<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                             ----------------------

                                   FORM 10-KSB

[X]             ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934
                  [NO FEE REQUIRED, EFFECTIVE OCTOBER 7, 1996]

                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996

                                       OR

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

                         Commission File Number 0-21967

                            KEY FLORIDA BANCORP, INC.
             (Exact name of registrant as specified in its charter)
 
                   FLORIDA                                    65-0105205
        (State or other jurisdiction                      (I.R.S. Employer
      of incorporation or organization)                  Identification No.)

6016 26TH STREET WEST, SUITE 1, BRADENTON, FL                  34207
  (Address of principal executive offices)                  (Zip Code)

    Registrant's telephone number, including area code: (941) 751-4460

    Securities registered pursuant to Section 12(b) of the Act: NONE 
    Securities registered pursuant to Section 12(g) of the Act:


                     COMMON STOCK, PAR VALUE $0.01 PER SHARE
                                (Title of Class)


      Check whether the issuer has (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 issuer was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days. YES  X    NO
          ---      ---

      Check if disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of issuer's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [ X ]

      The issuer's revenues for its most recent fiscal year was $11,546,081

      The aggregate market value of the Common Stock held by non-affiliates of
the issuer is $16,536,000, based on the price at which shares of common
stock were sold on January 2, 1997.

      As of April 15, 1997, there were issued and outstanding 2,758,129 shares
of the issuer's Common Stock.


                     DOCUMENTS INCORPORATED BY REFERENCE

      1. Portions of the 1996 Annual Report to Shareholders for the year ended
December 31, 1996 are incorporated into Part II, Items 5 through 8 of this
Annual Report on Form 10-KSB.

      2. Portions of the Proxy Statement for the Annual Meeting of Shareholders
to be held on May 27, 1997 to be filed with the Securities and Exchange
Commission pursuant to Regulation 14A within 120 days of the issuer's fiscal
year end are incorporated into Part III, Items 10 through 13 of this Annual
Report on Form 10-KSB.

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                                TABLE OF CONTENTS
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Part I

<S>              <C>                                                                                            <C>
Item 1.          Business.................................................................................       1
                   General................................................................................       1
                   Deposits...............................................................................       2
                   Loan Portfolio.........................................................................       2
                   Investments............................................................................       3
                   Correspondent Banking..................................................................       4
                   Data Processing........................................................................       4
                   Effect of Governmental Policies........................................................       4
                   Interest and Usury.....................................................................       4
                   Supervision and Regulation.............................................................       5
                   Industry Restructuring.................................................................      10
                   Competition............................................................................      11
                   Employees..............................................................................      11
                   Statistical Profile and Other Financial Data...........................................      11

Item 2.          Properties...............................................................................      12

Item 3.          Legal Proceedings........................................................................      12

Item 4.          Submission of Matters to a Vote of Security Holders......................................      12

Part II

Item 5.          Market for the Registrant's Common Equity and Related
                   Stockholder Matters....................................................................      13

Item 6.          Management's Discussion and Analysis of Financial Condition and
                   Results of Operations..................................................................      13

Item 7.          Financial Statements.....................................................................      13

Item 8.          Changes in and Disagreements with
                   Accountants on Accounting and Financial Disclosure.....................................      13
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Part III

<S>              <C>                                                                                            <C>   
Item 9.          Directors, Executive Officers, Promoters and Control Persons;
                   Compliance with Section 16(a) of the Exchange Act......................................      15

Item 10.         Executive Compensation...................................................................      15

Item 11.         Security Ownership of Certain Beneficial Owners and
                   Management.............................................................................      15

Item 12.         Exhibits, Financial Statement Schedules, and Reports on Form 8-K.........................      15

Signatures................................................................................................      18

Exhibit Index.............................................................................................      19
</TABLE>



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                                     PART I

ITEM 1.       BUSINESS

GENERAL

      Key Florida Bancorp, Inc. ("Bancorp") was incorporated under the laws of
the State of Florida on July 26, 1988. Bancorp is a registered bank company and
owns all of the voting shares of Liberty National Bank ("LNB"). Bancorp has no
significant operations other than owning the stock of LNB. LNB, which is a
national banking association, is the only source of revenue for Bancorp.

      On July 30, 1996, Bancorp closed the merger of Key Florida Bank, F.S.B.
("KFB"), which was a wholly-owned subsidiary of Bancorp at the time of the
merger, with and into LNB. In the merger, the outstanding shares of LNB common
stock were converted into an aggregate of 2,739,847 shares of Bancorp common
stock, par value $.01 per share ("Bancorp Common Stock").

      LNB provides a range of consumer and commercial banking services to
individuals, businesses and industries. The basic services offered by LNB
include: demand interest bearing and noninterest bearing accounts, money market
deposit accounts, NOW accounts, time deposits, safe deposit services, credit
cards, cash management, direct deposits, notary services, money orders, night
depository, travelers' checks, cashier's checks, domestic collections, savings
bonds, bank drafts, automated teller services, drive-in tellers, and banking by
mail. In addition, LNB makes secured and unsecured commercial and real estate
loans and issues stand-by letters of credit. LNB provides automated teller
machine (ATM) cards, as a part of the HONOR ATM network, thereby permitting
customers to utilize the convenience of larger ATM networks. In addition to the
foregoing services, the offices of LNB provide customers with extended banking
hours. LNB does not have trust powers and, accordingly, no trust services are
provided.

      The revenues of LNB are primarily derived from interest on, and fees
received in connection with, real estate and other loans, and from interest and
dividends from investment and mortgage-backed securities, and short-term
investments. The principal sources of funds for LNB's lending activities are its
deposits, repayment of loans, the sale and maturity of investment securities,
and borrowings from the Federal Home Loan Bank of Atlanta. The principal
expenses of LNB are the interest paid on deposits, and operating and general
administrative expenses.

