U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

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

                       FOR THE QUARTER ENDED JUNE 30, 1999

                                       OR

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

                        COMMISSION FILE NUMBER 005-55641

                         UNITED FINANCIAL HOLDINGS, INC.
                 (Name of Small Business Issuer in its Charter)

           FLORIDA                                               59-2156002
(State or Other Jurisdiction of                                (IRS Employer
 Incorporation or Organization)                             Identification No.)

                        333 THIRD AVENUE NORTH, SUITE 200
                       ST. PETERSBURG, FLORIDA 33701-3346
                    (Address of Principal Executive Offices)
                                 (727) 898-2265
                (Issuer's Telephone Number, Including Area Code)

Check whether the issuer:  (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the past 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 ___

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common equity, as of the latest practicable date:

    Common Stock, $0.01 Par value                          4,151,821
--------------------------------------          -------------------------------
              Class                             Outstanding as of July 31, 1999
<PAGE>





                         UNITED FINANCIAL HOLDINGS, INC.

                                      INDEX
                                                                         PAGE
================================================================================
PART I.  FINANCIAL INFORMATION

     ITEM 1.     Financial Statements (unaudited)

         Condensed Consolidated Balance Sheets -
         At June 30, 1999 and December 31, 1998                            1

         Condensed Consolidated Statements of Earnings -
         For the three month and six months ended June 30, 1999 and 1998   2

         Condensed Consolidated Statements of Comprehensive Income -
         For the three month and six months ended June 30, 1999 and 1998   3

         Condensed Consolidated Statement of Stockholders' Equity -
         For the six months ended June 30, 1999                            4

         Condensed Consolidated Statements of Cash Flows -
         For the six months ended June 30, 1999 and 1998                   5-6

         Notes to Condensed Consolidated Financial Statements              7-9

     ITEM 2.     Management's Discussion and Analysis of Financial
                 Condition and Results of Operations                       9-16


PART II.  OTHER INFORMATION

     ITEM 1.     Legal Proceedings                                         17

     ITEM 2.     Changes in Securities and Use of Proceeds                 17

     ITEM 3.     Defaults Upon Senior Securities                           18

     ITEM 4.     Submission of Matters to a Vote of Shareholders           18

     ITEM 5.     Other Information                                         19

     ITEM 6.     Exhibits and Reports on Form 8-K                          19


SIGNATURES                                                                 19








<PAGE>
PART I.  FINANCIAL INFORMATION
ITEM 1.  FINANCIAL STATEMENTS

                United Financial Holdings, Inc. and Subsidiaries
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (unaudited)
                                 (in thousands)
                                               June 30,       December 31,
 ASSETS                                           1999              1998
                                              ----------       -----------
Cash and due from banks                       $  7,087         $  7,967
Federal funds sold                               4,106            4,011
Trading securities                                 108              157
Securities held to maturity, market value
  of $14,191 and $11,437 respectively           14,538           11,206
Securities available for sale, at market        11,520           14,527
Loans, net                                     128,646          116,546
Premises and equipment, net                      9,854            9,275
Federal Home Loan Bank stock                       507              433
Federal Reserve Bank stock                         204              159
Intangible assets                                1,521            1,451
Other real estate owned                          1,079            1,015
Other assets                                     5,399            5,155
                                             -----------      ------------
       Total assets                          $ 184,569        $ 171,902
                                             ===========      ============
                        LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits
  Demand                                     $  31,636        $  27,742
  NOW and money market                          52,231           48,550
  Savings & Time Deposits                       70,446           62,803
                                             -----------      ------------
       Total deposits                          154,313          139,095

Securities sold under agreements to repurchase   5,319            8,796
Convertible subordinated debentures                630              630
Long-term debt                                       -               34
Other liabilities                                1,919            2,576
                                             ------------      ------------
       Total liabilities                       162,181          151,131

Company-obligated Mandatory Redeemable Capital
 Securities of Subsidiary Trust Holding Solely
 Subordinated Debentures Of The Company          6,750            6,000

