FPB BANCORP, INC.

                               2001 ANNUAL REPORT












<PAGE>


CORPORATE PROFILE

FPB Bancorp,  Inc. ("FPB Bancorp") is a one-bank  holding  company.  FPB Bancorp
owns 100% of First Peoples Bank ("First  Peoples").  On October 17, 2001,  First
Peoples'  stockholders  approved a plan of corporate  reorganization under which
First Peoples would become a wholly-owned subsidiary of FPB Bancorp. On December
3, 2001,  FPB Bancorp  became  effective  and a majority  of the First  Peoples'
stockholders exchanged their common shares for shares of FPB Bancorp.

First Peoples is a Florida state-chartered  commercial bank and its deposits are
insured by the Federal Deposit Insurance  Corporation.  First Peoples opened for
business on April 26, 1999 and  provides a variety of banking  services to small
businesses  and residents and  individuals in St. Lucie County,  Florida.  First
Peoples  currently  has one retail  banking  office  located at 1301 SE Port St.
Lucie Boulevard in Port St. Lucie,  Florida. At December 31, 2001, First Peoples
had  total   consolidated   assets  of  $41.7  million  and  total  consolidated
stockholders' equity of $4.1 million.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report contains certain  forward-looking  statements which represent
management's expectations or beliefs,  including, but not limited to, statements
concerning  the  banking  industry  and the  issuer's  operations,  performance,
financial  condition and growth. For this purpose,  any statements  contained in
this  Report  that  are  not  statements  of  historical   fact  may  be  deemed
forward-looking  statements.  Without  limiting the generality of the foregoing,
words  such as  "may,"  "will,"  "expect,"  "believe,"  "anticipate,"  "intend,"
"could,"  "should,"  "can,"  "estimate,"  or "continue" or the negative of other
variations   thereof  or  comparable   terminology   are  intended  to  identify
forward-looking statements. These statements by their nature involve substantial
risks and uncertainties,  certain of which are beyond management's  control, and
actual  results  may  differ  materially  depending  on a variety  of  important
factors, including competition, general economic conditions, changes in interest
rates,  and  changes in the value of real estate and other  collateral  securing
loans, among other things.



Contents                                                                    Page

Financial Highlights...........................................................1

Letter to Shareholders......................................................2-3
..
Selected Financial Data........................................................4

Management's Discussion and Analysis of Financial Condition
         and Results of Operations..........................................5-15

Financial Statements.......................................................16-35

Independent Auditors' Report..................................................36

Board of Directors.........................................................37-38

Non-Director Executive Officers...............................................39

Community Liaison Board.......................................................40

General Information...........................................................41

Common Stock Prices and Dividends.............................................41





<PAGE>



<TABLE>

                              FINANCIAL HIGHLIGHTS

               December 31, 2001 and 2000 or the Years Then Ended
                (Dollars in thousands, except per share figures)

                                                                                                     2001         2000
                                                                                                     ----         ----
<S>                                                                                               <C>          <C>
At Year End:

         Assets.................................................................................  $   41,706   $  30,532
         Loans, net.............................................................................  $   32,215   $  17,965
         Securities.............................................................................  $    5,479   $   6,987
         Deposits ..............................................................................  $   33,993   $  25,814
         Stockholders' equity...................................................................  $    4,090   $   4,144
         Book value per share...................................................................  $     8.36   $    8.47
         Shares outstanding.....................................................................     489,410     489,410
         Equity as a percentage of assets.......................................................        9.81%      13.57%
         Nonperforming assets-to-total assets ratio.............................................         NIL         NIL

For The Year:

         Interest income........................................................................  $    2,519   $   1,755
         Net loss ..............................................................................  $      (49)  $    (227)
         Loss per share basic and diluted.......................................................  $     (.10)  $    (.46)
         Return on average assets...............................................................        (.14%)      (.93%)
         Return on average equity...............................................................       (1.17%)     (5.40%)
         Average equity as a percentage of average assets.......................................       12.36%      17.19%
         Noninterest expenses to average assets.................................................        4.60%       5.24%


Yields and Rates:

         Loan portfolio.........................................................................        8.63%       9.25%
         Securities.............................................................................        6.08%       5.99%
         Other interest-earning assets..........................................................        4.17%       6.12%
         All interest-earning assets............................................................        7.85%       7.72%
         Deposits ..............................................................................        4.59%       5.32%
         Other borrowings.......................................................................        3.44%       -    %
         All interest-bearing liabilities.......................................................        4.58%       5.32%
         Interest-rate spread (1)...............................................................        3.27%       2.40%
         Net yield on average interest earning assets (2).......................................        4.59%       4.13%

_________________
<FN>
(1)      Average yield on all interest-earning  assets less average rate paid on
         all interest-bearing liabilities.
(2)      Net interest income divided by average interest-earning assets.
</FN>
</TABLE>





                                       1
<PAGE>


                             LETTER TO SHAREHOLDERS



                                 March 15, 2002


Dear Shareholders:

We are very  pleased to present this Annual  Report for the year ended  December
31,  2001.  It has been a very  difficult  year for all of us in  business  with
interest  rates on both  deposits  and loans  falling to levels of over 40 years
ago. The horrific  events of September 11th helped to bring us all together as a
nation and changed us in many ways that none of us would have thought  possible.
The banking industry  survived that crisis period very well and has proven to be
quite the resilient  force that it was originally  designed to be. Despite those
circumstances,  we still had a banner year at First Peoples Bank as evidenced by
the following growth patterns.

We closed the year with approximately $42 million in total assets, a 37% growth.
Loans totaled $32 million and grew by 79%. Deposits also increased by 32% to $34
million.

We formed a Holding Company in 2001. That action was approved by a wide majority
at a special  shareholder  meeting  held at the bank in  September.  Officially,
First Peoples Bank is now a 100% owned  subsidiary of FPB Bancorp,  Inc. The new
holding company allows us to utilize a number of options such as the opportunity
to offer new  investment  and  insurance  products  should we choose to get into
those areas.  We are currently in the process of exchanging your original shares
of bank stock into holding company stock. That exchange process is being handled
through our transfer agent, Registrar and Transfer Company.

Our  Internet  product has now been  offered for over a year and its success has
been somewhat  mixed.  Many people are still concerned about using the "net" for
personal  and  business  activities.  But the  process  is very  safe and a real
timesaver,  especially the online personal bill payment services. The commercial
application  is also very  easy to use and  allows  our  business  customers  to
monitor activity on their accounts prior to receiving their monthly  statements.
This can help a business  owner not only track their  deposits  but also monitor
them daily for suspicious activity.

Perhaps the most exciting  development  in 2001 was our purchase of a lot in Ft.
Pierce for our first branch  location.  The property is located at the corner of
Virginia Ave. and 25th Street.  Our new sign has been on the site since October.
We are extremely  excited about the Ft. Pierce  marketplace,  as over 40% of our
shareholders  work or live  there.  We  anticipate  a late  2002 or  early  2003
starting  date  and a mid 2003  target  date to open.  All of  these  dates  are
tentative  and  subject  to  change.  We will  provide  periodic  updates on the
progress of the new facility and its timetable.

We are currently  working on a new stock  offering for FPB Bancorp,  Inc.  which
will be ready for circulation  sometime in late April or early May of this year.
It is known as a Rights/Community Stock Offering and will allow for shareholders
to purchase  additional  shares of stock in the new holding company equal to the
number of shares they now own for an amount less than the current  market price.
Depositors  will also have an opportunity  to purchase any remaining  shares not
exercised and then whatever is left over will be available on the open market to
the general  public at a higher  figure than the  shareholder's  or  depositor's
price.

First Peoples Bank staff and management continue to be involved in all facets of
the community.  Whether it is a community event or project,  charitable endeavor
or  participation  in a walkathon or building  homes for  Habitat,  our staff is
involved and committed to this area and its success.  We try to contribute to as
many worthwhile area activities as possible with our time, talent and charitable
donations.

The  officers  and  staff  have  again  pledged  some very  ambitious  goals and
objectives  in the budget  process for 2002.  We are  determined  to continue to
offer the highest and most personalized service to our customers. We continue to
stress total  relationship  banking in everything that we do and in the services
we  provide.  Our  ultimate  goal is to  provide a maximum  return to all of our
shareholders for their investment in First Peoples Bank.



                                       2
<PAGE>



Privacy is a real concern nationwide and it is common knowledge in the financial
industry that community banks have always provided safeguards and high standards
in protecting personal  information for its customers.  However, new legislation
was implemented in 2001 nationally and it called for more stringent treatment of
a customer's  private  information.  First  Peoples  Bank  developed an internal
privacy  policy  and it was  put in  effect  before  the  mandatory  July  2002,
effective date.

We ended  2001 on a  positive  earnings  note,  with our first  full  quarter of
profitability for the period of October through December. We had over 3,600 loan
and deposit accounts at year-end.  Our courier service for commercial  customers
reaches over 100 accounts weekly and our total teller  transactions  continue to
increase  dramatically.  Delinquent  loan  accounts  continue to be very low and
manageable.  Most  people now think of First  Peoples  Bank along with the other
larger  banks  when  they  come  into  our area and are  looking  for  financial
services.

We are grateful for your continued support and look forward to seeing you at the
annual  meeting  on April  24,  2002.  It will be held at 5 p.m.  at the  bank's
facility at 1301 Port St Lucie Boulevard, Port St. Lucie, FL 34952.

On behalf of the entire  bank,  its staff and  directors,  we wish to once again
thank you for your  commitment to community  banking.  If you haven't yet opened
your account or stopped by for a visit, please do so soon.



Sincerely,





David W. Skiles                             Gary A. Berger
President CEO                               Board Chairman
















                                       3
<PAGE>

<TABLE>

                             SELECTED FINANCIAL DATA

 December 31, 2001, 2000 and 1999 and the Years Ended December 31, 2001 and 2000
                     and the Period Ended December 31, 1999
                (Dollars in thousands, except per share figures)



                                                                                        2001         2000        1999
                                                                                        ----         ----        ----
At Year End:

<S>                                                                                <C>               <C>         <C>
Cash and cash equivalents......................................................... $    2,448        4,380       1,758
Securities........................................................................      5,479        6,987       7,415
Loans, net........................................................................     32,215       17,965       6,530
All other assets..................................................................      1,564        1,200         973

     Total assets................................................................. $   41,706       30,532      16,676

Deposit accounts..................................................................     33,933       25,814      11,797
All other liabilities.............................................................      3,683          574         555
Stockholders' equity..............................................................      4,090        4,144       4,324

     Total liabilities and stockholders' equity................................... $   41,706       30,532      16,676

For the Period:

Total interest income............................................................. $    2,519        1,755         472
Total interest expense............................................................      1,046          815         172

Net interest income...............................................................      1,473          940         300

Provision for loan losses.........................................................        202          162          60

Net interest income after provision for loan losses...............................      1,271          778         240

Noninterest income................................................................        214          141          30
Noninterest expenses..............................................................      1,557        1,282         780

Loss before income tax credit.....................................................        (72)        (363)       (510)
Income tax credit.................................................................        (23)        (136)       (173)

Net loss.......................................................................... $      (49)        (227)       (337)

Net loss per share................................................................ $     (.10)        (.46)       (.69)

Weighted-average number of shares outstanding.....................................    489,410      489,410     489,410

Ratios and Other Data:

Return on average assets..........................................................       (.14%)       (.93%)     (3.94%)
Return on average equity..........................................................      (1.17%)      (5.40%)    (10.50%)
Average equity as a percentage of average assets..................................      12.36%       17.19%      37.50%
Interest-rate spread during the period............................................       3.27%        2.40%       2.96%
Net yield on average interest-earning assets......................................       4.59%        4.13%       3.95%
Noninterest expenses to average assets............................................       4.60%        5.24%       9.12%
Ratio of average interest-earning assets to average
     interest-bearing liabilities.................................................       1.40         1.48        1.43
Nonperforming loans and foreclosed real estate as a percentage of
     total assets at end of year..................................................        NIL          NIL         NIL
Allowance for loan losses as a percentage
     of total loans at end of year................................................      1.10%         1.11%        .91%
Total number of banking offices...................................................          1            1           1
Total shares outstanding at end of year...........................................    489,410      489,410     489,410
Book value per share at end of year...............................................     $ 8.36      $  8.47      $ 8.83
</TABLE>




                                       4
<PAGE>

                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

  December 31, 2001 and 2000 and for the Years Ended December 31, 2001 and 2000


General

FPB  Bancorp,  Inc. is a bank  holding  company.  FPB Bancorp owns 100% of First
Peoples Bank.

First  Peoples is a bank whose  deposits  are  insured  by the  Federal  Deposit
Insurance  Corporation.  First Peoples provides a variety of banking services to
small  businesses and residents and individuals in St. Lucie County and Northern
Martin County,  Florida.  First Peoples  currently has one retail banking office
located at 1301 SE Port St.  Lucie  Boulevard  in Port St.  Lucie,  Florida.  At
December 31, 2001, First Peoples had total consolidated  assets of $41.7 million
and total consolidated stockholders' equity of $4.1 million.

Regulation and Legislation

As a  banking  holding  company,  FPB  Bancorp  is  regulated  by the  Board  of
Governor's of the Federal Reserve System. As a state-chartered  commercial bank,
First Peoples is subject to extensive  regulation  by the Florida  Department of
Banking and Finance and the Federal Deposit Insurance Corporation. First Peoples
files reports with the Florida Department and the FDIC concerning its activities
and financial condition,  in addition to obtaining regulatory approvals prior to
entering into certain transactions such as mergers with or acquisitions of other
financial  institutions.  Periodic  examinations  are  performed  by the Florida
Department  and the FDIC to monitor our compliance  with the various  regulatory
requirements.

