND DIVIDEND INCOME. Net interest and dividend income for the three
months ended September 30, 2002, increased by $1.5 million, or 37.1%, over the
same period last year. The Company's net interest margin increased 36 basis
points to 4.19% for the quarter ended September 30, 2002 as compared to the
comparable quarter of 2001. The decline is based primarily on management's
decision to increase the Company's liquidity to provide for continued loan
growth and to provide alternative liquidity as the Company's internet
certificate portfolio continues to roll off.

The Company's net interest spread increased 59 basis points to 3.65% for the
three months ended September 30, 2002, from 3.06% for the comparable period of
2001. The increased net interest spread reflects a greater decline in the
Company's cost of interest paying liabilities than the decline in its yield on
earning assets.

PROVISION FOR LOAN LOSSES. The determination of the allowance for loan losses,
and the related provision, is considered by management to be a critical
accounting policy and is based upon estimates made by management. The provision
for loan losses decreased to $372 thousand for the three months ended September
30, 2002, from $526 thousand in the same period of 2001, reflecting the slower
growth in the loan portfolio in the third quarter of 2002 as well as
management's assessment of the quality of the loan portfolio and its view of the
current state of the economy. The Company's provision for loan losses maintained
the allowance at a level management believes appropriate in light of the
Company's lending activities, the quality of the loan portfolio, collateral
maintained, 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 Company had no recoveries
and charged off $87 thousand against the allowance during the quarter. Total
classified loans increased to $880 thousand at September 30, 2002 from $532
thousand at June 30, 2002. The Company's ratio of non-performing assets to total
assets declined to 0.14% at September 30, 2002 from 0.19% at December 31, 2001.


                                       16
<PAGE>
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 2002, total non-interest income
increased $62 thousand, or 23.4%, to $327 thousand from $265 thousand in the
same period of last year. The increase includes $19 thousand more in service
charges and fees on deposit accounts and $25 thousand more in insurance
commissions earned by Admiralty Insurance Services, LLC, the Company's former
insurance affiliate.

NON-INTEREST EXPENSE. For the three-month period ended September 30, 2002, the
Company experienced increases of $49 thousand in its non-interest expense over
the comparable period of 2001. For the three-month period ended September 30,
2002, the Company's total non-interest expense was $3.2 million, compared to
total non-interest expense of $3.1 million for the same period in 2001. The
increase in non-interest expense in the three month period of 2002 reflects a
$117 thousand increase in salaries 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 branches in Altamonte Springs (which opened in
September 2001) and Fort Lauderdale (which opened in August 2001). Full time
equivalent employees increased to 120 at September 30, 2002, from 117 at
September 30, 2001. The increase in salaries and benefits is more than offset by
a decrease of $194 thousand in expense for the senior management incentive
program as the Company has suspended the program for 2002. Occupancy expense
increased by $16 thousand, or 3.5%, in the three months ended September 30, 2002
as compared to the same period in 2001. The increase in occupancy expenses
relates primarily to $24 thousand for expenses at the Fort Lauderdale branch
which opened in August 2001. Furniture and equipment expenses increased to $27
thousand in the third quarter of 2002 from $187 thousand in the third quarter of
2001. Increases to furniture and equipment expenses at the Fort Lauderdale and
Altamonte Springs offices were $9 thousand and $4 thousand, respectively, in
2002 while the Company did not have these locations for the full quarter in
2001. Due to the Company's adoption of SFAS 142 "Goodwill and Other Intangible
Assets", the Company had no goodwill amortization in 2002 and $38 thousand for
the third quarter of 2001. The Company experienced a net increase of $122
thousand in other non-interest expenses in the third quarter of 2002 compared to
the same period in 2001. This increase includes increases of $17 thousand in
data processing, $34 thousand in amortization of SBA loan related assets, $22
thousand for courier services and $16 thousand in other real estate expenses.
The increase is partially offset by decreases of $13 thousand in business
development, and supplies and $16 thousand in donations. Other expenses were
also reduced by $52 thousand in director and committee fees and expenses, as the
Company suspended these payments for 2002. Other expenses for the third quarter
of 2002 also include $100 thousand paid to Sandler O'Neill & Partners, L.P. for
their advisory services related to the merger agreement between the Company, RBC
Centura and Royal Bank of Canada. The Company also accrued $50 thousand in the
third quarter of 2002 toward legal expenses in connection with the merger
transaction.

                                       17
<PAGE>


INCOME TAXES. Income tax expense increased to $896 thousand for the quarter
ended September 30, 2002, compared to $311 thousand for the same period last
year due to higher taxable income in the current quarter. The effective tax rate
for the third quarter of 2002 was 36.1% compared to 40.2% in the third quarter
of 2001. The reduced effective tax rate is attributable to relief of $81
thousand of the valuation allowance for the deferred tax asset, non-deductible
expenses including the amortization of goodwill and a higher level of taxable
income in relation to the non-deductible expenses.















