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   March 31, 2003
                                        -----------------

                                       OR

___      TRANSITION  REPORT  PURSUANT  TO  SECTION 13 or 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934 (no fee required)

         For the transition period from ________ to ________





                           Commission File No. 0-25988

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


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


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


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

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. Yes X No___


The number of shares of the  registrant's  common stock  outstanding as of April
30, 2003 was 6,211,750 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 Statements of Financial Condition ......................................................... 3
         Consolidated Statements of Income  ......................................................................4
         Consolidated Statements of Cash Flows ...................................................................5
         Notes to Consolidated Financial Statements ..............................................................6
         Selected Financial Data ................................................................................10

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

         Overview ...............................................................................................11
         Results of Operations ..................................................................................11
         Liquidity and Interest Rate Sensitivity.................................................................14
         Earning Assets..........................................................................................18
         Funding Sources ........................................................................................22
         Capital Resources ......................................................................................22
         Critical Accounting Policies ...........................................................................23

         Item 3.  Quantitative and Qualitative Disclosure About Market Risk .....................................23

PART II - OTHER INFORMATION
         Item 1.  Legal Proceedings .............................................................................25

         Item 2.  Changes in Securities and Use of Proceeds .....................................................25

         Item 3.  Defaults Upon Senior Securities ...............................................................25

         Item 4.  Submission of Matters to a Vote of Security Holders ...........................................25

         Item 5.  Other Information .............................................................................25

         Item 6.  Exhibits and Reports on Form 8-K ..............................................................25
</TABLE>

                                       2
<PAGE>


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


<TABLE>
                                                          ASSETS                                      (Unaudited)
                                                                                                       March 31,        December 31,
                                                                                                         2003              2002
                                                                                                       ---------        ----------
                                                                                                               (thousands)

Cash and cash equivalents:
<S>                                                                                                    <C>              <C>
     Cash and due from banks                                                                           $  21,029        $  15,986
     Federal funds sold                                                                                   10,750            5,400
     Interest-bearing deposits in other banks                                                             47,169           12,215
                                                                                                       ---------        ---------
       Total cash and cash equivalents                                                                    78,948           33,601
Investment securities available for sale                                                                  57,080           49,682
Loans:
     Commercial                                                                                          101,609          111,033
     Commercial real estate                                                                              330,230          324,525
     Mortgages (including home equity)                                                                   138,274          132,513
     Consumer                                                                                             30,710           32,199
     Credit card                                                                                           1,076            1,164
     Tax free                                                                                              4,063            4,351
                                                                                                       ---------        ---------
       Total loans, net of unearned income                                                               605,962          605,785
Less:  Allowance for loan losses                                                                          (6,548)          (6,574)
                                                                                                       ---------        ---------
       Net loans                                                                                         599,414          599,211

Loans held for sale                                                                                        1,836           10,893
Premises and equipment, net                                                                               24,945           25,086
Intangible assets, net                                                                                     5,875            6,056
Other assets                                                                                               6,107            6,145
                                                                                                       ---------        ---------
         TOTAL ASSETS                                                                                  $ 774,205        $ 730,674
                                                                                                       =========        =========
                                         LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Deposits:
     Non-interest bearing demand                                                                       $  90,539        $  80,065
     Savings, NOW and money market                                                                       253,792          236,284
     Time under $100,000                                                                                 178,201          172,671
     Time $100,000 and over                                                                              172,284          159,616
                                                                                                       ---------        ---------
       Total deposits                                                                                    694,816          648,636
Securities sold under repurchase agreements and federal funds purchased                                   10,554           14,446
Other borrowings                                                                                          11,000           11,000
Other liabilities                                                                                          6,259            5,671
                                                                                                       ---------        ---------
       Total liabilities                                                                                 722,629          679,753
                                                                                                       ---------        ---------

SHAREHOLDERS' EQUITY
Preferred stock; $.01 par value; 500,000 shares authorized,
     no shares issued or outstanding                                                                           -                -
Common stock; $.01 par value; 10,000,000 shares authorized,
     6,142,450 shares issued and outstanding at March 31, 2003 and
     6,125,500 shares issued and outstanding at December 31, 2002
                                                                                                              61               61
Additional paid-in capital                                                                                30,999           30,840
Retained earnings                                                                                         20,538           19,912
Accumulated other comprehensive (loss) income, net of taxes                                                  (22)             108
                                                                                                       ---------        ---------
       Total shareholders' equity                                                                         51,576           50,921
                                                                                                       ---------        ---------
         TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                                                    $ 774,205        $ 730,674
                                                                                                       =========        =========
</TABLE>



                                       3
<PAGE>


                   CNB FLORIDA BANCSHARES, INC. AND SUBSIDIARY
                        CONSOLIDATED STATEMENTS OF INCOME
                                   (Unaudited)
<TABLE>
                                                                                                          Three Months Ended
                                                                                                               March 31,
                                                                                                      2003                   2002
                                                                                                   ----------             ----------
                                                                                                              (thousands)
Interest Income
<S>                                                                                                <C>                    <C>
    Interest and fees on loans                                                                     $   10,075             $    9,252
    Interest on investment securities available for sale                                                  461                    436
    Interest on investment securities held to maturity                                                      -                     41
    Interest on federal funds sold                                                                         38                     13
    Interest on interest-bearing deposits                                                                 123                      2
                                                                                                   ----------             ----------
      Total interest income                                                                            10,697                  9,744

Interest Expense
    Interest on deposits                                                                                3,942                  3,665
    Interest on repurchases and federal funds purchased                                                    27                     61
    Interest on other borrowings                                                                          168                    161
                                                                                                   ----------             ----------
      Total interest expense                                                                            4,137                  3,887
                                                                                                   ----------             ----------
        Net interest income                                                                             6,560                  5,857

Provision for Loan Losses                                                                                 675                    500
                                                                                                   ----------             ----------
    Net interest income after provision for loan losses                                                 5,885                  5,357

Non-Interest Income
    Service charges                                                                                       855                    740
    Secondary market mortgage sales                                                                       507                    473
    Other fees and charges                                                                                247                    191
    Gain on called investment securities                                                                   13                      -
                                                                                                   ----------             ----------
      Total non-interest income                                                                         1,622                  1,404

Non-Interest Expense
    Salaries and employee benefits                                                                      2,854                  2,743
    Occupancy and equipment expenses                                                                      903                    822
    Other operating expenses                                                                            1,712                  1,594
                                                                                                   ----------             ----------
      Total non-interest expense                                                                        5,469                  5,159
                                                                                                   ----------             ----------

Income before income taxes                                                                              2,038                  1,602
    Provision for income taxes                                                                            737                    607
                                                                                                   ----------             ----------

NET INCOME                                                                                         $    1,301             $      995
                                                                                                   ==========             ==========

Earnings Per Share (Note 3):

    Basic earnings per common share                                                                $     0.21             $     0.16
                                                                                                   ==========             ==========
    Weighted average shares outstanding                                                             6,126,940              6,101,099
                                                                                                   ==========             ==========

    Diluted earnings per common share                                                              $     0.21             $     0.16
                                                                                                   ==========             ==========
    Diluted weighted average shares outstanding                                                     6,327,413              6,152,808
                                                                                                   ==========             ==========
</TABLE>



