<PAGE>

                                  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
           SEPTEMBER 30, 1999

                                       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.)

            Post Office Box 3239
            201 North Marion Street
            Lake City, Florida                                    32056
            ------------------                                    -----
            (Address of principal executive offices)              (Zip Code)


       Registrant's telephone number, including area code: (904) 755-3240




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 October
31, 1999 was 6,108,570 shares, $0.01 par value per share.


<PAGE>

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




                                TABLE OF CONTENTS


<TABLE>
<S>                                                                                    <C>
PART I - FINANCIAL INFORMATION
           Item 1.   Financial Statements
                     (unaudited)

           Consolidated Statement of Financial Condition .............................  3
           Consolidated Statement of Income ..........................................  4
           Consolidated Statement of Cash Flows ......................................  6
           Notes to Consolidated Financial Statements ................................  7
           Selected Financial Data ...................................................  9

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

           Overview .................................................................. 10
           Results of Operations ..................................................... 10
           Earning Assets ............................................................ 13
           Funding Sources ........................................................... 18
           Liquidity ................................................................. 18
           Capital Resources ......................................................... 19
           Year 2000 Compliance ...................................................... 20

           Item 3.  Quantitative and Qualitative Disclosure About Market Risk ........ 21

PART II - OTHER INFORMATION
           Item 1.  Legal Proceedings ................................................ 23

           Item 2.  Changes in Securities ............................................ 23

           Item 3.  Defaults Upon Senior Securities .................................. 23

           Item 4.  Submission of Matters to a Vote of Security Holders .............. 23

           Item 5.  Other Information ................................................ 23

           Item 6.  Exhibits and Reports on Form 8-K ................................. 23
</TABLE>



                                        2

<PAGE>


                                     PART I
                              FINANCIAL INFORMATION

                   CNB FLORIDA BANCSHARES, INC. AND SUBSIDIARY
                  CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                   September 30,   December 31,
                                                                       1999            1998
                                                                    ---------       ---------
                                           ASSETS                          (thousands)
<S>                                                                 <C>             <C>
Cash and cash equivalents:
     Cash and due from banks                                        $  11,207       $  12,630
     Federal funds sold                                                14,800          25,250
     Interest bearing deposits in other banks                          11,348          11,007
                                                                    ---------       ---------
       Total cash and cash equivalents                                 37,355          48,887
Investment securities available for sale                               38,372          59,337
Investment securities held to maturity                                 10,785           2,940
Loans:
     Commercial, financial and agricultural                           112,067          85,208
     Real estate - mortgage                                            81,870          72,357
     Real estate - construction                                        12,415           8,527
     Installment and consumer                                          22,019          20,923
                                                                    ---------       ---------
       Total loans, net of unearned income                            228,371         187,015
Less: Allowance for loan losses                                        (2,306)         (1,875)
                                                                    ---------       ---------
       Net loans                                                      226,065         185,140

Premises and equipment, net                                            13,132          10,754
Other assets                                                            4,397           4,507
                                                                    ---------       ---------
            TOTAL ASSETS                                            $ 330,106       $ 311,565
                                                                    =========       =========

                   LIABILITIES AND SHAREHOLDERS' EQUITY

LIABILITIES
Deposits:
     Non-interest bearing demand                                    $  45,521       $  35,701
     Savings, NOW and money market                                     98,407          92,495
     Time (under $100,000)                                             88,907          95,369
     Time ($100,000 and over)                                          41,621          41,544
                                                                    ---------       ---------
       Total deposits                                                 274,456         265,109

Securities sold under repurchase agreements                             9,922          12,570
Other liabilities                                                       2,653           2,990
                                                                    ---------       ---------
       Total liabilities                                              287,031         280,669
                                                                    ---------       ---------

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;
     6,108,570 and 4,856,770 shares issued and outstanding
     at September 30, 1999 and December 31, 1998, respectively             61              49
Additional paid-in capital                                             30,830          19,465
Retained earnings                                                      12,433          10,964
Accumulated other comprehensive income, net of tax                       (249)            418
                                                                    ---------       ---------
       Total shareholders' equity                                      43,075          30,896
                                                                    ---------       ---------
            TOTAL LIABILITIES AND SHAREHOLDERS'  EQUITY             $ 330,106       $ 311,565
                                                                    =========       =========
</TABLE>

                                        3

<PAGE>



                   CNB FLORIDA BANCSHARES, INC. AND SUBSIDIARY
                        CONSOLIDATED STATEMENT OF INCOME
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                           Nine Months Ended September 30,
                                                               1999              1998
                                                            -----------       ----------
                                                                      (thousands)
<S>                                                        <C>               <C>
INTEREST INCOME
  Interest and fees on loans                                $    13,956       $   11,711
  Interest on investment securities held to maturity                354              271
  Interest on investment securities available for sale            2,100            2,253
  Interest on federal funds sold                                    530            1,189
  Interest on interest bearing deposits                             408              242
                                                            -----------       ----------
     Total interest income                                       17,348           15,666

INTEREST EXPENSE
  Interest on deposits                                            6,426            6,724
  Interest on notes payable                                          --                7
  Interest on short-term borrowings                                 214              261
                                                            -----------       ----------
     Total interest expense                                       6,640            6,992
                                                            -----------       ----------
          Net interest income                                    10,708            8,674

PROVISION FOR LOAN LOSSES                                           785              400
                                                            -----------       ----------
  Net interest income after provision for loan losses             9,923            8,274

NON-INTEREST INCOME
  Service charges                                                 1,556            1,304
  Other fees and charges                                            613              410
  Gain on sale of securities                                         --                2
                                                            -----------       ----------
     Total non-interest income                                    2,169            1,716
                                                            -----------       ----------

NON-INTEREST EXPENSE
  Salaries and employee benefits                                  4,599            3,506
  Occupancy and equipment expenses                                1,348            1,201
  Other operating expenses                                        2,582            2,128
                                                            -----------       ----------
     Total non-interest expense                                   8,529            6,835
                                                            -----------       ----------

Income before income taxes                                        3,563            3,155
     Income taxes                                                 1,241            1,088
                                                            -----------       ----------

NET INCOME                                                  $     2,322       $    2,067
                                                            ===========       ==========

Other comprehensive (loss) income, net of tax                      (666)             192
                                                            -----------       ----------
Comprehensive income                                        $     1,656       $    2,259
                                                            ===========       ==========

EARNINGS PER SHARE (NOTE 3):

     Basic earnings per share                               $      0.39       $     0.43
                                                            ===========       ==========
     Weighted average shares outstanding                      5,956,858        4,856,770
                                                            ===========       ==========

