UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
            ---------------------------------------------------------

                                   FORM 10-QSB

                      QUARTERLY REPORT UNDER SECTION 13 OR
                        15(d) OF THE SECURITIES EXCHANGE
                                   ACT OF 1934

                  For the Quarterly Period Ended June 30, 2001
                        Commission File Number 000-26145

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

                         CITRUS FINANCIAL SERVICES, INC.
             (Exact Name of registrant as specified in its charter)

Florida                                                      65-0136504
-------                                                      ----------
(State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                               Identification No.)

1717 Indian River Boulevard
Suite 100
Vero Beach, Florida                                          32960
-------------------                                          -----
(Address of Principal Executive Offices)                     (Zip Code)

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

                                 (561) 778-4100
               (Registrant's telephone number including area code)

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

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 _____.
    -----

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
Common stock as of the latest practicable date:

     Class                                      Outstanding as of August 9, 2001
---------------                                 --------------------------------
Common Stock                                                1,467,226
Par Value $3.15 per share (rounded)















<PAGE>




                         CITRUS FINANCIAL SERVICES, INC.

                                      INDEX

                                                                           PAGE
                                                                          NUMBER

REPORT OF INDEPENDENT ACCOUNTANTS                                            3

PART I:  FINANCIAL INFORMATION

     Item 1: Financial Statements:

             Consolidated Condensed Balance Sheets as of June 30, 2001
             (Unaudited) and December 31, 2000                               4

             Consolidated Statements of Operations and Comprehensive Income
             for the Three and Six Months Ended June 30, 2001 and 2000
             (Unaudited)                                                     5

             Consolidated Condensed Statements of Cash Flows for the Three
             and Six Months Ended June 30, 2001 and 2000 (Unaudited)         6

             Consolidated Statement of Changes in Stockholders' Equity
             (Unaudited)                                                     7

             Notes to Consolidated Financial Statements (Unaudited)          8

     Item 2: Management's Discussion and Analysis of Financial Condition
             and Results of Operations                                       12

PART II: OTHER INFORMATION                                                   21

Signatures                                                                   22



























<PAGE>











                        REPORT OF INDEPENDENT ACCOUNTANTS




To the Audit Committee
Citrus Financial Services, Inc. and Subsidiary
Vero Beach, Florida

We have reviewed the accompanying consolidated condensed balance sheet of Citrus
Financial Services,  Inc., and its wholly-owned  subsidiary  ("Citrus"),  Citrus
Bank, N.A.  ("Citrus Bank"),  as of June 30, 2001, and the related  consolidated
statements of operations and  comprehensive  income and  consolidated  condensed
statements  of cash  flows for the three and six months  periods  ended June 30,
2001  and  2000,   and  the  related   consolidated   statement  of  changes  in
stockholders'  equity  for the six months  period  ended  June 30,  2001.  These
consolidated financial statements are the responsibility of Citrus' management.

We conducted our review in accordance with standards established by the American
Institute  of  Certified  Public  Accountants.  A review  of  interim  financial
information consists principally of applying analytical  procedures to financial
data and making  inquiries of persons  responsible  for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with  generally  accepted  auditing  standards,  the  objective  of which is the
expression of an opinion regarding the consolidated  financial  statements taken
as a whole. Accordingly, we do not express such an opinion.

Based  upon our  review,  we are not aware of any  material  modifications  that
should be made to the consolidated  financial  statements  referred to above for
them to be in conformity with generally accepted accounting principles.

We previously audited, in accordance with generally accepted auditing standards,
the  consolidated  balance  sheet  as of  December  31,  2000,  and the  related
consolidated  statements of operations and comprehensive income, cash flows, and
changes in stockholders'  equity for the year then ended (not presented herein);
and in our report dated  January 26,  2001,  except for Note 19, as to which the
date is March 6, 2001, we expressed an unqualified opinion on those consolidated
financial  statements.  In  our  opinion,  the  information  set  forth  in  the
accompanying  consolidated  condensed  balance sheet as of December 31, 2000, is
fairly stated, in all material respects, in relation to the consolidated balance
sheet from which it has been derived.


STEVENS, POWELL & COMPANY, P.A.
Jacksonville, Florida
August 9, 2001













                                      - 3 -


<PAGE>


                 CITRUS FINANCIAL SERVICES, INC. AND SUBSIDIARY
                      CONSOLIDATED CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
                                                                                June 30, 2001
                                                                                    (Unaudited)   December 31, 2000
                                                                              -------------------------------------
                                                                              (In Thousands, Except Per Share Data)
<S>                                                                                 <C>                   <C>
ASSETS
Cash and due from banks                                                             $     2,040           $     3,677
Federal funds sold                                                                        3,846                 6,351
                                                                                    -----------           -----------
     Total cash and cash equivalents                                                      5,886                10,028
Interest-bearing deposits in other banks                                                  1,049                    29
Securities available-for-sale at fair value                                              10,149                13,001
Securities held-to-maturity (market value of
    $676 for 2001 and $657 for 2000)                                                        667                   680
Loans held for investment less allowance for credit losses                               61,510                67,482
Loans held for sale                                                                       1,062                   688
Facilities                                                                                2,698                 2,856
Other real estate owned                                                                     753                   129
Deferred income taxes                                                                       120                    99
Accrued interest receivable                                                                 511                   530
Other assets                                                                              1,454                   399
                                                                                    -----------           -----------

         TOTAL                                                                      $    85,859           $    95,921
                                                                                    ===========           ===========


LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
     Noninterest-bearing demand deposits                                            $    12,365           $    12,320
     Interest-bearing demand deposits                                                     4,167                 4,148
     Money market deposits                                                                4,327                 4,277
     Savings deposits                                                                     9,787                 8,693
     Time deposits, $100,000 and over                                                     8,381                10,762
     Other time deposits                                                                 37,629                46,358
                                                                                    -----------           -----------

         Total deposits                                                                  76,656                86,558

Other borrowings                                                                             92                   117
Accrued interest payable on deposits                                                        290                   426
Accounts payable and accrued liabilities                                                     58                    49
                                                                                    -----------           -----------

         Total liabilities                                                               77,096                87,150
                                                                                    -----------           -----------

Commitments and contingencies                                                              --                    --
                                                                                    -----------           -----------

Stockholders' equity:
     Preferred stock, $5.00 par value, authorized and
          unissued 1,000,000 shares in 2001 and 2000                                       --                    --
     Common stock, $3.15 par value (rounded), authorized
          10,000,000 shares, issued 1,423,402 shares in 2001 and 2000                     4,491                 4,491
     Additional paid-in capital                                                           4,638                 4,638
     Accumulated deficit                                                                   (407)                 (355)
     Accumulated other comprehensive income
         Net unrealized holding gains (losses) on securities                                 41                    (3)
                                                                                    -----------           -----------

         Total stockholders' equity                                                       8,763                 8,771
                                                                                    -----------           -----------

         TOTAL                                                                      $    85,859           $    95,921
                                                                                    ===========           ===========

Book value per common share                                                         $      6.16           $      6.16
                                                                                    ===========           ===========

Common shares outstanding                                                             1,423,402             1,423,402
                                                                                    ===========           ===========
</TABLE>

          See accompanying notes to consolidated financial statements.