      As is the case with banking institutions generally, LNB's operations are
materially and significantly influenced by general economic conditions and by
related monetary and fiscal policies of financial institution regulatory
agencies, including the Board of Governors of the Federal Reserve System
("Federal Reserve") and the Office of the Comptroller of the Currency ("OCC").
Deposit flows and costs of funds are influenced by interest rates on competing
investments and general market rates of interest. Lending activities are
affected by the demand for financing of real estate and other types of loans,
which in turn is affected by the interest rates at which such

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financing may be offered and other factors affecting local demand and
availability of funds. LNB faces strong competition in the attraction of
deposits (its primary source of lendable funds) and in the origination of loans.
See "Competition."

DEPOSITS

      LNB's deposit services include business and individual checking accounts,
savings accounts, NOW accounts and certificates of deposit. It is LNB's policy
to monitor its competition in order to keep the rates paid on its deposits at a
competitive level. Time deposits of $100,000 and over made up 10.75% of LNB's
total deposits at December 31, 1996 as compared to 12.6% at December 31, 1995.
The majority of the deposits of LNB are generated from Manatee and Sarasota
counties. LNB does not accept brokered deposits. At December 31, 1996, 0.03% of
LNB's total deposits were comprised of public fund deposits.  There were no
public fund deposits at December 31, 1995. At December 31, 1996, no single
depositor accounted for more than 0.5% of LNB's total deposits as compared to
1.0% at December 31, 1995. Management does not believe LNB is dependent on a
single deposit customer or group of customers concentrated in a particular
industry, whose loss or insolvency would have a material adverse effect on LNB's
operations.

      Time deposits of $100,000 and over, public fund deposits and funds of
single depositors tend to be short-term in nature and more sensitive to changes
in interest rates than other types of deposits and, therefore, may be a less
stable source of funds. In the event that existing short-term deposits are not
renewed, the resulting loss of the deposited funds could adversely affect LNB's
liquidity. In a rising interest rate market, such short-term deposits may prove
to be a costly source of funds because their short-term nature facilitates
renewal at increasingly higher interest rates, which may adversely affect
Bancorp's earnings. However, the converse is true in a falling interest rate
market making such short-term deposits more favorable to Bancorp.

LOAN PORTFOLIO

      LNB's loans are concentrated in three major areas: commercial loans, real
estate loans, and installment loans. Approximately 14.55% of LNB's total loan
portfolio at December 31, 1996, consisted of commercial loans as compared to
19.61% at December 31, 1995. The majority of LNB's loans are made on a secured
basis. At December 31, 1996 and 1995, no concentration of loans within any
portfolio category to any group of borrowers engaged in similar activities or in
a similar business exceeded 0.5% of total loans, except that as of such date
loans collateralized with mortgages on real estate represented 78.36% and
72.68%, respectively, of the loan portfolio and were to borrowers in varying
activities and businesses.

      LNB's commercial loans include loans to individuals and small-to
medium-sized businesses located primarily in Manatee and Sarasota counties for
working capital, equipment purchases, and various other business purposes. A
majority of LNB's commercial loans are secured by inventory, equipment or
similar assets, but these loans may also be made on an unsecured basis.
Commercial loans may be made at variable- or fixed-interest rates; however, it
is LNB's policy that those loans

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which will have terms or amortization schedules of longer than one year will
normally carry interest rates which vary with the prime interest lending rate
and will become payable in full and are generally refinanced in three to five
years.

      LNB's real estate loans are secured by mortgages and consist primarily of
loans to individuals and businesses for various consumer and business purposes
(whether or not related to the real estate securing them). LNB also engages in
lending to builders and individuals for the construction of single-family
residences. These real estate loans may be made at fixed-or variable-interest
rates. LNB generally does not make commercial loans for terms exceeding 20
years, but does make loans repayable in monthly installments (based on up to a
20-year amortization schedule) which become payable in full and are generally
refinanced in three to five years. LNB's residential real estate loans generally
are repayable in monthly installments based on an amortization schedule of up to
20-years with variable-interest rates; however, most loans are established with
a short-term call provision.

      LNB's installment loan portfolio consists primarily of loans to
individuals for various consumer purposes, but includes some business purpose
loans which are payable on an installment basis. The majority of these loans are
for terms of less than five years and are secured by liens on various personal
assets of the borrowers, but installment loans may be made on an unsecured
basis. Installment loans are made at fixed-and variable-interest rates, and may
be made based on up to a five-year amortization schedule.

INVESTMENTS

      LNB invests a portion of its assets in U.S. Treasury and U.S. Government
agency obligations, certificates of deposit, collateralized mortgage obligations
("CMO's"), overnight investments in the Federal Home Loan Bank, and federal
funds sold. LNB's investments are managed in relation to loan demand and deposit
growth, and are generally used to provide for the investment of excess funds at
minimal risks while providing liquidity to fund increases in loan demand or to
offset fluctuations in deposits.

      With respect to LNB's investment portfolio, LNB's total portfolio may be
invested in U.S. Treasury and general obligations of its agencies because such
securities generally represent a minimal investment risk. Occasionally, LNB
purchases certificates of deposits of national and state banks. These
investments may exceed $100,000 in any one institution (the limit of FDIC
insurance for deposit accounts). CMO's are secured with Federal National
Mortgage Association ("FNMA") mortgage-backed securities and generally have a
shorter life than the stated maturity. Federal funds sold is the excess cash LNB
has available over and above daily cash needs. This money is invested on an
overnight basis with approved correspondent banks.

