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


                                    FORM 10-Q


X        QUARTERLY  REPORT  PURSUANT  TO SECTION  13 OR 15(d) OF THE  SECURITIES
         EXCHANGE ACT OF 1934 (no fee required)  For the quarterly  period ended
         June 30, 2001

                                       OR

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





                           Commission File No. 0-25988

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


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


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


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



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


The number of shares of the registrant's common stock outstanding as of July 31,
2001 was 6,100,376 shares, $0.01 par value per share.



<PAGE>





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




                                TABLE OF CONTENTS


PART I - FINANCIAL INFORMATION
         Item 1.  Financial Statements
                  (unaudited)

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

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

         Overview.............................................................10
         Results of Operations................................................10
         Liquidity and Interest Rate Sensitivity..............................13
         Earning Assets.......................................................16
         Funding Sources......................................................21
         Capital Resources................................................... 21

         Item 3.  Quantitative and Qualitative Disclosure About Market Risk...22

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

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

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

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

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

         Item 6.  Exhibits and Reports on Form 8-K ...........................23





                                        2

<PAGE>
<TABLE>
                                     PART I
                              FINANCIAL INFORMATION

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

                                                             (Unaudited)         (Audited)
                                                               June 30,         December 31,
                                                                2001               2000
                                                              ----------        ------------
                                     ASSETS                            (thousands)
<S>                                                          <C>                <C>
Cash and cash equivalents:
    Cash and due from banks                                  $   24,156         $   20,769
    Federal funds sold                                              475                  -
    Interest bearing deposits in other banks                        520                129
                                                                -------            -------
      Total cash and cash equivalents                            25,151             20,898
Investment securities available for sale                         33,064             33,236
Investment securities held to maturity                            6,213              7,460
Loans:
    Commercial, financial and agricultural                      238,986            192,540
    Real estate - mortgage                                      155,218            120,663
    Real estate - construction                                   46,919             33,648
    Installment and consumer                                     38,942             33,970
                                                                -------            -------
      Total loans, net of unearned income                       480,065            380,821
Less: Allowance for loan losses                                  (4,558)            (3,670)
                                                                -------            -------
      Net loans                                                 475,507            377,151

Premises and equipment, net                                      25,279             22,433
Intangible assets                                                 6,865              1,034
Other assets                                                      4,880              5,381
                                                                -------            -------
           TOTAL ASSETS                                      $  576,959         $  467,593
                                                                =======            =======

                      LIABILITIES AND SHAREHOLDERS' EQUITY

LIABILITIES
Deposits:
    Non-interest bearing demand                              $   67,520         $   52,082
    Savings, NOW and money market                               173,640            129,865
    Time (under $100,000)                                       148,287            115,406
    Time ($100,000 and over)                                    100,029             70,333
                                                                -------            -------
      Total deposits                                            489,476            367,686

Securities sold under repurchase agreements
    and federal funds purchased                                  11,501             21,142
Short term borrowings                                            25,000             30,000
Other liabilities                                                 5,071              4,129
                                                                -------            -------
      Total liabilities                                         531,048            422,957
                                                                -------            -------

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;
    6,099,376 shares issued and outstanding at June 30, 2001
    and December 31, 2000, respectively                              61                 61
Additional paid-in capital                                       30,595             30,581
Retained earnings                                                14,870             14,027
Accumulated other comprehensive income (loss), net of tax           385               (33)
                                                                -------            -------
      Total shareholders' equity                                 45,911             44,636
                                                                -------            -------
           TOTAL LIABILITIES AND SHAREHOLDERS'  EQUITY       $  576,959         $  467,593
                                                                =======            =======
</TABLE>
                                        3
<PAGE>

<TABLE>


                   CNB FLORIDA BANCSHARES, INC. AND SUBSIDIARY
                        CONSOLIDATED STATEMENT OF INCOME
                                   (Unaudited)
                                                                                  Six Months Ended June 30,
                                                                                   2001               2000
                                                                                ---------          ---------
                                                                                         (thousands)
<S>                                                                            <C>               <C>
Interest Income
  Interest and fees on loans                                                   $   18,447        $   13,042
  Interest on investment securities held to maturity                                  215               297
  Interest on investment securities available for sale                                979             1,061
  Interest on federal funds sold                                                       28               160
  Interest on interest bearing deposits                                                 2                40
                                                                                ---------         ----------
    Total interest income                                                          19,671            14,600

Interest Expense
  Interest on deposits                                                              8,643             5,836
  Interest on repurchases and federal funds purchased                                 359               190
  Interest on short term borrowings                                                   866               169
                                                                                ---------         ---------
    Total interest expense                                                          9,868             6,195
                                                                                ---------         ---------
        Net interest income                                                         9,803             8,405