                                       18
<PAGE>
           Nine months Ended September 30, 2002 and September 30, 2001

The Company generated net income of $4.5 million, or $0.85 per share basic and
$0.80 per share diluted, in the nine months ended September 30, 2002 compared to
net income of $934 thousand, or $0.20 per share basic and $0.19 per share
diluted, in the same period of 2001.

INTEREST AND DIVIDEND INCOME. The Company's interest and dividend income
increased $2.7 million, or 12.2%, to $25.0 million for the nine months ended
September 30, 2002 from $22.3 million for the same period of 2001. This increase
in interest income primarily relates to an increase in the Company's average
balance of earning assets, partially offset by a lower yield on those interest
earning assets. Average balances increased by $122.3 million for loans, $4.5
million for investment securities (including Federal Reserve Bank stock and FHLB
stock) and $23.6 million for federal funds sold. The average yield on the loan
portfolio decreased to 7.0% in the nine months ended September 30, 2002,
compared to 8.6% in the nine months ended September 30, 2001. The average yield
on federal funds sold decreased to 1.7% in the nine months ended September 30,
2002 from 4.4% for the same period in 2001. The average yield on investment
securities, including Federal Reserve Bank and FHLB stocks, decreased to 5.6% in
the nine months ended September 30, 2002 from 6.6% in the same period of 2001.
During the nine months ended September 30, 2002 the yield on the Company's
interest earning assets decreased to 6.4% from 8.0% during the nine months ended
September 30, 2001. All decreases are due primarily to lower market interest
rates.

INTEREST EXPENSE. The Company's interest expense for the nine months ended
September 30, 2002 decreased $2.2 million, or 19.5%, to $9.1 million from $11.3
million for the same period last year. The decrease in interest expense reflects
a lower cost of funds on interest bearing liabilities partially offset by a
38.6% increase in average interest bearing liabilities at September 30, 2002, as
compared to the same period in 2001. Total average deposits increased $152.5
million in the nine months ended September 30, 2002 as compared to the same
period in 2001. The average balance of non-interest bearing demand deposits and
money market deposits increased by $29.9 million, and $64.6 million,
respectively, in the nine months ended September 30, 2002 as compared to the
same period in 2001, with the average balance of non-interest bearing demand
deposits reaching $78.0 million for the nine months ended September 30, 2002
from $48.1 million for the nine months ended September 30, 2001. In addition,
the average balance of the Company's time deposits increased by $44.4 million,
to $227.5 million for the nine months ended September 30, 2002 from $183.1
million for the nine months ended September 30, 2001. The Company's average cost
of deposits for the nine months ended September 30, 2002, decreased to 2.4% from
4.2% for the comparable period of 2001, primarily due to the lower rates of
interest on deposit accounts. The average balance of securities sold under
agreement to repurchase was $2.9 million, and the average balance of other
borrowings was $554 thousand at average rates of 6.5% and 2.9% respectively,
during the nine months ended September 30, 2002. In the nine months ended
September 30, 2001 the average balance of securities sold under agreement to
repurchase was $5.9 million and the average of other borrowings was $2.3


                                       19
<PAGE>
million, at average rates of 6.3% and 5.5%, respectively. The funds received in
the securities repurchase contract were for a three year term and therefore
reflect the market rate of interest for a three year borrowing when the
arrangement originated in October 1999. The Company's average cost of funds for
the nine months ended September 30, 2002, decreased to 2.4% from 4.3% in the
comparable period of 2001 due primarily to lower market interest rates.

NET INTEREST AND DIVIDEND INCOME. Net interest and dividend income for the nine
months ended September 30, 2002, increased by $4.9 million, or 44.9%, over the
same period last year.

The Company's net interest margin increased 12 basis points to 4.06% for the
nine months ended September 30, 2002 as compared to the same period in the prior
year and the Company's net interest spread increased 45 basis points to 3.52%
for the nine months ended September 30, 2002, from 3.07% for the comparable
period of 2001. The increase in net interest spread reflects a greater decline
in the Company's cost of interest paying liabilities than the decline in its
yield on earning assets. The decline in the cost of liabilities reflects current
lower market interest rates and a shift in the deposit mix toward lower cost
deposits.