                                       4
<PAGE>



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

<TABLE>
                                                                                                            Three Months Ended
                                                                                                                  March 31,
                                                                                                           2003              2002
                                                                                                         --------          --------
                                                                                                                 (thousands)
CASH FLOWS FROM OPERATING ACTIVITIES
<S>                                                                                                      <C>               <C>
Net income                                                                                               $  1,301          $    995
Adjustments to reconcile net income to net cash provided by operating activities:
    Net gain on called investment securities available for sale                                               (13)                -
    Depreciation and amortization                                                                             644               620
    Provision for loan losses                                                                                 675               500
    Investment securities amortization, net                                                                   121                42
    Net proceeds from loans held for sale                                                                   9,057             4,690
    Changes in assets and liabilities:
       Other assets                                                                                           111              (796)
       Other liabilities                                                                                      219             1,107
                                                                                                         --------          --------
          Net cash provided by operating activities                                                        12,115             7,158
                                                                                                         --------          --------

CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of investment securities available for sale                                                     (20,637)          (11,253)
Proceeds from maturities of securities available for sale                                                   5,926             2,922
Proceeds from called securities available for sale                                                          7,000             4,000
Proceeds from called securities held to maturity                                                                -             2,021
Net increase in loans                                                                                        (877)           (8,588)
Purchases of premises and equipment, net                                                                     (321)              (86)
                                                                                                         --------          --------
          Net cash used in investing activities                                                            (8,909)          (10,984)
                                                                                                         --------          --------

CASH FLOWS FROM FINANCING ACTIVITIES
Net increase in deposits                                                                                   46,180            16,757
Net decrease in securities sold under repurchase agreements
   and federal funds purchased                                                                             (3,892)           (6,139)
Cash dividends                                                                                               (306)             (305)
Repurchase of common stock                                                                                      -              (100)
Proceeds from exercise of stock options                                                                       159                 -
                                                                                                         --------          --------
          Net cash provided by financing activities                                                        42,141            10,213
                                                                                                         --------          --------
NET INCREASE IN CASH AND CASH EQUIVALENTS                                                                  45,347             6,387

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

CASH AND CASH EQUIVALENTS, end of period                                                                 $ 78,948          $ 27,064
                                                                                                         ========          ========
SUPPLEMENTAL DISCLOSURES:
          Interest paid                                                                                  $  3,772          $  4,582
                                                                                                         ========          ========

          Taxes paid                                                                                     $    271          $    146
                                                                                                         ========          ========
</TABLE>


                                       5
<PAGE>




                   CNB FLORIDA BANCSHARES, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 March 31, 2003
                                   (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 accounting  principles generally
accepted in the United  States of America.  In the opinion of  management,  such
financial  statements  reflect  all  adjustments   (consisting  only  of  normal
recurring adjustments) necessary for a fair statement of the financial position,
results  of  operations  and  cash  flows  for the  interim  periods  presented.
Operating  results for the three months ended March 31, 2003 are not necessarily
indicative of the results that may be expected for the year ending  December 31,
2003.  Management's  discussion and analysis should be read in conjunction  with
the consolidated financial statements.  Certain amounts and captions relating to
2002 have been reclassified to conform to current year presentation.

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

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

Note 3.  Earnings Per Share
Basic  earnings per common  share is  calculated  based on the weighted  average
number of shares of common stock outstanding during the period. Diluted earnings
per common share is calculated based on the weighted average number of shares of
common stock outstanding and common stock equivalents, consisting of outstanding
stock  options that have a dilutive  effect on earnings per share.  Common stock
equivalents  are  determined  using the treasury stock method for diluted shares
outstanding.  The  difference  between  diluted and basic shares  outstanding is
common stock equivalents from stock options outstanding during the periods ended
March 31, 2003 and 2002.

The  following  table sets forth the  computation  of earnings per share for the
three month periods ended March 31, 2003 and 2002.

<TABLE>
                                                                                                         Three Months Ended
                                                                                                  March 31,                March 31,
                                                                                                    2003                     2002
                                                                                                 ----------               ----------
Numerator:
<S>                                                                                              <C>                      <C>
   Net income available to common shareholders                                                   $    1,301               $      995
                                                                                                 ==========               ==========
Denominator:
   Denominator for basic earnings per common share
      Weighted-average shares                                                                     6,126,940                6,101,099
Effect of dilutive securities:
      Common stock options                                                                          200,473                   51,709
                                                                                                 ----------               ----------
   Dilutive potential common shares                                                                 200,473                   51,709
                                                                                                 ----------               ----------
   Denominator for diluted earnings per common share
      Adjusted weighted average shares                                                            6,327,413                6,152,808
                                                                                                 ==========               ==========

Basic earnings per common share                                                                  $     0.21               $     0.16
                                                                                                 ==========               ==========


Diluted earnings per common share                                                                $     0.21               $     0.16
                                                                                                 ==========               ==========
</TABLE>


                                       6
<PAGE>

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 months ending March 31, 2003 and 2002.

<TABLE>
                                                                                                             Three Months Ended
                                                                                                         March 31,         March 31,
                                                                                                           2003              2002
                                                                                                         -------           -------
<S>                                                                                                      <C>               <C>
Unrealized (loss) gain recognized in other comprehensive income (net):
   Available for sale securities                                                                         $  (204)          $  (260)
   Interest rate swap designated as cash flow hedge                                                           (3)               94
                                                                                                         -------           -------
   Total unrealized loss before income taxes                                                                (207)             (166)
   Deferred income taxes                                                                                     (77)              (62)
                                                                                                         -------           -------
       Net of deferred income tax                                                                        $  (130)          $  (104)
                                                                                                         =======           =======

Amounts reported in net income:
   Gain on called securities                                                                             $    13            $    -
   Interest rate swap designated as cash flow hedge                                                          (84)              (69)
   Net amortization (accretion)                                                                              121                42
                                                                                                         -------           -------
   Reclassification adjustment                                                                                50               (27)
   Deferred income taxes                                                                                      19               (10)
                                                                                                         -------           -------
       Reclassification adjustment, net of deferred income tax                                           $    31           $   (17)
                                                                                                         =======           =======


Amounts reported in other comprehensive income:
   Net unrealized loss arising during period, net of tax                                                 $   (99)          $  (121)
   Reclassification adjustment, net of tax                                                                   (31)               17
                                                                                                         -------           -------
   Unrealized loss arising during period, net of tax                                                        (130)             (104)
   Net income                                                                                              1,301               995
                                                                                                         -------           -------
      Total comprehensive income                                                                         $ 1,171           $   891
                                                                                                         =======           =======
</TABLE>











                                       7
<PAGE>


Note 5.  Stock Based Compensation
The Company has  long-term  incentive  plans that  provide  stock-based  awards,
including  stock  options to certain  key  employees.  The  Company  applies the
provisions of Accounting  Principles Board Opinion No. 25,  Accounting for Stock
Issued to Employees,  in accounting for its stock option and award plans and has
adopted the  disclosure-only  option under  Statement  of  Financial  Accounting
Standards,  ("SFAS") No. 123,  Accounting for Stock-Based  Compensation.  If the
Company had adopted the accounting provisions of SFAS 123 and recognized expense
for the fair value of employee  stock  options  granted over the vesting life of
the  options,  pro forma net income  would be as  indicated  below  (dollars  in
thousands, except per share data):



<TABLE>
                                                           As Reported                         Pro Forma
                                                   ----------------------------        ---------------------------
                                                   March 31,          March 31,        March 31,        March 31,
                                                     2003               2002             2003             2002
                                                   -------            --------         --------         --------

<S>                                                <C>                <C>              <C>              <C>

Net income                                         $ 1,301            $    995         $  1,280         $    955


Basic earnings per common share                    $  0.21            $   0.16         $   0.21         $   0.16


Diluted earnings per common share                  $  0.21            $   0.16         $   0.20         $   0.16
</TABLE>


