<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D. C.  20549
                              ___________________

                                  FORM 10-QSB
                                   (MARK ONE)

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
     EXCHANGE ACT OF 1934
     For the quarterly period ended June 30, 2001
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)

<TABLE>
<S>                                                                  <C>

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

      4400 PGA BOULEVARD, PALM BEACH GARDENS, FLORIDA                            33410
-------------------------------------------------------------------------------------------------------------
         (Address of Principal Executive Offices)                              (Zip Code)
</TABLE>

                                (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 August 10, 2001 there were 5,029,142 shares of Class B common stock
outstanding.
<PAGE>

                     ADMIRALTY BANCORP, INC. AND SUBSIDIARY

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>

<S>                                                                             <C>
Part I.   Financial Information

Item 1.   Financial Statements
                                                                                Page
                                                                                ----
          Condensed Consolidated Balance Sheets (unaudited) -
           At June 30, 2001 and at December 31, 2000..........................    3

          Condensed Consolidated Statements of Operations (unaudited) -
           Three months ended June 30, 2001 and 2000..........................    4

          Condensed Consolidated Statements of Operations (unaudited) -
           Six months ended June 30, 2001 and 2000............................    5

          Condensed Consolidated Statements of Cash Flows (unaudited) -
           Six months ended June 30, 2001 and 2000.............................   6

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

Item 2.   Management's Discussion and Analysis of Financial Condition
          And Results of Operations............................................  13

Part II.  Other Information

          Item 1.  Legal Proceedings...........................................  28

          Item 2.  Changes in Securities and Use of Proceeds...................  28

          Item 3.  Defaults Upon Senior Securities.............................  28

          Item 4.  Submission of Matters to a Vote of Security Holders.........  28

          Item 5.  Other Information...........................................  28

          Item 6.  Exhibits and Reports on Form 8-K............................  28

                   Signature Page..............................................  30
</TABLE>


                                       2
<PAGE>

<TABLE>
<CAPTION>
                                              ADMIRALTY BANCORP, INC. AND SUBSIDIARY

                                               CONDENSED CONSOLIDATED BALANCE SHEETS
                                                      (dollars in thousands)
                                                            (unaudited)
                                                                                              June 30,             December 31,
                                                                                                2001                   2000
                                                                                            -------------          -------------
<S>                                                                                         <C>                    <C>
ASSETS
Cash and cash equivalents
       Cash and due from banks............................................................  $      13,341          $      11,221
       Interest bearing due from banks....................................................            105                  1,035
       Federal funds sold.................................................................         20,643                 21,189
                                                                                            -------------          -------------
              Total cash and cash equivalents.............................................         34,089                 33,445
Investment securities available for sale,
       at fair market value...............................................................         18,325                 13,628
Investment securities held to maturity, at cost
       (fair market value of $34.7 million and $24.8 million at
       June 30, 2001 and December 31, 2000, respectively) ................................         34,180                 24,549
Loans, net ...............................................................................        322,583                218,629
Accrued interest receivable ..............................................................          1,638                  1,439
Federal Reserve Bank and FHLB stock ......................................................          1,704                  1,337
Premises and equipment, net ..............................................................          5,140                  2,666
Deferred tax asset, net ..................................................................            728                    774
Goodwill, net ............................................................................          3,310                  3,387
Other assets .............................................................................          1,965                  1,507
                                                                                            -------------          -------------
       Total assets.......................................................................  $     423,662          $     301,361
                                                                                            =============          =============
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Deposits .................................................................................  $     373,047          $     261,315
Securities sold under agreement to repurchase ............................................          5,900                  5,900
Advances from FHLB .......................................................................          1,000                  4,000
Accrued interest payable .................................................................            685                    597
Other liabilities ........................................................................            669                    831
                                                                                            -------------          -------------
       Total liabilities..................................................................        381,301                272,643
                                                                                            -------------          -------------
SHAREHOLDERS' EQUITY
Preferred stock, no par value, 2,000,000 shares
       authorized, no shares issued or outstanding........................................             -                      -
Common stock, Class A, no par value, 1,000,000 shares authorized,
       no shares issued and outstanding at June 30, 2001 and 117,500
       shares issued and outstanding at December 31, 2000,................................             -                     990
Common stock, Class B, no par value, 7,500,000 shares authorized,
       5,049,142 and 3,555,431 shares issued and outstanding
       at June 30, 2001 and December 31, 2000, respectively ..............................         44,594                 30,507
Accumulated deficit ......................................................................         (2,360)                (2,831)
Accumulated other comprehensive income, net ..............................................            127                     52
                                                                                            -------------          -------------
       Total shareholders' equity.........................................................         42,361                 28,718
                                                                                            -------------          -------------
       Total liabilities and shareholders' equity.........................................  $     423,662          $     301,361
                                                                                            =============          =============
</TABLE>
 The accompanying notes are an integral part of these consolidated financial
                                  statements.


                                       3
<PAGE>

<TABLE>
<CAPTION>
                                              ADMIRALTY BANCORP, INC. AND SUBSIDIARY

                                          CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

                                          (dollars in thousands, except per-share data)
                                                           (unaudited)

                                                                                 Three Months         Three Months
                                                                                    Ended                Ended
                                                                                June 30, 2001        June 30, 2000
                                                                                -------------        -------------
<S>                                                                              <C>                  <C>
Interest and dividend income
        Loans ..........................................................        $       6,347        $       2,936
        Mortgage-backed securities......................................                  786                  519
        Other debt securities...........................................                   54                  107
        Federal funds sold .............................................                  184                   82
        Dividends from FRB and FHLB stock ..............................                   25                   22
        Other...........................................................                    2                    1
                                                                                -------------        -------------
              Total interest and dividend income........................                7,398                3,667
                                                                                -------------        -------------

Interest expense
        Deposits........................................................                3,710                1,272
        Federal funds purchased.........................................                   -                    10
        Securities sold under repurchase agreement .....................                   94                  142
        Advances from FHLB..............................................                   24                  150
                                                                                -------------        -------------
              Total interest expense....................................                3,828                1,574
                                                                                -------------        -------------

              Net interest and dividend income..........................                3,570                2,093
Provision for loan losses ..............................................                  656                  244
                                                                                -------------        -------------
              Net interest and dividend income after
              provison for loan losses..................................                2,914                1,849
                                                                                -------------        -------------
Non-interest income
        Service charges and fees........................................                  290                  221
        Insurance commissions...........................................                   24                   -
        Gain on sale of loans...........................................                   -                     9
        Gain on sale of other real estate...............................                   -                    17
        Other income....................................................                   -                     1
                                                                                -------------        -------------
              Total non-interest income.................................                  314                  248
                                                                                -------------        -------------
Non-interest expense
        Salaries and employee benefits..................................                1,522                  742
        Occupancy.......................................................                  430                  267
        Furniture and equipment.........................................                  169                   97
        Amortization of goodwill........................................                   39                   39
        Other expense...................................................                  760                  561
                                                                                -------------        -------------
              Total non-interest expense................................                2,920                1,706
                                                                                -------------        -------------
              Income before income tax expense..........................                  308                  391
Income tax expense .....................................................                  137                  166
                                                                                -------------        -------------
        Net income......................................................        $         171        $         225
                                                                                =============        =============
Per share data
  Net income per share - basic .........................................        $        0.04        $        0.08
                                                                                =============        =============
  Net income per share - diluted........................................        $        0.04        $        0.08
                                                                                =============        =============
  Weighted average shares outstanding basic.............................            4,283,073            2,842,452
                                                                                =============        =============
  Weighted average shares outstanding - diluted.........................            4,429,222            2,842,452
                                                                                =============        =============
</TABLE>

