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

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

                                    FORM 10-Q
                                   (MARK ONE)

[X]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES
         EXCHANGE ACT OF 1934

         For the quarterly period ended March 31, 2002

                                       or

[_]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES
         EXCHANGE ACT OF 1934

         For the transition period from _______________ to _______________

                         Commission file number 0-24891

                             ADMIRALTY BANCORP, INC.
                             -----------------------
             (Exact Name of Registrant as Specified in its Charter)

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


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

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


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

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

As of May 5, 2002 there were 5,288,437 shares of Common Stock outstanding.
================================================================================
<PAGE>

                     ADMIRALTY BANCORP, INC. AND SUBSIDIARY

                                TABLE OF CONTENTS

Part I.  Financial Information

Item 1. Financial Statements
                                                                           Page
                                                                           ----
         Condensed Consolidated Balance Sheets (unaudited) -
           At March 31, 2002 and at December 31, 2001....................... 3

         Condensed Consolidated Statements of Operations (unaudited) -
           Three months ended March 31, 2002 and 2001....................... 4

         Condensed Consolidated Statements of Cash Flows (unaudited) -
           Three months ended March 31, 2002 and 2001....................... 5

         Notes to Condensed Consolidated Financial Statements (unaudited)... 6

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

Item 3.  Quantitative and Qualitative Disclosures About Market Risk......... 25

Part II.  Other Information

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

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

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

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

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

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

                  Signature Page............................................ 28

                                       2
<PAGE>

PART I   FINANCIAL INFORMATION

ITEM 1.
                              FINANCIAL STATEMENTS

                     Admiralty Bancorp, Inc. and subsidiary
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                             (dollars in thousands)
                                   (unaudited)
<TABLE><CAPTION>
                                                                              March 31,       December 31,
                                                                                 2002             2001
                                                                              ---------        ---------
<S>                                                                           <C>              <C>
ASSETS
Cash and cash equivalents
        Cash and due from banks ......................................        $  15,828        $  15,930
        Interest bearing due from banks ..............................               25              345
        Federal funds sold ...........................................           49,107           21,217
                                                                              ---------        ---------
              Total cash and cash equivalents ........................           64,960           37,492
Investment securities available for sale,
        at fair market value .........................................           16,924           17,969
Investment securities held to maturity, at cost
        (fair market value of $36.1 million at March 31, 2002 and
        December 31, 2001) ...........................................           35,796           35,589
Loans, net ...........................................................          400,593          390,457
Accrued interest receivable ..........................................            1,907            1,928
Federal Reserve Bank and FHLB stock ..................................            2,007            2,007
Premises and equipment, net ..........................................            5,342            5,422
Deferred tax asset, net ..............................................            1,749            1,714
Goodwill, net ........................................................            3,234            3,234
Other assets .........................................................            1,834            1,770
                                                                              ---------        ---------
        Total assets .................................................        $ 534,346        $ 497,582
                                                                              =========        =========

LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Deposits .............................................................        $ 483,938        $ 449,144
Securities sold under agreement to repurchase ........................            2,900            2,900
Advances from FHLB ...................................................            1,000            1,000
Accrued interest payable .............................................              451              496
Other liabilities ....................................................            1,415              756
                                                                              ---------        ---------
        Total liabilities ............................................          489,704          454,296
                                                                              ---------        ---------
SHAREHOLDERS' EQUITY
Preferred stock, no par value, 2,000,000 shares
        authorized, no shares issued or outstanding ..................             --               --
Common stock, no par value, 8,500,000 shares authorized,
        5,282,485 issued and outstanding .............................           44,596           44,596
Retained earnings (accumulated deficit) ..............................                8           (1,407)
Accumulated other comprehensive income, net ..........................               38               97
                                                                              ---------        ---------
        Total shareholders' equity ...................................           44,642           43,286
                                                                              ---------        ---------
        Total liabilities and shareholders' equity ...................        $ 534,346        $ 497,582
                                                                              =========        =========

The accompanying notes are an integral part of these condensed consolidated financial statements
</TABLE>
                                       3
<PAGE>

