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

                       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 June 30, 2002

                                       or

   [_]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES
           EXCHANGE ACT OF 1934
           For the transition period from ________________ to _________________

                         Commission file number 0-24891



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


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

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

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


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

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

As of July 20, 2002 there were 5,288,437 shares of Common Stock outstanding.
================================================================================
<PAGE>

                     ADMIRALTY BANCORP, INC. AND SUBSIDIARY

                                TABLE OF CONTENTS


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

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

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

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

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

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

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

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

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


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

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

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

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

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

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

    Item 6.  Exhibits and Reports on Form 8-K................................33

       SIGNATURE PAGE........................................................34

                                        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>
                                                         June 30,     December 31,
                                                           2002           2001
                                                       ------------   ------------
<S>                                                   <C>            <C>
ASSETS
Cash and cash equivalents
     Cash and due from banks                           $     17,759   $     15,930
     Interest bearing due from banks                             48            345
     Federal funds sold                                      68,622         21,217
                                                       ------------   ------------
          Total cash and cash equivalents                    86,429         37,492

Investment securities available for sale,
     at fair market value                                    15,960         17,969
Investment securities held to maturity, at cost
     (fair market value of $37.4 million at June 30,
     2002 and $36.1 million at December 31, 2001)            36,432         35,589
Loans, net                                                  422,623        390,457
Accrued interest receivable                                   1,916          1,928
Federal Reserve Bank and FHLB stock                           2,065          2,007
Premises and equipment, net                                   5,744          5,422
Deferred tax asset, net                                       1,656          1,714
Goodwill, net                                                 3,234          3,234
Other assets                                                  1,719          1,770
                                                       ------------   ------------
            Total assets                               $    577,778   $    497,582
                                                       ============   ============

LIABILITIES AND SHAREHOLDERS' EQUITY

LIABILITIES
Deposits                                               $    526,899   $    449,144
Securities sold under agreement to repurchase                 2,900          2,900
Other borrowings                                                351          1,000
Accrued interest payable                                        506            496
Other liabilities                                               696            756
                                                       ------------   ------------
     Total liabilities                                      531,352        454,296
                                                       ------------   ------------

SHAREHOLDERS' EQUITY

Preferred stock, no par value, 2,000,000 shares
     authorized, no shares issued or outstanding                  -              -
Common stock, no par value, 8,500,000 shares
     authorized, 5,288,437 issued and outstanding            44,661         44,596
Retained earnings (accumulated deficit)                       1,505         (1,407)
Accumulated other comprehensive income, net                     260             97
                                                       ------------   ------------
     Total shareholders' equity                              46,426         43,286
                                                       ------------   ------------
     Total liabilities and shareholders' equity        $    577,778   $    497,582
                                                       ============   ============
</TABLE>
         The accompanying notes are an integral part of these condensed
                       consolidated financial statements.

                                        3
<PAGE>

                     ADMIRALTY BANCORP, INC. AND SUBSIDIARY

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                  (dollars in thousands, except per-share data)
                                   (unaudited)
<TABLE><CAPTION>
                                                       Three Months   Three Months
                                                           Ended          Ended
                                                       June 30, 2002  June 30, 2001
                                                       ------------   ------------
<S>                                                   <C>            <C>
Interest and dividend income
     Loans                                             $      7,356   $      6,347
     Mortgage-backed securities                                 610            786
     Other debt securities                                      124            154
     Federal funds sold                                         275            184
     Dividends from FRB and FHLB stock                           30             25
     Other                                                       12              2
                                                       ------------   ------------
          Total interest and dividend income                  8,407          7,398
                                                       ------------   ------------

Interest expense
     Deposits                                                 3,196          3,710
     Securities sold under repurchase agreement                  47             94
     Other borrowings                                             2             24
                                                       ------------   ------------
          Total interest expense                              3,245          3,828
                                                       ------------   ------------

          Net interest and dividend income                    5,162          3,570
Provision for loan losses                                       151            656
                                                       ------------   ------------
          Net interest and dividend income after
          provision for loan losses                           5,011          2,914
                                                       ------------   ------------
Non-interest income
     Service charges and fees                                   289            290
     Insurance commissions                                       11             24
     Gain on sale of loans                                       19              -
     Other income                                                 1              -
                                                       ------------   ------------
          Total non-interest income                             320            314
                                                       ------------   ------------

Non-interest expense
     Salaries and employee benefits                           1,540          1,522
     Occupancy                                                  470            430
     Furniture and equipment                                    211            169
     Amortization of goodwill                                     -             39
     Other expense                                              766            760
                                                       ------------   ------------
          Total non-interest expense                          2,987          2,920
                                                       ------------   ------------
          Income before income tax expense                    2,344            308
Income tax expense                                              847            137
                                                       ------------   ------------
     Net income                                        $      1,497   $        171
                                                       ============   ============
Per share data
  Net income per share - basic                         $       0.28   $       0.04
                                                       ============   ============
  Net income per share- diluted                        $       0.27   $       0.04
                                                       ============   ============
  Weighted average shares outstanding - basic             5,287,390      4,534,916
                                                       ============   ============
  Weighted average shares outstanding - diluted           5,587,831      4,681,065
                                                       ============   ============
</TABLE>
         The accompanying notes are an integral part of these condensed
                       consolidated financial statements.

