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 SEPTEMBER 30, 2001

                                       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                             (IRS Employer
of 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                       4,440, 421
-----------------------------                  ---------------------
            Class                          Outstanding as of November 2, 2001

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






                         UNITED FINANCIAL HOLDINGS, INC.

                                      INDEX

                                                                         PAGE
                                                                         ----
PART I.  FINANCIAL INFORMATION

     ITEM 1.     Financial Statements (unaudited)

         Condensed Consolidated Balance Sheets -
         At September 30, 2001 and December 31, 2000                     1

         Condensed Consolidated Statements of Earnings -
         For the three and nine months ended
         September 30, 2001 and 2000                                     2

         Condensed Consolidated Statements of
         Comprehensive Income -
         For the three and nine months ended
         September 30, 2001 and 2000                                     3

         Condensed Consolidated Statement of
         Stockholders' Equity -
         For the nine months ended September 30, 2001                    4

         Condensed Consolidated Statements of Cash Flows -
         For the nine months ended September 30, 2001 and 2000           5-6

         Notes to Condensed Consolidated Financial Statements            7-10


     ITEM 2.     Management's Discussion and Analysis of Financial
                 Condition and Results of Operations                    11-16

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                        17

     ITEM 4.     Submission of Matters to a Vote of Shareholders        17

     ITEM 5.     Other Information                                      18

     ITEM 6.     Exhibits and Reports on Form 8-K                       18


SIGNATURES                                                              19









PART I.  FINANCIAL INFORMATION
ITEM 1.  FINANCIAL STATEMENTS
                United Financial Holdings, Inc. and Subsidiaries
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (in thousands)
                                              September 30,      December 31,
                                                  2001               2000
ASSETS                                         (unaudited)        (audited)
                                               -----------     -  ---------
Cash and due from banks                      $    12,727        $     9,420
Federal funds sold                                20,630              4,961
Securities held to maturity, market value         19,546             16,036
   of $19,942 and $16,078 respectively
Securities available for sale, at market          22,796             11,296
Loans, net                                       220,492            182,028
Premises and equipment, net                       11,606             10,138
Federal Home Loan Bank stock                         507                507
Federal Reserve Bank stock                           226                226
Intangible assets                                  3,200              1,960
Other real estate owned                              143                175
Other assets                                       7,695              6,714
                                            ------------       ------------
       Total assets                          $   319,568        $   243,461
                                              ==========         ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits
  Demand                                    $    50,911        $    37,051
  NOW and money market                           96,802             78,887
  Savings and time deposits                     123,068             86,214
                                           ------------       ------------
       Total deposits                           270,781            202,152

Securities sold under agreements to
repurchase and fed funds purchased                11,243             10,163
Convertible subordinated debentures                    -                630
Short term debt                                    1,753                  -
Other liabilities                                  3,633              4,230
                                            ------------       ------------
      Total liabilities                         287,410            217,175

Company-obligated mandatory redeemable
capital securities of subsidiary
trust holding solely subordinated
debentures of the company                          6,750              6,750
STOCKHOLDERS' EQUITY
  7% convertible preferred stock                      67                 67
  Series one convertible preferred stock           3,220                  -
  Common stock                                        44                 43
  Paid-in capital                                 10,983             10,052
  Treasury shares                                   (177)              (117)
  Accumulated other comprehensive income             252                (32)
  Retained earnings                               11,019              9,523
                                            ------------       ------------
    Total stockholders' equity                    25,408             19,536
                                            ------------       ------------
    Total liabilities & stockholders'equity $    319,568       $    243,461
                                            ============       ============
     See accompanying notes to condensed consolidated financial statements.
                                      - 1 -

                United Financial Holdings, Inc. and Subsidiaries
                  CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
                (unaudited)(in thousands, except per share data)
                                       Three Months Ended     Nine Months Ended
                                        Sept 30, Sept 30,    Sept 30, Sept 30,
                                          2001     2000        2001     2000
                                        -------  -------    --------  --------
Interest income
  Loans and loan fees                   $ 4,921  $ 4,608    $ 14,543  $ 12,428
  Securities                                520      442       1,381     1,223
  Federal funds sold and securities
     purchased under reverse repurchase
     agreements                             252      120         651       402
                                        -------  -------    --------  --------
       Total interest income              5,693    5,170      16,575    14,053

Interest expense
  Deposits                                2,238    1,837       6,499     4,989
  Other debt and borrowings                 104      136         358       340
  Subordinated debentures issued
     to subsidiary trust                    159      159         476       476
                                        -------  -------    --------  --------
       Total interest expense             2,501    2,132       7,333     5,805
                                        -------  -------    --------  --------