In  determining  the pro forma  disclosures  above,  the fair  value of  options
granted was estimated on the grant date using the  Black-Scholes  option-pricing
model.  The  Black-Scholes  model was  developed  to estimate  the fair value of
traded  options,  which  have  different  characteristics  than  employee  stock
options, and changes to the subjective  assumptions used in the model can result
in  materially  different  fair value  estimates.  There were no employee  stock
options   granted   during  the  three  months   ended  March  31,   2003.   The
weighted-average  grant date fair  values of options  granted  during  2002 were
based on the following assumptions:


              Risk-free interest rate ............          5.13%
              Dividend yield .....................          1.88%
              Volatility .........................         38.00%
              Expected lives .....................        6 years


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

Note 6.  Recent Accounting Pronouncements

In June 2001, the Financial Accounting Standards Board ("FASB") issued SFAS 143,
Accounting for Asset  Retirement  Obligations  ("SFAS 143").  SFAS 143 addresses
financial   accounting  and  reporting  for  obligations   associated  with  the
retirement of tangible  long-lived  assets and the associated  asset  retirement
costs.  Although  earlier  application is encouraged,  SFAS 143 is effective for
financial  statements issued for fiscal years beginning after June 15, 2002. The
Company  adopted the provisions of this Statement on January 1, 2003,  which did
not  have  a  significant  impact  on  the  Company's   consolidated   financial
statements.

In April 2002, the FASB issued SFAS 145, Rescission of FASB Statements No. 4, 44
and 64,  Amendments of SFAS 13, and Technical  Corrections as of May 2002 ("SFAS
145").  SFAS  145  rescinds  SFAS 4,  Extinguishments  of Debt  Made to  Satisfy
Sinking-Funds  Requirements.  SFAS 145 also  rescinds  SFAS 44,  Accounting  for
Intangible  Assets of Motor Carriers and amends SFAS 13,  Accounting for Leases,
to eliminate an inconsistency between the required accounting for sale-leaseback
transactions and the required  accounting for certain lease  modifications  that
have economic effects that are similar to sale-leaseback transactions.  SFAS 145
is  generally  effective  for  financial  statements  issued  for  fiscal  years
beginning  after May 15, 2002.  The provisions of this Statement were adopted by
the Company on January 1, 2003,  which did not have a significant  impact on the
Company's consolidated financial statements.



                                       8
<PAGE>

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

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

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

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

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













                                       9
<PAGE>





                   CNB FLORIDA BANCSHARES, INC. AND SUBSIDIARY
                        Unaudited Selected Financial Data





<TABLE>
                                                                                                        Three Months Ended
                                                                                                             March 31,
Dollars in thousands except per share information.                                                2003                      2002
====================================================================================================================================
SUMMARY OF OPERATIONS:
<S>                                                                                          <C>                       <C>
Total interest income                                                                        $    10,697               $     9,744
Total interest expense                                                                            (4,137)                   (3,887)
                                                                                             -----------               -----------
Net interest income                                                                                6,560                     5,857
Provision for loan losses                                                                           (675)                     (500)
                                                                                             -----------               -----------
Net interest income after provision for loan losses                                                5,885                     5,357
Non-interest income                                                                                1,622                     1,404
Non-interest expense                                                                              (5,469)                   (5,159)
                                                                                             -----------               -----------
Income before taxes                                                                                2,038                     1,602
Income taxes                                                                                        (737)                     (607)
                                                                                             -----------               -----------
Net income                                                                                   $     1,301               $       995
                                                                                             ===========               ===========
====================================================================================================================================
PER COMMON SHARE:
Basic earnings                                                                               $      0.21               $      0.16
Diluted earnings                                                                                    0.21                      0.16
Book value                                                                                          8.40                      7.75
Dividends Declared                                                                                  0.06                      0.05
Actual shares outstanding                                                                      6,142,450                 6,095,953
Weighted average shares outstanding                                                            6,126,940                 6,101,099
Diluted weighted average shares outstanding                                                    6,327,413                 6,152,808
====================================================================================================================================
KEY RATIOS:
Return on average assets                                                                            0.70%                     0.66%
Return on average shareholders' equity                                                             10.22                      8.48
Dividend payout                                                                                    23.81                     31.25
Efficiency ratio                                                                                   66.84                     71.05
Total risk-based capital ratio                                                                      8.80                      8.87
Average shareholders' equity to average assets                                                      6.80                      7.73
Tier 1 leverage                                                                                     6.07                      6.65
====================================================================================================================================
FINANCIAL CONDITION AT PERIOD-END:
Assets                                                                                       $   774,205               $   624,340
Loans                                                                                            605,962                   519,901
Deposits                                                                                         694,816                   549,648
Shareholders' equity                                                                              51,576                    47,262

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



                                       10
<PAGE>

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

OVERVIEW

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

RESULTS OF OPERATIONS

     The Company's earnings for the three month period ended March 31, 2003 were
$1,301,000,  or $0.21 per  diluted  share,  compared to  $995,000,  or $0.16 per
diluted share, in the first quarter of 2002. These results reflect growth in net
interest  income and  non-interest  income.  Total  assets  increased  to $774.2
million compared to $730.7 million at December 31, 2002. Total outstanding loans
and  deposits  rose  17%  and  26%  to  $606.0   million  and  $694.8   million,
respectively,  at March  31,  2003  from  $519.9  million  and  $549.6  million,
respectively, at March 31, 2002.

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.  The Company's  primary
objective  is to manage its  assets  and  liabilities  to  provide  the  largest
possible  amount  of income  while  balancing  interest  rate,  credit  quality,
liquidity and capital risks.  Net interest  income for the first quarter of 2003
was $6.6  million,  compared to $5.9 million for the first three months in 2002,
an  increase  of 12%.  Loan  growth  and  spread  management  were  the  primary
contributors to the increase in net interest income.

     Total average earning assets increased by $143.2 million,  or 26% to $702.7
million in 2003,  compared to $559.4 million in 2002.  Increases in time,  money
market and other interest bearing  deposits,  were the main  contributors in the
$128.1 million, or 26%, growth in average interest bearing liabilities.

     Net  interest  margin  declined  to 3.79%  in the  first  quarter  of 2003,
compared  to 4.25%  for the same  period in 2002.  Total  earning  asset  yields
decreased  to 6.17% in 2003  from  7.06% in 2002 and  rates on  interest-bearing
liabilities  decreased  to 2.73% in 2003  from  3.23% in 2002.  Interest  income
increased  10% while  interest  expense  increased  6% for the 2003 quarter over
comparable  2002 amounts.  The increased  interest  income and expense  reflects
growth in loans and deposits  that outpaced the decline in yields and rates over
this period.  The decline in net interest yield reflects spread  tightening as a
result of declining  loan yields and an increase in lower  yielding,  short-term
investments.  Table 1:  "Average  Balances  - Yields  and  Rates"  provides  the
Company's  average  volume of  interest  earning  assets  and  interest  bearing
liabilities for the first quarter of 2003 and 2002.