      LNB monitors changes in financial markets. In addition to investments for
its portfolio, LNB monitors its daily cash position to ensure that all available
funds earn interest at the earliest possible date. A portion of the investment
account is designated as secondary reserves and invested in liquid securities
that can be readily converted to cash with minimum risk of market

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loss. These investments usually consist of U.S. Treasury obligations, U.S.
government agencies and federal funds. The remainder of the investment account
may be placed in investment securities of different type and longer maturity.
Daily surplus funds are sold in the federal funds market for one business day.
LNB attempts to stagger the maturities of its securities so as to produce a
steady cash-flow in the event LNB needs cash, or economic conditions change to a
more favorable rate environment.

CORRESPONDENT BANKING

      Correspondent banking involves one bank providing services to another bank
which cannot provide that service for itself from an economic or practical
standpoint. LNB is required to purchase correspondent services offered by larger
banks, including check collections, purchase of Federal funds, security
safekeeping, investment services, coin and currency supplies, overline and
liquidity loan participations and sales of loans to or participation with
correspondent banks.

      LNB sells loan participations to correspondent banks with respect to loans
which exceed LNB's lending limit. Management of LNB has established
correspondent relationships with the NationsBank, SunTrust and Compass Bank. As
compensation for services provided by a correspondent, LNB maintains certain
balances with such correspondent in non-interest bearing accounts. Such
compensating balances are not deemed significant to LNB's operations.

DATA PROCESSING

      LNB has a data processing department which provides a full range of data
processing services, including an automated general ledger, deposit accounting,
and commercial, mortgage and installment lending data processing.

EFFECT OF GOVERNMENTAL POLICIES

      The earnings and business of Bancorp are and will be affected by the
policies of various regulatory authorities of the United States, especially the
Federal Reserve. The Federal Reserve, among other things, regulates the supply
of credit and deals with general economic conditions within the United States.
The instruments of monetary policy employed by the Federal Reserve for these
purposes influence in various ways the overall level of investments, loans,
other extensions of credit and deposits, and the interest rates paid on
liabilities and received on assets.

INTEREST AND USURY

      LNB is subject to numerous state and federal statutes that affect the
interest rates that may be charged on loans. These laws do not, under present
market conditions, deter LNB from continuing the process of originating loans.



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SUPERVISION AND REGULATION

      Bank Holding Company Regulation. Bancorp is a one-bank holding company,
registered with the Federal Reserve under the Bank Holding Company Act of 1956
("BHC Act"). As such, Bancorp is subject to the supervision, examination, and
reporting requirements of the BHC Act and the regulations of the Federal
Reserve. Bancorp is required to furnish to the Federal Reserve an annual report
of its operations at the end of each fiscal year, and such additional
information as the Federal Reserve may require pursuant to the BHC Act.

      The BHC Act requires every bank holding company to obtain the prior
approval of the Federal Reserve before (i) it may acquire direct or indirect
ownership or control of any voting shares of any bank if, after such
acquisition, the bank holding company will directly or indirectly own or control
more than 5% of the total voting shares of the bank, (ii) it or any of its
subsidiaries, other than a bank, may acquire all or substantially all of the
assets of the bank, or (iii) it may merge or consolidate with any other bank
holding company.

      The BHC Act further provides that the Federal Reserve may not approve any
transaction that would result in a monopoly or would be in furtherance of any
combination or conspiracy to monopolize or attempt to monopolize the business of
banking in any section of the United States, or the effect of which may be
substantially to lessen competition or to tend to create a monopoly in any
section of the country, or that in any other manner would be in restraint of
trade, unless the anticompetitive effects of the proposed transaction are
clearly outweighed by the public interest in meeting the convenience and needs
of the community to be served. The Federal Reserve is also required to consider
the financial and managerial resources and future prospects of the bank holding
companies and banks concerned and the convenience and needs of the community to
be served. Consideration of financial resources generally focuses on capital
adequacy and consideration of convenience and needs issues includes the parties'
performance under the Community Reinvestment Act of 1977 (the "CRA"), both of
which are discussed below.

      The BHC Act generally prohibits Bancorp from engaging in activities other
than banking or managing or controlling banks or other permissible subsidiaries
and from acquiring or retaining direct or indirect control of any company
engaged in any activities other than those activities determined by the Federal
Reserve to be so closely related to banking or managing or controlling banks as
to be a proper incident thereto. In determining whether a particular activity is
permissible, the Federal Reserve must consider whether the performance of such
an activity reasonably can be expected to produce benefits to the public, such
as greater convenience, increased competition, or gains in efficiency, that
outweigh possible adverse effects, such as undue concentration of resources,
decreased or unfair competition, conflicts of interests, or unsound banking
practices. For example, factoring accounts receivable, acquiring or servicing
loans, leasing personal property, conducting discount securities brokerage
activities, performing certain data processing services, acting as agent or
broker in selling credit life insurance and certain other types of insurance in
connection with credit transactions, and performing certain insurance

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underwriting activities all have been determined by the Federal Reserve to be
permissible activities of bank holding companies. Despite prior approval, the
Federal Reserve has the power to order a bank holding company or its
subsidiaries to terminate any activity or to terminate its ownership or control
of any subsidiary when it has reasonable cause to believe that continuation of
such activity or such ownership or control constitutes a serious risk to the
financial safety, soundness, or stability of any bank subsidiary of that bank
holding company.

      Banks are subject to the provisions of the CRA. Under the terms of the
CRA, the appropriate federal bank regulatory agency is required, in connection
with its examination of a bank, to assess such bank's record in meeting the
credit needs of the community served by that bank, including low-and
moderate-income neighborhoods. The regulatory agency's assessment of the bank's
record is made available to the public. Further, such assessment is required of
any bank which has applied to (i) charter a national bank, (ii) obtain deposit
insurance coverage for a newly chartered institution, (iii) establish a new
branch office that will accept deposits, (iv) relocate an office, or (v) merge
or consolidate with, or acquire the assets or assume the liabilities of, a
federally regulated financial institution. In the case of a bank holding company
applying for approval to acquire a bank or other bank holding company, the
Federal Reserve will assess the record of each subsidiary bank of the applicant
bank holding company, and such records may be the basis for denying the
application.