     Diluted earnings per share                             $      0.39       $     0.42
                                                            ===========       ==========
     Diluted weighted average shares outstanding              6,030,671        4,969,978
                                                            ===========       ==========
</TABLE>


                                        4

<PAGE>


                   CNB FLORIDA BANCSHARES, INC. AND SUBSIDIARY
                        CONSOLIDATED STATEMENT OF INCOME
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                           Three Months Ended September 30,
                                                               1999              1998
                                                            -----------       ----------
                                                                     (thousands)
<S>                                                         <C>               <C>
INTEREST INCOME
  Interest and fees on loans                                $     4,929       $    4,073
  Interest on investment securities held to maturity                152               77
  Interest on investment securities available for sale              621              677
  Interest on federal funds sold                                    154              469
  Interest on interest bearing deposits                             141               82
                                                            -----------       ----------
     Total interest income                                        5,997            5,378

INTEREST EXPENSE
  Interest on deposits                                            2,136            2,331
  Interest on short-term borrowings                                  87              104
                                                            -----------       ----------
     Total interest expense                                       2,223            2,435
                                                            -----------       ----------
          Net interest income                                     3,774            2,943

PROVISION FOR LOAN LOSSES                                           275              170
                                                            -----------       ----------
  Net interest income after provision for loan losses             3,499            2,773

NON-INTEREST INCOME
  Service charges                                                   557              451
  Other fees and charges                                            182              128
                                                            -----------       ----------
     Total non-interest income                                      739              579
                                                            -----------       ----------

NON-INTEREST EXPENSE
  Salaries and employee benefits                                  1,620            1,250
  Occupancy and equipment expenses                                  464              407
  Other operating expenses                                          942              724
                                                            -----------       ----------
     Total non-interest expense                                   3,026            2,381
                                                            -----------       ----------

Income before income taxes                                        1,212              971
     Income taxes                                                   423              333
                                                            -----------       ----------

NET INCOME                                                  $       789       $      638
                                                            ===========       ==========

Other comprehensive (loss) income, net of tax                      (122)             144
                                                            -----------       ----------
Comprehensive income                                        $       667       $      782
                                                            ===========       ==========

EARNINGS PER SHARE (NOTE 3):

     Basic earnings per share                               $      0.13       $     0.13
                                                            ===========       ==========
     Weighted average shares outstanding                      6,108,570        4,856,770
                                                            ===========       ==========

     Diluted earnings per share                             $      0.13       $     0.13
                                                            ===========       ==========
     Diluted weighted average shares outstanding              6,182,951        4,969,978
                                                            ===========       ==========
</TABLE>



                                        5

<PAGE>



                   CNB FLORIDA BANCSHARES, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                            Nine Months Ended September 30,
                                                                 1999           1998
                                                               --------       --------
                                                                     (thousands)
<S>                                                            <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income                                                     $  2,322       $  2,067
Adjustments to reconcile net income to net cash
  provided by operating activities:
     Depreciation and amortization                                  710            666
     Provision for loan loss                                        785            400
     Investment securities (accretion) amortization, net           (288)            54
     Changes in assets and liabilities:
       Other assets                                                 370           (551)
       Other liabilities                                           (337)           949
                                                               --------       --------

       Net cash provided by operating activities                  3,562          3,585
                                                               --------       --------

CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of investment securities available for sale           (20,405)        (4,163)
Purchases of investment securities held to maturity              (8,754)            --
Proceeds from maturities of securities available for sale        37,639         10,970
Proceeds from maturities of securities held to maturity             875          2,470
Proceeds from called securities available for sale                3,000          3,600
Net increase in loans                                           (41,710)       (17,266)
Purchases of premises and equipment, net                         (2,953)        (1,197)
                                                               --------       --------

       Net cash used in investing activities                    (32,308)        (5,586)
                                                               --------       --------

CASH FLOWS FROM FINANCING ACTIVITIES
Increase (decrease) in deposits                                   9,348         17,729
Decrease in securities sold under repurchase agreements          (2,648)        (1,523)
Repayment of note payable                                            --         (1,450)
Cash dividends paid                                                (854)          (729)
Issuance of common stock                                         11,362             --
Exercise of options                                                   6             --
                                                               --------       --------

       Net cash provided by financing activities                 17,214         14,027
                                                               --------       --------


Increase (decrease) in cash and cash equivalents                (11,532)        12,026

Cash and cash equivalents at beginning of period                 48,887         39,857
                                                               --------       --------

Cash and cash equivalents at end of period                     $ 37,355       $ 51,883
                                                               ========       ========

SUPPLEMENTAL DISCLOSURES:
       Interest paid                                           $  6,976       $  6,987
                                                               ========       ========

       Taxes paid                                              $  1,270       $    722
                                                               ========       ========
</TABLE>



                                        6

<PAGE>



                   CNB FLORIDA BANCSHARES, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 1999
                                   (Unaudited)


NOTE 1. BASIS OF PRESENTATION
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 generally accepted accounting
principles. In the opinion of management, such financial statements reflect all
adjustments (consisting only of normal recurring adjustments) necessary for a
fair statement of the results for the interim periods presented. Operating
results for the nine months ended September 30, 1999 are not necessarily
indicative of the results that may be expected for the year ending December 31,
1999. Management's discussion and analysis should be read in conjunction with
the consolidated financial statements.

NOTE 2. CONSOLIDATION
The consolidated financial statements include the accounts of CNB Florida
Bancshares, Inc. 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 share is calculated based on weighted average number of
shares of common stock during the period. Diluted earnings per share is
calculated based on the weighted average number of shares of common stock
outstanding and common stock equivalents, consisting of outstanding stock
options. Common stock equivalents are determined using the treasury 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 September 30, 1999 and 1998.

NOTE 4.  COMPREHENSIVE INCOME
Comprehensive income is defined as the total of net income and all other changes
in equity. The following table details the Company's comprehensive income for
the three and nine month periods ending September 30, 1999 and 1998.

<TABLE>
<CAPTION>
                                                       Nine Months            Three Months
                                                    Ended September 30,     Ended September 30,
                                                    1999          1998        1999       1998
                                                   -------       ------      -----       ----
<S>                                                <C>           <C>         <C>         <C>
Net Income                                         $ 2,322       $2,067      $ 789       $638
Other Comprehensive Income (Loss), Net of Tax
   Unrealized (Losses) Gains on Securities:
     Unrealized (Losses) Gains on Securities
     Arising During the Period                        (847)         227       (115)       157
  Less: Reclassification Adjustment                   (181)          35          7         13
                                                   -------       ------      -----       ----
Total Unrealized (Losses) Gains, Net of Tax
  Recognized in Other Comprehensive Income            (666)         192       (122)       144
                                                   -------       ------      -----       ----
Comprehensive Income, Net of Tax                   $ 1,656       $2,259      $ 667       $782
                                                   =======       ======      =====       ====
</TABLE>


                                        7

<PAGE>



NOTE 5.  2-FOR-1 STOCK SPLIT
On July 15, 1998, the Company declared a 2-for-1 common stock split for
shareholders of record on August 10, 1998 to be effective on August 17, 1998.
The accompanying financial statements have been restated to reflect this stock
split.