                                       11
<PAGE>

                  Table 1: Average Balances - Yields and Rates

<TABLE>
                                        Three Months Ended March 31, 2003      Three Months Ended March 31, 2002
                                       ----------------------------------     ----------------------------------
                                                      Interest                              Interest
                                        Average      Income or    Average      Average     Income or      Average
                                        Balance       Expense      Rate        Balance      Expense         Rate
                                       ----------    ----------   -------     ---------    ----------     -------
                                                                       (dollars in thousands)
ASSETS:
<S>                                    <C>           <C>            <C>       <C>          <C>              <C>
  Federal funds sold                   $   13,024    $       38     1.18%     $   3,154    $       13       1.67%
  Investment securities
    available for sale                     47,805           461     3.91         38,685           436       4.57
  Investment securities
    held to maturity                            -             -        -          2,832            41       5.87
  Loans (1)                               604,042        10,075     6.76        514,332         9,252       7.30
  Interest bearing deposits                37,820           123     1.32            439             2       1.85
                                       ----------    ---------- --------      ---------    ----------       ----

TOTAL EARNING ASSETS                      702,691        10,697     6.17        559,442         9,744       7.06
  All other assets                         56,445                                55,482
                                       ----------                             ---------

TOTAL ASSETS                           $  759,136                             $ 614,924
                                       ==========                             =========

LIABILITIES AND
  SHAREHOLDERS' EQUITY:
  NOW and money markets                $  222,862    $      943     1.72%     $ 171,855    $      763       1.80%
  Savings                                  23,244            29     0.51         21,004            39       0.75
  Time deposits                           346,895         2,970     3.47        268,598         2,863       4.32
  Repurchases and federal
     funds purchased                       11,638            27     0.94         16,100            61       1.54
 Short term borrowings                      1,000             7     2.84              -             -          -
 Other borrowings                          10,000           161     6.53         10,000           161       6.53
                                       ----------    ----------    -----      ---------    ----------       ----
TOTAL INTEREST BEARING
  LIABILITIES                             615,639         4,137     2.73        487,557         3,887       3.23
  Demand deposits                          85,721                                75,430
  Other liabilities                         6,126                                 4,374
  Shareholders' equity                     51,650                                47,563
                                       ----------                             ---------

TOTAL LIABILITIES AND
  SHAREHOLDERS' EQUITY                 $  759,136                             $ 614,924
                                       ==========                             =========

                                                                    ----                                    ----
INTEREST SPREAD (2)                                                 3.44%                                   3.83%
                                                                    ====                                    ====

                                                     ----------                            ----------
NET INTEREST INCOME                                  $    6,560                            $    5,857
                                                     ==========                            ==========


NET INTEREST MARGIN (3)                                             3.79%                                   4.25%
                                                                    ====                                    ====

----------
<FN>
(1)  Interest  income on average loans includes loan fee recognition of $154,000
     and $123,000 in 2003 and 2002, respectively.
(2)  Represents the average rate earned minus average rate paid.
(3)  Represents net interest income divided by total earning assets.
</FN>
</TABLE>



                                       12
<PAGE>




          Table 1a: Analysis of Changes in Interest Income and Expense

<TABLE>
                                                                NET CHANGE MARCH 31,                   NET CHANGE MARCH 31,
                                                              2002-2003 ATTRIBUTABLE TO:             2001-2002 ATTRIBUTABLE TO:
                                                          ----------------------------------      ---------------------------------
                                                                                       Net                                    Net
                                                          Volume (1)    Rate (2)      Change      Volume (1)   Rate (2)      Change
                                                          ----------    --------      ------      ----------   --------      ------
                                                                       (thousands)
INTEREST INCOME:
<S>                                                        <C>          <C>          <C>          <C>          <C>          <C>
   Federal funds sold                                      $    41      $   (16)     $    25      $    23      $   (25)     $    (2)
   Investment securities available for sale                    103          (78)          25           84         (167)         (83)
   Investment securities held to maturity                      (41)           -          (41)         (68)          (2)         (70)
   Loans                                                     1,480         (657)         823        2,770       (2,425)         345
   Interest bearing deposits                                   170          (49)         121            4           (5)          (1)
                                                           -------      -------      -------      -------      -------      -------
      Total                                                  1,753         (800)         953        2,813       (2,624)         189
                                                           -------      -------      -------      -------      -------      -------


INTEREST EXPENSE:
   NOW and money markets                                       226          (46)         180          427         (625)        (198)
   Savings                                                       4          (14)         (10)          15          (33)         (18)
   Time deposits                                               835         (728)         107        1,224       (1,473)        (249)
   Repurchases and federal funds
     purchased                                                 (10)         (24)         (34)           9         (134)        (125)
   Short term borrowings                                         7            -            7         (537)           -         (537)
   Other borrowings                                              -            -            -          161            -          161
                                                           -------      -------      -------      -------      -------      -------
      Total                                                  1,062         (812)         250        1,299       (2,265)        (966)
                                                           -------      -------      -------      -------      -------      -------
         Net interest income                               $   691      $    12      $   703      $ 1,514      $  (359)     $ 1,155
                                                           =======      =======      =======      =======      =======      =======


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

Non-Interest Income

     Non-interest  income totaled $1.6 million for the first quarter of 2003, an
increase of 16% from $1.4 million earned in the  comparable  period in 2002. The
increase was  primarily  attributed to an $115,000  increase in service  charges
from the  increased  deposit base, a $34,000  increase in secondary  market loan
sale income and a $35,000  increase in investment  services  income.  During the
first  quarter  of 2003,  the  Company  began  selling a larger  portion  of its
secondary market mortgage loans through table funding arrangements.  Under table
funding arrangements, the Company receives payment for the loans it sells at the
time the loan is funded. These loans are not warehoused on the Company's balance
sheet,  accordingly,  it is expected  that the level of loans held for sale will
continue to decline as more secondary market  originations and sales are handled
through table funding arrangements.

     Non-interest  income,  annualized,  as a percentage  of average  assets was
0.87% for the first  quarter  ended  March 31,  2003,  compared to 0.93% for the
comparable period in 2002.

Non-Interest Expense

     Non-interest  expense  increased  6% to $5.5  million  in the 2003  quarter
compared to $5.2 million in the 2002 quarter.  The increase is  attributable  to
increases in personnel,  occupancy, equipment and data processing expenses. As a
percentage of average assets,  annualized non-interest expense decreased to 2.9%
from  3.4% in the  first  quarter  2003 and  2002,  respectively.  This  decline
reflects the Company's continued focus on overhead expense management.  Salaries
and  employee  benefits  increased  $111,000 or 4% to $2.9 million for the first
three months of 2003, compared to $2.7 million for the same period in 2002. As a
percentage  of  average  assets  annualized,   salaries  and  employee  benefits


                                       13
<PAGE>

decreased  to  1.52%  from  1.81%,  for the  first  quarter  of 2003  and  2002,
respectively.  Full-time  equivalent  employees  increased by 9 during the first
quarter of 2003 as compared to the same period in 2002.

     Occupancy expense (including premises,  furniture,  fixtures and equipment)
increased $81,000,  or 10% during the three months ended March 31, 2003 compared
to the same  period  in 2002.  The  increase  is  primarily  attributable  to an
increase in property taxes, insurance, building depreciation and data processing
depreciation expenses.

     Other operating expenses increased $118,000, or 7%, in the first quarter of
2003 compared to the same period in 2002. The following  table details the areas
of significance in other operating expenses.

                        Table 2: Other Operating Expenses

                                              Three Months Ended March 31,
                                            2003                       2002
                                       ---------------            --------------
                                                      (thousands)
Data processing                           $  356                     $  319
Legal and professional                       199                        196
Communications                               189                        179
Amortization of intangible assets            182                        187
Postage and delivery                         175                        157
Advertising and promotion                    125                        113
Supplies                                      94                        116
Loan expenses                                 77                         46
Regulatory fees                               66                         58
Administrative                                35                         44
Other general operating                       34                         20
Education expense                             30                         22
Insurance and bonding                         29                         24
Dues and subscriptions                        27                         24
Directors fees                                23                         19
Other                                         71                         70
                                          ------                     ------
Total other operating expenses            $1,712                     $1,594
                                          ======                     ======


Income Taxes

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

LIQUIDITY AND INTEREST RATE SENSITIVITY

     Liquidity  is defined as the  ability  of the  Company to meet  anticipated
demands  for  funds  under  credit  commitments  and  deposit  withdrawals  at a
reasonable cost on a timely basis.  Management  measures the Company's liquidity
position by giving consideration to both on-and off-balance sheet sources of and
demands  for funds on a daily and weekly  basis.  These funds can be obtained by
converting  assets to cash or by attracting new deposits.  Average liquid assets
(cash and amounts  due from banks,  interest  bearing  deposits in other  banks,
federal funds sold and investment  securities available for sale) totaled $118.6
million and  represented  17% of average total deposits during the first quarter
of 2003,  compared to $59.8 million and 11% for 2002. Average loans were 89% and
96% of average  deposits  for the three month  periods  ended March 31, 2003 and
2002, respectively.