      Bank Regulation. LNB is chartered under the laws of the United States and
its deposits are insured by the Federal Deposit Insurance Corporation (the
"FDIC") to the extent provided by law. LNB is subject to comprehensive
regulation, examination and supervision by the OCC and to other laws and
regulations applicable to banks. Such regulations include limitations on loans
to a single borrower and to its directors, officers and employees; restrictions
on the opening and closing of branch offices; the maintenance of required
capital and liquidity ratios; the granting of credit under equal and fair
conditions; and the disclosure of the costs and terms of such credit. LNB is
examined periodically by the OCC to whom it submits periodic reports regarding
its financial condition and other matters. The OCC has a broad range of powers
to enforce regulations under its jurisdiction, and to take discretionary actions
determined to be for the protection of the safety and soundness of national
banks, including the institution of cease and desist orders and the removal of
directors and officers. The OCC also has the authority to approve or disapprove
mergers, consolidations, and similar corporate actions.

      Under federal law, federally insured banks are subject, with certain
exceptions, to certain restrictions on any extension of credit to their parent
holding companies or other affiliates, on investment in the stock or other
securities of affiliates, and on the taking of such stock or securities as
collateral from any borrower. In addition, such banks are prohibited from
engaging in certain tie-in arrangements in connection with any extension of
credit or the providing of any property or service.

      In 1989, the Financial Institutions Reform, Recovery and Enforcement Act
of 1989 ("FIRREA") was enacted. FIRREA contains major regulatory reforms,
stronger capital standards

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for savings and loan associations and stronger civil and criminal enforcement
provisions. FIRREA also provides that a depository institution insured by the
FDIC can be held liable for any loss incurred by, or reasonably expected to be
incurred by, the FDIC after August 9, 1989 in connection with (i) the default of
a commonly controlled FDIC insured depository institution, or (ii) any
assistance provided by the FDIC to a commonly controlled FDIC insured
institution in danger of default.

      In 1991, the FDIC Improvement Act of 1991 ("FDICIA") was enacted. FDICIA
made a number of reforms addressing the safety and soundness of deposit
insurance funds, supervision, accounting, and prompt regulatory action, and also
implements other regulatory improvements. Annual full-scope, on-site
examinations are required of all insured depository institutions. The cost for
conducting an examination of an institution may be assessed to that institution,
with special consideration given to affiliates and any penalties imposed for
failure to provide information requested. Insured state banks also are precluded
from engaging as principal in any type of activity that is impermissible for a
national bank, including activities relating to insurance and equity
investments. FDICIA also recodified current law restricting extensions of credit
to insiders under the Federal Reserve Act.

      Dividends. Dividends from LNB constitute the primary source of funds for
dividends to be paid by Bancorp. There are various statutory and contractual
limitations on the ability of LNB to pay dividends, extend credit, or otherwise
supply funds to Bancorp. The Federal Reserve and the OCC also have the general
authority to limit the dividends paid by bank holding companies and national
banks, respectively, if such payment may be deemed to constitute an unsafe and
unsound practice. The declaration and payment of dividends by a national bank
are subject to the national banking laws and the rules and regulations of the
OCC governing the manner and amount of dividends which may be paid to
shareholders and the methods, if any, by which permanent capital reserves may be
retired or reduced. Under the national banking laws, a national bank may not pay
dividends from its capital; all dividends must be paid out of net profits, after
deducting for expenses. A national bank also is precluded from declaring a
dividend until its surplus equals its stated capital, unless there has been
transferred to surplus no less than 1/10th of the bank's net profits for the
preceding two consecutive half-year periods (in the case of an annual dividend).
The approval of the OCC is required if the total of all dividends declared by a
national bank in any calendar year exceeds the total of its net profits for that
year combined with its retained net profits for the preceding two years, plus
any required transfers to surplus. Florida law applicable to companies
(including Bancorp) provides that dividends may be declared and paid only if,
after giving it effect, (i) the company is able to pay its debts as they become
due in the usual course of business, and (ii) the company's total assets would
be greater than the sum of its total liabilities plus the amount that would be
needed if the company were to be dissolved at the time of the dividend to
satisfy the preferential rights upon dissolution of shareholders whose
preferential rights are superior to those receiving the dividend.

         Effect of Governmental Policies. The earnings and business of Bancorp
and LNB are effected by the policies of various regulatory authorities of the
United States, especially the Federal

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Reserve. The Federal Reserve, among other things, regulates the supply of credit
and deals with general economic conditions within the United States. The
instruments of monetary policy employed by the Federal Reserve for those
purposes influence in various ways the overall level of investments, loans,
other extensions of credits, and deposits, and the interest rates paid on
liabilities and received on assets.

      Enforcement Powers. Congress has provided the federal bank regulatory
agencies with an array of powers to enforce laws, rules, regulations and orders.
Among other things, the agencies may require that institutions cease and desist
from certain activities, may preclude persons from participating in the affairs
of insured depository institutions, may suspend or remove deposit insurance, and
may impose civil money penalties against institution-affiliated parties for
certain violations.

      Maximum Legal Interest Rates. Like the laws of many states, Florida law
contains provisions on interest rates that may be charged by banks and other
lenders on certain types of loans. Numerous exceptions exist to the general
interest limitations imposed by Florida law. The relative importance of these
interest limitation laws to the financial operations of LNB will vary from time
to time, depending on a number of factors, including conditions in the money
markets, the costs and availability of funds, and prevailing interest rates.