       Net interest income                3,192    3,038       9,242     8,248
Provision for loan losses                   180      250         600       600
                                        -------  -------    --------  --------
       Net interest income after
         provison for loan losses         3,012    2,788       8,642     7,648

Other income
  Service charges on deposit accounts       337      275         935       730
  Trust and investment management           769      789       2,352     2,346
  Gain on sale of loans                      70      117         334       281
  All other fees and income                 219      153         562       462
                                        -------  -------    --------  --------
       Total other income                 1,395    1,334       4,183     3,819

Other expense
   Salaries and employee benefits         1,889    1,560       5,469     4,635
   Occupancy                                261      136         689       377
   Furniture and equipment                  211      143         573       456
   Data processing                          211      140         591       433
   Marketing and business development       119       78         352       303
   Other                                    577      474       1,648     1,740
                                        -------  -------    --------  --------
       Total other expense                3,268    2,531       9,322     7,944
                                        -------  -------    --------  --------
       Earnings before income taxes       1,139    1,591       3,503     3,523
Income tax expense                          412      604       1,272     1,295
                                        -------  -------    --------  --------
       NET EARNINGS                     $   727  $   987    $  2,231  $  2,228
                                        =======  =======    ========  ========
Earnings per share:
   Basic                                $   .16  $   .23    $    .49  $    .53
   Diluted                              $   .16  $   .22    $    .49  $    .50
     See accompanying notes to condensed consolidated financial statements.
                                      - 2 -

                United Financial Holdings, Inc. and Subsidiaries
            CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                           (unaudited) (in thousands)


                                       Three Months Ended     Nine Months Ended
                                        Sept 30, Sept 30,    Sept 30, Sept 30,
                                          2001     2000        2001     2000
                                        -------  -------    --------  --------

Net earnings                            $   727  $   987    $  2,231  $  2,228
Other comprehensive income
     Unrealized holding gains (losses)      188      192         430       131
Income tax (expense) benefit related
     to items of other comprehensive
     income                                 (64)     (65)       (146)      (45)
                                        -------  -------    --------  --------

Comprehensive income                    $   851  $ 1,114    $  2,515  $  2,314
                                        =======  =======    ========  ========





































     See accompanying notes to condensed consolidated financial statements.
                                      - 3 -

                United Financial Holdings, Inc. and Subsidiaries
            CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                           (unaudited) (in thousands)

                                         7%       Series One
                                     Convertible  Convertible
                          Common     Preferred   Preferred      Paid-In
                          Stock       Stock       Stock        Capital
                         --------    ---------    ----------    --------
Balance at December
31, 2000                 $     43    $     67     $      -      $ 10,052

Net earnings                    -           -            -             -
Dividends on
common and                      -           -            -             -
preferred stock
Accumulated other
   comprehensive
   income                       -           -            -             -
Conversion of
   debentures                   1           -            -           629
Treasury shares
   acquired                     -           -            -             -
Performance shares
   issued                       -           -            -           302
Preferred stock
issued in acquisition           -           -        3,220             -
                         --------    ---------    ----------    --------
Balance at
September 30, 2001       $     44    $     67     $   3,220     $ 10,983
                         ========    =========    ==========    ========

                       Accumulated Other
                         Comprehensive    Treasury      Retained
                            Income         Shares       Earnings       Total
                         -------------   ---------    -----------   ----------
Balance at December
31, 2000                 $     (32)      $   (117)    $   9,523     $  19,536
Net earnings                     -              -         2,231         2,231
Dividends on
common and                       -              -          (735)         (735)
preferred stock
Accumulated other
   comprehensive
   income                     284              -             -            284
Conversion of
   debentures                   -              -             -            630
Treasury shares
   acquired                     -            (60)            -            (60)
Performance shares
   issued                       -              -             -            302
Preferred stock
issued in acquisition           -              -             -          3,220
                         -------------   ---------    -----------   ----------
Balance at September
30, 2001                 $    252        $   (177)    $  11,019     $  25,408
                         =============   =========    ===========   ==========
     See accompanying notes to condensed consolidated financial statements.
                                      - 4 -

                United Financial Holdings, Inc. and Subsidiaries
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (unaudited)
                                 (in thousands)

                                                          Nine Months Ended
                                                        Sept 30,     Sept 30,
                                                         2001          2000
                                                       ---------     ---------
Cash flows from operating activities:

    Net earnings                                       $   2,231     $   2,228
    Adjustments to reconcile net earnings
     to net cash provided by operating activities

       Provision for loan losses                             600           600
       Provision for depreciation and amortization           736           592
       Accretion of securities discount                      (51)          (10)
       Amortization of unearned loan fees                   (225)          (75)
       Amortization of securities premiums                    28             9
       Gain on sales of loans                               (525)         (426)
       Decrease (increase) in interest receivable            153          (159)
       Increase in interest payable                          217           224
       (Increase) decrease in other assets                    (8)        1,220
       (Decrease) increase in other liabilities           (1,237)          353
                                                       ---------     ---------