Provision for Loan Losses                                                             900               600
                                                                                ---------         ---------
  Net interest income after provision for loan losses                               8,903             7,805

Non-interest Income
  Service charges                                                                   1,218             1,059
  Other fees and charges                                                            1,238               492
                                                                                ---------         ---------
    Total non-interest income                                                       2,456             1,551
                                                                                ---------         ---------

Non-interest Expense
  Salaries and employee benefits                                                    4,977             4,159
  Occupancy and equipment expenses                                                  1,396             1,018
  Other operating expenses                                                          2,748             2,278
                                                                                ---------         ---------
    Total non-interest expense                                                      9,121             7,455
                                                                                ---------         ---------

Income before income taxes                                                          2,238             1,901
    Income taxes                                                                      785               657
                                                                                ---------         ---------

NET INCOME                                                                     $    1,453        $    1,244
                                                                                =========         =========

Earnings Per Share (Note 3):

    Basic earnings per share                                                   $     0.24        $     0.20
                                                                                =========         =========
    Average common shares outstanding                                           6,096,244         6,104,910
                                                                                =========         =========

    Diluted earnings per share                                                 $     0.23        $     0.20
                                                                                =========         =========
    Diluted average common shares and share equivalents                         6,216,274         6,148,794
                                                                                =========         =========
</TABLE>

                                        4

<PAGE>

<TABLE>

                   CNB FLORIDA BANCSHARES, INC. AND SUBSIDIARY
                        CONSOLIDATED STATEMENT OF INCOME
                                   (Unaudited)
                                                                                 Three Months Ended June 30,
                                                                                   2001               2000
                                                                                -----------        ----------
                                                                                         (thousands)
<S>                                                                            <C>                <C>
Interest Income
  Interest and fees on loans                                                   $     9,540        $     6,863
  Interest on investment securities held to maturity                                   104                149
  Interest on investment securities available for sale                                 460                525
  Interest on federal funds sold                                                        12                 84
  Interest on interest bearing deposits                                                  -                 34
                                                                                ----------         ----------
    Total interest income                                                           10,116              7,655

Interest Expense
  Interest on deposits                                                               4,513              3,062
  Interest on repurchases and federal funds purchased                                  173                113
  Interest on short-term borrowings                                                    329                169
                                                                                ----------         ----------
    Total interest expense                                                           5,015              3,344
                                                                                ----------         ----------
        Net interest income                                                          5,101              4,311

Provision for Loan Losses                                                              500                300
                                                                                ----------         ----------
  Net interest income after provision for loan losses                                4,601              4,011

Non-interest Income
  Service charges                                                                      654                544
  Other fees and charges                                                               783                236
                                                                                ----------         ----------
    Total non-interest income                                                        1,437                780
                                                                                ----------         ----------

Non-interest Expense
  Salaries and employee benefits                                                     2,564              2,105
  Occupancy and equipment expenses                                                     739                518
  Other operating expenses                                                           1,430              1,135
                                                                                ----------         ----------
    Total non-interest expense                                                       4,733              3,758
                                                                                ----------         ----------

Income before income taxes                                                           1,305              1,033
    Income taxes                                                                       462                359
                                                                                ----------         ----------

NET INCOME                                                                     $       843        $       674
                                                                                ==========         ==========

Earnings Per Share (Note 3):

    Basic earnings per share                                                   $      0.14        $      0.11
                                                                                ==========         ==========
    Average common shares outstanding                                            6,097,474          6,102,462
                                                                                ==========         ==========

    Diluted earnings per share                                                 $      0.14        $      0.11
                                                                                ==========         ==========
    Diluted average common shares and share equivalents                          6,233,770          6,137,181
                                                                                ==========         ==========
</TABLE>


                                        5

<PAGE>

<TABLE>


                   CNB FLORIDA BANCSHARES, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                                   (Unaudited)
                                                                             Six Months Ended June 30,
                                                                             2001                2000
                                                                         -----------         ------------
                                                                                     (thousands)
<S>                                                                      <C>                  <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income                                                               $     1,453          $     1,244
Adjustments to reconcile net income to net cash
  provided by operating activities:
     Depreciation and amortization                                               819                  546
     Provision for loan loss                                                     900                  600
     Investment securities (accretion) amortization, net                          (5)                  17
     Non-cash compensation                                                        14                   29
     Changes in assets and liabilities:
      Other assets                                                               251                 (469)
      Other liabilities                                                          942                  132
                                                                          ----------           ----------

      Net cash provided by operating activities                                4,374                2,099
                                                                          ----------           ----------

CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of investment securities available for sale                        (27,511)                   -
Proceeds from maturities of securities available for sale                     18,358                1,467
Proceeds from maturities of securities held to maturity                            3                  309
Proceeds from called securities available for sale                            10,000                  512
Proceeds from called securities held to maturity                               1,242                  118
Net increase in loans                                                        (87,020)             (47,113)
Purchases of premises and equipment, net                                      (2,577)              (4,760)
Branches acquired from Republic Bank                                          43,211                    -
                                                                          ----------           ----------

