UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 10-Q


 X    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE
---   ACT OF 1934 (no fee required)

      For the quarterly period ended   June 30, 2003
                                     ----------------

                                       OR

      TRANSITION  REPORT  PURSUANT  TO  SECTION  13 or  15(d) OF THE  SECURITIES
---   EXCHANGE ACT OF 1934 (no fee required)
      For the transition period from ________ to ________





                           Commission File No. 0-25988

                          CNB Florida Bancshares, Inc.
                          ----------------------------
             (Exact Name of Registrant as Specified in Its Charter)


                FLORIDA                                        59-2958616
      ------------------------------                       -----------------
      (State or other jurisdiction                          (I.R.S. Employer
      of incorporation or organization)                    Identification No.)


      9715 Gate Parkway North
      Jacksonville, Florida                                      32246
      ------------------------------                       ------------------
      (Address of principal executive offices)                (Zip Code)


       Registrant's telephone number, including area code: (904) 997-8484

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

The number of shares of the registrant's common stock outstanding as of July 31,
2003 was 6,220,490 shares, $0.01 par value per share.



<PAGE>

                          CNB FLORIDA BANCSHARES, INC.
                          FINANCIAL REPORT ON FORM 10-Q




                                TABLE OF CONTENTS


<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION
         Item 1.  Financial Statements (Unaudited)

<S>                                                                                                               <C>
         Consolidated Statements of Financial Condition ......................................................... 3
         Consolidated Statements of Income  ......................................................................4
         Consolidated Statements of Cash Flows ...................................................................6
         Notes to Consolidated Financial Statements ..............................................................7
         Selected Financial Data ................................................................................11

         Item 2. Management's Discussion and Analysis of Financial Condition
                  and Results of Operations

         Overview ...............................................................................................12
         Results of Operations ..................................................................................12
         Liquidity and Interest Rate Sensitivity.................................................................18
         Earning Assets..........................................................................................21
         Funding Sources ........................................................................................25
         Capital Resources ......................................................................................25
         Critical Accounting Policies............................................................................26

         Item 3.  Quantitative and Qualitative Disclosure About Market Risk .....................................26

         Item 4.  Controls and Procedures........................................................................27

PART II - OTHER INFORMATION
         Item 1.  Legal Proceedings .............................................................................28

         Item 2.  Changes in Securities and Use of Proceeds......................................................28

         Item 3.  Defaults Upon Senior Securities ...............................................................28

         Item 4.  Submission of Matters to a Vote of Security Holders ...........................................28

         Item 5.  Other Information .............................................................................28

         Item 6.  Exhibits and Reports ..........................................................................28
</TABLE>


<PAGE>



                                     PART I
                              FINANCIAL INFORMATION

                   CNB FLORIDA BANCSHARES, INC. AND SUBSIDIARY
                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

<TABLE>
<CAPTION>
                                                                                                    (Unaudited)
                                       ASSETS                                                         June 30,         December 31,
                                                                                                        2003               2002
                                                                                                     ----------        ------------
Cash and cash equivalents:                                                                                    (thousands)
<S>                                                                                                  <C>                  <C>
     Cash and due from banks                                                                         $  21,155            $  15,986
     Federal funds sold                                                                                 17,900                5,400
     Interest-bearing deposits in other banks                                                           27,410               12,215
                                                                                                     ---------            ---------
       Total cash and cash equivalents                                                                  66,465               33,601
Investment securities available for sale                                                                65,088               49,682
Loans:
     Commercial                                                                                        104,778              111,033
     Commercial real estate                                                                            341,088              324,525
     Mortgages (including home equity)                                                                 144,367              132,513
     Consumer                                                                                           31,823               32,199
     Credit card                                                                                         1,060                1,164
     Tax free                                                                                            6,886                4,351
                                                                                                     ---------            ---------
       Total loans, net of unearned income                                                             630,002              605,785
Less:  Allowance for loan losses                                                                        (6,788)              (6,574)
                                                                                                     ---------            ---------
       Net loans                                                                                       623,214              599,211

Loans held for sale                                                                                        905               10,893
Premises and equipment, net                                                                             24,633               25,086
Intangible assets, net                                                                                   5,693                6,056
Other assets                                                                                             6,340                6,145
                                                                                                     ---------            ---------
         TOTAL ASSETS                                                                                $ 792,338            $ 730,674
                                                                                                     =========            =========
                      LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Deposits:
     Non-interest bearing demand                                                                     $ 101,022            $  80,065
     Savings, NOW and money market                                                                     265,458              236,284
     Time under $100,000                                                                               177,537              172,671
     Time $100,000 and over                                                                            167,971              159,616
                                                                                                     ---------            ---------
       Total deposits                                                                                  711,988              648,636
Securities sold under repurchase agreements and federal funds purchased                                  9,627               14,446
Other borrowings                                                                                        11,000               11,000
Other liabilities                                                                                        6,154                5,671
                                                                                                     ---------            ---------
       Total liabilities                                                                               738,769              679,753
                                                                                                     ---------            ---------

SHAREHOLDERS' EQUITY
Preferred stock; $.01 par value; 500,000 shares authorized,
     no shares issued or outstanding                                                                        --                   --
Common stock; $.01 par value; 10,000,000 shares authorized,
     6,220,490 shares issued and outstanding at June 30, 2003 and
     6,125,500 shares issued and outstanding at December 31, 2002                                           62                   61
Additional paid-in capital                                                                              31,802               30,840
Retained earnings                                                                                       21,829               19,912
Accumulated other comprehensive (loss) income, net of taxes                                               (124)                 108
                                                                                                     ---------            ---------
       Total shareholders' equity                                                                       53,569               50,921
                                                                                                     ---------            ---------
         TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                                                  $ 792,338            $ 730,674
                                                                                                     =========            =========
</TABLE>

     See accompanying notes to unaudited consolidated financial statements.

                                       3

<PAGE>

                   CNB FLORIDA BANCSHARES, INC. AND SUBSIDIARY
                        CONSOLIDATED STATEMENTS OF INCOME
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                                                           Three Months
                                                                                                              Ended
                                                                                                             June 30,
                                                                                                      2003                   2002
                                                                                                   ----------             ----------
                                                                                                            (thousands)
Interest Income
<S>                                                                                                <C>                    <C>
    Interest and fees on loans                                                                     $   10,075             $    9,648
    Interest on investment securities available for sale                                                  516                    411
    Interest on investment securities held to maturity                                                     --                     30
    Interest on federal funds sold                                                                         31                     29
    Interest on interest-bearing deposits                                                                 123                      4
                                                                                                   ----------             ----------
      Total interest income                                                                            10,745                 10,122

Interest Expense
    Interest on deposits                                                                                3,784                  3,512
    Interest on repurchases and federal funds purchased                                                    29                     47
    Interest on other borrowings                                                                          170                    163
                                                                                                   ----------             ----------
      Total interest expense                                                                            3,983                  3,722
                                                                                                   ----------             ----------
        Net interest income                                                                             6,762                  6,400

Provision for Loan Losses                                                                                 650                    525
                                                                                                   ----------             ----------
    Net interest income after provision for loan losses                                                 6,112                  5,875

Non-Interest Income
    Service charges                                                                                       912                    822
    Secondary market mortgage sales                                                                       383                    521
    Other fees and charges                                                                                192                    153
    Securities gains                                                                                      382                      4
                                                                                                   ----------             ----------
      Total non-interest income                                                                         1,869                  1,500

Non-Interest Expense
    Salaries and employee benefits                                                                      2,696                  2,783
    Occupancy and equipment expense                                                                       880                    834
    Other operating expense                                                                             1,789                  1,687
                                                                                                   ----------             ----------
      Total non-interest expense                                                                        5,365                  5,304
                                                                                                   ----------             ----------

Income before income taxes                                                                              2,616                  2,071
    Provision for income taxes                                                                            947                    738
                                                                                                   ----------             ----------

NET INCOME                                                                                         $    1,669             $    1,333
                                                                                                   ==========             ==========


Earnings Per Share (Note 3):

    Basic earnings per common share                                                                $     0.27             $     0.22
                                                                                                   ==========             ==========
    Weighted average shares outstanding                                                             6,206,429              6,095,953
                                                                                                   ==========             ==========

    Diluted earnings per common share                                                              $     0.26             $     0.21
                                                                                                   ==========             ==========
    Diluted weighted average shares outstanding                                                     6,394,681              6,200,906
                                                                                                   ==========             ==========

Dividends Per Share                                                                                $     0.06             $     0.05
                                                                                                   ==========             ==========
</TABLE>

     See accompanying notes to unaudited consolidated financial statements.

                                       4

<PAGE>



                   CNB FLORIDA BANCSHARES, INC. AND SUBSIDIARY
                        CONSOLIDATED STATEMENTS OF INCOME
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                                                          Six Months Ended
                                                                                                              June 30,
                                                                                                     2003                   2002
                                                                                                   ----------             ----------
                                                                                                             (thousands)
Interest Income
<S>                                                                                                <C>                    <C>
    Interest and fees on loans                                                                     $   20,150             $   18,900
    Interest on investment securities available for sale                                                  977                    847
    Interest on investment securities held to maturity                                                     --                     71
    Interest on federal funds sold                                                                         69                     43
    Interest on interest-bearing deposits                                                                 246                      5
                                                                                                   ----------             ----------
      Total interest income                                                                            21,442                 19,866

Interest Expense
    Interest on deposits                                                                                7,726                  7,177
    Interest on repurchases and federal funds purchased                                                    56                    108
    Interest on other borrowings                                                                          338                    324
                                                                                                   ----------             ----------
      Total interest expense                                                                            8,120                  7,609
                                                                                                   ----------             ----------
        Net interest income                                                                            13,322                 12,257

Provision for Loan Losses                                                                               1,325                  1,025
                                                                                                   ----------             ----------
    Net interest income after provision for loan losses                                                11,997                 11,232

Non-Interest Income
    Service charges                                                                                     1,767                  1,562
    Secondary market mortgage sales                                                                       890                    994
    Other fees and charges                                                                                439                    344
    Securities gains                                                                                      395                      4
                                                                                                   ----------             ----------
      Total non-interest income                                                                         3,491                  2,904

Non-Interest Expense
    Salaries and employee benefits                                                                      5,550                  5,526
    Occupancy and equipment expense                                                                     1,783                  1,656
    Other operating expense                                                                             3,501                  3,281
                                                                                                   ----------             ----------
      Total non-interest expense                                                                       10,834                 10,463
                                                                                                   ----------             ----------

Income before income taxes                                                                              4,654                  3,673
    Provision for income taxes                                                                          1,684                  1,345
                                                                                                   ----------             ----------

NET INCOME                                                                                         $    2,970             $    2,328
                                                                                                   ==========             ==========


Earnings Per Share (Note 3):

    Basic earnings per common share                                                                $     0.48             $     0.38
                                                                                                   ==========             ==========

    Weighted average shares outstanding                                                             6,166,904              6,098,512
                                                                                                   ==========             ==========

    Diluted earnings per common share                                                              $     0.47             $     0.38
                                                                                                   ==========             ==========

    Diluted weighted average shares outstanding                                                     6,359,519              6,176,294
                                                                                                   ==========             ==========

Dividends Per Share                                                                                $     0.12             $     0.10
                                                                                                   ==========             ==========
</TABLE>

     See accompanying notes to unaudited consolidated financial statements.