                                        4
<PAGE>

                     ADMIRALTY BANCORP, INC. AND SUBSIDIARY

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                  (dollars in thousands, except per-share data)
                                   (unaudited)
<TABLE><CAPTION>
                                                        Six Months     Six Months
                                                           Ended          Ended
                                                       June 30, 2002  June 30, 2001
                                                       ------------   ------------
<S>                                                   <C>            <C>
Interest and dividend income
     Loans                                             $     14,316   $     12,015
     Mortgage-backed securities                               1,282          1,361
     Other debt securities                                      211            161
     Federal funds sold                                         395            532
     Dividends from FRB and FHLB stock                           59             47
     Other                                                       13             14
                                                       ------------   ------------
          Total interest and dividend income                 16,276         14,130
                                                       ------------   ------------

Interest expense
     Deposits                                                 6,029          7,079
     Securities sold under repurchase agreement                  93            186
     Other borrowings                                             7             85
                                                       ------------   ------------
          Total interest expense                              6,129          7,350
                                                       ------------   ------------
          Net interest and dividend income                   10,147          6,780
Provision for loan losses                                       253          1,103

          Net interest and dividend income after
          provision for loan losses                           9,894          5,677
                                                       ------------   ------------
Non-interest income
     Service charges and fees                                   574            572
     Insurance commissions                                       16             41
     Gain on sale of loans                                       19             10
     Other income                                                 2              3
                                                       ------------   ------------
          Total non-interest income                             611            626
                                                       ------------   ------------

Non-interest expense
     Salaries and employee benefits                           3,055          2,922
     Occupancy                                                  996            770
     Furniture and equipment                                    416            316
     Amortization of goodwill                                     -             77
     Other expense                                            1,422          1,398
                                                       ------------   ------------
          Total non-interest expense                          5,889          5,483
                                                       ------------   ------------
          Income before income tax expense                    4,616            820
Income tax expense                                            1,704            349
                                                       ------------   ------------
     Net income                                        $      2,912   $        471
                                                       ============   ============

Per share data
  Net income per share - basic                         $       0.55   $       0.11
                                                       ============   ============
  Net income per share- diluted                        $       0.52   $       0.11
                                                       ============   ============
  Weighted average shares outstanding - basic             5,284,951      4,327,053
                                                       ============   ============
  Weighted average shares outstanding - diluted           5,599,956      4,447,252
                                                       ============   ============
</TABLE>
         The accompanying notes are an integral part of these condensed
                       consolidated financial statements.

                                        5
<PAGE>

                     ADMIRALTY BANCORP, INC. AND SUBSIDIARY

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (dollars in thousands)
                                   (unaudited)
<TABLE><CAPTION>
                                                        Six months     Six months
                                                          ended          ended
                                                       June 30, 2002  June 30, 2001
                                                       ------------   ------------
<S>                                                   <C>            <C>
Operating activities
   Net income                                          $      2,912   $        471
   Adjustments to reconcile net income to net cash
       provided by operating activities
     Provision for loan losses                                  253          1,103
     Depreciation and amortization                              299            427
     Amortization, net of accretion, of investment
       securities                                                82             27
     Gain on sale of loans                                      (19)           (10)
     Change in accrued interest receivable                       12           (199)
     Change in other assets                                     258           (458)
     Change in accrued interest payable                          10             88
     Change in other liabilities                                (60)          (162)
                                                       ------------   ------------
          Net cash provided by operating activities           3,747          1,287
                                                       ------------   ------------

Investing activities
     Proceeds from maturities of investment
       securities available for sale                          3,252          8,361
     Proceeds from maturities of investment
       securities held to maturity                            6,200          4,912
     Purchases of investment securities available
       for sale                                              (1,000)       (12,943)
     Purchases of investment securities held to
       maturity                                              (7,106)       (14,564)
     Purchase of Federal Reserve Bank & FHLB stock              (58)          (367)
     Net loan originations and principal collections
       on loans                                             (33,029)      (105,333)
     Proceeds from loan sales                                   381            286
     Purchase of premises and equipment, net                   (621)        (2,824)
                                                       ------------   ------------
          Net cash used in investing activities             (31,981)      (122,472)
                                                       ------------   ------------

Financing activities
     Net increase in deposits                                77,755        111,732
     Decrease in FHLB advances                               (1,000)        (3,000)
     Increase in other borrowings                               351              -
     Proceeds from issuance of common stock for
       stock options exercised                                   65              -
     Proceeds from issuance of common stock -
       net of costs of $21                                        -         13,097
                                                       ------------   ------------
          Net cash provided by financing activities          77,171        121,829
                                                       ------------   ------------

Net increase in cash and cash equivalents                    48,937            644

Cash and cash equivalents, beginning of period               37,492         33,445
                                                       ------------   ------------
Cash and cash equivalents, end of period               $     86,429   $     34,089
                                                       ============   ============
</TABLE>

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

                                        6
<PAGE>
                     Admiralty Bancorp, Inc. and subsidiary

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 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 absorbs all costs incurred by AIS for operating expenses. AIS did
minimal business during the six months ended June 30, 2002 and 2001, and $16
thousand and $41 thousand in income was recognized during the respective 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. 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.

                                        7
<PAGE>

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 $39 thousand and $77 thousand
during the three and six months ended June 30, 2001, respectively. The adoption
of Statement 142 did not result in a transitional impairment loss. Net income,
basic net income per share and diluted net income per share for the three months
ended June 30, 2001, adjusted to eliminate the amortization of goodwill, amount
to $210 thousand, $0.05 and $0.05 respectively. Net income, basic net income per
share and diluted net income per share for the six months ended June 30, 2001,
adjusted to eliminate the amortization of goodwill, amount to $548 thousand,
$0.12 and $0.12 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                Six months ended
                                                -----------------------------   -----------------------------
               (in thousands)                   June 30, 2002   June 30, 2001   June 30, 2002   June 30, 2001
                                                -------------   -------------   -------------   -------------

<S>                                            <C>             <C>             <C>             <C>
Net Income                                      $       1,497   $         171   $       2,912   $         471

Other comprehensive income, net of tax -
    Change in unrealized gain on securities
      held available for sale                             355              26             262             121
      Tax effect of unrealized gains                     (133)            (10)            (99)            (46)
                                                -------------   -------------   -------------   -------------
Comprehensive income                            $       1,719   $         187   $       3,075   $         546
                                                =============   =============   =============   =============
</TABLE>
                                        8
<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
six months ended June 30, 2002 and 2001:
<TABLE><CAPTION>
                                                     Three months ended                Six months ended
                                                -----------------------------   -----------------------------
                                                June 30, 2002   June 30, 2001   June 30, 2002   June 30, 2001
                                                -------------   -------------   -------------   -------------
                                                        (dollars in thousands, except per share data)

<S>                                            <C>             <C>             <C>             <C>
Net income                                      $       1,497   $         171   $       2,912   $         471
                                                =============   =============   =============   =============

Weighted average shares - basic                     5,287,390       4,534,916       5,284,951       4,327,053
                                                =============   =============   =============   =============