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



                                       4
<PAGE>


<TABLE>
<CAPTION>
                                              ADMIRALTY BANCORP, INC. AND SUBSIDIARY

                                          CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

                                          (dollars in thousands, except per-share data)
                                                           (unaudited)

                                                                                 Six Months           Six Months
                                                                                    Ended                Ended
                                                                                June 30, 2001        June 30, 2000
                                                                                -------------        -------------
<S>                                                                              <C>                  <C>
Interest and dividend income
        Loans ..........................................................        $      12,015        $       5,391
        Mortgage-backed securities......................................                1,361                  936
        Other debt securities...........................................                  161                  218
        Federal funds sold .............................................                  532                   93
        Dividends from FRB and FHLB stock ..............................                   47                   39
        Other...........................................................                   14                    2
                                                                                -------------        -------------
              Total interest and dividend income........................               14,130                6,679
                                                                                -------------        -------------

Interest expense
        Deposits........................................................                7,079                2,227
        Federal funds purchased.........................................                   -                    23
        Securities sold under repurchase agreement .....................                  186                  282
        Advances from FHLB..............................................                   85                  212
                                                                                -------------        -------------
              Total interest expense....................................                7,350                2,744
                                                                                -------------        -------------

              Net interest and dividend income..........................                6,780                3,935
Provision for loan losses ..............................................                1,103                  443
                                                                                -------------        -------------
              Net interest and dividend income after
              provison for loan losses..................................                5,677                3,492
                                                                                -------------        -------------
Non-interest income
        Service charges and fees........................................                  572                  455
        Insurance commissions...........................................                   41                   -
        Gain on sale of securities......................................                   -                    16
        Gain on sale of loans...........................................                   10                    9
        Gain on sale of other real estate...............................                   -                    17
        Other income....................................................                    3                    4
                                                                                -------------        -------------
              Total non-interest income.................................                  626                  501
                                                                                -------------        -------------
Non-interest expense
        Salaries and employee benefits..................................                2,922                1,487
        Occupancy.......................................................                  770                  482
        Furniture and equipment.........................................                  316                  181
        Amortization of goodwill........................................                   77                   77
        Other expense...................................................                1,398                1,006
                                                                                -------------        -------------
              Total non-interest expense................................                5,483                3,233
                                                                                -------------        -------------
              Income before income tax expense..........................                  820                  760
Income tax expense .....................................................                  349                  322
                                                                                -------------        -------------
        Net income......................................................        $         471        $         438
                                                                                =============        =============
Per share data
  Net income per share - basic .........................................        $        0.12        $        0.15
                                                                                =============        =============
  Net income per share - diluted........................................        $        0.11        $        0.15
                                                                                =============        =============
  Weighted average shares outstanding - basic...........................            4,075,210            2,842,452
                                                                                =============        =============
  Weighted average shares outstanding - diluted.........................            4,195,409            2,842,452
                                                                                =============        =============
</TABLE>

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



                                       5
<PAGE>

<TABLE>
<CAPTION>
                                              ADMIRALTY BANCORP, INC. AND SUBSIDIARY

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

                                                                                          Six months ended       Six months ended
                                                                                           June 30, 2001          June 30, 2000
                                                                                          ---------------       -----------------
<S>                                                                                        <C>                  <C>
Operating activities
        Net income................................................................          $        471          $         438
        Adjustments to reconcile net income to net cash provided by
          operating activities
          Provision for loan losses ..............................................                 1,103                    443
          Depreciation and amortization ..........................................                   427                    260
          Amortization, net of accretion, of investment securities ...............                    27                      4
          Gain on sale of securities .............................................                    -                     (16)
          Gain on sale of loans ..................................................                   (10)                    (9)
          Gain on sale of other real estate owned.................................                    -                     (17)
          Increase in accrued interest receivable.................................                  (199)                  (237)
          Increase in other assets ...............................................                  (458)                  (634)
          Increase in accrued interest payable....................................                    88                    117
          (Decrease) increase in other liabilities................................                  (162)                   102
                                                                                            ------------          -------------
               Net cash provided by operating activities .........................                 1,287                    451
                                                                                            ------------          -------------

Investing activities
        Proceeds from maturities of investment securities
          available for sale......................................................                 8,361                  1,040
        Proceeds from maturities of investment securities
          held to maturity........................................................                 4,912                    620
        Proceeds from sale of investment securities available for sale ...........                    -                      17
        Purchases of investment securities available for sale.....................               (12,943)                (4,998)
        Purchases of investment securities held to maturity.......................               (14,564)                (4,998)
        Purchase of Federal Reserve Bank & FHLB stock ............................                  (367)                  (505)
        Net loan originations and principal collections on loans..................              (105,333)               (37,939)
        Proceeds from loan sales..................................................                   286                    289
        Proceeds from sales of other real estate owned............................                    -                     123
        Purchase of premises and equipment, net...................................                (2,824)                  (824)
                                                                                            ------------          -------------
               Net cash used in investing activities .............................              (122,472)               (47,175)
                                                                                            ------------          -------------

Financing activities
        Net increase in deposits..................................................               111,732                 43,162
        Net change in federal funds purchased.....................................                    -                    (571)
        (Decrease) increase in FHLB advances......................................                (3,000)                 9,000
        Proceeds from issuance of common stock - net of costs of $21..............                13,097                     -
                                                                                            ------------          -------------
               Net cash provided by financing activities .........................               121,829                 51,591
                                                                                            ------------          -------------

Net increase in cash and cash equivalents ........................................                   644                  4,867

Cash and cash equivalents, beginning of period ...................................                33,445                  5,136
                                                                                            ------------          -------------
Cash and cash equivalents, end of period .........................................          $     34,089          $      10,003
                                                                                            ============          =============
</TABLE>

 The accompanying notes are an integral part of these 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 (including normal recurring accruals)
which, in the opinion of management, are necessary to present fairly the
Company's consolidated financial condition and the consolidated results of
operations and the consolidated cash flows for interim periods.  Certain prior
year amounts have been reclassified to conform to the 2001 presentation.  The
results for interim periods are not necessarily indicative of trends or results
to be expected for the full year.  These condensed consolidated interim
financial statements and notes should be read in conjunction with the Company's
Annual Report on Form 10-KSB for the year ended December 31, 2000.

The Company is incorporated in the state of Delaware and is registered with the
Board of Governors of the Federal Reserve Bank as a financial holding company.
The Bank is a Florida state chartered commercial bank, with its main office in
Palm Beach Gardens, Florida, and branches in Altamonte Springs, Boca Raton,
Cocoa Beach, Juno Beach, Jupiter, Orlando (2) and Melbourne, Florida.  On March
11, 2000, the Company converted from a one bank holding company to a financial
holding company under the Gramm-Leach-Bliley Financial Modernization Act of 1999
(the "Modernization Act").  This status permits the Company to undertake
financial activities which need not be closely related to banking, such as
insurance brokerage activities.  Under the Modernization Act, the Company's bank
subsidiary must remain "well capitalized" (i.e., have a leveraged capital ratio
of 5% or greater and a risk based capital ratio of 10% or greater) and well
managed, or the Company could be required to divest itself of its non-banking
activities.  In addition, the Company must maintain a rating of "satisfactory"
or better under the Community Reinvestment Act.  The Company has entered into a
joint venture to sell insurance, and may seek alliances with other financial
service providers, as a way to enhance non-interest income.