                                      - 4 -


<PAGE>


                 CITRUS FINANCIAL SERVICES, INC. AND SUBSIDIARY
   CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (UNAUDITED)
<TABLE>
<CAPTION>

                                                              For the Three Months           For the Six Months
                                                                  Ended June 30,               Ended June 30,
                                                              --------------------          -------------------
                                                               2001            2000         2001           2000
                                                               ----            ----         ----           ----
                                                                (Dollars in Thousands, Except Per Share Data)
<S>                                                           <C>            <C>           <C>            <C>
INTEREST INCOME
   Interest and fees on loans held for investment             $ 1,383        $ 1,639       $ 2,898        $ 3,198
   Interest and fees on loans held for sale                        38             13            61             44
   Investment income securities
         Taxable                                                  187            107           456            194
         Dividends                                                  8              8            16             16
   Interest on deposits in other banks                             11              3            13              3
   Federal funds sold                                              74             58           143            121
                                                              -------        -------       -------        -------
         Total interest income                                  1,701          1,828         3,587          3,576
                                                              -------        -------       -------        -------

INTEREST EXPENSE
   Interest on deposits                                           876            880         1,875          1,660
   Other                                                            1              2             3              5
                                                              -------        -------       -------        -------
         Total interest expense                                   877            882         1,878          1,665
                                                              -------        -------       -------        -------

NET INTEREST INCOME BEFORE
   PROVISION FOR CREDIT LOSSES                                    824            946         1,709          1,911

PROVISION FOR CREDIT LOSSES                                       271             51           239            125
                                                              -------        -------       -------        -------

NET INTEREST INCOME AFTER
   PROVISION FOR CREDIT LOSSES                                    553            895         1,470          1,786
                                                              -------        -------       -------        -------

OTHER INCOME
   Deposit service charges                                         93             86           174            176
   Servicing fees                                                   4              4             8              8
   Gain on sale of assets                                           3           --              15              1
   Other                                                           23             14            42             29
                                                              -------        -------       -------        -------
         Total other income                                       123            104           239            214
                                                              -------        -------       -------        -------

OTHER EXPENSES
   Salaries and employee benefits                                 401            458           830            930
   Equipment                                                      140            130           242            233
   Occupancy and premises                                          66             70           132            143
   Professional services                                          109             65           201            131
   Advertising and public relations                                22             31            48             61
   Telephone and data communications                               23             27            48             56
   Other                                                          157            124           291            262
                                                              -------        -------       -------        -------
         Total other expenses                                     918            905         1,792          1,816
                                                              -------        -------       -------        -------

INCOME (LOSS) BEFORE PROVISION
   FOR INCOME TAXES                                              (242)            94           (83)           184

PROVISION FOR INCOME TAXES                                        (91)            35           (31)            68
                                                              -------        -------       -------        -------

NET INCOME (LOSS)                                                (151)            59           (52)           116

OTHER COMPREHENSIVE INCOME,
   NET OF INCOME TAXES:
     Unrealized holding gains (losses) arising during period       (8)             3            44            (10)
                                                              -------        -------       -------        -------

COMPREHENSIVE INCOME (LOSS)                                   $  (159)       $    62       $    (8)       $   106
                                                              =======        =======       =======        =======

Earnings Per Share Information
     Primary                                                  $ (0.11)       $  0.04       $ (0.04)       $  0.08
                                                              =======        =======       =======        =======
     Fully diluted                                            $ (0.11)       $  0.04       $ (0.04)       $  0.08
                                                              =======        =======       =======        =======
</TABLE>

          See accompanying notes to consolidated financial statements.

                                      - 5 -


<PAGE>


                 CITRUS FINANCIAL SERVICES, INC. AND SUBSIDIARY
           CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>

                                                                        For the Three Months         For the Six Months
                                                                           Ended June 30,              Ended June 30,
                                                                        --------------------        ---------------------
                                                                          2001         2000           2001          2000
                                                                          ----         ----           ----          ----
                                                                                  (Dollars in Thousands)

<S>                                                                    <C>           <C>           <C>           <C>
Net income (loss)                                                      $   (151)     $     59      $    (52)     $    116
Adjustments to reconcile net income (loss) to net cash
     provided (used) by operating activities:
         Provision for credit losses                                        271            51           239           125
         Depreciation and amortization                                       93            90           178           180
         Net premium amortization and discount accretion                     12            16            10            10
         (Increase) decrease in other assets                             (1,189)          508        (1,852)          628
         Increase (decrease) in other liabilities                            85            90             9            69
         Origination of loans held for sale                              (8,299)       (4,513)      (15,343)      (11,690)
         Proceeds on sale of loans held for sale                          8,504         4,833        14,969        13,054
                                                                       --------      --------      --------      --------

              Net cash provided (used) by
                operating activities                                       (674)        1,134        (1,842)        2,492
                                                                       --------      --------      --------      --------

Cash flows from investing activities: Net (increase) decrease in:
         Investment securities                                            4,071        (2,734)        2,934        (2,586)
         Interest-bearing deposits in other banks                           (17)         (294)       (1,020)         (328)
         Loans                                                            3,028          (583)        5,733        (5,244)
     Purchases of bank premises and equipment, net                           (4)           34           (20)          (63)
                                                                       --------      --------      --------      --------

              Net cash provided (used) by
                investing activities                                      7,078        (3,577)        7,627        (8,221)
                                                                       --------      --------      --------      --------

Cash flows from financing activities:
     Net increase (decrease) in deposits                                 (8,978)            2        (9,902)        2,662
     Repayments of FHLB advances, net                                       (12)          (12)          (25)          (95)
                                                                       --------      --------      --------      --------

              Net cash provided (used) by
                financing activities                                     (8,990)          (10)       (9,927)        2,567
                                                                       --------      --------      --------      --------

Decrease in cash and cash equivalents                                    (2,586)       (2,453)       (4,142)       (3,162)

Cash and cash equivalents at beginning of period                          8,472         6,881        10,028         7,590
                                                                       --------      --------      --------      --------

Cash and cash equivalents at end of period                             $  5,886      $  4,428      $  5,886      $  4,428
                                                                       ========      ========      ========      ========
</TABLE>














          See accompanying notes to consolidated financial statements.

                                      - 6 -


<PAGE>


                 CITRUS FINANCIAL SERVICES, INC. AND SUBSIDIARY
      CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED)
<TABLE>
<CAPTION>




                                                                                                          Net
                                                    Common Stock                                       Unrealized
                                             ---------------------------                                 Holding
                                                         Par                Additional                    Gains           Total
                                                        Value                 Paid-in    Accumulated   (Losses) on    Stockholders'
                                             Shares   (Rounded)   Amount      Capital      Deficit      Securities       Equity
                                             ------   ---------   ------     ---------     -------     -----------       ------
                                                                     (Dollars in Thousands, Except Par Value Per Share)
<S>                                        <C>         <C>       <C>         <C>          <C>            <C>           <C>
Balance, December 31, 2000                 1,423,402   $   3.15  $   4,491   $   4,638    $  (355)       $    (3)      $   8,771

Comprehensive income:
   Net income (loss)                             --         --         --          --         (52)            --
   Net change in unrealized holding
     gains (losses) on securities                --         --         --          --         --              44

Total comprehensive income (loss)                --         --         --          --         --              --           (8)
                                           ---------   --------  ---------   ---------    --------       -------       ---------

Balance, June 30, 2001                     1,423,402   $   3.15  $   4,491   $   4,638    $  (407)       $    41       $   8,763
                                           =========   ========  =========   =========    ========       =======       =========

</TABLE>



































          See accompanying notes to consolidated financial statements.