NOTE 6.  INITIAL PUBLIC OFFERING
During February 1999, the Company sold 1,250,000 shares of common stock and
received proceeds from the issuance of approximately $11.4 million, net of
underwriting discount and expenses.

NOTE 7.  COMPANY NAME CHANGE
On May 19, 1999, the Company's shareholders approved a proposal to change the
name of CNB, Inc. to CNB Florida Bancshares, Inc. The change was effective June
30, 1999.





                                        8

<PAGE>



                   CNB FLORIDA BANCSHARES, INC. AND SUBSIDIARY
                             SELECTED FINANCIAL DATA


<TABLE>
<CAPTION>
                                                         Nine Months Ended September 30,
                                                    1999               1998          CHANGE%
                                                 ------------      -------------    ---------
DOLLARS IN THOUSANDS EXCEPT PER SHARE INFORMATION.
----------------------------------------------------------------------------------------------
<S>                                              <C>                <C>                 <C>
SUMMARY OF OPERATIONS:
Total interest income                            $    17,348        $    15,666         11%
Total interest expense                                (6,640)            (6,992)        (5)
                                                 -----------        -----------
Net interest income                                   10,708              8,674         23
Provision for loan losses                               (785)              (400)        96
                                                 -----------        -----------
Net interest income after
      provision for loan losses                        9,923              8,274         20
Non-interest income                                    2,169              1,716         26
Non-interest expense                                  (8,529)            (6,835)        25
                                                 -----------        -----------
Income before taxes                                    3,563              3,155         13
Income taxes                                          (1,241)            (1,088)        14
                                                 -----------        -----------
Net income                                       $     2,322        $     2,067         12
                                                 ===========        ===========

----------------------------------------------------------------------------------------------
PER COMMON SHARE:
Basic earnings                                   $      0.39        $      0.43         (9)%
Diluted earnings                                        0.39               0.42         (7)
Book value                                              7.05               6.29         12
Dividends                                               0.15               0.15         --
Actual shares outstanding                          6,108,570          4,856,770         26
Weighted average shares outstanding                5,956,858          4,856,770         23
Diluted weighted average shares outstanding        6,030,671          4,969,978         21

----------------------------------------------------------------------------------------------
KEY RATIOS:
Return on average assets                                0.98%              0.97%         1%
Return on average shareholders' equity                  7.50               9.27        (19)
Dividend payout                                        38.46              34.88         10
Efficiency ratio                                       66.23              65.78          1
Total risk-based capital ratio                         19.63              17.51         12
Average shareholders' equity to
  average assets                                       13.07              10.51         24
Tier 1 leverage                                        13.05               9.92         32

----------------------------------------------------------------------------------------------
FINANCIAL CONDITION AT PERIOD-END:
Assets                                           $   330,106        $   290,566         14%
Total loans, net                                     228,371            176,622         29
Total deposits                                       274,456            249,173         10
Shareholders' equity                                  43,075             30,555         41

----------------------------------------------------------------------------------------------
</TABLE>


                                        9

<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.
("the Company") for the three and nine months ended September 30, 1999 and 1998.
This financial information should be read in conjunction with the unaudited
consolidated financial statements of CNB Florida Bancshares, Inc. 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
Form 10-K for the year ended December 31, 1998. 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 change in interest
rates, variances in actual versus projected growth in assets, loan losses, the
ability to control expenses, costs of opening new branches and entering the
Jacksonville and Gainesville markets, competitive factors, general economic
conditions, changes in government regulation, the ability to attract and retain
qualified personnel and the ability to attract new deposits. 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.

            On January 29, 1999, the Company's common stock began trading on the
NASDAQ National Market under the symbol "CNBB". The Company issued and sold
1,250,000 shares of common stock during its initial public offering at $10.25.
Proceeds from the offering net of underwriting discount and expenses totaled
$11.4 million. This increased capital will support the Company's expansion in
the Jacksonville and Gainesville markets.

            At the Annual Meeting on May 19, 1999, the Company's shareholders
approved a proposal to change the name of CNB, Inc. to CNB Florida Bancshares,
Inc. to become effective June 30, 1999. The new name better reflects the nature
of the Company's business and its geographic focus.

RESULTS OF OPERATIONS

           The Company's net income for the nine month period ended September
30, 1999 was $2.3 million, or $0.39 per diluted share, compared to $2.1 million,
or $0.42 per diluted share, for the nine month period in 1998. Net income for
the three month period ended September 30, 1999 was $789,000, or $0.13 per
diluted share, compared to $638,000, or $0.13 per diluted share, for the
comparable period in 1998. These results reflected growth in net interest income
and in non-interest income, as well as planned expense growth related to
expansion in the Jacksonville and Gainesville markets. Per share earnings for
1999 compared to 1998 were adversely impacted by the Company's initial public
offering completed January 29, 1999.

NET INTEREST INCOME
           Net interest income is the single largest source of revenue for the
Bank and consists of interest and fee income generated by earning assets, less
interest expense paid on interest bearing liabilities. Net interest income was
$10.7 million for the nine month period ending September 30, 1999, compared to
$8.7 million for the comparable period in 1998, an increase of 23.5%. Interest
income for the three and nine month periods ended September 30, 1999, increased
$619,000, or 11.5%, and $1.7 million, or 10.7%, respectively, over the
comparable prior year periods. The increase in interest income is mainly
attributable to the growth in the loan portfolio. Loans, which represent the
Company's highest yielding assets, increased on average $39.9 million or 23.8%
and represented 71.6% of total average earning assets for the nine months ended
September 30, 1999 versus 64.7% for 1998.

           Interest expense for the three and nine month periods ended September
30, 1999, decreased $212,000, or 8.7% and $352,000, or 5.0%, respectively over
the comparable prior year period. Lower rates, in interest paid on interest
bearing liabilities for the 1999 nine month period compared to the same period
in 1998 was the significant reason for the decline in interest expense. This
decrease in interest rates led to a 47 basis point reduction in the average rate
paid on interest bearing liabilities, which decreased to 3.81% for the 1999 nine
month period compared

                                       10

<PAGE>



to 4.28% for the comparable 1998 period.