The Company has formed Admiralty Insurance Services, LLC ("AIS") as a joint
venture with USI Florida ("USI") to offer a wide range of insurance products,
primarily to customers of the Bank.  USI and the Company are each 50 percent
owners of AIS.  USI and AIS will share equally in commissions on policies sold,
and the Company is entitled to 50 percent of the net income of AIS.  Under the
agreement, USI will absorb all costs incurred by AIS for operating expenses.
During the six months ended June 30, 2001, $41  thousand in income from AIS was
recognized by the Company.


NOTE 2 - RECENT ACCOUNTING PRONOUNCEMENTS

In June 1998, the Financial Accounting Standards Board ("FASB") issued SFAS No.
133, "Accounting for Derivative Instruments and Hedging Activities" ("Statement
133").  The effective date of Statement 133 was delayed by SFAS No. 137,
"Accounting for Derivative Instruments and Hedging Activities - Deferral of the
Effective Date of FASB No. 133."  Statement 133 is now effective for all
quarters of all fiscal years beginning after June 15, 2000, with early adoption
permitted.  Statement 133 establishes accounting and reporting standards for
derivative instruments, including certain derivative instruments embedded in
other contracts, and for hedging activities.  It requires that an entity
recognize all derivatives as either assets or liabilities in the statement of
financial position and measure those instruments at fair

                                       7
<PAGE>

value. The Company adopted Statement 133 on January 1, 2001, and adoption of the
statement did not have any financial statement impact.

In September 2000, the FASB issued SFAS No. 140, "Accounting for Servicing of
Financial Assets and Extinguishments of Liabilities," ("Statement 140") which
replaces SFAS No. 125.  This statement provides consistent standards for
distinguishing transfers of financial assets that are sales from transfers that
are secured borrowings.  Because Statement 140 focuses on control after a
transfer of financial assets, an entity is required to recognize the financial
and servicing assets it controls and the liabilities it has incurred,
derecognize financial assets when control has been surrendered, and derecognize
liabilities when extinguished.  All measurements and allocations should be based
on fair value.  Statement 140 is effective for transfers and servicing of
financial assets and extinguishments of liabilities occurring after June 30,
2001.  This statement is effective for recognition and reclassification of
collateral and for disclosures relating to securitization transactions and
collateral for fiscal years ending after December 15, 2000.  The implementation
of this statement did not have a material effect on the Company's financial
statements.

In July 2001, the FASB issued 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 June 30, 2001. Statement 142 will
require that goodwill and intangible assets with indefinite useful lives no
longer be amortized, but instead be tested for impairment at least annually in
accordance with the provisions of Statement 142. Other intangible assets would
continue to be amortized over the estimated useful lives. In the transition, any
impairment loss 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 is required to adopt the provisions of Statement 141 immediately and
the Company plans to adopt Statement 142 effective January 1, 2002. As of the
date of adoption, the Company expects to have unamortized goodwill in the amount
of $3.2 million that will be subject to the transition provisions of Statements
141 and 142. Pursuant to Statement 142 no further amortization of goodwill will
occur. Amortization expense related to goodwill was $77 thousand and $153
thousand for six months ended June 30, 2001 and the year ended December 31,
2000, respectively. Because of the calculations involved, the Company cannot
reasonably estimate at the date of this report whether any transitional
impairment losses will be required to be recognized as the cumulative effect of
a change in accounting principal.


NOTE 3 - COMPREHENSIVE INCOME


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

                                                          Six months ended
                                                   -----------------------------
                                                   June 30, 2001   June 30, 2000
                                                   -------------   -------------
                                                            (in thousands)

Net Income........................................... $ 471             $ 438

Other comprehensive income, net of tax -
     Change in net unrealized gain on securities
      held available for sale, net of taxes of $46
      and $12 in 2001 and 2000, respectively.........    75                21
                                                      -----             -----
Comprehensive income................................. $ 546             $ 459
                                                      =====             =====

                                       8
<PAGE>

NOTE 4 - NET INCOME PER SHARE

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

The following table illustrates the reconciliation of the numerator and
denominator of the basic and diluted earnings per share computations for the six
months ended June 30, 2001 and 2000:


                                                  Six months ended
                                         ---------------------------------
                                         June 30, 2001       June 30, 2000
                                         -------------       -------------
                                               (dollars in thousands)

Net income.............................   $      471           $      438
                                          ==========           ==========
Weighted average shares - basic........    4,075,210            2,842,452

Additional dilutive shares related
 to stock benefit plans................      120,199                    0
                                          ----------           ----------
Weighted average shares - diluted......    4,195,409            2,842,452
                                          ==========           ==========
Basic net income per share.............   $     0.12           $     0.15
                                          ==========           ==========
Diluted net income per share...........   $     0.11           $     0.15
                                          ==========           ==========

The basic and diluted weighted average number of shares outstanding and net
income per share information reflect a 1:1.1291 conversion ratio for
discretionary conversions of Class A shares to Class B shares, resulting from
the change in the Class A conversion ratio caused by the 1999 stock dividend on
the Class B shares.  During the three and six month periods ended June 30, 2001,
51,250 and 117,500 Class A shares were converted to 57,867 and 132,670 shares of
Class B common stock, respectively.  As of June 30, 2001, all of the Class A
common stock has been converted to Class B common stock.

The basic and diluted weighted average number of shares outstanding and net
income per share information reflect an increase in the average number of shares
outstanding due to stock purchase warrants exercised during the period.  Under
the terms of the warrant agreement the Company had the right to accelerate the
warrant expiration date in the event that (i) the Class B common stock is traded
on a nationally recognized  securities exchange or the NASDAQ National or
SmallCap Market, and (ii) the Class B common stock has traded at $13.28 per
share or above and has not traded below $13.28 per share for 20 consecutive
trading days.  Having met the two conditions, the Company accelerated the
expiration date of the warrants to June 15, 2001.  During the three and six
month periods ended June 30, 2001, 1,026,979 and 1,079,907 Class B shares were
issued for the exercise of warrants.  As of June 30, 2001 no warrants remained
outstanding.

                                       9
<PAGE>

NOTE 5 - INVESTMENT AND MORTGAGE BACKED SECURITIES

The amortized cost and fair value of investment securities and mortgage-backed
securities at June 30, 2001 are as follows:

<TABLE>
<CAPTION>

                                          AMORTIZED     GROSS UNREALIZED  GROSS UNREALIZED
                                            COST            GAINS            LOSSES         FAIR VALUE
                                       --------------   ---------------   ----------------  ----------
                                                             (In thousands)
June 30, 2001
-------------
<S>                                        <C>             <C>             <C>             <C>
AVAILABLE FOR SALE:

U.S. Government and Agency
 securities.....................           $ 2,000          $ 28            $  0           $ 2,028

Mortgage-backed securities......            16,107           183              (7)           16,283

Other securities................                14             0               0                14
                                           -------          ----            ----           -------
Sub-total.......................           $18,121          $211            $ (7)          $18,325
                                           -------          ----            ----           -------
HELD TO MATURITY:

U.S. Government and Agency
 securities.....................           $   500          $ 17            $  0           $   517