                                      - 7 -


<PAGE>


                 CITRUS FINANCIAL SERVICES, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                                  JUNE 30, 2001


NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES

The consolidated  financial  statements include the accounts of Citrus Financial
Services,  Inc.,  and  its  wholly  owned  subsidiary,  Citrus  Bank,  N.A.  The
consolidated  financial  statements  for the three and six months ended June 30,
2001 and 2000, have not been audited and do not include information or footnotes
necessary  for a  complete  presentation  of  financial  condition,  results  of
operations  and cash flows in  conformity  with  generally  accepted  accounting
principles. However, in the opinion of management, the accompanying consolidated
financial  statements  contain all adjustments,  which are of a normal recurring
nature,  necessary for a fair  presentation.  The results of operations  for the
interim  periods are not  necessarily  indicative  of the  results  which may be
expected for an entire year. The accounting  policies followed by Citrus are set
forth in Note 1 to Citrus'  consolidated  financial  statements contained in the
2000 Annual Report to Stockholders and are incorporated herein by reference.

Use of Estimates

The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect  the  reported  amounts  of assets  and  liabilities  and  disclosure  of
contingent  assets and  liabilities at the date of the financial  statements and
the  reported  amounts of revenues  and expenses  during the  reporting  period.
Actual results could differ from those estimates.

Material  estimates that are  particularly  susceptible  to  significant  change
relate to the  determination of the allowance for credit losses on loans and the
valuation  of  real  estate  acquired  in  connection  with  foreclosures  or in
satisfaction  of loans  ("Other  Real Estate  Owned").  In  connection  with the
determination  of the allowances for credit losses on loans and foreclosed  real
estate, management obtains independent appraisals for significant properties.

While  management  uses available  information to recognize  losses on loans and
foreclosed  real estate,  future  additions to the  allowances  may be necessary
based on changes in local economic conditions. In addition, regulatory agencies,
as an integral part of their  examination  process,  periodically  review Citrus
Bank's allowances for losses on loans and foreclosed real estate.  Such agencies
may require Citrus Bank to recognize  additions to the allowances based on their
judgments about information  available to them at the time of their examination.
Management  does not  anticipate  that the allowances for credit losses on loans
and foreclosed real estate will change materially in the near term.

Fair Value of Financial Instruments

Financial  instruments of Citrus consist of cash, due from banks,  federal funds
sold,  investment  securities,  loans receivable,  accrued interest  receivable,
deposits, federal funds purchased,  other borrowings,  accrued interest payable,
and  off-balance  sheet  commitments  such as  commitments  to extend credit and
standby letters of credit. On an interim basis, management considers the cost of
providing estimated fair values by each class of financial  instrument to exceed
the benefits derived. In management's  opinion, the carrying amount of financial
instruments approximates fair value.

Reclassifications

Certain amounts in the prior periods have been  reclassified to conform with the
presentation for the current period.

Recent Accounting Pronouncements

In September  2000, the Financial  Accounting  Standards  Board ("FASB")  issued
Statement of Financial  Accounting  Standards ("SFAS") No. 140,  "Accounting for
Transfers and Servicing of Financial Assets and  Extinguishment of Liabilities,"
a  replacement  of SFAS No.  125.  This  statement  revises  the  standards  for
securitization  and other  transfers  of  financial  assets and  collateral  and
requires certain disclosures and is effective as of March 31, 2001. The adoption
of this  pronouncement  did not have a  material  impact  on  Citrus'  financial
statements.




                                      - 8 -


<PAGE>


                 CITRUS FINANCIAL SERVICES, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                                  JUNE 30, 2001


NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (Continued)

In June 2001, the FASB approved SFAS No. 141, "Business  Combinations," and SFAS
No. 142,  "Goodwill  and Other  Intangible  Assets."  SFAS 141 requires that all
business  combinations  initiated after June 30, 2001 be accounted for using the
purchase  method.   SFAS  142  changes  the  accounting  for  goodwill  from  an
amortization  method to an  impairment-only  approach.  Instead of amortization,
goodwill and  intangible  assets that have  indefinite  useful lives will not be
amortized but rather will be tested at least annually for impairment  applying a
fair-value  based test.  Intangible  assets that have finite  useful  lives will
continue to be amortized over their useful lives,  but without the constraint of
an arbitrary ceiling. Citrus does not presently have any goodwill recorded; thus
management  does not believe that the effects of the new  standards  will have a
material impact on Citrus' financial statements.

On  July  6,  2001,  the  Securities  and  Exchange  Commission  released  Staff
Accounting Bulletin (SAB) No. 102, "Selected Loan Loss Allowance Methodology and
Documentation  Issues," which requires companies to have adequate  documentation
on the development  and  application of a systematic  methodology in determining
allowance  for loan losses.  Management  believes  that it has complied with the
requirements and that the adoption will have no material impact to the financial
statements.


NOTE 2 - COMPUTATION OF PER SHARE EARNINGS

Basic  earnings per share ("EPS")  amounts are computed by dividing net earnings
by the weighted  average number of common shares  outstanding  for the three and
six months  ended June 30, 2001 and 2000.  Diluted EPS are  computed by dividing
net earnings by the weighted average number of shares and all dilutive potential
shares outstanding during the period. At June 30, 2001 and 2000, the outstanding
options  that were fully vested  totaled  43,824 and 58,824,  respectively.  For
purposes of computing  diluted EPS, the treasury  stock method was used for 2001
and 2000. The following information was used in the computation of EPS on both a
basic and  diluted  basis for the three and six months  ended June 30,  2001 and
2000:
<TABLE>
<CAPTION>


                                                                        For the Three Months                For the Six Months
                                                                           Ended June 30,                      Ended June 30,
                                                                       2001              2000              2001              2000
                                                                     --------          --------          --------         ----------
<S>                                                                 <C>               <C>              <C>               <C>
Basic EPS computation:
  Numerator - Net income (loss)                                     $   151,000)      $    59,000      $   (52,000)      $   116,000
  Denominator - Weighted average shares outstanding                   1,423,402         1,411,041        1,423,402         1,370,187
                                                                    -----------       -----------      -----------       -----------

  Basic EPS                                                         $     (0.11)      $      0.04      $     (0.04)      $      0.08
                                                                    ===========       ===========      ===========       ===========

Diluted EPS computation:
  Numerator - Net income (loss)                                     $  (151,000)      $    59,000      $   (52,000)      $   116,000
                                                                    -----------       -----------      -----------       -----------
  Denominator - Weighted average shares outstanding                   1,423,402         1,411,041        1,423,402         1,370,187
  Stock options and warrants                                             14,716            24,296           14,716            24,296
                                                                    -----------       -----------      -----------       -----------

                                                                      1,438,118         1,435,337        1,438,118         1,394,483
                                                                    -----------       -----------      -----------       -----------

  Diluted EPS                                                       $     (0.11)      $      0.04      $     (0.04)      $      0.08
                                                                    ===========       ===========      ===========       ===========

</TABLE>








                                      - 9 -


<PAGE>


                 CITRUS FINANCIAL SERVICES, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                                  JUNE 30, 2001


NOTE 3 - LOANS HELD FOR INVESTMENT
<TABLE>
<CAPTION>

Loans held for investment consisted of (dollars in thousands):
                                                               June 30,                  December 31,
                                                                 2001                        2000
                                                               --------                    --------
<S>                                                            <C>                         <C>
Real estate                                                    $ 50,869                    $ 51,988
Commercial and agriculture                                        7,935                      12,548
Installment and other loans                                       3,575                       3,935
                                                               --------                    --------
      Total loans, gross                                         62,379                      68,471
Unearned income and deferred fees                                    (5)                         (3)
Allowance for credit losses                                        (864)                       (986)
                                                               --------                    --------
      Net loans                                                $ 61,510                    $ 67,482
                                                               ========                    ========
</TABLE>


NOTE 4 - LOANS HELD FOR SALE

Loans held for sale include  residential real estate loans held for sale to FNMA
and  outstanding  loans  originated by third-party  brokers,  assigned to Citrus
Bank,  and held by Citrus Bank  pending  transfer  to  investors  with  take-out
commitments.  At June 30,  2001,  and  December  31,  2000,  such loans  totaled
$1,062,000 and $688,000, respectively. These loans are carried at cost, which is
lower than market.