Weighted average shares - diluted                   5,587,831       4,681,065       5,599,956       4,447,252
                                                =============   =============   =============   =============

Basic net income per share                      $        0.28   $        0.04   $        0.55   $        0.11
                                                =============   =============   =============   =============

Diluted net income per share                    $        0.27   $        0.04   $        0.52   $        0.11
                                                =============   =============   =============   =============
</TABLE>

                                        9
<PAGE>

NOTE 5 - INVESTMENT AND MORTGAGE BACKED SECURITIES

The amortized cost and fair value of investment securities and mortgage-backed
securities classified available for sale at June 30, 2002 and December 31, 2001
are as follows:
<TABLE><CAPTION>
                                                                    Gross           Gross
                                                  Amortized       Unrealized      Unrealized
                                                     Cost           Gains           Losses        Fair Value
                                                -------------   -------------   -------------   -------------
                                                                       (In thousands)
AVAILABLE FOR SALE:
-------------------
June 30, 2002
-------------
<S>                                            <C>             <C>             <C>             <C>
U.S. Government and Agency securities           $       2,000   $          38   $           0   $       2,038
Mortgage-backed securities                             13,530             378               0          13,908
Other securities                                           14               0               0              14
                                                -------------   -------------   -------------   -------------
Total                                           $      15,544   $         416   $           0   $      15,960
                                                =============   =============   =============   =============

December 31, 2001
-----------------
U.S. Government and Agency securities           $       1,000   $          29   $           0   $       1,029
Mortgage-backed securities                             16,800             144             (18)         16,926
Other securities                                           14               0               0              14
                                                -------------   -------------   -------------   -------------
Total                                           $      17,814   $         173   $         (18)  $      17,969
                                                =============   =============   =============   =============
</TABLE>

                                       10
<PAGE>

The amortized cost and fair value of investment securities and mortgage-backed
securities classified held to maturity at June 30, 2002 and December 31, 2001
are as follows:
<TABLE><CAPTION>
                                                                    Gross           Gross
                                                  Amortized       Unrealized      Unrealized
                                                     Cost           Gains           Losses        Fair Value
                                                -------------   -------------   -------------   -------------
                                                                       (In thousands)
Held to Maturity
----------------
June 30, 2002
-------------
<S>                                            <C>             <C>             <C>             <C>
U.S. Treasury securities                        $       5,066   $          25   $           0   $       5,091

U.S. Government and Agency securities                   8,045              66               0           8,111

Mortgage-backed securities                             23,321             841               0          24,162
                                                -------------   -------------   -------------   -------------
     Total                                      $      36,432   $         932   $           0   $      37,364
                                                =============   =============   =============   =============

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

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

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

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

The carrying value of securities pledged to secure deposits and for other
purposes required or permitted by law amounted to approximately $13.2 million
and $21.4 million at June 30, 2002 and December 31, 2001, respectively.

                                       11
<PAGE>

NOTE 6 - LOANS

The following schedule presents the components of loans, net of unearned income,
by type, as of June 30, 2002 and December 31, 2001:

<TABLE><CAPTION>
                                                       June 30, 2002              December 31, 2001
                                                 -------------------------    -------------------------
                                                                  (Dollars in thousands)
                                                   Amount          Percent      Amount          Percent
                                                   ------          -------      ------          -------
<S>                                              <C>                  <C>     <C>                  <C>
Commercial and Industrial                        $  54,530            13%     $  49,846            13%

Real Estate Non-Residential Properties             320,088            75%       297,850            75%

Residential Properties                              29,594             7%        24,802             6%

Construction                                        18,132             4%        17,771             4%

Consumer *                                           6,036             1%         6,380             2%

Gross Loans                                        428,380           100%       396,649           100%

less:  net deferred fees                             1,174                        1,348

Total loans                                        427,206                      395,301

less:  allowance for loan losses                     4,583                        4,844

Net loans                                        $ 422,623                    $ 390,457
                                                 =========                    =========
</TABLE>

* Includes $915 thousand and $819 thousand in overdrafts at June 30, 2002 and
December 31, 2001, respectively.

Changes in the allowance for loan losses are as follows:

<TABLE><CAPTION>
                                          Three months ended                     Six months ended
                                   --------------------------------     --------------------------------
                                   June 30, 2002      June 30, 2001     June 30, 2002      June 30, 2001
                                   -------------      -------------     -------------      -------------
                                                           (Dollars in thousands)
                                                           ----------------------
<S>                                <C>                <C>               <C>                <C>
Balance at beginning of period     $       4,516      $       2,833     $       4,844      $       2,381
Provision for loan losses                    151                656               253              1,103
Charge-offs                                  (93)              --                (525)              --
Recoveries                                     9               --                  11                  5
                                   -------------      -------------     -------------      -------------
Ending Balance                     $       4,583      $       3,489     $       4,583      $       3,489
                                   =============      =============     =============      =============

Ratio of net charge-offs to
average loans outstanding                   0.02%              0.00%             0.13%             0.00%

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

Loans with unpaid principal balances of $513 and $967 thousand were 90 days or
more contractually delinquent or on nonaccrual status at June 30, 2002 and
December 31, 2001.

                                       12
<PAGE>

NOTE 7 - CAPITAL STRUCTURE

The shareholders of the Company approved a resolution to amend the Company's
Certificate of Incorporation at the annual meeting held April 26, 2002. The
amendment 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).





















                                       13
<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.











                                       14
<PAGE>

                              RESULTS OF OPERATIONS

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

The Company generated net income of $1.5 million, or $0.28 per share basic and
$0.27 per share diluted, in the second quarter of 2002 compared to net income of
$171 thousand, or $0.04 per share basic and diluted, in the second quarter of
2001.

At June 30, 2002, the Company's total assets reached $577.8 million, an increase
of 16.1% over total assets at December 31, 2001. The Company's net loans totaled
$422.6 million, an increase of 8.2% over net loans at December 31, 2001, and the
Company's deposits totaled $526.9 million, an increase of 17.3% over total
deposits at December 31, 2001.