Mortgage-backed securities .....            33,680           526             (23)           34,183
                                           -------          ----            ----           -------
Sub-total.......................           $34,180          $543            $(23)          $34,700
                                           -------          ----            ----           -------
TOTAL ..........................           $52,301          $754            $(30)          $53,025
                                           =======          ====            ====           =======
</TABLE>



The amortized cost and fair value of investment and mortgage-backed securities
at December 31, 2000 are as follows:

<TABLE>
<CAPTION>

                                          AMORTIZED     GROSS UNREALIZED  GROSS UNREALIZED
                                            COST            GAINS            LOSSES         FAIR VALUE
                                       --------------   ---------------   ----------------  ----------
                                                             (In thousands)
December 31, 2000
-----------------
<S>                                      <C>               <C>             <C>               <C>
AVAILABLE FOR SALE:

U.S. Government and Agency
 securities.....................           $ 7,500          $  7            $(30)            7,477

Mortgage-backed securities......             6,031           106               0             6,137

Other securities................                14             0               0                14
                                           -------          ----            ----           -------
Sub-total.......................           $13,545          $113            $(30)          $13,628
                                           -------          ----            ----           -------
</TABLE>

                                       10
<PAGE>

<TABLE>
<CAPTION>

HELD TO MATURITY:
<S>                                      <C>               <C>             <C>               <C>
U.S. Government and Agency
 securities.....................           $ 1,000          $  5            $ (1)          $ 1,004

Mortgage-backed securities......            23,549           228               0            23,777
                                           -------          ----            ----           -------
Sub-total.......................           $24,549          $233            $ (1)          $24,781
                                           -------          ----            ----           -------
TOTAL ..........................           $38,094          $346            $(31)          $38,409
                                           =======          ====            ====           =======
</TABLE>

The carrying value of securities pledged to secure deposits and for other
purposes required or permitted by law amounted to approximately $27.5 million
and $28.1 million at June 30, 2001 and December 31, 2000, respectively.


NOTE 6 - LOANS

The following schedule presents the components of loans, net of unearned income,
by type, as of June 30, 2001 and December 31, 2000:

<TABLE>
<CAPTION>
                                                          June 30, 2001                 December 31, 2000
                                                          -------------                 -----------------
                                                                     (Dollars in thousands)
                                                        Amount       Percent          Amount       Percent
                                                        ------       -------          ------       -------
<S>                                                      <C>           <C>              <C>          <C>
Commercial and Industrial........................      $ 50,156        15%            $ 43,006        19%

Real Estate Non-Residential Properties...........       233,736        71%             147,996        67%

Residential Properties...........................        25,313         8%              19,399         9%

Construction.....................................        12,770         4%               7,869         3%

Consumer.........................................         5,142         2%               3,424         2%
                                                       --------       ---             --------       ---
Gross Loans......................................       327,117       100%             221,694       100%
                                                                      ---                            ---
less:  net deferred fees.........................         1,045                            684
                                                       --------                       --------
Total loans......................................       326,072                        221,010

less:  allowance for loan losses.................         3,489                          2,381
                                                       --------                       --------
Net loans........................................      $322,583                       $218,629
                                                       ========                       ========
</TABLE>

                                       11
<PAGE>

Changes in the allowance for loan losses are as follows:


                                              Six months ended
                                   -------------------------------------
                                   June 30, 2001           June 30, 2000
                                   -------------           -------------
                                           (Dollars in thousands)
                                      --------------------------------
Balance at beginning of year           $2,381                  $1,017
Provision for loan losses               1,103                     443
Charge-offs                                 -                       -
Recoveries                                  5                       3
                                       ------                  ------
Ending Balance                         $3,489                  $1,463
                                       ======                  ======
Ratio of net charge-offs to
average loans outstanding                0.00%                   0.00%

Balance of allowance as a % of
total loans at period end                1.07%                   1.06%



Loans with unpaid principal balances of $425 and $402 thousand were 90 days or
more contractually delinquent or on nonaccrual status at June 30, 2001 and
December 31, 2000.

                                       12
<PAGE>

Item 2.

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

                                   OVERVIEW
                                   --------

               SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This report contains certain "forward-looking statements" as defined under
Section 21E of the Securities Exchange Act of 1934.  The Company desires to take
advantage of the "safe harbor" provisions of Section 21E and is including this
statement for the express purpose of availing itself of the protection of the
safe harbor with respect to all such forward-looking statements.  These forward-
looking statements, which are included in Management's Discussion and Analysis,
describe future plans or strategies and may include the Company's expectations
of future financial results.  The words "believe", "expect", "anticipate",
"estimate", "project", and similar expressions identify forward-looking
statements.  The Company's ability to predict results or the effect of future
plans or strategies or qualitative or quantitative changes based on market risk
exposure is inherently uncertain.  Factors which could effect actual results
include but are not limited to i) 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.

                                       13
<PAGE>

 EXPANSION INTO THE ORLANDO, FLORIDA MARKET, WITHIN BREVARD COUNTY, FLORIDA AND
                          INTO BROWARD COUNTY, FLORIDA

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

To undertake our capital offering we filed a registration statement on Form SB-2
with the Securities and Exchange Commission that became effective on November 7,
2000.  The full 1.1 million shares offered were sold before January 31, 2001.

The Company opened a full service branch in downtown Orlando on September 7,
2000.  The Company opened a full service South Orlando branch on March 19, 2001
and opened a full service branch in Altamonte Springs, a suburb of Orlando, on
June 15, 2001.

The Company is also expanding its operation in Brevard County, Florida.  We
currently operate a full service branch in Melbourne which opened in March 2000
and opened a full service branch in Cocoa Beach, Florida in April 2001.

The Company announced its expansion into the Broward County, Florida market in
July 2001.  We are currently remodeling a former bank branch in downtown Fort
Lauderdale, Florida which we expect to open as a full service facility in August
2001.

The Board of Directors and management has focused on the Company's continued
growth, as the Board believes the Company must reach a critical mass to maximize
profitability and shareholder value.  This growth strategy has impacted the
Company's earnings through loan loss reserve provisions, to reflect the
increased size of the portfolio, and higher non-interest expense.  The Company
expects to remain focused on franchise growth through the remainder of 2001, and
then to focus on enhancing profitability in 2002 and thereafter, while
moderating growth.

                                       14
<PAGE>

                             RESULTS OF OPERATIONS


              Three Months Ended June 30, 2001 and June 30, 2000.

For the quarter ended June 30, 2001, the Company generated net income of $171
thousand, a decrease from net income of $225 thousand for the second quarter of
2000.

At June 30, 2001, the Company's total assets reached $423.7 million, an increase
of 40.6% over total assets at December 31, 2000.  The Company's net loans
totaled $322.6 million, an increase of 47.5% over net loans at December 31,
2000, and the Company's deposits totaled $373.0 million, an increase of 42.8%
over total deposits at December 31, 2000.

Interest and Dividend Income.  Total interest and dividend income increased $3.7
million, or 101.7%, to $7.4 million for the quarter ended June 30, 2001 from
$3.7 million for the same period of 2000.  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 the portfolio of interest earning
assets.  Average balances increased by $173.8 million for loans, $15.8 million
for investment securities including Federal Reserve Bank stock and FHLB stock
and $12.0 million for federal funds sold.  The average yield on the loan
portfolio decreased to 8.5% in the second quarter of 2001, compared to 9.4% in
the second quarter of 2000.  The average yield on federal funds sold decreased
to 4.3% in 2001 from 6.4% in 2000.  The average yield on investment securities,
including Federal Reserve Bank and FHLB stocks, decreased to 6.6% in the second
quarter 2001 from 7.1% in the second quarter of 2000.  During the three months
ended June 30, 2001 the yield on the Company's interest earning assets decreased
to 8.0% from 8.8% earned during the three months ended June 30, 2000.  All
decreases are due primarily to lower market rates of interest.