                        Admiralty Bancorp, Inc. and subsidiary
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                  (dollars in thousands, except per-share data)
                                   (unaudited)
<TABLE><CAPTION>
                                                                     Three Months      Three Months
                                                                        Ended             Ended
                                                                       March 31,         March 31,
                                                                         2002              2001
                                                                      ----------        ----------
<S>                                                                   <C>               <C>
Interest and dividend income
          Loans                                                       $    6,960        $    5,668
          Mortgage-backed securities                                         672               575
          Other debt securities                                               87               107
          Federal funds sold                                                 120               348
          Dividends from FRB and FHLB stock                                   29                22
          Other                                                                1                12
                                                                      ----------        ----------
                   Total interest and dividend income                      7,869             6,732
                                                                      ----------        ----------
Interest expense
          Deposits                                                         2,833             3,369
          Securities sold under repurchase agreement                          46                92
          Advances from FHLB                                                   5                61
                                                                      ----------        ----------
                   Total interest expense                                  2,884             3,522
                                                                      ----------        ----------
                   Net interest and dividend income                        4,985             3,210
Provision for loan losses                                                    102               447
                                                                      ----------        ----------
                   Net interest and dividend income after
                   provision for loan losses                               4,883             2,763
                                                                      ----------        ----------
Non-interest income
          Service charges and fees                                           285               282
          Insurance commissions                                                5                17
          Gain on sale of loans                                             --                  10
          Other income                                                         1                 3
                                                                      ----------        ----------
                   Total non-interest income                                 291               312
                                                                      ----------        ----------
Non-interest expense
          Salaries and employee benefits                                   1,515             1,400
          Occupancy                                                          526               340
          Furniture and equipment                                            205               147
          Amortization of goodwill                                          --                  38
          Other expense                                                      656               638
                                                                      ----------        ----------
                   Total non-interest expense                              2,902             2,563
                                                                      ----------        ----------
                   Income before income tax expense                        2,272               512
Income tax expense                                                           857               212
                                                                      ----------        ----------
          Net income                                                  $    1,415        $      300
                                                                      ==========        ==========
Per share data
  Net income per share - basic                                        $     0.27        $     0.07
                                                                      ==========        ==========
  Net income per share- diluted                                       $     0.25        $     0.07
                                                                      ==========        ==========
  Weighted average shares outstanding  basic                           5,282,485         4,116,863
                                                                      ==========        ==========
  Weighted average shares outstanding - diluted                        5,614,183         4,384,235
                                                                      ==========        ==========

The accompanying notes are an integral part of these condensed consolidated financial statements.
</TABLE>
                                       4
<PAGE>
                     Admiralty Bancorp, Inc. and subsidiary
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (dollars in thousands)
                                   (unaudited)
<TABLE><CAPTION>
                                                                                 Three Months      Three Months
                                                                                    Ended             Ended
                                                                                   March 31,         March 31,
                                                                                     2002              2001
                                                                                  ----------        ----------
<S>                                                                                <C>               <C>
Operating activities
          Net income                                                               $  1,415         $    300
          Adjustments to reconcile net income to net cash provided by
              operating activities
              Provision for loan losses                                                 102              447
              Depreciation and amortization                                             299              205
              Amortization, net of accretion, of investment securities                   41                8
              Gain on sale of loans                                                    --                (10)
              Change in accrued interest receivable                                      21             (185)
              Change in other assets                                                    184              (38)
              Change in accrued interest payable                                        (45)              76
              Change in other liabilities                                               659             (117)
                                                                                   --------         --------
                  Net cash provided by operating activities                           2,676              686
                                                                                   --------         --------
Investing activities
          Proceeds from maturities of investment securities
              available for sale                                                      1,942            5,655
          Proceeds from maturities of investment securities
              held to maturity                                                        3,850            1,995
          Purchases of investment securities available for sale                      (1,000)          (8,511)
          Purchases of investment securities held to maturity                        (4,089)          (9,583)
          Net loan originations and principal collections on loans                  (10,486)         (43,098)
          Proceeds from loan sales                                                     --                286
          Purchase of premises and equipment, net                                      (219)          (2,098)
                                                                                   --------         --------
              Net cash used in investing activities                                 (10,002)         (55,354)
                                                                                   --------         --------
Financing activities
          Net increase in deposits                                                   34,794           62,937
          Decrease in FHLB advances                                                    --             (1,000)
          Proceeds from issuance of common stock - net of costs                        --              3,096
                                                                                   --------         --------
              Net cash provided by financing activities                              34,794           65,033
                                                                                   --------         --------
Net increase in cash and cash equivalents                                            27,468           10,365

Cash and cash equivalents, beginning of period                                       37,492           33,445
                                                                                   --------         --------
Cash and cash equivalents, end of period                                           $ 64,960         $ 43,810
                                                                                   ========         ========

The accompanying notes are an integral part of these condensed consolidated financial statements.
</TABLE>
                                       5
<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. The results for
interim periods are not necessarily indicative of trends or results to be
expected for the full year. These condensed consolidated interim financial
statements and notes should be read in conjunction with the Company's Annual
Report on Form 10-KSB for the year ended December 31, 2001.

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, Fort Lauderdale, Juno Beach, Jupiter, Orlando and Melbourne,
Florida. On March 11, 2000, the Company converted from a one bank holding
company to a financial holding company under the Gramm-Leach-Bliley Financial
Modernization Act of 1999 (the "Modernization Act"). This status permits the
Company to undertake financial activities which need not be closely related to
banking, such as insurance brokerage activities. Under the Modernization Act,
the Company's bank subsidiary must remain "well capitalized" (i.e., have a
leverage capital ratio of 5% or greater and a risk based capital ratio of 10% or
greater) and well managed, or the Company could be required to divest itself of
its non-banking activities. In addition, the Company must maintain a rating of
"satisfactory" or better under the Community Reinvestment Act. The Company 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. AIS
did minimal business during the three months ended March 31, 2002 and 2001, and
$5 thousand and $17 thousand in income was recognized during the respective the
periods by the Company.

NOTE 2 - IMPACT OF NEW ACCOUNTING STANDARDS

In July 2001, the Financial Accounting Standards Board (" FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 141, "Business
Combinations", ("Statement 141") and SFAS No. 142, "Goodwill and Other
Intangible Assets," ("Statement 142"). Statement 141 requires that the purchase
method of accounting be used for all business combinations initiated after June
30, 2001. Statement 142 requires that goodwill and intangible assets with
indefinite useful lives no longer be amortized, but instead tested for
impairment at least annually in accordance with the provisions of Statement 142.
Other intangible assets would continue to be amortized over their estimated
useful lives.