      Net cash used in investing activities                                  (44,294)             (49,467)
                                                                          ----------           ----------

CASH FLOWS FROM FINANCING ACTIVITIES
Increase in deposits                                                          59,424               41,101
Securities sold under repurchase agreements and
  federal funds purchased                                                     (9,641)              (4,311)
Short term borrowings                                                         (5,000)              15,000
Cash dividends paid                                                             (610)                (612)
Repurchase of common stock                                                         -                 (281)
Exercise of options                                                                -                   89
                                                                          ----------           ----------

      Net cash provided by financing activities                               44,173               50,986
                                                                          ----------           ----------

Increase in cash and cash equivalents                                          4,253                3,618

Cash and cash equivalents at beginning of period                              20,898               17,520
                                                                          ----------           ----------

Cash and cash equivalents at end of period                               $    25,151          $    21,138
                                                                          ==========           ==========

SUPPLEMENTAL DISCLOSURES:
      Interest paid                                                      $     8,799          $     5,684
                                                                          ==========           ==========

      Taxes paid                                                         $       886          $     1,044
                                                                          ==========           ==========
</TABLE>

                                        6

<PAGE>


                   CNB FLORIDA BANCSHARES, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  June 30, 2001
                                   (Unaudited)


Note 1. Basis of Presentation
The accompanying unaudited financial statements have been prepared in accordance
with the  instructions  to Form 10- Q which do not require all  information  and
footnotes necessary for a complete  presentation of financial position,  results
of operations and cash flows in conformity  with generally  accepted  accounting
principles. In the opinion of management,  such financial statements reflect all
adjustments  (consisting only of normal recurring  adjustments)  necessary for a
fair  statement  of the  results for the interim  periods  presented.  Operating
results for the six months ended June 30, 2001 are not necessarily indicative of
the  results  that  may be  expected  for the year  ending  December  31,  2001.
Management's  discussion  and analysis  should be read in  conjunction  with the
consolidated financial statements.

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

Note 3.  Earnings Per Share
Basic  earnings  per share is  calculated  based on weighted  average  number of
shares  of  common  stock  during  the  period.  Diluted  earnings  per share is
calculated  based on the  weighted  average  number of  shares  of common  stock
outstanding  and common  stock  equivalents,  consisting  of  outstanding  stock
options.  Common stock  equivalents are determined using the treasury method for
diluted  shares  outstanding.  The difference  between  diluted and basic shares
outstanding is common stock  equivalents from stock options and restricted stock
outstanding during the periods ended June 30, 2001 and 2000.

Note 4.  Branch Acquisitions
On May 11,  2001,  the Bank  purchased  the Lake City and Live Oak  branches  of
Republic Bank. The Bank acquired loans and deposits of approximately $12 million
and $64 million,  respectively. The Bank also recorded a core deposit intangible
of $6 million, which is being amortized over its estimated life of 10 years.

Note 5.  Comprehensive Income
Comprehensive income is defined as the total of net income and all other changes
in equity.  The following table details the Company's  comprehensive  income for
the three and six months period ending June 30, 2001 and 2000.
<TABLE>

                                                             Six Months                    Three Months
                                                           Ended June 30,                  Ended June 30,
                                                          2001         2000               2001         2000
                                                       --------       ------            -------       ------

<S>                                                   <C>          <C>                <C>          <C>
Net Income                                            $   1,453    $   1,244          $    843     $    674
Other Comprehensive Income (Loss), Net of Tax
  Unrealized Gains (Losses) on Securities:
   Unrealized Gains (Losses) on Securities
   Arising During the Period                                416           33                61          (20)
 Less: Reclassification Adjustment                           (3)          11                (1)           4
                                                       --------     --------           -------      -------
Total Unrealized Gains (Losses), Net of Tax
 Recognized in Other Comprehensive Income                   419           22                62          (24)
                                                       --------     --------           -------      -------
Comprehensive Income, Net of Tax                      $   1,872    $   1,266          $    905     $    650
                                                       ========     ========           =======      =======
</TABLE>


                                        7

<PAGE>


Note 6.  Recent Accounting Pronouncements
In July 2001, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial Accounting  Standards No. 141, Business  Combinations ("SFAS 141").
SFAS 141 requires the purchase  method of accounting  for business  combinations
initiated after June 30, 2001 and eliminates the  poolings-of-interests  method.
The Company will apply the provisions of SFAS 141 to future acquisitions.