STOCKHOLDERS' EQUITY
  7% convertible preferred stock                   100              209
  Common stock                                      42               40
  Paid-in capital                                9,386            9,192
  Common stock subscription receivable               -             (393)
  Accumulated other comprehensive income           (78)             141
  Retained earnings                              6,188            5,582
                                             ------------     --------------
       Total stockholders' equity               15,638           14,771
                                             ------------     --------------
  Total liabilities and stockholders' equity $ 184,569        $ 171,902
                                             ============     ==============
     See accompanying notes to condensed consolidated financial statements.
                                      -1-
<PAGE>
                United Financial Holdings, Inc. and Subsidiaries
                  CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
                                   (unaudited)
                      (in thousands, except per share data)
                              Three Months Ended         Six Months Ended
                             June 30,     June 30,    June 30,       June 30,
                               1999         1998        1999           1998
                             ---------    ---------   ---------     ---------
Interest income
  Loans and loan fees        $   3,001    $   2,446   $   5,874     $   4,871
  Securities                       440          441         861           810
  Federal funds sold securities
    purchased under reverse
    repurchase agreements           85          194         133           326
                             ---------    ---------   ---------     ---------
       Total interest income     3,526        3,081       6,868         6,007
Interest expense
  Deposits                       1,187        1,277       2,272         2,394
  Long-term debt and
    other borrowings                59           46         125           130
  Subordinated debentures
    issued to subsidiary trust     158            -         365             -
                             ---------    ---------   ---------     ---------
       Total interest expense    1,404        1,323       2,762         2,524
                             ---------    ---------   ---------     ---------
       Net interest income       2,122        1,758       4,106         3,484
Provision for loan losses          180          160         405           250
                             ---------    ---------   ---------     ---------
   Net interest income after
     provision for loan losses   1,942        1,598       3,701         3,233
Other income
  Service charges on
    deposit accounts               197          172         373           347
  Trust and investment
    management income              697          589       1,360         1,138
  Gain on Sale of Loans            139          113         251           129
  All other fees and income        174          226         346           374
                             ---------    ---------   ---------     ---------
       Total other income        1,207        1,100       2,330         1,988
Other expense
   Salaries & employee benefits  1,198        1,128       2,564         2,263
   Occupancy expense               130          143         260           291
   Furniture & equipment expense   157          127         298           256
   Data Processing                 107          109         238           221
   Marketing & business development 90           60         131           116
   Other operating expenses        611          381       1,049           776
                             ---------    ---------   ---------     ---------
                                 2,293        1,948       4,540         3,923
                             ---------    ---------   ---------     ---------
  Earnings before income taxes     856          750       1,491         1,298
Income tax expense                 319          298         549           512
                             ---------    ---------   ---------     ---------
       NET EARNINGS          $     537    $     452   $     942     $     786
                             =========    =========   =========     =========
Earnings Per Share:
   Basic                     $     .13    $     .13   $     .23     $      .22
   Diluted                   $     .12    $     .12   $     .22     $      .21
    See accompanying notes to condensed consolidated financial statements.
                                      -2-
<PAGE>
                United Financial Holdings, Inc. and Subsidiaries
            CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                                   (unaudited)
                                 (in thousands)
                              Three Months Ended         Six Months Ended
                             June 30,     June 30,    June 30,       June 30,
                               1999         1998        1999           1998
                             ---------    ---------   ---------     ---------
Net earnings                 $     537    $     452   $     942     $     786
Other comprehensive income
   Unrealized holding
     gains (losses)               (215)          20        (332)           25
   Income tax (expense) benefit
     related to items of other
     comprehensive income           73           (8)        113            (9)
                             ---------    ---------   ---------     ---------

Comprehensive income         $     395    $     464   $     723     $     802
                             =========    =========   =========     =========






































    See accompanying notes to condensed consolidated financial statements.
                                      -3-
<PAGE>
                United Financial Holdings, Inc. and Subsidiaries
            CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                                   (unaudited)
                                 (in thousands)

                                             Accumu-
                          7%                 lated    Stock
                          Convert-           Other    Subscrip-
                          ible               Compre-  tion     Re-
                 Common   Preferred Paid-In  hensive  Receiv-  tained
                 Stock    Stock     Capital  Income   able     Earnings Total
                 -------- --------- -------- -------- -------  -------- --------
Balance at
 December 31,
 1998            $     40 $     209 $  9,192 $    141 $  (393) $  5,582 $14,771
Net Earnings            -         -        -        -       -       942     942
Dividends on Common
   & Preferred Stock    -         -        -        -       -      (336)   (336)
IPO subscriptions &
   costs                -         -      (25)       -     393         -     368
Accumulated other
   comprehensive income -         -        -     (219)      -         -    (219)
Performance Shares
   Issued               1         -      112        -       -         -     113
Conversion of 7%
   Preferred to Common
   Stock                1      (109)     107        -       -         -      (1)
                 -------- --------- -------- -------- -------  -------- --------

Balance at
 June 30, 1999   $     42 $     100 $  9,386 $    (78)$     -  $  6,188 $15,638
                 ======== ========= ======== ======== =======  ======== =======

























    See accompanying notes to condensed consolidated financial statements.
                                      -4-
<PAGE>
                United Financial Holdings, Inc. and Subsidiaries
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (unaudited)
                                 (in thousands)

                                                       Six Months Ended
                                                   June 30,        June 30,
                                                    1999             1998
                                                   -----------     -----------
Cash flows from operating activities:
    Net earnings                                   $       942     $       786
    Adjustments to reconcile net earnings
     to net cash provided by (used in)
     operating activities
       Provision for loan losses                           405             250
       Provision for depreciation and amortization         384             320
       Unrealized gain on trading securities                (8)              -
       Accretion of securities discount                     (7)            (25)
       Amortization of unearned loan fees                  (75)            (42)
       Amortization of securities premiums                  10              13
       Gain on sales of loans                             (434)           (198)
       Decrease (increase) in interest receivable          (88)             44
       Increase in interest payable                         23               3
      (Increase) in other assets                          (330)           (200)
       Decrease in other liabilities                      (681)           (381)
                                                   -----------     -----------

         Net cash provided by
          operating activities                             141             570

Cash flows from investing activities:
    Purchase of Federal Reserve Bank stock
     and FHLB stock                                       (118)            (73)
    Net (increase) in Federal funds sold                   (95)        (19,326)
    Principal repayments of held to
      maturity securities                                1,090            340
    Principal repayments of available for
      sale securities                                    1,981             416
    Proceeds from maturities of available for
      sale securities                                    3,000             500
    Proceeds from maturities of held to
      maturity securities                                 (170)          2,026
    Purchases of available for sale securities          (4,491)         (5,649)
    Purchases of held to maturity securities            (1,899)         (5,915)
    Proceeds from sales of loans                         4,457           1,649
    Net (increase) in loans                            (16,455)         (4,309)
    Capital expenditures                                  (922)            (35)
                                                   -----------     -----------

          Net cash used in investing activities        (13,622)        (30,376)







   See accompanying notes to condensed consolidated financial statements.
                                      -5-
<PAGE>
                United Financial Holdings, Inc. and Subsidiaries
           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
                                   (unaudited)
                                 (in thousands)
                                   (continued)