         Net cash provided by operating activities         1,919         4,556

Cash flows from investing activities:

    Purchase of Federal Reserve Bank stock
       and FHLB stock                                          -           (23)
    Acquisition of First Security Bank,
       net of cash acquired                               (1,752)
    Net (increase) decrease in federal
       funds sold                                         (6,794)          238
    Principal repayments of held to
       maturity securities                                 1,105            24
    Principal repayments of available
       for sale securities                                   945           558
    Proceeds from sale of
       trading securities                                      -            75
    Proceeds from maturities of available
       for sale securities                                 3,745         1,500
    Proceeds from maturities of held
       to maturity securities                              8,580         1,266
    Purchases of available for sale securities           (12,561)       (2,767)
    Purchases of held to maturity securities             (12,533)       (2,310)
    Proceeds from sales of loans                           6,010         5,429
    Net (increase) in loans                              (29,395)      (24,438)
    Capital expenditures                                  (1,770)         (396)
                                                        --------     ---------
          Net cash used in investing activities          (44,420)      (20,844)


                              (Continued on Page 6)
     See accompanying notes to condensed consolidated financial statements.
                                      - 5 -

                United Financial Holdings, Inc. and Subsidiaries
           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                             Continued from Page 5
                           (unaudited) (in thousands)

                                                  Nine Months Ended
                                            September 30,     September 30,
                                                2001              2000
                                            -----------       -------------

Cash flows from financing activities:
   Net increase in demand deposits,
   NOW accounts, money market account
   and savings accounts                     $    21,606        $     4,866
   Net increase in certificates of deposit       22,164              7,067
   Net increase in securities sold under
     agreements to repurchase                     1,080              4,949
   Increase in borrowings                         1,753                  -
   Dividend paid on preferred stock                 (47)                (7)
   Dividend paid on common stock                   (688)              (550)
   Purchase of Treasury Shares                      (60)              (100)
                                             ----------         ----------

         Net cash provided by
         financing activities                    45,808             16,225
                                             ----------         ----------

Net increase (decrease) in cash
   and due from banks                             3,307               (63)

Cash and due from banks at
   beginning of period                            9,420              8,866
                                             ----------         ----------

Cash and due from banks at
   end of period                             $   12,727         $    8,803
                                             ==========         ==========


Cash paid during the period for:

   Interest                                  $    7,156         $    5,581
   Income taxes                              $    1,523         $    1,568

Supplemental Disclosure of
   Non-cash Activity

Non-cash common stock issued                 $      933         $      347

Other Information

      On April 1, 2001, the Company  completed the acquisition of First Security
Bank  for a cash  payment  of  approximately  $2,147,000,  acquisition  cost  of
approximately  $65,000, and 402,473 shares of Series One Preferred Stock, valued
at  approximately  $3,220,000.  The Company acquired net assets of approximately
$4,374,000 and goodwill of approximately $1,058,000.

     See accompanying notes to condensed consolidated financial statements.
                                      - 6 -

UNITED FINANCIAL HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

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 six branch offices serving the southern and middle section
of the Pinellas County area of the State of Florida.

      The Company's other operating  subsidiaries are EPW Investment Management,
Inc., an investment  advisory firm registered under the Investment  Advisers Act
of 1940 ("EPW") headquartered in Tampa, Florida, with an office in Jacksonville,
Florida,  United Trust  Company,  a  Florida-chartered  trust  company  ("United
Trust") located in St.  Petersburg,  Florida,  and United Bank of the Gulf Coast
(the   "Sarasota   Bank",   formerly   known  as   First   Security   Bank),   a
Florida-chartered  commercial bank with one office located in Sarasota, Florida.
The Sarasota Bank was started by a group of local investors in February 1999 and
acquired  by the  Company on April 1, 2001.  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  nine  months  ended  September  30,  2001  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,  2000  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 of
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 the conversion of the convertible debt and
the preferred  stock and the exercise of 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 -

                                       For the three months ended September 30,
                                                      2001
                                                    Weighted     Per
                                                    Average      Share
                                        Earnings    Shares       Amount
                                        --------    ---------    ------
Basic EPS
  Net earnings available to
    common stockholders                 $    703    4,440,421    $  .16
                                                                 ======

Effect of  dilutive  securities
  Incremental shares from
  assumed  exercise or
  conversion of:
     Convertible debt                           -           -
     Preferred stock                           24      56,233
     Stock options                              -     105,287
                                        ---------   ---------

Diluted EPS

  Net earnings available to common
    stockholders and assumed
    conversions                         $     727   4,601,941    $  .16
                                        =========   =========    ======