Interest Expense.  The Company's interest expense for the second quarter of 2001
increased $2.2 million, or 143.2%, to $3.8 million from $1.6 million for the
same period last year.  The increase in interest expense reflects a 142.1%
increase in average interest bearing liabilities at June 30, 2001, as compared
to the same period in 2000.  The average balance of time deposits and money
market deposits increased by $138.6 million, and $45.9 million, respectively, in
the second quarter of 2001 as compared to the same period in 2000.  The increase
in time deposits reflects our need to aggressively compete for deposits to fund
our ongoing loan growth.  The increase in money market deposit accounts reflects
the success of our tiered-rate money market accounts which offer competitive
rates based upon the size of the customer's account balance.  In addition, the
average balance of the Company's non-interest bearing demand deposits increased
by $17.7 million, to $50.2 million for the three months ended June 30, 2001 from
$32.5 million for the three months ended June 30, 2000.  The Company's average
cost of deposits for the three months ended June 30, 2001 increased to 4.3% from
3.7% for the comparable period of 2000, primarily due to the increased volume of
the higher yielding money market and time deposit accounts, needed to fund our
continued loan growth, partially offset by lower rates being paid on those
accounts.  The average balance of securities sold under agreement to repurchase
was $5.9 million, and the average balance of advances from the FHLB was $2.1
million, at average rates of 6.4% and 4.7% respectively, during the three months
ended June 30, 2001.  In the quarter ended June 30, 2000 the average balance of
securities sold under agreement to repurchase was $9.1 million and the average
of advances from the FHLB was $9.2 million, at average rates of

                                       15
<PAGE>

6.2% and 6.5% respectively. The funds obtained through the repurchase agreement
and FHLB advances were used to purchase securities under a leveraged growth and
interest rate risk reduction strategy. The Company's average cost of funds for
the three months ended June 30, 2001, increased to 4.3% from 4.0% in the
comparable period of 2000.

Net-Interest and Dividend Income. Net interest and dividend income for the three
months ended June 30, 2001, increased by $1.5 million, or 70.6%, over the same
period last year.

The Company's net interest spread decreased 78 basis points to 3.00% for the
three months ended June 30, 2001, from 3.78% for the comparable period of 2000,
reflecting the Company's lower yield on earning assets and higher cost of funds
for the current period.

Provision for Loan Losses.  The increase to $656 thousand from $244 thousand in
the provision for loan losses for the three months ended June 30, 2001, compared
to the comparable period of 2000, reflects the growth in the loan portfolio in
the second quarter of 2001 compared to the same period the prior year.  The
Company's provision for loan losses maintained the reserve at a level management
believes appropriate in light of the Company's lending activities, the quality
of the loan portfolio, historical experience, volume and type of lending
conducted by the Company, the status of past due and non-performing loans, the
general economic conditions of the Company's lending area and other factors
affecting collectibility of the Company's loan portfolio.  The provision for the
three months ended June 30, 2001 was due to growth primarily in the non-
residential real estate loan portfolio and to a lesser extent due to growth in
the commercial and industrial, residential real estate and construction loan
portfolios.  The Company had no material recoveries or charge offs against the
reserve during the quarter.  The Company did not experience any material change
in its level of classified loans during the three month period ended June 30,
2001, while the Company's ratio of non-performing assets to total assets
declined to 0.10% at June 30, 2001 from 0.18% at December 31, 2000.  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 second quarter of 2001, total non-interest income
increased $66 thousand, or 26.6%, from the same period of last year.  The
increase includes $69 thousand more in service charges and fees and $24 thousand
in commissions earned by Admiralty Insurance Services, LLC, the Company's
insurance affiliate.  These increases were partially offset by the absence of
any gains on sales of loans or gains on sales of other real estate in the second
quarter of 2001, while the Company had $9 thousand in gains on sales of loans
and $17 thousand in gains on sale of other real estate in the second quarter of
2000.

Non-Interest Expense.  For the three month period ended June 30, 2001, the
Company experienced increases in its non-interest expense over the comparable
period of 2000.  For the three month period ended June 30, 2001, the Company's
total non-interest expense was $2.9 million, compared to total non-interest
expense of $1.7 million for the 2000 period.  The increase in non-interest
expense in the three month period of 2001 reflects a $780 thousand increase in
compensation and employee benefit expense as the Company hired additional staff
to administer growth in its loan and deposit portfolios and to staff its new
full service branches in downtown Orlando (which opened in September 2000),
South Orlando (which opened in March 2001), Cocoa Beach (which opened in April
2001) and Altamonte Springs which opened in June 2001.  Full time equivalent
employees increased to 118 at June 30, 2001, from 66 at June 30, 2000.

                                       16
<PAGE>

Occupancy expense increased by $163 thousand, or 61.0%, in the three months
ended June 30, 2001 as compared to the same period in 2000.  Rents at the
downtown Orlando office, South Orlando office, Cocoa Beach office and Altamonte
Springs office were $71 thousand, $41 thousand, $27 thousand and $11 thousand,
respectively, in the second quarter of 2001 while the Company did not have these
locations in the second quarter of 2000.  Furniture and equipment expenses
increased to $169 thousand in the second quarter of 2001 from $97 thousand in
the second quarter of 2000.  Furniture and equipment expenses at the Cocoa Beach
office, downtown Orlando office, Altamonte Springs office, and the South Orlando
office were $8 thousand, $17 thousand, $3 thousand and $8 thousand respectively
in 2001 while the Company did not have these locations in 2000.  The Company
also had $30 thousand more in furniture and equipment expenses related to its
administrative and operational functions, primarily related to its new in-house
data processing and items processing functions which were put into service in
April 2000.  Goodwill amortization totaled $39 thousand for the second quarter
of 2001 and 2000.  The Company also experienced the following increases in other
non-interest expenses related primarily to its growth:  telephone expense
increased $24  thousand, or 66.0%, stationery and supplies expense increased $38
thousand, or 92.6%, business development expense increased $36 thousand,  or
96.1%, donations increased $17 thousand, or 491.7%, directors fees and expenses
increased $23 thousand, or 112.3%, committee fees increased $15 thousand
compared to no such fees in the second quarter of 2000 and FDIC and State
assessments increased $30 thousand, or 194.7%.  ATM processing fees decreased
$14 thousand, or 58.8% and other losses decreased $53 thousand, or 100% from the
second quarter of 2000.

Income Taxes.  Income tax expense decreased  to $137 thousand for the quarter
ended June 30, 2001, compared to $166 thousand for the same period last year due
to lower taxable income in the current quarter.  The effective tax rate for the
second quarter of 2001 was 44.5% compared to 42.5% in the second quarter of
2000.  The increase in the effective rate for the quarter results from changes
in estimates of  the annual effective tax rate from quarter to quarter.

                                       17
<PAGE>

               Six months Ended June 30, 2001 and June 30, 2000.

For the period ended June 30, 2001, the Company generated net income of $471
thousand, an increase from net income of $438 thousand for the same period in
2000.