                                                       Six Months Ended
                                                   June 30,        June 30,
                                                    1999             1998
                                                   -----------     ------------

Cash flows from financing activities:
Net increase in demand deposits, NOW accounts,
     money market accounts and savings accounts    $     8,597     $     28,954
   Net (decrease) increase in certificates
     of deposit                                          6,620           (1,488)
   Net increase (decrease) in securities sold under     (3,477)           3,088
     agreements to repurchase
   Repayment of long-term debt                             (34)            (308)
   Issuance of Company-obligated mandatory redeemable
     capital securities of subsidiary trust holding solely
     subordinated debentures of the Company                750                -
   Issuance of common stock                                480              284
   Dividend paid on preferred stock                         (7)              (8)
   Dividend paid on common stock                          (328)            (233)
                                                   -----------      -----------

         Net cash provided by financing activities      12,601           30,289
                                                   -----------      -----------

Net increase in cash and due from banks                   (880)             483

Cash and due from banks at beginning of period           7,967            7,337
                                                   -----------      -----------

Cash and due from banks at end of period           $     7,087      $     7,820
                                                   ===========      ===========


Cash paid during the period for:
   Interest                                        $     2,739      $     2,521
   Income taxes                                    $       535      $       391

Supplemental Disclosure of Non-cash Activity
Performance shares issued                          $       113      $       116












   See accompanying notes to condensed consolidated financial statements.
                                      -6-
<PAGE>
UNITED FINANCIAL HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - HOLDING COMPANY AND SUBSIDIARIES BACKGROUND INFORMATION

United  Financial  Holdings,  Inc. (the  "Company") is a registered bank holding
company  formed  in 1982,  the  principal  subsidiary  of which is  United  Bank
("Bank"),  a Florida-chartered  commercial bank headquartered in St. Petersburg,
Florida. The Bank was founded in 1979 and is a community-oriented,  full service
commercial  bank with five branch offices  serving the southern  Pinellas County
area of the State of Florida.

The Company's other operating  subsidiaries are Eickhoff,  Pieper, & Willoughby,
Inc., an investment  advisory firm registered under the Investment  Advisers Act
of 1940 ("EPW") headquartered in Tampa, Florida, with an office in Jacksonville,
Florida,  and United Trust Company, a  Florida-chartered  trust company ("United
Trust") located in St.  Petersburg,  Florida.  EPW offers investment  management
services  to  corporate,   municipal  and  high  net  worth  individual  clients
throughout  the State of Florida.  United Trust is a wholesale  provider of data
processing,  administrative and accounting support and asset custody services to
professionals holding assets in trust (primarily legal and accounting firms). In
addition,  United Trust also  provides  retail trust and  investment  management
services to individual and corporate clients.

NOTE 2 - BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information. In the opinion of management, all adjustments, consisting
primarily of normal recurring adjustments,  necessary for a fair presentation of
the results for the interim  periods  have been made to fairly state the results
for the interim  periods.  The results of operations of the three and six months
ended June 30, 1999 are not necessarily  indicative of the results  expected for
the full year.

The organization and business of the Company,  accounting  policies  followed by
the Company and other  information  are contained in the Company's  December 31,
1998 Form 10-KSB.  This quarterly report should be read in conjunction with such
annual report.

NOTE 3 - EARNINGS PER SHARE

Basic earnings per share are based on the weighted  average number common shares
outstanding during the periods. Diluted earnings per share includes the weighted
average number of common shares  outstanding  during the periods and the further
dilution from stock options using the treasury stock method.  The following is a
reconciliation  of the  numerators  and  denominators  of the basic and  diluted
earnings per share computations for the periods presented (dollars in thousands,
except per share data).









                                      -7-
<PAGE>
                               For the three months ended June 30
                               ----------------------------------
                                 1999                     1998
                      --------------------------   ----------------------------
                                Weighted  Per                  Weighted  Per
                                Average   Share                Average   Share
                      Earnings  Shares    Amount   Earnings    Shares    Amount
                     ---------  --------- ------   ---------   --------- ------
Basic EPS
  Net earnings
    available to
    Common
    Stockholders      $    530  4,061,313 $  .13   $    444    3,493,150 $  .13
                                          ======                         ======

Effect of  dilutive securities
  Incremental  shares
   from  assumed  exercise or
    conversion of:
       Convertible Debt      8    152,789                  8     152,789
       Preferred Stock       7    174,854                  8     193,702
       Stock Options         0          0                  0      34,824
                     ---------  ---------          ---------   ---------

Diluted EPS
  Net earnings available to Common
    Stockholders and assumed
    conversions      $     545  4,388,956 $  .12   $     460   3,874,465 $  .12
                     =========  ========= ======   =========   ========= ======
                               For the six months ended June 30
                               ----------------------------------
                                 1999                     1998
                      --------------------------   ----------------------------
                                Weighted  Per                  Weighted  Per
                                Average   Share                Average   Share
                      Earnings  Shares    Amount   Earnings    Shares    Amount
                     ---------  --------- ------   ---------   --------- ------
Basic EPS
  Net earnings
   available to Common
    Stockholders     $     935  4,056,251 $  .23   $     778   3,481,948 $  .22
                                          ======                         ======

Effect of  dilutive  securities
  Incremental  shares
   from  assumed  exercise or
    conversion of:
       Convertible Debt    16     152,789                  16    152,789
       Preferred Stock      7     175,355                   8    195,315
       Stock Options        0           0                   0     34,824
                     ---------  ---------           ---------  ---------

Diluted EPS
  Net earnings available to Common
    Stockholders and assumed
    conversions      $     958  4,384,395  $  .22   $     802  3,864,876 $  .21
                     =========  =========  ======   =========  ========= ======

                                      -8-
<PAGE>
NOTE 4 - CAPITAL

In December  1998, the Company issued and sold 450,000 shares of common stock at
$7.25 per share and, through a statutory business trust created and wholly owned
by the Company,  issued  $6,000,000  of 9.40% Trust  Preferred  Securities  (the
"Trust Preferred  Securities") in an underwritten  public  offering.  In January
1999,  the  Company  issued an  additional  57,705  shares  of common  stock and
$749,600 of additional Trust Preferred  Securities pursuant to the underwriter's
exercise of its over-allotment option.