INTEREST AND DIVIDEND INCOME. The Company's interest and dividend income
increased $1.0 million, or 13.6%, to $8.4 million for the quarter ended June 30,
2002 from $7.4 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 $121.6 million for loans, $1.8 million for
investment securities (including Federal Reserve Bank stock and FHLB stock) and
$48.6 million for federal funds sold. The average yield on the loan portfolio
decreased to 7.0% in the second quarter of 2002, compared to 8.5% in the second
quarter of 2001. The average yield on federal funds sold decreased to 1.7% in
the second quarter of 2002 from 4.3% for the same period in 2001. The average
yield on investment securities, including Federal Reserve Bank and FHLB stocks,
decreased to 5.6% in the second quarter of 2002 from 6.6% in the second quarter
of 2001. During the three months ended June 30, 2002 the yield on the Company's
interest earning assets decreased to 6.2% from 8.0% for the three months ended
June 30, 2001. All decreases are due primarily to lower market interest rates,
as well as management's decision to enhance the Company's liquidity by
increasing its investment in federal funds sold. Management believes the
liquidity will be needed both to fund future loan demand and to provide
liquidity as the Company's portfolio of certificates of deposit originated over
the internet continues to run off. The Company does not intend to emphasize this
method of origination of deposits in the future.

INTEREST EXPENSE. The Company's interest expense for the second quarter of 2002
decreased $583 thousand, or 15.2%, to $3.2 million from $3.8 million for the
same period last year. The decrease in interest expense reflects a lower cost of
funds on interest bearing liabilities partially offset by a 46.3% increase in
average interest bearing liabilities at June 30, 2002, as compared to the same
period in 2001. Total average deposits increased $174.9 million in the second
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
$29.4 million, and $59.7 million, respectively, in the second quarter of 2002 as
compared to the same period in 2001, with the average balance of non-

                                       15
<PAGE>

interest bearing demand deposits reaching $79.6 million for the three months
ended June 30, 2002 from $50.2 million for the three months ended June 30, 2001.
In addition, the average balance of the Company's time deposits increased by
$70.5 million, to $252.6 million for the three months ended June 30, 2002 from
$182.1 million for the three months ended June 30, 2001. The Company's average
cost of deposits for the three months ended June 30, 2002, decreased to 2.5%
from 4.3% for the comparable period of 2001, primarily due to the lower rates of
interest on deposit accounts. The average balance of securities sold under
agreement to repurchase was $2.9 million, and the average balance of other
borrowings was $320 thousand at average rates of 6.5% and 2.5% respectively,
during the three months ended June 30, 2002. In the quarter ended June 30, 2001
the average balance of securities sold under agreement to repurchase was $5.9
million and the average of advances from the FHLB was $2.1 million, at average
rates of 6.4% and 4.7%, respectively. The Company's average cost of funds for
the three months ended June 30, 2002, decreased to 2.5% from 4.3% in the
comparable period of 2001 due primarily to lower market interest rates.

NET INTEREST AND DIVIDEND INCOME. Net interest and dividend income for the three
months ended June 30, 2002, increased by $1.6 million, or 44.6%, over the same
period last year. The Company's net interest margin decreased seven basis points
to 3.81% for the quarter ended June 30, 2002 as compared to the comparable
quarter of 2001. The decline is based primarily on management's decision to
increase the Company's liquidity to provide for continued loan growth and to
provide alternative liquidity as the Company's internet certificate portfolio
continues to roll off.

The Company's net interest spread increased 28 basis points to 3.28% for the
three months ended June 30, 2002, from 3.00% for the comparable period of 2001.
The increased net interest spread reflects a greater decline in the Company's
cost of interest paying liabilities than the decline in its yield on earning
assets.

PROVISION FOR LOAN LOSSES. The determination of the allowance for loan losses,
and the related provision, is considered by management to be a critical
accounting policy and is based upon estimates made by management. The provision
for loan losses decreased to $151 thousand for the three months ended June 30,
2002, from $656 thousand in the same period of 2001, reflecting the slower
growth in the loan portfolio in the second quarter of 2002 as well as
management's assessment of the quality of the loan portfolio and its view of the
current state of the economy. The Company's provision for loan losses maintained
the allowance at a level management believes appropriate in light of the
Company's lending activities, the quality of the loan portfolio, collateral
maintained, historical experience, volume and type of lending conducted by the
Company, the status of past due and non-performing loans, the general economic
conditions of the Company's lending area and other factors affecting
collectibility of the Company's loan portfolio. The Company recovered $9
thousand of previously charged off loans and charged off the unsecured portion
of one loan which had previously been identified as a problem loan, totaling $89
thousand against the allowance during the quarter. Total classified loans were
reduced to $532 thousand at June 30, 2002 from $673 thousand at March 31, 2002,
primarily as a result of the aforementioned transactions. The Company's ratio of
non-

                                       16
<PAGE>

performing assets to total assets declined to 0.13% at June 30, 2002 from
0.19% at December 31, 2001. While the Company's management uses available
information to recognize losses on loans, future additions to the allowance may
be necessary based on changes in economic conditions, the financial status of
borrowers and regulatory requirements.

NON-INTEREST INCOME. For the second quarter of 2002, total non-interest income
increased $6 thousand, or 1.9%, to $320 thousand from $314 thousand in the same
period of last year. The increase includes $19 thousand in gains on loan sales
while the Company sold no loans in the second quarter of last year, partially
offset by a $13 thousand decrease in commissions earned by Admiralty Insurance
Services, LLC, the Company's insurance affiliate.