     In addition to core  deposit  growth,  sources of funds  available  to meet
liquidity  demands include cash received  through ordinary  business  activities
such as the  collection  of interest  and fees,  federal  funds  sold,  loan and
investment maturities and lines for the purchase of federal funds by the Company
from its principal correspondent banks. The Bank is also a member of the Federal
Home Loan Bank and has access to short-term  and long-term  funds.  In addition,


                                       14
<PAGE>

the Company entered into a line of credit with one of its correspondent banks in
April 2001.  The  agreement was amended in October 2001 to reflect the following
structures:  (1) a $3 million revolving line of credit maturing on June 30, 2002
(subsequently renewed through June 30, 2003) with interest floating quarterly at
3-month  Libor plus 145 basis  points;  and (2) a $10 million term loan maturing
October 3, 2006 with interest floating quarterly at 3-month Libor plus 170 basis
points.  Semi-annual principal payments of approximately $714,000 begin in 2004.
The Company also entered into a $10 million  pay-fixed  interest  rate swap with
the same  bank.  The fixed rate  under the  interest  rate swap is 6.45% and the
variable rate is based on 3-month Libor plus 170 basis points.  The swap matures
October 3, 2006 and has been  designated  as a cash flow  hedge of the  variable
interest  payments  on the $10  million  term loan noted in (2) above.  The fair
value of the interest rate swap at March 31, 2003 was approximately  ($693,000).
There was $1 million  outstanding  on the $3 million line of credit on March 31,
2003.   The  term  loan,   line  of  credit  and  interest  rate  swap  are  all
collateralized by 100% of the common stock of the Bank.

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

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

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

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

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

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

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

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

     Failure to  maintain  any of these  covenants  would  place the  Company in
default of the line of credit  agreement.  In such a case,  absent  any  waivers
obtained from the lender,  all amounts  payable could be accelerated  and become
due  immediately.  As of March 31, 2003, the Company was in compliance  with all
covenants.

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

     The Company's  liquidity  position increased during the quarter as compared
to the fourth quarter 2002 as loan balances were  essentially flat while deposit
growth continued.  The Company continues to maintain an asset sensitive position
with respect to net  interest  income.  Maintaining  this profile will allow the
Company to take advantage of an anticipation of rising rates.

     The Company's  gap and liquidity  positions are reviewed on a regular basis
by management to determine whether or not changes in policies and procedures are
necessary to achieve financial goals.  This analysis includes  assumptions about
balance  sheet growth and related mix as well as pricing and  maturity  profile.
Included in the review is an internal  analysis  of the  possible  impact on net
interest income due to market changes in interest rates.  Based on this internal
analysis,  at March 31, 2003, a gradual  increase in interest rates of 200 basis
points would have  increased net interest  income over the ensuing  twelve-month
period by 4.50%.  A gradual  decrease in interest rates of 200 basis points over


                                       15
<PAGE>

this same period would have  decreased net interest  income by 4.49% as compared
to a stable rate  environment.  At March 31, 2003, the Bank's net economic value
ratio  was  8.45%  and  10.86%,   assuming  a  gradual   increase  or  decrease,
respectively,  in interest rates of 200 basis points over a 12-month period. The
net  economic  value ratio is the market  value of equity  divided by the market
value of assets and  measures  the Bank's  capitalization,  talking into account
balance sheet gains and losses.

     Table 3, "Rate  Sensitivity  Analysis",  presents rate sensitive assets and
liabilities,  separating  fixed  and  variable  interest  rate  categories.  The
estimated  fair value of each  instrument  category  is also shown in the table.
While  these  fair  values  are  based  on  management's  judgment  of the  most
appropriate  factors,  there is no  assurance  that,  were the  Company  to have
disposed of such  instruments at March 31, 2003, the estimated fair values would
necessarily  have been  achieved at that date,  since  market  values may differ
depending on various circumstances.
















                                       16
<PAGE>

<TABLE>
Table 3: Rate Sensitivity Analysis
 March 31, 2003
(dollars in thousands)                                                                                                      Fair
                                      1 Year       2 Years     3 Years     4 Years     5 Years     Beyond      TOTAL        Value
                                      ------       -------     -------     -------     -------     ------      -----        -----
INTEREST-EARNING ASSETS:
------------------------
<S>                                  <C>          <C>         <C>         <C>         <C>         <C>         <C>          <C>
Gross Loans
     Fixed rate loans                $ 108,701    $  51,438   $  38,314   $  41,493   $  45,527   $  95,865   $ 381,338    $ 398,337
       Average interest rate              6.92%        7.38%       7.57%       7.37%       7.19%       6.87%       7.12%

     Variable rate loans                63,705       17,301      24,130      13,856      14,882      90,750     224,624      224,679
       Average interest rate              5.34%        5.63%       5.13%       5.66%       6.12%       6.81%       6.01%

Investment securities (1)
     Fixed rate investments             18,086        1,500       5,486           -           -      27,791      52,863       53,507
       Average interest rate              4.21%        2.00%       3.24%                               4.46%       4.18%

     Variable rate investments               -            -           -           -           -         440         440          454
       Average interest rate                                                                           4.30%       4.30%

Federal funds sold                      10,750            -           -           -           -           -      10,750       10,750
       Average interest rate              1.16%                                                                    1.16%

Other earning assets (2)                50,288            -           -           -           -           -      50,288       50,288
       Average interest rate              1.58%                                                                    1.58%
                                     ---------    ---------   ---------   ---------   ---------   ---------   ---------    ---------

Total interest-earning assets        $ 251,530    $  70,239   $  67,930   $  55,349   $  60,409   $ 214,846   $ 720,303    $ 738,015
       Average interest rate              5.01%        6.83%       6.35%       6.94%       6.93%       6.53%       6.08%
                                     =========    =========   =========   =========   =========   =========   =========    =========

INTEREST-BEARING LIABILITIES:
-----------------------------

NOW                                   $ 67,216    $       -   $       -   $       -   $       -   $  65,513   $ 132,729    $ 132,729
       Average interest rate              1.99%                                                        0.50%       1.25%

Money market                            92,691            -           -           -           -       4,436      97,127       97,127
       Average interest rate              2.37%                                                        1.24%       2.32%

Savings                                      -            -           -           -           -      23,936      23,936       23,936
       Average interest rate                                                                           0.50%       0.50%

CD's under $100,000                    107,428       36,237      24,508       9,261         767           -     178,201      179,759
       Average interest rate              2.72%        3.82%       4.05%       4.32%       4.64%                  3.22%

CD's $100,000 and over                 120,361       26,534      17,447       5,546       2,396           -     172,284      173,848
       Average interest rate              3.29%        4.04%       4.09%       4.42%       5.13%                   3.55%

Securities sold under
   repurchase agreements and
   federal funds purchased              10,554            -           -           -           -           -      10,554       10,554
       Average interest rate              0.95%                                                                    0.95%

Short-term borrowings                    1,000            -           -           -           -           -       1,000        1,000
       Average interest rate              2.83%                                                                    2.83%