                                       6
<PAGE>

In the transition, any impairment losses will be measured as of the date of
adoption and recognized as the cumulative effect of a change in accounting
principle in the first interim period.

The Company was required to adopt the provisions of Statement 141 immediately
and the Company adopted Statement 142 effective January 1, 2002. As of the date
of adoption, the Company had unamortized goodwill in the amount of approximately
$3.2 million that is subject to the transition provisions of Statements 141 and
142. Pursuant to Statement 142, the Company will no longer amortize goodwill.
Amortization expense related to goodwill was $38 thousand during the three
months ended March 31, 2001. The adoption of Statement 142 did not result in a
transitional impairment loss. Net income, basic net income per share and diluted
net income per share for the three months ended March 31, 2001, adjusted to
eliminate the amortization of goodwill, amount to $338 thousand, $0.08 and $0.08
respectively.

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

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

NOTE 3 - COMPREHENSIVE INCOME

The following table sets forth the components of the Company's comprehensive
income:
<TABLE><CAPTION>
                                                                   Three months ended
                                                            ---------------------------------
                                                            March 31, 2002     March 31, 2001
                                                            --------------     --------------
                                                                     (in thousands)
<S>                                                             <C>               <C>
       Net Income                                               $ 1,415           $   300

       Other comprehensive income, net of tax -
           Change in net unrealized gain on securities
             held available for sale, net of taxes of $36
             and $(35) in 2002 and 2001, respectively               (59)               59
                                                                -------           -------
       Comprehensive income                                     $ 1,356           $   359
                                                                =======           =======
</TABLE>
                                       7
<PAGE>

NOTE 4 - EARNINGS PER COMMON SHARE

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

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

The following table illustrates the reconciliation of the numerator and
denominator of the basic and diluted net income per share computations for the
three months ended March 31, 2002 and 2001:

<TABLE><CAPTION>
                                                            Three months ended
                                                     ----------------------------------
                                                     March 31, 2002      March 31, 2001
                                                     --------------      --------------
                                              (dollars in thousands, except per share data)
<S>                                                    <C>                 <C>
       Net income ...........................          $    1,415          $      300
                                                       ==========          ==========

       Weighted average shares - basic ......           5,282,485           4,116,863
                                                       ==========          ==========

       Weighted average shares - diluted ....           5,614,183           4,384,235
                                                       ==========          ==========

       Basic net income per share ...........          $     0.27          $     0.07
                                                       ==========          ==========

       Diluted net income per share .........          $     0.25          $     0.07
                                                       ==========          ==========
</TABLE>
                                       8
<PAGE>

NOTE 5 - INVESTMENT AND MORTGAGE BACKED SECURITIES

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

<TABLE><CAPTION>
                                                         GROSS         GROSS
                                         AMORTIZED     UNREALIZED    UNREALIZED         FAIR
                                           COST          GAINS         LOSSES           VALUE
                                         -------        -------        -------         -------
                                                           (In thousands)
<S>                                      <C>            <C>            <C>             <C>
       AVAILABLE FOR SALE:
       -------------------
       March 31, 2002
       --------------
       U.S. Government and Agency
       securities ....................   $ 2,000        $    18        $   (13)        $ 2,005

       Mortgage-backed securities ....    14,849            133            (77)         14,905
       Other  securities .............        14              0              0              14
                                         -------        -------        -------         -------

       Total .........................   $16,863        $   151        $   (90)        $16,924
                                         =======        =======        =======         =======

       December 31, 2001
       -----------------
       U.S. Government and Agency
       securities ....................   $ 1,000        $    29        $     0         $ 1,029

       Mortgage-backed securities ....    16,800            144            (18)         16,926
       Other securities ..............        14              0              0              14
                                         -------        -------        -------         -------

       Total .........................   $17,814        $   173        $   (18)        $17,969
                                         =======        =======        =======         =======
</TABLE>
                                       9
<PAGE>

The amortized cost and fair value of investment securities and mortgage-backed
securities classified held to maturity at March 31, 2002 and December 31, 2001
are as follows:
<TABLE><CAPTION>
                                      AMORTIZED    GROSS UNREALIZED    GROSS UNREALIZED
                                        COST            GAINS               LOSSES         FAIR VALUE
                                      ---------    ----------------    ----------------    ----------
                                                              (In thousands)
<S>                                  <C>               <C>                 <C>             <C>
HELD TO MATURITY
----------------
March 31, 2002
--------------
U.S. Treasury securities........      $  4,064          $    0              $  (23)            4,041
U.S. Government and Agency
securities......................         6,052              28                 (52)            6,028
Mortgage-backed securities......        25,680             433                 (93)           26,020
                                      --------          ------              ------          --------
Total ..........................      $ 35,796          $  461              $ (168)         $ 36,089
                                      ========          ======              ======          ========

December 31, 2001
-----------------
U.S. Treasury securities........      $  2,037          $    0              $   (6)         $  2,031
U.S. Government and Agency               4,002              45                  (8)            4,039
securities......................
Mortgage-backed securities......        29,550             489                 (26)           30,013
                                      --------          ------              ------          --------
Total...........................      $ 35,589          $  534              $  (40)         $ 36,083
                                      ========          ======              ======          ========
</TABLE>

The carrying value of securities pledged to secure deposits and for other
purposes required or permitted by law amounted to approximately $18.1 million
and $21.4 million at March 31, 2002 and December 31, 2001, respectively.