                                       5

<PAGE>



                   CNB FLORIDA BANCSHARES, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                                                            Six Months Ended
                                                                                                                June 30,
                                                                                                         2003                2002
                                                                                                       ----------         ----------

                                                                                                                (thousands)
CASH FLOWS FROM OPERATING ACTIVITIES
<S>                                                                                                      <C>               <C>
Net income                                                                                               $  2,970          $  2,328
Adjustments to reconcile net income to net cash provided by operating activities:
    Gain on sale of investment securities available for sale                                                 (382)               --
    Gain on called investment securities available for sale                                                   (13)               (4)
    Depreciation and amortization                                                                           1,285             1,236
    Provision for loan losses                                                                               1,325             1,025
    Investment securities amortization, net                                                                   262                91
    Loss on sale of premises and equipment                                                                     63                --
    Changes in assets and liabilities:
       Loans held for sale                                                                                  9,988             2,803
       Other assets                                                                                          (126)           (1,220)
       Other liabilities                                                                                      191               686
                                                                                                         --------          --------
          Net cash provided by operating activities                                                        15,563             6,945
                                                                                                         --------          --------

CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of investment securities available for sale                                                     (55,094)          (20,239)
Proceeds from maturities of securities available for sale                                                  16,637             3,234
Proceeds from sales of securities available for sale                                                       10,382                --
Proceeds from called securities available for sale                                                         12,500             8,140
Proceeds from called securities held to maturity                                                               --             2,321
Net increase in loans                                                                                     (25,327)          (43,826)
Sale of premises and equipment                                                                                245                --
Purchases of premises and equipment                                                                          (777)             (179)
                                                                                                         --------          --------
          Net cash used in investing activities                                                           (41,434)          (50,549)

CASH FLOWS FROM FINANCING ACTIVITIES
Net increase in deposits                                                                                   63,352            54,642
Net decrease in securities sold under repurchase agreements
   and federal funds purchased                                                                             (4,819)           (8,090)
Cash dividends                                                                                               (679)             (610)
Repurchase of common stock                                                                                     --              (100)
Proceeds from exercise of stock options                                                                       881                --
                                                                                                         --------          --------
          Net cash provided by financing activities                                                        58,735            45,842
                                                                                                         --------          --------
NET INCREASE IN CASH AND CASH EQUIVALENTS                                                                  32,864             2,238

CASH AND CASH EQUIVALENTS, beginning of period                                                             33,601            20,677
                                                                                                         --------          --------

CASH AND CASH EQUIVALENTS, end of period                                                                 $ 66,465          $ 22,915
                                                                                                         ========          ========

SUPPLEMENTAL DISCLOSURES:
          Interest paid                                                                                  $  7,768          $  8,399
                                                                                                         ========          ========

          Income taxes paid                                                                              $  1,864          $  1,267
                                                                                                         ========          ========
</TABLE>

     See accompanying notes to unaudited consolidated financial statements.

                                       6

<PAGE>



                   CNB FLORIDA BANCSHARES, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  June 30, 2003
                                   (Unaudited)

Note 1. Basis of Presentation and Accounting Policies
The accompanying unaudited financial statements have been prepared in accordance
with the  instructions  to Form 10-Q which do not  require all  information  and
footnotes necessary for a complete  presentation of financial position,  results
of operations and cash flows in conformity with accounting  principles generally
accepted in the United  States of America.  In the opinion of  management,  such
financial  statements  reflect  all  adjustments   (consisting  only  of  normal
recurring adjustments) necessary for a fair statement of the financial position,
results  of  operations  and  cash  flows  for the  interim  periods  presented.
Operating  results for the six months  ended June 30,  2003 are not  necessarily
indicative of the results that may be expected for the year ending  December 31,
2003.  Management's  discussion and analysis should be read in conjunction  with
the consolidated financial statements.  Certain amounts and captions relating to
2002 have been reclassified to conform to current year presentation.

Accounting  policies  followed in the presentation of interim  financial results
are  presented  in Note 2 of CNB Florida  Bancshares,  Inc.'s (the  "Company's")
audited  consolidated  financial  statements  included in Form 10-K for the year
ended  December  31,  2002,  which is  available  on the  Company's  web site at
www.cnbnb.com.

Note 2. Consolidation
The consolidated  financial  statements  include the accounts of the Company and
its wholly owned  subsidiary,  CNB National Bank. All  significant  intercompany
accounts and transactions have been eliminated.

Note 3.  Earnings Per Share
Basic  earnings per common  share is  calculated  based on the weighted  average
number of shares of common stock outstanding during the period. Diluted earnings
per common share is calculated based on the weighted average number of shares of
common stock outstanding and common stock equivalents, consisting of outstanding
stock  options that have a dilutive  effect on earnings per share.  Common stock
equivalents  are  determined  using the treasury stock method for diluted shares
outstanding.  The  difference  between  diluted and basic shares  outstanding is
common stock equivalents from stock options outstanding during the periods ended
June 30, 2003 and 2002.

The  following  table sets forth the  computation  of earnings per share for the
each of the three and six month periods ended June 30, 2003 and 2002.

<TABLE>
<CAPTION>
                                                                                   Three Months Ended           Six Months Ended
                                                                                 June 30,      June 30,       June 30,     June 30,
                                                                                   2003          2002           2003         2002
                                                                                ----------    ----------    ----------    ----------
Numerator:
<S>                                                                             <C>           <C>           <C>           <C>
   Net income available to common shareholders                                  $    1,669    $    1,333    $    2,970    $    2,328
                                                                                ==========    ==========    ==========    ==========
Denominator:
   Denominator for basic earnings per common share
      Weighted-average shares                                                    6,206,429     6,095,953     6,166,904     6,098,512
   Effect of dilutive securities:
      Common stock options                                                         188,252       104,953       192,615        77,782
                                                                                ----------    ----------    ----------    ----------
   Dilutive potential common shares                                                188,252       104,953       192,615        77,782
                                                                                ----------    ----------    ----------    ----------
   Denominator for diluted earnings per common share
      Adjusted weighted average shares                                           6,394,681     6,200,906     6,359,519     6,176,294
                                                                                ==========    ==========    ==========    ==========

Basic earnings per common share                                                 $     0.27    $     0.22    $     0.48    $     0.38
                                                                                ==========    ==========    ==========    ==========

Diluted earnings per common share                                               $     0.26    $     0.21    $     0.47    $     0.38
                                                                                ==========    ==========    ==========    ==========
</TABLE>

Note 4.  Comprehensive Income
Comprehensive  income is defined as the change in equity during a period arising
from  non-owner  transactions  and  events.  The  following  table  details  the
Company's comprehensive income for the three and six months ending June 30, 2003
and 2002.

                                       7

<PAGE>

<TABLE>
<CAPTION>
                                                                                    Three Months Ended           Six Months Ended
                                                                                   June 30,     June 30,       June 30,     June 30,
                                                                                     2003         2002           2003         2002
                                                                                   -------       -------       -------       -------
Unrealized gain (loss) recognized in other comprehensive
income (net):

<S>                                                                               <C>           <C>           <C>           <C>
   Available for sale securities                                                  $   (98)      $   421       $  (301)      $   160
   Interest rate swap designated as cash flow hedge                                   (65)         (321)          (68)         (226)
                                                                                  -------       -------       -------       -------
   Total unrealized gain (loss) before income taxes                                  (163)          100          (369)          (66)
   Deferred income taxes                                                               60           (37)          137            24
                                                                                  -------       -------       -------       -------
     Net of deferred income tax                                                   $  (103)      $    63       $  (232)      $   (42)
                                                                                  =======       =======       =======       =======

Amounts reported in net income:
   Securities gains                                                               $   382       $     4       $   395       $     4
   Interest rate swap designated as cash flow hedge                                   (88)          (69)         (171)         (138)
   Net amortization (accretion)                                                       141            49           262            91
                                                                                  -------       -------       -------       -------
   Reclassification adjustment                                                        435           (16)          486           (43)
   Deferred income taxes                                                             (161)            6          (180)           16
                                                                                  -------       -------       -------       -------
     Reclassification adjustment, net of deferred income tax                      $   274       $   (10)      $   306       $   (27)
                                                                                  =======       =======       =======       =======

Amounts reported in other comprehensive income:
   Net unrealized  gain (loss)  arising during period, net of tax                 $   171       $    53       $    74       $   (69)
   Reclassification adjustment, net of tax                                           (274)           10          (306)           27
                                                                                  -------       -------       -------       -------
   Unrealized gain (loss) arising during period, net of tax                          (103)           63          (232)          (42)
   Net income                                                                       1,669         1,333         2,970         2,328
                                                                                  -------       -------       -------       -------
      Total comprehensive income                                                  $ 1,566       $ 1,396       $ 2,738       $ 2,286
                                                                                  =======       =======       =======       =======
</TABLE>

Note 5.  Stock-Based Compensation

The Company has  long-term  incentive  plans that  provide  stock-based  awards,
including  stock  options to certain  key  employees.  The  Company  applies the
provisions of Accounting  Principles Board Opinion No. 25,  Accounting for Stock
Issued to Employees,  in accounting for its stock option and award plans and has
adopted the  disclosure-only  option under  Statement  of  Financial  Accounting
Standards,  ("SFAS") No. 123,  Accounting for Stock-Based  Compensation.  If the
Company had adopted the accounting provisions of SFAS 123 and recognized expense
for the fair value of employee  stock  options  granted over the vesting life of
the  options,  pro forma net income  would be as  indicated  below  (dollars  in
thousands, except per share data):

<TABLE>
<CAPTION>
                                                                                     For the Six Months Ended
                                                               ---------------------------------------------------------------
                                                                        As Reported                       Pro Forma
                                                               --------------------------        -----------------------------
                                                                June 30,         June 30,         June 30,           June 30,
                                                                  2003             2002             2003               2002
                                                               ---------        ---------        ---------        ------------
<S>                                                            <C>              <C>              <C>              <C>
Net income .........................................           $   2,970        $   2,328        $   2,858        $      2,162
Basic earnings per common share ....................           $    0.48        $    0.38        $    0.46        $       0.35
Diluted earnings per common share ..................           $    0.47        $    0.38        $    0.45        $       0.35
</TABLE>


<TABLE>
<CAPTION>
                                                                                 For the Three Months Ended
                                                               ---------------------------------------------------------------
                                                                        As Reported                       Pro Forma
                                                               --------------------------        -----------------------------
                                                                June 30,         June 30,         June 30,           June 30,
                                                                  2003             2002             2003               2002
                                                               ---------        ---------        ---------        ------------

<S>                                                            <C>              <C>              <C>              <C>
Net income .........................................           $   1,669        $   1,333        $   1,593        $      1,215
Basic earnings per common share ....................           $    0.27        $    0.22        $    0.26        $       0.20
Diluted earnings per common share ..................           $    0.26        $    0.21        $    0.25        $       0.20
</TABLE>

                                       8
<PAGE>

In  determining  the pro forma  disclosures  above,  the fair  value of  options
granted was estimated on the grant date using the  Black-Scholes  option-pricing
model.  The  Black-Scholes  model was  developed  to estimate  the fair value of
traded  options,  which  have  different  characteristics  than  employee  stock
options, and changes to the subjective  assumptions used in the model can result
in materially different fair value estimates.  Options to purchase 91,500 shares
of stock with an  estimated  average fair value of $4.50 per option were granted
during the six months ended June 30, 2003.  Options to purchase  112,000  shares
with an estimated average fair value of $4.12 per option were granted during the
six months ended June 30, 2002. The  weighted-average  grant date fair values of
options granted during 2003 and 2002 were based on the following assumptions:

                                                         2003             2002
                                                       -------          -------
Risk-free interest rate ......................           2.49%            5.13%
Dividend yield ...............................           1.54%            1.88%
Volatility ...................................          37.00%           38.00%
Expected lives ...............................         6 years          6 years

Compensation expense under the fair value-based method is recognized over the
vesting period of the related stock options and is based on the estimated number
of shares expected to actually vest. Accordingly, the pro forma results of
applying SFAS No. 123 in 2003 and 2002 may not be indicative of future amounts.