Other borrowings  (3)                        -        1,428       1,428       7,144           -           -      10,000       10,000
       Average interest rate                           3.46%       3.46%       3.46%                               3.46%
                                     ---------    ---------   ---------   ---------   ---------   ---------   ---------    ---------


Total interest-bearing liabilities   $ 399,250    $  64,199   $  43,383   $  21,951   $   3,163   $  93,885   $ 625,831    $ 628,953
       Average interest rate              2.64%        3.90%       4.05%       4.07%       5.01%       0.53%       2.61%
                                     =========    =========   =========   =========   =========   =========   =========    =========

----------
<FN>
(1)  Securities  available for sale are shown at their amortized cost, excluding
     market value adjustment for net unrealized gains of $658,000.
(2)  Represents  interest  bearing  deposits  with Banks,  Federal  Reserve Bank
     Stock, Federal Home Loan Bank Stock and other marketable equity securities.
(3)  Other  borrowings  consists  of a term loan  maturing  October 3, 2006 that
     bears interest at 3-month Libor plus 170 basis points. The variable rate is
     reset quarterly.  The variable interest payments on the term loan are being
     hedged  through an interest rate swap.  Under the interest  rate swap,  the
     Company pays a fixed rate of interest of 6.45% and receives a floating rate
     of interest of 3-month Libor plus 170 basis points. Other terms of the swap
     mirror those of the term debt.
</FN>
</TABLE>


                                       17
<PAGE>


     Core  deposits,  which  represent all deposits  other than time deposits in
excess of $100,000,  averaged 75% of total average deposits for the three months
ended March 31, 2003 compared  with 76% for the three months ended  December 31,
2002.  The Bank  closely  monitors  its  reliance on time  deposits in excess of
$100,000, which are generally considered less stable and less reliable than core
deposits.  Table 4, 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.

             Table 4: Maturity of Time Deposits of $100,000 or More
                                 March 31, 2003
                             (dollars in thousands)

                                                             Amount

             Three months or less                          $ 41,324
             Three through six months                        38,301
             Six through twelve months                       40,736
             Over twelve months                              51,923
                                                            -------
             Total                                         $172,284
                                                            =======

EARNING ASSETS

Loans

     Lending  activities  are the Company's  single  largest  source of revenue.
Although  management is continually  evaluating  alternative sources of revenue,
lending  is  the  major  segment  of  the  Company's  business  and  is  key  to
profitability.  During the first  quarter  of 2003,  average  loans were  $604.0
million and were 89% of average deposits, compared to $514.3 million and 96% for
the same period in 2002.  The following  table  reflects the  composition of the
Company's loan portfolio as of March 31, 2003 compared to December 31, 2002.

                      Table 5: Loan Portfolio Composition

                                               March 31,            December 31,
                                                 2003                  2002
                                              ---------             ----------
                                                         (thousands)
Commercial                                    $ 101,609             $ 111,033
Commercial real estate                          330,230               324,525
Mortgages (including home equity)               138,274               132,513
Consumer                                         30,710                32,199
Credit card                                       1,076                 1,164
Tax free                                          4,063                 4,351
                                              ---------             ---------

Total loans, net of unearned income             605,962               605,785
Less: allowance for loan losses                  (6,548)               (6,574)
                                              ---------             ---------

Net loans                                     $ 599,414             $ 599,211
                                              =========             =========

     Loan  concentrations are considered to exist where there are amounts loaned
to multiple  borrowers engaged in similar activities which collectively would be
similarly  impacted by economic or other  conditions  and when the total of such
amounts  exceeds 25% of total capital.  Due to the lack of diversified  industry
and the relative  proximity of markets served, the Company has concentrations in
geographic  as well as in  types  of  loans  funded.  The  Bank's  four  largest
concentration categories are: Land Development ($40.92 million), Commercial Real
Estate ($30.2 million), Professional ($29.1 million) and Commercial Construction
($24.5 million).

Loan Quality

     The  allowance  for loan loss is  established  through a provision for loan
loss charged to expense.  Loans are charged  against the allowance for loan loss


                                       18
<PAGE>

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

     The allowance for loan losses on March 31, 2003,  was 1.08% of total loans,
compared to 1.09% at December  31,  2002 and 1.03% at March 31,  2002.  Table 6:
"Allocation  of  Allowance  for Loan  Losses",  set forth below,  indicates  the
specific reserves allocated by loan type.

                Table 6: Allocation of Allowance for Loan Losses

<TABLE>
                                                            March 31,                           December 31,
                                                              2003                                 2002
                                                    -----------------------------       -------------------------------
                                                                    Percent of                            Percent of
                                                                   Loans in Each                         Loans in Each
                                                                    Category to                           Category to
                                                    Amount          Total Loans         Amount            Total Loans
                                                    ------          -------------       ------           -------------
                                                                       (dollars in thousands)

<S>                                                 <C>                  <C>            <C>                  <C>
Commercial                                          $2,413               16.8%          $1,991               18.3%
Commercial real estate                               2,836               54.5            3,180               53.6
Mortgages (including home equity)                      526               22.8              495               21.9
Consumer                                               576                5.0              802                5.3
Credit card                                            118                0.2              106                0.2
Tax free                                                 -                0.7                -                0.7
Unallocated                                             79                  -                -                -
                                                    ------             ------           ------              -----
Total                                               $6,548              100.0%          $6,574              100.0%
                                                    ======             ======           ======              =====
</TABLE>


     Non-performing  assets consist of non-accrual loans, loans past due 90 days
or more and still accruing interest,  other real estate owned and repossessions.
Non-performing  assets  decreased  by $582,000  from  December  31, 2002 to $7.5
million at March 31, 2003. Non-performing assets as a percentage of total assets
decreased to .97% on March 31, 2003 from 1.11% on December 31, 2002. Non-accrual
loans include two secured credits that make up approximately 57% of the balance.
Both relationships are collateralized by commercial real estate, and the Company
is in the process of actively  resolving  each of them.  Any expected  losses on
these  loans have been  included in the  allowance  for loan losses at March 31,
2003.

                         Table 7: Non-Performing Assets

                                                    March 31,       December 31,
                                                      2003              2002
                                                    ---------       -----------
                                                     (dollars in thousands)
     Non-accrual loans                              $  7,088          $  5,611
     Past due loans 90 days or
        more and still accruing                          340             2,439
     Other real estate owned
        and repossessions                                 64                24
                                                    --------          --------
     Total non-performing assets                    $  7,492          $  8,074
                                                    ========          ========

     Percent of total assets                            .97%             1.11%




                                       19
<PAGE>


                 Table 8: Activity in Allowance for Loan Losses
<TABLE>
                                                                                                        Three Months Ended
                                                                                                             March 31,
                                                                                                   2003                     2002
                                                                                                 ---------               ---------
                                                                                                       (dollars in thousands)

<S>                                                                                              <C>                     <C>
Balance at beginning of year                                                                     $   6,574               $   5,205
Loans charged-off:
   Commercial                                                                                          425                     211
   Mortgage (including home equity)                                                                    102                      67
   Consumer                                                                                            178                      93
   Credit card                                                                                          16                      20
                                                                                                 ---------               ---------
      Total loans charged-off                                                                         (721)                   (391)
Recoveries on loans previously charged-off:
   Commercial                                                                                            6                       2
   Mortgage (including home equity)                                                                      -                      26
   Consumer                                                                                             13                      27
   Credit card                                                                                           1                       2
                                                                                                 ---------               ---------
      Total loan recoveries                                                                             20                      57
                                                                                                 ---------               ---------
        Net loans charged-off                                                                         (701)                   (334)
                                                                                                 ---------               ---------

Provision for loan losses charged to expense                                                           675                     500
                                                                                                 ---------               ---------
Ending balance                                                                                   $   6,548               $   5,371
                                                                                                 =========               =========

Total loans outstanding                                                                          $ 605,962               $ 519,901
Average loans outstanding                                                                        $ 604,042               $ 514,332

Allowance for loan losses to loans outstanding                                                        1.08%                   1.03%
Net charge-offs to average loans outstanding, annualized                                              0.47%                   0.26%
</TABLE>


Investment Portfolio

     The Company uses its securities  portfolio to assist in maintaining  proper
interest rate sensitivity in the balance sheet, to provide  securities to pledge
as  collateral  for public  funds and  repurchase  agreements  and to provide an
alternative  investment  for  available  funds.  The  total  recorded  value  of
securities  was $57.1  million at March 31, 2003,  an increase of 15% from $49.7
million at the end of 2002.