PROVISION FOR LOAN LOSSES. The determination of the allowance for loan losses,
and the related provision, is considered by management to be a critical
accounting policy and is based upon estimates made by management. The provision
for loan losses decreased to $625 thousand for the nine months ended September
30, 2002, from $1.6 million in the same period of 2001, reflecting the slower
growth in the loan portfolio in the nine months ended September 30, 2002;
management's assessment of the asset quality within the loan portfolio; as well
as management's view of the current state of the economy. The Company's
provision for loan losses maintained the allowance at a level management
believes appropriate in light of the Company's current lending activities,
management's assessment of the quality of the loan portfolio, collateral
maintained, 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 Company recovered $11
thousand of previously charged off loans and charged off $612 thousand against
the allowance during the period. Two loans with an aggregate balance of $248
thousand were transferred to other real estate during the nine month period. One
of the properties was subsequently sold with no material loss and the other
remains on the books and is currently under contract for sale. Total classified
loans were reduced to $880 thousand at September 30, 2002 from $1.6 million at
December 31, 2001. The Company's ratio of non-performing assets to total assets
decreased to 0.14% at September 30, 2002 from 0.19% at December 31, 2001. 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.


                                       20
<PAGE>
NON-INTEREST INCOME. For the nine months ended September 30, 2002, total
non-interest income increased $47 thousand, or 5.3%, to $938 thousand from $891
thousand in the same period of last year. The increase includes $21 thousand
more in service charges and fees, $9 thousand more in gains on sales of loans
and $17 thousand more in miscellaneous other income.

NON-INTEREST EXPENSE. During the nine month period ended September 30, 2002, the
Company experienced increases of $455 thousand in its non-interest expense over
the comparable period of 2001. For the nine month period ended September 30,
2002, the Company's total non-interest expense was $9.1 million, compared to
total non-interest expense of $8.6 million for the same period in 2001. The
increase in non-interest expense in the nine month period of 2002 reflects a $55
thousand increase in salaries 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 branches in south Orlando (which opened in March
2001), Cocoa Beach (which opened in April 2001), Altamonte Springs (which opened
in September 2001) and Fort Lauderdale (which opened in August 2001). The
increase in salaries and benefits is partially offset by a decrease of $395
thousand in expense for the senior management incentive program as the Company
has suspended the program for 2002. Occupancy expense increased $242 thousand in
the nine months ended September 30, 2002 as compared to the same period in 2001.
The increase in occupancy expenses relates primarily to $65 thousand for the
Altamonte Springs office, $41 thousand for the South Orlando office, $9 thousand
for the Orlando office, $18 thousand for the Cocoa Beach office, $72 thousand
for the Fort Lauderdale office and $14 thousand for the administrative offices.
Furniture and equipment expenses increased to $630 thousand in the first nine
months of 2002 from $503 thousand in the comparable period of 2001. This
increase in furniture and equipment expenses relates primarily to the Altamonte
Springs, South Orlando, Downtown Orlando, Cocoa Beach and Fort Lauderdale
offices which were not open for the full nine month period in 2001. As discussed
above, the Company had no goodwill amortization in 2002 and $115 thousand in
goodwill amortization for the first nine months of 2001. The Company experienced
a net increase of $146 thousand in other non-interest expenses in the third
quarter of 2002 compared to the same period in 2001. This increase includes
increases of $84 thousand in data processing expenses and $72 thousand in other
losses. The increases are partially offset by decreases of $58 thousand in
stationery and supplies, $46 thousand in business development and public
relations and $36 thousand in donations. Other operating expense also includes a
$162 thousand decrease in director and committee fees and expenses as the
Company suspended these payments for 2002. Other expenses for 2002 also include
$100 thousand paid to Sandler O'Neill & Partners, L.P. for their advisory
services related to the merger agreement between the Company, RBC Centura and
Royal Bank of Canada. The Company also accrued $50 thousand in 2002 toward legal
expenses in connection with the merger transaction.

INCOME TAXES. Income tax expense increased to $2.6 million for the nine months
ended September 30, 2002, compared to $660 thousand for the same period last
year due to higher taxable income in the current period. The effective tax rate
for the nine months ended September 30, 2002 was 36.6% compared to 41.4% in the
same period in 2001. The reduced effective tax rate is attributable to relief of
$81 thousand of the valuation allowance for the deferred tax asset, lower
non-deductible expenses including the amortization of goodwill and a higher
level of taxable income in relation to the non-deductible expenses.

                                       21
<PAGE>
                               FINANCIAL CONDITION

                September 30, 2002 compared to December 31, 2001

Total assets increased to $595.5 million, an increase of $98.0 million, or
19.7%, from total assets of $497.6 million at December 31, 2001. Changes in
total assets includes increases of $4.6 million in cash and non-interest bearing
due from banks, $39.6 million in federal funds sold, $57.1 million in net loans,
and $985 thousand in investment securities held to maturity. The change in total
assets also includes decreases of $3.6 million in investment securities
classified as available for sale, $285 thousand in interest bearing due from
banks, $163 thousand in premises and equipment net of amortization and accretion
and $163 thousand in other assets.