Note 6.  Recent Accounting Pronouncements

In June 2001, the Financial Accounting Standards Board ("FASB") issued SFAS 143,
Accounting for Asset  Retirement  Obligations  ("SFAS 143").  SFAS 143 addresses
financial   accounting  and  reporting  for  obligations   associated  with  the
retirement of tangible  long-lived  assets and the associated  asset  retirement
costs.  The Company adopted the provisions of this Statement on January 1, 2003,
which did not have a significant impact on the Company's  consolidated financial
statements.

In April 2002, the FASB issued SFAS 145, Rescission of FASB Statements No. 4, 44
and 64,  Amendments of SFAS 13, and Technical  Corrections as of May 2002 ("SFAS
145").  SFAS  145  rescinds  SFAS 4,  Extinguishments  of Debt  Made to  Satisfy
Sinking-Funds  Requirements.  SFAS  145 also  rescinds  FAS 44,  Accounting  for
Intangible Assets of Motor Carriers and amends FAS 13, Accounting for Leases, to
eliminate an inconsistency  between the required  accounting for  sale-leaseback
transactions and the required  accounting for certain lease  modifications  that
have  economic  effects  that are similar to  sale-leaseback  transactions.  The
provisions  of this  Statement  were  adopted by the Company on January 1, 2003,
which did not have a significant impact on the Company's  consolidated financial
statements.

In  November  2002,  the FASB  issued  FASB  Interpretation  No. 45  Guarantor's
Accounting  and  Disclosure  Requirements  for  Guarantees,  Including  Indirect
Guarantees of Indebtedness of Others,  an  Interpretation of FASB Statements No.
5, 57, and 107 and Rescission of FASB  Interpretation  No. 34 ("FIN 45"). FIN 45
elaborates  on the  disclosures  to be made by a  guarantor  in its  interim and
annual financial  statements about its obligations under certain guarantees that
it has issued.  It also clarifies that a guarantor is required to recognize,  at
the inception of a guarantee,  a liability for the fair value of the  obligation
undertaken  in issuing  the  guarantee.  The  initial  recognition  and  initial
measurement  provisions  of FIN 45 are  applicable  on a  prospective  basis  to
guarantees  issued or modified  after  December  31, 2002,  irrespective  of the
guarantor's  fiscal  year-end.  The provisions of this Statement were adopted by
the Company on January 1, 2003,  which did not have a significant  impact on the
Company's consolidated financial statements.

In January 2003, the FASB issued FASB  Interpretation  No. 46,  Consolidation of
Variable-Interest  Entities - an Interpretation of ARB No. 51 ("FIN 46"). FIN 46
addresses  consolidation by business  enterprises of variable interest entities,
which  have  one or  both  of the  following  characteristics:  (1)  the  equity
investment  at risk is not  sufficient  to  permit  the  entity to  finance  its
activities without additional subordinated financial support from other parties,
which is provided  through other  interests  that will absorb some or all of the
expected  losses of the entity and (2) the equity  investors lack one or more of
the following essential  characteristics of a controlling  financial interest:

o    The  direct or  indirect  ability  to make  decisions  about  the  entity's
     activities through voting rights or similar rights

                                       9

<PAGE>

o    The  obligation to absorb the expected  losses of the entity if they occur,
     which makes it possible for the entity to finance its activities

o    The right to receive the  expected  residual  returns of the entity if they
     occur,  which is the  compensation  for the risk of absorbing  the expected
     losses.

This  Interpretation  applies  immediately to variable interest entities created
after January 31, 2003, and to variable interest entities in which an enterprise
obtains an  interest  after that date.  It applies in the first  fiscal  year or
interim period beginning after June 15, 2003, to variable  interest  entities in
which an enterprise  holds a variable  interest that it acquired before February
1,  2003.  The  adoption  of FIN 46 did not  have a  significant  impact  on the
Company's consolidated financial statements.

In April  2003,  the  FASB  issued  SFAS  149,  Amendment  of  Statement  133 on
Derivative  Instruments and Hedging Activities ("SFAS 149"). SFAS 149 amends and
clarifies  financial  accounting  and  reporting  for  derivative   instruments,
including  certain  derivative  instruments  embedded in other contracts and for
hedging  activities  under FASB  Statement No. 133,  Accounting  for  Derivative
Instruments and Hedging Activities.  SFAS 149 is effective for contracts entered
into or modified  after June 30,  2003,  except as stated  below and for hedging
relationships  designated  after June 30, 2003. The provisions of this Statement
that relate to Statement 133 Implementation  Issues that have been effective for
fiscal quarters that began prior to June 15, 2003, should continue to be applied
in accordance with their respective effective dates. In addition, the provisions
of SFAS 149 which relate to forward purchases or sales of when-issued securities
or other  securities  that do not yet exist,  should be applied to both existing
contracts  and new contracts  entered into after June 30, 2003.  The adoption of
SFAS 149 is not expected to have a material impact on the Company's consolidated
financial statements.

In May  2003,  the FASB  issued  SFAS  150,  Accounting  for  Certain  Financial
Instruments  with  Characteristics  of Both Liabilities and Equity ("SFAS 150").
This  Statement  establishes  standards for  classification  and  measurement of
certain  financial  instruments  with  characteristics  of both  liabilities and
equity.  SFAS 150  requires  that  financial  instruments  within  its  scope be
classified  as a  liability  (or an  asset in some  circumstances).  SFAS 150 is
effective for financial instruments entered into or modified after May 31, 2003,
and  otherwise  is  effective  at the  beginning  of the  first  interim  period
beginning  after June 15, 2003. The adoption of SFAS 150 is not expected to have
a material impact on the Company's consolidated financial statements.


                                       10

<PAGE>

                   CNB FLORIDA BANCSHARES, INC. AND SUBSIDIARY
                             Selected Financial Data




<TABLE>
<CAPTION>
                                                                                                     Six Months Ended June 30,
Dollars in thousands except per share information.                                                2003                      2002
====================================================================================================================================
SUMMARY OF OPERATIONS:
<S>                                                                                          <C>                       <C>
Total interest income                                                                        $    21,442               $    19,866
Total interest expense                                                                            (8,120)                   (7,609)
                                                                                             -----------               -----------
Net interest income                                                                               13,322                    12,257
Provision for loan losses                                                                         (1,325)                   (1,025)
                                                                                             -----------               -----------
Net interest income after provision for loan losses                                               11,997                    11,232
Non-interest income                                                                                3,491                     2,904
Non-interest expense                                                                             (10,834)                  (10,463)
                                                                                             -----------               -----------
Income before taxes                                                                                4,654                     3,673
Income taxes                                                                                      (1,684)                   (1,345)
                                                                                             -----------               -----------
Net income                                                                                   $     2,970               $     2,328
                                                                                             -----------               -----------

====================================================================================================================================
PER COMMON SHARE:
Basic earnings                                                                               $      0.48               $      0.38
Diluted earnings                                                                                    0.47                      0.38
Book value                                                                                          8.61                      7.93
Dividends declared                                                                                  0.12                      0.10
Actual shares outstanding                                                                      6,220,490                 6,095,953
Weighted average shares outstanding                                                            6,166,904                 6,098,512
Diluted weighted average shares outstanding                                                    6,359,519                 6,176,294

====================================================================================================================================
KEY RATIOS:
Return on average assets                                                                            0.78%                     0.75%
Return on average shareholders' equity                                                             11.43                      9.83
Dividend payout                                                                                    25.00                     26.32
Efficiency ratio                                                                                   64.44                     69.01
Total risk-based capital ratio                                                                      8.90                      8.66
Average shareholders' equity to average assets                                                      6.82                      7.61
Tier 1 leverage                                                                                     6.20                      6.56

====================================================================================================================================
FINANCIAL CONDITION AT PERIOD-END:
Assets                                                                                       $   792,338               $   660,943
Loans                                                                                            630,002                   554,992
Deposits                                                                                         711,988                   587,533
Shareholders' equity                                                                              53,569                    48,352

====================================================================================================================================
</TABLE>

                                       11

<PAGE>



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

OVERVIEW

     The following  analysis reviews  important  factors affecting the financial
condition  and results of  operations  of CNB Florida  Bancshares,  Inc. for the
three and six months ended June 30, 2003 and 2002.  This  financial  information
should  be  read  in  conjunction  with  the  unaudited  consolidated  financial
statements of CNB Florida Bancshares,  Inc. ("the Company") and its wholly owned
subsidiary,  CNB  National  Bank ("the  Bank"),  included in "Item 1.  Financial
Statements" above and the audited consolidated  financial statements included in
the Company's  Form 10-K for the year ended December 31, 2002. The Company makes
its  Securities  and  Exchange  Commission  filings  available on its website at
www.cnbnb.com.  The analysis contains forward-looking statements with respect to
-------------
financial  and business  matters,  which are subject to risks and  uncertainties
that may change over a period of time. These risks and uncertainties include but
are not  limited to changes in the  interest  rate  environment  that may reduce
margins,  general economic or business  conditions in the Company's markets that
lead to a deterioration in credit quality or reduced loan demand, legislative or
regulatory  changes  and  competitors  of the  Company  that  may  have  greater
financial   resources  and  develop   products  or  services  that  enable  such
competitors to compete more  successfully  than the Company.  Other factors that
may cause actual results to differ from the  forward-looking  statements include
customer  acceptance of new products and services,  changes in customer spending
and saving habits and the Company's  success in managing costs  associated  with
expansion.   Readers  are  cautioned  not  to  place  undue  reliance  on  these
forward-looking  statements,  which  speak  only as of the date  hereof.  Actual
results could be  significantly  different from the  forward-looking  statements
contained herein. The Company has no foreign operations;  accordingly, there are
no assets or liabilities attributable to foreign operations.