     Securities are classified as either held-to-maturity or available-for-sale.
At March 31, 2003 investment securities  available-for-sale  made up 100% of the
total   investment    portfolio   of   $57.1   million.    Securities   in   the
available-for-sale portfolio are recorded at fair value on the balance sheet and
unrealized gains and losses  associated with these securities are recorded,  net
of deferred income tax, as accumulated other  comprehensive  income (loss). Also
included in other comprehensive income (loss) are accumulated net gains (losses)
on cash flow hedges. At March 31, 2003,  accumulated other comprehensive  income
(loss) was ($22,000), compared to $108,000 at December 31, 2002.

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


                                       20
<PAGE>


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

           Table 9: Maturity Distribution of Investment Securities (1)
                                 March 31, 2003

<TABLE>
(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                                              $            -       $            -       $ 4,059       $ 4,057
                                                                 --------------       --------------       -------       -------
Total U.S. Treasury                                                           -                    -         4,059         4,057

 U.S. Government Agencies and Corporations (2):
   One year or less                                                           -                    -        14,027        14,513
   Over one through five years                                                -                    -         6,986         7,018
   Over five through ten years                                                -                    -        10,000        10,000
                                                                 --------------       --------------       -------       -------
Total U.S. Government Agencies                                                -                    -        31,013        31,531
 and Corporations

Obligations of State and Political
 Subdivisions:
   Over ten years                                                             -                    -         2,174         2,219
                                                                 --------------       --------------       -------       -------
Total Obligations of State and                                                -                    -         2,174         2,219
 Political Subdivisions

Mortgage-Backed Securities (3):
   Over one through five years                                                -                    -            16            16
   Over five through ten years                                                -                    -         5,081         5,137
   Over ten years                                                             -                    -        10,960        11,001
                                                                 --------------       --------------       -------       -------
Total Mortgage-Backed Securities                                              -                    -        16,057        16,154

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

                                                                 --------------       --------------       -------       -------
Total Securities                                                 $            -       $            -       $56,422       $57,080
                                                                 ==============       ==============       =======       =======
----------
<FN>
(1)  All securities,  excluding Obligations of State and Political Subdivisions,
     are taxable.
(2)  Includes securities issued through government agencies that are callable at
     various times by the issuer prior to the stated maturity date. At March 31,
     2003,  such callable  securities had an amortized cost of $27.0 million and
     an estimated fair market value of $27.5 million.
(3)  Represents  investments in mortgage-backed  securities which are subject to
     early  repayment.
(4)  Represents  investment  in Federal  Reserve Bank and Federal Home Loan Bank
     stock and other marketable equity securities.
</FN>
</TABLE>


             Table 10: Weighted Average Yield by Range of Maturities

<TABLE>
                                      March 31, 2003      December 31, 2002       March 31, 2002
                                      --------------      -----------------       --------------
<S>                                       <C>                   <C>                    <C>
One Year or Less                          4.21%                 2.41%                  2.27%
More than One through Five Years          2.97%                 4.87%                  5.08%
More than Five through Ten Years          4.59%                 4.48%                  4.99%
More than Ten Years (1)                   4.02%                 4.46%                  4.56%

----------
<FN>
(1)  Represents adjustable rate mortgage-backed securities which are repriceable
     within one year.
</FN>
</TABLE>



                                       21
<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 March 31, 2003 and December 31, 2002.

                            Table 11: Total Deposits

                                             March 31,              December 31,
                                               2003                     2002
                                           -----------             ------------
                                                       (thousands)
Non-interest bearing:
        Demand checking                      $ 90,539                $ 80,065
Interest bearing:
        NOW checking                          132,729                 118,619
        Money market checking                  97,127                  95,354
        Savings                                23,936                  22,311
        Certificates of deposit               350,485                 332,287
                                             --------                --------

Total deposits                               $694,816                $648,636
                                             ========                ========



CAPITAL RESOURCES

     Shareholders'  equity at March 31, 2003 was $51.6  million,  as compared to
$50.9 million at December 31, 2002.  During the first quarter of 2003, the Board
of Directors  declared dividends totaling $0.06 per share (payable May 2, 2003),
an increase of 20% from the fourth quarter 2002 dividend. At March 31, 2003, the
Company's common stock had a book value of $8.40 per share compared to $8.31 per
share at December 31, 2002.

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

     Quantitative  measures as defined by regulation  and  established to ensure
capital  adequacy  require  the Bank to maintain  minimum  amounts and ratios of
Total and Tier 1 capital to  risk-weighted  assets and Tier 1 capital to average
assets.  If such  minimum  amounts  and ratios are met,  the Bank is  considered
"adequately  capitalized."  If a bank exceeds the  requirements  of  "adequately
capitalized" and meets even more stringent minimum  standards,  it is considered
to be  "well  capitalized."  As of March  31,  2003,  the  Bank met all  capital
adequacy requirements to which it is subject.


                                       22
<PAGE>


     At March 31, 2003 and 2002, the Company's Tier 1 capital,  Total risk-based
capital and Tier 1 leverage ratios were are as follows:


                            Table 12: Capital Ratios

<TABLE>
                                               March 31,                 Well-Capitalized     Regulatory
                                        2003               2002            Requirements        Minimums
                                    ------------       ------------        ------------        --------
<S>                                     <C>                <C>                 <C>                <C>
Risk Based Capital Ratios:
     Tier 1 Capital Ratio               7.7%               7.8%                6.0%               4.0%

     Total Capital to
       Risk-Weighted Assets             8.8%               8.9%               10.0%               8.0%

Tier 1 Leverage Ratio                   6.1%               6.6%                5.0%               4.0%
</TABLE>


CRITICAL ACCOUNTING POLICIES

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

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

     The  accounting  for the Company's  core deposit  intangible  asset is also
subject to significant  estimates about future  results.  In connection with the
acquisition of the Lake City and Live Oak branches of Republic Bank in 2001, the
Company  recorded a core deposit  intangible of approximately  $6,000,000.  This
intangible asset is being amortized on a straight-line  basis over its estimated
useful  life of 10 years.  The life of this  asset  was  based on the  estimated
future period of benefit to the Company of the depositor relationships acquired.
To the extent that the deposit  accounts  acquired leave the Company faster than
anticipated,  the amount of the core deposit  intangible  that is amortized each
period could increase  significantly,  thus shortening its useful life.  Through
March 31, 2003, the  performance of the depositor  relationships  did not differ
materially from expectations.

            QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

     On January  28,  1997,  the  Securities  and  Exchange  Commission  adopted
amendments to Regulation  S-K,  Regulation S-X, and various forms to clarify and
expand existing  requirements for disclosures about derivatives and market risks
inherent in derivatives  and other  financial  instruments.  As noted below,  at
March 31, 2003,  the Company was a party to a single  interest  rate  derivative
contract.  The Company also holds other  financial  instruments,  which  include
investments,  loans and deposit liabilities.  The release requires  quantitative
and qualitative disclosures about market risk. See the section titled "Liquidity
and  Interest  Rate  Sensitivity"  for  further   discussion  on  the  Company's
management of interest rate risk.