      Bank Branching. Banks in Florida are permitted to branch state wide. Such
branch banking by national banks, however, is subject to prior approval by the
OCC. Any such approval would take into consideration several factors, including
the bank's level of capital, the prospects and economics of the proposed branch
office, and other conditions deemed relevant by the OCC for purposes of
determining whether approval should be granted to open a branch office.

      Change of Control. Federal law restricts the amount of voting stock of a
bank holding company and a bank that a person may acquire without the prior
approval of banking regulators. The overall effect of such laws is to make it
more difficult to acquire a bank holding company and a bank by tender offer or
similar means than it might be to acquire control of another type of
corporation. Consequently, shareholders of Bancorp may be less likely to benefit
from the rapid increases in stock prices that may result from tender offers or
similar efforts to acquire control of other companies. Federal law also imposes
restrictions on acquisitions of stock in a bank holding company and a state
bank. Under the federal Change in Bank Control Act and the regulations
thereunder, a person or group must give advance notice to the Federal Reserve
before acquiring control of any bank holding company and the OCC before
acquiring control of any national bank (such as LNB). Upon receipt of such
notice, the Federal Reserve and the OCC, as the case may be, may approve or
disapprove the acquisition. The Change in Bank Control Act creates a rebuttable
presumption of control if a member or group acquires a certain percentage or
more of a bank holding company's or bank's voting stock, or if one or more other
control factors set forth in the Act are present.


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      Insurance of Deposits. LNB's deposit accounts are insured by the FDIC up
to a maximum of $100,000 per insured depositor. The FDIC issues regulations,
conducts periodic examinations, requires the filing of reports and generally
supervises the operations of its insured banks. Any insured bank which is not
operated in accordance with or does not conform to FDIC regulations, policies
and directives may be sanctioned for non-compliance. Proceedings may be
instituted against any insured bank or any director, officer, or employee of
such bank engaging in unsafe and unsound practices, including the violation of
applicable laws and regulations. The FDIC has the authority to terminate
insurance of accounts pursuant to procedures established for that purpose.

         Capital Requirements. The federal bank regulatory authorities have
adopted risk-based capital guidelines for banks and bank holding companies that
are designed to make regulatory capital requirements more sensitive to
differences in risk profile among banks and bank holding companies. The
resulting capital ratios represent qualifying capital as a percentage of total
risk-weighted assets and off-balance sheet items. The guidelines are minimums,
and the federal regulators have noted that banks and bank holding companies
contemplating significant expansion programs should not allow expansion to
diminish their capital ratios and should maintain all ratios well in excess of
the minimums. The current guidelines require all bank holding companies and
federally-regulated banks to maintain a minimum risk-based total capital ratio
equal to 8%, of which at least 4% must be Tier 1 capital. Tier 1 capital
includes common stockholders' equity, qualifying perpetual preferred stock, and
minority interests in equity accounts of consolidated subsidiaries, but excludes
goodwill and most other intangibles and excludes the allowance for loan and
lease losses. Tier 2 capital includes the excess of any preferred stock not
included in Tier 1 capital, mandatory convertible securities, hybrid capital
instruments, subordinated debt and intermediate term-preferred stock, and
general reserves for loan and lease losses up to 1.25% of risk-weighted assets.
At December 31, 1996, (i) Bancorp's Tier 1 and total risk-based capital ratios
were 9.04% and 10.05%, respectively, and (ii) LNB's Tier 1 and total risk-based
capital ratios were 8.68% and 9.69%, respectively.

      FDICIA contains "prompt corrective action" provisions pursuant to which
banks are to be classified into one of five categories based upon capital
adequacy, ranging from "well capitalized" to "critically undercapitalized" and
which require (subject to certain exceptions) the appropriate federal banking
agency to take prompt corrective action with respect to an institution which
becomes "significantly undercapitalized" or "critically undercapitalized".

         The FDIC has issued regulations to implement the "prompt corrective
action" provisions of FDICIA. In general, the regulations define the five
capital categories as follows: (i) an institution is "well capitalized" if it
has a total risk-based capital ratio of 10% or greater, has a Tier 1 risk-based
capital ratio of 6% or greater, has a leverage ratio of 5% or greater and is not
subject to any written capital order or directive to meet and maintain a
specific capital level for any capital measures; (ii) an institution is
"adequately capitalized" if it has a total risk-based capital ratio of 8% or
greater, has a Tier 1 risk-based capital ratio of 4% or greater, and has a
leverage ratio of 4% or greater; (iii) an institution is "undercapitalized" if
it has a total risk-based capital ratio of

                                        9

<PAGE>   13



less than 8%, has a Tier 1 risk-based capital ratio that is less than 4% or has
a leverage ratio that is less than 4%; (iv) an institution is "significantly
undercapitalized" if it has a total risk-based capital ratio that is less than
6%, a Tier 1 risk-based capital ratio that is less than 3% or a leverage ratio
that is less than 3%; and (v) an institution is "critically undercapitalized" if
its "tangible equity" is equal to or less than 2% of its total assets. The FDIC
also, after an opportunity for a hearing, has authority to downgrade an
institution from "well capitalized" to "adequately capitalized" or to subject an
"adequately capitalized" or "under-capitalized" institution to the supervisory
actions applicable to the next lower category, for supervisory concerns. As of
December 31, 1996, LNB had a total risk-based capital ratio of 9.68%, a Tier 1
risk-based capital ratio of 8.68%, and a leverage ratio of 5.67%.