           Total earning asset yields declined to 7.99% in 1999 from 8.07%,
while being offset by a decrease in rates on interest-bearing liabilities to
3.81% from 4.28% in 1998. Table 1: "Average Balances - Yields and Rates"
provides the Company's average volume of interest earning assets and interest
bearing liabilities for the nine months ended September 30, 1999 and 1998. Table
1a present an analysis of changes in interest income and expense.

                  TABLE 1: AVERAGE BALANCES - YIELDS AND RATES
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                Nine Months Ended                     Nine Months Ended
                                                September 30, 1999                    September 30, 1998
                                     -----------------------------------     ---------------------------------
                                                   Interest                               Interest
                                     Average       Income or     Average     Average      Income or   Average
                                     Balance        Expense       Rate       Balance       Expense      Rate
                                    --------       --------       ----       --------      -------      ----
ASSETS:                                                        (DOLLARS IN THOUSANDS)
<S>                                 <C>            <C>            <C>        <C>           <C>          <C>
  Federal funds sold                $ 14,864       $    530       4.77%      $ 29,407      $ 1,189      5.41%
  Investment securities
     available for sale               47,916          2,100       5.86         49,286        2,253      6.11
  Investment securities
     held to maturity                  8,632            354       5.48          7,108          271      5.10
  Loans (1)                          207,706         13,956       8.98        167,760       11,711      9.33
  Interest bearing deposits           11,132            408       4.90          5,826          242      5.55
                                    --------       --------       ----       --------      -------      ----

TOTAL EARNING ASSETS                 290,250         17,348       7.99        259,387       15,666      8.07
  All other assets                    26,469                                   24,159
                                    --------                                 --------

TOTAL ASSETS                        $316,719                                 $283,546
                                    ========                                 ========

LIABILITIES AND
  SHAREHOLDERS' EQUITY:
  NOW and money markets             $ 78,001       $  1,212       2.08%      $ 67,931      $ 1,276      2.51%
  Savings                             17,496            185       1.41         16,246          237      1.95
  Time deposits                      131,226          5,029       5.12        127,272        5,211      5.47
  Short term borrowings                6,433            214       4.45          6,844          261      5.10
  Notes payable and debentures            --             --         --            113            7      8.00
                                    --------       --------       ----       --------      -------      ----
TOTAL INTEREST BEARING
  LIABILITIES                        233,156          6,640       3.81        218,406        6,992      4.28
  Demand deposits                     39,663                                   32,453
  Other liabilities                    2,497                                    2,881
  Shareholders' equity                41,403                                   29,806
                                    --------                                 --------

TOTAL LIABILITIES AND
  SHAREHOLDERS' EQUITY              $316,719                                 $283,546
                                    ========                                 ========
                                                                  ----                                  ----
INTEREST SPREAD (2)                                               4.18%                                 3.79%
                                                                  ====                                  ====
                                                   --------                               --------
NET INTEREST INCOME                                $ 10,708                               $  8,674
                                                   ========                               ========

NET INTEREST MARGIN (3)                                           4.93%                                 4.47%
                                                                  ====                                  ====
</TABLE>


(1) Interest income on average loans includes loan fee recognition of $473,000
and $410,000 in 1999 and 1998, respectively.
(2) Represents the average rate earned minus average rate paid.
(3) Represents net interest income divided by total earning assets.


                                       11

<PAGE>







          TABLE 1A: ANALYSIS OF CHANGES IN INTEREST INCOME AND EXPENSE
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                    NET CHANGE SEPTEMBER 30,                NET CHANGE SEPTEMBER 30,
                                                    1998-1999 ATTRIBUTABLE TO:             1997-1998 ATTRIBUTABLE TO:
                                                 ---------------------------------     -----------------------------------
                                                                              Net                                     Net
                                                 Volume (1)   Rate (2)      Change     Volume (1)     Rate (2)      Change
                                                 ---------    --------      ------     ----------     --------      ------
                                                                               (THOUSANDS)
<S>                                              <C>           <C>         <C>         <C>            <C>          <C>
INTEREST INCOME:
   Federal funds sold                            $  (588)      $ (71)      $  (659)      $   725       $  27       $   752
   Investment securities available for sale          (64)        (89)         (153)         (513)         11          (502)
   Investment securities held to maturity             59          24            83           (93)        (14)         (107)
   Loans                                           2,784        (539)        2,245           971         (59)          912
   Interest bearing deposits                         220         (54)          166           233         (22)          211
                                                 -------       -----       -------       -------       -----       -------
      Total                                        2,411        (729)        1,682         1,323         (57)        1,266
                                                 -------       -----       -------       -------       -----       -------


INTEREST EXPENSE:
   NOW and money markets                             189        (253)          (64)          104          11           115
   Savings                                            18         (70)          (52)           17          (1)           16
   Time deposits                                     158        (340)         (182)          355         137           492
   Short term borrowings                             (14)        (33)          (47)           80           2            82
   Notes payable and debentures                       (7)         --            (7)         (129)         --          (129)
                                                 -------       -----       -------       -------       -----       -------
      Total                                          344        (696)         (352)          427         149           576
                                                 -------       -----       -------       -------       -----       -------
         Net interest income                     $ 2,067       $ (33)      $ 2,034       $   896       $(206)      $   690
                                                 =======       =====       =======       =======       =====       =======
</TABLE>


(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.



NON-INTEREST INCOME
           Non-interest income for the nine months ended September 30, 1999 was
$2.2 million, an increase of $453,000, or 26.4% as compared to the same period
in 1998. For the three months ended September 30, 1999, non-interest income
increased $160,000 or 27.6% to $739,000 as compared to $579,000 for the same
period in 1998. Service charges on deposit accounts increased $106,000, or 23.5%
in the third quarter of 1999, versus the comparable period in 1998, and
$252,000, or 19.3% for the nine months ended September 30, 1999 compared to the
same period in 1998. This revenue growth is attributed to a 29% increase in
loans outstanding at September 30, 1999 compared to one year ago, as well as
increased service charge fees that went into effect March 1, 1999. Other fee
income, which includes credit card fees, credit life insurance income, safe
deposit box fees, fees from loans sold to secondary markets, net gains and
losses from sale of securities and other miscellaneous fees, had an increase of
42.2% for the third quarter of 1999 compared to the third quarter of 1998 and an
increase of 48.8% for the first nine months of 1999 versus the comparable period
in 1998.