Citrus Bank does not originate any significant amounts of loans specifically for
resale.  Loans  originated by Citrus Bank and sold principally to FNMA generally
represent  less  than 3% of all  loans  originated.  The only  servicing  income
received by Citrus Bank comes form the  servicing of loans sold  principally  to
FNMA. Servicing income of $8,000 was recorded by Citrus Bank for each of the six
months ended June 30, 2001 and 2000, respectively.


NOTE 5 - ALLOWANCE FOR CREDIT LOSSES

Citrus'  Board of Directors  monitors the loan  portfolio  quarterly in order to
enable  it to  evaluate  the  adequacy  of  the  allowance  for  credit  losses.
Management  has  implemented  a risk system that  identifies  potential  problem
credits as early as possible,  categorizes  the credits as to risk, and monitors
the progress of the credits. Citrus maintains the allowance for credit losses at
a  level  sufficient  to  absorb  all  estimated  losses  inherent  in the  loan
portfolio.  Activity in the  allowance  for credit  losses  follows  (dollars in
thousands):
<TABLE>
<CAPTION>
                                                                        Six Months           Twelve Months
                                                                      Ended June 30,       Ended December 31,
                                                                           2001                 2000
                                                                        --------             ---------
<S>                                                                       <C>                <C>
Balance, beginning of period                                              $  986             $  401
                                                                          ------             ------
Recoveries
         Real estate loans                                                  --                 --
         Installment loans                                                     1                 84
         Credit card and related plans                                      --                    2
         Commercial and all other loans                                       24                  1
                                                                          ------             ------
                                                                              25                 87
                                                                          ------             ------
Charge-offs
         Real estate loans                                                  --                    5
         Installment loans                                                     5                 28
         Credit card and related plans                                         7                 13
         Commercial and all other loans                                      374                586
                                                                          ------             ------
                                                                             386                632
                                                                          ------             ------

Provision charged to operations                                              239              1,130
                                                                          ------             ------

Balance, end of period                                                    $  864             $  986
                                                                          ======             ======
</TABLE>

                                     - 10 -


<PAGE>


                 CITRUS FINANCIAL SERVICES, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                                  JUNE 30, 2001


NOTE 6 - FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK

Citrus is a party to financial  instruments with  off-balance  sheet risk in the
normal course of business to meet the financing  needs of its  customers.  These
financial  instruments include  commitments to extend credit.  Those instruments
involve,  to varying  degrees,  elements of credit,  and  interest  rate risk in
excess of the amounts  recognized in the balance sheet. The contract or notional
amounts of those  instruments  reflect the extent of  involvement  Citrus has in
particular classes of financial instruments.

Financial  instruments  at June 30,  2001,  consisted of  commitments  to extend
credit approximating $7.0 million and letters of credit of $100,000.

Commitments  to extend  credit are  agreements  to lend to a customer as long as
there is no violation of any condition established in the contract.  Commitments
generally  have fixed  expiration  dates or other  termination  clauses  and may
require  payment of a fee. Since many of the  commitments are expected to expire
without  being  drawn  upon,  the total  commitment  amounts do not  necessarily
represent future cash requirements.


NOTE 7 - STOCKHOLDERS' EQUITY

Citrus has authorized 11,000,000 shares of authorized capital stock,  consisting
of  10,000,000  shares of common  stock,  par value $3.15 (as adjusted for stock
splits) per share,  and 1,000,000  shares of preferred stock, par value of $5.00
per share. As of June 30, 2001, 1,423,402 shares of common stock were issued and
outstanding  and 43,824  shares  were  subject to  issuance  pursuant  to vested
options. No shares of preferred stock were issued.  Subsequent to June 30, 2001,
all outstanding options were exercised.


NOTE 8 - PROPOSED MERGER

On March 6, 2001,  Citrus signed an Agreement and Plan of  Reorganization by and
among CIB Marine Bancshares,  Inc. ("CIBM"),  Citrus, and Citrus Bank. Under the
terms of this  agreement,  which  are  subject  to  stockholder  and  regulatory
approval, Citrus' outstanding common stock will be converted into shares of CIBM
based at the respective  exchange  values.  If the Citrus exchange value is less
than $9.50, CIBM may, in its sole discretion,  (i) terminate its agreement; (ii)
substitute  $9.50 as the Citrus  exchange  value;  or,  (iii)  offer  Citrus the
exchange  value as  calculated  in the  agreement  and Citrus  may,  in its sole
discretion,  accept the offer and all other terms of the  agreement.  Closing is
expected to occur during September 2001.


















                                     - 11 -


<PAGE>


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

                                    Overview

Citrus Financial Services,  Inc., is a registered bank holding company under the
federal  Bank  Holding  Company Act of 1956,  as  amended,  and owns 100% of the
issued and outstanding  common stock of Citrus Bank, N.A., Vero Beach,  Florida.
Citrus was incorporated  under the laws of the State of Florida on May 19, 1989,
to enhance Citrus Bank's ability to serve its future customers' requirements for
financial  services.  The holding company provides  flexibility for expansion of
Citrus' banking business through acquisition of other financial institutions and
provision  of  additional   banking-related   services  which  the   traditional
commercial bank may not provide under present laws.

Citrus Bank  commenced  business  operations  on April 13, 1990,  in a permanent
facility  located at the corner of Indian River Boulevard and 17th Street,  Vero
Beach,  Florida.  The facility is a three-story  office  condominium,  the first
floor of which is owned by Citrus Bank.  Citrus Bank operates a branch office at
1020 U.S. 1, Sebastian, Florida, which commenced operations in February 1993 and
another branch office located at 1020 Buttonwood Street,  Barefoot Bay, Florida,
which commenced  operations in September 1996.  During 1999,  Citrus opened loan
production  offices in Miami and Sebring,  Florida.  In July 2000, Citrus closed
the loan production office in Miami, Florida.


                           Forward-looking Statements

When used in this Form 10-QSB,  the words or phrases "will likely  result," "are
expected  to," "will  continue,"  "is  anticipated,"  "estimate,"  "project," or
similar expressions are intended to identify "forward-looking statements" within
the  meaning of the  Private  Securities  Litigation  Reform  Act of 1995.  Such
statements are subject to certain risks and  uncertainties  including changes in
economic  conditions in Citrus'  market area,  changes in policies by regulatory
agencies,  fluctuations  in interest  rates,  demand for loans in Citrus' market
area and competition,  that could cause actual results to differ materially from
historical earnings and those presently anticipated or projected.  Citrus wishes
to caution  readers  not to place  undue  reliance  on any such  forward-looking
statements,  which  speak  only as to the date  made.  Citrus  wishes  to advise
readers that the factors listed above could affect Citrus' financial performance
and could cause Citrus' actual  results for future periods to differ  materially
from any opinions or statements  expressed with respect to future periods in any
current statements.  Citrus does not undertake,  and specifically  disclaims any
obligation, to publicly release the result of any revisions which may be made to
any forward-looking statements to reflect events or circumstances after the date
of such statements or to reflect the occurrence of anticipated or  unanticipated
events.


                         Future Accounting Requirements

There  are  currently  no FASB  pronouncements  issued  that are  scheduled  for
implementation during the second half of 2001.