      Additionally, FDICIA requires, among other things, that (i) only a "well
capitalized" depository institution may accept brokered deposits without prior
regulatory approval and (ii) the appropriate federal banking agency annually
examine all insured depository institutions, with some exceptions for small,
"well capitalized" institutions and state-chartered institutions examined by
state regulators. FDICIA also contains a number of consumer banking provisions,
including disclosure requirements and substantive contractual limitations with
respect to deposit accounts.

      Interstate Banking. The Reigle-Neal Interstate Banking and Branching
Efficiency Act of 1994 provides for nationwide interstate banking and branching.
Under the law, interstate acquisitions of banks or bank holding companies in any
state by bank holding companies in any other state is permissible subject to
certain limitations. Florida also has a law that allows out-of-state bank
holding companies (located in states that allow Florida bank holding companies
to acquire banks and bank holding companies in that state) to acquire Florida
banks and Florida bank holding companies. The law essentially provides for
out-of-state entry by acquisition only (and not by interstate branching) and
requires the acquired Florida bank to have been in existence for at least three
years. Interstate branching and consolidation of existing bank subsidiaries in
different states will be permissible beginning June 1, 1997. Out-of-state banks
that do not operate a branch in Florida are prohibited from establishing a de
novo branch in Florida. Beginning June 1, 1997, a Florida bank may establish,
maintain, and operate one or more branches in a state other than Florida
pursuant to an interstate merger transaction in which the Florida bank is the
resulting bank. An interstate merger transaction resulting in the acquisition by
an out-of-state bank of a Florida bank is not permitted unless the Florida bank
has been in existence and continuously operating, on the day of the acquisition,
for more than three years.


INDUSTRY RESTRUCTURING

      For well over a decade, the banking industry has been undergoing a
restructuring process which is anticipated to continue. The restructuring has
been caused by product and technological innovations in the financial services
industry, deregulation of interest rates, and increased competition from foreign
and nontraditional banking competitors, and has been characterized

                                       10

<PAGE>   14



principally by the gradual erosion of geographic barriers to intrastate and
interstate banking and the gradual expansion of investment and lending
authorities for bank institutions.

      Members of Congress and the administration have indicated their intention
to consider additional legislation designed to institute reforms to promote the
viability of the industry. Certain of the proposals would revise the federal
regulatory structure for insured depository institutions; others would affect
the nature of products, services, and activities that bank holding companies and
their subsidiaries may offer or engage in, and the types of entities that may
control depository institutions. There can be no assurance as to whether or in
what form any such proposed legislation might be enacted, or what impact such
legislation might have upon Bancorp.


COMPETITION

      Bancorp encounters strong competition both in making loans and in
attracting deposits. The deregulation of the banking industry and the widespread
enactment of state laws which permit multi-bank holding companies as well as an
increasing level of interstate banking have created a highly competitive
environment for commercial banking. In one or more aspects of its business, LNB
competes with other commercial banks, savings and loan associations, credit
unions, finance companies, mutual funds, insurance companies, brokerage and
investment banking companies, and other financial intermediaries. Most of these
competitors, some of which are affiliated with bank holding companies, have
substantially greater resources and lending limits, and may offer certain
services that LNB does not currently provide. In addition, many of LNB's
non-bank competitors are not subject to the same extensive federal regulations
that govern bank holding companies and federally insured banks. Recent federal
and state legislation has heightened the competitive environment in which
financial institutions must conduct their business, and the potential for
competition among financial institutions of all types has increased
significantly.

     To compete, LNB relies upon specialized services, responsive handling of
customer needs, and personal contacts by its officers, directors, and staff.
Large multi-branch banking competitors tend to compete primarily by rate and the
number and location of branches while smaller, independent financial
institutions tend to compete primarily by rate and personal service.


EMPLOYEES

     As of December 31, 1996, Bancorp had 87 full-time employees and 6 part-time
employees. The employees are not represented by a collective bargaining unit.
Bancorp believes that its employee relations are good.





                                       11

<PAGE>   15



STATISTICAL PROFILE AND OTHER FINANCIAL DATA

      Reference is hereby made to the statistical and financial data contained
in the section captioned "Management's Discussion and Analysis of Financial
Condition and Results of Operations," which is included in the Bancorp's 1996
Annual Report to Shareholders and incorporated in this report under Item 7 of
Part II, for statistical and financial data providing a review of Bancorp's
business activities.


ITEM 2. PROPERTIES

      The main office of Bancorp is located at 6016 26th Street West, Suite 1,
Bradenton, Florida in a one-story building, in which approximately 1,000 square
feet is leased by Bancorp (under a lease which, with renewal options, expires in
June, 1999). The main office of LNB is located at 6001 26th Street West,
Bradenton, Florida in a two-story building of approximately 9,000 square feet,
which is owned by LNB. LNB also has banking offices located at 3901 Cortez Road
West, Bradenton, Florida, in a one-story building of approximately 4,500 square
feet, which is leased by LNB (under a lease which, with renewal options, expires
in December, 1997); 5390 Gulf of Mexico Drive, Longboat Key, Florida in a
one-story building of approximately 2,310 square feet, which is leased by LNB
(under a lease which, with renewal options, expires in August 2001); 4423
Manatee Avenue West, Bradenton, Florida in a one-story building of approximately
2,400 square feet, which is owned by LNB; 6304 N. Lockwood Ridge Road, Sarasota,
Florida in a one-story building of approximately 4,000 square feet, which is
owned by LNB; 6704 Bee Ridge Road, Sarasota, Florida in a two-story building of
approximately 4,000 square feet, which is leased by LNB (under a lease which,
with renewal options, expires in 2011); 3815 U.S. Highway 301 N., Ellenton,
Florida 34222 in a one-story building of approximately 4,000 square feet, which
is owned by LNB.