Credit Risk

FPB Bancorp's primary business is making  commercial,  business,  consumer,  and
real estate loans. That activity entails potential loan losses, the magnitude of
which  depend on a variety of economic  factors  affecting  borrowers  which are
beyond the  control of FPB  Bancorp.  While  underwriting  guidelines  have been
instituted  and credit review  procedures  have been put in place to protect FPB
Bancorp from avoidable  credit losses,  some losses will  inevitably  occur.  At
December  31,  2001,  FPB  Bancorp had no  nonperforming  assets and has minimal
charge-off experience.

<TABLE>
The following table presents information  regarding our total allowance for loan
losses as well as the  allocation  of such amounts to the various  categories of
loans at December 31, (dollars in thousands):

                                                      2001                    2000                    1999
                                                          Loans to                Loans to                Loans to
                                                             Total                   Total                   Total
                                                Amount       Loans      Amount       Loans       Amount      Loans

         <S>                                     <C>         <C>         <C>         <C>           <C>       <C>
         Commercial loans....................... $ 116       32.31%      $  75       37.31%        $ 19      44.27%
         Commercial real estate loans...........   108       30.09          52       25.87           21      29.52
         Residential real estate loans..........     6        1.67          10        4.98            1       2.01
         Consumer loans.........................   129       35.93          64       31.84           19      24.20
                                                   ---       -----          --       -----           --      -----

         Total allowance for loan losses........ $ 359      100.00%      $ 201      100.00%        $ 60     100.00%
                                                 =====      ======       =====      ======         ====     ======

         The allowance for loan losses as a
           percentage of total loans
           outstanding..........................              1.10 %                  1.11%                    .91%
                                                              ====                    ====                     ===
</TABLE>







                                       5
<PAGE>


The following  table sets forth the  composition of FPB Bancorp's loan portfolio
at December 31, (dollars in thousands):
<TABLE>


                                                             2001                   2000                 1999
                                                       ---------------       ----------------      ---------------
                                                                  % of                   % of                 % of
                                                       Amount    Total       Amount     Total      Amount    Total
                                                       ------    -----       ------     -----      ------    -----

               <S>                                   <C>         <C>       <C>          <C>       <C>        <C>
               Commercial......................      $ 11,667    35.82%    $  6,037     33.28%    $ 2,904    44.27%
               Commercial real estate..........        11,192    34.36        6,420     35.40       1,936    29.52
               Consumer........................         8,472    26.01        5,393     29.73       1,587    24.20
               Residential real estate.........         1,241     3.81          289      1.59         132     2.01
               --------------------------------         -----     ----          ---      ----         ---     ----

                  .............................        32,572   100.00%      18,139    100.00%      6,559   100.00%
               Less:                                            ======                 ======               ======
                 Deferred fees.................             2                    27                    31
                Allowance for loan losses......          (359)                 (201)                  (60)
                                                         ----                  ----                   ---

               Loans, net......................      $ 32,215              $ 17,965               $ 6,530
                                                     ========              ========               =======
</TABLE>

Liquidity and Capital Resources

FPB Bancorp's  primary  source of cash during the year ended  December 31, 2001,
was from the proceeds from net deposit  inflows of $8.2  million.  Cash was used
primarily to purchase  securities and to originate  loans. At December 31, 2001,
we had outstanding  commitments to originate  loans  totalling $4.7 million.  At
December 31, 2001, First Peoples exceeded its regulatory liquidity requirements.

Investment Securities.  The following table sets forth the carrying value of our
securities portfolio at December 31 (in thousands):

                                                             2001        2000
     Securities available for sale:
         U.S. Treasury securities........................  $      -    $ 1,996
         U.S. Government agency securities...............     3,481      4,991
         Mortgage-backed securities......................     1,015          -
                                                           --------    -------

                                                           $  4,496    $ 6,987
                                                           ========    =======
     Securities held to maturity-
         Mortgage-backed securities......................  $    963    $     -
                                                            ========    =======




                                       6
<PAGE>

The following table sets forth, by maturity  distribution,  certain  information
pertaining to the securities portfolio as follows (dollars in thousands):
<TABLE>

                                                    From One Year      From Five Years
                                 One Year or Less   to Five Years       to Ten Years       Over Ten Years             Total
                                 ----------------   -------------       ------------       --------------             -----
                                Carrying  Average  Carrying  Average  Carrying  Average   Carrying  Average     Carrying Average
                                   Value    Yield     Value    Yield   Value     Yield     Value     Yield       Value    Yield
                                   -----    -----     -----    -----   -----     -----     -----     -----       -----    -----
<S>                           <C>                  <C>          <C>     <C>                   <C>               <C>          <C>
December 31, 2001:
Securities Available for Sale:
     U.S. Government
       agency securities..    $     -       -%     $ 3,481      5.03%   $   -        -%       $   -       -%    $ 3,481      5.03%
     Mortgage-backed
       securities.........          -       -%         395      6.25      620     5.50            -       -       1,015      5.79

       Total..............    $     -       -%     $ 3,876      5.15%   $ 620     5.50%       $   -       -%    $ 4,496      5.20%

Securities Held to Maturity:
     Mortgage-backed
       securities.........    $     -       -%     $     -         -%   $   -        -%       $ 963    5.75%    $   963      5.75%

December 31, 2000:
Securities Available for Sale:
     U.S. Treasury
       securities.........    $ 1,996    5.31%     $     -         -%   $   -        -%       $   -       -%    $ 1,996       5.31%
     U.S. Government
       agency securities..        498    5.61        4,493      7.57        -        -            -       -       4,991      7.35

     Total................    $ 2,494    5.37%     $ 4,493      7.57%   $   -        -%       $   -       -%    $ 6,987      6.78%
</TABLE>















                                       7
<PAGE>

Regulatory Capital Requirements

Under FDIC  regulations,  First  Peoples is  required  to meet  certain  minimum
regulatory capital  requirements.  This is not a valuation allowance and has not
been  created by charges  against  earnings.  It  represents  a  restriction  on
stockholders' equity.

Quantitative  measures  established  by  regulation to ensure  capital  adequacy
require financial institutions to maintain minimum amounts and ratios (set forth
in the table below) of total and Tier I capital,  as defined in the regulations,
to  risk-weighted  assets,  also as  defined in the  regulations,  and of Tier I
capital to average assets.  Management  believes,  as of December 31, 2001, that
First Peoples met all capital adequacy requirements to which it is subject.
<TABLE>

                                                                                                  Minimum
                                                                                                 To Be Well
                                                                                              Capitalized Under
                                                                For Capital Adequacy          Prompt Corrective
                                                Actual                Purposes                Action Provisions
                                           -------------       ---------------------          ------------------
                                           Amount      %        Amount             %          Amount          %
                                           ------     ---       ------            ---          ------        ---
                                                               (Dollars in thousands)
<S>                                     <C>          <C>        <C>              <C>         <C>            <C>
     As of December 31, 2001:
         Total capital to Risk-
           Weighted assets..........    $ 4,277      13.03%     $ 2,623          8.00%       $ 3,284        10.00%
         Tier I Capital to Risk-
           Weighted Assets..........      3,919      11.94        1,313          4.00          1,970         6.00
         Tier I Capital
           to Total Assets..........      3,919      10.30        1,522          4.00          1,903         5.00

     As of December 31, 2000:
         Total capital to Risk-
           Weighted assets..........      4,044      21.24        1,523          8.00          1,904        10.00
         Tier I Capital to Risk-
           Weighted Assets..........      3,843      20.18          762          4.00          1,142         6.00
         Tier I Capital
           to Total Assets..........      3,843      13.11        1,173          4.00          1,466         5.00

</TABLE>









                                       8
<PAGE>


Market Risk

Market risk is the risk of loss from adverse changes in market prices and rates.
FPB Bancorp's market risk arises primarily from  interest-rate  risk inherent in
its  loan  and  deposit-taking  activities.  To that  end,  management  actively
monitors and manages its interest-rate risk exposure.  The measurement of market
risk associated  with financial  instruments is meaningful only when all related
and offsetting on- and  off-balance-sheet  transactions are aggregated,  and the
resulting  net  positions are  identified.  Disclosures  about the fair value of
financial instruments,  which reflect changes in market prices and rates, can be
found in Note 8 of Notes to Consolidated Financial Statements.

FPB Bancorp does not engage in trading or hedging activities and does not invest
in  interest-rate  derivatives  or enter into interest  rate swaps.  The primary
objective in managing  interest-rate  risk is to maximize  earnings and minimize
the potential  adverse  impact of changes in interest rates on FPB Bancorp's net
interest  income and capital,  while  adjusting  FPB  Bancorp's  asset-liability
structure to obtain the maximum yield-cost spread on that structure. FPB Bancorp
relies primarily on our asset-liability  structure to manage interest rate risk.
However,  a sudden and  substantial  increase  in interest  rates may  adversely
impact  our  earnings,  to the  extent  that  the  interest-earning  assets  and
interest-bearing  liabilities  do not  change  at the  same  speed,  to the same
extent, or on the same basis.

Asset and Liability Structure

As  part  of its  asset  and  liability  management  program,  FPB  Bancorp  has
established and implemented various internal asset-liability decision processes,
as well as  communications  and control  procedures  to aid us in  managing  our
earnings.  We believe that these  processes and  procedures  provide FPB Bancorp
with  better  capital  planning,  asset mix and  volume  controls,  loan-pricing
guidelines,  and deposit interest-rate guidelines which should result in tighter
controls and less exposure to interest-rate risk.

The matching of assets and  liabilities may be accomplished in part by examining
the extent to which such assets and  liabilities  are "interest rate  sensitive"
and by monitoring an institution's  interest rate sensitivity "gap." An asset or
liability is said to be interest rate sensitive within a specific time period if
it will mature or reprice within that time period. The interest-rate sensitivity
gap  is  defined  as  the  difference   between   interest-earning   assets  and
interest-bearing  liabilities  maturing or repricing within a given time period.
The gap ratio is computed as the amount of rate sensitive assets less the amount
of rate  sensitive  liabilities  divided by total  assets.  A gap is  considered
positive when the amount of interest-rate sensitive assets exceeds interest-rate
sensitive  liabilities.  A  gap  is  considered  negative  when  the  amount  of
interest-rate  sensitive  liabilities  exceeds  interest-rate  sensitive assets.
During a period of rising interest rates, a negative gap would adversely  affect
net  interest  income,  while a positive  gap would result in an increase in net
interest income. During a period of falling interest rates, a negative gap would
result  in an  increase  in net  interest  income,  while a  positive  gap would
adversely affect net interest income.

In order to minimize the potential for adverse effects of material and prolonged
increases in interest rates on the results of operations, we continue to monitor
asset and  liability  management  policies to better  match the  maturities  and
repricing terms of its interest-earning assets and interest-bearing liabilities.
Such policies  have  consisted  primarily of:  emphasizing  the  origination  of
adjustable-rate loans; maintaining a stable core deposit base; and maintaining a
significant portion of liquid assets consisting primarily of cash and short-term
securities.



                                       9
<PAGE>

The following table sets forth certain information  relating to interest-earning
assets and interest-bearing liabilities at December 31, 2001, that are estimated
to mature or are  scheduled  to  reprice  within the period  shown  (dollars  in
thousands):

<TABLE>

                                                                More             More
                                                    One       than One         than Five
                                                    Year      Year and         Years and       Over
                                                     or       Less than        Less than     Fifteen
                                                    Less     Five Years      Fifteen Years     Years     Total
                                                    ----     ----------      -------------     -----     -----

<S>                                               <C>          <C>              <C>            <C>        <C>
Mortgage and commercial loans (1):
    Commercial loans..........................    $  8,642     $  1,944         $  1,081       $    -     $ 11,667
    Commercial real estate loans..............       7,408        2,987              797            -       11,192
    Residential mortgage loans................           -          865              376            -        1,241
    Consumer loans............................       1,116        6,077            1,279            -        8,472
                                                  --------     --------         --------       ------     --------
         Total loans..........................      17,166       11,873            3,533            -       32,572
                                                  --------     --------         --------       ------     --------
Federal funds sold............................         353            -                -            -          353
Securities (2)................................         475        3,481            1,101          502        5,559
Time deposit..................................         100            -                -            -          100
                                                  --------     --------         --------       ------     --------
         Total rate-sensitive assets..........    $ 18,094     $ 15,354         $  4,634       $  502     $ 38,584
                                                  ========     ========         ========       ======     ========

Deposit accounts (3):
    Money market deposits.....................    $  6,545     $      -         $      -       $    -     $  6,545
    NOW deposits..............................       1,292            -                -            -        1,292
    Savings deposits..........................       3,419            -                -            -        3,419
    Certificates of deposit...................      11,325        4,587                -            -       15,912
                                                  --------     --------         --------       ------     --------
         Total deposit accounts...............      22,581        4,587                -            -       27,168

    Borrowings................................       2,842            -                -            -        2,842
                                                  --------     --------         --------       ------     --------
         Total rate-sensitive liabilities.....    $ 25,423     $  4,587         $      -       $    -     $ 30,010
                                                  ========     ========         ========       ======     ========

GAP (repricing differences)...................      (7,329)      10,767          4,634            502        8,574
                                                    ======       ======          =====            ===        =====

Cumulative GAP................................      (7,329)       3,438          8,072          8,574
                                                    ======        =====          =====          =====

Cumulative GAP/total assets...................      (17.57)%       8.24%         19.35%          5.85%
                                                    ======         ====          =====           ====
----------
<FN>
(1) In  preparing  the table  above,  adjustable-rate  loans are included in the
    period in which the interest  rates are next scheduled to adjust rather than
    in the period in which the loans  mature.  Fixed-rate  loans are  scheduled,
    including repayment, according to their maturities.