                               Impact of Inflation

The  consolidated  financial  statements and related data presented  herein have
been  prepared in  accordance  with  generally  accepted  accounting  principles
("GAAP"),  which require the  measurements  of financial  position and operating
results  in terms of  historical  dollars,  without  considering  changes in the
relative  purchasing  power of money  over time due to  inflation.  Unlike  most
industrial companies,  substantially all of the assets and liabilities of Citrus
are  monetary in nature.  As a result,  interest  rates have a more  significant
impact on Citrus'  performance  than the effects of general levels of inflation.
Interest  rates do not  necessarily  move in the same  direction  or in the same
magnitude as the prices of goods and services, since such prices are affected by
inflation  to  a  larger  extent  than  interest  rates.  As  discussed  herein,
management seeks to manage the relationships  between interest  sensitive assets
and  liabilities  in order to protect  against wide interest rate  fluctuations,
including those resulting from inflation.






                                     - 12 -


<PAGE>


                              Results of Operations

Net Income

Citrus  recorded net losses of $151,000 and $52,000 for the three and six months
ended June 30, 2001, as compared with net income of $59,000 and $116,000 for the
three and six months ended June 30, 2000.  Significant  factors  contributing to
this decline were:

o    average earning assets increased 2.9% and 6.8% for the three and six months
     ended June 30, 2001, versus 2000 comparable periods; however, substantially
     all of the growth was in assets that earn less than the loan portfolio;

o    declining margins as the cost of deposits have risen sharply  (particularly
     in the first  quarter  of 2001),  while the  yield on  earning  assets  has
     declined 50 to 80 basis points;

o    the increased  provision for credit  losses  resulted from one  significant
     charge off of the remaining  balance of a floor plan loan.  The outcome and
     timing of the resolution of Citrus Bank's  litigation  cannot be determined
     by  management;   therefore,   all  of  the  remaining   balance   totaling
     approximately $350,000 was charged off in June 2001; and,

o    noninterest  expenses have  remained flat with cost savings  related to the
     closing of the Miami loan production  office in July 2000,  followed by the
     employment  termination  of two  executive  officers in late 2000 offset by
     increased    expense   related   to   the   pending   merger   and   higher
     collection-related costs as Citrus Bank addresses problem loans and OREO.


           Comparison of the Results of Operations for the Six Months
                          Ended June 30, 2001 and 2000

Net Interest Income

The largest component of net income for Citrus is net interest income,  which is
the difference between the income earned on assets and interest paid on deposits
and borrowings used to support such assets. Net interest income is determined by
the rates  earned on Citrus'  interest-earning  assets and the rates paid on its
interest-bearing  liabilities,  the relative amounts of interest-earning  assets
and  interest-bearing  liabilities,  and the degree of mismatch and the maturity
and   repricing    characteristics   of   its   interest-earning    assets   and
interest-bearing liabilities.

Net interest income (before  provision for credit losses) was $1,709,000 for the
six months ended June 30,  2001,  as compared to  $1,911,000  for the six months
ended June 30, 2000. Citrus' total loan portfolio between these periods declined
$3.8 million,  or 5.3%; and with declining rate environment,  change in mix, and
increase in the average cost of interest-bearing liabilities of 30 basis points,
net interest margin and interest-rate  spread deteriorated in 2001. Net interest
margin (which is net interest income divided by average interest-earning assets)
declined to 3.9% for the six months ended June 30, 2001, as compared to 4.6% for
the six months ended June 30, 2000.  Net  interest-rate  spread,  the difference
between  the  yield on  earning  assets  and the rate  paid on  interest-bearing
liabilities,  was 2.9% for the six months  ended June 30,  2001,  as compared to
3.7% for the six months ended June 30, 2000.

The rates paid on time deposits  averaged 6.1% and 5.6% for the six months ended
June 30,  2001 and 2000,  respectively.  During  the  first six  months of 2001,
increases of $2.6 million in average  time  deposits  along with the increase in
rates paid for these deposits contributed to the declining  interest-rate spread
and net interest  margin.  The funds  received  from the growth in time deposits
along with loan repayments were deployed to increase lower yielding  investments
and  federal  funds  sold  by an  average  of $7.3  million  and  $1.6  million,
respectively.









                                     - 13 -


<PAGE>


Average Balances,  Income and Expenses,  and Rates. The following table depicts,
for the  periods  indicated,  certain  information  related to  Citrus'  average
balance sheet and its average yields on assets and average costs of liabilities.
Such yields are derived by dividing  income or expense by the average balance of
the corresponding assets or liabilities. Average balances have been derived from
daily averages.

Average Balances, Income and Expenses, and Rates (dollars in thousands)
<TABLE>
<CAPTION>

                                                                           For the Six Months Ended June 30,
                                                                      2001                                  2000
                                                       -----------------------------------     ---------------------------------
                                                                    Interest       Average                 Interest     Average
                                                       Average        and           Yield/     Average        and        Yield/
                                                       Balance      Dividends        Rate      Balance     Dividends      Rate
                                                       -------      ---------        ----      -------     ---------      ----
<S>                                                    <C>           <C>              <C>     <C>          <C>              <C>
Earning assets:
     Interest-earning deposits                         $   604       $    13          4.3%    $    85      $     3          6.3%
     Taxable securities                                 14,328           472          6.6%      7,071          210          5.9%
     Federal funds sold                                  5,777           143          5.0%      4,144          121          5.8%
     Loans held for sale                                 1,514            61          8.1%      1,059           44          8.3%
     Loans held for investment, net                     66,123         2,898          8.8%     70,354        3,198          9.1%
                                                        ------         -----                   ------        -----

         Total earning assets                           88,346         3,587          8.1%     82,713        3,576          8.6%
                                                                       -----                                 -----

Non-earning assets                                       5,808                                  6,984
                                                         -----                                  -----

         Total assets                                  $94,154                                $89,697
                                                       =======                                =======

Interest-bearing liabilities:
     NOW and money market deposits                     $ 8,671           102          2.4%    $ 8,153           94          2.3%
     Savings                                             9,339           135          2.9%      8,570          138          3.2%
     Time deposits                                      53,562         1,638          6.1%     51,004        1,428          5.6%
     Other borrowings                                      105             3          5.5%        168            5          5.8%
                                                        ------         -----                   ------        -----

         Total interest-bearing liabilities             71,677         1,878          5.2%     67,895        1,665          4.9%
                                                                       -----                                 -----

Noninterest-bearing liabilities                         13,663                                 12,989
Stockholders' equity                                     8,814                                  8,813
                                                        ------                                 ------

         Total liabilities and
              stockholders' equity                     $94,154                                $89,697
                                                       =======                                =======

Net interest income before provision
  for credit losses                                                  $ 1,709                               $ 1,911
                                                                     =======                               =======

Interest-rate spread                                                                  2.9%                                  3.7%
                                                                                      ====                                  ====

Net interest margin                                                                   3.9%                                  4.6%
                                                                                      ====                                  ====

Ratio of average earning assets to
  average interest-bearing liabilities                  123.3%                                 121.8%
                                                        ======                                 ======

</TABLE>










                                     - 14 -


<PAGE>


Provision and Allowance for Credit Losses

Citrus has developed  policies and procedures for evaluating the overall quality
of its credit  portfolio  and the timely  identification  of  potential  problem
loans. Management's judgment as to the adequacy of the allowance is based upon a
number of  assumptions  about future events which it believes to be  reasonable,
but  which  may or may  not be  valid.  Thus,  there  can be no  assurance  that
charge-offs in future periods will not exceed the allowance for credit losses or
that additional increases in the credit loss allowance will not be required.