Interest and Dividend Income.  Total interest and dividend income increased $7.4
million, or 111.6%, to $14.1 million for the period ended June 30, 2001 from
$6.7 million for the same period of 2000.  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 the portfolio of interest earning
assets.  Average balances increased by $155.1 million for loans, $12.7 million
for investment securities including Federal Reserve Bank stock and FHLB stock
and $18.2 million for federal funds sold.  The average yield on the loan
portfolio decreased to 8.9% in the six month period ended June 30, 2001,
compared to 9.3% in the same period in 2000.  The average yield on federal funds
sold decreased to 5.1% in 2001 from 6.3% in 2000.  The average yield on
investment securities, including Federal Reserve Bank and FHLB stocks, decreased
to 6.7% in the period ended June 30, 2001 from 7.0% in the same period in 2000.
During the six months ended June 30, 2001 the yield on the Company's interest
earning assets decreased to 8.4% from 8.7% earned during the six months ended
June 30, 2000.  These decreases are due primarily to lower market rates of
interest.

Interest Expense.  The Company's interest expense for the period ended June 30,
2001 increased $4.6 million, or 167.9%, to $7.3 million from $2.7 million for
the same period last year.  The increase in interest expense reflects a 146.1%
increase in average interest bearing liabilities at June 30, 2001, as compared
to the same period in 2000.  The average balance of time deposits and money
market deposits increased by $126.1 million, and $43.1 million, respectively, in
the period ended of 2001 as compared to the same period in 2000.  The increase
in time deposits reflects our need to aggressively compete for deposits to fund
our ongoing loan growth.  The increase in money market deposit accounts reflects
the success of our tiered-rate money market accounts which offer competitive
rates based upon the size of the customer's account balance.  In addition, the
average balance of the Company's non-interest bearing demand deposits increased
by $14.9 million, to $45.9 million for the six months ended June 30, 2001 from
$31.0 million for the six months ended June 30, 2000.  The Company's average
cost of deposits for the six months ended June 30, 2001 increased to 4.5% from
3.5% for the comparable period of 2000, primarily due to the increased volume of
the higher yielding money market and time deposit accounts, needed to fund our
continued loan growth, partially offset by lower rates being paid on those
accounts.  The average balance of securities sold under agreement to repurchase
was $5.9 million, and the average balance of advances from the FHLB was $3.0
million, at average rates of 6.4% and 5.7% respectively, during the six months
ended June 30, 2001.  In the period ended June 30, 2000 the average balance of
securities sold under agreement to repurchase was $9.1 million and the average
of advances from the Federal Home Loan Bank was $6.6 million, at average rates
of 6.2% and 6.4% respectively.  The funds obtained through the repurchase
agreement and FHLB advances were used to purchase securities under a leveraged
growth and interest rate risk reduction strategy.  The Company's average cost of
funds for the six months ended June 30, 2001, increased to 4.6% from 3.8% in the
comparable period of 2000.

Net-Interest and Dividend Income. Net interest and dividend income for the six
months ended June 30, 2001, increased by $2.8 million, or 72.3%, over the same
period last year.

                                       18
<PAGE>

The Company's net interest spread decreased 80 basis points to 3.07% for the six
months ended June 30, 2001, from 3.87% for the comparable period of 2000,
reflecting the Company's lower yield on earning assets and higher cost of funds
for the current period.

Provision for Loan Losses.  The increase to $1.1 million from $443 thousand in
the provision for loan losses for the six months ended June 30, 2001, compared
to the comparable period of 2000, reflects the growth in the loan portfolio in
the period ended June 30, 2001 compared to the same period the prior year.  The
Company's provision for loan losses maintained the reserve at a level management
believes appropriate in light of the Company's lending activities, the quality
of the loan portfolio, historical experience, volume and type of lending
conducted by the Company, the status of past due and non-performing loans, the
general economic conditions of the Company's lending area and other factors
affecting collectibility of the Company's loan portfolio.  The provision for the
six months ended June 30, 2001 was due to growth primarily in the non-
residential real estate loan portfolio and to a lesser extent due to growth in
the commercial and industrial, residential real estate and construction loan
portfolios.  The Company had recoveries of $5 thousand and no charge offs
against the reserve.  The Company did not experience any material change in its
level of classified loans during the six month period ended June 30, 2001, while
the Company's ratio of non-performing assets to total assets declined to 0.10%
at June 30, 2001 from 0.18% at December 31, 2000.  While the Company's
management uses available information to recognize losses on loans, future
additions to the allowance may be necessary based on changes in economic
conditions, the financial status of borrowers and regulatory requirements.

Non-Interest Income.  For the first six months of 2001, total non-interest
income increased $125 thousand, or 25.0%, from the same period of last year.
The increase includes $117 thousand more in service charges and fees and $41
thousand in commissions earned by Admiralty Insurance Services, LLC, the
Company's insurance affiliate.  These increases were partially offset by the
absence of any gains on sales of securities or gains on sales of other real
estate in the period ended June 30, 2001, while the Company had $16 thousand in
gains on sales of securities and $17 thousand in gains on sale of other real
estate in the period ended June 30, 2000.

Non-Interest Expense.  For the six month period ended June 30, 2001, the Company
experienced increases in its non-interest expense over non-interest expense for
the comparable period of 2000.  For the six month period ended June 30, 2001,
the Company's total non-interest expense was $5.5 million, compared to total
non-interest expense of $3.2 million for the comparable period in 2000.  The
increase in non-interest expense in the first six months of 2001 reflects a $1.4
million increase in compensation and employee benefit expense as the Company
hired additional staff to administer growth in its loan and deposit portfolios
and to staff its new full service branches in downtown Orlando (which opened in
September 2000), South Orlando (which opened in March 2001), Cocoa Beach (which
opened in April 2001) and Altamonte Springs which opened in June 2001.  Full
time equivalent employees increased to 118 at June 30, 2001, from 66 at June 30,
2000.  Occupancy expense increased by $288 thousand, or 59.8%, in the six months
ended June 30, 2001 as compared to the same period in 2000.  Rents at the
downtown Orlando office, South Orlando office, Melbourne office, and Cocoa Beach
office were $132 thousand, $45 thousand, $18 thousand, and $27 thousand,
respectively, in the period ended June 30, 2001 while the Company did not have
these locations in 2000.  Furniture and equipment expenses increased to $316
thousand in the six month period ended June 30, 2001 from $181 thousand in the
comparable period of 2000.  Furniture and equipment expenses at the

                                       19
<PAGE>

Cocoa Beach office, downtown Orlando office, Altamonte Springs office, and the
South Orlando office were $9 thousand, $36 thousand, $4 thousand and $9 thousand
respectively in 2001 while the Company did not have these locations in the
comparable period of 2000. The Company also had $58 thousand more in furniture
and equipment expenses related to its administrative and operational functions
primarily related to its new in-house data processing and items processing
functions which were put into service in April 2000. Goodwill amortization
totaled $77 thousand for the six month periods ended June 30, 2001 and 2000. The
Company also experienced the following increases in other non-interest expenses
related primarily to its growth: telephone expense increased $38 thousand, or
58.4%, waived check printing fees increased $23 thousand, or 139.2%, stationery
and supplies expense increased $54 thousand, or 68.5%, business development
expense increased $62 thousand, or 110.1%, data processing costs increased $41
thousand, or 23.9%, directors fees and expenses increased $45 thousand, or
100.0%, and FDIC and State assessments increased $54 thousand, or 186.9%. ATM
processing fees decreased $28 thousand, or 59.4% and other losses decreased $53
thousand, or 93.1%.