NON-INTEREST EXPENSE
           Non-interest expense increased in the third quarter of 1999 compared
to the same period in 1998 by $645,000 or 27.1%, and $1.7 million, or 24.8% for
the 1999 nine month period versus the comparable period in 1998. Noninterest
expense as a percentage of average assets for the nine month period ending
September 30, 1999 and 1998 was

                                       12

<PAGE>



3.60% and 3.22%, respectively. Salaries and employee benefits increased $1.1
million or 31.2% to $4.6 million for the 1999 nine month period, compared to
$3.5 million for the same period in 1998. This increase reflects implementation
of the Company's business plan to build an organization structure supporting
expansion in the Jacksonville and Gainesville markets. Third quarter results
reflect the operations for the full period of the Jacksonville temporary
location opened during the second quarter of 1999. The Bank will occupy this
temporary location until the completion of its Jacksonville headquarters
expected during the second quarter of 2000. The Bank expects to occupy its new
Gainesville headquarters in the first quarter of 2000. For the 1999 nine month
period, non-interest expense also included a $135,000 charge related to certain
management changes announced in March, which included the naming of Bennett
Brown as President and Chief Operating Officer of the Bank and the resignation
of the former President.

           Occupancy expense, including premises, furniture, fixtures and
equipment, increased $57,000, or 14.0% and $147,000, or 12.2%, respectively in
1999, over the comparable three and nine month periods in 1998. The increase is
primarily attributable to occupancy expenses associated with the expansion into
Jacksonville.

           Other operating expenses increased $454,000, or 21.3%, for the nine
months of 1999 compared to the same period in 1998. The following table details
the areas of significance in other operating expenses.

                        TABLE 2: OTHER OPERATING EXPENSES


<TABLE>
<CAPTION>
                                                        Nine Months Ended September 30,
                                                            1999            1998
                                                          ------          ------
                                                                 (thousands)
<S>                                                       <C>             <C>
Data processing                                           $  433          $  404
Postage and delivery                                         339             275
Advertising and promotion                                    300             239
Telephone                                                    281             196
Legal and professional                                       235             155
Supplies                                                     221             178
Loan expenses                                                142              99
Amortization of intangible assets                            135             143
Administrative                                               123              90
Regulatory fees                                              107             100
Other                                                        266             249
                                                          ------          ------
Total other operating expenses                            $2,582          $2,128
                                                          ======          ======
</TABLE>


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 effective tax rate for 1999 is approximately 35%.


EARNING ASSETS
LOANS
           Average loans during the nine month period ending September 30, 1999
were $207.7 million and were 78.0% of average deposits, compared to $167.8
million and 68.8% for 1998. Total loans have increased by $41.4 million, or
22.1%, since December 31, 1998. The shifting of federal funds sold into higher
yielding loans have added greatly to the improvement of the Company interest
margins and spreads. This growth is reflective of the Company's business plan to
increase its loan to deposit ratio. The following table reflects the composition
of the Company's loan portfolio as of September 30, 1999 compared to December
31, 1998.



                                       13

<PAGE>



                       TABLE 3: LOAN PORTFOLIO COMPOSITION

<TABLE>
<CAPTION>
                                                   September 30,      December 31,
                                                       1999               1998
                                                    ---------         ---------
                                                            (thousands)
<S>                                                <C>               <C>
Commercial, financial and agricultural              $ 112,067         $  85,208
Real estate - mortgage                                 81,870            72,357
Real estate - construction                             12,415             8,527
Installment and consumer                               22,019            20,923
                                                    ---------         ---------

Total loans, net of unearned income                   228,371           187,015
Less: allowance for loan losses                        (2,306)           (1,875)
                                                    ---------         ---------

Net loans                                           $ 226,065         $ 185,140
                                                    =========         =========
</TABLE>

           The following table sets forth the maturity distribution for selected
components of the Company's loan portfolio on September 30, 1999. Demand loans
and overdrafts are reported as due in one year or less, and loan maturity is
based upon scheduled principal payments.


                  TABLE 4: MATURITY SCHEDULE OF SELECTED LOANS
                               September 30, 1999

<TABLE>
<CAPTION>
                                              0-12         1-5         Over 5
                                             Months       Years         Years        Total
                                            -------      -------      --------      --------
                                                              (thousands)
<S>                                         <C>          <C>          <C>           <C>
Commercial, financial and agricultural      $13,091      $56,574      $ 42,402      $112,067
Real estate - construction                   12,415           --            --        12,415
All other loans                               5,926       33,265        64,698       103,889
                                            -------      -------      --------      --------

Total                                       $31,432      $89,839      $107,100      $228,371
                                            =======      =======      ========      ========

Fixed interest rate                         $12,467      $66,045      $ 47,250      $125,762
Variable interest rate                      $18,965      $23,794      $ 59,850      $102,609
</TABLE>


LOAN QUALITY
            The allowance for loan losses represents a reserve for losses in the
loan portfolio. On an ongoing basis, management attempts to maintain the
allowance for loan losses at levels sufficient to provide for losses inherent in
the loan portfolio. The allowance for loan losses is established through a
provision charged to expense. In determining the adequacy of the reserve for
loan losses, management considers those levels maintained by other peer banks,
conditions of the individual borrowers, the Company's historical loan loss
experience and the general economic environment, as well as the overall
portfolio composition. Loans are charged against the allowance when it is
recognized that collection of the principal is unlikely. The allowance for loan
losses on September 30, 1999, was 1.01% of total loans, compared to 0.91% one
year earlier. Table 5: "Allocation of Allowance for Loan Losses", set forth
below, indicates the specific reserves allocated by loan type.


                                       14

<PAGE>




                TABLE 5: ALLOCATION OF ALLOWANCE FOR LOAN LOSSES

<TABLE>
<CAPTION>
                                        September 30,                December, 31
                                           1999                         1998
                                   -------------------------     --------------------------
                                                 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, financial
   and agricultural                $1,373           49%          $1,061           46%
Real estate - mortgage                154           36%             127           39%
Real estate- construction               8            5%               6            4%
Consumer                              750           10%             621           11%
Unallocated                            21           --               60           --
                                   ------          ---           ------          ---
Total                              $2,306          100%          $1,875          100%
                                   ======          ===           ======          ===
</TABLE>


           Total non-performing assets decreased by $1.2 million or 61.5% to
$780,000 on September 30, 1999, compared to $2.0 million on December 31, 1998.
Non-performing assets as a percentage of total assets decreased to 0.24% on
September 30, 1999 from 0.65% on December 31, 1998. Non-accrual loans have
decreased $955,000 since December 31, 1998. This decrease was due to changes in
four loans, including $413,000 principal reductions on two loans. Other real
estate owned and repossessions decreased by $364,000, which is largely due to
the sale of three commercial properties.