(2) Securities are scheduled through the maturity dates and include Federal Home
    Loan Bank stock.

(3) Money-market,  NOW, and savings  deposits  are regarded as ready  accessible
    withdrawable  accounts.  All other time deposits are  scheduled  through the
    maturity dates.
</FN>
</TABLE>


                                       10
<PAGE>


The following table reflects the contractual  principal  repayments by period of
the loan portfolio at December 31, 2001 (in thousands):

<TABLE>

                                                                                                                Real
                                                                                                               Estate
Years Ending                                                                               Commercial        Construction
         December 31,                                                                        Loans             Loans
         ------------                                                                        -----             -----

           <S>                                                                              <C>               <C>
           2002..........................................................................   $  4,167          $   50
           2003..........................................................................      1,584              72
           2004..........................................................................      1,315              72
           2005-2006.....................................................................      1,779             145
           2007-2008.....................................................................      1,039             145
           2009 & beyond.................................................................      1,783             477
                                                                                               -----             ---

           Total.........................................................................   $ 11,667          $  961
</TABLE>

Of the $8,411 of loans due after 2002,  19.86% of such loans have fixed interest
rates and 80.14% have adjustable interest rates.

The  following  table sets forth total loans  originated  and repaid  during the
period ended December 31 (in thousands):
<TABLE>

                                                                                                    2001       2000
                                                                                                    ----       ----
              Originations:
                  <S>                                                                           <C>        <C>
                  Commercial loans............................................................  $ 12,826   $  8,539
                  Commercial real estate loans................................................     2,138      4,652
                  Residential mortgage loans..................................................       687        158
                  Consumer loans..............................................................     7,782      5,675
                                                                                                   -----      -----

                           Total loans originated.............................................    23,433     19,024

                  Principal reductions........................................................     9,000      7,444
                                                                                                   -----      -----

                  Increase in total loans.....................................................  $ 14,433   $ 11,580
                                                                                                ========   ========
</TABLE>









                                       11
<PAGE>

The following  table shows the  distribution  of, and certain other  information
relating to deposit  accounts by type  (dollars in  thousands):
<TABLE>

                                                                                       At December 31,
                                                                          2001                           2000
                                                                                 % of                           % of
                                                                 Amount         Deposits        Amount       Deposits
                                                                 ------         --------        ------       --------

         <S>                                                  <C>                 <C>         <C>               <C>
         Demand deposits..................................    $   6,825           20.08%      $  6,298          24.40%
         Money-market deposits............................        6,545           19.25          2,591          10.04
         NOW deposits.....................................        1,292            3.80          1,239           4.80
         Savings deposits.................................        3,419           10.06          2,945          11.40
                                                               --------          ------       --------         ------

                  Subtotal................................       18,081           53.19         13,073          50.64
                                                               --------          ------       --------         ------

         Certificate of deposits:
                  1.00% - 1.99%...........................          154             .45              -              -
                  2.00% - 2.99%...........................        1,540            4.53            149            .58
                  3.00% - 3.99%...........................        3,933           11.57              -              -
                  4.00% - 4.99%...........................        4,688           13.79              9            .03
                  5.00% - 5.99%...........................        2,334            6.87            549           2.13
                  6.00% - 6.99%...........................        3,055            8.99         11,484          44.49
                  7.00% - 7.99%...........................          208             .61            550           2.13
                                                               --------          ------       --------         ------
         Total certificates of deposit (1)................       15,912           46.81         12,741          49.36
                                                               --------          ------       --------         ------
         Total deposits...................................     $ 33,993          100.00%      $ 25,814         100.00%
                                                               ========          ======       ========         ======

<FN>
----------
(1)   Included  individual  retirement accounts ("IRAs") totaling $1,058,000 and
      $907,000  at December  31, 2001 and 2000,  all of which are in the form of
      certificates of deposit.
</FN>
</TABLE>

The following table presents by various  interest rate categories the amounts of
certificates  of deposit at December 31, 2001,  which mature  during the periods
indicated (in thousands):
<TABLE>

                                                                   Year Ending December 31,
                                                     ----------------------------------------------------------------
                                                     2002           2003           2004           2005           2006         Total
                                                     ----           ----           ----           ----           ----         -----

<S>     <C>                                       <C>           <C>              <C>             <C>            <C>          <C>
1.00% - 1.99% ............................        $   154       $      -         $    -          $   -          $   -        $   154
2.00% - 2.99% ............................          1,501             39              -              -              -          1,540
3.00% - 3.99% ............................          2,685          1,157             91              -              -          3,933
4.00% - 4.99% ............................          4,217            355             14              -            102          4,688
5.00% - 5.99% ............................          2,131            104             99              -              -          2,334
6.00% - 6.99% ............................            529          2,513              -             13              -          3,055
7.00% - 7.99% ............................            108            100              -              -              -            208
                                                  -------        -------        -------        -------        -------        -------
Total certificates of deposit ............        $11,325        $ 4,268        $   204        $    13        $   102        $15,912
                                                  =======        =======        =======        =======        =======        =======
</TABLE>

Jumbo certificates ($100,000 and over) mature as follows (in thousands):
<TABLE>

                                                                                      December 31,
                                                                                      ------------
                                                                                    2001        2000
                                                                                    ----        ----

     <S>                                                                         <C>       <C>
     Due three months or less..............................................      $ 1,153   $   500
     Due over three months to six months...................................          780       632
     Due over six months to one year.......................................          918       602
     Due over one year to five years.......................................        2,188       971
                                                                                   -----       ---

                                                                                 $ 5,039   $ 2,705
                                                                                 =======   =======
</TABLE>






                                       12
<PAGE>

Results of Operations

FPB Bancorp's  operating  results depend  primarily on our net interest  income,
which is the difference between interest income on  interest-earning  assets and
interest  expense  on  interest-bearing  liabilities,  consisting  primarily  of
deposits.  Net interest  income is determined by the  difference  between yields
earned on interest-earning assets and rates paid on interest-bearing liabilities
("interest-rate spread") and the relative amounts of interest-earning assets and
interest-bearing  liabilities. FPB Bancorp's interest-rate spread is affected by
regulatory,  economic,  and competitive  factors that influence  interest rates,
loan demand, and deposit flows. In addition,  our net earnings are also affected
by the level of nonperforming  loans and foreclosed real estate,  as well as the
level of our noninterest income, and our noninterest expenses,  such as salaries
and employee benefits, occupancy and equipment costs and income taxes.

The following table sets forth, for the period indicated, information regarding:
(i)  the  total   dollar   amount  of   interest   and   dividend   income  from
interest-earning  assets and the resultant  average yield; (ii) the total dollar
amount of interest  expense on  interest-bearing  liabilities  and the resultant
average costs; (iii) net  interest/dividend  income;  (iv) interest rate spread;
(v) net interest  margin.  Average  balances are based on average daily balances
(dollars in thousands).
<TABLE>


                                                                  Years Ended December 31,
                                           -----------------------------------------------------------------------
                                                         2001                                2000
                                           ---------------------------------      --------------------------------
                                                       Interest     Average                Interest       Average
                                            Average      and         Yield/     Average      and           Yield/
                                            Balance    Dividends     Rate       Balance    Dividends       Rate
                                            -------    ---------     ----       -------    ---------       ----
<S>                                        <C>          <C>          <C>       <C>         <C>             <C>
Interest-earning assets:
     Loans..............................   $ 24,379     $ 2,105      8.63%     $ 11,917    $ 1,102         9.25%
     Securities.........................      4,822         293      6.08         7,907        474         5.99
     Other interest-earning assets (1)..      2,899         121      4.17         2,923        179         6.12
                                              -----         ---                   -----        ---

         Total interest-earning assets..     32,100       2,519      7.85        22,747      1,755         7.72
                                                          =====                              =====

Noninterest-earning assets..............      1,729                               1,704
                                              -----                               -----

         Total assets...................   $ 33,829                            $ 24,451
                                           ========                            ========

Interest-bearing liabilities:
     Savings, NOW and money-market
         deposits.......................      7,963         219      2.75         5,870        221         3.76
     Certificates of deposit............     14,622         818      5.59         9,457        594         6.28
     Other borrowings...................        264           9      3.44             -          -            -
                                                ---         ---                   -----        ---

         Total interest-bearing
             liabilities................     22,849       1,046      4.58        15,327        815         5.32
                                                          -----                                ---
Noninterest-bearing liabilities.........      6,799                               4,922
Stockholders' equity....................      4,181                               4,202
                                              -----                               -----

         Total liabilities and
             stockholders' equity.......   $ 33,829                            $ 24,451
                                           ========                            ========

Net interest income.....................                $ 1,473                            $   940
                                                        =======                            =======

Interest-rate spread....................                             3.27%                                 2.40%
                                                                     ====                                  ====

Net interest margin (2).................                             4.59%                                 4.13%
                                                                     ====                                  ====

Ratio of average interest-earning
     assets to average interest-bearing
     liabilities........................       1.40                                1.48
                                               ====                                ====

<FN>
(1) Other interest-earning assets included federal funds sold, Federal Home Loan
    Bank stock and time deposits.
(2) Net interest margin is net interest income divided by total interest-earning
    assets.
</FN>
</TABLE>



                                       13
<PAGE>

Rate/Volume Analysis

The following table sets forth certain information regarding changes in interest
income and  interest  expense for the periods  indicated.  For each  category of
interest-earning  assets  and  interest-bearing   liabilities,   information  is
provided  on  changes  attributable  to (1)  changes  in  rate  (change  in rate
multiplied by prior volume),  (2) changes in volume (change in volume multiplied
by prior  rate) and (3) changes in  rate-volume  (change in rate  multiplied  by
change in volume).
<TABLE>

Year Ended December 31, 2001 vs. 2000:
                                                                                      Increase (Decrease) Due to
                                                                                      --------------------------
                                                                                                      Rate/
                                                                                  Rate    Volume     Volume     Total
                                                                                  ----    ------     ------     -----
                                                                                      (In thousands)
Interest-earning assets:
<S>                                                                              <C>     <C>          <C>     <C>
    Loans....................................................................    $ (73)  $ 1,152      $(76)   $ 1,003
    Securities...............................................................        7      (185)       (3)      (181)
    Other interest-earning assets............................................      (57)       (1)        -        (58)
                                                                                   ---        --       ---        ---

      Total..................................................................     (123)      966       (79)       764
                                                                                  ----       ---       ---        ---

Interest-bearing liabilities:
    Deposits:
      Savings, demand, money-market and NOW deposits.........................      (59)       79       (22)        (2)
      Time deposits..........................................................      (65)      324       (35)       224
      Other borrowings.......................................................        -         -         9          9
                                                                                  ----       ---       ---        ---
      Total..................................................................     (124)      403       (48)       231
                                                                                  ----       ---       ---        ---
Net change in net interest income............................................    $   1   $   563      $(31)   $   533
                                                                                 =====   =======      ====    =======
</TABLE>



                                       14
<PAGE>


              Comparison of Years Ended December 31, 2001 and 2000

General. Net consolidated loss for the year ended December 31, 2001, was $49,000
  or $.10 per basic and diluted share  compared to net loss $227,000 or $.46 per
  basic and diluted share for the year ended December 31, 2000. This improvement
  in net  operating  results was  primarily  due to an increase in net  interest
  income and noninterest income,  partially offset by an increase in noninterest
  expenses and the provision for loan losses, all as a result of our growth.

Interest Income.  Interest  income  increased to $2.5 million for the year ended
  December  31, 2001,  from $1.8  million for the year ended  December 31, 2000.
  Interest income on loans increased to $2.1 million from $1.1 million due to an
  increase in the average loan portfolio balance for the year ended December 31,
  2001, partially offset by a decrease in the  weighted-average  yield earned on
  the  portfolio to 8.63% for 2001 from 9.25% for 2000.  Interest on  securities
  decreased to $0.3 million due to a decrease in the average  securities balance
  in 2001,  partially  offset by an increase in the  average  yield  earned from
  5.99%  in 2000 to 6.08% in 2001.  Interest  on other  interest-earning  assets
  decreased to $0.1 million  primarily due to a decrease in the average  balance
  and a decrease in the weighted-average yield earned on those assets.

Interest Expense.  Interest expense  increased to $1.0 million in 2001 from $0.8
  million in 2000.  Interest expense increased due to the $7.3 million growth in
  average  interest-bearing   deposits  in  2001,  despite  a  decrease  in  the
  weighted-average rate paid on deposits.

Provision  for Loan  Losses.  The  provision  for loan  losses  was  charged  to
  operations  to bring the total  allowance  to a level  deemed  appropriate  by
  management and is based upon historical experience, the volume and the type of
  lending conducted by FPB Bancorp. In addition, industry standards, the amounts
  of  nonperforming  loans,  general economic  conditions,  particularly as they
  relate to market areas, and other factors related to the collectibility of our
  loan portfolio were  considered.  The provision for loan losses increased from
  $162,000 in 2000 to $202,000 in 2001.  The increase  was due  primarily to the
  $14.4  million  increase  in the loan  portfolio  during the year.  Management
  believes  that the  allowance  for loan  losses of  $359,000  is  adequate  at
  December 31, 2001.

Noninterest  Income.  Noninterest  income  increased  from  $141,000  in 2000 to
  $214,000 in 2001.  This was  primarily  due to  increased  service  charges on
  deposit accounts in 2001, compared to 2000.