RESULTS OF OPERATIONS

     The Company's  earnings for the three month period ended June 30, 2003 were
$1.7 million, or $0.26 per diluted share, compared to $1.3 million, or $0.21 per
diluted share,  in the second quarter of 2002. For the six months ended June 30,
2003, net income was $3.0 million or $0.47 per diluted  share,  compared to $2.3
million, or $0.38 per diluted share for the comparable 2002 period. Total assets
increased  to $792.3  million at June 30,  2003  compared  to $730.7  million at
December 31, 2002 and $660.9 million at June 30, 2002. Total  outstanding  loans
and  deposits  rose  14%  and  21%  to  $630.0   million  and  $712.0   million,
respectively,  at  June  30,  2003  from  $555.0  million  and  $587.5  million,
respectively, at June 30, 2002.

Net Interest Income

Net  interest  income is the single  largest  source of revenue for the Bank and
consists of interest and net loan fee income  generated by earning assets,  less
interest expense paid on interest  bearing  liabilities.  The Company's  primary
objective  is to manage its  assets  and  liabilities  to  provide  the  largest
possible  amount  of income  while  balancing  interest  rate,  credit  quality,
liquidity and capital risks.  Net interest income for the first half of 2003 was
$13.3  million,  compared to $12.3  million for the first six months in 2002, an
increase of 9%. Interest income increased 6% while interest expense increased 7%
for the 2003 second quarter over  comparable  2002 amounts.  The increase in net
interest  income  reflects  growth in loans,  investments  and interest  bearing
deposits,  which were  partially  offset by higher  time  deposit  balances  and
declining rates and spreads.

     Total average earning assets  increased  $141.9  million,  or 25% to $715.5
million in 2003,  compared to $573.6 million in 2002. The primary drivers of the
increase was due to growth in the average balance of loans and interest  bearing
deposits  to $611.9  million  and $38.2  million  at June 30,  2003 from  $527.4
million and $0.6 million for the same period in 2002, respectively. Increases in
time,  money  market  and  other  interest  bearing  deposits,   were  the  main
contributors in the $123.0 million,  or 25% growth in average  interest  bearing
liabilities.

     Net interest  margin was 3.76% in the second quarter 2003 compared to 4.37%
in the second  quarter 2002 and 3.79% in the first quarter  2003.  Total earning
asset  yields for the first six months in 2003  decreased to 6.04% from 6.98% in
2002 and rates on interest-bearing  liabilities  decreased to 2.64% in 2003 from
3.08% in 2002. The decline in net interest margin reflects spread  tightening as
a result of declining loan yields and an increase in lower yielding,  short-term
investments.  The Company continues to maintain an asset sensitive position with
respect to net interest income.  Maintaining this profile will allow the Company
to take  advantage  of a rising  rate  environment.  Tables 1 and 2 provide  the

                                       12

<PAGE>

Company's  average  volume of  interest  earning  assets  and  interest  bearing
liabilities  for the first half of 2003 and 2002 and the three months ended June
30, 2003 and 2002, respectively.

            Table 1: Year to Date Average Balances - Yields and Rates
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                    Six Months Ended June 30, 2003               Six Months Ended June 30, 2002
                                              ---------------------------------------     ------------------------------------------
                                                               Interest                                  Interest
                                              Average         Income or      Average       Average      Income or          Average
                                              Balance          Expense         Rate        Balance       Expense             Rate
                                             ---------       -----------    ----------    ---------     ----------        ----------
                                                                       (dollars in thousands)
ASSETS:
<S>                                           <C>             <C>                <C>      <C>            <C>                  <C>
  Federal funds sold                          $ 12,102        $     69           1.15%    $  5,234       $     43             1.66%
  Investment securities
    available for sale                          53,303             977           3.69       37,982            847             4.50
  Investment securities
    held to maturity                                 -               -           -           2,364             71             6.06
  Loans (1)                                    611,854          20,150           6.64      527,419         18,900             7.23
  Interest bearing deposits                     38,206             246           1.30          553              5             1.82
                                              --------        --------       --------     --------       --------         --------

TOTAL EARNING ASSETS                           715,465          21,442           6.04      573,552         19,866             6.98
  All other assets                              53,271                                      54,643
                                              --------                                    --------

TOTAL ASSETS                                  $768,736                                    $628,195
                                              ========                                    ========

LIABILITIES AND
  SHAREHOLDERS' EQUITY:
  NOW and money markets                       $227,205        $  1,842           1.63%    $179,827       $  1,580             1.77%
  Savings                                       23,627              58           0.50       21,526             80             0.75
  Time deposits                                347,303           5,826           3.38      272,248          5,517             4.09
  Repurchases and federal
     funds purchased                            11,986              56           0.94       14,555            108             1.50
 Short term borrowings                           1,000              14           2.82            -              -             -
 Other borrowings (2)                           10,000             324           6.53       10,000            324             6.53
                                              --------        --------       --------     --------       --------         --------
TOTAL INTEREST BEARING
  LIABILITIES                                  621,121           8,120           2.64      498,156          7,609             3.08
  Demand deposits                               89,142                                      77,613
  Other liabilities                              6,053                                       4,651
  Shareholders' equity                          52,420                                      47,775
                                              --------                                    --------

TOTAL LIABILITIES AND
  SHAREHOLDERS' EQUITY                        $768,736                                    $628,195
                                              ========                                    ========

                                                                             --------                                     --------
INTEREST SPREAD (3)                                                              3.40%                                        3.90%
                                                                             ========                                     ========

                                                              --------                                   --------
NET INTEREST INCOME                                           $ 13,322                                   $ 12,257
                                                              ========                                   ========

                                                                             --------                                     --------
NET INTEREST MARGIN (4)                                                          3.75%                                        4.31%
                                                                             ========                                     ========

<FN>
----------
(1)  Interest  income on average loans includes loan fee recognition of $282,000
     and $234,000 in 2003 and 2002, respectively.
(2)  Interest  expense  and  average  rate  amounts  include  the  impact of the
     Company's $10 million pay-fixed interest rate swap that is accounted for as
     a cash flow hedge of other borrowings.
(3)  Represents the average rate earned minus average rate paid.
(4)  Represents net interest income divided by total earning assets.
</FN>
</TABLE>

                                       13

<PAGE>





    Table 1a: Analysis of Year to Date Changes in Interest Income and Expense
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                  NET CHANGE JUNE 30,                     NET CHANGE JUNE 30,
                                                               2002-2003 ATTRIBUTABLE TO:             2001-2002 ATTRIBUTABLE TO:
                                                         -----------------------------------     -----------------------------------
                                                                                       Net                                    Net
                                                         Volume (1)     Rate (2)     Change      Volume (1)    Rate (2)      Change
                                                         ----------     --------     -------     ----------    --------     --------
                                                                                          (thousands)
INTEREST INCOME:
<S>                                                        <C>          <C>          <C>          <C>          <C>          <C>
   Federal funds sold                                      $    56      $   (30)     $    26      $    99      $   (84)     $    15
   Investment securities available for sale                    342         (212)         130          143         (275)        (132)
   Investment securities held to maturity                      (71)           -          (71)        (142)          (2)        (144)
   Loans                                                     3,026       (1,776)       1,250        4,810       (4,357)         453
   Interest bearing deposits                                   340          (99)         241            3            -            3
                                                           -------      -------      -------      -------      -------      -------
      Total                                                  3,693       (2,117)       1,576        4,913       (4,718)         195
                                                           -------      -------      -------      -------      -------      -------


INTEREST EXPENSE:
   NOW and money markets                                       416         (154)         262          766       (1,126)        (360)
   Savings                                                       8          (30)         (22)          25          (54)         (29)
   Time deposits                                             1,521       (1,212)         309        2,002       (3,079)      (1,077)
   Repurchases and federal funds
     purchased                                                 (19)         (33)         (52)          (9)        (242)        (251)
   Short term borrowings                                        14            -           14         (866)           -         (866)
   Other borrowings                                              -            -            -          324            -          324
                                                           -------      -------      -------      -------      -------      -------
      Total                                                  1,940       (1,429)         511        2,242       (4,501)      (2,259)
                                                           -------      -------      -------      -------      -------      -------
Net interest income                                        $ 1,753      $  (688)     $ 1,065      $ 2,671      $  (217)     $ 2,454
                                                           =======      =======      =======      =======      =======      =======

<FN>
----------
(1) The volume variance  reflects the change in the average balance  outstanding
multiplied by the actual average rate during the prior period.
(2) The rate variance  reflects the change in the actual average rate multiplied
by the average balance  outstanding  during the prior period.  Changes which are
not  solely  due to volume  changes  or  solely  due to rate  changes  have been
attributed to rate changes.
</FN>
</TABLE>


                                       14

<PAGE>




             Table 2: Quarterly Average Balances - Yields and Rates
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                   Three Months Ended June 30, 2003            Three Months Ended June 30, 2002
                                             -----------------------------------------    ------------------------------------------
                                                               Interest                                  Interest
                                              Average         Income or      Average       Average      Income or          Average
                                              Balance          Expense         Rate        Balance       Expense             Rate
                                             ---------       -----------    ----------    ---------     ----------        ----------
                                                                       (dollars in thousands)
ASSETS:
<S>                                           <C>             <C>                <C>      <C>            <C>                  <C>
  Federal funds sold                          $ 11,191        $     31           1.11%    $  7,290       $     29             1.60%
  Investment securities
    available for sale                          58,740             516           3.52       37,286            411             4.42
  Investment securities
    held to maturity                                 -               -           -           1,901             30             6.33
  Loans (1)                                    619,581          10,075           6.52      540,361          9,648             7.16
  Interest bearing deposits                     32,588             123           1.51          666              4             2.41
                                              --------        --------       --------     --------       --------         --------

TOTAL EARNING ASSETS                           722,100          10,745           5.97      587,504         10,122             6.91
  All other assets                              56,128                                      53,830
                                              --------                                    --------

TOTAL ASSETS                                  $778,228                                    $641,334
                                              ========                                    ========

LIABILITIES AND
  SHAREHOLDERS' EQUITY:
  NOW and money markets                       $231,501        $    899           1.56%    $187,711       $    817             1.75%
  Savings                                       24,005              29           0.48       22,043             41             0.75
  Time deposits                                347,706           2,856           3.29      275,859          2,654             3.86
  Repurchases and federal
     funds purchased                            12,331              29           0.94       13,026             47             1.45
 Short term borrowings                           1,000               7           2.81            -              -                -
 Other borrowings (2)                           10,000             163           6.54       10,000            163             6.54
                                              --------        --------       --------     --------       --------         --------
TOTAL INTEREST BEARING
  LIABILITIES                                  626,543           3,983           2.55      508,639          3,722             2.94
  Demand deposits                               92,525                                      79,987
  Other liabilities                              5,979                                       4,716
  Shareholders' equity                          53,181                                      47,992
                                              --------                                    --------