                         TABLE 6: NON-PERFORMING ASSETS

<TABLE>
<CAPTION>
                                                  September 30,        December 31,
                                                      1999                 1998
                                                      ----                 ----
                                                        (dollars in thousands)
<S>                                               <C>                <C>
Non-accrual loans                                     $438               $1,393
Past due loans 90 days or
   more and still accruing                              93                   22
Other real estate owned
   and repossessions                                   249                  613
                                                      ----               ------
Total non-performing assets                           $780               $2,028
                                                      ====               ======

Percent of total assets                               0.24%                0.65%
</TABLE>



           The determination of the reserve level rests upon management's
judgment about factors affecting loan quality and assumptions about the economy.
Management considers the period-end allowance appropriate and adequate to cover
inherent losses in the loan portfolio; however, management's judgment is based
upon a number of assumptions about future events, which are believed to be
reasonable, but which may or may not prove to be valid. Thus, there can be no
assurance that charge-offs in future periods will not exceed the allowance for
loan losses or that additional increases in the allowance for loan losses will
not be required. Table 7: "Activity in Allowance for Loan Losses", below,
indicates activity in the allowance for loan losses for the nine month period
ending September 30, 1999 as compared to 1998.


                                       15

<PAGE>


                 TABLE 7: ACTIVITY IN ALLOWANCE FOR LOAN LOSSES

<TABLE>
<CAPTION>
                                                                          September 30,
                                                                     1999                 1998
                                                                  ---------            ---------
                                                                       (dollars in thousands)
<S>                                                               <C>                  <C>
Allowance for loan loss balance applicable to:
Balance at beginning of year                                      $   1,875            $   1,495
Loans charged-off:
   Commercial, financial and agricultural                               291                  121
   Real estate, mortgage                                                 13                   --
   Real estate, construction                                             --                    3
   Consumer                                                             195                  237
                                                                  ---------            ---------
      Total loans charged-off                                          (499)                (361)
Recoveries on loans previously charged-off:
   Commercial, financial and agricultural                               113                   33
   Real estate, mortgage                                                 --                    7
   Real estate, construction                                             --                   --
   Consumer                                                              32                   28
                                                                  ---------            ---------
      Total loan recoveries                                             145                   68
                                                                  ---------            ---------
         Net loans charged-off                                         (354)                (293)
                                                                  ---------            ---------
Provision for loan losses charged to expense                            785                  400
                                                                  ---------            ---------
Ending balance                                                    $   2,306            $   1,602
                                                                  =========            =========

Total loans outstanding                                           $ 228,371            $ 176,622
Average loans outstanding                                         $ 207,706            $ 167,760

Allowance for loan losses to loans outstanding                         1.01%                0.91%
Net charge-offs to average loans outstanding, annualized               0.23%                0.23%
</TABLE>


INVESTMENT PORTFOLIO
           When the Company's liquidity position exceeds expected loan demand,
investment securities are considered by management as a secondary earnings
alternative. Typically, management remains short-term (under 5 years) in its
decision to invest in certain securities and always strives to ensure a portion
of its investment portfolio to be maturing in the next quarter. As these
investments mature, they will be used to meet cash needs or will be reinvested
to maintain a desired liquidity position. The composition of the portfolio
offers management full flexibility in managing its liquidity position and
interest rate sensitivity, without adversely impacting its regulatory capital
levels. The Federal Reserve Bank and the Federal Home Loan Bank also require
equity investments to be maintained by the Bank as a member of their services.
The investment securities available for sale are carried at fair market value
and had an unrealized loss, net of taxes, of approximately $249,000 on September
30, 1999 as compared to an unrealized gain, net of taxes, of approximately
$418,000 on December 31, 1998. Unrealized gains or losses are recorded as
adjustments to shareholders' equity but are not included in the Company's net
income; however, they are included in comprehensive income.

           The following tables set forth the maturity distribution and the
weighted average yields of the Company's investment portfolio by those
securities held to maturity and available for sale.



                                       16

<PAGE>



           TABLE 8: MATURITY DISTRIBUTION OF INVESTMENT SECURITIES (1)
                               September 30, 1999

<TABLE>
<CAPTION>
(DOLLARS IN THOUSANDS)                       Held to Maturity            Available for Sale
------------------------------------------------------------------------------------------------

                                         Amortized     Estimated       Amortized     Estimated
                                            Cost      Market Value        Cost      Market Value
                                          -------        -------        -------        -------
<S>                                      <C>          <C>              <C>          <C>
U.S. Treasury:
   One year or less                       $    --        $    --        $ 4,997        $ 5,015
   Over one through five years                 --             --          7,979          7,580
                                          -------        -------        -------        -------
Total U.S. Treasury                            --             --         12,476         12,595

 U.S. Government Agencies
 and Corporations:
   Over one through five years                 --             --         20,000         19,397
   Over five through ten years              8,732          8,295             --             --
                                          -------        -------        -------        -------
Total U.S. Government Agencies              8,732          8,295         20,000         19,397
 and Corporations

Obligations of State and Political
 Subdivisions:
   One year or less                            --             --             85             85
   Over one through five years                 --             --            789            789
   Over five through ten years                 --             --            100            101
   Over ten years                              --             --            608            612
                                          -------        -------        -------        -------
Total Obligations of State and                 --             --          1,582          1,587
 Political Subdivisions

Mortgage-Backed Securities (2):
   Over one through five years              2,053          1,984             --             --
   Over five through ten years                 --             --            975            976
   Over ten years                              --             --          1,879          1,888
                                          -------        -------        -------        -------
Total Mortgage-Backed Securities            2,053          1,984          2,854          2,864

Other Securities:
   Over ten years (3)                          --             --          1,855          1,929
                                          -------        -------        -------        -------
Total Other Securities                         --             --          1,855          1,929
                                          -------        -------        -------        -------
Total Securities                          $10,785        $10,279        $38,767        $38,372
                                          =======        =======        =======        =======
</TABLE>

(1) All securities, excluding Obligations of State and Political Subdivisions,
are taxable.
(2) Represents investments in mortgage-backed securities which are subject to
early repayment.
(3) Represents investment in Federal Reserve Bank and Federal Home Loan Bank
stock and other marketable equity securities.

             TABLE 9: WEIGHTED AVERAGE YIELD BY RANGE OF MATURITIES

<TABLE>
<CAPTION>
                                  September 30, 1999    December 31, 1998     September 30, 1998
                                  ------------------    -----------------     ------------------
<S>                               <C>                   <C>                   <C>
One Year or Less                          6.01%               5.23%               5.67%
Over One through Five Years               6.09%               6.26%               6.17%
Over Five through Ten Years               5.74%               5.82%               5.94%
Over Ten Years (1)                        5.61%               5.91%               6.22%
</TABLE>

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

                                       17

<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 September 30, 1999 and December 31, 1998.