NOTE 5 - COMPREHENSIVE INCOME

Under  Statement  of  Financial   Accounting   Standards  No.  130,   "Reporting
Comprehensive  Income",  certain  transactions  and other  economic  events that
bypass the income statement must be displayed as other comprehensive income. The
Company's comprehensive income consists of net earnings and unrealized gains and
losses on securities available-for-sale, net of income taxes.


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

      This  report  contains   statements   that   constitute   "forward-looking
statements"  within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The
words  "believe,"  "estimate,"  "expect,"  "intend,"  "anticipate,"  "plan"  and
similar   expressions   and  variations   thereof   identify   certain  of  such
forward-looking  statements  which speak only as of the dates on which they were
made.  The Company  undertakes no  obligation  to publicly  update or revise any
forward-looking  statements,  whether  as a result  of new  information,  future
events,  or  otherwise.  Readers  are  cautioned  that any such  forward-looking
statements  are not  guarantees  of future  performance  and  involve  risks and
uncertainties,  and  that  actual  results  may  differ  materially  from  those
indicated in the forward-looking statements as a result of various factors. Such
factors  include,   but  are  not  limited  to  competition,   general  economic
conditions,  potential  changes in interest  rates,  and changes in the value of
real estate securing loans made by the Company.

COMPARISON OF BALANCE SHEETS AT JUNE 30, 1999 AND DECEMBER 31, 1998

Overview

      Total assets of the Company were $184.6 million at June 30, 1999, compared
to $171.9  million at December 31, 1998,  an increase of $12.7  million or 7.4%.
This  increase was  primarily  the result of the  Company's  internal  growth of
earning assets (primarily loans) funded by an increase in deposits.

Investment Securities

      Investment  securities,  consisting  of U.S.  Treasury and federal  agency
securities,  obligations of state and political subdivisions and mortgage-backed
and corporate debt securities,  were $26.1 million at June 30, 1999, compared to
$25.7  million at  December  31,  1998,  an  increase  of $0.4  million or 1.6%.
Included  in  investment  securities  at June 30,  1999,  were $11.5  million of
securities held as "available for sale" to provide the Bank greater  flexibility
to respond to changes in interest rates.  These securities have been recorded at
market value.

                                      -9-
<PAGE>
Loans

      Total  loans were  $131.5  million at June 30,  1999,  compared  to $119.2
million at December 31,  1998,  an increase of $12.3  million or 10.3%.  For the
same  period,  real estate  mortgage  loans  increased  by $5.8 million or 7.5%,
commercial  loans  increased  by $6.7  million  or 19.3%,  and all  other  loans
including  consumer  loans  decreased  by $0.2  million  or 3.2%.  Loans  net of
allowance for loan loss were $128.6 million at June 30, 1999, compared to $116.5
million at December 31, 1998.


      The following table sets forth  information  concerning the loan portfolio
by collateral types as of the dates indicated (dollars in thousands):

                                        June 30, 1999        December 31, 1998
Real estate mortgage loans:
  Commercial real estate                $      67,487          $      60,693
  One-to-four family residential                6,171                  7,075
  Multifamily residential                       6,687                  6,673
  Construction and land development             3,480                  3,572
                                        -------------          -------------
      Total real estate mortgage loans         83,835                 78,013

Commercial loans                               41,629                 34,904
Consumer loans                                  4,497                  4,438
Other loans                                     1,544                  1,803
                                        -------------          -------------
  Gross loans                                 131,505                119,158
Allowances for loan losses                     (2,076)                (1,984)
Unearned fees                                    (783)                  (628)
                                        -------------          -------------
      Total loans net of allowance
        and unearned fees               $     128,646          $     116,546
                                        =============          =============

Asset Quality and Allowance for Loan Losses

      The  allowance  for loan  losses  represents  management's  estimate of an
amount  adequate  to provide  for  potential  losses  within the  existing  loan
portfolio.  The allowance is based upon an ongoing  quarterly  assessment of the
probable  estimated  losses  inherent  in the  loan  portfolio,  and to a lesser
extent, unused commitments to provide financing.

      The  methodologies  for  assessing  the  appropriateness  of the allowance
consists of several key elements,  which include:  1) the formula allowance;  2)
review of the underlying  collateral on specific  loans;  and 3) historical loan
losses.  The  formula  allowance  is  calculated  by  applying  loss  factors to
outstanding  loans and unused  commitments,  in each case based on the  internal
risk  grade of those  loans.  Changes  in risk  grades  of both  performing  and
non-performing  loans affect the amount of the formula allowance.  On the larger
criticized  or  classified  credits,  a review is  conducted  of the  underlying
collateral  which secures each credit. A worse case scenario review is conducted
on  those  loans to  calculate  the  amount,  if any,  of  potential  loss.  The
historical  loan loss method is a review of the last six years of actual losses.
The loss percentage is calculated and applied to the current  outstanding  loans
in total.