                                       For the three months ended September 30,
                                                       2000
                                                     Weighted     Per
                                                     Average      Share
                                        Earnings     Shares       Amount
                                        --------     ---------    ------
Basic EPS
  Net earnings available to
    common stockholders                 $    983     4,230,000    $  .23
                                                                  ======

Effect of  dilutive  securities
  Incremental shares from
  assumed  exercise or
  conversion of:
     Convertible debt                          8       152,789
     Preferred stock                           3        84,345
     Stock options                             -         2,688
                                        --------     ---------

Diluted EPS

  Net earnings available to common
    stockholders and assumed
    conversions                        $    994     4,469,822    $  .22
                                       ========     =========    ======



                             (Continued on Page 8b)
                                     - 8a -

(Continued from Page 8a)             For the nine months ended September 30,
                                                      2001
                                                    Weighted     Per
                                                    Average      Share
                                        Earnings    Shares       Amount
                                        --------    ---------    ------
Basic EPS
  Net earnings available to
    common stockholders                 $  2,184    4,429,367    $  .49
                                                                 ======

Effect of  dilutive  securities
   Incremental shares from assumed
   exercise or conversion of:
       Convertible debt                         1       8,955
       Preferred stock                         47      56,233
       Stock options                            -      39,740
                                        ---------   ---------

Diluted EPS
  Net earnings available to common
    stockholders and assumed
    conversions                         $   2,232   4,534,295    $  .49
                                        =========   =========    ======

                                      For the nine months ended September 30,
                                                      2000
                                                    Weighted     Per
                                                    Average      Share
                                        Earnings    Shares       Amount
                                        --------    ---------    ------
Basic EPS
  Net earnings available to
    common stockholders                 $  2,221    4,229,493    $  .53
                                                                 ======

Effect of  dilutive  securities
   Incremental shares from assumed
   exercise or conversion of:
       Convertible debt                       23      152,789
       Preferred stock                         7       84,345
       Stock options                           -        2,566
                                        --------    ---------

Diluted EPS
  Net earnings available to common
    stockholders and assumed
    conversions                         $  2,251    4,469,193   $   .50
                                        ========    =========   =======

NOTE 4 - BUSINESS SEGMENT INFORMATION
      United Financial has three reportable segments:  Commercial Banking, Trust
Services,  and Investment  Management Services.  Corporate and Overhead includes
corporate expenses such as corporate overhead,  intercompany  transactions,  and
certain  goodwill  amortization.  The  following  table  presents the  Company's
Business  Segment  Information for the three and nine months ended September 30,
2001 and 2000, respectively:

                                     - 8b-


                          For the three months ended September 30, 2001
                      Commercial  Investment  Trust     Corporate
                      Banking     Management  Services  & Overhead  Total
                      ----------  ----------  --------  ---------- ---------
Net interest income   $    3,307  $        -  $     43  $    (158) $   3,192
Non interest income          686         394       388        (73)     1,395
                      ----------  ----------  --------  ---------  ---------
Total revenue              3,993         394       431       (231)     4,587
Loan loss provision          180           -         -          -        180
Non interest expense       2,528         319       412          9      3,268
                      ----------  ----------  --------  ---------  ---------
Pretax income (loss)       1,285          75        19       (240)     1,139
Income taxes (benefit)       479          28        15       (110)       412
                      ----------  ----------  --------  ---------  ---------
Segment net income    $      806  $       47  $      4  $    (130) $     727
                      ==========  ==========  ========  =========  =========



                          For the three months ended September 30, 2000
                      Commercial  Investment  Trust     Corporate
                      Banking     Management  Services  & Overhead  Total
                      ----------  ----------  --------  ---------- ---------
Net interest income   $    3,136  $        -  $     62  $    (160) $   3,038
Non interest income          572         426       375        (39)     1,334
                      ----------  ----------  --------  ---------  ---------
Total revenue              3,708         426       437       (199)     4,372
Loan loss provision          250           -         -          -        250
Non interest expense       1,883         335       280         33      2,531
                      ----------  ----------  --------  ---------  ---------
Pretax income (loss)       1,575          91       157       (232)     1,591
Income taxes (benefit)       586          35        67        (84)       604
                      ----------  ----------  --------  ---------  ---------
Segment net income    $      989  $       56  $     90  $    (148) $     987
                      ==========  ==========  ========  =========  =========





















                             (Continued on Page 9b)
                                    - 9a-

                            (Continued from Page 9a)