Asset  Classification.  Commercial  banks  are  required  to  review  and,  when
appropriate, classify their assets on a regular basis. The OCC has the authority
to identify  problem assets and, if appropriate,  require them to be classified.
There are three  classifications for problem assets:  substandard,  doubtful and
loss.   Substandard   assets  have  one  or  more  defined  weaknesses  and  are
characterized  by the distinct  possibility  that the insured  institution  will
sustain some loss if the  deficiencies  are not corrected.  Doubtful assets have
the weaknesses of substandard assets with the additional characteristic that the
weaknesses  make  collection  or  liquidation  in full on the basis of currently
existing  facts,  condition,  and  values  questionable,  and  there  is a  high
possibility of loss. An asset classified as loss is considered uncollectible and
of such little  value that  continuance  as an asset of the  institution  is not
warranted.  If an asset or portion  thereof is classified  as loss,  the insured
institution establishes a specific reserve for the full amount of the portion of
the asset  classified as loss. All or a portion of general loan loss  allowances
established to cover possible losses related to assets classified as substandard
or doubtful may be included in determining an institution's  regulatory capital,
while specific valuation  allowances for loan losses generally do not qualify as
regulatory   capital.   Assets  that  do  not  warrant   classification  in  the
aforementioned  categories,  but possess  weaknesses,  are classified as special
mention and are monitored by Citrus.

At June 30, 2001,  Citrus had 13 loans classified as substandard,  doubtful,  or
loss totaling $1.9 million.  At December 31, 2000,  Citrus had 24 loans totaling
$3.9 million in the same  categories.  At both June 30,  2001,  and December 31,
2000,  Citrus had no material loss assets  identified to be  charged-off.  Loans
classified by management as impaired totaled $489,000 and $1,236,000 at June 30,
2001, and December 31, 2000, respectively.

Nonperforming  loans include loans that have been placed on nonaccrual status by
Citrus and loans past due for ninety days or more.  Some of these  nonperforming
loans are well-collateralized,  posing no significant risk of loss, and have not
been classified as substandard,  doubtful,  or loss. A summary of  nonperforming
loans and assets follows:









                        [Page intentionally left blank.]

















                                     - 15 -


<PAGE>
<TABLE>
<CAPTION>


                                                                                       June 30,         December 31,
                                                                                         2001              2000
                                                                                       --------          --------
                                                                                         (dollars in thousands)
<S>                                                                                     <C>                <C>
Nonaccrual loans held for investment:
     Real estate loans                                                                  $  199             $  196
     Installment loans                                                                     163                  6
     Credit cards and related plans                                                       --                 --
     Commercial and all other loan                                                         127              1,034
                                                                                        ------             ------
Total nonaccrual loans held for investment                                                 489              1,236
                                                                                        ------             ------

Accruing loans held for investment over 90 days delinquent:
     Real estate loans                                                                    --                   60
     Installment loans                                                                    --                 --
     Credit cards and related plans                                                       --                   32
     Commercial and all other loans                                                         20               --
                                                                                        ------             ------
Total accrual loans held for investment over 90 days delinquent                             20                 92
                                                                                        ------             ------

Troubled debt restructurings not included above                                           --                 --
                                                                                        ------             ------

Total nonperforming loans held for investment                                              509              1,328
                                                                                        ------             ------

Other real estate owned:
     Real estate acquired by foreclosure or deed in lieu
         of foreclosure                                                                    753                129
                                                                                        ------             ------
     Total nonperforming loans held for investment and
          other real estate owned                                                       $1,262             $1,457
                                                                                        ======             ======

     Total nonperforming loans held for investment
         as a percentage of total loans held for investment                               0.82%              1.94%
                                                                                        ======             ======
     Total nonperforming loans held for investment
         as a percentage of total assets                                                  0.59%              1.38%
                                                                                        ======             ======
     Total nonperforming loans held for investment
         and other real estate owned as a percentage of total assets                      1.47%              1.52%
                                                                                        ======             ======

Troubled debt restructurings and modified loans held for investment:
     Current                                                                            $1,333             $1,478
     Past due over 30 days and less than 90 days                                          --                 --
     Past due over 90 days and included above                                               68               --
                                                                                        ------             ------

                                                                                        $1,401             $1,478
                                                                                        ======             ======
</TABLE>


Nonperforming  loans of $509,000 at June 30, 2001,  declined  from the March 31,
2001, and December 31, 2000,  totals of $633,000 and  $1,328,000,  respectively.
Other real estate owned at June 30, 2001,  totaled  $753,000,  as compared  with
$129,000 at December 31, 2000.  Troubled debt  restructurings  at June 30, 2001,
declined $77,000 from the level at December 31, 2000.

Allowance for Credit  Losses.  The  allowance  for credit losses is  established
through a provision for loan losses charged  against  income.  Loans are charged
against the provision when management  believes that the  collectibility  of the
principal is unlikely.  The  provision  is an estimated  amount that  management
believes will be adequate to absorb losses  inherent in the loan portfolio based
on evaluations of its  collectibility.  The evaluations take into  consideration
such  factors as changes  in the  nature  and volume of the  portfolio,  overall
portfolio  quality,   specific  problem  loans  and  commitments,   and  current
anticipated  economic  conditions that may affect the borrower's ability to pay.
While  management  uses the best  information  available to recognize  losses on
loans,  future  additions to the provision may be necessary  based on changes in
economic conditions.


                                     - 16 -


<PAGE>
<TABLE>
<CAPTION>


Activity in the allowance for credit losses follows (dollars in thousands):
                                                                            Six Months         Twelve Months
                                                                           Ended June 30,     Ended December 31,
                                                                               2001                 2000
                                                                             --------             ---------
<S>                                                                           <C>                   <C>
Balance, beginning of period                                                  $  986                $  401
                                                                              ------                ------

Recoveries:
     Real estate loans                                                          --                    --
     Installment loans                                                             1                    84
     Credit card and related plans                                              --                       2
     Commercial and all other loans                                               24                     1
                                                                              ------                ------
                                                                                  25                    87
                                                                              ------                ------
Charge-offs:
     Real estate loans                                                          --                       5
     Installment loans                                                             5                    28
     Credit card and related plans                                                 7                    13
     Commercial and all other loans                                              374                   586
                                                                              ------                ------
                                                                                 386                   632
                                                                              ------                ------

Provision charged to operations                                                  239                 1,130
                                                                              ------                ------

Balance, end of period                                                        $  864                $  986
                                                                              ======                ======

Ratio of net charge-offs during the period to average
   loans held for investment outstanding during the period                      1.09%                 0.77%
                                                                              ======                ======
</TABLE>


At June 30, 2001, the allowance for credit losses amounted to $864,000, or 1.39%
of outstanding  loans held for  investment.  At December 31, 2000, the allowance
for credit losses amounted to $986,000,  or 1.44% of outstanding  loans held for
investment.  Citrus' provision for credit losses was $239,000 for the six months
ended June 30, 2001.  For the same six months period in 2000,  the provision for
credit  losses  was  $125,000.  The  provision  was made  based on  management's
assessment of general  credit loss risk and asset  quality.  The increase in the
allowance for credit losses as a percentage of outstanding loans reflects recent
increases in the level of net charge-offs experienced in late-2000 and 2001, and
increases in classified  and  nonperforming  loans during the last six months of
2000.