NON-INTEREST EXPENSE. For the three-month period ended June 30, 2002, the
Company experienced an increase of $67 thousand in its non-interest expense over
the comparable period of 2001. For the period ended June 30, 2002, the Company's
total non-interest expense was $3.0 million, compared to total non-interest
expense of $2.9 million for the same period in 2001. The increase in
non-interest expense in the three month period of 2002 reflects a $18 thousand
increase in salaries and employee benefit expense as the Company hired
additional staff to administer growth in its loan and deposit portfolios and to
staff its new full service branches in Altamonte Springs (which opened in
September 2001) and Fort Lauderdale (which opened in August 2001). Full time
equivalent employees increased to 122 at June 30, 2002, from 118 at June 30,
2001. The increase in salaries and benefits is partially offset by a decrease of
$115 thousand in expense for the senior management incentive program as the
Company has suspended the program for 2002. Occupancy expense increased by $40
thousand, or 9.3%, in the three months ended June 30, 2002 as compared to the
same period in 2001. Occupancy expenses at the Fort Lauderdale office were $26
thousand in the second quarter of 2002 while the Company did not have this
location in the second quarter of 2001. Furniture and equipment expenses
increased to $211 thousand in the second quarter of 2002 from $169 thousand in
the second quarter of 2001. Furniture and equipment expenses at the Altamonte
Springs office, South Orlando office, downtown Orlando office Cocoa Beach office
and Fort Lauderdale office were $3 thousand, $5 thousand, $11 thousand, $6
thousand and $13 thousand more respectively in 2002 than in the second 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 $39
thousand for the second quarter of 2001. The Company experienced a net increase
of $6 thousand in other non-interest expenses in the second quarter of 2002
compared to the same period in 2001. This increase includes increases of $28
thousand in data processing and $67 thousand in other losses. The increase is
partially offset by decreases of $20 thousand in business development, $28
thousand in stationery and supplies and $17 thousand in donations. Other
expenses were also reduced by $58 thousand in director and committee fees and
expenses as the Company suspended these payments for 2002.

                                       17
<PAGE>

INCOME TAXES. Income tax expense increased to $847 thousand for the quarter
ended June 30, 2002, compared to $137 thousand for the same period last year due
to higher taxable income in the current quarter. The effective tax rate for the
second quarter of 2002 was 36.1% compared to 44.5% in the second 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.




































                                       18
<PAGE>

                Six Months Ended June 30, 2002 and June 30, 2001

The Company generated net income of $2.9 million, or $0.55 per share basic and
$0.52 per share diluted, in the six months ended June 30, 2002 compared to net
income of $471 thousand, or $0.11 per share basic and diluted, in the same
period of 2001.

INTEREST AND DIVIDEND INCOME. The Company's interest and dividend income
increased $2.2 million, or 15.2%, to $16.3 million for the six months ended June
30, 2002 from $14.1 million for the same period of 2001. This increase in
interest income primarily relates to an increase in the Company's average
balance of earning assets, partially offset by a lower yield on those interest
earning assets. Average balances increased by $137.4 million for loans, $7.5
million for investment securities (including Federal Reserve Bank stock and FHLB
stock) and $26.2 million for federal funds sold. The average yield on the loan
portfolio decreased to 7.1% in the six months ended June 30, 2002, compared to
8.9% in the six months ended June 30, 2001. The average yield on federal funds
sold decreased to 1.7% in the six months ended June 30, 2002 from 5.1% for the
same period in 2001. The average yield on investment securities, including
Federal Reserve Bank and FHLB stocks, decreased to 5.7% in the six months ended
June 30, 2002 from 6.7% in the same period of 2001. During the six months ended
June 30, 2002 the yield on the Company's interest earning assets decreased to
6.4% from 8.4% during the six months ended June 30, 2001. All decreases are due
primarily to lower market interest rates.

INTEREST EXPENSE. The Company's interest expense for the six months ended June
30, 2002 decreased $1.2 million, or 16.6%, to $6.1 million from $7.3 million for
the same period last year. The decrease in interest expense reflects a lower
cost of funds on interest bearing liabilities partially offset by a 49.3%
increase in average interest bearing liabilities at June 30, 2002, as compared
to the same period in 2001. Total average deposits increased $172.9 million in
the six months ended June 30, 2002 as compared to the same period in 2001. The
average balance of non-interest bearing demand deposits and money market
deposits increased by $29.6 million, and $58.1 million, respectively, in the six
months ended June 30, 2002 as compared to the same period in 2001, with the
average balance of non-interest bearing demand deposits reaching $75.5 million
for the six months ended June 30, 2002 from $45.9 million for the six months
ended June 30, 2001. In addition, the average balance of the Company's time
deposits increased by $71.1 million, to $237.1 million for the six months ended
June 30, 2002 from $166.0 million for the six months ended June 30, 2001. The
Company's average cost of deposits for the six months ended June 30, 2002,
decreased to 2.5% from 4.5% for the comparable period of 2001, primarily due to
the lower rates of interest on deposit accounts. The average balance of
securities sold under agreement to repurchase was $2.9 million, and the average
balance of other borrowings was $658 thousand at average rates of 6.5% and 2.1%
respectively, during the six months ended June 30, 2002. In the six months ended
June 30, 2001 the average balance of securities sold under agreement to
repurchase was $5.9 million and the average of other borrowings was $3.0
million, at average rates of 6.4% and 5.7%, respectively. The funds received in
the securities repurchase contract were for a three year term and therefore
reflect the market rate of interest for a three year borrowing when the
arrangement originated in October 1999. The Company's average
                                       19
<PAGE>

cost of funds for the six months ended June 30, 2002, decreased to 2.5% from
4.6% 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 six
months ended June 30, 2002, increased by $3.4 million, or 49.7%, over the same
period last year.

The Company's net interest margin decreased three basis points to 3.99% for the
six months ended June 30, 2002 as compared to the same period in the prior year
and the Company's net interest spread increased 38 basis points to 3.45% for the
six months ended June 30, 2002, from 3.07% for the comparable period of 2001.
The increase in net interest spread reflects a greater decline in the Company's
cost of interest paying liabilities than the decline in its yield on earning
assets. The decline in the cost of liabilities reflects current lower market
interest rates and a shift in the deposit mix toward lower cost deposits.

PROVISION FOR LOAN LOSSES. The determination of the allowance for loan losses,
and the related provision, is considered by management to be a critical
accounting policy and is based upon estimates made by management. The provision
for loan losses decreased to $253 thousand for the six months ended June 30,
2002, from $1.1 million in the same period of 2001, reflecting the slower growth
in the loan portfolio in the six months ended June 30, 2002, asset quality
within the loan portfolio as well as management's view of the current state of
the economy. The Company's provision for loan losses maintained the allowance at
a level management believes appropriate in light of the Company's 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 recovered $11 thousand of previously
charged off loans and charged off $525 thousand against the allowance during the
period. Two loans with an aggregate balance of $248 thousand were transferred to
other real estate during the six month period. Total classified loans were
reduced to $532 thousand at June 30, 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 June 30,
2002 from 0.19% at December 31, 2001. While the Company's management uses
available information to recognize losses on loans, future additions to the
allowance may be necessary based on changes in economic conditions, the
financial status of borrowers and regulatory requirements.