The $57.1 million increase in net loans is comprised primarily of increases of
$50.0 million in non-residential real estate loans, $9.6 million in residential
real estate loans and $3.0 million in construction loans. The Company
experienced a decrease of $5.3 million in commercial and industrial loans over
the nine month period. The net increase is the result of the management team's
continuing efforts to attract new business and expand relationships with
existing customers. There has been no significant change in the loan portfolio
mix at September 30, 2002 as compared to December 31, 2001.

At September 30, 2002, federal funds sold increased by $39.6 million from
December 31, 2001. The increase is attributable primarily to management's
decision to increase liquidity through local deposits to fund its anticipated
run off of the portfolio of internet certificates as well as to fund anticipated
loan growth.

Total deposits increased 20.8%, to $542.6 million at September 30, 2002 from
$449.1 million at December 31, 2001. Deposits and the deposit mix are summarized
as follows:
                                     SEPTEMBER 30, 2002     DECEMBER 31, 2001
                                     ------------------     ------------------
                                               (dollars in thousands)
Non-interest bearing demand .......  $ 83,831       16%     $ 63,988       14%
Savings, NOW and money market .....   240,683       44%      161,480       36%
Time deposits, under $100,000 .....   109,897       20%      111,402       25%
Time deposits, $100,000 and over...   108,224       20%      112,274       25%
                                     --------     -----     --------     -----
                                     $542,635      100%     $449,144      100%
                                     ========               ========

Money market accounts increased $68.1 million in the first nine months of 2002.
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.

Time deposits decreased $5.6 million in the first nine months of 2002. 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,


                                       22
<PAGE>
savings banks and commercial banks at terms from ninety days to three years. A
substantial portion of the internet certificates are being allowed to run off at
maturity as the Company raises money locally. At September 30, 2002 the Company
had $23.5 million in deposits raised through this program compared to $106.1
million at December 31, 2001. The weighted average rate of the internet
portfolio at September 30, 2002 was 3.00%, the weighted average contractual life
was 10.7 months and the weighted average remaining life was 3.4 months.

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

                                      NINE MONTHS ENDED         YEAR ENDED
                                     SEPTEMBER 30, 2002     DECEMBER 31, 2001
                                     ------------------     ------------------
    (dollars in thousands)                       AVERAGE                AVERAGE
                                      AMOUNT      YIELD      AMOUNT      YIELD
                                     --------     -----     --------     -----
Non-Interest Bearing Demand .......  $ 78,047      0.0%     $ 51,083      0.0%
Interest-Bearing Demand ...........    31,529      0.5%       21,084      0.6%
Money Market Deposits .............   157,444      2.3%      101,740      3.5%
Savings Deposits ..................     3,351      1.2%        2,327      1.7%
Time Deposits .....................   227,522      3.6%      194,266      5.4%
                                     --------               --------
Total .............................  $497,893               $370,500
                                     ========               ========

The decreased average yield on time deposits is primarily attributable to the
rollover of older higher rate certificates of deposit within the portfolio to
the lower rates currently being offered.

Securities sold under agreement to repurchase totaled $2.9 million at September
30, 2002 and December 31, 2001. This repurchase transaction involved a $10.1
million FHLMC mortgage backed security, which was simultaneously purchased and
sold under agreement to repurchase, and which is classified as held to maturity.
The Company is required to maintain a specified margin between the market value
of the security and the amount advanced under the repurchase agreement.

During June 2002, the Company established a $3 million, revolving borrowing line
with one of the Bank's correspondent banks. The line, which is secured by 100
percent of the Bank's outstanding shares, is to be used by the Company solely
for the purpose of maintaining the Bank in a well capitalized status. The line
is for one year and bears interest at prime minus one percent, with a 4.75%
floor, with interest only payable quarterly. The $750 thousand in other
borrowings at September 30, 2002 represent funds drawn under the Company's
revolving line. In order to gain release of the stock securing this borrowing
line, the Company anticipates replacing the line of credit with a $5 million,
unsecured line of credit with RBC Centura during the fourth quarter of 2002. At
December 31, 2001 the $1.0 million other borrowing represents a FHLB advance.
The funds obtained when this advance was originated in February 2000 were used
toward the purchase of a $10.0 million GNMA II mortgage-backed security, of
which one half is classified as available for sale and one half is classified as
held to maturity. The security was pledged to secure the borrowing line and the

                                       23
<PAGE>
Company was required to maintain a specified margin between the market value of
the security and the amount advanced under the line. The FHLB advance was paid
off in April 2002 and the security is no longer pledged to the FHLB.

Accrued interest payable decreased $49 thousand, or 9.9%, due primarily to lower
rates being paid on interest paying liabilities partially offset by an increased
volume of interest paying liabilities. Other liabilities decreased $42 thousand,
or 5.6%, due primarily to a $22 thousand decrease in loan commitment fees on
loans not yet closed and other loan related fees, and a $72 thousand decrease in
accrued income taxes partially offset by a $52 thousand increase in other
accrued expenses.