                                       23
<PAGE>

     The Company's sole derivative  contract is a $10 million notional  interest
rate swap that was entered into as a hedge of interest rate risk inherent in the
Company's $10 million term loan.  Under the terms of the swap,  the Company will
receive a variable rate of interest equal to 90-day Libor plus 170 basis points,
reset  quarterly.  The Company will pay a fixed rate of interest  equal to 6.45%
for the life of the  contract.  All cash  flows  are  computed  based on the $10
million  notional amount and are settled  quarterly on a net basis. The contract
matures October 3, 2006 and the notional amount will be reduced by $714,286 on a
semi-annual  basis beginning April 2004. The fair value of the swap at March 31,
2003 was  approximately  ($693,000).  The swap is being  accounted for as a cash
flow hedge of the variable interest payments under the $10 million term debt.

     Non-derivative  financial instruments that have market risk are included in
Table 3: "Rate Sensitivity  Analysis".  These instruments are shown by maturity,
separated by fixed and variable interest rates. The estimated fair value of each
instrument  category is also shown in the table.  While these  estimates of fair
value are based on management's judgment of the most appropriate factors,  there
is no assurance that,  were the Company to have disposed of such  instruments at
March 31, 2003, the estimated fair values would  necessarily  have been achieved
at that date, since market values may differ depending on various circumstances.
The estimated fair values at March 31, 2003 would not  necessarily be considered
to apply at subsequent dates.












                                       24
<PAGE>



                                     PART II
                                OTHER INFORMATION

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

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

Item 3.  Defaults Upon Senior Securities - Not applicable.

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

Item 5.  Other Information - Not applicable.

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

(a) Exhibits:

         99.1     Chief Executive Officer certification pursuant to  Section 906
                  of the Sarbanes-Oxley Act of 2002.
         99.2     Chief Financial Officer certification pursuant to  Section 906
                  of the Sarbanes-Oxley Act of 2002.

(b)      Reports on Form 8-K:

         On January 28,  2003,  the Company  filed a Form 8-K to report its 2002
         fourth quarter and full year results.





                                       25
<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:   May 14, 2003
















                                       26
<PAGE>


                                 CERTIFICATIONS


I, K. C. Trowell, certify that:

         1.    I have reviewed this quarterly report on Form 10-Q of CNB Florida
               Bancshares, Inc.

         2.    Based on my knowledge, this quarterly report does not contain any
               untrue  statement of a material  fact or omit to state a material
               fact  necessary  to make  the  statements  made,  in light of the
               circumstances   under  which  such   statements  were  made,  not
               misleading  with respect to the period  covered by this quarterly
               report;

         3.    Based  on my  knowledge,  the  financial  statements,  and  other
               financial  information included in this quarterly report,  fairly
               present in all material respects the financial condition, results
               of  operations  and cash flows of the  registrant as of, and for,
               the periods presented in this quarterly report;

         4.    The registrant's  other certifying  officer and I are responsible
               for   establishing  and  maintaining   disclosure   controls  and
               procedures  (as defined in exchange  Act Rules 13a-14 and 15d-14)
               for the registrant and we have;

               a) designed  such  disclosure  controls and  procedures to ensure
                  that  material   information   relating  to  the   registrant,
                  including its consolidated subsidiary,  is made known to us by
                  others within those entities,  particularly  during the period
                  in which this quarterly report is being prepared;

               b) evaluated the  effectiveness  of the  registrant's  disclosure
                  controls and  procedures  as of a date within 90 days prior to
                  the filing  date of this  quarterly  report  (the  "Evaluation
                  Date"); and

               c) presented in this quarterly  report our conclusions  about the
                  effectiveness of the disclosure  controls and procedures based
                  on our evaluation as of the Evaluation Date;

         5.    The registrant's  other certifying  officer and I have disclosed,
               based on our most recent evaluation, to the registrant's auditors
               and the audit  committee of  registrant's  board of directors (or
               persons performing the equivalent function):

               a) All  significant  deficiencies  in the design or  operation of
                  internal   controls   which   could   adversely   affect   the
                  registrant's ability to record, process,  summarize and report
                  financial  data  and  have  identified  for  the  registrant's
                  auditors any material weaknesses in internal controls; and

               b) any fraud,  whether or not material,  that involves management
                  or  other  employees  who  have  a  significant  role  in  the
                  registrant's internal controls; and

         6.    The registrant's other certifying officer and I have indicated in
               this  quarterly  report  whether  or not there  were  significant
               changes  in  internal  controls  or in other  factors  that could
               significantly  affect internal controls subsequent to the date of
               our most recent evaluation, including any corrective actions with
               regard to significant deficiencies and material weaknesses.

Date:  May 14, 2003
                                                /s/ K. C. Trowell
                                                --------------------------------
                                                K. C. Trowell
                                                Chairman of the Board, President
                                                and Chief Executive Officer





                                       27
<PAGE>



I, G. Thomas Frankland, certify that:

         1.    I have reviewed this quarterly report on Form 10-Q of CNB Florida
               Bancshares, Inc.

         2.    Based on my knowledge, this quarterly report does not contain any
               untrue  statement of a material  fact or omit to state a material
               fact  necessary  to make  the  statements  made,  in light of the
               circumstances   under  which  such   statements  were  made,  not
               misleading  with respect to the period  covered by this quarterly
               report;

         3.    Based  on my  knowledge,  the  financial  statements,  and  other
               financial  information included in this quarterly report,  fairly
               present in all material respects the financial condition, results
               of  operations  and cash flows of the  registrant as of, and for,
               the periods presented in this quarterly report;

         4.    The registrant's  other certifying  officer and I are responsible
               for   establishing  and  maintaining   disclosure   controls  and
               procedures  (as defined in exchange  Act Rules 13a-14 and 15d-14)
               for the registrant and we have;

               a) designed  such  disclosure  controls and  procedures to ensure
                  that  material   information   relating  to  the   registrant,
                  including its consolidated subsidiary,  is made known to us by
                  others within those entities,  particularly  during the period
                  in which this quarterly report is being prepared;

               b) evaluated the  effectiveness  of the  registrant's  disclosure
                  controls and  procedures  as of a date within 90 days prior to
                  the filing  date of this  quarterly  report  (the  "Evaluation
                  Date"); and

               c) presented in this quarterly  report our conclusions  about the
                  effectiveness of the disclosure  controls and procedures based
                  on our evaluation as of the Evaluation Date;

         5.    The registrant's  other certifying  officer and I have disclosed,
               based on our most recent evaluation, to the registrant's auditors
               and the audit  committee of  registrant's  board of directors (or
               persons performing the equivalent function):

               a) All  significant  deficiencies  in the design or  operation of
                  internal   controls   which   could   adversely   affect   the
                  registrant's ability to record, process,  summarize and report
                  financial  data  and  have  identified  for  the  registrant's
                  auditors any material weaknesses in internal controls; and

               b) any fraud,  whether or not material,  that involves management
                  or  other  employees  who  have  a  significant  role  in  the
                  registrant's internal controls; and

         6.    The registrant's other certifying officer and I have indicated in
               this  quarterly  report  whether  or not there  were  significant
               changes  in  internal  controls  or in other  factors  that could
               significantly  affect internal controls subsequent to the date of
               our most recent evaluation, including any corrective actions with
               regard to significant deficiencies and material weaknesses.

Date:  May 14, 2003
                                                /s/ G. Thomas Frankland
                                                -----------------------
                                                    G. Thomas Frankland
                                                    Executive Vice President and
                                                    Chief Financial Officer




                                       28