                                       10
<PAGE>

NOTE 6 - LOANS

The following schedule presents the components of loans, net of unearned income,
by type, as of March 31, 2002 and December 31, 2001:

<TABLE><CAPTION>
                                                         March 31, 2002                December 31, 2001
                                                         --------------                -----------------
                                                                     (Dollars in thousands)
                                                   Amount             Percent       Amount            Percent
                                                   ------             -------       ------            -------
<S>                                               <C>                   <C>        <C>                   <C>
Commercial and Industrial ................        $ 51,535              13%        $ 49,846              13%

Real Estate Non-Residential Properties ...         301,092              74%         297,850              75%

Residential Properties ...................          30,141               8%          24,802               6%

Construction .............................          17,507               4%          17,771               4%

Consumer * ...............................           6,025               1%           6,380               2%
                                                  --------        --------         --------        --------
Gross Loans ..............................         406,300             100%         396,649             100%

less:  net deferred fees .................           1,191                            1,348
                                                  --------                         --------
Total loans ..............................         405,109                          395,301

less:  allowance for loan losses .........           4,516                            4,844
                                                  --------                         --------
Net loans ................................        $400,593                         $390,457
                                                  ========                         ========
</TABLE>

* Includes $756 thousand and $819 thousand in overdrafts at March 31, 2001 and
December 31, 2001, respectively.

Changes in the allowance for loan losses are as follows:

<TABLE><CAPTION>
                                              Three months ended
                                           ------------------------
                                           March 31,       March 31,
                                             2002             2002
                                           -------          -------
                                            (Dollars in thousands)
                                           -------          -------
<S>                                        <C>              <C>
Balance at beginning of year ......        $ 4,844          $ 2,381
Provision for loan losses .........            102              447
Charge-offs .......................           (431)            --
Recoveries ........................              1                5
                                           -------          -------
Ending Balance ....................        $ 4,516          $ 2,833
                                           =======          =======

Ratio of net charge-offs to
average loans outstanding .........           0.11%            0.00%

Balance of allowance as a % of
total loans at period end .........           1.11%            1.07%
</TABLE>

Loans with unpaid principal balances of $430 and $967 thousand were 90 days or
more contractually delinquent or on nonaccrual status at March 31, 2002 and
December 31, 2001.

                                       11
<PAGE>

NOTE 7 - CAPITAL STRUCTURE

The shareholders of the Company approved a resolution to amend the Company's
Certificate of Incorporation at the annual meeting held April 26, 2002. The
amendment eliminates the Company's Class A common stock (1,000,000 shares) and
re-designates the Class B common stock (7,500,000 shares) as Common Stock
(8,500,000 shares). The balance sheets and earnings per share figures presented
in this report are presented using the amended capital structure.




































                                       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
affect actual results include but are not limited to i) changes in general
market interest rates, ii) general economic conditions, both in the United
States generally and specifically in the Company's market area, iii)
legislative/regulatory changes, iv) monetary and fiscal policies of the U.S.
Treasury and the Federal Reserve, v) changes in the quality or composition of
the Company's loan and investment portfolios, vi) demand for loan products, vii)
deposit flows, viii) competition, and ix) demand for financial services in the
Company's markets. These factors should be considered in evaluating the
forward-looking statements, and undue reliance should not be placed on such
statements.

















                                       13
<PAGE>

                              RESULTS OF OPERATIONS
                              ---------------------

              Three Months Ended March 31, 2002 and March 31, 2001.

The Company generated net income of $1.4 million, or $0.27 per share basic and
$0.25 per share diluted, in the first quarter of 2002 compared to net income of
$300 thousand, or $0.07 per share basic and diluted, in the first quarter of
2001.

At March 31, 2002, the Company's total assets reached $534.3 million, an
increase of 7.4% over total assets at December 31, 2001. The Company's net loans
totaled $400.6 million, an increase of 2.6% over net loans at December 31, 2001,
and the Company's deposits totaled $483.9 million, an increase of 7.7% over
total deposits at December 31, 2001.

INTEREST AND DIVIDEND INCOME. The Company's interest and dividend income
increased $1.2 million, or 16.9%, to $7.9 million for the quarter ended March
31, 2002 from $6.7 million for the same period of 2001. This increase in
interest income primarily relates to an increase in the Company's average
balance of earning assets, partially offset by a lower yield on those interest
earning assets. Average balances increased by $153.4 million for loans, $13.2
million for investment securities (including Federal Reserve Bank stock and FHLB
stock) and $3.7 million for federal funds sold. The average yield on the loan
portfolio decreased to 7.1% in the first quarter of 2002, compared to 9.4% in
the first quarter of 2001. The average yield on federal funds sold decreased to
1.7% in the first quarter of 2002 from 5.6% for the same period in 2001. The
average yield on investment securities, including Federal Reserve Bank and FHLB
stocks, decreased to 5.9% in the first quarter 2002 from 6.9% in the first
quarter of 2001. During the three months ended March 31, 2002 the yield on the
Company's interest earning assets decreased to 6.6% from 8.8% during the three
months ended March 31, 2001. All decreases are due primarily to lower market
interest rates.