NON-INTEREST INCOME. For the six months ended June 30, 2002, total non-interest
income decreased $15 thousand, or 2.4%, to $611 thousand from $626 thousand in
the same period of last year. The decrease includes $2 thousand more in service
charges and fees, $25 thousand less in commissions earned by Admiralty Insurance
Services, LLC, the Company's insurance affiliate and $9 thousand more in gains
on sales of loans.

NON-INTEREST EXPENSE. For the six month period ended June 30, 2002, the Company
experienced increases of $406 thousand in its non-interest expense over the
comparable

                                       20
<PAGE>

period of 2001. For the period ended June 30, 2002, the Company's total
non-interest expense was $5.9 million, compared to total non-interest expense of
$5.5 million for the same period in 2001. The increase in non-interest expense
in the six month period of 2002 reflects a $133 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 Cocoa Beach (which opened in April 2001), Altamonte Springs (which
opened in September 2001) and Fort Lauderdale (which opened in August 2001).
Full time equivalent employees increased to 122 at June 30, 2002, from 118 at
June 30, 2001. The increase in salaries and benefits is partially offset by a
decrease of $201 thousand in expense for the senior management incentive program
as the Company has suspended the program for 2002. Occupancy expense increased
by $226 thousand, or 29.4%, in the six months ended June 30, 2002 as compared to
the same period in 2001. Occupancy expenses at the Altamonte Springs, South
Orlando, downtown Orlando, Cocoa Beach and For Lauderdale offices increased $80
thousand, $42 thousand, $11 thousand, $18 thousand and $48 thousand,
respectively, in the six months ended June 30, 2002 as compared to the same six
month period in 2001. Furniture and equipment expenses increased to $416
thousand in the six months ended June 30, 2002 from $316 thousand in the same
period of 2001. Furniture and equipment expenses at the Altamonte Springs, South
Orlando, downtown Orlando, Cocoa Beach and Fort Lauderdale offices increased $11
thousand, $17 thousand, $18 thousand, $17 thousand and $25 thousand in the first
six months of 2002 as compared to the same period in 2001. Due to the Company's
adoption of SFAS 142 "Goodwill and Other Intangible Assets", the Company had no
goodwill amortization in 2002 and $77 thousand for the first six months of 2001.
The Company experienced a net increase of $24 thousand in other non-interest
expenses in the six months ended June 30, 2002 compared to the same period in
2001. This increase includes increases of $67 thousand in data processing, $19
thousand in waived check printing fees and $63 thousand in other losses. The
increase is partially offset by decreases of $32 thousand in business
development, $24 thousand in stationery and supplies and $21 thousand in
donations. Other expenses were also reduced by $110 thousand in director and
committee fees and expenses as the Company suspended these payments for 2002.

INCOME TAXES. Income tax expense increased to $1.7 million for the six months
ended June 30, 2002, compared to $349 thousand for the same period last year due
to higher taxable income in the current period. The effective tax rate for the
six months ended June 30, 2002 was 36.9% compared to 42.6 % in the same period
in 2001. The reduced effective tax rate is attributable to relief of $41
thousand of the valuation allowance for the deferred tax asset, lower
non-deductible expenses including the amortization of goodwill and a higher
level of taxable income in relation to the non-deductible expenses.

                                       21
<PAGE>

                               FINANCIAL CONDITION

                   June 30, 2002 compared to December 31, 2001

Total assets increased to $577.8 million, an increase of $80.2 million, or
16.1%, from total assets of $497.6 million at December 31, 2001. Changes in
total assets includes increases of $1.8 million in cash and non-interest bearing
due from banks, $47.4 million in federal funds sold, $32.2 million in net loans,
and $843 thousand in investment securities held to maturity. The change in total
assets also includes decreases of $2.0 million in investment securities
classified as available for sale, $297 thousand in interest bearing due from
banks and $51 thousand in other assets.

The $32.2 million increase in net loans is comprised primarily of $4.7 million
in commercial loans, $22.2 million in non-residential real estate loans and $4.8
million in residential real estate loans. The net increase is the result of the
management team's continuing efforts to attract new business and expand
relationships with existing customers. There has been no significant change in
the loan portfolio mix at June 30, 2002 as compared to December 31, 2001.

At June 30, 2002, federal funds sold increased by $47.4 million from December
31, 2001. The increase is attributable primarily to management's decision to
increase liquidity through local deposits to fund its anticipated run off of the
portfolio of internet certificates as well as to fund anticipated loan growth.

Total deposits increased 17.3%, to $526.9 million at June 30, 2002 from $449.1
million at December 31, 2001. Deposits and the deposit mix are summarized as
follows:

<TABLE><CAPTION>
                                              June 30, 2002                    December 31, 2001
    (dollars in thousands)              -------------------------         -------------------------
<S>                                     <C>                    <C>        <C>                    <C>
Non-interest bearing demand             $ 82,071               16%        $ 63,988               14%
Savings, NOW and money market            209,147               40%         161,480               36%
Time deposits, under $100,000            122,307               23%         111,402               25%
Time deposits, $100,000 and over         113,374               21%         112,274               25%
                                        --------                          --------
                                        $526,899              100%        $449,144              100%
                                        ========                          ========
</TABLE>

Money market accounts increased $13.9 million in the first six 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 $12.0 million in the first six 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. A
substantial portion of the internet certificates are being allowed to run off at
maturity as the Company raises money locally. At June 30,

                                       22
<PAGE>

2002 the Company had $51.7 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 June 30, 2002 was 3.56%, the weighted average
contractual life was 10.8 months and the weighted average remaining life was 2.9
months.