Noninterest Expense. Total noninterest expense increased to $1.6 million for the
  year ended  December  31,  2001,  compared to $1.3  million in 2000.  This was
  primarily due to increases in employee compensation and benefits and occupancy
  and equipment expense all due to the overall growth of FPB Bancorp.

Income Taxes.  The income tax benefit was $136,000 (an effective  rate of 37.5%)
  for 2000  compared to a $23,000 (an  effective  rate of 31.9%) for 2001. It is
  management's  belief that it is more likely than not the benefit and  deferred
  tax asset recognized will be realized in future periods.


Impact of Inflation and Changing Prices

The financial statements and related data presented herein have been prepared in
accordance with accounting principles generally accepted in the United States of
America,  which  requires the  measurement  of financial  position and operating
results  in terms of  historical  dollars,  without  considering  changes in the
relative  purchasing  power of money  over time due to  inflation.  Unlike  most
industrial  companies,  substantially  all of our  assets  and  liabilities  are
monetary in nature. As a result,  interest rates have a more significant  impact
on our  performance  than the effects of general  levels of inflation.  Interest
rates do not necessarily  move in the same direction or in the same magnitude as
the prices of goods and services, since such prices are affected by inflation to
a larger extent than interest rates.


                                       15
<PAGE>



                        FPB BANCORP, INC. AND SUBSIDIARY

                           Consolidated Balance Sheets
                     ($ in thousands, except share amounts)
<TABLE>

                                                                                                              At December 31,
                                                                                                         -------------------------
     Assets                                                                                              2001                 2000
                                                                                                         ----                 ----

<S>                                                                                                   <C>                     <C>
Cash and due from banks ..................................................................            $  2,095                1,494
Federal funds sold .......................................................................                 353                2,886
                                                                                                      --------               ------
              Total cash and cash equivalents ............................................               2,448                4,380

Time deposit .............................................................................                 100                  100
Securities available for sale ............................................................               4,496                6,987
Securities held to maturity ..............................................................                 983                    -
Loans, net of allowance for loan losses of  $359 and $201 ................................              32,215               17,965
Premises and equipment, net ..............................................................                 616                  366
Federal Home Loan Bank stock, at cost ....................................................                  80                   29
Accrued interest receivable ..............................................................                 211                  201
Deferred income taxes ....................................................................                 444                  418
Other assets .............................................................................                 113                   86
                                                                                                      --------               ------
              Total assets ...............................................................            $ 41,706               30,532
                                                                                                      ========               ======


    Liabilities and Stockholders' Equity

Liabilities:
    Noninterest-bearing demand deposits ..................................................               6,825                6,298
    Savings, NOW and money-market deposits ...............................................              11,256                6,775
    Time deposits ........................................................................              15,912               12,741
                                                                                                      --------               ------
              Total deposits .............................................................              33,993               25,814

    Federal funds purchased ..............................................................               1,500                  -
    Federal Home Loan Bank advance .......................................................               1,000                  -
    Notes payable ........................................................................                 342                  -
    Official checks ......................................................................                 742                  534
    Other liabilities ....................................................................                  39                   40
                                                                                                      --------               ------
              Total liabilities ..........................................................              37,616               26,388
                                                                                                      --------               ------
Commitments and contingencies (Notes 4 and 8)

Stockholders' equity:
    Preferred stock, $.01 par value; 1,000,000 shares authorized,
         no shares issued or outstanding .................................................                 -                    -
    Common stock, $.01 par value; 5,000,000 shares authorized,
         489,410 shares issued and outstanding ...........................................                   5                    5
    Additional paid-in capital ...........................................................               4,846                4,846
    Accumulated deficit ..................................................................                (761)                (712)
    Accumulated other comprehensive income ...............................................                 -                      5
                                                                                                      --------               ------
              Total stockholders' equity .................................................               4,090                4,144
                                                                                                      --------               ------
              Total liabilities and stockholders' equity .................................            $ 41,706               30,532
                                                                                                      ========               ======
</TABLE>

See Accompanying Notes to Consolidated Financial Statements.




                                       16
<PAGE>

                        FPB BANCORP, INC. AND SUBSIDIARY

                      Consolidated Statements of Operations
                     ($ in thousands, except share amounts)

<TABLE>
                                                                                                         Year Ended December 31,
                                                                                                         -----------------------
                                                                                                     2001                     2000
                                                                                                     ----                     ----
Interest income:
<S>                                                                                              <C>                          <C>
    Loans ........................................................................               $   2,105                    1,102
    Securities ...................................................................                     293                      474
    Other ........................................................................                     121                      179
                                                                                                     -----                    -----
              Total interest income ..............................................                   2,519                    1,755


Interest expense:
    Deposits .....................................................................                   1,037                      815
    Other ........................................................................                       9                      -
                                                                                                     -----                    -----
              Total interest expense .............................................                   1,046                      815
                                                                                                     -----                    -----
Net interest income ..............................................................                   1,473                      940

              Provision for loan losses ..........................................                     202                      162
                                                                                                     -----                    -----
Net interest income after provision for loan losses ..............................                   1,271                      778
                                                                                                     -----                    -----
Noninterest income:
    Service charges and fees on deposit accounts .................................                     179                      122
    Other fees ...................................................................                      22                       15
    Other ........................................................................                      13                        4
                                                                                                     -----                    -----
              Total noninterest income ...........................................                     214                      141
                                                                                                     -----                    -----
Noninterest expenses:
    Salaries and employee benefits ...............................................                     654                      537
    Occupancy and equipment ......................................................                     322                      259
    Advertising ..................................................................                      68                       82
    Professional fees ............................................................                     114                       68
    Data processing ..............................................................                     111                       62
    Insurance expense ............................................................                      24                       28
    Supplies .....................................................................                      45                       25
    Other ........................................................................                     219                      221
                                                                                                     -----                    -----
              Total noninterest expenses .........................................                   1,557                    1,282
                                                                                                     -----                    -----
Loss before income tax benefit ...................................................                     (72)                    (363)

    Income tax benefit ...........................................................                     (23)                    (136)

Net loss .........................................................................               $     (49)                    (227)
                                                                                                 =========                  =======

Loss per share basic and diluted .................................................               $    (.10)                    (.46)
                                                                                                 =========                  =======

Weighted-average number of shares, basic and diluted .............................                 489,410                  489,410
                                                                                                 =========                  =======

</TABLE>
See Accompanying Notes to Consolidated Financial Statements.


                                       17
<PAGE>

                        FPB BANCORP, INC. AND SUBSIDIARY

                 Consolidated Statements of Stockholders' Equity

                     Years Ended December 31, 2001 and 2000
                     ($ in thousands, except share amounts)
<TABLE>



                                                                                                     Accumulated
                                                                                                        Other
                                                                                                       Compre-
                                            Common Stock            Additional                         hensive          Total
                                         --------------------         Paid-In      Accumulated         Income       Stockholders'
                                         Shares        Amount         Capital        Deficit           (Loss)          Equity
                                         ------        ------         -------        -------           ------          ------

<S>                                     <C>             <C>           <C>               <C>             <C>             <C>
Balance at December 31, 1999........    489,410         $ 5           4,846             (485)           (42)            4,324

Comprehensive income (loss):

         Net loss...................     -               -             -                (227)            -               (227)

         Net unrealized gain on
             securities available
             for sale, net of
             tax of $27.............     -               -             -                 -               47                47

         Comprehensive income
             (loss).................                                                                                     (180)

Balance at December 31, 2000........    489,410           5           4,846             (712)             5             4,144

Comprehensive income (loss):

         Net loss...................     -               -             -                 (49)            -                (49)

         Net unrealized gain on
             securities available
             for sale, net of
             tax of $3..............     -               -             -                 -               (5)               (5)

         Comprehensive income
             (loss).................                                                                                      (54)

Balance at December 31, 2001........    489,410         $ 5           4,846             (761)           -               4,090

</TABLE>

See Accompanying Notes to Consolidated Financial Statements.


                                       18
<PAGE>


                        FPB BANCORP, INC. AND SUBSIDIARY

                      Consolidated Statements of Cash Flows
                                ($ in thousands)
<TABLE>

                                                                                                            Year Ended December 31,
                                                                                                            -----------------------
                                                                                                         2001                  2000
                                                                                                         ----                  ----
<S>                                                                                                    <C>                     <C>
Cash flows from operating activities:
    Net loss ...............................................................................           $    (49)               (227)
    Adjustments to reconcile net loss to net cash provided by
      (used in) operating activities:
         Depreciation ......................................................................                 92                  81
         Provision for loan losses .........................................................                202                 162
         Credit for deferred income taxes ..................................................                (23)               (136)
         Net amortization of loan fees .....................................................                 14                  34
         Net amortization of securities ....................................................                (18)                 (9)
         Increase in accrued interest receivable ...........................................                (10)               (113)
         Increase in other assets ..........................................................                (27)                (34)
         Increase in official checks and other liabilities .................................                207                  20
                                                                                                            ---                  --

                  Net cash provided by (used in) operating activities ......................                388                (222)
                                                                                                            ---                ----

Cash flows from investing activities:
    Purchase of securities available for sale ..............................................             (5,122)             (2,487)
    Purchase of securities held to maturity ................................................             (1,004)                -
    Maturities and calls of securities available for sale ..................................              7,500                 -
    Principal payments of securities available for sale ....................................                124               2,997
    Principal payments of held to maturity securities ......................................                 20                 -
    Net increase in loans ..................................................................            (14,466)            (11,631)
    Purchase of Federal Home Loan Bank stock ...............................................                (51)                -
    Purchase of premises and equipment .....................................................               (342)                (52)
                                                                                                           ----                 ---

                  Net cash used in investing activities ....................................            (13,341)            (11,173)
                                                                                                        -------             -------

Cash flows from financing activities:
    Net increase in deposits ...............................................................              8,179              14,017
    Increase in other borrowings ...........................................................              1,500                 -
    Increase in Federal Home Loan Bank advance .............................................              1,000                 -
    Increase in notes payable ..............................................................                342                 -
                                                                                                           ----                 ---

                  Net cash provided by financing activities ................................             11,021              14,017
                                                                                                         ------              ------

Net (decrease) increase in cash and cash equivalents .......................................             (1,932)              2,622

Cash and cash equivalents at beginning of period ...........................................              4,380               1,758
                                                                                                          -----               -----

Cash and cash equivalents at end of period .................................................           $  2,448               4,380
                                                                                                       ========               =====

Supplemental disclosure of cash flow information:
    Cash paid during the year for:
         Interest ..........................................................................           $  1,033                 807
                                                                                                       ========                 ===

         Income taxes ......................................................................           $    -                   -
                                                                                                       ========                 ===
    Noncash transactions:
         Accumulated other comprehensive income (loss),
              change in unrealized gain or loss on securities
              available for sale, net of tax ...............................................           $     (5)                 47
                                                                                                       ========                 ===
</TABLE>

See Accompanying Notes to Consolidated Financial Statements.




                                       19
<PAGE>

                        FPB BANCORP, INC. AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

               December 31, 2001 and 2000 and the Years Then Ended


(1)  Summary of Significant Accounting Policies
    Organization.  FPB Bancorp,  Inc. (the "Holding Company") owns 100% of First
         Peoples Bank (the "Bank") (collectively  referred to as the "Company").
         On  October  17,  2001,  the  Bank's  stockholders  approved  a plan of
         corporate   reorganization   under  which  the  Bank  would   become  a
         wholly-owned  subsidiary of the Holding  Company.  On December 3, 2001,
         the  Holding  Company  became  effective  and a majority  of the Bank's
         stockholders  exchanged  their common  shares for shares of the Holding
         Company. As a result, 489,410 shares of previously issued common shares
         of the Bank were  exchanged  for 489,410  common  shares of the Holding
         Company. The book value per share of the Bank stock is identical to the
         book value per share of the Holding  Company  stock after the exchange.
         The Holding  Company's  acquisition  of the Bank has been accounted for
         using a method similar to a pooling of interests and, accordingly,  the
         financial data for periods  presented  include the results of the Bank.
         The Holding Company operates as a one-bank holding company and its only
         business activity is the operation of the Bank.

         The  Bank  is a  state  (Florida)-chartered  commercial  bank  and  its
         deposits are insured by the Federal Deposit Insurance Corporation.  The
         Bank offers a variety of community  banking  services to individual and
         corporate  customers  through  its banking  office  located in Port St.
         Lucie, Florida.

         The following is a description of the significant  accounting  policies
         and  practices  followed  by  the  Company,   which  conform  with  the
         accounting  principles  generally  accepted  in the  United  States  of
         America and prevailing practices within the banking industry.

    Basis of Presentation.  The  consolidated  financial  statements include the
         Company and its subsidiary.  All significant  intercompany accounts and
         transactions have been eliminated in consolidation.

    Use  of  Estimates.   In  preparing  consolidated  financial  statements  in
         conformity with accounting  principles generally accepted in the United
         States  of  America,  management  is  required  to make  estimates  and
         assumptions  that affect the reported amounts of assets and liabilities
         as of the date of the balance  sheet and  reported  amounts of revenues
         and expenses during the reporting  period.  Actual results could differ
         from  those  estimates.   Material   estimates  that  are  particularly
         susceptible  to  significant  change  in the near  term  relate  to the
         determination of the allowance for loan losses and deferred tax assets.

    Cash and Cash  Equivalents.  For purposes of the consolidated  statements of
         cash flows,  cash and cash  equivalents  include  cash and balances due
         from banks and federal  funds sold,  both of which mature within ninety
         days.