                          For the nine months ended September 30, 2001
                      Commercial  Investment  Trust     Corporate
                      Banking     Management  Services  & Overhead   Total
                      ----------  ----------  --------  ----------  --------
Net interest income   $    9,560  $        -  $    157  $     (475) $  9,242
Non interest income        1,980       1,215     1,173        (185)    4,183
                      ----------  ----------  --------  ----------- --------
Total revenue             11,540       1,215     1,330        (660)   13,425
Loan loss provision          600           -         -           -       600
Non interest expense       7,058       1,004     1,209          51     9,322
                      ----------  ----------  --------  ----------  --------
Pretax income (loss)       3,882         211       121        (711)    3,503
Income taxes (benefit)     1,424          80        72        (304)    1,272
                      ----------  ----------  --------  ----------  --------
Segment net income    $    2,458  $      131  $     49  $     (407) $  2,231
                      ==========  ==========  ========  ==========  ========



                          For the nine months ended September 30, 2000
                      Commercial  Investment  Trust     Corporate
                      Banking     Management  Services  & Overhead   Total
                      ----------  ----------  --------  ----------  --------
Net interest income   $    8,561  $        -  $    170  $     (483) $  8,248
Non interest income        1,559       1,269     1,113        (122)    3,819
                      ----------  ----------  --------  ----------  --------
Total revenue             10,120       1,269     1,283        (605)   12,067
Loan loss provision          600           -         -           -       600
Non interest expense       5,643       1,278       928          95     7,944
                      ----------  ----------  --------  ----------  --------
Pretax income (loss)       3,877          (9)      355        (700)    3,523
Income taxes (benefit)     1,397          (3)      156        (255)    1,295
                      ----------  ----------  --------  ----------  --------
Segment net income    $    2,480  $       (6) $    199  $     (445) $  2,228
                      ==========  ==========  ========  ==========  ========




















                                    - 9b -

NOTE 5 - COMMITMENTS AND CONTINGENCIES

      In March  2001,  the  Company  entered  into a $5  million  line of credit
agreement  with an unrelated  bank.  Terms of the  agreement  include a variable
interest rate of 3 month Libor plus 200 basis points,  interest payable monthly,
principal  due at maturity,  and a maturity date of March 23, 2002. At September
30, 2001 $1.8 million was outstanding under this agreement.

NOTE 6 - ACQUISITION

      On April 1, 2001,  the Company  completed an acquisition of 100 percent of
the stock of First Security Bank in exchange for a cash payment of approximately
$2.1 million,  acquisition  costs of $65,000,  and 402,473  shares of Series One
Preferred Stock valued at approximately $3.2 million.  The selling  shareholders
are also  entitled to an  additional  64,396 shares of Common Stock should First
Security Bank achieve  certain net interest  income  targets  through 2005.  The
acquisition  was  accounted  for using the purchase  method of  accounting.  The
Company  recorded  net assets of  approximately  $4.4  million  and  goodwill of
approximately  $1.1 million.  Pro forma  information  is not presented for First
Security Bank due to its immateriality.

      The shares of the Series One  Preferred  Stock are  convertible  in Common
Stock at $8.00 per share.  The  Company  may  redeem,  in whole or in part,  the
shares  after 2007 based upon a defined  formula.  The shares are required to be
redeemed by the  Company  upon the First  Security  Bank  achieving  certain net
interest income targets as specified in the acquisition agreement.

NOTE 7 - RECENT ACCOUNTING PRONOUNCEMENTS

     On July 20, 2001, the Financial  Accounting  Standards  Board (FASB) issued
Statement of Financial Accounting  Standards (SFAS) 141, Business  Combinations,
and SFAS 142,  Goodwill and  Intangible  Assets.  SFAS 141 is effective  for all
business  combinations  completed after June 30, 2001. SFAS 142 is effective for
fiscal years beginning after December 15, 2001;  however,  certain provisions of
this Statement apply to goodwill and other  intangible  assets acquired  between
July 1, 2001 and the  effective  date of SFAS  142.  Major  provisions  of these
Statements and their effective dates for the Company are as follows:

*    all  business  combinations  initiated  after  June 30,  2001  must use the
     purchase method of accounting. The pooling of interest method of accounting
     is prohibited except for transactions initiated before July 1, 2001.
*    intangible  assets  acquired  in a business  combination  must be  recorded
     separately  from  goodwill  if they arise from  contractual  or other legal
     rights  or are  separable  from  the  acquired  entity  and  can  be  sold,
     transferred,  licensed, rented or exchanged, either individually or as part
     of a related contract, asset or liability.
*    goodwill,  as well as intangible  assets with  indefinite  lives,  acquired
     after June 30, 2001, will not be amortized.  Effective  January 1, 2002 all
     previously  recognized goodwill and intangible assets with indefinite lives
     will no longer be subject to amortization.
*    effective  January 1, 2002 goodwill and intangible  assets with  indefinite
     lives will be tested  for  impairment  annually  and  whenever  there is an
     impairment indicator.
*    all acquired  goodwill must be assigned to reporting  units for purposes of
     impairment testing and segment reporting.