INTEREST EXPENSE. The Company's interest expense for the first quarter of 2002
decreased $638 thousand, or 18.1%, to $2.9 million from $3.5 million for the
same period last year. The decrease in interest expense reflects a lower cost of
funds on interest bearing liabilities offset by a 52.9% increase in average
interest bearing liabilities at March 31, 2002, as compared to the same period
in 2001. Total average deposits increased $141.1 million in the first quarter of
2002 as compared to the same period in 2001. The average balance of non-interest
bearing demand deposits and money market deposits increased by $29.8 million,
and $56.5 million, respectively, in the first quarter of 2002 as compared to the
same period in 2001, with the average balance of non-interest bearing demand
deposits reaching $71.4 million for the three months ended March 31, 2002 from
$41.6 million for the three months ended March 31, 2001. In addition, the
average balance of the Company's time deposits increased by $71.6 million, to
$221.3 million for the three months ended March 31, 2002 from $149.7 million for
the three months ended March 31, 2001. The Company's average cost of deposits
for the three months ended March 31, 2002, decreased to 2.5% from 4.8% for the
comparable period of 2001, primarily due to the lower rates of interest on
deposit accounts. The average balance of securities sold under agreement to
repurchase was $2.9 million, and the average balance of advances from the FHLB
was $1.0 million at average rates of 6.4% and 2.0% respectively, during the
three months ended March 31, 2002. In the quarter ended March 31, 2001 the
average balance of securities sold under agreement to repurchase was $5.9
million and the average of advances from the FHLB

                                       14
<PAGE>

was $3.9 million, both at average rates of 6.3%. The Company's average cost of
funds for the three months ended March 31, 2002, decreased to 2.5% from 4.8% in
the comparable period of 2001 due primarily to lower market interest rates.

NET INTEREST AND DIVIDEND INCOME. Net interest and dividend income for the three
months ended March 31, 2002, increased by $1.8 million, or 55.3%, over the same
period last year.

The Company's net interest spread increased 47 basis points to 3.63% for the
three months ended March 31, 2002, from 3.16% for the comparable period of 2001,
reflecting a greater decline in the Company's cost of interest paying
liabilities, as a result of lower market interest rates and a shift in the
deposit mix, than the decline in its yield on earning assets.

PROVISION FOR LOAN LOSSES. The determination of the allowance for loan losses,
and the related provision, is considered by management to be a critical
accounting policy. The provision for loan losses decreased to $102 thousand for
the three months ended March 31, 2002, from $447 thousand in the same period of
2001, reflecting the slower growth in the loan portfolio in the first quarter of
2002 as well as management's view of the current state of the economy. 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, collateral maintained, historical experience, volume and
type of lending conducted by the Company, the status of past due and
non-performing loans, the general economic conditions of the Company's lending
area and other factors affecting collectibility of the Company's loan portfolio.
The Company had no material recoveries during the quarter and charged off three
loans, which had previously been identified as problem loans, totaling $431
thousand against the reserve during the quarter. Two loans with an aggregate
balance of $248 thousand were transferred to other real estate during the
quarter. Total classified loans were reduced to $673 thousand at March 31, 2002
from $1.6 million at December 31, 2001, primarily as a result of the
aforementioned transactions. The Company's ratio of non-performing assets to
total assets declined to 0.13% at March 31, 2002 from 0.19% at December 31,
2001. While the Company's management uses available information to recognize
losses on loans, future additions to the allowance may be necessary based on
changes in economic conditions, the financial status of borrowers and regulatory
requirements.

NON-INTEREST INCOME. For the first quarter of 2002, total non-interest income
decreased $21 thousand, or 6.7%, to $291 thousand from $312 thousand in the same
period of last year. The decrease includes $3 thousand more in service charges
and fees, $12 thousand less in commissions earned by Admiralty Insurance
Services, LLC, the Company's insurance affiliate and $10 thousand less in gains
on sales of loans as the Company sold no loans during the quarter ended March
31, 2002.

NON-INTEREST EXPENSE. For the three-month period ended March 31, 2002, the
Company experienced increases of $339 thousand in its non-interest expense over
the comparable period of 2001. For the period ended March 31, 2002, the
Company's total non-interest expense was $2.9 million, compared to total
non-interest expense of $2.6 million for the same period in 2001. The increase
in non-interest expense in the three month period of 2002 reflects a $115
thousand increase in salaries and employee benefit expense as the Company hired
additional staff to administer growth in its loan and deposit portfolios and to
staff its new full service branches in South Orlando (which opened in March
2001), Cocoa Beach (which opened in April 2001), Altamonte Springs (which opened
in September 2001) and Fort Lauderdale (which opened in