                                                                     (continued)


                                       20
<PAGE>



                        FPB BANCORP, INC. AND SUBSIDIARY

              Notes to Consolidated Financial Statements, Continued


(1)  Summary of Significant Accounting Policies, Continued
    Securities. Securities may be classified as either trading, held to maturity
         or available for sale.  Trading  securities  are held  principally  for
         resale and recorded at their fair values.  Unrealized  gains and losses
         on  trading   securities   are  included   immediately  in  operations.
         Held-to-maturity  securities  are  those  which  the  Company  has  the
         positive  intent and  ability to hold to maturity  and are  reported at
         amortized cost. Available-for-sale securities consist of securities not
         classified as trading  securities nor as  held-to-maturity  securities.
         Unrealized holding gains and losses, net of tax, on  available-for-sale
         securities are reported as a net amount in other  comprehensive  income
         (loss). Gains and losses on the sale of  available-for-sale  securities
         are determined using the  specific-identification  method. Premiums and
         discounts on securities  available for sale are  recognized in interest
         income using the interest method over the period to maturity.

    Loans.  Loans  management  has  the  intent  and  ability  to  hold  for the
         foreseeable  future or until  maturity or pay-off are reported at their
         outstanding  principal adjusted for any charge-offs,  the allowance for
         loan losses, and any deferred fees or costs.

         Commitment fees, loan  origination fees and certain direct  origination
         costs are  capitalized  and recognized as an adjustment of the yield of
         the related loan.

         The accrual of interest on loans is  discontinued  at the time the loan
         is ninety days delinquent unless the loan is well collateralized and in
         process of collection.  In all cases, loans are placed on nonaccrual or
         charged-off  at an earlier date if  collection of principal or interest
         is considered doubtful.

         All  interest  accrued but not  collected  for loans that are placed on
         nonaccrual or  charged-off is reversed  against  interest  income.  The
         interest  on  these  loans  is  accounted  for  on  the  cash-basis  or
         cost-recovery method, until qualifying for return to accrual. Loans are
         returned to accrual status when all the principal and interest  amounts
         contractually   due  are  brought   current  and  future  payments  are
         reasonably assured.

    Allowance for Loan Losses.  The allowance for loan losses is  established as
         losses are  estimated  to have  occurred  through a provision  for loan
         losses  charged to  operations.  Loan  losses are  charged  against the
         allowance  when  management  believes  the  uncollectibility  of a loan
         balance is confirmed.  Subsequent  recoveries,  if any, are credited to
         the allowance.

         The  allowance  for loan  losses is  evaluated  on a  regular  basis by
         management  and is  based  upon  management's  periodic  review  of the
         collectibility  of the  loans in light of  historical  experience,  the
         nature and volume of the loan  portfolio,  adverse  situations that may
         affect  the  borrower's  ability  to  repay,  estimated  value  of  any
         underlying   collateral  and  prevailing  economic   conditions.   This
         evaluation is inherently  subjective as it requires  estimates that are
         susceptible  to  significant   revision  as  more  information  becomes
         available.


                                                                     (continued)


                                       21
<PAGE>

                        FPB BANCORP, INC. AND SUBSIDIARY

              Notes to Consolidated Financial Statements, Continued


(1)  Summary of Significant Accounting Policies, Continued
    Allowance for Loan Losses,  Continued.  A loan is considered  impaired when,
         based on  current  information  and  events,  it is  probable  that the
         Company will be unable to collect the  scheduled  payments of principal
         or interest  when due  according to the  contractual  terms of the loan
         agreement.  Factors considered by management in determining  impairment
         include  payment  status,  collateral  value,  and the  probability  of
         collecting  scheduled  principal and interest  payments when due. Loans
         that  experience  insignificant  payment delays and payment  shortfalls
         generally are not  classified as impaired.  Management  determines  the
         significance of payment delays and payment shortfalls on a case-by-case
         basis,  taking into consideration all of the circumstances  surrounding
         the loan and the  borrower,  including  the  length of the  delay,  the
         reasons for the delay,  the borrower's  prior payment  record,  and the
         amount of the shortfall in relation to the principal and interest owed.
         Impairment is measured on a loan by loan basis for commercial  loans by
         either the present  value of expected  future cash flows  discounted at
         the loan's effective interest rate, the loan's obtainable market price,
         or  the  fair  value  of  the  collateral  if the  loan  is  collateral
         dependent.

         Large  groups of smaller  balance  homogeneous  loans are  collectively
         evaluated for impairment.  Accordingly, the Company does not separately
         identify  individual  consumer  and  residential  loans for  impairment
         disclosures.

    Premises and Equipment.  Land is stated at cost. Leasehold  improvements and
         furniture,  fixtures and equipment are stated at cost less  accumulated
         depreciation and  amortization.  Depreciation and amortization  expense
         are  computed  using the  straight-line  method over the shorter of the
         lease term or the estimated useful life of each type of asset.

    Transfer of Financial  Assets.  Transfers of financial  assets are accounted
         for as  sales,  when  control  over the  assets  has been  surrendered.
         Control over  transferred  assets is deemed to be surrendered  when (1)
         the assets have been  isolated  from the  Company,  (2) the  transferee
         obtains the right (free of  conditions  that  constrain  it from taking
         advantage of that right) to pledge or exchange the transferred  assets,
         and (3) the  Company  does  not  maintain  effective  control  over the
         transferred assets through an agreement to repurchase them before their
         maturity.

    Income Taxes.  Deferred  income tax assets and  liabilities  are recorded to
         reflect the tax  consequences on future years of temporary  differences
         between  revenues and expenses  reported for  financial  statement  and
         those  reported  for  income  tax  purposes.  Deferred  tax  assets and
         liabilities  are measured using the enacted tax rates expected to apply
         to taxable income in the years in which those temporary differences are
         expected to be realized or settled.  Valuation  allowances are provided
         against assets which are not likely to be realized.


                                                                     (continued)


                                       22
<PAGE>

                        FPB BANCORP, INC. AND SUBSIDIARY

              Notes to Consolidated Financial Statements, Continued


(1)  Summary of Significant Accounting Policies, Continued
    Stock-Based Compensation. Statement of Financial Accounting Standards (SFAS)
         No.  123,  Accounting  for  Stock-Based  Compensation,  encourages  all
         entities to adopt a fair value based method of accounting  for employee
         stock compensation plans,  whereby compensation cost is measured at the
         grant date based on the value of the award and is  recognized  over the
         service period,  which is usually the vesting period.  However, it also
         allows an entity to  continue  to measure  compensation  cost for those
         plans using the intrinsic  value based method of accounting  prescribed
         by Accounting  Principles  Board Opinion No. 25,  Accounting  for Stock
         Issued to Employees,  whereby  compensation cost is the excess, if any,
         of the  quoted  market  price of the stock at the grant  date (or other
         measurement  date) over the amount an employee  must pay to acquire the
         stock.  Stock options issued under the Bank's stock option plan have no
         intrinsic  value  at the  grant  date,  and  under  Opinion  No.  25 no
         compensation  cost is recognized  for them.  The Company has elected to
         continue with the  accounting  methodology  in Opinion No. 25 and, as a
         result,  has  provided  proforma  disclosures  of net loss and loss per
         share and  other  disclosures,  as if the fair  value  based  method of
         accounting had been applied.

    Off-Balance-Sheet  Instruments.  In the  ordinary  course  of  business  the
         Company  has  entered  into  off-balance-sheet   financial  instruments
         consisting of unfunded loan commitments,  available lines of credit and
         standby letters of credit.  Such financial  instruments are recorded in
         the consolidated financial statements when they are funded.

    Loss Per  Share.  Basic  loss per  share  is  computed  on the  basis of the
         weighted-average number of common shares outstanding. Outstanding stock
         options are not dilutive due to the net loss incurred by the Company.

    Fair Values of Financial Instruments.  The following methods and assumptions
         were  used by the  Company  in  estimating  fair  values  of  financial
         instruments disclosed herein:

         Cash  and  Cash  Equivalents.  The  carrying  amounts  of cash and cash
         equivalents approximate their fair value.

         Securities.  Fair  values  for  securities  are based on quoted  market
         prices,  where  available.  If quoted market prices are not  available,
         fair  values  are  based  on  quoted   market   prices  of   comparable
         instruments.

         Loans.  For  variable-rate  loans that reprice  frequently  and have no
         significant  change in credit  risk,  fair values are based on carrying
         values. Fair values for certain fixed-rate  mortgage (e.g.  one-to-four
         family  residential),  commercial real estate and commercial  loans are
         estimated  using  discounted  cash flow analyses,  using interest rates
         currently  being  offered for loans with similar  terms to borrowers of
         similar credit quality.

         Federal Home Loan Bank Stock.  Fair value of the Bank's  investment  in
         Federal Home Loan Bank stock is based on its redemption value, which is
         its cost of $100 per share.

         Deposit  Liabilities.  The  fair  values  disclosed  for  demand,  NOW,
         money-market  and savings  deposits  are, by  definition,  equal to the
         amount payable on demand at the reporting date (that is, their carrying
         amounts).  Fair  values for  fixed-rate  certificates  of  deposit  are
         estimated  using  a  discounted  cash  flow  calculation  that  applies
         interest rates currently being offered on certificates to a schedule of
         aggregated expected monthly maturities on time deposits.

         Accrued Interest.  The carrying amounts of accrued interest approximate
         their fair values.

                                                                     (continued)


                                       23
<PAGE>

                        FPB BANCORP, INC. AND SUBSIDIARY

              Notes to Consolidated Financial Statements, Continued



(1)  Summary of Significant Accounting Policies, Continued
    Fair Values of Financial Instruments, Continued.

         Borrowings.  The carrying amount of federal funds purchased approximate
         their fair values.  Fair values of advances  from the Federal Home Loan
         Bank are estimated  using  discounted  cash flow analysis  based on the
         Company's  current  incremental  borrowing  rates for similar  types of
         borrowings.

         Off-Balance-Sheet   Instruments.   Fair  values  for  off-balance-sheet
         lending  commitments are based on fees currently  charged to enter into
         similar  agreements,  taking into  account the  remaining  terms of the
         agreements and the counterparties' credit standing.

    Advertising. The Company expenses all media advertising as incurred.

    Comprehensive Income (Loss).  Accounting  principles  generally require that
         recognized  revenue,  expenses,  gains and  losses be  included  in net
         income (loss). Although certain changes in assets and liabilities, such
         as unrealized gains and losses on  available-for-sale  securities,  are
         reported as a separate  component of the equity  section of the balance
         sheet, such items, along with net loss, are components of comprehensive
         income (loss).

    Reclassification. Certain amounts in the 2000 financial statements have been
         reclassified to conform with 2001 presentation.













                                       24
<PAGE>

                        FPB BANCORP, INC. AND SUBSIDIARY

              Notes to Consolidated Financial Statements, Continued


(2)  Securities
    Securities  have been  classified  according  to  management's  intent.  The
         carrying  amount of securities and their fair values are as follows (in
         thousands):
<TABLE>

                                                                                    Gross          Gross
                                                                   Amortized     Unrealized     Unrealized        Fair
                                                                      Cost          Gains         Losses         Value
                                                                      ----          -----         ------         -----
<S>                                                                 <C>               <C>            <C>          <C>
         At December 31, 2001:
           Securities available for sale:
              U.S. Government agency securities...............      $ 3,478           35             (32)         3,481
              Mortgage-backed securities......................        1,018            8             (11)         1,015
                                                                    -------           --             ---          -----
                  Total securities available for sale.........      $ 4,496           43             (43)         4,496
                                                                    =======           ==             ===          =====

           Securities held to maturity-
              Mortgage-backed securities......................      $   983            -             (20)           963
                                                                    =======           ==             ===          =====
         At December 31, 2000:
           Securities available for sale:
              U.S. Treasury securities........................        1,998            -              (2)         1,996
              U.S. Government agency securities...............        4,981           10               -          4,991
                                                                    -------           --             ---          -----
                  Total securities available for sale.........      $ 6,979           10              (2)         6,987
                                                                    =======           ==             ===          =====
</TABLE>

    There were no sales of securities in 2001 or 2000.

    The  scheduled  maturities of securities at December 31, 2001 are as follows
   (in thousands):

<TABLE>

                                                                   Available for Sale           Held to Maturity
                                                                   ------------------           ----------------
                                                                  Amortized       Fair        Amortized       Fair
                                                                    Cost         Value          Cost         Value
                                                                    ----         -----          ----         -----

              <S>                                                 <C>             <C>            <C>           <C>
              Due from one to five years......................    $ 3,478         3,481            -             -
              Mortgage-backed securities......................      1,018         1,015          983           963
                                                                    -----         -----          ---           ---

                                                                  $ 4,496         4,496          983           963
                                                                  =======         =====          ===           ===
</TABLE>

    At December 31, 2001  securities  with a carrying  value of $1,279,000  were
    pledged to the State of Florida as collateral  for public funds.  There were
    no securities pledged as collateral for public funds at December 31, 2000.