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 contractually delinquent 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 is backed
out of current period income. Until the loan becomes current, any payments
received from the borrower are applied to outstanding principal 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 $723 thousand at September 30, 2002 from $524
thousand at December 31, 2001. The balance represents the unguaranteed portion
of four Small Business Administration loans and three conventional loans.
Management believes these loans are all adequately reserved and it does not
expect any material losses as a result of these credits.

The Company had $129 thousand in other real estate owned at September 30, 2002
representing a former restaurant. Management does not expect any material losses
from the disposition this property. The Company had no other real estate owned
at December 31, 2001.


                                       24
<PAGE>
The following table sets forth information concerning risk elements in the
Company's portfolio:

                                              SEPTEMBER 30,     DECEMBER 31,
                                                  2002              2001
                                              ------------      ------------
                                                  (dollars in thousands)

Non-accrual loans .........................   $        723      $        524
Other real estate owned ...................            129                 0
                                              ------------      ------------
Total non-performing assets (1) ...........   $        852      $        524
                                              ============      ============

Non-accrual loans to total loans ..........           0.16%             0.13%
Non-performing assets to total assets......           0.14%             0.19%
Allowance for loan losses as a
percentage of non-performing assets........         571.46%           500.93%


(1)  Excludes loans past due 90 days or more and still accruing interest of $443
thousand at December 31, 2001. No loans were past due 90 days or more and still
accruing interest at September 30, 2002.

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. Our officers, outside, independent loan review auditors and
our Directors' Loan Committee analyze risks within the loan portfolio on an
ongoing basis. A risk system, consisting of multiple grading categories, is
utilized as an analytical tool to assess the risk and appropriate allowances.
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 allowance. There were no significant changes in
loan concentrations, quality and terms during the nine months ended September
30, 2002, that resulted in a change in the allowance for loan losses. These
estimates are reviewed at least quarterly, and, as adjustments become necessary,
they are realized in the periods in which they become known. There were no
significant changes in the estimation methods or fundamental assumptions used in
the calculation of the allowance for loan losses at September 30, 2002 compared
to December 31, 2001. 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 allowance, 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

                                       25
<PAGE>
periodically review the Company's loan portfolio and 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, 2002, the allowance for loan losses was $4.9 million, an
increase of $24 thousand from December 31, 2001. During the nine months ended
September 30, 2002 the Company had charge-offs of $612 thousand, recoveries of
$11 thousand and provided a loan loss provision of $625 thousand. The
charge-offs primarily relate to two loans previously identified as problem
loans, a partial charge-off of the unsecured portion of two other loans and the
charge-off of an overdrawn deposit account.

INVESTMENT SECURITIES
At September 30, 2002, the Company's investment securities portfolio, both held
to maturity and available for sale, totaled $51.0 million, a decrease of $2.6
million, from total investment securities of $53.6 million at December 31, 2001.
The Company invested primarily in U.S. Treasury and U.S. Agency securities
during the nine months ended September 30, 2002. At September 30, 2002, $14.4
million of the Company's investment securities were classified as available for
sale and $36.6 million were classified as held to maturity. At December 31,
2001, $18.0 million and $35.6 million of securities were classified as available
for sale and held to maturity, respectively.

The Company classifies all of its investment securities as available for sale or
held to maturity; it has no securities held for trading.

LIQUIDITY

The Company's liquidity is a measure of its ability to fund loans, withdrawals
or maturities of deposits, and other cash outflows in a cost effective manner.
The Company's principal sources of funds are deposits, scheduled amortization
and prepayments of loan principal, sales and maturities of investment securities
and funds provided by operations. While scheduled loan payments and maturing
investments are relatively predictable sources of funds, deposit flows and loan
prepayments are greatly influenced by general interest rates, economic
conditions and competition.

As is disclosed under "Deposits", a substantial portion of the Company's deposit
portfolio consists of time deposits, including time deposits originated through
the internet deposit listing service used by the Company. These deposits are
generally of short to intermediate term, with terms generally from 90 days to
three years. The proceeds of these deposits have been invested in longer term
assets, primarily commercial and commercial real estate loans. The Company will
need to maintain these deposits, or find alternative sources of liquidity, in
order to maintain these assets. Although management believes a substantial
amount of the existing time deposits will renew, or substitute deposits will be
originated, the need to maintain this liquidity may impact the Company's ability
to react to changes in market rates of interest. As is discussed below,
management also believes the Company has substantial alternative sources of
liquidity.

Net cash provided by the Company's operating activities was $6.2 million in the
first nine months of 2002 compared to $2.8 million for the nine months ended
September 30, 2001.