                                       15
<PAGE>

August 2001). Full time equivalent employees increased to 117 at March 31, 2002,
from 103 at March 31, 2001. The increase in salaries and benefits is partially
offset by a decrease of $86 thousand in expense for the senior management
incentive program as the Company has suspended the program for 2002, and so
ceased accruing expense for bonuses. Occupancy expense increased by $186
thousand, or 54.7%, in the three months ended March 31, 2002 as compared to the
same period in 2001. Occupancy expenses at the Cocoa Beach office, Fort
Lauderdale office and Altamonte Springs office were $22 thousand, $22 thousand
and $79 thousand, respectively, in the first quarter of 2002 while the Company
did not have these locations in the first quarter of 2001. Additionally,
occupancy expenses at the south Orlando office were $39 thousand greater in 2002
as the branch was not open for the full first quarter of 2001. Furniture and
equipment expenses increased to $205 thousand in the first quarter of 2002 from
$147 thousand in the first quarter of 2001. Furniture and equipment expenses at
the Cocoa Beach office, Fort Lauderdale office and Altamonte Springs office were
$12 thousand, $12 thousand and $8 thousand respectively in 2002 while the
Company did not have these locations in 2001. Furniture and equipment expenses
for the south Orlando office were $13 thousand greater in the first quarter of
2002 as the branch was not open for the full first quarter of 2001. Due to the
Company's adoption of SFAS 142 "Goodwill and Other Intangible Assets", the
Company had no goodwill amortization in 2002 and $38 thousand for the first
quarter of 2001. The Company experienced a net increase of $18 thousand in other
non-interest expenses in the first quarter of 2002 compared to the same period
in 2001. This increase is offset by a decrease of $52 thousand in director and
committee fees and expenses as the Company suspended these payments for 2002 and
adopted a change in control bonus program for directors instead.

INCOME TAXES. Income tax expense increased to $857 thousand for the quarter
ended March 31, 2002, compared to $212 thousand for the same period last year
due to higher taxable income in the current quarter. The effective tax rate for
the first quarter of 2002 was 37.7% compared to 41.4% in the first quarter of
2001. The reduced effective tax rate is attributable to lower non-deductible
expenses including the amortization of goodwill and a higher level of taxable
income in relation to the non-deductible expenses.

                                       16
<PAGE>

                               FINANCIAL CONDITION
                               -------------------

                  March 31, 2002 compared to December 31, 2001

Total assets increased to $534.3 million, an increase of $36.7 million, or 7.4%,
from total assets of $497.6 million at December 31, 2001. Changes in total
assets includes increases of $27.9 million in federal funds sold, $10.1 million
in net loans, $207 thousand in investment securities held to maturity and $248
thousand in other real estate owned. The change in total assets also includes
decreases of $1.0 million in investment securities classified as available for
sale, $320 thousand in interest bearing due from banks, $184 thousand in other
assets and $102 thousand in cash and non-interest bearing due from banks.

The $10.1 million increase in net loans is comprised primarily of $1.7 million
in commercial loans, $3.2 million in non-residential real estate loans and $5.3
million in residential real estate loans. The net increase is the result of the
management team's efforts to attract new business and expand relationships with
existing customers. There has been no significant change in the loan portfolio
mix at March 31, 2002 as compared to December 31, 2001.

At March 31, 2002, federal funds sold increased by $27.9 million from December
31, 2001. The increase is attributable primarily to growth in deposits outpacing
loan and investment portfolio growth during the period.

Total deposits increased 7.7%, to $483.9 million at March 31, 2002 from $449.1
million at December 31, 2001. Deposits and the deposit mix are summarized as
follows:

<TABLE><CAPTION>
                                                   March 31, 2002                  December 31, 2001
                                             -------------------------         -------------------------
      (dollars in thousands)
<S>                                          <C>                    <C>        <C>                    <C>
Non-interest bearing demand .........        $ 78,165               16%        $ 63,988               14%
Savings, NOW and money market .......         176,109               36%         161,480               36%
Time deposits, under $100,000 .......         120,766               25%         111,402               25%
Time deposits, $100,000 and over ....         108,898               23%         112,274               25%
                                             --------                          --------
                                             $483,938              100%        $449,144              100%
                                             ========                          ========
</TABLE>

Money market accounts increased $13.1 million in the first three months of 2002.
This increase reflects the market's acceptance of two, tiered rate money market
account products, which pay increased rates as the balance in the account
increases.

Time deposits increased $6.0 million in the first three months of 2002. The
Company subscribes to a deposit listing service on the internet which allows it
to post time deposit rates on a web site which is available to other subscribers
who use the site as an information source for investing in time deposits. The
deposits raised through this program are primarily deposits of credit unions,
savings banks and commercial banks at terms from ninety days to three years. At
March 31, 2002 the Company had $101.6 million in deposits raised through this
program compared to $106.1 million at December 31, 2001. The weighted average
rate of the internet portfolio at March 31, 2002 was 3.58%, the weighted average
contractual life was 9.2 months and the weighted average remaining life was 3.6
months.