                                                                     (continued)



                                       25
<PAGE>

                        FPB BANCORP, INC. AND SUBSIDIARY

              Notes to Consolidated Financial Statements, Continued


(3)  Loans
    The components of loans are as follows (in thousands):
<TABLE>

                                                                                     At December 31,
                                                                               ----------------------------
                                                                               2001                    2000
                                                                               ----                    ----

<S>                                                                         <C>                        <C>
Commercial ..................................................               $ 11,667                   6,037
Commercial real estate ......................................                 10,231                   5,668
Construction loans ..........................................                    961                     752
Consumer ....................................................                  8,472                   5,393
Residential real estate .....................................                  1,241                     289
                                                                               -----                     ---

             Total loans ....................................                 32,572                  18,139

Add (deduct):
    Deferred loan fees, net .................................                      2                      27
    Allowance for loan losses ...............................                   (359)                   (201)
                                                                                ----                    ----

Loans, net ..................................................               $ 32,215                  17,965
                                                                            ========                  ======
</TABLE>

<TABLE>

    An  analysis  of the change in the  allowance  for loan  losses  follows (in
    thousands):

                                                                                            2001            2000
                                                                                            ----            ----

              <S>                                                                          <C>                <C>
              Beginning balance...........................................                 $ 201              60
              Provision for loan losses...................................                   202             162
              Charge-offs   ..........................................                       (44)            (21)
              Recoveries   ...............................................                     -               -
                                                                                           -----            ----
              Ending balance..............................................                 $ 359             201
                                                                                           =====             ===
</TABLE>

    The Company had no impaired loans in 2001 or 2000.

(4)  Premises and Equipment
    A summary of premises and equipment follows (in thousands):
<TABLE>

                                                                                               At December 31,
                                                                                               ---------------
                                                                                            2001             2000
                                                                                            ----             ----

              <S>                                                                          <C>                 <C>
              Land, future branch location.........................................        $ 305                 -
              Leasehold improvements...............................................          102                97
              Furniture, fixtures and equipment....................................          424               392

                  Total, at cost...................................................          831               489

                  Less accumulated depreciation and amortization...................         (215)             (123)
                                                                                            ----              ----

                  Premises and equipment, net......................................        $ 616               366
                                                                                           =====               ===
</TABLE>

                                                                     (continued)




                                       26
<PAGE>

                        FPB BANCORP, INC. AND SUBSIDIARY

              Notes to Consolidated Financial Statements, Continued


(4) Premises and Equipment, Continued
    The  Company currently leases its banking facility under an operating lease.
         The lease expires in 2014 with renewal  options of two five year terms.
         Annual rental expense increases based on the consumer price index. Rent
         expense under the operating  lease during the years ended  December 31,
         2001 and 2000 was $107,000 and $101,000, respectively. The Company also
         has a purchase  option which expires in 2003.  The future minimum lease
         payments are approximately as follows (in thousands):

              Year Ending                                       Amount
              -----------                                       ------

              2002.........................................   $   102
              2003.........................................       103
              2004.........................................       105
              2005.........................................       107
              2006.........................................       110
              Thereafter...................................       862
                                                                  ---

                                                              $ 1,389
                                                              =======

(5) Deposits
    The  aggregate  amount  of time  deposits  with a  minimum  denomination  of
         $100,000,  was approximately  $5,039,000 and $2,705,000 at December 31,
         2001 and 2000, respectively.

    A schedule of maturities of time deposits follows (in thousands):

              Year Ending
              December 31,                                               Amount

                  2002..........................................       $ 11,325
                  2003..........................................          4,268
                  2004..........................................            204
                  2005..........................................             13
                  2006..........................................            102
                                                                            ---

                                                                       $ 15,912
                                                                       ========

(6) Federal Home Loan Bank Advance
    At  December  31,  2001,  a  Federal  Home Loan Bank ("FHLB") advance in the
         amount of $1,000,000 was  outstanding.  The advance bears interest at a
         floating  rate based on the FHLB Atlanta  overnight  deposit rate +.30%
         (currently  1.83%) and  matures on  December  20,  2002.  There were no
         advances   outstanding   at   December   31,   2000.   The  advance  is
         collateralized  by securities  available for sale with a carrying value
         of $2,363,503 at December 31, 2001 and all the Company's FHLB stock.


                                                                     (continued)


                                       27
<PAGE>


                        FPB BANCORP, INC. AND SUBSIDIARY

              Notes to Consolidated Financial Statements, Continued

(7) Notes Payable
    In October  2001, the Holding  Company obtained a term loan and an unsecured
         line of credit in the amounts of $305,000 and  $100,000,  respectively.
         The notes bear interest at a rate of prime minus 1%  (currently  3.75%)
         which is payable  monthly.  The notes mature  October 9, 2002. The term
         loan is  collateralized  by land  with a carry  value of  $305,000.  At
         December 31, 2001, the term loan and line of credit balance outstanding
         were $305,000 and $37,000, respectively.

(8) Financial Instruments
    The Company is a party to  financial instruments with off-balance-sheet risk
         in the normal  course of  business to meet the  financing  needs of its
         customers.  These financial  instruments are unfunded loan commitments,
         available  lines of  credit  and  standby  letters  of  credit  and may
         involve, to varying degrees,  elements of credit and interest-rate risk
         in excess of the amount  recognized in the consolidated  balance sheet.
         The  contract  amounts  of these  instruments  reflect  the  extent  of
         involvement the Company has in these financial instruments.

    The  Company's exposure to credit loss in the event of nonperformance by the
         other  party to the  financial  instrument  for  commitments  to extend
         credit is represented by the contractual  amount of those  instruments.
         The Company uses the same credit  policies in making  commitments as it
         does for on-balance-sheet instruments.

    Commitments to extend credit are agreements to lend to a customer as long as
         there is no violation of any  condition  established  in the  contract.
         Commitments generally have fixed-expiration  dates or other termination
         clauses  and  may  require  payment  of a  fee.  Because  some  of  the
         commitments  are expected to expire without being drawn upon, the total
         commitment   amounts  do  not   necessarily   represent   future   cash
         requirements.  The Company  evaluates each customer's credit worthiness
         on a case-by-case basis. The amount of collateral  obtained,  if deemed
         necessary  by the  Company,  upon  extension  of  credit,  is  based on
         management's credit evaluation of the counterparty.  Standby letters of
         credit  and  conditional  commitments  are  issued  by the  Company  to
         guarantee the  performance  of a customer to a third party.  The credit
         risk involved in issuing  letters of credit is essentially  the same as
         that included in extending loans to customers.

    The  estimated fair values of the Company's  financial  instruments  were as
    follows (in thousands):
<TABLE>

                                                               At December 31, 2001            At December 31, 2000
                                                               --------------------            --------------------
                                                             Carrying          Fair          Carrying           Fair
                                                              Amount           Value          Amount            Value
                                                              ------           -----          ------            -----
    <S>                                                     <C>                <C>              <C>              <C>
    Financial assets:
         Cash and cash equivalents.....................     $   2,448          2,448            4,380            4,380
         Time deposit..................................           100            100              100              100
         Securities available for sale.................         4,496          4,496            6,987            6,987
         Securities held to maturity...................           983            963                -                -
         Loans, net....................................        32,215         32,729           17,965           17,892
         Federal Home Loan Bank stock..................            80             80               29               29
         Accrued interest receivable...................           211            211              201              201

    Financial liabilities:
         Deposit liabilities...........................        33,993         34,269           25,814           25,942
         Federal funds purchased.......................         1,500          1,500                -                -
         Federal Home Loan Bank advance................         1,000          1,000                -                -
         Notes payable.................................           342            342                -                -
</TABLE>

                                                                     (continued)



                                       28
<PAGE>

                        FPB BANCORP, INC. AND SUBSIDIARY

              Notes to Consolidated Financial Statements, Continued


(8) Financial Instruments, Continued
    A summary  of  the amounts  of the Company's financial  instruments with off
         balance sheet risk at December 31, 2001 follows (in thousands):
<TABLE>

              <S>                                                                          <C>
              Standby letters of credit.........................................           $   153
                                                                                           =======

              Unfunded loan commitments.........................................           $ 4,671
                                                                                           =======

              Available lines of credit.........................................           $ 2,229
                                                                                           =======
</TABLE>

(9) Credit Risk
    The Company  grants the majority  of its loans to borrowers  throughout  the
         Port St. Lucie,  Florida  area.  Although the Company has a diversified
         loan  portfolio,  a significant  portion of its  borrowers'  ability to
         honor their  contracts is dependent upon the economy in Port St. Lucie,
         Florida.

(10) Income Taxes
     The income tax benefit consisted of the following (in thousands):
<TABLE>

                                                                                             Years Ended December 31,
                                                                                             ------------------------
                                                                                             2001                2000
                                                                                             ----                ----
<S>                                                                                          <C>                 <C>
              Deferred:
                  Federal  .......................................................           $(20)               (116)
                  State...........................................................             (3)                (20)
                                                                                               ---                 ---

                           Total deferred.........................................           $(23)               (136)
                                                                                             ====                ====
</TABLE>

    The  reasons for the  differences  between the statutory  Federal income tax
         rate and the effective tax rate are  summarized as follows  (dollars in
         thousands):
<TABLE>

                                                                                Years Ended December 31,
                                                                      ------------------------------------------
                                                                            2001                    2000
                                                                            ----                    ----
                                                                                  % of                     % of
                                                                                  Pretax                  Pretax
                                                                      Amount      Loss          Amount     Loss
                                                                      ------      ----          ------     ----

<S>                                                                    <C>        <C>           <C>        <C>
              Income tax benefit at statutory rate................     $(25)      (34)%         $(123)     (34)%
              (Increase) decrease resulting from:
                  State taxes, net of Federal tax benefit.........       (2)       (3)            (13)      (4)
                  Other...........................................        4         5            -         -
                                                                         --        --             ---       --
                                                                      $ (23)      (32)%         $(136)     (38)%
                                                                      =====       ===           =====      ===
</TABLE>

                                                                     (continued)





                                       29
<PAGE>



                        FPB BANCORP, INC. AND SUBSIDIARY

              Notes to Consolidated Financial Statements, Continued


(10)  Income Taxes, Continued
    The  tax  effects of  temporary  differences  that give rise to  significant
         portions of the deferred tax assets and  deferred tax  liabilities  are
         presented below (in thousands).
<TABLE>

                                                                                                At December 31,
                                                                                                ---------------
                                                                                                2001       2000
                                                                                                ----       ----
              <S>                                                                              <C>          <C>
              Deferred tax asset:
                  Net operating loss carryforwards....................................         $ 448        438
                  Organizational and preopening costs.................................            71         93
                  Allowance for loan losses...........................................            55         22
                                                                                                  --         --

                           Deferred tax assets........................................           574        553
                                                                                                 ---        ---

              Deferred tax liabilities:
                  Accrual to cash adjustment..........................................           110        113
                  Accumulated depreciation............................................            20         19
                  Unrealized gain on securities available for sale....................             -          3
                                                                                                 ---        ---
                           Deferred tax liabilities...................................           130        135
                                                                                                 ---        ---
                           Net deferred tax asset.....................................         $ 444        418
                                                                                               =====        ===
</TABLE>

    At   December  31,  2001,  the Company  has the  following  approximate  net
         operating loss carryforwards  available to offset future taxable income
         (in thousands):

              Expiration

                  2018........................................         $     5
                  2019........................................             540
                  2020........................................             619
                  2021........................................              25
                                                                           ---
                                                                       $ 1,189
                                                                       =======








                                       30
<PAGE>


                        FPB BANCORP, INC. AND SUBSIDIARY

              Notes to Consolidated Financial Statements, Continued


(11)  Related Party Transactions
    Loans to officers  and directors  of the Company and  entities in which they
         hold a financial interest were as follows (in thousands):
<TABLE>

                                                                                                  2001          2000
                                                                                                  ----          ----

<S>                                                                                            <C>               <C>
Balance at beginning of year .............................................                     $   679           201
Borrowings ...............................................................                         962           525
Repayments ...............................................................                        (415)          (47)
                                                                                                  ----           ---

Balance at end of year ...................................................                     $ 1,226           679
                                                                                               =======           ===
</TABLE>

(12)  Stock Options
    The  Company  established  an  Incentive  Stock Option Plan for officers and
         employees of the Company and reserved 97,882 shares of common stock for
         the plan. The exercise price of the stock options is the greater of $10
         or the fair market value of the common stock on the date of grant.  The
         options  vest 33.3%  during the  second and third  year,  respectively,
         after grant and are fully exercisable  during the fourth year after the
         grant date.  The options  must be  exercised  within ten years from the
         date of grant.

<TABLE>

    A summary of stock option follows:
                                                                                 Range
                                                                                of Per       Weighted-
                                                                                 Share        Average      Aggregate
                                                                  Number of     Option       Per Share      Option
                                                                   Shares        Price        Price         Price
                                                                   ------        -----        -----         -----

              <S>                                                  <C>         <C>             <C>            <C>
              Outstanding at December 31, 1999................     93,030      $ 10.00         10.00          930,300
              Granted.........................................        350        10.00         10.00            3,500
              Forfeited.......................................     (1,700)       10.00         10.00          (17,000)
                                                                   ------        -----         -----          -------

              Outstanding at December 31, 2000................     91,680        10.00         10.00          916,800
              Granted.........................................      2,000        10.00         10.00           20,000
              Forfeited.......................................     (1,750)       10.00         10.00          (17,500)
                                                                   ------        -----         -----          -------

              Outstanding at December 31, 2001................     91,930      $ 10.00         10.00          919,300
                                                                   ======      =======         =====          =======
</TABLE>

    The  weighted-average  remaining  contractual life of the outstanding  stock
         options  at  December  31,  2001 and 2000 was 8.5 years and 8.5  years,
         respectively.