                                     -10-
<PAGE>
      Various  conditions  which would  affect the loan  portfolio  are also
evaluated.  General  economic  and  business conditions that affect the port-
folio are reviewed  including:  1) credit quality trends  including  trends in
past due and non-performing  loans; 2) collateral values in general;  3) loan
volumes and  concentration;  4) recent loss experience in particular  segments
of the  portfolio;  5) duration  and  strength of the current  business  cycle;
6) bank  regulatory examination  results;  and 7) findings of the external loan
review process.  Senior management and the Directors'  General Loan Committee
review these  conditions  quarterly.  If any of these conditions  presents a
problem to the loan portfolio, an additional allocation may be recommended.


      The following table sets forth information  concerning the activity in the
allowance for loan losses during the periods indicated (dollars in thousands):

                                               For the six months ended
                                          June 30, 1999          June 30, 1998
                                          --------------         --------------
Allowance at beginning of period          $        1,984         $        1,648
Charge-offs:
  Real estate loans                                   27                      -
  Commercial loans                                   269                    131
  Consumer loans                                      21                      1
                                          --------------         --------------
      Total charge-offs                              317                    147
Recoveries:
  Real estate loans                                    -                      -
  Commercial loans                                     4                      8
  Consumer loans                                       -                      -
                                          --------------         --------------
      Total recoveries                                 4                      8
Net charge-offs                                      313                    138
Provision for loan losses                            405                    250
                                          --------------         --------------
Allowance at end of period                $        2,076         $        1,759
                                          ==============         ==============


Nonperforming Assets

      Nonperforming  assets  include 1) loans which are 90 days or more past due
and have been placed into non-accrual status; 2) accruing loans that are 90 days
or more delinquent that are deemed by management to be adequately secured and in
the  process of  collection;  and 3) ORE (i.e.,  real  estate  acquired  through
foreclosure or deed in lieu of  foreclosure).  All delinquent loans are reviewed
on a regular basis and are placed on non-accrual  status when, in the opinion of
management,   the  possibility  of  collecting  additional  interest  is  deemed
insufficient to warrant further accrual. As a matter of policy,  interest is not
accrued on loans past due 90 days or more  unless the loan is both well  secured
and in  process  of  collection.  When a loan is placed in  non-accrual  status,
interest accruals cease and uncollected accrued interest is reversed and charged
against current income.  Additional  interest income on such loans is recognized
only when received.





                                      -11-
<PAGE>
      The following  table sets forth  information  regarding the  components of
nonperforming assets at the dates indicated (dollars in thousands):

                                        June 30, 1999         December 31, 1998
                                        --------------        -----------------
Real estate loans                       $        2,430           $        2,820
Commercial loans                                   587                    1,181
Consumer loans                                       -                        -
                                        --------------        -----------------
   Total non-accrual loans(1)                    3,017                    4,001
Other Real Estate                                1,074                    1,015
Accruing Loans 90 days past due..                  552                      449
                                        --------------        -----------------
   Total nonperforming assets           $        4,648        $           5,465
                                        ==============        =================

(1)   $1,391 of the  non-accrual  loans as of June 30,  1999 are being paid on a
      monthly basis on a  pre-judgment  stipulation,  and interest and principal
      are being recorded as received on a cash basis.

Bank Premises and Equipment

      Bank premises and equipment was $9.9 million at June 30, 1999, compared to
$9.3  million at December  31,  1998,  an increase of $.6 million or 6.5%.  This
increase  was  primarily  due to the  acquisition  of a new bank  branch  office
building  and  related   equipment,   partially   offset  by  depreciation   and
amortization of leasehold improvements.

Deposits

      Total  deposits were $154.3  million at June 30, 1999,  compared to $139.1
million at December 31, 1998, an increase of $15.2 million or 10.9%.  During the
six months ended June 30, 1999, demand deposits increased $3.9 million,  NOW and
money market  deposits  increased  $3.7 million,  and savings  deposits and time
deposits increased $7.6 million.

Long-term Debt and Convertible Subordinated Debentures

      There  was  no   long-term   debt   outstanding   (excluding   convertible
subordinated  debentures) at June 30, 1999, compared to $34 thousand at December
31, 1998, a decrease of $34  thousand.  The decrease was due to the repayment of
debt  with  an  unrelated  bank.  In  addition,  $630  thousand  in  convertible
subordinated debentures were outstanding during both periods.

Mandatory Redeemable Capital Securities of Subsidiary Trust

      In December 1998, the Company,  through a statutory business trust created
and owned by the  Company,  issued  approximately  $6.7  million  (including  an
overallotment of approximately $750 thousand that closed on January 14, 1999) of
Trust Preferred Securities that will mature on December 10, 2028.

Stockholders' Equity

      Stockholders' equity was $15.6 million at June 30, 1999, or 8.45% of total
assets,  compared to $14.8  million,  or 8.61% of total  assets at December  31,
1998. At June 30, 1999,  the Bank's Tier I (core)  Capital ratio was 7.54%,  its


                                      -12-
<PAGE>
Tier I Risk-based  Capital  ratio was 9.11%,  and its Total  Risk-based  Capital
ratio was 10.36%.  The capital  ratios of the Bank at that date all exceeded the
minimum  regulatory  guidelines  for  an  institution  to  be  considered  "well
capitalized".  The increase in stockholders' equity was due to year-to-date 1999
net  income,  less  dividends  declared  and  changes  in the  market  value  of
securities available for sale, net of deferred taxes.