ITEM 3. LEGAL PROCEEDINGS

      LNB is a party to various legal proceedings in the ordinary course of its
business, including proceedings to collect loans or enforce security interests.
In the opinion of management of Bancorp, none of the legal proceedings currently
pending will, when resolved, have a material adverse effect on the business or
financial condition of Bancorp on a consolidated basis.


ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

      No matters were submitted to a vote of Bancorp security holders during the
fourth quarter of the year ended December 31, 1996.

                                       12

<PAGE>   16



                                     PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
        MATTERS

      The information contained under the section captioned "Capital Stock" in
the Annual Report is incorporated herein by reference.


ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

      The information contained in the section captioned "Management's
Discussion and Analysis of Financial Condition and Results of Operations" in the
Annual Report is incorporated herein by reference.


ITEM 7. FINANCIAL STATEMENTS

      The following financial statements and the supplementary financial
information included in the 1996 Annual Report to Shareholders are incorporated
herein by reference:

      1. The consolidated financial statements, together with the report thereon
of Key Florida Bancorp, Inc. dated March 7, 1997.

      2. Management's Discussion and Analysis of Financial Condition and Results
of Operations and related statistical information.

      With the exception of the aforementioned information and the information
incorporated in Items 5, 6, 7, and 8, the 1996 Annual Report to Shareholders is
not to be deemed filed as part of this Form 10-KSB Report.


ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND 
        FINANCIAL DISCLOSURE

      The consolidated financial statements of Bancorp at September 30, 1995 and
1994 and for the years then ended were audited by Varnadore, Tyler & Hawthorne,
P.A., independent auditors, as stated in their report herein. On January 26,
1995, Bancorp dismissed Coopers & Lybrand, L.L.P. as its accountants and
retained the accounting firm of Varnadore, Tyler & Hawthorne, P.A. The report of
Coopers & Lybrand, L.L.P. on the financial statements for 1994 and 1993 did not
contain an adverse opinion or a disclaimer of opinion nor was such report
qualified or modified as to audit scope or accounting principle, except that the
report on the financial statement for the year ending September 30, 1993
included an explanatory paragraph that, at September 30,

                                       13

<PAGE>   17



1993, KFB "did not have the required minimum regulatory capital which could
result in regulatory authorities limiting an institution's asset growth and
imposing other sanctions and enforcement actions, including regulatory
take-over, that raise substantial doubt about its ability to continue as a going
concern." During Bancorp's two most recent fiscal years and the subsequent
interim period preceding the change in Coopers & Lybrand, L.L.P. as Bancorp's
accountants, there were no disagreements with the former accountant on any
matter of accounting principle or practices, financial statement disclosure, or
auditing scope or procedure, which disagreement or disagreements, if not
resolved to the satisfaction of the former accountant, would have caused it to
make a reference to the subject matter of the disagreement in connection with
its report. The decision to dismiss Coopers & Lybrand, L.L.P. was recommended
and approved by the Board of Directors of Bancorp.

      On November 26, 1996, Varnadore, Tyler & Hawthorne, P.A. resigned as
independent auditors of Bancorp. On December 19, 1996, Bancorp engaged Purvis,
Gray and Company, certified public accountants, to act as independent auditors
for Bancorp. The report of Varnadore, Tyler & Hawthorne, P.A. on the financial
statements of Bancorp at December 31, 1995 and 1994 and for the years then ended
did not contain an adverse opinion or disclaimer of opinion nor was such report
qualified as to auditing scope or accounting principle. During Bancorp's two
most recent fiscal years and the subsequent interim period preceding the change
in Varnadore, Tyler & Hawthorne, P.A. as Bancorp's accountants, there were no
disagreements with the former accountant on any matter of accounting principle
or practices, financial statement disclosure, or auditing scope or procedure,
which disagreement or disagreements, if not resolved in the satisfaction of the
former accountant, would have caused it to make a reference to the subject
matter of the disagreement in connection with this report.


                                       14

<PAGE>   18



                                    PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
        WITH SECTION 16(A) OF THE EXCHANGE ACT

      The information contained under the sections captioned "Directors" and
"Executive Officers" under "Election of Directors" in the registrant's
definitive Proxy Statement for the Annual Meeting of Shareholders to be held on
May 27, 1997, to be filed with the SEC pursuant to Regulation 14A within 120
days of the registrant's fiscal year end (the "Proxy Statement"), is
incorporated herein by reference.


ITEM 10. EXECUTIVE COMPENSATION

      The information contained in the sections captioned "Information About the
Board of Directors and Its Committees", and "Executive Compensation" and
Benefits and "Information on Benefit Plans and Policies" under "Election of
Directors" in the Proxy Statement, is incorporated herein by reference.


ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

      Information contained in the sections captioned "Directors" and
"Management Stock Ownership" under "Election of Directors," in the Proxy
Statement, is incorporated herein by reference.


ITEM 12. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

      (A)  THE FOLLOWING DOCUMENTS ARE FILED AS PART OF THIS REPORT:

      1.    FINANCIAL STATEMENTS

            Report of Independent Certified Public Accountants

            Consolidated Balance Sheet as of December 31, 1996

            Consolidated Statement of Income for Key Florida Bancorp,
            Inc. and Subsidiaries for the year ended December 31, 1996, 
            and Statement of Income for Liberty National Bank for the year
            ended December 31, 1995

            Consolidated Statement of Stockholders' Equity for Key Florida
            Bancorp, Inc. and Subsidiaries for the year ended December 31,
            1996, and Statement of Stockholders' Equity for Liberty National
            Bank for the year ended December 31, 1995


                                       15

<PAGE>   19



            Consolidated Statement of Cash Flows for Key Florida Bancorp, Inc.
            and Subsidiaries for the year ended December 31, 1996, and
            Statement of Cash Flows for Liberty National Bank for the year
            ended December 31, 1995

            Notes to Consolidated Financial Statements


        2.  Financial Statement Schedules

            All schedules have been omitted as the required information is
            either inapplicable or included in the Notes to Consolidated
            Financial Statements.