                                                                     (continued)


                                       31
<PAGE>


                        FPB BANCORP, INC. AND SUBSIDIARY

              Notes to Consolidated Financial Statements, Continued


 (12)  Stock Options, Continued
     These options are exercisable as follows:
<TABLE>

                                                                                 Number of          Weighted-Average
                  Year Ending                                                      Shares            Exercise Price
                  -----------                                                      ------            --------------

<S>                                                                                <C>                             <C>
Currently ..........................................................               59,253                          $   10.00
2002 ...............................................................               31,227                              10.00
2003 ...............................................................                  783                              10.00
2004 ...............................................................                  667                              10.00
                                                                                      ---
                                                                                   91,930                          $   10.00
                                                                                   ======                          =========
</TABLE>

    Proforma fair value  disclosures  are required if the intrinsic value method
         is being utilized. In order to calculate the fair value of the options,
         it was assumed that the  risk-free  interest  rate was 5.0% in 2001 and
         5.5% in 2000,  there would be no dividends paid by the Company over the
         exercise  period,  the expected life of the options would be the entire
         exercise period and stock  volatility  would be zero due to the lack of
         an active  trading  market for the  stock.  For  purposes  of pro forma
         disclosures,  the  estimated  fair value is  included in expense in the
         period  vesting  occurs.  The  following  information  pertains  to the
         options  granted to purchase  common stock ($ in thousands,  except per
         share amounts):
<TABLE>


                                                                                                        Year Ended December 31,
                                                                                                        -----------------------
                                                                                                    2001                      2000
                                                                                                    ----                      ----
<S>                                                                                             <C>                           <C>
Grant-date fair value of options granted
    during the year ...........................................................                 $   7,580                     1,421
                                                                                                =========                     =====

Per share .....................................................................                      3.79                      4.06
                                                                                                     ====                      ====

Net losses as presented .......................................................                 $     (49)                     (227)
                                                                                                =========                      ====

Per share .....................................................................                      (.10)                     (.46)
                                                                                                     ====                      ====

Proforma net loss .............................................................                 $    (115)                     (336)
                                                                                                =========                      ====

Per share .....................................................................                      (.24)                     (.69)
                                                                                                     ====                      ====
</TABLE>

(13)  Stock Warrants
    During 1999, the Company  granted stock warrants to certain  shareholders to
         purchase 24,000 shares of the Company's  common stock at $10 per share.
         These  warrants  expire in 2004 and can be  redeemed by the Company for
         $.01 with thirty days notice.

(14)  Profit Sharing Plan
    The  Company  sponsors  a  section  401(k)  profit  sharing  plan  which  is
         available to all employees electing to participate. The Company did not
         make a contribution in 2001 or 2000.

                                                                     (continued)


                                       32
<PAGE>

                        FPB BANCORP, INC. AND SUBSIDIARY

              Notes to Consolidated Financial Statements, Continued


(15)  Regulatory Matters
    The  Bank is subject to certain restrictions on the amount of dividends that
         it may declare without prior regulatory approval. At December 31, 2001,
         no  retained  earnings  were  available  for  dividends  without  prior
         regulatory approval.

    The  Bank is subject to various regulatory capital requirements administered
         by the regulatory  banking  agencies.  Failure to meet minimum  capital
         requirements  can initiate  certain  mandatory and possibly  additional
         discretionary  actions by regulators that, if undertaken,  could have a
         direct  material  effect  on  the  Company's   consolidated   financial
         statements.  Under  capital  adequacy  guidelines  and  the  regulatory
         framework  for prompt  corrective  action,  the Bank must meet specific
         capital guidelines that involve quantitative  measures of their assets,
         liabilities,  and certain  off-balance-sheet  items as calculated under
         regulatory accounting practices. The capital amounts and classification
         are also subject to  qualitative  judgements  by the  regulators  about
         components, risk weightings, and other factors.

    Quantitative  measures  established by regulation to ensure capital adequacy
         require the Bank to maintain minimum amounts and percentages (set forth
         in the following  table) of total and Tier 1 capital (as defined in the
         regulations) to risk-weighted assets (as defined) and of Tier 1 capital
         (as defined) to average assets (as defined). Management believes, as of
         December 31, 2001, the Bank met all capital  adequacy  requirements  to
         which they are subject.

    As   of December 31, 2001, the most recent  notification from the regulatory
         authorities   categorized  the  Bank  as  well  capitalized  under  the
         regulatory framework for prompt corrective action. To be categorized as
         well   capitalized,   an  institution   must  maintain   minimum  total
         risk-based,  Tier 1 risk-based,  and Tier 1 leverage percentages as set
         forth in the following tables.  There are no conditions or events since
         that  notification  that  management  believes  have changed the Bank's
         category.  The Bank's actual capital  amounts and  percentages are also
         presented in the table (dollars in thousands).
<TABLE>

                                                                                                  Minimum
                                                                                                 To Be Well
                                                                                               Capitalized Under
                                                                   For Capital Adequacy        Prompt Corrective
                                              Actual                      Purposes             Action Provisions
                                       ------------------          ---------------------       -----------------
                                       Amount          %           Amount             %        Amount          %
                                       ------         ---          ------            ---       ------         ---
<S>                                   <C>             <C>         <C>                <C>      <C>            <C>
     As of December 31, 2001:
         Total capital to Risk-
           Weighted assets..........  $ 4,277         13.03%      $ 2,623            8.00%    $ 3,284        10.00%
         Tier I Capital to Risk-
           Weighted Assets..........    3,919         11.94         1,313            4.00       1,970         6.00
         Tier I Capital
           to Total Assets..........    3,919         10.30         1,522            4.00       1,903         5.00

     As of December 31, 2000:
         Total capital to Risk-
           Weighted assets..........    4,044         21.24         1,523            8.00       1,904        10.00
         Tier I Capital to Risk-
           Weighted Assets..........    3,843         20.18           762            4.00       1,142         6.00
         Tier I Capital
           to Total Assets..........    3,843         13.11         1,173            4.00       1,466         5.00
</TABLE>

                                                                     (continued)



                                       33
<PAGE>

                        FPB BANCORP, INC. AND SUBSIDIARY

              Notes to Consolidated Financial Statements, Continued


(16)  Holding Company Financial Information
    The  Holding Company's  unconsolidated  financial  information is as follows
         (in thousands):


                             Condensed Balance Sheet
                                                                 At December 31,
                                                                 ---------------
                                                                       2001
                                                                       ----
 Assets

Cash and cash equivalents .......................................     $    6
Investment in subsidiary ........................................      4,111
Land ............................................................        305
Deferred income taxes ...........................................         10
                                                                      ------
    Total assets ................................................     $4,432
                                                                      ======

    Liabilities and Stockholders' Equity

Notes payable ...................................................        342
Stockholders' equity ............................................      4,090
                                                                      ------
    Total liabilities and stockholders' equity ..................     $4,432
                                                                      ======

                         Condensed Statement of Earnings


                                                                    Year Ended
                                                                    December 31,
                                                                    ------------
                                                                        2001
                                                                        ----

Revenues...................................................          $    6
Expenses...................................................             (27)
                                                                        ---

    Loss before loss of subsidiary.........................             (21)
    Loss of subsidiary.....................................             (28)
                                                                        ---

    Net earnings...........................................            $(49)
                                                                       ====

                                                                     (continued)


                                       34
<PAGE>


                        FPB BANCORP, INC. AND SUBSIDIARY

              Notes to Consolidated Financial Statements, Continued


(15) Holding Company Financial Information, Continued


                        Condensed Statement of Cash Flows


                                                                    Year Ended
                                                                    December 31,
                                                                    ------------
                                                                       2001
                                                                       ----
Cash flows from operating activities:
     Net loss ....................................................        $ (49)
     Adjustments to reconcile net loss to net cash
       used in operating activities:
         Undistributed loss of subsidiary ........................           28
         Increase in deferred income taxes .......................          (10)
                                                                            ---

            Net cash used in operating activities ................          (31)
                                                                            ---

Cash flows used in investing activity-
     Purchase of land ............................................         (305)
                                                                           ----

Cash flows from financing activity-
     Increase in notes payable ...................................          342
                                                                           ----

Net increase in cash and cash equivalents ........................            6

Cash and cash equivalents at beginning of the year ...............            -
                                                                           ----
Cash and cash equivalents at end of year .........................        $   6
                                                                          =====


                                       35
<PAGE>


                          Independent Auditors' Report



Board of Directors
FPB Bancorp, Inc.
Port St. Lucie, Florida:

     We  have  audited  the  accompanying  consolidated  balance  sheets  of FPB
Bancorp,  Inc. and Subsidiary (the "Company") at December 31, 2001 and 2000, and
the related  consolidated  statements of operations,  stockholders'  equity, and
cash flows for the years then ended. These consolidated financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these consolidated financial statements based on our audits.

     We conducted our audits in accordance  with  auditing  standards  generally
accepted in the United States of America.  Those standards  require that we plan
and  perform  the  audit  to  obtain  reasonable  assurance  about  whether  the
consolidated  financial statements are free of material  misstatement.  An audit
includes  examining,  on a test  basis,  evidence  supporting  the  amounts  and
disclosures in the  consolidated  financial  statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall consolidated  financial statement
presentation.  We believe  that our audits  provide a  reasonable  basis for our
opinion.

     In our opinion,  the consolidated  financial  statements  referred to above
present fairly, in all material respects,  the financial position of the Company
at December 31, 2001 and 2000,  and the results of its  operations  and its cash
flows for the  years  then  ended,  in  conformity  with  accounting  principles
generally accepted in the United States of America.





HACKER, JOHNSON & SMITH PA
Fort Lauderdale, Florida
February 4, 2002



                                       36
<PAGE>


                               BOARD OF DIRECTORS



James L. Autin,  M.D., age 49,  graduated with honors from Tulane  University in
1974,  receiving  a Bachelor of Arts  degree in music  history  and  theory.  He
received his Doctor of Medicine degree from Louisiana State  University  Medical
Center in New Orleans in 1978,  then underwent  surgical  specialty  training in
otolaryngology/head and neck surgery at St. Louis University Hospitals. In 1984,
Dr.  Autin  initiated  his private  practice in St.  Lucie  County.  He is Board
Certified in two  specialties,  facial  plastic and  reconstructive  surgery and
otolaryngology/head  and neck surgery. He served on the Community Advisory Board
of Port St. Lucie National Bank from 1994 to 1997.

John R.  Baker,  Sr.,  age 52, is the Bank's  Vice  Chairman  of the  Board.  He
graduated   from  the  University  of  Georgia  with  a  Bachelors  of  Business
Administration in Real Estate.  He moved to Stuart,  Florida in 1981 and assumed
the  position  of  Vice  President,  General  Manager  of  Bessemer  Properties,
Incorporated.  Prior to moving to  Stuart,  Mr.  Baker  served  as  Director  of
Residential  Sales for  Bessemer  in Atlanta,  Georgia,  where he began his real
estate career in 1975. Mr. Baker is a former  director of Barnett Bank of Martin
County and is past President of Treasure Coast Builders  Association and Florida
Home  Builders  Association.  He also  served as  Chairman  of Housing & Finance
Authority in Martin County and the Martin County Affordable  Housing Task Force.
Mr.  Baker  lives in Vero  Beach and has been  active in youth  sports in Martin
County and is  currently a coach for the  Sebastian  Soccer  Association.  He is
employed  with the  Laurel  Corporation  in Vero  Beach and is  involved  in all
aspects of real estate.

Gary A. Berger,  age 52, serves as the Bank's Chairman of the Board.  Mr. Berger
is President of the accounting firm of Berger,  Toombs, Elam & Frank, CPA. He is
a  graduate  of  Michigan  State  University  and has  been a  certified  public
accountant  since 1975. Mr. Berger is a member of the Rotary Club of Ft. Pierce.
He is also a member of the Florida Institute of Certified Public Accountants and
a member of the American Institute of Certified Public  Accountants.  He is past
Treasurer  of United  Way,  past  President  of the St.  Lucie  County  Economic
Development Council and past President of the Rotary Club of Fort Pierce.

Donald J. Cuozzo, age 48, received a Bachelor of Science degree in Environmental
Technology  from Florida  Institute  of  Technology  in 1979.  He began his work
career in the public sector with the Martin County Growth Management  Department
before leaving to work as a regional and national  development  coordinator.  In
that role,  he was  instrumental  in obtaining  approval of the Martin Downs DRI
amendment and in  coordinating  the  acquisition  and development of a number of
large residential  communities in Palm Beach and Martin County.  Mr. Cuozzo also
served as a principal  with a large Palm Beach  County  based  engineering  firm
where he gained  extensive  experience  in the area of  project  management  and
coordination.  In 1993,  he co-founded  Houston  Cuozzo Group ("HCG") to provide
planning,  design and government oriented strategic planning service for private
and public sector clients in South Florida. Mr. Cuozzo has more than 20 years of
experience planning and implementing  numerous land developments  throughout the
region and has worked in nearly all facets of community and project development.
Mr. Cuozzo is a founding member of the Martin County Business Development Board,
a graduate of the first class of Martin County  Leadership 91/92 and a recipient
of the 1991 Industry  Appreciation  Award for  Outstanding  contribution  to the
Community.  He is a past Second Vice  President of the Treasure  Coast  Builders
Association.  Mr. Cuozzo was recently  appointed to the Treasure  Coast Regional
Planning Council by Governor Jeb Bush.

Ann L.  Decker,  age 50, was born in  Chicago,  Illinois  and has a Bachelor  of
Science in  Professional  Business  Management  from Barry  University in Miami,
Florida.  She presently  serves as District  Manager for U.S.  Congressman  Mark
Foley. Ms. Decker was formerly a co-owner of Intracoastal Printing,  Inc., which
was sold in 1990.  She is also on the Board of Directors of the Visiting  Nurses
Association  of  Florida  and  serves as Vice  President  of the Port St.  Lucie
Republican Club and as President of the JIG Investment Club.