                                    - 10-

    The Company will continue to amortize  goodwill  recognized prior to July 1,
2001,  under its current  method until  January 1, 2002 at which time annual and
quarterly  goodwill  amortization  of  $172,000  and  $43,000  will no longer be
recognized.  By June 30, 2002,  the Company will have  completed a  transitional
fair value based  impairment test of goodwill as of January 1, 2002.  Impairment
losses,  if any,  resulting from the transitional  testing will be recognized in
the  quarter  ended  March  31,  2002 as a  cumulative  effect  of a  change  in
accounting principle.

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 SEPTEMBER 30, 2001 AND DECEMBER 31, 2000
Overview

       Total  assets of the Company were $319.6  million at September  30, 2001,
compared to $243.5 million at December 31, 2000, an increase of $76.1 million or
31.3%.  This increase was the result of the  acquisition  of the Sarasota  Bank,
with assets of approximately $40 million and of the Company's internal growth of
earning  assets  (primarily  loans)  funded  by  an  increase  in  deposits  and
securities sold under agreements to repurchase.

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 $42.3  million at  September  30,  2001,
compared to $27.3  million at December 31, 2000, an increase of $15.0 million or
54.9%.  Included in  investment  securities  at September  30, 2001,  were $22.8
million  of  securities  held as  "available  for sale" to provide  the  Company
greater flexibility to respond to changes in interest rates and liquidity. These
securities have been recorded at market value.

Loans

       Total loans were $225.2 million at September 30, 2001, compared to $185.8
million at December 31,  2000,  an increase of $39.4  million or 21.2%.  For the
same period,  real estate  mortgage  loans  increased by $22.6 million or 19.3%,
commercial  loans  increased  by $15.8  million  or 25.5%,  and all other  loans
including  consumer  loans  increased  by $1.0  million  or 14.3%.  Loans net of
allowance for loan loss and unearned  fees were $220.5  million at September 30,
2001 compared to $182.0 million at December 31, 2000.
                                    - 11 -

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

                                       September 30, 2001     December 31, 2000

Real estate mortgage loans:

  Commercial real estate                  $      97,375          $      84,556
  One-to-four family residential                 13,497                  9,685
  Multifamily residential                        14,648                 16,185
  Construction and land development              13,881                  6,382
                                          -------------          -------------
      Total real estate mortgage loans          139,401                116,808

Commercial loans                                 77,761                 61,970
Consumer loans                                    6,425                  5,501
Other loans                                       1,579                  1,551
                                          -------------          -------------
      Gross loans                               225,166                185,830
Allowances for loan losses                       (3,583)              (2,761)
Unearned fees                                   (1,091)               (1,041)
                                          ------------           -----------
      Total loans net of allowance and
      earned fees                         $     220,492          $     182,028
                                          =============          =============

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
consist 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  that 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.

     Various conditions that would affect the loan portfolio are also evaluated.
General economic and business  conditions that affect the portfolio 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.
                                    - 12 -

       The following table sets forth information concerning the activity in the
allowance for loan losses during the periods indicated (dollars in thousands):
                                                For the nine months ended
                                      September 30, 2001     September 30, 2000
                                      ------------------     ------------------
Allowance at beginning of period         $        2,761         $        2,341
Charge-offs:
  Real estate loans                                  55                      -
  Commercial loans                                   31                    227
  Consumer loans                                     22                     17
                                         --------------         --------------
      Total charge-offs                             108                    244
Recoveries:
  Real estate loans                                  20                     25
  Commercial loans                                   46                     29
  Consumer loans                                      8                      4
                                         --------------         --------------
      Total recoveries                               74                     58
Net charge-offs                                      34                    186
Allowance related to First Security                 256                      -
Provision for loan losses                           600                    600
                                         --------------         --------------
Allowance at end of period               $        3,583         $        2,755
                                         ==============         ==============
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.

       The following  table sets forth  information  regarding the components of
nonperforming assets at the dates indicated (dollars in thousands):
                                   September 30, 2001       December 31, 2000
                                   ------------------       ------------------
Real estate loans                    $           458           $        309
Commercial loans                                 339                    277
Consumer loans                                     -                      -
                                     ---------------           ------------
     Total non-accrual loans                     797                    586
Other real estate                                143                    175
Accruing loans 90 days past due                  150                    107
                                     ---------------           ------------
     Total nonperforming assets      $         1,090           $        868
                                     ===============           ============

Bank Premises and Equipment
       Bank  premises and  equipment  was $11.6  million at September  30, 2001,
compared to $10.1  million at December 31, 2000,  an increase of $1.5 million or
14.9%. This increase was primarily due to the acquisition of two new Bank branch
                                    - 13 -

sites as well as the fixed assets associated with the Sarasota Bank acquisition,
partially  offset  by  the  depreciation  of the  buildings  and  equipment  and
amortization of leasehold improvements.