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

<TABLE><CAPTION>
                                          Six Months Ended                      Year Ended
                                           June 30, 2002                     December 31, 2001
                                   ------------------------------     ------------------------------
   (dollars in thousands)                                 Average                            Average
                                     Amount                Yield        Amount                Yield
                                     ------                -----        ------                -----
<S>                                <C>                      <C>       <C>                      <C>
Non-Interest Bearing Demand        $ 75,524                 0.0%      $ 51,083                 0.0%
Interest-Bearing Demand              30,306                 0.5%        21,084                 0.6%
Money Market Deposits               143,751                 2.3%       101,740                 3.5%
Savings Deposits                      3,156                 1.2%         2,327                 1.7%
Time Deposits                       237,051                 3.6%       194,266                 5.4%
                                   --------                           --------
Total                              $489,788                           $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.

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

During June 2002, the Company established a $3 million, revolving borrowing line
with one of the Bank's correspondent banks. The line, which is secured by 100
percent of the stock in the Bank, is to be used by the Company solely for the
purpose of maintaining the Bank in a well capitalized status. The line is a one
year line accruing interest at prime minus one percent, with a 4.75% floor, and
it requires interest payments quarterly. The $351 thousand in other borrowings
at June 30, 2002 represent funds drawn under the Company's revolving line. At
December 31, 2001 the $1.0 million other borrowing represents a FHLB advance.
The funds obtained when this advance was originated in February 2000 were used
toward the purchase of a $10.0 million GNMA II mortgage-backed security, of
which one half is classified as available for sale and one half is classified as
held to maturity. The security was pledged to secure the borrowing line and the
Company was required to maintain a specified margin between the market value of
the security and the amount advanced under the line. The FHLB advance was paid
off in April 2002 and the security is no longer pledged to the FHLB.

                                       23
<PAGE>

Accrued interest payable increased $10 thousand, or 2.0%, due primarily to an
increased volume of interest paying liabilities offsetting lower rates being
paid on those liabilities. Other liabilities decreased $60 thousand, or 7.9%,
due primarily to a $28 thousand decrease in loan commitment fees on loans not
yet closed and other loan related fees, and a $35 thousand decrease 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 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 $513 thousand at June 30, 2002 from $524 thousand
at December 31, 2001. The balance represents the unguaranteed portion of four
Small Business Administration loans and three conventional loans. Management
believes these loans are all adequately reserved and it does not expect any
material losses as a result of these credits.

The Company had $248 thousand in other real estate owned at June 30, 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.

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

                                                   June 30,      December 31,
                                                     2002            2001
                                                -------------   -------------
                                                    (dollars in thousands)

      Non-accrual loans                         $         513   $         524

      Other real estate owned                             248               0
                                                -------------   -------------
      Total non-performing assets (1)           $         761   $         524
                                                =============   =============

      Non-accrual loans to total loans                  0.12%           0.13%

      Non-performing assets to total assets             0.13%           0.19%

      Allowance for loan losses as a
      percentage of non-performing assets             602.23%         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 June 30, 2002.

ALLOWANCE FOR LOAN LOSSES

The Company attempts to maintain an allowance for loan losses at a sufficient
level to provide for potential losses in the loan portfolio. Loan losses are
charged directly to the allowance when they occur and any recovery is credited
to the allowance. Our officers, outside, independent loan review auditors and
our Directors' Loan Committee analyze risks within the loan portfolio on an
ongoing basis. A risk system, consisting of multiple grading categories, is
utilized as an analytical tool to assess the risk and appropriate allowances.
Along with the risk system, management further evaluates risk characteristics of
the loan portfolio under current and anticipated economic conditions and
considers such factors as the financial condition of the borrower, past and
expected loss experience, and other factors management feels deserve recognition
in establishing an appropriate allowance. There were no significant changes in
loan concentrations, quality and terms during the six months ended June 30,
2002, that resulted in a change in the allowance for loan losses. These
estimates are reviewed at least quarterly, and, as adjustments become necessary,
they are realized in the periods in which they become known. There were no
significant changes in the estimation methods or fundamental assumptions used in
the calculation of the allowance for loan losses at June 30, 2002 compared to
December 31, 2001. Additions to the allowance are made by provisions charged to
expense and the allowance is reduced by net charge-offs (i.e., loans judged to
be uncollectible and charged against the allowance, less any recoveries on such
loans). Although management attempts to maintain the allowance at a level deemed
adequate, future additions to the allowance may be necessary based upon changes
in market conditions. In addition, various regulatory agencies periodically
review the Company's loan portfolio and allowance for loan losses. These
agencies may require the Company

                                       25
<PAGE>

to take additional provisions based on their judgments about information
available to them at the time of their examination.

At June 30, 2002, the allowance for loan losses was $4.6 million, a decrease of
$261 thousand from December 31, 2001. During the six months ended June 30, 2002
the Company had charge-offs of $525 thousand, recoveries of $11 thousand and
provided a loan loss provision of $253 thousand. The charge-offs primarily
relate to two loans previously identified as problem loans and a partial
charge-off of the unsecured portion of another loan.

INVESTMENT SECURITIES
At June 30, 2002, the Company's investment securities portfolio, both held to
maturity and available for sale, totaled $52.4 million, a decrease of $1.2
million, from total investment securities of $53.6 million at December 31, 2001.
The Company invested primarily in U.S. Treasury and U.S. Agency securities
during the six months ended June 30, 2002. At June 30, 2002, $16.0 million of
the Company's investment securities were classified as available for sale and
$36.4 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.

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 $3.7 million in the
first six months of 2002 compared to $1.3 million for the six months ended June
30, 2001.

                                       26
<PAGE>

Net cash used in investing activities was $32.0 million in the period ended June
30, 2002 compared to $122.5 million in the comparable period of 2001. Net cash
provided by the Company's investment portfolio was $1.3 million in the first six
months of 2002, while in the comparable period of 2001 it used $14.2 million for
its securities portfolio. Additionally, the Company used $32.6 million and
$105.0 million for net loans and loan sales in the first six 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 $77.2 million in the
first six months of 2002, and $121.8 million in the comparable period of 2001.
The increase in 2002 was due to a $77.8 million increase in deposits, $351
thousand in borrowings from a correspondent bank and $65 thousand received from
the exercise of stock options. The 2002 increases were partially offset by
repayment of $1.0 million in FHLB advances. Deposits provided an increase of
$111.7 million and proceeds from the issuance of common stock provided $13.1
million while repayment of FHLB borrowings used $3.0 million in the six months
ended June 30, 2001.