                            TABLE 10: TOTAL DEPOSITS

<TABLE>
<CAPTION>
                                       September 30,   December 31,
                                           1999             1998
                                        --------        --------
                                              (thousands)
<S>                                   <C>             <C>
Non-interest bearing:
         Demand checking                $ 45,521        $ 35,701
Interest bearing:
         NOW checking                     53,519          49,158
         Money market checking            27,519          26,966
         Savings                          17,369          16,371
         Certificates of deposit         130,528         136,913
                                        --------        --------

Total deposits                          $274,456        $265,109
                                        ========        ========
</TABLE>


LIQUIDITY

           Liquidity represents the ability to provide steady sources of funds
for loan commitments and investment activities, as well as to provide sufficient
funds to cover deposit withdrawals and payment of debt and operating
obligations. 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 $85.7 million and represented 32.2% of
average total deposits during the nine months of 1999, compared to $94.6 million
and 38.8% for 1998. Average loans were 78.0% and 68.8% of average deposits for
the nine month period ended September 30, 1999 and 1998, respectively.

           Core deposits, which represent all deposits other than time deposits
in excess of $100,000, were 84.8% of total deposits at September 30, 1999 and
84.3% at December 31, 1998. 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 11, 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.

           The Company also has available lines of credit with other financial
institutions totaling $8.0 million. There were no amounts outstanding as of
September 30, 1999.



                                       18

<PAGE>





             TABLE 11: MATURITY OF TIME DEPOSITS OF $100,000 OR MORE
                               September 30, 1999
                             (dollars in thousands)

<TABLE>
<CAPTION>
                                                      Amount
                                                     -------
                    <S>                              <C>
                    Three months or less             $11,534
                    Three through six months           6,308
                    Six through twelve months         17,457
                    Over twelve months                 6,322
                                                     -------
                    Total                            $41,621
                                                     =======
</TABLE>


CAPITAL RESOURCES

           The Comptroller regulates risk based capital guidelines for national
banks. These guidelines are intended to provide an additional measure of a
bank's capital adequacy by assigning weighted levels of risk to asset
categories. Banks are also required to systematically hold capital against such
"off balance sheet" activities as loans sold with recourse, loan commitments,
guarantees and standby letters of credit. These guidelines are intended to
strengthen the quality of capital by increasing the emphasis on common equity
and restricting the amount of loss reserves and other forms of equity such as
preferred stock that may be included in capital.

           Under the terms of the guidelines, banks must meet minimum capital
adequacy ratios based upon both total assets and risk adjusted assets. All banks
are required to maintain a minimum ratio of total capital to risk-weighted
assets of 8% and a minimum ratio of Tier 1 capital to risk-weighted assets of
4%. Tier 1 Capital includes common shareholders' equity and qualifying preferred
stock, less goodwill and other adjustments. Tier 2 Capital consists of preferred
stock not qualifying as Tier 1 Capital, mandatory convertible debt, limited
amounts of subordinated debt, other qualifying term debt and the allowance for
credit losses up to 1.25% of risk-weighted assets. Total Capital consists of
Tier 1 Capital and Tier 2 Capital. The regulatory agencies have also established
an additional capital adequacy guideline referred to as the Tier 1 leverage
ratio that measures the ratio of Tier 1 capital to average quarterly assets.
Adherence to these guidelines has not had an adverse impact on the Company or
the Bank. Selected capital ratios at September 30, 1999 compared to 1998 and
regulatory requirements are as follows:

                            TABLE 12: CAPITAL RATIOS

<TABLE>
<CAPTION>
                                              September 30,           Well Capitalized       Regulatory
                                         1999            1998           Requirements           Minimums
                                     ------------    ------------       ------------           --------
<S>                                  <C>             <C>              <C>                    <C>
Risk Based Capital Ratios:
     Tier 1 Capital Ratio               18.6%            16.6%                6.0%                4.0%

     Total Capital to
       Risk-Weighted Assets             19.6%            17.5%               10.0%                8.0%

Tier 1 Leverage Ratio                   13.1%             9.9%                5.0%                4.0%
</TABLE>




                                       19

<PAGE>



YEAR 2000 COMPLIANCE

           The Company has a four-phase plan to resolve the Year 2000 issue
with respect to internal and external systems:

           - Identifying significant systems and assessing potential Year 2000
             issues relating to those systems;
           - Renovating, repairing and replacing noncompliant systems;
           - Testing and validating solutions; and
           - Implementing those solutions.

           The first, second and third phase of the plan has been completed and
the Company has substantially completed the fourth phase. The first phase
involved assessing all computer controlled systems, including computer systems
of the Company's vendors, items processing, ATMs, telecommunications, security
and alarm, elevator, telephone, HVAC, and environmental systems with embedded
microchips. The Company's local area network has been evaluated and is Year 2000
compliant.

           The second phase involves upgrading, as applicable, hardware,
software, networks, ATMs and other processing platforms. The noncompliant
individual personal computers throughout the organization have been replaced.
Total hardware upgrades are one hundred percent completed.

           The testing and validation phases are completed. All areas of the
implementation phase is also complete with the exception of one software program
in a non mission critical area. The software will be implemented in the first
half of November. The Company has a Board approved contingency plan in place for
the mission critical system in the event of unforeseen difficulties to minimize
any disruptions. The contingency plan also includes specific recovery plans for
each core business process that considers the minimum level of acceptable
output.

           The vast majority of the Company's processing needs are outsourced to
two outside vendors, and the Company is monitoring their Year 2000 compliance
progress closely. The Company has participated with on-site testings of the
vendors' systems. This testing is completed with no complications reported. The
Company has implemented and is using the systems on a daily basis. In connection
with their review of the Company's Year 2000 efforts, the Comptroller of the
Currency, the Bank's primary regulator, has also reviewed the Company's efforts
with respect to the outside vendors.

           Year 2000 issues also may adversely impact the businesses of the
Company's customers and their ability to honor their financial commitments. The
Company has in effect a loan policy pursuant to which it reviews all present and
potential borrowers with loan portfolio amounts exceeding $500,000 for Year 2000
preparation. The Bank's loan documentation for new, complex commercial loans,
including loans over $250,000, contain loan agreements with Year 2000
representations and warranties. Presently the Bank has not found customers with
any recognized Year 2000 issues specific to that customer's business operations.

           The costs associated with the Company's Year 2000 issues are not
expected to have a material impact on the results of the operations or financial
condition of the Company. The total two year budget for Year 2000 costs over
1998 and 1999 is $150,000, with $121,000 spent through September 1999. The
budget for Year 2000 costs is based on management's best estimates, which are
derived utilizing a number of assumptions of future events including the
availability of internal and external resources, third party modifications and
other factors. These assumptions may be proved incorrect and actual costs for
Year 2000 issues may vary.