Deposits

       Total  deposits were $270.8  million at September  30, 2001,  compared to
$202.1  million at December  31,  2000,  an increase of $68.7  million or 34.1%.
During the nine months ended September 30, 2001, demand deposits increased $13.9
million,  NOW and money market  deposits  increased  $17.9 million,  and savings
deposits and time deposits increased $36.9 million.

Short-term Debt

      At  September  30,  2001,  there  was  $1.8  million  of  short-term  debt
outstanding compared to $0 outstanding at December 31, 2000. The Company drew on
its line of credit with an unaffiliated  bank for working  capital  purposes and
for other investments.

Long-term Debt and Convertible Subordinated Debentures

       There  was  no  long-term   debt   outstanding   (excluding   convertible
subordinated  debentures) at either  September 30, 2001 or December 31, 2000. At
September   30,  2001  there  were  no   convertible   subordinated   debentures
outstanding.  The balance of convertible subordinated debentures at December 31,
2000 was $630 thousand.  These  debentures were called in January 2001, at which
time the holders elected to convert the debentures into Common Stock.

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. The principal
assets of the Trust are Debentures  issued to the Company in an aggregate amount
of $6.96 million, with an interest rate of 9.40% and a maturity date of December
10, 2028.

Stockholders' Equity

       Stockholders' equity was $25.4 million at September 30, 2001, or 7.95% of
total assets,  compared to $19.5  million,  or 8.01% of total assets at December
31, 2000.  At September  30, 2001,  the Bank's Tier I (core)  Capital  ratio was
7.58%,  its Tier I Risk-based  Capital ratio was 8.93%, and its Total Risk-based
Capital  ratio  was  10.18%.  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 the issuance
of the Series One Preferred  Stock in  conjunction  with the  acquisition of the
Sarasota Bank,  year to date net income,  less  dividends  declared and treasury
shares redeemed,  and increases in the market value of securities  available for
sale, net of deferred taxes.

COMPARISON OF RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED
SEPTEMBER 30, 2001 AND 2000

Overview


                                    - 14 -

       Net  income  for the  three  months  ended  September  30,  2001 was $727
thousand  or $0.16 per share  diluted,  compared  to $987  thousand or $0.22 per
share  diluted for the same period in 2000.  On a pre-tax  basis,  United  Trust
earned  $19  thousand  in 2001  versus  $157  thousand  in 2000,  EPW earned $75
thousand versus $91 thousand and the Commercial  Banking's  pre-tax profits were
$1.3 million versus $1.6 million during this same period.

Analysis of Net Interest Income

       Interest  income for the three months ended  September  30, 2001 was $5.7
million, compared to $5.2 million for the same period in 2000, a $0.5 million or
9.6% increase.  This increase in interest income is primarily due to an increase
in earning assets,  consisting  mostly of federal funds sold and loans including
the earning  assets  acquired  from the  Sarasota  Bank,  offset by a decline in
interest  rates.  Interest  expense was $2.5  million for the three months ended
September 30, 2001, compared to $2.1 million for the same period in 2000, a $0.4
million or 19.0%  increase.  This  increase is  primarily  due to an increase in
interest  bearing  liabilities  including  those  liabilities  acquired from the
Sarasota Bank, somewhat offset by a decline in interest rates.

Provision for Loan Losses

       For the three months ended  September  30, 2001,  the  provision for loan
losses charged to expense was $180  thousand,  compared to $250 thousand for the
same period in 2000,  a decrease  of $70  thousand or 28.0%.  The  allowance  of
possible  loan  losses was $3.9  million at  September  30,  2001.  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 provisions will not be required.

Noninterest Income

       Noninterest income for the three months ended September 30, 2001 was $1.4
million  compared to $1.3  million  for the same period in 2000,  an increase of
$0.1 million or 7.7%.  This  increase was primarily due to an increases in other
fees and service charges on deposits, partially offset by decreases in Trust and
Investment income and gain on sale of loans.

Noninterest Expense

       Total  noninterest  expense for the three months ended September 30, 2001
was $3.3  million  compared  to $2.5  million  for the same  period in 2000,  an
increase  of $0.8  million  or 32.0%.  This  increase  was due to  increases  in
salaries  and  benefits  of  $329  thousand,  occupancy  and  equipment  of $193
thousand,  data  processing of $71 thousand and other expenses of $103 thousand.
Included in these  categories  are the  expenses of the  Sarasota  Bank that was
acquired effective April 1, 2001.