COMPARISON OF RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED
JUNE 30, 1999 AND 1998

Overview

      Net income for the three months  ended June 30, 1999 was $537  thousand or
$0.12 per share  diluted,  compared to $452  thousand or $0.12 per share diluted
for the same  period in 1998.  On a  pre-tax  basis,  United  Trust  earned  $83
thousand in 1999 versus $43 thousand in 1998,  EPW's pre-tax  operating  profits
(before  deducting  $35  thousand  of  costs  associated  with the  issuance  of
performance  shares in 1998) increased to $107 thousand from $79 thousand during
this period and the Bank's pre-tax profits  increased to $890 thousand from $732
thousand during this same period.

Analysis of Net Interest Income

      Interest income for the three months ended June 30, 1999 was $3.5 million,
compared to $3.1  million for the same period in 1998,  a $0.4  million or 12.9%
increase.  This  increase in interest  income is primarily due to an increase in
earning assets,  consisting  mostly of loans.  Interest expense was $1.4 million
for the three months ended June 30, 1999,  compared to $1.3 million for the same
period in 1998, a $0.1 million or 7.7% increase.  This increase is primarily due
to the interest  expense  associated  with the  issuance of the Trust  Preferred
Securities in December 1998.

Provision for Loan Losses

      For the three months ended June 30, 1999,  the  provision  for loan losses
charged to expense was $180  thousand,  compared to $160  thousand  for the same
period in 1998, an increase of $20 thousand or 12.5%.  The allowance of possible
loan losses was $2.1 million at June 30, 1999.  Management's  judgment as to the
adequacy of the allowance is based upon a number of assumptions about the future
events which it believes to be reasonable, but which may or may not be accurate.
Because of the inherent  uncertainty of  assumptions  made during the evaluation
process,  there can be no assurance  that loan losses in future periods will not
exceed the allowance for loan losses or that additional  allocations will not be
required.

Noninterest Income

      Noninterest  income  for the three  months  ended  June 30,  1999 was $1.2
million  compared to $1.1  million  for the same period in 1998,  an increase of
$0.1 million or 9.1%. This increase was primarily due to increased revenues from
EPW and United Trust whose combined revenues increased $108 thousand during this
period.

Noninterest Expense

      Total  noninterest  expense for the three  months  ended June 30, 1999 was
$2.3 million,  compared to $1.9 million for the same period in 1998, an increase

                                      -13-
<PAGE>
of $0.4  million or 21.1%.  This  increase  was due to  increases  in salary and
benefits  expense  of $70  thousand,  furniture  and  equipment  expense  of $30
thousand,  marketing and business development expense of $30 thousand, and other
operating  expense of $230  thousand,  which includes $70 thousand in consulting
expense,  legal and  professional  fees of $41  thousand  and REO expense of $21
thousand.

COMPARISON OF RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED
JUNE 30, 1999 AND 1998

Overview

      Net income for the six months  ended June 30,  1999 was $942  thousand  or
$0.22 per share  diluted,  compared to $786  thousand or $0.21 per share diluted
for the same  period in 1998.  On a pre-tax  basis,  United  Trust  earned  $130
thousand in 1999 versus $42 thousand in 1998,  EPW's pre-tax  operating  profits
increased  to $78 thousand  from $72 thousand  during this period and the Bank's
pre-tax  profits  increased to $1,675  thousand from $1,337 thousand during this
same period.

Analysis of Net Interest Income

      Interest  income for the six months ended June 30, 1999 was $6.9  million,
compared to $6.0  million for the same period in 1998,  a $0.9  million or 15.0%
increase.  This  increase in interest  income is primarily due to an increase in
earning assets,  consisting  mostly of loans.  Interest expense was $2.8 million
for the six months  ended June 30,  1999,  compared to $2.5 million for the same
period in 1998, a $0.3 million or 12.0% increase. This increase is primarily due
to the interest  expense  associated  with the  issuance of the Trust  Preferred
Securities in December 1998.

Provision for Loan Losses

      For the six months  ended June 30,  1999,  the  provision  for loan losses
charged to expense was $405  thousand,  compared to $250  thousand  for the same
period in 1998, an increase of $155 thousand or 62.0%. The allowance of possible
loan losses was $2.1 million at June 30, 1999.  Management's  judgment as to the
adequacy of the allowance is based upon a number of assumptions about the future
events which it believes to be reasonable, but which may or may not be accurate.
Because of the inherent  uncertainty of  assumptions  made during the evaluation
process,  there can be no assurance  that loan losses in future periods will not
exceed the allowance for loan losses or that additional  allocations will not be
required.

Noninterest Income

      Noninterest income for the six months ended June 30, 1999 was $2.3 million
compared  to $2.0  million  for the same  period in 1998,  an  increase  of $0.3
million or 15.0%. This increase was primarily due to increased revenues from EPW
and United Trust whose combined  revenues  increased  $222 thousand  during this
period and gains on the sale of SBA loans, which increased by $122 thousand.

Noninterest Expense

      Total noninterest  expense for the six months ended June 30, 1999 was $4.5
million,  compared to $3.9  million for the same period in 1998,  an increase of
$0.6 million or 15.4%.  Substantially  all of this increase occurred in salaries

                                      -14-
<PAGE>
and benefits  expense,  and includes $90 thousand related to the cash payment in
lieu of the issuance of performance shares in connection with the acquisition of
EPW.