Income Taxes.  Income tax expense increased to $349 thousand for the period
ended June 30, 2001, compared to $322 thousand for the same period last year due
to higher taxable income in the current period.  The effective tax rate for the
period ended of 2001 was 42.6% compared to 42.4% in the period ended of 2000.

                                       20
<PAGE>

                              FINANCIAL CONDITION

                  June 30, 2001 compared to December 31, 2000

Total assets increased to $423.7 million, an increase of $122.3 million, or
40.6%, from total assets of $301.4 million at December 31, 2000.  Increases in
total assets included increases of 2.1 million in cash and demand balances due
from banks, $104.0 million in net loans, $9.6 million in investment securities
held to maturity, $4.7 million in investment securities available for sale, $2.5
million in net premises and equipment, $199 thousand in accrued interest
receivable, and decreases of $930 thousand in interest bearing due from banks
and $546 thousand in federal funds sold.

The $104.0 million increase in net loans is comprised primarily of $7.1 million
in commercial loans, $85.7 million in non-residential real estate loans, $5.9
million in residential real estate loans, and $4.9 million in construction
loans.  The net increase is the result of the management team's efforts to
attract new business and expand relationships with existing customers.  Loans
originated in the recently opened Orlando, Florida branches contributed $51
million toward the overall increase in loans.

At June 30, 2001, cash and due from banks increased $2.1 million partially as a
result of additional cash for the newly opened branches and partially due to
larger cash letters associated with the larger depositor base.  Interest bearing
due from banks decreased $930 thousand as one bank account which was no longer
needed was closed and funds were drawn down from the Federal Home Loan Bank
account.  The Company added to its investment portfolio to enhance its return on
its liquid assets and maintain adequate liquidity.  Securities available for
sale and securities held to maturity increased $4.7 million and $9.6 million
respectively, during the first six months of 2001.  Federal Reserve Bank stock
and FHLB stock increased $367 thousand as the Company increased its holdings of
Federal Reserve Bank stock in compliance with its membership requirements.
Accrued interest receivable increased $199 thousand as a result of growth in the
loan and investment portfolios.  The Company's net investment in premises and
equipment increased $2.5 million, including $1.1 million for land to be used for
the Altamonte Springs branch.  The Altamonte Springs branch opened June 15, 2001
in a leased modular building.  A permanent branch will be built on the remaining
portion of the land.  The site occupied by the permanent building is a corner
lot with access from two roads.  After the permanent facility is opened the
Company expects to return the modular unit and sell the excess land.   The
increase in net premises and equipment also includes net increases of $532
thousand, $343 thousand and $338 thousand for improvements at the South Orlando,
downtown Orlando and Cocoa Beach branches, respectively.  The South Orlando
branch opened during March 2001, the downtown Orlando branch moved into its
permanent location in February 2001, and the Cocoa Beach office opened in April
2001.  Other assets increased $458 thousand, including increases of $216
thousand in prepaid expenses and $287 thousand in taxes receivable.

                                       21
<PAGE>

Total deposits increased 42.8%, to $373.0 million at June 30, 2001 from $261.3
million at December 31, 2000.  Deposits are summarized as follows:


                                           June 30, 2001    December 31, 2000
                                           -------------    -----------------
                                                   (in thousands)
Non-interest bearing demand..............     $ 49,412          $ 41,025
Savings, NOW and money market............      127,304            88,986
Time deposits, under $100,000............       86,648            63,607
Time deposits, $100,000 and over.........      109,683            67,697
                                              --------          --------
                                              $373,047          $261,315
                                              ========          ========

Money market accounts increased $32.4 million in the first six months of 2001.
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 increased $65.0 million in the six months of 2001.  The Company
subscribes to a deposit listing service on the internet which allows it to post
time deposit rates on a web site which is available to other subscribers who use
the site as an information source for investing in time deposits.  The deposits
raised through this program are primarily deposits of credit unions, savings
banks and commercial banks, although $22.9 million in deposits have been raised
through deposit brokers utilizing the program.  Certificates of deposit sold to
brokers are at the same rates and terms offered to the banks and credit unions
utilizing the program.  The terms of the deposits offered through the internet
program are generally from ninety days to three years.  The Company raised $45.4
million with this program in the first six months of 2001.  At June 30, 2001 the
Company had $79.5 million in deposits raised through this program compared to
$34.1 million at December 31, 2000.  The weighted average rate of the internet
portfolio at June 30, 2001 was 5.13% and the weighted average remaining life was
5.39 months.  The weighted average rate of the local time deposit portfolio,
excluding public fund time deposits, at June 30, 2001 was 5.56% and the weighted
average remaining life was 6.01 months.

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


<TABLE>
<CAPTION>
                                                         JUNE 30, 2001                       DECEMBER 31, 2000
                                               --------------------------------      -------------------------------
                                                                    AVERAGE                                AVERAGE
                                                 AMOUNT              YIELD              AMOUNT              YIELD
                                                 ------             -------             ------             --------
                                                                   (dollars in thousands)
<S>                                               <C>                <C>                 <C>                <C>
Non-Interest Bearing Demand .............        $ 45,918            0.0%              $ 32,738              0.0%
Interest-Bearing Demand..................          17,201            0.6%                12,544              0.7%
Money Market Deposits ...................          85,639            4.3%                53,811              5.0%
Savings Deposits.........................           2,163            1.8%                 2,296              2.0%
Time Deposits............................         165,970            6.3%                63,912              6.5%
                                                 --------                              --------
Total                                            $316,891                              $165,301
                                                 ========                              ========
</TABLE>


The decreased average yield on time deposits is attributable to lower market
interest rates.  The Company offered these higher yielding certificates of
deposit to attract deposits to fund the growth in the loan portfolio.

                                       22
<PAGE>

FHLB advances totaled $1.0 million at June 30, 2001 compared to $4.0 million at
December 31, 2000.  The funds used to reduce the borrowing were raised through
the deposit portfolio.  The funds obtained in this borrowing were used toward
the purchase of a $10 million GNMA II mortgage-backed security, of which one
half is classified as available for sale and one half is classified as held to
maturity.  The security is pledged to secure the borrowing line and the Company
is required to maintain a specified margin between the market value of the
security and the amount advanced under the line.

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




<TABLE>
<CAPTION>
                                                                Six months ended   Twelve months ended
                                                                  June 30, 2001     December 31, 2000
                                                                ----------------   -------------------
                                                                     (dollars in thousands)
<S>                                                                   <C>               <C>
FHLB advances
      Balance outstanding..............................             $1,000              $4,000
      Weighted average interest rate at period end.....                3.9%                6.6%
      Maximum balance at any month-end.................             $4,000              $9,400
      Average amount outstanding during period.........             $2,992              $6,118
      Weighted average interest rate during period.....                5.8%                6.6%
</TABLE>


Accrued interest payable increased $88 thousand, or 14.7%, due primarily to an
increased volume of interest paying liabilities partially offset by lower rates
on some of those liabilities.  Other liabilities decreased $162 thousand, or
19.5%, due primarily to a $64 thousand decrease in loan commitment fees on loans
not yet closed and a $12 thousand increase in accrued expenses payable and a $93
thousand decrease in taxes payable.