As a state chartered commercial bank, the Bank is required to maintain a daily
liquidity position equal to at least 15 percent of its total transaction
accounts and 8 percent of its total non-transaction accounts, less those
deposits of public funds for which security has been pledged. As of June 30,
2002, the Bank had a liquidity ratio of 25.1% which was adequate to meet the
statutory requirement. The primary source of the Bank's liquidity is federal
funds sold - overnight loans to major commercial banks. At June 30, 2002,
federal funds sold totaled $68.6 million. Funds not required to meet loan and
deposit demand were invested primarily in U.S Treasury and U.S. Government
Agency securities. The Bank considers these investments to be secondary sources
of liquidity. The Bank's investment securities classified as available for sale
had a carrying value of $16.0 million at June 30, 2002.

An additional external source of liquidity is an unsecured $12 million federal
funds overnight borrowing line of credit and a secured line of credit with a
correspondent bank. The Company's unencumbered investment securities are the
collateral for the secured line of credit and serve to determine the total
amount available under the line. At June 30, 2002, no funds were drawn under
either the secured or unsecured line. The Company did not draw on either the
secured or unsecured lines of credit during the six months ended June 30, 2002.
The Company also maintains a line of credit at the Federal Home Loan Bank of
Atlanta secured by first lien residential mortgages.


                                       27
<PAGE>

CAPITAL RESOURCES

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

Total stockholders' equity increased to $46.4 million at June 30, 2002 from
$43.3 million at December 31, 2001. June 30, 2002 equity was affected by net
income of $2.9 million, an increase of $65 thousand for stock options exercised,
and an increase of $163 thousand in net unrealized gains on available for sale
securities.

At June 30, 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)          $47,297         10.05%    >= $37,638     >= 8.00%         >= $47,047    >= 10.00%

Tier I Capital
     (to risk weighted assets)          $42,714          9.08%    >= $18,819     >= 4.00%         >= $28,228     >= 6.00%

Tier I Capital
     (to average assets)                $42,714          7.52%    >= $22,711     >= 4.00%         >= $28,388     >= 5.00%
</TABLE>

On March 11, 2000, the Company converted from a one bank holding company to a
financial holding company under the Gramm-Leach-Bliley Financial Modernization
Act of 1999 (the "Modernization Act"). This status permits the Company to
undertake financial activities which need not be closely related to banking,
such as insurance brokerage activities. Under the Modernization Act, the
Company's bank subsidiary must, among other requirements, remain "well
capitalized" or the Company could be required to divest itself of its
non-banking activities. During June 2002, the Company drew $351 thousand against
its credit line of which $350 thousand was used toward a capital investment in
the Bank and the remaining $1 thousand was used to pay the origination costs of
the line.

                                       28
<PAGE>

At June 30, 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)       >= $47,515         10.10%    >= $37,636     >= 8.00%         >= $47,045    >= 10.00%

Tier I Capital
     (to risk weighted assets)       >= $42,932          9.13%    >= $18,818     >= 4.00%         >= $28,227     >= 6.00%

Tier I Capital
     (to average assets)             >= $42,932          7.56%    >= $22,711     >= 4.00%         >= $28,388     >= 5.00%
</TABLE>





















                                       29
<PAGE>

ITEM 3. QUANTATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

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

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

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

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

                                       30
<PAGE>

The Company's most recent available information, as of March 31, 2002, indicates
if interest rates increase 200 basis points or decrease 100 basis points from
current rates at a steady pace over the twelve months succeeding the analysis
date, the Company would expect net interest income to increase 5.59% or decrease
3.91%, respectively. In addition, based on an immediate and sustained 200 basis
point increase or decrease, the Company would expect its estimated Net Portfolio
Value to increase $10.1 million or decrease $12.0 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 66%, or $359 million, of the Company's assets.
Interest bearing deposits total $406 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. In a rising
rate environment the Company would also expect its earning assets to reprice
faster than its paying liabilities resulting in an increase in the Net Portfolio
Value.

























                                       31
<PAGE>

PART II OTHER INFORMATION
-------------------------

ITEM 1.  LEGAL PROCEEDINGS

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

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

See Item 4(c) below.

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 26, 2002.
  (b)    Not applicable
  (c)    The following directors were elected to serve three year terms in an
         uncontested election:


                       Shares Voted      Shares Voted                  Broker
                            For        Against/Withheld  Abstentions  Non-Votes
 ------------------  ----------------  ----------------  -----------  ---------
 William Berger          4,818,641             0            7,593         0

 David B. Dickenson      4,825,755             0              479         0

 Thomas L. Gray          4,825,755             0              479         0

 Leslie E. Goodman       4,825,755             0              479         0

 Douglas Hooker          4,818,091             0            8,143         0

 George Zoffinger        4,825,755             0              479         0


     Shares were voted as follows on a proposal to amend the Company's
Certificate of Incorporation to eliminate the Company's Class A Common Stock and
thereby authorize the Company's Certificate of Incorporation to provide for a
single class of common stock:


       Shares Voted      Shares Voted                       Broker
            For         Against/Withheld   Abstentions    Non-Votes
     ----------------   ----------------   -----------   -----------
         2,872,961            1,669           5,130       1,946,474


  (d)    Not applicable.

ITEM 5.  OTHER INFORMATION

Not applicable.


                                       32
<PAGE>

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

  (a)  Exhibits

       Number           Description
       ------           -----------
       None.

  (b)  Reports on Form 8-K

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


































                                       33
<PAGE>

SIGNATURE PAGE

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


                                           ADMIRALTY BANCORP, INC.



Date:   July 24, 2002                      By: /s/ Ward Kellogg
                                               ------------------------------
                                               WARD KELLOGG, President


Date:   July 24, 2002                      By: /s/ Kevin M. Sacket
                                               ------------------------------
                                               KEVIN M. SACKET, Treasurer
                                               (Principal Financial Officer)

























                                       34