Noninterest Income and Expense

Noninterest  Income.  Citrus'  primary source of  noninterest  income is service
charges on deposit  accounts.  In addition,  Citrus  originates  mortgage loans,
which are closed in the name of a third party,  for which Citrus receives a fee.
Other sources of noninterest income include bankcard fees,  commissions on check
sales, safe deposit box rent, wire transfer, and official check fees.

Total noninterest income increased by $25,000,  or 11.7%,  during the six months
ended June 30,  2001,  as compared to the same  period in 2000.  Increases  from
gains on sale of assets ($14,000) and rental income from OREO ($8,000) accounted
for substantially all of the improvements.

Noninterest  Expense.  Total  noninterest  expense decreased  $24,000,  or 1.3%,
during the six months  ended June 30,  2001,  as  compared to the same period in
2000. This decrease was primarily due to:

o    the net decline in salaries  and employee  benefits of $100,000,  or 10.8%,
     resulting from the closure of the Miami loan production office in July 2000
     and the termination of two executive officers in late 2000;

o    occupancy-related  expenses declining $11,000,  or 7.7%; as a result of the
     closure of the Miami loan production office; offset by:

o    increased  professional fees ($70,000 or 53.4%) and other expenses ($29,000
     or 11.1%)  related to  pending  merger and  increased  costs of  collection
     efforts in the loan department.

                                     - 17 -


<PAGE>


Income Tax Expense

The income tax  provision was a benefit of $31,000 for the six months ended June
30, 2001, or an effective rate of 37.3%. This compares with an effective rate of
37.0% for the same period in 2000.

            Comparison of Results of Operations for the Three Months
                          Ended June 30, 2001 and 2000

Net Interest Income

Net interest  income  (before  provision for credit losses) was $824,000 for the
three months  ended June 30, 2001,  as compared to $946,000 for the three months
ended June 30, 2000. The growth of Citrus'  average total earning assets between
these  periods of $2.4  million  was more than  offset by an  increase  in total
interest-bearing  deposits  of  $827,000  and the  decline in  average  yield on
earning  assets  of 80 basis  points.  The  declining  yield on  earning  assets
reflects the change in mix of earning assets from higher yielding loans to lower
yielding  investments and federal funds.  Total loans declined $7.8 million,  or
10.8%, while securities increased $5.8 million, or 77.1%, and federal funds sold
increased $2.4 million,  or 63.7%.  The resulting net interest  margin (which is
net interest income divided by average interest-earning assets) declined to 3.8%
for the three  months  ended June 30,  2001,  as  compared to 4.5% for the three
months ended June 30, 2000. Net interest-rate spread, the difference between the
yield on earning assets and the rate paid on interest-bearing  liabilities,  was
2.9% for the three months ended June 30, 2001, as compared to 3.6% for the three
months ended June 30, 2000.

Noninterest Income and Expense

Noninterest  Income:  Total other income increased by $19,000,  or 18.3%, during
the three months  ended June 30,  2001,  as compared to the same period in 2000.
Increases from gains on sale of assets and rental income from OREO accounted for
substantially all of the improvements.

Noninterest  Expense.  Total  noninterest  expense increased  $13,000,  or 1.4%,
during the three months  ended June 30, 2001,  as compared to the same period in
2000. The following variances affected this quarter's results:

o    salaries and  employee  benefits  declined  $57,000,  or 12.4%,  due to the
     closure  of  the  Miami  loan  production  office  in  July  2000  and  the
     termination of two executive officers in late 2000;

o    occupancy-related  expenses  declined  $4,000,  or 5.7%; as a result of the
     closure of the Miami loan production office; and,

o    professional fees increased $44,000, or 67.7%, and other expenses increased
     $33,000,  or 26.6%,  related  to  pending  merger  and  increased  costs of
     collection efforts in the loan department.

Income Tax Expense

The income tax  provision  was a benefit of $91,000 for the three  months  ended
June 30, 2001,  or an effective  rate of 37.6%.  This compares with an effective
rate of 37.2% for the same period in 2000.





                        [Page intentionally left blank.]








                                     - 18 -


<PAGE>


                               Financial Condition

Citrus' total assets at June 30, 2001,  were $85.9 million,  a decrease of $10.1
million,  or 10.5%, from $95.9 million at December 31, 2000.  Decreases in total
loans of $5.6 million, cash and cash equivalents of $4.1 million, and securities
of $2.9 million  were  recorded  since  December  31,  2000.  Deposits  declined
approximately  $9.9  million,   with  higher  costing  certificates  of  deposit
contributing  $11.1 million in decreases,  while other deposits improved by $1.2
million.

Total  stockholders'  equity as of June 30, 2001, was  $8,763,000,  a decline of
$8,000, or approximately 0.1%, compared with stockholders'  equity of $8,771,000
as of December 31, 2000. This decrease was attributable to:

o    net losses for the six months of 2001 of $52,000, partially offset by,

o    an increase of $44,000 in the market value (net of deferred  income  taxes)
     of investment securities available-for-sale.

The following  table shows selected ratios for the periods ended or at the dates
indicated (annualized for the six months ended June 30, 2001):
<TABLE>
<CAPTION>
                                                                              Six Months Ended       Year Ended
                                                                                 June 30,            December 31,
                                                                                   2001                  2000
                                                                               -------------         ------------
<S>                                                                               <C>                   <C>
         Return on average assets                                                 -0.11%                -0.44%
         Return on average equity                                                 -1.18%                -4.48%
         Interest-rate spread during the period                                    2.90%                 3.40%
         Net interest margin                                                       3.90%                 4.30%
         Allowance for credit losses to period end loans held for investment       1.39%                 1.44%
         Net charge-offs to average loans held for investment                      1.09%                 0.77%
         Nonperforming assets to period end loans held for investment
             and foreclosed property                                               2.00%                 2.12%
         Nonperforming assets to period end total assets                           1.47%                 1.52%
</TABLE>


                         Liquidity and Capital Resources

Liquidity  Management.  Liquidity management involves monitoring Citrus' sources
and uses of funds in order to meet its day-to-day cash flow  requirements  while
maximizing  profits.  Liquidity  represents  the ability of a company to convert
assets  into  cash or cash  equivalents  without  significant  loss and to raise
additional funds by increasing  liabilities.  Liquidity  management is made more
complicated  because  different  balance sheet components are subject to varying
degrees of  management  control.  For example,  the timing of  maturities of the
investment portfolio is very predictable and subject to a high degree of control
at the time  investment  decisions are made.  However,  net deposit  inflows and
outflows  are far less  predictable  and are not  subject to the same  degree of
control.  Asset  liquidity  is  provided  by cash and assets  which are  readily
marketable,  which can be  pledged,  or which  will  mature in the near  future.
Liability  liquidity is provided by access to core funding sources,  principally
the ability to generate customer deposits in Citrus' market area.

In  addition,  liability  liquidity  is  provided  through the ability to borrow
against  approved lines of credit (federal funds  purchased) from  correspondent
banks and to borrow on a secured basis through  securities sold under agreements
to repurchase.

Short-Term Investments.  Short-term investments,  which consist of federal funds
sold and securities  purchased under  agreements to resell and  interest-bearing
deposits,  averaged  $6.4 million in the first six months of 2001 as compared to
$4.2  million in the same period of 2000.  At June 30,  2001,  and  December 31,
2000,   short-term   investments   totaled  $4.9   million  and  $6.4   million,
respectively.  These  funds are a primary  source of Citrus'  liquidity  and are
generally invested in an earning capacity on an overnight basis.

Management   regularly  reviews  the  liquidity   position  of  Citrus  and  has
implemented   internal  policies  which  establish  guidelines  for  sources  of
asset-based  liquidity  and limit the total  amount of  purchased  funds used to
support the balance sheet and funding from non-core sources.