TOTAL LIABILITIES AND
  SHAREHOLDERS' EQUITY                        $778,228                                    $641,334
                                              ========                                    ========

                                                                             --------                                     --------
INTEREST SPREAD (3)                                                              3.42%                                        3.97%
                                                                             ========                                     ========

                                                              --------                                   --------
NET INTEREST INCOME                                           $  6,762                                   $  6,400
                                                              ========                                   ========

                                                                             --------                                     --------
NET INTEREST MARGIN (4)                                                          3.76%                                        4.37%
                                                                             ========                                     ========

<FN>
----------
(1)  Interest  income on average loans includes loan fee recognition of $128,000
     and $111,000 in 2003 and 2002, respectively.
(2)  Interest  expense  and  average  rate  amounts  include  the  impact of the
     Company's $10 million pay-fixed interest rate swap that is accounted for as
     a cash flow hedge of other borrowings.
(3)  Represents the average rate earned minus average rate paid.
(4)  Represents net interest income divided by total earning assets.
</FN>
</TABLE>


                                       15

<PAGE>


     Table 2a: Analysis of Quarterly Changes in Interest Income and Expense
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                          NET CHANGE JUNE 30,               NET CHANGE JUNE 30,
                                                                       2002-2003 ATTRIBUTABLE TO:       2001-2002 ATTRIBUTABLE TO:
                                                                    -------------------------------  -------------------------------
                                                                                            Net                               Net
                                                                    Volume (1)  Rate (2)   Change    Volume (1)  Rate (2)   Change
                                                                    ----------  --------  ---------  ---------   --------  ---------
                                                                       (thousands)
INTEREST INCOME:
<S>                                                                  <C>        <C>        <C>        <C>        <C>        <C>
   Federal funds sold                                                $    16    $   (14)   $     2    $    76    $   (60)   $    16
   Investment securities available for sale                              236       (132)       104         58       (107)       (49)
   Investment securities held to maturity                                (30)         -        (30)       (75)         1        (74)
   Loans                                                               1,414       (987)       427      2,116     (2,007)       109
   Interest bearing deposits                                             192        (73)       119          -          4          4
                                                                     -------    -------    -------    -------    -------    -------
      Total                                                            1,828     (1,206)       622      2,175     (2,169)         6
                                                                     -------    -------    -------    -------    -------    -------


INTEREST EXPENSE:
   NOW and money markets                                                 191       (109)        82        344       (506)      (162)
   Savings                                                                 4        (16)       (12)        11        (22)       (11)
   Time deposits                                                         691       (489)       202        794     (1,622)      (828)
   Repurchases and federal funds
     purchased                                                            (3)       (15)       (18)       (33)       (93)      (126)
   Short term borrowings                                                   7          -          7       (329)         -       (329)
   Other borrowings                                                        -          -          -        163          -         163
                                                                     -------    -------    -------    -------    -------    -------
      Total                                                              890       (629)       261        950     (2,243)    (1,293)
                                                                     -------    -------    -------    -------    -------    -------
Net interest income                                                  $   938    $  (577) $     361    $ 1,225    $   (74)   $ 1,299
                                                                     =======    =======    =======    =======    =======    =======


<FN>
----------
(1) The volume variance  reflects the change in the average balance  outstanding
multiplied by the actual average rate during the prior period.
(2) The rate variance  reflects the change in the actual average rate multiplied
by the average balance  outstanding  during the prior period.  Changes which are
not  solely  due to volume  changes  or  solely  due to rate  changes  have been
attributed to rate changes.
</FN>
</TABLE>

Non-Interest Income

     Non-interest  income  for the  three and six  months  ended  June 30,  2003
increased  $369,000,  or 25%  and  $587,000,  or  20%,  respectively,  from  the
comparable  periods  in 2002.  The  increases  were  primarily  attributed  to a
$382,000  gain on the sale of  investment  securities  during  the  2003  second
quarter. The securities sold were short dated,  callable agency debt instruments
with premiums resulting from continued interest rate declines and were sold as a
partial hedge of the continued margin compression. Other changes in non-interest
income for the three and six month periods include  increases in deposit service
charges  of  $90,000  and  $205,000,  respectively  for the two  periods.  These
increases were partially offset by declines in secondary market mortgage fees of
$138,000  and  $104,000  for three and six month  periods  ended  June 30,  2003
compared to  comparable  periods in 2002.  The lower level of  secondary  market
mortgage  income is  attributable  to a temporary  reduction in loan  production
staff resulting from organizational changes within the mortgage function.  Other
fee income,  which includes credit card fees, credit life insurance income, safe
deposit  box  fees,  discount  brokerage  fees  and  other  miscellaneous  fees,
increased $39,000 and $95,000 for the three and six month periods ended June 30,
2003 compared to the corresponding 2002 periods.

     Non-interest  income,  annualized,  as a percentage  of average  assets was
0.92%  for the six  months  ended  June 30,  2003,  compared  to  0.93%  for the
comparable period in 2002.


                                       16

<PAGE>

Non-Interest Expense

     Non-interest  expense was $5.4 million and $10.8  million for the three and
six month periods ended June 30, 2003 compared to $5.3 million and $10.5 million
for the respective 2002 periods,  an increase of 1% and 4%,  respectively.  This
increase is primarily attributable to nominal increases in personnel, occupancy,
equipment and data processing  expenses.  Annualized,  non-interest expense as a
percentage  of average  assets was 2.8% for the first half of 2003,  compared to
3.4% for the 2002 comparable period, reflecting the Company's continued focus on
overhead expense management. Salaries and employee benefits increased $24,000 or
1% to $5.6 million for the first half of 2003,  compared to $5.5 million for the
same period in 2002. As a percentage of average assets annualized,  salaries and
employee  benefits  decreased to 1.5% from 1.8%,  for the first half of 2003 and
2002,  respectively.  Average full-time equivalent employees increased by 8 from
June 30, 2002 to June 30, 2003.

     Occupancy expense (including premises,  furniture,  fixtures and equipment)
increased  in the three  and six month  periods  of 2003 by  $46,000,  or 6% and
$127,000, or 8%, respectively, over the comparable periods in 2002. The increase
is  primarily   attributable  to  an  increase  in  property   taxes,   building
depreciation  and data  processing  depreciation  expenses.  These  expenses are
expected  to  increase  as the Company  adds two  additional  branches  over the
remainder of 2003.  One branch  opened in July 2003 and the other is expected to
open during the fourth quarter 2003.

     Other operating  expenses increased  $220,000,  or 7%, in the first half of
2003 compared to the same period in 2002. The following  table details the areas
of  significance in other  operating  expenses.  The increase in data processing
fees  is  due  to  higher  core  processing   expenses  associated  with  higher
transaction   volumes  and  costs   associated   with   information   technology
enhancements implemented during the second quarter. Loan expenses increased as a
result of the increase in  non-performing  loans in the fourth  quarter of 2002.
The increase in other  expenses was due to a $63,000 loss on the sale of certain
excess bank real estate during the second quarter.

                        Table 3: Other Operating Expenses
                                                      Six Months Ended June 30,
                                                            2003     2002
                                                          ------   ------
                                                             (thousands)
Data processing                                           $  734   $  662
Legal and professional                                       392      408
Communications                                               374      362
Postage and delivery                                         373      354
Amortization of intangible assets                            363      374
Advertising and promotion                                    241      218
Supplies                                                     192      217
Regulatory fees                                              133      117
Loan expenses                                                126       71
Administrative                                                71       86
Other general operating                                       64       49
Education expense                                             62       64
Insurance and bonding                                         60       39
Dues and subscriptions                                        51       49
Directors fees                                                47       42
Other                                                        218      169
                                                          ------   ------
Total other operating expenses                            $3,501   $3,281
                                                          ======   ======

Income Taxes

     The Company's income tax expense in interim reporting periods is determined
by estimating the combined federal and state effective tax rate for the year and
applying such rate to interim pre-tax  income.  The Company's  estimated  annual
effective tax rate for 2003 is approximately 36%.

                                       17

<PAGE>

LIQUIDITY AND INTEREST RATE SENSITIVITY

     Liquidity  is defined as the  ability  of the  Company to meet  anticipated
demands  for  funds  under  credit  commitments  and  deposit  withdrawals  at a
reasonable cost on a timely basis.  Management  measures the Company's liquidity
position by giving consideration to both on-and off-balance sheet sources of and
demands  for funds on a daily and weekly  basis.  These funds can be obtained by
converting  assets to cash or by attracting new deposits.  Average liquid assets
(cash and amounts  due from banks,  interest  bearing  deposits in other  banks,
federal funds sold and investment  securities available for sale) totaled $123.3
million and  represented  18% of average total deposits during the first half of
2003, compared to $61.1 million and 11% for 2002. Average loans were 89% and 96%
of average  deposits  for the  six-month  period  ended June 30,  2003 and 2002,
respectively.

     In addition to core  deposit  growth,  sources of funds  available  to meet
liquidity  demands include cash received  through ordinary  business  activities
such as the  collection  of interest  and fees,  federal  funds  sold,  loan and
investment maturities and lines for the purchase of federal funds by the Company
from its principal correspondent banks. The Bank is also a member of the Federal
Home Loan Bank and has access to short-term  and long-term  funds.  In addition,
the Company entered into a line of credit with one of its correspondent banks in
April 2001.  The  agreement was amended in October 2001 to reflect the following
structures:  (1) a $3 million revolving line of credit maturing on June 30, 2003
(subsequently renewed through June 30, 2004) with interest floating quarterly at
3-month  Libor plus 145 basis  points;  and (2) a $10 million term loan maturing
October 3, 2006 with interest floating quarterly at 3-month Libor plus 170 basis
points.  Semi-annual principal payments of approximately $714,000 begin in 2004.
The Company also entered into a $10 million  pay-fixed  interest  rate swap with
the same  bank.  The fixed rate  under the  interest  rate swap is 6.45% and the
variable rate is based on 3-month Libor plus 170 basis points.  The swap matures
October 3, 2006 and has been  designated  as a cash flow  hedge of the  variable
interest  payments  on the $10  million  term loan noted in (2) above.  The fair
value of the interest rate swap at June 30, 2003 was  approximately  ($759,000).
There was $1 million  outstanding  on the $3 million  line of credit on June 30,
2003.   The  term  loan,   line  of  credit  and  interest  rate  swap  are  all
collateralized by 100% of the common stock of the Bank.