                                       17
<PAGE>

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

<TABLE><CAPTION>
                                               March 31, 2002                    December 31, 2001
                                        ----------------------------     ------------------------------
      (dollars in thousands)                                   Average                            Average
                                         Amount                 Yield      Amount                  Yield
                                         ------                 -----      ------                  -----
<S>                                     <C>                      <C>       <C>                      <C>
Non-Interest Bearing Demand ....        $ 71,394                 0.0%      $ 51,083                 0.0%
Interest-Bearing Demand ........          28,449                 0.5%        21,084                 0.6%
Money Market Deposits ..........         134,037                 2.3%       101,740                 3.5%
Savings Deposits ...............           2,874                 1.1%         2,327                 1.7%
Time Deposits ..................         221,342                 3.7%       194,266                 5.4%
                                        --------                         ----------
Total ..........................        $458,096                         $  370,500
                                        ========                         ==========
</TABLE>

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

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

FHLB advances totaled $1.0 million at March 31, 2002 and December 31, 2001. The
funds obtained when this borrowing was originated in February 2000 were used
toward the purchase of a $10.0 million GNMA II mortgage-backed security, of
which one half is classified as available for sale and one half is classified as
held to maturity. The security 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.

Accrued interest payable decreased $45 thousand, or 9.1%, due primarily to lower
interest rates offsetting the increased volume of interest paying liabilities.
Other liabilities increased $659 thousand, or 87.2%, due primarily to a $10
thousand decrease in loan commitment fees on loans not yet closed, a $61
thousand increase in accrued expenses and a $594 thousand increase in accrued
income taxes.

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

                                       18
<PAGE>

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 decreased to $430 thousand at March 31, 2002 from $524
thousand at December 31, 2001. The balance represents the unguaranteed portion
of three Small Business Administration loans and two conventional loans.
Management believes these loans are all adequately reserved and it does not
expect any material losses as a result of these credits.

The Company had $248 thousand in other real estate owned at March 31, 2002. The
balance consists of two properties, a single family home and a former
restaurant. Management does not expect any material losses from the disposition
of these two properties. The Company had no other real estate owned at December
31, 2001.

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


                                          March 31,      December 31,
                                             2002            2001
                                          ---------      ------------
                                            (dollars in thousands)

Non-accrual loans                           $ 430            $ 524

Other real estate owned                       248                0
                                            -----            -----

Total non-performing assets (1)             $ 678            $ 524
                                            =====            =====

Non-accrual loans to total loans            0.11%            0.13%

Non-performing assets to total assets       0.13%            0.19%

Allowance for loan losses as a
percentage of non-performing assets        666.08%          500.93%

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


ALLOWANCE FOR LOAN LOSSES

The Company attempts to maintain an allowance for loan losses at a sufficient
level to provide for potential losses in the loan portfolio. Loan losses are
charged directly to the allowance when they occur and any recovery is credited
to the allowance. 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

                                       19
<PAGE>

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.
There were no significant changes in loan concentrations, quality and terms
during the three months ended March 31, 2002, that resulted in a change in the
allowance for loan losses. These estimates are reviewed at least quarterly, and,
as adjustments become necessary, they are realized in the periods in which they
become known. There were no significant changes in the estimation methods or
fundamental assumptions used in the calculation of the allowance for loan losses
at March 31, 2002 compared to December 31, 2001. Additions to the allowance are
made by provisions charged to expense and the allowance is reduced by net
charge-offs (i.e., loans judged to be uncollectible and charged against the
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 loan portfolio and
allowance for loan losses. These agencies may require the Company to take
additional provisions based on their judgments about information available to
them at the time of their examination.

At March 31, 2002, the allowance for loan losses was $4.5 million, a decrease of
$328 thousand from December 31, 2001. During the three months ended March 31,
2002 the Company had charge-offs of $431 thousand, recoveries of $1 thousand and
provided a loan loss provision of $102 thousand. The charge-offs consisted
primarily of one loan which had previously been identified as a problem loan.

INVESTMENT SECURITIES

At March 31, 2002, the Company's investment securities portfolio, both held to
maturity and available for sale, totaled $52.7 million, a decrease of $838
thousand, from total investment securities of $53.6 million at December 31,
2001. The Company invested primarily in U.S. Treasury and U.S. Agency securities
during the first quarter of 2002. At March 31, 2002, $16.9 million of the
Company's investment securities were classified as available for sale and $35.8
million were classified as held to maturity. At December 31, 2001, $18.0 million
and $35.6 million of securities were classified as available for sale and held
to maturity, respectively.






                                       20
<PAGE>

LIQUIDITY

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

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

Net cash provided by the Company's operating activities was $2.7 million in the
first three months of 2002 compared to $686 thousand for the three months ended
March 31, 2001.

Net cash used in investing activities was $10.0 million in the period ended
March 31, 2002 compared to $55.4 million in the comparable period of 2001. Net
cash provided by the Company's investment portfolio was $703 thousand in the
first three months of 2002, while in 2001 it used $10.4 million for its
securities portfolio. Additionally, the Company used $10.5 million and $43.1
million for net loans and loan sales in the first three months of 2002 and 2001,
respectively. The change in the level of cash used for the investment and loan
portfolios reflects management's moderation of the Company's growth rate.

Net cash provided by the Company's financing activities was $34.8 million in the
first three months of 2002, and $65.0 million in the comparable period of 2001.
The increase in 2002 was due to a $34.8 million increase in deposits. Deposits
provided an increase of $62.9 million and proceeds from the issuance of common
stock provided $3.1 million in the three months ended March 31, 2001.