        3.  EXHIBITS

<TABLE>
              <S>       <C>                                                                           
               3.1      Articles of Incorporation of Key Florida Bancorp, Inc.;                       
                        Articles of Amendment for Certificate of Designation of                       
                        Variable Rate Cumulative Preferred Stock, Series A;                           
                        and Amendment to Certificate of Designation of Variable                       
                        Rate Cumulative Preferred Stock, Series A (Incorporated by                    
                        reference to Exhibit 3.1 to Bancorp's Registration Statement                  
                        No. 333-2962 (the "Registration Statement"))                                  
                                                                                                      
               3.2      Bylaws of Key Florida Bancorp, Inc. (Incorporated by                          
                        reference to Exhibit 3.2 to the Registration Statement)                       
                                                                                                      
               4.1      Specimen Stock Certificate of Key Florida Bancorp, Inc.                       
                        (Incorporated by reference to Exhibit 4.1 to the                              
                        Registration Statement)                                                       
                                                                                                      
              10.1      Key Florida Bancorp, Inc. 1987 Stock Option Plan                              
                        (Incorporated by reference to Exhibit 10.1 to the                             
                        Registration Statement)                                                       
                                                                                                      
              10.2      Employment Agreement dated December 1, 1995 between 
                         Key Florida Bancorp, Inc. and Daniel S. Hager                         
                        (Incorporated by reference to Exhibit 10.2 to the                             
                        Registration Statement) *                                                     
                                                                                                      
              10.3      Employment Agreement dated July 30, 1996 between Liberty                      
                        National Bank and Stephen R. Jonsson (Incorporated by reference               
                        to Exhibit 10.3, to Bancorp's Registration Statement on Form                  
                        10-SB with the Securities and Exchange Commission on January 13,              
                        1997) *                                                                       
</TABLE>


                                       16

<PAGE>   20


<TABLE>

      <S>       <C>                        
      10.4      Lease dated July 1, 1991 between The Centre
                of LBK, Inc. and Key Florida Bank, F.S.B.
                (Incorporated by reference to Exhibit 10.5 to the
                Registration Statement)

      10.5      Lease dated May 11, 1995 between Wildewood
                Plaza and Key Florida Bank, F.S.B. and Addendum
                to Lease dated May 11, 1995 (Incorporated by
                reference to Exhibit 10.6 to the Registration
                Statement)

      10.6      Lease between Liberty National Bank and Gingerich
                Properties Partnership (and Addenda thereto)
                (Incorporated by reference to Exhibit 10.7 to the
                Registration Statement)

      13.1      Key Florida Bancorp, Inc. 1996 Annual Report

      21.1      Subsidiaries of the Registrant

      23.1      Consent of Varnadore, Tyler & Hawthorne, P.A.

      23.2      Consent of Purvis, Gray and Company

      27        Financial Data Schedule (for SEC use only)
</TABLE>



      (b)  Reports on Form 8-K

           Bancorp filed Form 8-K Reports on November 26, 1996 (announcing the
           resignation of Varnadore, Tyler & Hawthorne, P.A., as independent
           auditors of Bancorp), December 19, 1996 (announcing the appointment
           of Purvis, Gray and Company, as independent auditors of Bancorp) and
           December 30, 1996 (filing financial statements of Bancorp as of and
           for the period ended June 30, 1996).

-----------------------


*     Represents a management contract or compensatory plan or arrangement
      required to be filed as an exhibit.


                                       17

<PAGE>   21



                                   SIGNATURES

      Pursuant to the requirements of Section 13 or 15(d) 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, in the City of
Bradenton, State of Florida, on the 15th day of April, 1997.

                                          KEY FLORIDA BANCORP, INC.

                                          By: /s/ Stephen R. Jonsson
                                             ----------------------------------
                                             Stephen R. Jonsson, President and
                                             Chief Executive Officer

      Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities indicated on April 15, 1997.

      Signature                                      Title
      ---------                                      -----

/s/ Harvey E. Anderson                      Chairman of the Board
-------------------------------              
Harvey E. Anderson

/s/ Stephen R. Jonsson                      President and Chief Executive 
-------------------------------              Officer and Director
Stephen R. Jonsson                       

/s/ Roger P. Conley                         Director
-------------------------------              
Roger P. Conley

/s/ Daniel S. Hager                         Director
-------------------------------              
Daniel S. Hager

/s/ Bryant A. Meeks                         Director
-------------------------------              
Bryant A. Meeks

/s/ Leonard J. Najjar                       Director
-------------------------------              
Leonard J. Najjar

/s/ James T. Rogers, M.D.                   Director
-------------------------------              
James T. Rogers, M.D.

/s/ H. R. Williams                          Director
-------------------------------              
H. R. Williams

/s/ Michael L. Hogan                        Senior Vice President
-------------------------------             (Principal financial officer
Michael L. Hogan, CPA                        and principal              
                                             accounting officer)        
                                             



                                       18

<PAGE>   22



                            Key Florida Bancorp, Inc.
                                   Form 10-KSB
                    For Fiscal Year Ending December 31, 1996

                                  EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit                                                                                       Page
  No.                                  Exhibit                                                 No.
--------                   -------------------------------------                              -----
<S>                        <C>                                                                 <C>
13.1                       Key Florida Bancorp, Inc. 1996 Annual
                           Report


21.1                       Subsidiaries of the Registrant

23.1                       Consent of Varnadore, Tyler & Hawthorne, P.A.

23.2                       Consent of Purvis, Gray and Company

27                         Financial Data Schedule (for SEC use only)
</TABLE>








                                       19