     In connection with the term loan and line of credit agreement,  the Company
is required to maintain compliance with certain covenants and restrictions.  The
following  financial covenants are to be maintained on a quarterly basis and are
calculated at the Bank-level:

o    Interest coverage ratio of greater than or equal to 2.00x through September
     30, 2003.

o    Debt  service  coverage  ratio of  greater  than or equal to 0.85x  through
     September 30, 2002; 1.00x from October 1, 2002 through  September 30, 2003;
     1.25x from  October 1, 2003  through  September  30,  2004;  and 1.50x from
     October 1, 2004 through maturity.

o    Ratio of non-performing  assets to total loans plus other real estate owned
     and repossessed assets of less than or equal to 1.25%.

o    Maintenance  of tier 1 and total risk based  capital  ratios  that meet the
     benchmarks for consideration as a "well-capitalized" institution (currently
     6% and 10%, respectively). Also, maintenance of a leverage capital ratio of
     at least 6%.

     In addition, the Company is subject to the following restrictions:

o    No additional debt is permitted without consent of the lender.

o    No increases in  dividends  paid by the Company to its common  shareholders
     are permitted without consent of the lender.

     Failure to  maintain  any of these  covenants  would  place the  Company in
default of the line of credit  agreement.  In such a case,  absent  any  waivers
obtained from the lender,  all amounts  payable could be accelerated  and become
due  immediately.  As of June 30, 2003,  the Company was in compliance  with all
covenants.

                                       18

<PAGE>

     Interest rate sensitivity refers to the responsiveness of  interest-earning
assets and interest-bearing liabilities to changes in market interest rates. The
rate  sensitive   position,   or  gap,  is  the  difference  in  the  volume  of
rate-sensitive assets and liabilities, at a given time interval,  including both
floating  rate  instruments  and  instruments  that  are  approaching  maturity.
Management  generally  attempts  to  maintain a balance  between  rate-sensitive
assets and  liabilities  as the exposure  period is  lengthened  to minimize the
overall interest rate risk to the Company.

     The Company's liquidity position increased during the first half of 2003 as
compared  to the first half of 2002 as average  loan  balances  increased  $84.4
million  while  deposit  growth  increased  $136.1  million.  Excess  funds were
deployed in  investment  securities,  interest  bearing  deposits with banks and
federal  funds sold.  The  Company  continues  to  maintain  an asset  sensitive
position with respect to net interest income. The Company currently  anticipates
that  market  interest  rates will  remain at current  low levels into 2004 with
increases then expected to be slow and protracted.

     The Company's  gap and liquidity  positions are reviewed on a regular basis
by management to determine whether or not changes in policies and procedures are
necessary to achieve financial goals.  This analysis includes  assumptions about
balance  sheet growth and related mix as well as pricing and  maturity  profile.
Included in the review is an internal  analysis  of the  possible  impact on net
interest income due to market changes in interest rates.  Based on this internal
analysis,  at June 30, 2003, a gradual  increase in interest  rates of 200 basis
points would have  increased net interest  income over the ensuing  twelve-month
period by 5.10% as  compared  to a  projection  under  stable  rates.  A gradual
decrease in interest  rates of 200 basis points over this same period would have
decreased net interest income by 5.28% as compared to a stable rate environment.
At June 30,  2003,  the Bank's net  economic  value ratio was 10.10% and 10.38%,
assuming a gradual increase or decrease,  respectively, in interest rates of 200
basis points over a 12-month period.  The net economic value ratio is the market
value of equity  divided by the market  value of assets and  measures the Bank's
capitalization,  talking  into  account  balance  sheet  gains and  losses.  The
computations  of interest rate risk do not  necessarily  include certain actions
that  management  may  undertake to manage this risk in response to  anticipated
changes in interest rates.

     Table 4, "Rate  Sensitivity  Analysis",  presents rate sensitive assets and
liabilities,  separating  the assets  and  liabilities  into fixed and  variable
interest rate categories.  The estimated fair value of each instrument  category
is also shown in the table.  While these fair  values are based on  management's
judgment of the most appropriate  factors,  there is no assurance that, were the
Company to have  disposed of such  instruments  at June 30, 2003,  the estimated
fair values  would  necessarily  have been  achieved at that date,  since market
values may differ depending on various circumstances.

                                       19

<PAGE>


Table 4: Rate Sensitivity Analysis
June 30, 2003
<TABLE>
<CAPTION>
(dollars in thousands)                                                                                                        Fair
                                       1 Year      2 Years      3 Years     4 Years     5 Years      Beyond      TOTAL       Value
                                      ---------   ---------    ---------   ---------   ---------   ---------   ---------   ---------
INTEREST-EARNING ASSETS:

Gross Loans
<S>                                   <C>         <C>          <C>         <C>         <C>         <C>         <C>         <C>
     Fixed rate loans                 $ 122,143   $  51,772    $  41,089   $  48,163   $  48,497   $ 107,395   $ 419,059   $ 431,507
       Average interest rate              6.58%       7.24%        7.17%       7.07%       6.77%       6.55%       6.79%

     Variable rate loans                 67,523      12,636       26,180      11,529      10,804      82,271     210,943     216,949
       Average interest rate              4.89%       5.66%        4.86%       5.65%       6.59%       6.90%       5.84%

Investment securities (1)
     Fixed rate investments               4,541           -        1,487       5,514           -      49,496      61,038      61,589
       Average interest rate              1.20%                    4.71%       2.15%                   4.09%       3.71%

     Variable rate investments                -           -            -           -           -         370         370         380
       Average interest rate                                                                           4.04%       4.04%

Federal funds sold                       17,900           -            -           -           -           -      17,900      17,900
       Average interest rate              1.10%                                                                    1.10%

Other earning assets (2)                 30,529           -            -           -           -           -      30,529      30,529
       Average interest rate              1.64%                                                                    1.64%
                                      ---------   ---------    ---------   ---------   ---------   ---------   ---------   ---------

Total interest-earning assets         $ 242,636   $  64,408    $  68,756   $  65,206   $  59,301   $ 239,532   $ 739,839   $ 758,854
       Average interest rate              4.98%       6.93%        6.24%       6.40%       6.74%       6.16%       5.91%
                                      =========   =========    =========   =========   =========   =========   =========   =========

INTEREST-BEARING LIABILITIES:

NOW                                   $  69,098   $       -    $       -   $       -   $       -   $  64,512   $ 133,610   $ 133,610
       Average interest rate              1.86%                                                        0.40%       1.16%

Money market                            102,701           -            -           -           -       4,519     107,220     107,220
       Average interest rate              2.29%                                                        1.25%       2.25%

Savings                                       -           -            -           -           -      24,628      24,628      24,628
       Average interest rate                                                                           0.50%       0.50%

CD's under $100,000                     108,432      39,701       20,032       8,524         848           -     177,537     179,122
       Average interest rate              2.55%       3.83%        3.98%       4.17%       4.49%                   3.08%

CD's $100,000 and over                  116,782      29,136       13,480       6,077       2,496           -     167,971     169,400
       Average interest rate              3.03%       3.87%        4.22%       4.27%       4.94%                   3.34%

Securities sold under
   repurchase agreements and
   federal funds purchased                9,627           -            -           -           -           -       9,627       9,627
       Average interest rate              0.95%                                                                    0.95%

Short-term borrowings                     1,000           -            -           -           -           -       1,000       1,000
       Average interest rate              2.74%                                                                    2.74%

Other borrowings  (3)                       714       1,428        7,858           -           -           -      10,000      10,000
       Average interest rate              3.46%       3.46%        3.46%                                           3.46%
                                      ---------   ---------    ---------   ---------   ---------   ---------   ---------   ---------

Total interest-bearing liabilities    $ 408,354   $  70,265    $  41,370   $  14,601   $   3,344   $  93,659   $ 631,593   $ 634,607
       Average interest rate              2.47%       3.84%        3.96%       4.21%       4.83%       0.47%       2.48%
                                      =========   =========    =========   =========   =========   =========   =========   =========

<FN>
----------
(1) Securities  available for sale are shown at their amortized cost,  excluding
    market value adjustment for net unrealized gains of $561,000.
(2) Represents interest bearing deposits with Banks, Federal Reserve Bank Stock,
    Federal Home Loan Bank Stock and other marketable equity securities.
(3) Other borrowings consists of a term loan maturing October 3, 2006 that bears
    interest at 3-month Libor plus 170 basis points.  The variable rate is reset
    quarterly.  The variable interest payments on the term loan are being hedged
    through an interest  rate swap.  Under the interest  rate swap,  the Company
    pays a fixed rate of  interest  of 6.45% and  receives  a  floating  rate of
    interest  of 3-month  Libor plus 170 basis  points.  Other terms of the swap
    mirror those of the term debt.
</FN>
</TABLE>

                                       20
<PAGE>

     Core  deposits,  which  represent all deposits  other than time deposits in
excess of $100,000,  were 76% of total  deposits at June 30,  2003,  up slightly
from 75% at December  31, 2002.  The Bank closely  monitors its reliance on time
deposits in excess of $100,000,  which are generally  considered less stable and
less reliable than core deposits. Table 5, below, sets forth the amounts of time
deposits with balances of $100,000 or more that mature within indicated periods.
The Bank does not, nor has it ever, solicited brokered deposits. Essentially all
of the time deposits with balances of $100,000 or more are from customers in the
Bank's primary markets.

             Table 5: Maturity of Time Deposits of $100,000 or More
                                  June 30, 2003
                             (dollars in thousands)

                                                                         Amount
                                                                         ------
Three months or less                                                    $ 41,829
Three through six months                                                  33,391
Six through twelve months                                                 41,562
Over twelve months                                                        51,189
                                                                        --------
      Total                                                             $167,971
                                                                        ========


EARNING ASSETS

Loans

     Lending  activities  are the Company's  single  largest  source of revenue.
Although  management is continually  evaluating  alternative sources of revenue,
lending  is  the  major  segment  of  the  Company's  business  and  is  key  to
profitability.  During the first half of 2003, average loans were $611.9 million
and were 89% of average  deposits,  compared  to $527.4  million and 96% for the
same  period in 2002.  The  following  table  reflects  the  composition  of the
Company's loan portfolio as of June 30, 2003 compared to December 31, 2002.

                       Table 6: Loan Portfolio Composition
                                                   June 30,      December 31,
                                                     2003            2002
                                                --------------  ---------------
                                                          (thousands)
Commercial                                        $ 104,778        $ 111,033
Commercial real estate                              341,088          324,525
Mortgages (including home equity)                   144,367          132,513
Consumer                                             31,823           32,199
Credit card                                           1,060            1,164
Tax free                                              6,886            4,351
                                                  ---------        ---------

Total loans, net of unearned income                 630,002          605,785
Less: allowance for loan losses                      (6,788)          (6,574)
                                                  ---------        ---------

Net loans                                         $ 623,214        $ 599,211
                                                  =========        =========


     Loan  concentrations are considered to exist where there are amounts loaned
to multiple  borrowers engaged in similar activities which collectively would be
similarly  impacted by economic or other  conditions  and when the total of such
amounts  exceeds 25% of total capital.  Due to the lack of diversified  industry
and the relative  proximity of markets served, the Company has concentrations of
loans from the North Florida  region as well as the types of loans  funded.  The
Bank's four  largest  concentration  categories  are:  Land  Development  ($35.6
million),  Commercial Real Estate ($30.6 million),  Professional ($29.5 million)
and Commercial Construction ($24.5 million).