                                       26
<PAGE>
Net cash used in investing activities was $55.7 million in the period ended
September 30, 2002 compared to $162.6 million in the comparable period of 2001.
Net cash provided by the Company's investment portfolio was $2.8 million in the
first nine months of 2002, while in the comparable period of 2001 it used $18.5
million for its securities portfolio. Additionally, the Company used $57.9
million and $140.7 million for net loans and loan sales in the first nine months
of 2002 and 2001, respectively. The change in the level of cash used for the
investment and loan portfolios reflects management's moderation of the Company's
growth rate.

Net cash provided by the Company's financing activities was $93.3 million in the
first nine months of 2002, and $183.0 million in the comparable period of 2001.
The increase in 2002 was due to a $93.5 million increase in deposits, $750
thousand in borrowings from a correspondent bank and $65 thousand received from
the exercise of stock options. The 2002 increases were partially offset by
repayment of $1.0 million in FHLB advances. Deposits provided an increase of
$172.9 million and proceeds from the issuance of common stock provided $13.1
million while repayment of FHLB borrowings used $3.0 million in the nine months
ended September 30, 2001.

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 non-transaction accounts, less those
deposits of public funds for which security has been pledged. As of September
30, 2002, the Bank had a liquidity ratio of 23.1% 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, 2002,
federal funds sold totaled $60.8 million. Funds not required to meet loan and
deposit demand were invested primarily in U.S Treasury and U.S. Government
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 $14.4 million at September 30, 2002.

An additional external source of liquidity is an unsecured $12 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, 2002, no funds were drawn
under either the secured or unsecured line. The Company did not draw on either
the secured or unsecured lines of credit during the nine months ended September
30, 2002. The Company also maintains a line of credit at the Federal Home Loan
Bank of Atlanta secured by first lien residential mortgages.




                                       27
<PAGE>
CAPITAL RESOURCES

The shareholders of the Company approved a resolution to amend the Company's
Certificate of Incorporation at the annual meeting held April 26, 2002. The
amendment eliminates the Company's Class A common stock (1,000,000 shares) and
re-designates the Class B common stock (7,500,000 shares) as Common Stock
(8,500,000 shares).

Total stockholders' equity increased to $48.1 million at September 30, 2002 from
$43.3 million at December 31, 2001. September 30, 2002 equity was affected by
net income of $4.5 million, an increase of $65 thousand for stock options
exercised, and an increase of $245 thousand in net unrealized gains on available
for sale securities.

At September 30, 2002, the Company exceeded all regulatory capital requirements
as follows:
                                CAPITAL ADEQUACY
                             (dollars in thousands)
<TABLE><CAPTION>
                                                                                        TO BE WELL CAPITALIZED
                                                                 FOR CAPITAL            UNDER PROMPT 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) .. $   49,173         9.86%    >/=$39,899    >/= 8.00%     >/=$49,874    >/= 10.00%

Tier I Capital
  (to risk weighted assets) .. $   44,305         8.88%    >/=$19,950    >/= 4.00%     >/=$29,924     >/= 6.00%

Tier I Capital
  (to average assets) ........ $   44,305         7.88%    >/=$22,498    >/= 4.00%     >/=$28,122     >/= 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. At September 30, 2002, the Company had $750 thousand
drawn against this credit line which was used toward a capital investment in the
Bank.

                                       28
<PAGE>

At September 30, 2002, the Bank exceeded all regulatory capital requirements as
follows:



                                CAPITAL ADEQUACY
                             (dollars in thousands)

<TABLE><CAPTION>
                                                                                        TO BE WELL CAPITALIZED
                                                                 FOR CAPITAL            UNDER PROMPT 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)....>/=$49,904      10.01%      >/=$39,899     >/= 8.00%    >/=$49,873     >/=10.00%

Tier I Capital
  (to risk weighted assets)....>/=$45,036       9.03%      >/=$19,949     >/= 4.00%    >/=$29,924     >/= 6.00%

Tier I Capital
  (to average assets)..........>/=$45,036       8.01%      >/=$22,491     >/= 4.00%    >/=$28,114     >/= 5.00%
</TABLE>

IMPACT OF INFLATION AND CHANGING PRICES

The financial statements of the Company and notes hereto, presented elsewhere
herein, have been prepared in accordance with accounting principles generally
accepted in the United States of America, which require the measurement of
financial position and operating results in terms of historical dollars without
considering the change in the relative purchasing power of money over time and
due to inflation. The impact of inflation is reflected in the increased cost of
the Company's operations. Unlike most industrial companies, nearly all the
assets and liabilities of the Company are monetary. As a result, interest rates
have a greater impact on the Company's performance than do the effects of
general levels of inflation. Interest rates do not necessarily move in the same
direction or to the same extent as the prices of goods and services.

                                       29
<PAGE>
ITEM 3.  QUANTATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company's operations may be subject to a variety of market risks, the most
material of which is the risk of changing interest rates. Most generally,
interest rate risk ("IRR") is the volatility in financial performance,
attributable to changes in market interest rates, which may result in either
fluctuation of net interest income or changes to the economic value of the
equity of the Company.