LIQUIDITY

       During the six months ended June 30, 1999, the Company's  primary sources
of funds  consisted  of deposit  inflows  and  proceeds  from the  maturity  and
principal  repayment  of  securities  available  for sale.  The Company used its
capital resources  principally to fund existing and continuing loan commitments,
to purchase loan  participations and to purchase  securities.  At June 30, 1999,
the Company had commitments to originate loans totaling $6.5 million. Management
believes  the  Company  has  adequate  resources  to fund  all its  commitments.
Management  also believes  that, if so desired,  it can adjust the rates on time
deposits  to retain  deposits  in a changing  interest  rate  environment.  As a
Florida-chartered  commercial bank, the Bank is required to maintain a liquidity
reserve of at least 15% of its total  transaction  accounts  and 8% of its total
nontransaction  accounts  less those  deposits  of  certain  public  funds.  The
liquidity  reserve  may  consist  of cash on hand,  cash on  demand  with  other
correspondent banks and other investments and short-term  marketable  securities
as  defined,  such as  federal  funds  sold  and  United  States  securities  or
securities  guaranteed by the United  States.  As of June 30, 1999, the Bank had
liquidity of approximately $24 million, or approximately 16% of total deposits.

      Management  believes the Bank was in compliance  with all minimum  capital
requirements which it was subject to at June 30, 1999.

YEAR 2000 CONSIDERATIONS

      During the next year, many businesses,  including  financial  institutions
such as the Company,  will face potentially  serious issues  associated with the
inability  of  certain  existing  data  processing   hardware  and  software  to
appropriately  recognize  calendar  dates  beginning in the year 2000. The "Year
2000" problem arose  because many existing  computer  programs use only the last
two  digits  to refer to a year.  Therefore,  these  computer  programs  may not
properly  recognize a year that begins with "20" instead of "19."  Additionally,
many  computer  programs that can only  distinguish  the final two digits of the
year may read entries for the year 2000 as the year 1900. For example,  computer
systems may compute payment, interest, delinquency or other figures important to
the  operations  of  financial  institutions  based on the  wrong  date.  If not
corrected, many computer applications,  including those owned by the Company and
third  parties  with  which the  Company  does  business,  could  fail or create
erroneous results,  thereby  potentially  impacting the operations and financial
performance  of the  Company.  Although  the  Company  is  currently  addressing
potential  Year 2000  problems,  there can be no assurance that its efforts will
prevent all potential  adverse  consequences  to the Company  resulting from the
Year 2000 problem.

      In 1997,  the Company  began the  process of  evaluating  its  information
technology for Year 2000 readiness. In April 1998, the Company adopted a formal,
comprehensive  Year 2000 Policy Statement  designed to identify and address Year
2000 issues that might impact the Company  (the "Year 2000  Plan").  The Company
has    completed    the    "Awareness,"    "Inventory,"     "Assessment,"    and
"Testing/Validation" phases of its Year 2000 Plan, which are designed to appoint
and train a group of employees to oversee and  implement  the Year 2000 Plan, to
provide for the  inventory of the  software and hardware of the Company,  and to
provide  further  assessment of the nature and size of the Year 2000 issues that
might affect the Company.  The Company continues to oversee its internal efforts
                                      -15-
<PAGE>
and the efforts of third  parties to timely and  properly  address the Year 2000
issues that have been  identified.  Testing and  validation  of the actions that
have been  taken  thus far were  completed  by June 30,  1999.  This  validation
process has also been audited by outside consultants.

      The Company outsources its principal data processing activities to a third
party and purchases most of its software  applications from third party vendors.
Additionally,  the Company  outsources  its trust  business data  processing and
custodial management activities to a third party. Each of the two foregoing data
processing  servicers has  represented  to the Company that it has completed its
Year 2000  testing.  The Company has received and reviewed the third party proxy
test results  which  support  their  claims.  Also the Company has completed all
testing and  validating of its own systems.  Based on these efforts to date, the
Company  believes  that its  vendors  and  significant  customers  are  actively
addressing the problems associated with the Year 2000 issue and that the Company
will be  prepared to respond to Year 2000  problems  as they arise.  The Company
will  continue to refine the  contingency  plans to address the most  reasonably
likely worst case  scenarios  relating to the Year 2000 problem  throughout  the
year 1999 and into the year 2000.  Although the Company's  Year 2000 efforts are
ongoing and will continue  throughout  the Year 2000,  there can be no assurance
that the Company will be prepared to timely respond to all year 2000 issues that
may arise.

      The  Company is also in the  process  of  identifying  Year 2000  problems
stemming from non-information  technology systems, such as microcontrollers used
to operate  security systems and elevators and embedded systems in its buildings
and equipment and other  infrastructure,  and establishing a program for testing
these systems for Year 2000 compliance.  However, the Company does not currently
anticipate  that it will  encounter  any  substantial  Year 2000  problems  with
respect to such  non-information  technology  systems,  and believes the cost to
remedy any such problems will not be material.

      The Company has not incurred material  testing,  compliance or replacement
costs  relating  to its Year  2000  investigation  to date.  The  Company  spent
approximately  $255,000 in 1998 and expects to spend  $280,000 in 1999, of which
$125,000 has been incurred to date, towards technology related costs,  including
the updating of software and  hardware  systems to ensure Year 2000  compliance.
The  Company  does not  expect to incur  additional  material  related  testing,
compliance  or  replacement  costs in the future and does not  believe  that the
potential  non-compliance  of its  information  and  non-information  technology
systems  and  programs  present  a  material  risk  to the  Company's  financial
condition or results of operations.  However, non-material costs may be incurred
due to short-term  disruptions  resulting  from Year 2000  compliance  problems,
testing and replacement costs.

      Notwithstanding the foregoing,  there can be no assurance that the Company
will be  successful in  implementing  its Year 2000 Plan and that it will not be
adversely  affected  by the  failure  of  third  party  vendors  or  significant
customers to become Year 2000 compliant. Although the Company is taking steps to
identify and address Year 2000 problems,  if unexpected or unresolved  Year 2000
problems develop,  given the Company's  reliance on data processing  services to
maintain  customer  balances,  service  customer  accounts and to perform  other
record  keeping and service  oriented  functions  associated  with the Company's
three primary business segments,  the occurrence of any such events could have a
material impact on the Company's results of operations,  liquidity and financial
condition.