Paul J. Miret,  age 55, is presently a realtor with RE/MAX 100 Riverside.  Prior
to that, he was the owner and operator of Sunshine  Carpet Cleaning from 1978 to
1998 and of Ameri-Kleen  Services from 1992 to 1998. He also owns and manages 23
residential  rental units.  From 1995 to 1997, Mr. Miret served on the Community
Board of Riverside National Bank. Mr. Miret is also a past President of the Port
St. Lucie Little League and the Port St. Lucie Exchange Club and a past director
of the Port St. Lucie Chamber of Commerce.


                                       37
<PAGE>

Robert L. Schweiger,  age 54, is the Bank's Secretary of the Board. He has lived
in the Port St.  Lucie  area since  1975,  and is  presently  the  Chairman  and
Co-Manager  of  Roberdos,  LC,  a  trade  magazine  and  industrial  trade  show
consulting firm. He is also the President of Redako Corporation,  a thoroughbred
horse  business.  From 1994 to 1997, Mr.  Schweiger  served as an Advisory Board
member of Port St. Lucie National  Bank. Mr.  Schweiger is a board member of the
Exchange  CASTLE and  secretary  and board  member of the Stuart  West  Property
Owner's Association. He has a Bachelor of Arts degree in English Literature from
the  American  University  of Beirut  and a Masters of  Business  Administration
degree from Florida Atlantic University.

Robert L.  Seeley,  age 77, has been in private  law  practice in Florida for 40
years. He currently is counsel to the Stuart law firm of Warner,  Fox,  Wackeen,
Dungey,  Seeley,  Sweet & Beard,  LLP. From 1973 to 1996, Mr. Seeley served as a
Director of Barnett Bank of the Treasure Coast.  He is also a founding  director
and the Chairman of HCA Medical Center and former  director of the St. Lucie and
Martin  County  Economic   Development   Councils.   Mr.  Seeley  completed  his
undergraduate  studies at the  University  of Illinois  and  received  his Juris
Doctorate degree from the University of Florida.

David W. Skiles,  age 54, is the  President and Chief  Executive  Officer of the
Bank.  Prior to joining the Bank, he was the Vice President and Regional Manager
of First United Bank from 1997 to 1998.  From 1989 to 1997,  Mr.  Skiles was the
Vice President and Senior Lender of Port St. Lucie National Bank. Mr. Skiles has
a Bachelor of Science  degree from Barry  University  and is a Vice President of
the St. Lucie County  Chamber and is an  associate  member of the  Stuart/Martin
County Chamber of Commerce.  Mr. Skiles  currently serves as Chairman of the PSL
Chamber's  Port St.  Lucie Area  Council  and is a member of the Port St.  Lucie
Breakfast Rotary Club and the Sertoma Club of Martin County. Mr. Skiles has also
served  on the  numerous  campaigns  for the  United  Way of St.  Lucie & Martin
Counties,  most  notably as Campaign  Chairman  in Martin  County in 1985 and as
chairman of the Professional Division in St Lucie County for the 2000 Campaign.

Thomas E.  Warner,  age 54, is currently on a leave of absence from the law firm
of  Warner,  Fox,  Wackeen,  Dungey,  Seeley,  Sweet & Beard,  LLP.  Mr.  Warner
presently serves as Solicitor  General of the State of Florida and, from 1992 to
1999, was a member of the Florida House of Representatives. Mr. Warner is also a
co-owner of War-Min,  Inc., NRS Land Trust and 1100 Land Trust. He received both
his  Bachelor of Science and Juris  Doctorate  degrees  from the  University  of
Florida  and is active in the Palm City  Presbyterian  Church and the Stuart Rod
and Reel Club.

Paul A. Zinter,  age 47, has been a resident of Port St. Lucie for 33 years, and
was a member of the  second  graduating  class  from Fort  Pierce  Central  High
School. Mr. Zinter received a Bachelor of Arts degree in business administration
from Eastern New Mexico  University in 1975, where he majored in real estate and
business  administration.  Following  college,  he joined his family's  Port St.
Lucie based real estate  agency,  Welcome  Center Real Estate,  Inc., as a sales
associate,  later  advancing  to the position of sales  manager.  For the past 8
years,  he has been the  managing  broker  and Chief  Executive  Officer of that
agency.  Mr. Zinter is a graduate of the Realtors  Institute,  holding Certified
Residential Specialist and Certified Real Estate Brokerage Manager certificates.
He is past President of the Rotary Club of Port St. Lucie,  past Director of the
St.  Lucie  County  Board of Realtors  and past  Administrative  Board Member of
Riverside National Bank.








                                       38
<PAGE>


                                FPB BANCORP, INC.

                                  NON-DIRECTOR
                               EXECUTIVE OFFICERS



Nancy E. Aumack,  age 53, has been the Bank's  Senior Vice  President  and Chief
Financial Officer since March 2001, and has held that position with FPB Bancorp,
Inc.  since  December  2001.  Immediately  prior to that,  she was  Senior  Vice
President and Chief Financial Officer of Independent  Community Bank,  Tequesta,
Florida.  In the period from 1997 to 1999, she served as Chief Financial Officer
and administrative support director for the engineering firm Lindahl,  Browning,
Ferrari & Hellstrom,  Inc. in Palm City, Florida.  From 1995 to 1997, she served
as Vice President and Chief Financial  Officer for Treasure Coast Bank,  Stuart,
Florida  and from 1983 to 1995,  she  served  as Vice  President  and  Financial
Accounting  Officer for American  Bank of Martin  County in Stuart.  Ms.  Aumack
received her A. S. degree in  financial  services  from Indian  River  Community
College in 1989.  She is  presently a member of the American  Heart  Association
Heart Walk Committee and the WPSL Christmas Kids Committee.

Stephen Krumfolz,  age 51, has been the Bank's Vice President and Senior Lending
Officer since July 1999,  and was promoted to Senior Vice  President in 2001. He
has held that position with FPB Bancorp,  Inc.  since  December  2001.  Prior to
joining the Bank, he was Vice  President  and SBA Lending  Manager for Riverside
National Bank,  from January 1998 through June 1999. He served as Vice President
and  Commercial  Lending  Officer  for Port St.  Lucie  National  Bank from 1994
through 1997,  and completed all phases of Barnett  Bank's  Management  Training
Program during his employment from 1989 through 1994. Mr.  Krumfolz  received an
Associates  Degree in Banking  through  the  American  Institute  of Banking and
Indian  River  Community  College  in  1991,  as  well as a Core  Credit  School
Certificate  from Barnett Bank in 1992.  He is an active  member of the Port St.
Lucie Breakfast Rotary Club and Treasure Coast Business On The Green.

Marge Riley, age 53, is FPB Bancorp, Inc.'s and the Bank's Senior Vice President
and Chief Operations  Officer.  She also serves as the Bank's Security  Officer,
Compliance  Officer,  Bank Secrecy Act Officer and  Community  Reinvestment  Act
Officer.  Prior to joining the Bank in 1998,  Ms. Riley was the  Assistant  Vice
President  and Branch  Manager for First  National  Bank & Trust  Company of the
Treasure  Coast from 1997 to 1998.  From 1990 to 1997,  she served as  Assistant
Vice  President Loan  Administrator  for Port St. Lucie National Bank. Ms. Riley
has Associate Degrees in Accounting and Banking and Financial  Services from Fox
Valley Technical College in Appleton,  Wisconsin.  She is presently Treasurer of
the Port St. Lucie Business Women,  Board Secretary for the Deaf Services Center
and a member of the Port St. Lucie Women On Wall Street.

                               FIRST PEOPLES BANK

                                    OFFICERS


             David W. Skiles, President and Chief Executive Officer

         Marge Riley, Senior Vice President and Chief Operating Officer

       Nancy E. Aumack, Senior Vice President and Chief Financial Officer

            Stephen Krumfolz, Senior Vice President and Senior Lender

                       Melissa M. Favorite, Vice President

                  Chrestia J. Bradley, Assistant Vice President





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<PAGE>



                             COMMUNITY LIAISON BOARD



Ronald Belkin is a graduate of New York Institute of Technology,  with a finance
degree.  He also received his Chartered Life  Underwriter  designation  from the
American  College  in Bryn  Mawr,  Pa.  He  served  with  the  Office  of  Naval
Intelligence  in Vietnam from 1968 - 1972.  Mr. Belkin is a licensed real estate
and mortgage  broker,  and he owns and operates  Dolphin Realty Group,  Inc., in
Port St. Lucie, Florida, which builds spec homes on Hutchinson Island.

Linda Braswell owns and operates  Braswell Bail Bonds & Braswell Surety Services
in  Stuart,  Florida.  She  is  past  president  of  the  Florida  Surety  Agent
Association,  and was its former secretary and vice president.  In addition, she
is a former SE Director and Vice  President of the  Professional  Bail Agents of
the U.S., and is it's current Sr. Vice President.  Mrs.  Braswell has twice been
appointed by Governor  Jeb Bush,  to the Judicial  Nominating  Commission,  19th
Judicial Circuit.

Meredith Breault graduated from Essex College of Business in New Jersey,  and is
the owner of Management  Recruiters in Port St.  Lucie,  Florida.  She is also a
fashion consultant with Weekenders,  USA,  presenting a wardrobe concept for all
lifestyles to women  throughout this area. In addition,  Meredith is involved in
the IRCC Scholarship Fund program.

Shirley  Cherveny   graduated  from  Monterey  Peninsula  College  in  Monterey,
California,  with a degree in special education and creative writing. Her career
includes a  professorship  in special  education  in Long  Island,  New York,  a
background in real estate  brokerage  sales, and operation of other companies in
the state of Florida,  currently  including the purchase and renovation of homes
in Martin and St. Lucie Counties, Florida.

Fred Fetzner is a graduate of Florida State University in 1962, and has been the
President and Chief  Executive  Officer of Tiger Tale  Publications  since 1976.
From  1963 to 1970,  he  served  as Sales  Manager  of  Xerox  Corporation,  and
following  that, he was  Marketing  Director of Boise Cascade Land Division from
1970 to 1972, and was with Direct Marketing, Inc. from 1973 to 1976.

Gardner S. Foote is a retired U.S. Air Force  aircraft  maintenance  supervisor,
flight engineer and senior manager,  serving active duty during WWII,  Korea and
Vietnam.  He is a member of the  Board of  Directors  of the Dow Air Force  Base
Federal  Credit  Union in  Bangor,  ME, as well as the  Bolling  Air Force  Base
Federal Credit Union, Washington,  DC. He was employed by Northern Virginia Bank
as their Facilities Manager and Purchasing Agent, and by the U.S.  Department of
Justice,  Drug  Enforcement  Administration.  He is a former chairman of the St.
Lucie County Solid Waste Advisory Board, and was a member of the Community Board
of Directors of Port St. Lucie National Bank.

Gilbert  Miller holds a B.S.  degree from  Bethune-Cookman  College,  an M.S. in
Education from Indiana  University,  and a Specialist  degree in supervision and
administration  from Florida  Atlantic  University in Boca Raton,  Florida.  His
career includes positions as a teacher, principal,  assistant superintendent and
deputy  superintendent of Martin County,  Florida Schools. He is affiliated with
St. Luke's  Episcopal  Church,  Phi Beta Sigma  Fraternity,  Martin County Block
Grant Committee,  Banner Lake Residents'  Association,  Inc.,  Banner Lake Club,
Inc.,  Chapman  School of  Seamanship,  American  Legion  Post #176,  Hobe Sound
Citizen's Alliance and the Banner Lake Gomez Crime Watch Program. He is a former
director of the Red Cross and the Boys and Girls Club of Martin County.

Howard Shields,  co-founder of First Peoples Bank, and chairman of its Community
Liaison Board,  began his banking career in Dayton,  Ohio, serving 27 years with
Merchants  National Bank and Trust Company.  After moving to Florida in 1976, he
served as executive vice president, and later director, of Stuart National Bank,
Stuart,  Florida,  charter  director of Treasure  Coast  Savings  Bank,  Stuart,
Florida,  managing agent for  Resolution  Trust  Company,  and president,  chief
executive officer and director of Seaboard Savings Bank, Stuart,  Florida. He is
a past president of the Rotary Club of Stuart, Florida, past president and board
member of United  Way of  Martin  County,  Florida,  a  long-time  member of the
Financial  Executives  Institute,  and past  chairman  of Group  Seven,  Florida
Bankers Association.


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<PAGE>

                               GENERAL INFORMATION


Annual Meeting         The  Annual  Meeting  of the Stockholders will be held at
                       First  Peoples  located at 1301 Port St. Lucie Boulevard,
                       Port St. Lucie, Florida at 5:00 P.M., April 24, 2002.

Transfer Agent and     Registrar and Transfer Co.
Registrar              10 Commerce Drive
                       Cranford, NJ  07016
                       (800) 368-5948

Corporate Counsel      Igler & Dougherty, P.A.
                       1501 Park Avenue East
                       Tallahassee,  Florida  32301


Independent            Hacker, Johnson & Smith PA
Auditors               Certified Public Accountants
                       4901 Northwest 17th Way, Suite 306
                       Fort Lauderdale, Florida  33309


                        COMMON STOCK PRICES AND DIVIDENDS


The common stock of FPB Bancorp,  Inc. is not actively traded, but was sold in a
public  offering in 2002 for $11.50 per share.  To date no cash  dividends  have
been  paid.  Future  dividends,  if any,  will be  determined  by the  Board  of
Directors.  As of December  31,  2001,  FPB Bancorp had 688 holders of record of
common stock.













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