The principal objective of the Company's IRR management activities is to provide
maximum levels of net interest income while maintaining acceptable levels of
interest rate and liquidity risk and facilitating the funding needs of the
Company.

Consistent with its definition of IRR, the Company measures earnings at risk and
value at risk. To measure earnings at risk, the Company utilizes an income
simulation model which starts with a detailed inventory of balance sheet items
and factors in the probability of the maturity and repricing characteristics of
assets and liabilities, including assumed prepayment risks. Simulation of net
interest income takes into account the relative sensitivities of these balance
sheet items to dynamic rates and projects their behavior over an extended period
of time. Simulation analysis of net interest income reflects both the
possibility and probability of the behavior of balance sheet items.

In addition to simulating net interest income to measure earnings at risk, the
Company also measures IRR from the perspective of value at risk. Such analysis
is the measurement and management of IRR from the longer term perspective of the
economic value of the equity of the Company. This is performed through Net
Portfolio Value (NPV) analysis which is intended to address the changes in
equity value arising from movements in interest rates. The NPV analysis first
reprices all of the assets and liabilities under the current interest rate
environment, then compares this result to repricing under a changed interest
rate environment, thus evaluating the impact of immediate and sustained interest
rate shifts across the current interest rate yield curve on the market value of
the current balance sheet. A significant limitation inherent in NPV analysis is
that it is static. Consequently, there is no recognition of the potential for
strategy adjustments in a volatile rate environment which would protect or
conserve equity values.

Changes in the estimates and assumptions made for IRR analysis could have a
significant impact on projected results and conclusions. These analyses involve
a variety of significant estimates and assumptions, including, among others: (1)
estimates concerning assets and liabilities without definite maturities or
repricing characteristics; (2) how and when yields on interest-earning assets
and costs of interest-bearing liabilities will change in response to movement of
market interest rates; (3) prepayment speeds; (4) future cash flows; and (5)
discount rates. Therefore, these techniques may not accurately reflect the
impact of general market interest rate movements on the Company's net interest
income or the value of its economic equity.



                                       30
<PAGE>
The Company's most recent available information, as of June 30, 2002, indicates
if interest rates increase 200 basis points or decrease 100 basis points from
current rates at a steady pace over the twelve months succeeding the analysis
date, the Company would expect net interest income to increase 4.9% or decrease
3.3%, respectively. In addition, based on an immediate and sustained 200 basis
point increase or decrease, the Company would expect its estimated Net Portfolio
Value to increase $13.6 million or decrease $14.4 million, respectively. The
change in Net Portfolio Value is caused by the mix in the Company's portfolios
of interest earning assets and interest paying liabilities. Variable and
adjustable rate loans make up 65%, or $377 million, of the Company's assets.
Interest bearing deposits total $445 million and borrowings total $2.9 million
at the simulation date. The Company's interest earning assets tend to reprice
faster than its interest bearing liabilities. Therefore, during periods of
falling interest rates, the Company's earning assets are expected to reprice
faster than its paying liabilities. This repricing difference results in a
reduction in the Net Portfolio Value in a falling rate environment. In a rising
rate environment the Company would also expect its earning assets to reprice
faster than its paying liabilities resulting in an increase in the Net Portfolio
Value.



ITEM 4.  CONTROLS AND PROCEDURES

Under the supervision and with the participation of our management, including
our principal executive officer and principal financial officer, we have
evaluated the effectiveness of the design and operation of our disclosure
controls and procedures within 90 days of the filing date of this quarterly
report, and, based on their evaluation, our principal executive officer and
principal financial officer have concluded that these controls and procedures
are effective. There were no significant changes in our internal controls or in
other factors that could significantly affect these controls subsequent to the
date of their evaluation.

Disclosure controls and procedures are our controls and other procedures that
are designed to ensure that information required to be disclosed by us in the
reports that we file or submit under the Exchange Act is recorded, processed,
summarized and reported, within the time periods specified in the Securities and
Exchange Commission's rules and forms. Disclosure controls and procedures
include, without limitation, controls and procedures designed to ensure that
information required to be disclosed by us in the reports that we file under the
Exchange Act is accumulated and communicated to our management, including our
principal executive officer and principal financial officer, as appropriate to
allow timely decisions regarding required disclosure.



                                       31
<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

Not applicable.