           There can be no assurance that all necessary modifications will be
identified and corrected or that unforeseen difficulties or costs will not
arise. The Company believes that the failure of third parties to address their
Year 2000 problems in a timely fashion presents the greatest likelihood of the
Company not being fully Year 2000 compliant. In addition, failure of telephone,
security service and utility providers to provide necessary service could
adversely impact the Company's operations and financial condition. In many
cases, the Company is unable to test the Year 2000

                                       20

<PAGE>



readiness of such providers. Such failures could materially adversely impact the
Company's data processing and other operations, the estimated costs of the Year
2000 plan and the target dates for completion. The effect of non-compliance by
third parties is not determinable at this time. Despite management's efforts to
address this issue, the number of external entities that have direct and
indirect business relationships with the Company, such as customers, vendors,
utilities, payment system providers, data processors and other financial
institutions make it impossible to assume that failure to achieve compliance by
one of these entities would not have an adverse material impact on the Company's
operations. The Company could be subject to litigation for computer systems
product failure, including equipment shutdown or failure to properly date
business records or process transactions. The amount of potential liability, if
any, and lost revenue cannot be reasonably estimated at this time.


            QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

           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 and instruments which are approaching maturity. The
measurement of the Company's interest rate sensitivity, or gap, is one of the
principal techniques used in asset and liability management. 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 risks to the Company. The Company attempts to maintain a
cumulative gap position equaling plus, or minus 20% of total assets.

           The Company's gap and liquidity positions are formally reviewed
quarterly by management to determine whether or not changes in policies and
procedures are necessary to achieve financial goals. Included in the review is
an internal analysis of the possible impact on net interest income due to market
rate changes of plus and minus 1%. In the Company's analysis, current average
rates within the repricing periods of affected balance sheet categories are
adjusted to a historical percentage of market change according to each rate
shock scenario. The adjusted rates are then substituted in interest computations
and compared to actual results. These efforts will continue to provide the tools
necessary in the Company's attempt to maximize its primary earnings factor-net
interest income. The Company is always looking for ways to enhance the process
of measuring the possible impact of change in market rates.

           The asset mix of the balance sheet is continually evaluated in terms
of several variables: yield, credit quality, appropriate funding sources and
liquidity. Management of the liability mix of the balance sheet focuses on
expanding the various funding sources.

           In Table 13, "Rate Sensitivity Analysis", rate sensitive assets and
liabilities are shown by maturity, separating 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 September 30, 1999, the estimated fair value
would have been achieved at that date, since market values may differ depending
on various circumstances. The estimated fair values at September 30, 1999 should
not necessarily be considered to apply at subsequent dates.




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<PAGE>



                       TABLE 13: RATE SENSITIVITY ANALYSIS
                               September 30, 1999

                             (dollars in thousands)
<TABLE>
<CAPTION>
                                                                                                                            Fair
                                       1 Year       2 Years      3 Years      4 Years      5 Years    Beyond     Total      Value
                                       ------       -------      -------      -------      -------    ------     -----      -----
<S>                                <C>           <C>          <C>          <C>          <C>          <C>        <C>        <C>
INTEREST-EARNING ASSETS:

Loans
      Fixed rate loans             $    12,467   $    11,387  $    12,794  $    16,800  $    25,064  $ 47,250   $125,762   $125,453
        Average interest rate             8.80%         9.29%        9.19%        8.79%        8.41%     8.12%      8.55%

      Variable rate loans               18,965         8,392        7,981        3,534        3,887    59,850    102,609    102,609
        Average interest rate             9.14%         8.87%        8.57%        8.71%        8.96%     8.06%      8.42%

Investment securities (1)
      Fixed rate investments             5,082         9,623           90          178       20,431    10,377     45,781     44,794
        Average interest rate             6.01%         6.25%        4.10%        7.10%        6.02%     5.71%      6.00%

      Variable rate investments             --            --           --           --           --     1,916      1,916      1,928
        Average interest rate                                                                            5.74%      5.74%

Federal funds sold                      14,800            --           --           --           --        --     14,800     14,800
        Average interest rate             5.18%                                                                     5.18%

Other earning assets (2)                13,203            --           --           --           --        --     13,203     13,203
        Average interest rate             4.94%                                                                     4.94%
                                   -----------   -----------  -----------  -----------  -----------  --------   --------   --------

Total interest-earning assets      $    64,517   $    29,402  $    20,865  $    20,512  $    49,382  $119,393   $304,071   $302,787
        Average interest rate             7.06%         8.18%        8.93%        8.76%        7.46%     7.84%      7.78%
                                   ===========   ===========  ===========  ===========  ===========  ========   ========   ========


INTEREST-BEARING LIABILITIES:

NOW                                $     5,240   $        --  $        --  $        --  $        --  $ 48,279   $ 53,519   $ 53,519
        Average interest rate             4.89%                                                          1.18%      1.54%

Money market (3)                        25,247            --           --           --           --     2,272     27,519     27,519
        Average interest rate             3.54%                                                          1.50%      3.37%
Savings                                     --            --           --           --           --    17,369     17,369     17,369
        Average interest rate                                                                            1.34%      1.34%

CD's $100,000 and over                  35,297         3,954        2,045          325           --        --     41,621     41,633
        Average interest rate             5.32%         5.81%        6.00%        5.41%                             5.40%

CD's under $100,000                     72,903        10,167        4,394        1,254          188         1     88,907     89,005
        Average interest rate             4.61%         5.22%        5.54%        5.19%        5.54%     5.16%      4.74%

Securities sold under
   repurchase agreements                 9,922            --           --           --           --        --      9,922      9,922
        Average interest rate             4.78%                                                                     4.78%
                                   -----------   -----------  -----------  -----------  -----------  --------   --------   --------

Total interest-bearing liabilities  $  148,609   $    14,121  $     6,439  $     1,579  $       188  $ 67,921   $238,857   $238,967
        Average interest rate             4.62%         5.39%        5.69%        5.24%        5.54%     1.23%      3.74%
                                   ===========   ===========  ===========  ===========  ===========  ========   ========   ========
</TABLE>


(1) Securities available for sale are shown at their amortized cost, excluding
market value adjustment for unrealized losses of $395,000.
(2) Represents interest bearing deposits with other banks, Federal Reserve Bank
Stock, Federal Home Loan Bank Stock and other marketable equity securities.
(3) All Money Market accounts $25,000 and over and 30% of Money Market accounts
under $25,000 have been designated as maturing within one year.


                                       22

<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 - Not applicable.

           Item 3.   Defaults Upon Senior Securities - Not applicable.

           Item 4.   Submission of Matters to a Vote of Security Holders - Not
                     applicable.

           Item 5.   Other Information - Not applicable.

           Item 6.   Exhibits and Reports on Form 8-K -

           (a)       Exhibits:

                     27 - Financial Data Schedule

           (b)       Form 8-K:

                     Not applicable.





                                       23

<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:    November 10, 1999






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