                                     -16-
<PAGE>
PART II.  OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

         The Company and the Bank are parties to various  legal  proceedings  in
the ordinary  course of business.  Management does not believe that there is any
pending or  threatened  proceeding  against the  Company or the Bank  which,  if
determined adversely,  would have a material effect on the business,  results of
operations, or financial position of the Company or the Bank.

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

         The following  shares of United Financial common stock, par value $0.01
per share ("United  Financial Common Stock"),  were issued during the six months
ended June 30, 1999:

         In December  1998,  the Company sold 450,000  shares of common stock at
$7.25  per  share and  $6,000,000  of 9.40%  Trust  Preferred  Securities  in an
underwritten public offering.  In January 1999, the Company issued an additional
57,705  shares of common  stock  and  $749,600  of  additional  Trust  Preferred
Securities pursuant to the underwriter's  exercise of its over-allotment option.
Of the net proceeds of approximately  $9.5 million,  approximately  $1.5 million
has been contributed as capital to the Bank and  approximately  $2.7 million was
used to repay  existing  debt with an unrelated  bank.  The balance was used for
general corporate purposes.

         On  February  26,  1999 an  aggregate  of 14,744  shares were issued to
certain officers of United Trust pursuant to an incentive stock plan established
in connection with the acquisition of Fiduciary  Services  Corporation  ("FSC").
Under the plan, no additional cash or consideration  was received by the Company
pursuant  to the  issuance of such  shares.  These  shares of common  stock were
issued in reliance upon the exemption  from  registration  under Section 4(2) of
the Securities Act of 1933 as transactions by an issuer not involving any public
offering.  The recipients of the securities issued  represented their intentions
to acquire the securities for investment  only and not with a view for resale or
distribution  and  appropriate  legends were  affixed to the share  certificates
issued.

                                      -17-
<PAGE>
         In March 1999, the Company  purchased a $250,000  equity  position,  or
approximately  5  percent,   in  United  Insurance   Holdings,   LC  ("Insurance
Holdings").  Insurance  Holdings  is  the  parent  company  of  United  Property
Insurance and Casualty Company,  Inc. The Company has the option to acquire,  at
its election, up to an aggregate of 20 percent of the common equity of Insurance
Holdings,   if  and  when  bank  holding  company  regulations  permit  such  an
investment.  Additionally, the Company originally made a $1 million loan advance
to  Insurance  Holdings  with a  maturity  date of June 8,  1999.  The  loan was
subsequently  renewed  for  another  60 day  term and a $0.5  million  principal
repayment  was made in July.  One  director  of the  Company  also  serves  as a
director of Insurance Holdings.

         In April 1999, the Company  purchased a $500,000  equity  position,  or
approximately  2.2%  of the  outstanding  capital  stock,  in  Nexity  Financial
Corporation  ("Nexity").  Nexity intends to acquire an Alabama stated  chartered
bank and pursue an internet  banking  business  strategy  and  ultimately  raise
additional capital in an initial public offering.

         The  remaining net offering  proceeds are on deposit in a  non-interest
bearing demand  deposit  account of the Company  established  with the Bank. The
Bank in turn is  using  those  funds  to fund  its  assets,  such as  loans  and
overnight investments.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

         None.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SHAREHOLDERS

         The Annual  Meeting  of  Shareholders  (the  "Annual  Meeting")  of the
Company was held on April 27, 1999. At the Annual Meeting  2,799,109 shares were
present in person or by proxy. The following matters were submitted to a vote of
shareholders:

1.      To elect four persons as members of the Board of Directors.

       The following directors were elected with a summary of the votes cast for
each nominee:

                            FOR           AGAINST         ABSTAIN        TERM
Ronald E. Clampitt        2,791,009       8,100              -          3 years
William A. Eickhoff       2,791,009       8,100              -          3 years
Charles O. Lowe           2,791,009       8,100              -          3 years
John B. Norrie            2,791,009       8,100              -          3 years

  In addition to the foregoing,  the following individuals are directors of
  United Financial whose terms continued after the Annual Meeting:
       Ward J. Curtis                                       Ronald R. Petrini
       David K. Davis, M.D.                                 Neil W. Savage
       Edward D. Foreman                                    John B. Wier
       Ian F. Irwin                                         Harold J. Winner
       Jack A. MaCris, M.D.

2.      To ratify the appointment of Grant Thornton L.L.P. as the Company's
        independent auditors for 1999.
                            FOR           AGAINST          ABSTAIN
                          2,782,891           -             16,218

                                      -18-
<PAGE>
       Grant Thornton was retained as independent accountants for the Company.

ITEM 5.  OTHER INFORMATION
         None.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

     There were no exhibits filed during the period ending June 30, 1999.

(b) Reports on Form 8-K

     There were no reports on Form 8-K filed  during the period  ending June 30,
     1999.

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

                UNITED FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES

                                   SIGNATURES

    Under  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 thereunto duly authorized.


                          UNITED FINANCIAL HOLDINGS, INC.
                                  (Registrant)

Date:   August 12, 1999                             By:   /s/ NEIL W. SAVAGE
      -------------------                                ---------------------
                                                           Neil W. Savage
                                                          President and Chief
                                                          Executive Officer


Date:   August 12,1999                              By:   /s/ C. PETER BARDIN
      -------------------                                ---------------------
                                                          C. Peter Bardin
                                                          Senior Vice President
                                                          and Chief Financial
                                                          Officer
                                                         (Principal Financial
                                                         and Accounting Officer)











                                     -19-