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (a)  Exhibits

              Number    Description
              ------    -----------
                2.1     Agreement and Plan of Merger dated as of August 29,
                        2002, among Admiralty Bancorp, Inc., RBC Centura Banks,
                        Inc. and Royal Bank of Canada. (1)

                2.2     Amendment to Agreement and Plan of Merger dated as of
                        August 29, 2002, among Admiralty Bancorp, Inc., RBC
                        Centura Banks, Inc. and Royal Bank of Canada, dated as
                        of October 25, 2002. (2)

                10.1    Form of Retention Agreement dated as of August 29, 2002,
                        between Admiralty Bancorp, Inc. and various Employees.
                        (3)

                99.1    Form of Voting and Support Agreement dated August 29,
                        2002 between Royal Bank of Canada and certain
                        stockholders of Admiralty Bancorp, Inc. (1)

                99.2    Amended and Restated Voting and Support Agreement dated
                        October 16, 2002 between Royal Bank of Canada and Bruce
                        A Mahon. (2)

                99.3    Amended and Restated Voting and Support Agreement dated
                        October 16, 2002 between Royal Bank of Canada and Ward
                        Kellogg. (2)

                99.4    Section 906 Certifications. (3)
                ----------------
                (1) Incorporated herein by reference to Exhibits 2.1 and 99.1,
                    respectively, to the Company's Form 8-k dated August 29,
                    2002, filed with the Securities and Exchange Commission on
                    September 6, 2002.
                (2) Incorated herein by reference to Exhibits 2.1, 99.1 and
                    99.2, respectively, to the Company's Form 8-k dated October
                    16, 2002, filed with the Securities and Exchange Commission
                    on November 1, 2002.
                (3) Filed herewith.

         (b)  Reports on Form 8-K


On July 17, 2002 the Company filed a Form 8-K reporting its results for the
second quarter of 2002.

On September 6, 2002 the Company filed a Form 8-K reporting that it had entered
in to an agreement and plan of merger with Royal Bank of Canada, and its wholly
owned U.S. banking subsidiary, RBC Centura Banks, Inc.



                                       32
<PAGE>

                                 SIGNATURE PAGE
                                 --------------

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:  November 14, 2002                  By: /s/ Ward Kellogg
                                              -----------------------------
                                              WARD KELLOGG, President




Date:  November 14, 2002                  By: /s/ Kevin M. Sacket
                                              -----------------------------
                                              KEVIN M. SACKET, Treasurer
                                              (Principal Financial Officer)










                                       33
<PAGE>
                                 CERTIFICATIONS
                                 --------------


I, Ward Kellogg, Chief Executive Officer, certify that:

1.   I have reviewed this quarterly report on Form 10-Q of Admiralty Bancorp,
Inc.;

2.   Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3.   Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4.   The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

     a) designed such disclosure controls and procedures to ensure that material
     information relating to the registrant, including its consolidated
     subsidiaries, is made known to us by others within those entities,
     particularly during the period in which this quarterly report is being
     prepared;

     b) evaluated the effectiveness of the registrant's disclosure controls and
     procedures as of a date within 90 days prior to the filing date of this
     quarterly report (the "Evaluation Date"); and

     c) presented in this quarterly report our conclusions about the
     effectiveness of the disclosure controls and procedures based on our
     evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have
disclosed, based on our most recent evaluation, to the registrant's auditors and
the audit committee of registrant's board of directors (or persons performing
the equivalent functions):

     a) all significant deficiencies in the design or operation of internal
     controls which could adversely affect the registrant's ability to record,
     process, summarize and report financial data and have identified for the
     registrant's auditors any material weaknesses in internal controls; and

     b)  any fraud, whether or not material, that involves management or other
     employees who have a significant role in the registrant's internal
     controls; and

6.   The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

November 14, 2002

/s/ Ward Kellogg
-----------------
Ward Kellogg
Chief Executive Officer

                                       34
<PAGE>
                                 CERTIFICATIONS
                                 --------------


I, Kevin M. Sacket, certify that:

1.   I have reviewed this quarterly report on Form 10-Q of Admiralty Bancorp,
Inc.;

2.   Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3.   Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4.   The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

     a) designed such disclosure controls and procedures to ensure that material
     information relating to the registrant, including its consolidated
     subsidiaries, is made known to us by others within those entities,
     particularly during the period in which this quarterly report is being
     prepared;

     b) evaluated the effectiveness of the registrant's disclosure controls and
     procedures as of a date within 90 days prior to the filing date of this
     quarterly report (the "Evaluation Date"); and

     c) presented in this quarterly report our conclusions about the
     effectiveness of the disclosure controls and procedures based on our
     evaluation as of the Evaluation Date;

5.   The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit committee
of registrant's board of directors (or persons performing the equivalent
functions):

     a) all significant deficiencies in the design or operation of internal
     controls which could adversely affect the registrant's ability to record,
     process, summarize and report financial data and have identified for the
     registrant's auditors any material weaknesses in internal controls; and

     b) any fraud, whether or not material, that involves management or other
     employees who have a significant role in the registrant's internal
     controls; and

6.   The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

November 14, 2002

/s/ Kevin M. Sacket
---------------------
Kevin M. Sacket
Treasurer, Principal
Financial Officer


                                       35