                                       21

<PAGE>

Loan Quality

     The  allowance  for loan loss is  established  through a provision for loan
loss charged to expense.  Loans are charged  against the allowance for loan loss
when management  believes that the  collectibility of the principal is unlikely.
The  allowance  for loan  loss is an amount  that  management  believes  will be
adequate  to absorb  inherent  losses on  existing  loans that are  probable  of
becoming  uncollectible based on evaluations of the collectibility of the loans.
The evaluations take into consideration such objective factors as changes in the
nature and volume of the loan  portfolio and  historical  loss  experience.  The
evaluation also considers certain  subjective  factors such as overall portfolio
quality,  review of specific problem loans and current economic  conditions that
may affect the  borrowers'  ability to pay. The level of the  allowance for loan
loss is also impacted by increases and decreases in loans  outstanding,  because
either more or less allowance is required as the amount of the Company's  credit
exposure  changes.  To the extent  actual loan  losses  differ  materially  from
management's   estimate  of  these  subjective   factors,   loan  growth/run-off
accelerates  or the mix of loan types  changes,  the level of the  provision for
loan loss, and related allowance, can and will fluctuate.

     The allowance  for loan losses on June 30, 2003,  was 1.08% of total loans,
compared to 1.09% at  December  31,  2002 and 1.04% at June 30,  2002.  Table 7:
"Allocation  of  Allowance  for Loan  Losses",  set forth below,  indicates  the
specific reserves allocated by loan type.

                Table 7: Allocation of Allowance for Loan Losses

<TABLE>
<CAPTION>
                                         June 30,                December 31,
                                           2003                      2002
                                  ------------------------  -------------------------
                                               Percent of                Percent of
                                             Loans in Each              Loans in Each
                                              Category to               Category to
                                   Amount     Total Loans    Amount     Total Loans
                                  ---------  -------------  ---------   -------------
                                               (dollars in thousands)
<S>                                 <C>          <C>         <C>            <C>
Commercial                          $2,151       16.6%       $1,991         18.3%
Commercial real estate               3,172       54.1         3,180         53.6
Mortgages (including home equity)      672       22.9           495         21.9
Consumer                               647        5.1           802          5.3
Credit card                            130        0.2           106          0.2
Tax free                                 -        1.1             -          0.7
Unallocated                             16          -             -            -
                                    ------      -----        ------        -----
Total                               $6,788      100.0%       $6,574        100.0%
                                    ======      =====        ======        =====
</TABLE>

     Non-performing  assets consist of non-accrual loans, loans past due 90 days
or more and still accruing interest,  other real estate owned and repossessions.
Non-performing  assets  decreased  18% from December 31, 2002 to $6.6 million at
June 30, 2003.  Non-performing  assets as a percentage of total assets decreased
to 0.84% on June 30, 2003 from 1.11% on December 31, 2002.

                         Table 8: Non-Performing Assets
                                                   June 30,       December 31,
                                                     2003            2002
                                                  ----------      ----------
                                                     (dollars in thousands)
Non-accrual loans                                  $  6,116        $  5,611
Past due loans 90 days or
   more and still accruing                              352           2,439
Other real estate owned
   and repossessions                                    171              24
                                                     ------         -------
Total non-performing assets                         $ 6,639        $  8,074
                                                     ======         =======

Percent of total assets                               0.84%           1.11%

                                       22

<PAGE>

                 Table 9: Activity in Allowance for Loan Losses

<TABLE>
<CAPTION>
                                                                  June 30,
                                                              2003         2002
                                                           ----------    ----------
                                                             (dollars in thousands)
<S>                                                        <C>           <C>
Balance at beginning of year                               $   6,574     $   5,205
Loans charged-off:
  Commercial                                                    (709)         (284)
  Commercial real estate                                         (90)          (33)
  Mortgage (including home equity)                               (41)          (68)
  Consumer                                                      (286)         (133)
  Credit card                                                    (31)          (46)
  Tax free                                                         -             -
                                                           ---------     ---------
      Total loans charged-off                                 (1,157)         (564)
Recoveries on loans previously charged-off:
  Commercial                                                      10             9
  Commercial real estate                                           -             2
  Mortgage (including home equity)                                 1            29
  Consumer                                                        31            39
  Credit card                                                      4             5
  Tax free                                                         -             -
                                                           ---------     ---------
      Total loan recoveries                                       46            84
                                                           ---------     ---------
        Net loans charged-off                                 (1,111)         (480)
                                                           ---------     ---------

Provision for loan losses charged to expense                   1,325         1,025
                                                           ---------     ---------
Ending balance                                             $   6,788     $   5,750
                                                           =========     =========

Total loans outstanding                                    $ 630,002     $ 554,992
Average loans outstanding                                  $ 611,854     $ 527,419
Allowance for loan losses to loans outstanding                 1.08%         1.04%
Net charge-offs to average loans outstanding, annualized       0.37%         0.18%
</TABLE>

Investment Portfolio

     The Company uses its securities  portfolio to assist in maintaining  proper
interest rate sensitivity in the balance sheet, to provide  securities to pledge
as  collateral  for public  funds and  repurchase  agreements  and to provide an
alternative  investment  for  available  funds.  The  total  recorded  value  of
securities  was $65.1  million at June 30,  2003,  an increase of 31% from $49.7
million  at the end of 2002.  The  increase  was  partially  the  result  of the
Company's desire to invest a portion of its excess  liquidity into  longer-dated
investments  in order to take  advantage of higher yields on funds that were not
expected to be immediately deployed into loans.

     Securities are classified as either held-to-maturity or available-for-sale.
At June 30, 2003 investment  securities  available-for-sale  made up 100% of the
total   investment    portfolio   of   $65.1   million.    Securities   in   the
available-for-sale portfolio are recorded at fair value on the balance sheet and
unrealized gains and losses  associated with these securities are recorded,  net
of deferred income tax, as accumulated other  comprehensive  income (loss). Also
included in other comprehensive income (loss) are accumulated net gains (losses)
on cash flow hedges. At June 30, 2003,  accumulated other  comprehensive  income
(loss),  net of tax, was ($124,000),  compared to $108,000 at December 31, 2002.
Of this amount,  $352,000 of unrealized  gains, net of deferred income tax, were
related to the  securities  available  for sale  portfolio  while  ($476,000) of
unrealized  losses,  net of deferred  income tax, were associated with cash flow
hedges.

     The Company invests  primarily in direct  obligations of the United States,
obligations  guaranteed  as to principal  and interest by the United  States and
obligations  of agencies  of the United  States  government.  In  addition,  the
Company enters into federal funds transactions with its principal  correspondent
banks.  The Federal Reserve Bank and FHLB also require equity  investments to be
maintained by the Company.

                                       23

<PAGE>

         The following tables set forth the maturity distribution and the
weighted average yields of the Company's investment portfolio.'

          Table 10: Maturity Distribution of Investment Securities (1)
                                  June 30, 2003

<TABLE>
<CAPTION>
(dollars in thousands)                                                       Held to Maturity              Available for Sale
------------------------------------------------------------------------------------------------------------------------------------
                                                                       Amortized       Estimated       Amortized       Estimated
                                                                         Cost         Market Value       Cost         Market Value
                                                                       ---------      ------------     ----------     ------------
U.S. Treasury:
<S>                                                                     <C>             <C>             <C>             <C>
   One year or less                                                     $     -         $     -         $ 4,041         $ 4,051
                                                                        -------         -------         -------         -------
Total U.S. Treasury                                                           -               -           4,041           4,051

U.S. Government Agencies
and Corporations (2):
   One year or less                                                           -               -             500             500
   Over one through five years                                                -               -           7,001           7,023
   Over five through ten years                                                -               -          10,000          10,237
   Over ten years                                                             -               -          10,000          10,000
                                                                        -------         -------         -------         -------
Total U.S. Government Agencies
and Corporations                                                              -               -          27,501          27,760

Obligations of State and Political
 Subdivisions:
   Over ten years                                                             -               -           2,172           2,305
                                                                        -------         -------         -------         -------
Total Obligations of State and
 Political Subdivisions                                                       -               -           2,172           2,305

Mortgage-Backed Securities (3):
   Over five through ten years                                                -               -          20,339          20,389
   Over ten years                                                             -               -           7,355           7,464
                                                                        -------         -------         -------         -------
Total Mortgage-Backed Securities                                              -               -          27,694          27,853

Other Securities:
   Over ten years (4)                                                         -               -           3,119           3,119
                                                                        -------         -------         -------         -------
Total Other Securities                                                        -               -           3,119           3,119

Total Securities                                                        $     -         $     -         $64,527         $65,088
                                                                        =======         =======         =======         =======

<FN>
----------
(1) All securities,  excluding Obligations of State and Political  Subdivisions,
are taxable.
(2) Includes  securities  that may be callable  prior to their  stated  maturity
date.
(3) Represents  investments in  mortgage-backed  securities which are subject to
early repayment.
(4)  Represents  investment  in Federal  Reserve Bank and Federal Home Loan Bank
stock and other marketable equity securities.
</FN>
</TABLE>


             Table 11: Weighted Average Yield by Range of Maturities

                                 June 30, 2003  December 31, 2002  June 30, 2002
                                 -------------  -----------------  -------------
One Year or Less                     1.21%            2.41%             2.44%
More than One through Five Years     2.69%            4.87%             5.23%
More than Five through Ten Years     3.61%            4.48%             4.99%
More than Ten Years (1)              4.16%            4.46%             4.58%

----------
(1) Includes  adjustable rate  mortgage-backed  securities which are repriceable
within one year.

                                       24

<PAGE>



Other Earning Assets

     Temporary investment needs are created in the day-to-day liquidity movement
of the Bank and are satisfied by selling excess funds overnight (Fed Funds Sold)
to  larger,  well  capitalized  banking  institutions.  If  these  funds  become
excessive,  management  determines what portion, if any, of the liquidity may be
rolled into longer term investments as securities.


FUNDING SOURCES

Deposits

     The Bank does not rely on  purchased  or  brokered  deposits as a source of
funds.  Instead,  competing  for  deposits  within its market area serves as the
Bank's  fundamental tool in providing a source of funds to be invested primarily
in loans.  The following  table sets forth certain  deposit  categories  for the
periods ended June 30, 2003 and December 31, 2002.

                            Table 12: Total Deposits

                                                    June 30,        December 31,
                                                      2003             2002
                                                   -----------     ------------
                                                            (thousands)
Non-interest bearing:
        Demand checking                           $  101,022        $   80,065
Interest bearing:
        NOW checking                                 133,610           118,619
        Money market checking                        107,220            95,354
        Savings                                       24,628            22,311
        Certificates of deposit                      345,508           332,287
                                                    --------          --------

Total deposits                                    $  711,988        $  648,636
                                                    ========          ========


CAPITAL RESOURCES

     Shareholders'  equity at June 30,  2003 was $53.6  million,  as compared to
$50.9 million at December 31, 2002. During the first and second quarter of 2003,
the Board of  Directors  declared  quarterly  dividends  of $0.06 per share,  an
increase of 20% from the fourth  quarter 2002  dividend.  At June 30, 2003,  the
Company's common stock had a book value of $8.61 per share compared to $8.31 per
share at December 31, 2002.