ASSET QUALITY

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

Non-performing assets include loans that are not accruing interest (non-accrual
loans) as a result of principal or interest being in default for a period of 90
days or more.  When a loan is classified as non-accrual, interest accruals
discontinue and all accumulated accrued interest receivable 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 $425 thousand at June 30, 2001 from $402 thousand
at December 31, 2000.  The balance represents the unguaranteed portion of six
Small Business Administration

                                       23
<PAGE>

loans and one automobile loan to an individual. 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 no other real estate owned at June 30, 2001 or December 31,
2000.

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


                                        June 30,              December 31,
                                          2001                    2000
                                        --------              ------------
                                             (dollars in thousands)

Non-accrual loans                      $   425                   $   402

Other real estate owned                      0                         0
                                       -------                   -------

Total non-performing assets(1)         $   425                   $   402
                                       =======                   =======

Non-accrual loans to total loans          0.13%                     0.18%

Non-performing assets to total assets     0.10%                     0.18%

Allowance for loan losses as a
percentage of non-performing assets     820.94%                   592.29%


(1)  No loans were past due 90 days or more and still accruing interest at the
     periods presented.


ALLOWANCE FOR LOAN LOSSES

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

At June 30, 2001, the allowance for loan losses was $3.5 million, an increase of
$1.1 million from December 31, 2000.  During the six months ended June 30, 2001
the Company had no charge-offs, recoveries of $5 thousand and provided a loan
loss provision of $1.1 million.

                                       24
<PAGE>

INVESTMENT SECURITIES

At June 30, 2001, the Company's investment securities portfolio, both held to
maturity and available for sale, totaled $52.5 million, an increase of $14.3
million, from total investment securities of $38.2 million at December 31, 2000.
The Company invested primarily in mortgage backed securities during the first
six months of 2001.  At June 30, 2001, $18.3 million of the Company's investment
securities were classified as available for sale and $34.2 million were
classified as held to maturity.  At December 31, 2000, $13.6 million and $24.6
million of securities were classified as available for sale and held to
maturity, respectively.


LIQUIDITY

Net cash provided by the Company's operating activities was $1.3 million in the
first six months of 2001 compared to $451 thousand for the six months ended June
30, 2000.  The increase is the result of the period's net income as well as the
non-cash increase in the allowance for loan losses.

Net cash used in investing activities was $122.5 million in the period ended
June 30, 2001 compared to $47.2 million in the comparable period of 2000.  The
Company used $14.2 million for net investment securities in 2001, while in 2000
it used $8.3 million for its securities portfolio.  Additionally, the Company
used $105.0 million and $37.7 million for net loans and loan sales in the first
six months of 2001 and 2000, respectively.

Net cash provided by the Company's financing activities was $121.8 million in
the first six months of 2001, and $51.6 million in the comparable period of
2000.  The increase in 2001 was due to a $111.7 million increase in deposits,
net proceeds of $13.1 million for stock issued and repayment of $3 million of
FHLB borrowings.  Deposits provided an increase of $43.2 million and proceeds
from FHLB advances provided $9.0 million in the three months ended June 30,
2000.

As a state chartered commercial bank, the Bank is required to maintain a daily
liquidity position equal to at least 15 percent of its total transaction
accounts and 8 percent of its total nontransaction accounts, less those deposits
of public funds for which security has been pledged.  As of June 30, 2001, the
Bank had a liquidity ratio of 19.4% 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 June 30, 2001, federal funds sold
totaled $20.6 million.  Funds not required to meet loan and deposit demand were
invested primarily in mortgage-backed 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 $18.3 million at June 30, 2001.

An additional external source of liquidity is an unsecured $7.5 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 June 30, 2001, 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 six months ended June 30, 2001.
The Company also

                                       25
<PAGE>

maintains a line of credit at the Federal Home Loan Bank of Atlanta secured by
securities and first mortgage loans. The total credit available under this line
is ten percent of the Bank's assets with the actual amount available based on
the market value of the collateral pledged.


CAPITAL RESOURCES

Total stockholders' equity increased to $42.4 million at June 30, 2001 from
$28.7 million at December 31, 2000.  June 30, 2001 equity was affected by net
income of $471 thousand, $2.5 million raised through a public offering of the
Company's Class B common stock, $10.5 million raised as a result of the exercise
of warrants, $54 thousand from the exercise of stock options and an increase of
$75 thousand in net unrealized gains on available for sale securities.

At June 30, 2001, the Company exceeded all regulatory capital requirements as
follows:



<TABLE>
<CAPTION>

                                                         CAPITAL ADEQUACY
                                                      (dollars in thousands)

                                                                                         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)......    42,173   11.53%         *29,256       *8.00%     *36,569          *10.00%

Tier I Capital
     (to risk weighted assets)......    38,684   10.58%         *14,628       *4.00%     *21,942           *6.00%

Tier I Capital
     (to average assets)............    38,684    9.87%         *15,677       *4.00%     *19,596           *5.00%
</TABLE>

*  Greater than or equal to

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.

                                       26
<PAGE>

At June 30, 2001, the Bank exceeded all regulatory capital requirements as
follows:


<TABLE>
<CAPTION>

                                                         CAPITAL ADEQUACY
                                                      (dollars in thousands)




                                                                                       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).....    41,612      11.38%         *29,251      *8.00%    *36,564      *10.00%

Tier I Capital
      (to risk weighted assets) ....    38,123      10.43%         *14,626      *4.00%     *21,938      *6.00%

Tier I Capital
      (to average assets)...........    38,123       9.89%        *15,423      *4.00%     *19,279      *5.00%
</TABLE>

*  Greater than or equal to

                                       27
<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


(a)  The annual shareholders' meeting was held April 27, 2001.
(b)  Not applicable.
(c)  The following directors were elected to serve three year terms in an
     uncontested election:

<TABLE>
<CAPTION>
                                     Shares Voted          Shares Voted                                          Broker Non-
                                          For            Against/Withheld              Abstentions                  Votes
--------------------------------------------------------------------------------------------------------------------------------
<S>                           <C>                     <C>                   <C>                       <C>
Sidney Hofing                        3,230,698                  0                       54,729                         0
--------------------------------------------------------------------------------------------------------------------------------
Ward Kellogg                         3,230,598                  0                       54,829                         0
--------------------------------------------------------------------------------------------------------------------------------
Patrick C. Mathes, III               3,230,698                  0                       54,729                         0
--------------------------------------------------------------------------------------------------------------------------------
Peter L.A. Pantages                  3,230,474                  0                       54,953                         0
--------------------------------------------------------------------------------------------------------------------------------
Joseph Veccia                        3,230,474                  0                       54,953                         0
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>

(d)  Not applicable.


Item 5    Other Information

Not applicable.


Item 6    Exhibits and Reports on Form 8-K

(a)  Exhibits

     Number  Description

     None.

                                       28
<PAGE>

(b)   Reports on Form 8-K


On June 4, 2001 the Company filed a Form 8-K announcing the calling of its
outstanding warrants and announcing that the Registrant's directors would be
exercising their stock warrants.

On April 26, 2001 the Company filed a Form 8-K announcing its results for the
first quarter of 2001.

                                       29
<PAGE>

                                 SIGNATURE


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

                                      ADMIRALTY BANCORP, INC.


Date:   August 10, 2001               By:   /s/ Ward Kellogg
                                         -----------------------------
                                         WARD KELLOGG, President


Date:  August 10, 2001                By:   /s/ Kevin M. Sacket
                                         -----------------------------
                                         KEVIN M. SACKET, Treasurer
                                         (Principal Financial Officer)

                                       30