COMPARISON OF RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 2001 AND 2000

Overview

       Net income for the nine months ended  September 30, 2001 was $2.2 million
or $0.49 per share diluted,  compared to $2.2 million or $0.50 per share diluted
                                    - 15 -

for the same  period in 2000.  On a pre-tax  basis,  United  Trust  earned  $355
thousand in 2001 versus $121 thousand in 2000, EPW's pre-tax  operating  profits
(before  deducting $280 thousand of costs associated with a cash payment in lieu
of the issuance of  performance  shares)  decreased to $211  thousand  from $289
thousand  (before  deducting  $297  thousand of costs  associated  with the cash
payment in lieu of the issuance of  performance  shares)  during this period and
Commercial  Banking's pre-tax profits were unchanged at $3.9 million during this
same period.

Analysis of Net Interest Income

       Interest  income for the nine months ended  September  30, 2001 was $16.6
million,  compared to $14.1  million for the same period in 2000, a $2.5 million
or 17.7%  increase.  This  increase in interest  income is  primarily  due to an
increase in earning  assets,  including  those  acquired from the Sarasota Bank,
partially  offset by a significant  decline in interest rates.  Interest expense
was $7.3 million for the nine months ended September 30, 2001,  compared to $5.8
million for the same period in 2000,  an increase of $1.5 million or 25.9%.  The
cost of the increase in interest bearing  liabilities was offset by the decrease
in interest rates.

Provision for Loan Losses

       For the nine months ended  September  30, 2001,  the  provision  for loan
losses  charged to expense was $600  thousand,  unchanged from $600 thousand for
the same period in 2000.  The allowance of possible loan losses was $3.6 million
at September 30, 2001. 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 provisions will not be required.

Noninterest Income

       Noninterest  income for the nine months ended September 30, 2001 was $4.2
million  compared to the $3.8 million from the same period in 2000,  an increase
of $0.4  million  or  10.5%.  The  increase  in  noninterest  income  was due to
increases in service charges on deposit  accounts of $205 thousand,  an increase
of $53 thousand in the gain on sale of loans and an additional  $100 thousand of
other fees during this period.

Noninterest Expense

       Total  noninterest  expense for the nine months ended  September 30, 2001
was $9.3  million  compared  to $7.9  million  for the same  period in 2000,  an
increase of $1.4 million or 17.7%.  This increase was due to increases in salary
and benefits expense of $834 thousand, occupancy and equipment of $429 thousand,
and data processing expense of $158 thousand,  partially offset by a decrease in
other operating  expense of $92 thousand.  Included in these  categories are the
expenses of the Sarasota Bank that was acquired on April 1, 2001.

LIQUIDITY

       During the nine months ended  September 30, 2001,  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,
                                    - 16 -

to purchase loan  participations  and to purchase  overnight  investments  (i.e.
federal  funds sold).  At September  30, 2001,  the Company had  commitments  to
originate  loans  totaling  $8.2  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
September 30, 2001, the Bank had liquidity of  approximately  $41.0 million,  or
approximately 15% of total deposits.

      Management  believes  the  Commercial  Banks were in  compliance  with all
minimum capital requirements that it was subject to at September 30, 2001.

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 nine months
ended September 30, 2001:

         On January 5, 2001, the Company called the $630 thousand of convertible
subordinated  debentures  that  were  issued  in 1996 in  conjunction  with  the
acquisition of EPW Investment Management,  Inc. The holders of these convertible
debentures  elected to convert their debentures into Common Stock,  resulting in
the Company issuing 152,783 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.

         On January 31, 2001, an aggregate of 39,721 shares of Common Stock 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").  These are the final  shares of Common  Stock to be issued  pursuant to
this plan. 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.

         On April 1, 2001,  an aggregate of 402,473  shares of the newly created
Series  One  Preferred  Stock  was  issued,  as  partial  consideration,  to the
                                    - 17 -

shareholders  of First  Security  Bank  (the  Sarasota  Bank).  The  shares  are
convertible  into Common Stock at $8.00 per share,  contingent upon the Sarasota
Bank  achieving  certain  net  interest  income  targets  as  specified  in  the
Acquisition  Agreement,  as amended. These shares of preferred 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.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

         None.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SHAREHOLDERS

         None.
ITEM 5.  OTHER INFORMATION

         None

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

         None

(b) Reports on Form 8-K

     There were no reports on Form 8-K filed during the period ending  September
30, 2001.


























                                    - 18 -

                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:   November 5, 2001                 By:   /s/ NEIL W. SAVAGE
      --------------------               -------------------------------
                                               Neil W. Savage
                                               President and
                                               Chief Executive Officer


Date:   November 5, 2001                  By:   /s/ C. PETER BARDIN
      --------------------                -------------------------------
                                                C. Peter Bardin
                                                Senior Vice President and
                                                Chief Financial Officer
                                                (Principal Financial and
                                                 Accounting Officer)
































                                    - 19 -