     The  Company  is  subject  to  various  regulatory   capital   requirements
administered by the federal banking agencies. Under capital adequacy guidelines,
the Company must meet  specific  capital  guidelines  that involve  quantitative
measures of its assets,  liabilities,  and  certain  off-balance  sheet items as
calculated  under   regulatory   accounting   practices.   Capital  amounts  and
classification are also subject to qualitative judgments by the regulators about
component, risk weightings and other factors.

     Quantitative  measures as defined by regulation  and  established to ensure
capital  adequacy  require  the Bank to maintain  minimum  amounts and ratios of
Total and Tier 1 capital to  risk-weighted  assets and Tier 1 capital to average
assets.  If such  minimum  amounts  and ratios are met,  the Bank is  considered
"adequately  capitalized."  If a bank exceeds the  requirements  of  "adequately
capitalized" and meets even more stringent minimum  standards,  it is considered
to be "well capitalized." As of June 30, 2003, the Bank met all capital adequacy
requirements to which it is subject.

                                       25

<PAGE>



     At June 30, 2003 and 2002, the Company's Tier 1 capital,  Total  risk-based
capital and Tier 1 leverage ratios were are as follows:


                            Table 13: Capital Ratios

<TABLE>
<CAPTION>
                                           June 30,            Well-Capitalized     Regulatory
                                     2003             2002       Requirements        Minimums
                                 ------------    ------------    ------------        --------
Risk Based Capital Ratios:
<S>       <C>                        <C>              <C>            <C>               <C>
     Tier 1 Capital Ratio            7.8%             7.6%           6.0%              4.0%

     Total Capital to
       Risk-Weighted Assets          8.9%             8.7%          10.0%              8.0%

Tier 1 Leverage Ratio                6.2%             6.6%           5.0%              4.0%
</TABLE>


CRITICAL ACCOUNTING POLICIES

     A  critical  accounting  policy is one that is both very  important  to the
portrayal of the Company's  financial  condition and requires  management's most
difficult,  subjective or complex  judgments.  The circumstances that make these
judgments  difficult,  subjective  or  complex  have to do with the need to make
estimates  about the  effect  of  matters  that are  inherently  uncertain.  The
Company's  considers the establishment and maintenance of the allowance for loan
loss and the  accounting  for its core deposit  intangible  asset to be critical
accounting policies.

     The  allowance  for loan loss is  established  through a provision for loan
loss charged to expense.  Loans are charged  against the allowance for loan loss
when management  believes that the  collectibility of the principal is unlikely.
The allowance is an amount that  management  believes will be adequate to absorb
inherent  losses  on  existing  loans  that may  become  uncollectible  based on
evaluations  of the  collectibility  of the  loans.  The  evaluations  take into
consideration  such objective factors as changes in the nature and volume of the
loan portfolio and historical  loss  experience.  The evaluation  also considers
certain subjective factors such as overall portfolio quality, review of specific
problem loans and current  economic  conditions  that may affect the  borrowers'
ability to pay.  The level of the  allowance  for loan loss is also  impacted by
increases  and  decreases  in loans  outstanding,  because  either  more or less
allowance is required as the amount of the Company's credit exposure changes. To
the extent actual loan losses differ  materially from  management's  estimate of
these subjective  factors,  loan  growth/run-off  accelerates or the mix of loan
types changes,  the level of the provision for loan loss, and related allowance,
can and will fluctuate.

     The  accounting  for the Company's  core deposit  intangible  asset is also
subject to significant  estimates about future  results.  In connection with the
acquisition of the Lake City and Live Oak branches of Republic Bank in 2001, the
Company  recorded a core deposit  intangible of approximately  $6,000,000.  This
intangible asset is being amortized on a straight-line  basis over its estimated
useful  life of 10 years.  The life of this  asset  was  based on the  estimated
future period of benefit to the Company of the depositor relationships acquired.
To the extent that the deposit  accounts  acquired leave the Company faster than
anticipated,  the amount of the core deposit  intangible  that is amortized each
period could increase  significantly,  thus shortening its useful life.  Through
June 30, 2003,  the  performance of the depositor  relationships  did not differ
materially from expectations.

            QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

     In 1997 the  Securities  and  Exchange  Commission  adopted  amendments  to
Regulation S-K, Regulation S-X, and various forms to clarify and expand existing
requirements  for  disclosures  about  derivatives  and market risks inherent in
derivatives and other financial  instruments.  As noted below, at June 30, 2003,
the Company  was a party to a single  interest  rate  derivative  contract.  The
Company also holds other financial instruments, which include investments, loans
and deposit  liabilities.  The release  requires  quantitative  and  qualitative
disclosures  about market risk. See the section  titled  "Liquidity and Interest
Rate Sensitivity" for further discussion on the Company's management of interest
rate risk.

                                       26

<PAGE>

     The Company's sole derivative  contract is a $10 million notional  interest
rate swap that was entered into as a hedge of interest rate risk inherent in the
Company's $10 million term loan.  Under the terms of the swap,  the Company will
receive a variable rate of interest equal to 90-day Libor plus 170 basis points,
reset  quarterly.  The Company will pay a fixed rate of interest  equal to 6.45%
for the life of the  contract.  All cash  flows  are  computed  based on the $10
million  notional amount and are settled  quarterly on a net basis. The contract
matures October 3, 2006 and the notional amount will be reduced by $714,286 on a
semi-annual  basis  beginning April 2004. The fair value of the swap at June 30,
2003,  including interest accruals,  was approximately  ($759,000).  The swap is
being accounted for as a cash flow hedge of the variable interest payments under
the $10 million term debt.

     Non-derivative  financial instruments that have market risk are included in
Table 3: "Rate Sensitivity  Analysis".  These instruments are shown by maturity,
separated by fixed and variable interest rates. The estimated fair value of each
instrument  category is also shown in the table.  While these  estimates of fair
value are based on management's judgment of the most appropriate factors,  there
is no assurance that,  were the Company to have disposed of such  instruments at
June 30, 2003, the estimated fair values would necessarily have been achieved at
that date,  since market values may differ  depending on various  circumstances.
The estimated  fair values at June 30, 2003 would not  necessarily be considered
to apply at subsequent dates.

                             CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

     As required by Rule 13a-15 under the  Securities  Exchange Act of 1934 (the
"Exchange Act"), within the 90 days prior to the filing date of this report, the
Company  carried  out an  evaluation  of the  effectiveness  of the  design  and
operation of the Company's  disclosure controls and procedures.  This evaluation
was  carried  out  under  the  supervision  and  with the  participation  of the
Company's Chief Financial Officer and Chief Executive  Officer.  Based upon that
evaluation,  the Company's Chief Financial  Officer and Chief Executive  Officer
have  concluded  that the  Company's  disclosure  controls  and  procedures  are
effective  in alerting  them to material  information  regarding  the  Company's
financial  statement and disclosure  obligation in order to allow the Company to
meet its reporting requirements under the Exchange Act in a timely manner.

Changes in Internal Control

     There have been no changes in internal  controls or in other  factors  that
could  significantly  affect  these  controls  subsequent  to the  date of their
evaluation,   including  any  corrective  actions  with  regard  to  significant
deficiencies and material weaknesses.

                                       27

<PAGE>



                                     PART II
                                OTHER INFORMATION

Item 1.   Legal Proceedings - There are no material pending legal proceedings to
          which the  Company or any of its  subsidiaries  is a party or of which
          any of their property is the subject.

Item 2.   Changes in Securities and Use of Proceeds - Not applicable.

Item 3.   Defaults Upon Senior Securities - Not applicable.

Item 4.   Submission of Matters to a Vote of Security Holders - On May 28, 2003,
          the Company held its Annual Meeting of Shareholders, whereby the Board
          of Directors (Thomas R. Andrews,  Lewis Ansbacher,  Audrey S. Bullard,
          Raymon Land,  Sr., Jon W. Pritchett,  Marvin H. Pritchett,  Halcyon E.
          Skinner,  William  Streicher  and K. C.  Trowell)  were  elected.  The
          following  summarizes  all  matters  submitted  and voted upon at this
          annual meeting:

(a)       The  following  directors  were  elected  to  serve  on the  Board  of
          Directors.  Except for Mr. Ansbacher,  these individuals served on the
          Board of Directors  prior to the Annual  Meeting.  The number of votes
          cast were as follows:

                                                 Against/        Abstentions/
                                   For           Withheld     Broker Non-Votes
          Thomas R. Andrews      5,073,155        16,526             0
          Lewis Ansbacher        5,073,155        16,526             0
          Audrey S. Bullard      5,066,997        22,684             0
          Raymon Land, Sr.       5,033,363        56,318             0
          Jon W. Pritchett       5,066,997        22,684             0
          Marvin H. Pritchett    5,066,997        22,684             0
          Halcyon E. Skinner     5,073,155        16,526             0
          William Streicher      5,073,155        16,526             0
          K. C. Trowell          5,063,747        25,934             0

Item 5.   Other Information - Not applicable.

Item 6.   Exhibits and Reports -

(a)       Exhibits:

          3i        Articles of  Incorporation of CNB Florida  Bancshares,  Inc.
                    (Exhibit 3(i) to the Company's  Annual Report on Form 10-Q/A
                    filed  with  the  Commission  on  May  21,  2003  is  hereby
                    incorporated by reference.)

          3ii       By-Laws of CNB Florida  Bancshares,  Inc.  (Exhibit 3(ii) to
                    the  Company's  Annual  Report on Form 10-Q/A filed with the
                    Commission  on  May  21,  2003  is  hereby  incorporated  by
                    reference.)

          31(a)     Chief Executive  Officer  certification  pursuant to Section
                    302 of the Sarbanes-Oxley Act of 2002.

          31(b)     Chief Financial  Officer  certification  pursuant to Section
                    302 of the Sarbanes-Oxley Act of 2002.

          32(a)     Chief Executive  Officer  certification  pursuant to Section
                    906 of the Sarbanes-Oxley Act of 2002.

          32(b)     Chief Financial  Officer  certification  pursuant to Section
                    906 of the Sarbanes-Oxley Act of 2002.

(b)       Reports on Form 8-K:

     On April 28,  2003,  the Company  filed a Form 8-K to report its 2003 first
quarter results.

                                       28

<PAGE>



                                   SIGNATURES



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

                          CNB Florida Bancshares, Inc.
                          ----------------------------
                                  (Registrant)


                                      By:      /s/ G. Thomas Frankland
                                              ----------------------------------
                                              G. Thomas Frankland
                                              Executive Vice President
                                              and Chief Financial Officer

                                      Date:   August 12, 2003

                                       29