As a state chartered commercial bank, the Bank is required to maintain a daily
liquidity position equal to at least 15 percent of its total transaction
accounts and 8 percent of its total nontransaction accounts, less those deposits
of public funds for which security has been pledged. As of March 31, 2002, the
Bank had a liquidity ratio of 22.6% 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 March 31, 2002, federal funds sold
totaled $49.1 million. Funds not required to meet loan and deposit demand were
invested primarily in U.S Treasury and U.S. Government Agency securities. The
Bank considers these investments to be

                                       21
<PAGE>

secondary sources of liquidity. The Bank's investment securities classified as
available for sale had a carrying value of $16.9 million at March 31, 2002.

An additional external source of liquidity is an unsecured $12 million federal
funds overnight borrowing line of credit and a secured line of credit with a
correspondent bank. The Company's unencumbered investment securities are the
collateral for the secured line of credit and serve to determine the total
amount available under the line. At March 31, 2002, no funds were drawn under
either the secured or unsecured line. The Company did not draw on either the
secured or unsecured lines of credit during the three months ended March 31,
2002. The Company also maintains a line of credit at the Federal Home Loan Bank
of Atlanta secured by first lien residential mortgages and mortgage-backed
securities.



























                                       22
<PAGE>

CAPITAL RESOURCES

The shareholders of the Company approved a resolution to amend the Company's
Certificate of Incorporation at the annual meeting held April 26, 2002. The
amendment eliminates the Company's Class A common stock (1,000,000 shares) and
re-designates the Class B common stock (7,500,000 shares) as Common Stock
(8,500,000 shares). The balance sheets and earnings per share figures presented
in this report are presented using the amended capital structure. The balance
sheets and earnings per share figures presented in this report are presented
using the amended capital structure.

Total stockholders' equity increased to $44.6 million at March 31, 2002 from
$43.3 million at December 31, 2001. March 31, 2002 equity was affected by net
income of $1.4 million and a decrease of $59 thousand in net unrealized gains on
available for sale securities.

At March 31, 2002, 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) ....        $45,664           10.33%   >= $35,361      >= 8.00        >= $44,201    >= 10.00

Tier I Capital
     (to risk weighted assets) ....        $41,148            9.31%   >= $17,680      >= 4.00        >= $26,520    >=  6.00

Tier I Capital
     (to average assets) ..........        $41,148            8.10%   >= $20,323      >= 4.00        >= $25,404    >=  5.00
</TABLE>

On March 11, 2000, the Company converted from a one bank holding company to a
financial holding company under the Gramm-Leach-Bliley Financial Modernization
Act of 1999 (the "Modernization Act"). This status permits the Company to
undertake financial activities which need not be closely related to banking,
such as insurance brokerage activities. Under the Modernization Act, the
Company's bank subsidiary must, among other requirements, remain "well
capitalized" or the Company could be required to divest itself of its
non-banking activities.

                                       23
<PAGE>

At March 31, 2002, 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) ....        $45,176           10.22%   >= $35,358      >= 8.00      >= $44,197       >= 10.00

Tier I Capital
     (to risk weighted assets) ....        $40,660            9.20%   >= $17,679      >= 4.00      >= $26,518       >=  6.00

Tier I Capital
     (to average assets) ..........        $40,660            8.06%   >= $20,171      >= 4.00      >= $25,214       >=  5.00
</TABLE>














                                       24
<PAGE>

Item 3.

            QUANTATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

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

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

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

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

The Company's most recent available information, as of December 31, 2001,
indicates if interest rates increase or decrease 200 basis points from current
rates at a steady pace over the twelve months succeeding the analysis date, the
Company would expect net interest income to increase 5.11% or decrease 7.40%,
respectively. In addition, based on an immediate and sustained 200 basis point
increase or decrease, the Company would expect its estimated Net Portfolio Value
to

                                       25
<PAGE>

increase $6.8 million or decrease $9.4 million, respectively. The change in
Net Portfolio Value is caused by the mix in the Company's portfolios of interest
earning assets and interest paying liabilities. Variable and adjustable rate
loans make up 71%, or $355 million, of the Company's assets. Interest bearing
deposits total $385 million and borrowings total $3.9 million at the simulation
date. The Company's interest earning assets tend to reprice faster than its
interest bearing liabilities. Therefore, during periods of falling interest
rates, the Company's earning assets are expected to reprice faster than its
paying liabilities. This repricing difference results in a reduction in the Net
Portfolio Value in a falling rate environment. Conversely, in a rising rate
environment the Company would expect its earning assets to reprice faster than
its paying liabilities resulting in an increase in the Net Portfolio Value.


































                                       26
<PAGE>

PART II OTHER INFORMATION

Item 1    Legal Proceedings
          -----------------

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

Item 2    Changes in Securities and Use of Proceeds
          -----------------------------------------

Not applicable

Item 3    Defaults Upon Senior Securities
          -------------------------------

Not applicable

Item 4    Submission of Matters to a Vote of Security Holders
          ---------------------------------------------------

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

Item 5    Other Information
          -----------------

Not applicable.


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

  (a)  Exhibits

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

          None.

  (b)  Reports on Form 8-K


On January 17, 2002 the Company filed a Form 8-K reporting its results for the
year end and fourth quarter of 2001.

                                       27
<PAGE>

                                    SIGNATURE


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

                                      ADMIRALTY BANCORP, INC.


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


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























                                       28