                                     - 19 -


<PAGE>


Deposits and Other  Sources of Funds.  In addition to  deposits,  the sources of
funds available for lending and other business purposes include loan repayments,
loan sales, and securities sold under agreements to repurchase.  Loan repayments
are a relatively stable source of funds,  while deposit inflows and outflows are
influenced  significantly by general interest rates and money market conditions.
Borrowings  may be used on a short-term  basis to compensate  for  reductions in
other sources,  such as deposits at less than projected levels and are also used
to fund the origination of mortgage loans designated to be sold in the secondary
markets.

Core Deposits. Core deposits,  which exclude certificates of deposit of $100,000
or more,  provide a relatively  stable funding source for Citrus' loan portfolio
and other earning  assets.  Citrus' core deposits were $68.3 million at June 30,
2001,  and $75.8  million at  December  31,  2000.  This  decline  reflects  the
reduction  in earning  assets over the  period.  Management  anticipates  that a
stable base of deposits will be Citrus'  primary  source of funding to meet both
its short-term and long-term liquidity needs in the future.

Customers with large  certificates of deposit tend to be extremely  sensitive to
interest rate levels, making these deposits less reliable sources of funding for
liquidity planning purposes than core deposits. Some financial institutions fund
their balance  sheets in part through  large  certificates  of deposit  obtained
through  brokers.  These  brokered  deposits  are  generally  expensive  and are
unreliable as long-term  funding  sources.  Accordingly,  Citrus does not accept
brokered deposits.

Borrowings.  Citrus Bank has a line of credit master  agreement with the FHLB of
Atlanta that enables Citrus Bank to borrow up to $10,000,000. These advances are
collateralized  by  Citrus  Bank's  FHLB  stock  and  a  blanket  floating  lien
consisting of wholly-owned residential (1-4 units) first mortgage loans. At June
30, 2001, there were no advances outstanding under this line. In addition to the
line of credit arrangement,  Citrus Bank had fixed FHLB advances  outstanding as
follows (dollars in thousands):
<TABLE>
<CAPTION>
                                             At June 30,        At December 31,
   Maturity Date       Interest Rate            2001                 2000
   -------------        -------------           ----                 ----
<S>                        <C>                 <C>                 <C>

      2003                 5.76%               $ 92                $117
                                               ====                ====
</TABLE>

Capital.  The Federal  Reserve Board and bank regulatory  agencies  require bank
holding  companies and financial  institutions  to maintain  capital at adequate
levels based on a percentage of assets and off-balance sheet exposures, adjusted
for  risk  weights  ranging  from 0% to 100%  (the  Federal  Reserve  grants  an
exemption from these requirements for bank holding companies with less than $150
million in  consolidated  assets,  and  therefore  Citrus'  capital is currently
measured only at Citrus Bank level). Under the risk-based  standard,  capital is
classified  into two  tiers.  Tier 1 capital  consists  of common  stockholders'
equity,  excluding the unrealized gain (loss) on available-for-sale  securities,
minus  certain  intangible  assets.  Tier 2  capital  consists  of  the  general
allowance for credit losses  subject to certain  limitations.  An  institution's
qualifying capital base for purposes of its risk-based capital ratio consists of
the sum of its Tier 1 and Tier 2 capital.  The regulatory  minimum  requirements
are 4% for Tier 1 and 8% for total risk-based capital.

Bank  holding  companies  and banks are also  required to maintain  capital at a
minimum level based on total assets,  which is known as the leverage ratio.  The
minimum  requirement for the leverage ratio is 3%, but all but the highest rated
institutions  are required to maintain  ratios 100 to 200 basis points above the
minimum. Citrus and Citrus Bank exceeded their minimum regulatory capital ratios
as of June 30, 2001, as reflected in the following table.

The  following  table sets  forth  Citrus  Bank's  regulatory  capital  position
(dollars in thousands):
<TABLE>
<CAPTION>
                                                       Actual               Minimum(1)           Well-Capitalized(2)
                                                Amount         %         Amount       %          Amount        %
                                                ------       -----       ------     -----        ------      -----
<S>                                             <C>          <C>         <C>        <C>          <C>         <C>
Total Capital (to Risk-Weighted Assets)         $8,588       13.37%      $5,140     8.00%        $6,425      10.00%
Tier I Capital (to Risk-Weighted Assets)        $7,784       12.12%      $2,570     4.00%        $3,855       6.00%
Tier I Capital (to Average Assets)              $7,784        8.46%      $3,679     4.00%        $4,599       5.00%
<FN>
(1)  The minimum required for adequately capitalized purposes.
(2)  To be "well-capitalized" under the FDIC's Prompt Corrective Action
     regulations.
</FN>
</TABLE>




                                     - 20 -


<PAGE>


                 CITRUS FINANCIAL SERVICES, INC. AND SUBSIDIARY



PART II:  OTHER INFORMATION

          Item 1.   Legal Proceedings.
                    None.

          Item 2.   Changes In Securities.
                    None.

          Item 3.   Defaults upon Senior Securities.
                    None.

          Item 4.   Submission of Matters to a Vote of Security Holders.
                    An  Annual  Meeting  of  Shareholders  was held on April 23,
                    2001. At that  meeting,  a majority of the  shareholders  of
                    record  voted to elect a total of three Class II  directors,
                    each to serve  for a term of three  years  (Proposal  I); to
                    ratify the Board of Directors'  appointment of the Company's
                    independent auditors for the fiscal year ending December 31,
                    2001 (Proposal II); to approve the adjournment of the Annual
                    Meeting  to  solicit  additional  proxies  in the event that
                    there were not  sufficient  votes to approve any one or more
                    or the proposals (Proposal III); and, to transact such other
                    business as may properly come before the 2001 Annual Meeting
                    and any adjournments thereof (Proposal IV).

<TABLE>
<CAPTION>

                    Proposal I
                                              Class II Directors with Terms Expiring in 2004
                                              ----------------------------------------------
                                         Director                  Votes For          Votes Against
                                     --------------------      ----------------     ------------------
<S>                                  <C>                           <C>                   <C>

                                     Robert L. Brackett            1,037,519             12,670

                                     Roy H. Lambert                1,037,519             12,670

                                     James R. Thompson             1,035,716             14,473


                    Proposal II

                                          Votes For              Votes Against        Votes Abstain

                                     --------------------      ----------------     ------------------
                                          1,048,210                   317                 1,662


                    Proposal III

                                          Votes For              Votes Against        Votes Abstain
                                     ---------------------     ----------------     ------------------

                                          1,035,417                  12,354               2,418


                    Proposal IV

                                          Authorized             Unauthorized
                                     ---------------------     ----------------
                                           799,699                 250,490
</TABLE>



          Item 5.   Other Information.

          Item 6.   Exhibits and Reports on Form 8-K.
                    a)   Exhibits.
                         --------
                         None.

                    b)   Reports on Form 8-K.
                         -------------------
                         None.



                                     - 21 -


<PAGE>


                 CITRUS FINANCIAL SERVICES, INC. AND SUBSIDIARY
                                   SIGNATURES



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


                                     Citrus Financial Services, Inc.




  Date:        August 9, 2001        /s/ Randy J. Riley
               --------------        ------------------
                                     Randy J. Riley
                                     Interim President/ Chief Executive Officer



  Date:        August 9, 2001        /s/ Marion H. Tupek
               --------------        -------------------
                                     Marion H. Tupek
                                     Principal Accounting Officer/Vice President



































                                     - 22 -


<PAGE>