In July 2001, the FASB also issued SFAS No. 142,  Goodwill and Other Intangibles
("SFAS 142").  SFAS 142  requires,  among other things,  the  discontinuance  of
goodwill  amortization  and includes  provisions for  reassessment of the useful
lives of existing  intangibles  and the  identification  of reporting  units for
purposes of assessing  potential future  impairments of goodwill.  SFAS 142 also
requires  the Company to complete a two-step  transitional  goodwill  impairment
test.  The first step of the  impairment  test must be completed six months from
the date of adoption  and the second step must be completed as soon as possible,
but no later than the end of the year of initial  application.  The Company will
be  adopting  the  provisions  of SFAS 142 on January 1,  2002.  Therefore,  the
Company is currently assessing but has not yet determined the impact of SFAS 142
on its financial  position and results of  operations.  For the six months ended
June 30, 2001, the Company recorded goodwill amortization expense of $35,000.

In July 2001,  the SEC  released  Staff  Accounting  Bulletin  ("SAB")  No. 102,
Selected Loan Loss Allowance  Methodology and Documentation  Issues. SAB No. 102
expresses  the  SEC  staff's  views  on  the  development,   documentation   and
application of a systematic methodology in determining a GAAP allowance for loan
losses.  The SAB stresses  that the  methodology  for computing the allowance be
both  disciplined  and  consistent,   and  emphasizes  that  the   documentation
supporting the allowance and provision must be sufficient.  SAB No. 102 provides
guidance that is consistent with the Federal Financial Institutions  Examination
Council's  ("FFIEC"),  Policy  Statement on Allowance  for Loan and Lease Losses
Methodologies and Documentation  for Banks and Savings  Institutions,  which was
also issued in July 2001.  SAB No. 102 is  applicable  to all  registrants  with
material loan portfolios while the parallel  guidance of the FFIEC is applicable
only to banks and savings  institutions.  The adoption of this  bulletin did not
have a material impact on reported results of operations of the Company.



















                                        8

<PAGE>

<TABLE>
                   CNB FLORIDA BANCSHARES, INC. AND SUBSIDIARY
                             Selected Financial Data

                                                               Six Months Ended June 30,
                                                             2001                     2000
                                                         ------------             -------------
Dollars in thousands except per share information.
---------------------------------------------------------------------------------------------------------

<S>                                                    <C>                      <C>
SUMMARY OF OPERATIONS:
Total interest income                                  $       19,671           $       14,600
Total interest expense                                         (9,868)                  (6,195)
                                                           ----------               ----------
Net interest income                                             9,803                    8,405
Provision for loan losses                                        (900)                    (600)
                                                          -----------               ----------
Net interest income after
      Provision for loan losses                                 8,903                    7,805
Non-interest income                                             2,456                    1,551
Non-interest expense                                           (9,121)                  (7,455)
                                                          -----------               ----------
Income before taxes                                             2,238                    1,901
Income taxes                                                     (785)                    (657)
                                                          -----------               ----------
Net income                                             $        1,453           $        1,244
                                                          ===========               ==========

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

PER COMMON SHARE:
Basic earnings                                         $        0.24            $         0.20
Diluted earnings                                                0.23                      0.20
Book value                                                      7.53                      7.13
Dividends                                                       0.10                      0.10
Actual shares outstanding                                  6,099,376                 6,106,300
Weighted average shares outstanding                        6,096,244                 6,104,910
Diluted weighted average shares outstanding                6,216,274                 6,148,794

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

KEY RATIOS:
Return on average assets                                        0.57%                     0.67%
Return on average shareholders' equity                          6.47                      5.78
Dividend payout                                                41.67                     50.00
Efficiency ratio                                               74.40                     74.88
Total risk-based capital ratio                                  9.24                     14.89
Average shareholders' equity to
  average assets                                                8.89                     11.51
Tier 1 leverage                                                 7.31                     11.08

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

FINANCIAL CONDITION AT PERIOD-END:
Assets                                                 $     576,959            $      398,489
Loans                                                        480,065                   313,127
Deposits                                                     489,476                   329,304
Shareholders' equity                                          45,911                    43,566

---------------------------------------------------------------------------------------------------------
</TABLE>
                                        9

<PAGE>
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS

OVERVIEW

         The  following   analysis  reviews   important  factors  affecting  the
financial  condition and results of operations of CNB Florida  Bancshares,  Inc.
for the six months  ended June 30,  2001 and 2000.  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
Form 10-K for the year ended December 31, 2000. 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  interest
rates,  variances in actual versus projected growth in assets,  loan losses, the
ability to control  expenses,  costs of opening new  branches  and  entering the
First Coast and Gainesville  markets,  competitive  factors and general economic
conditions,  changes in government regulation, the ability to attract and retain
qualified   personnel   and  the   ability  to  attract  new  loan  and  deposit
relationships.   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 six month  period ended June 30, 2001
were $1.5 million,  or $0.23 per diluted  share,  compared to $1.2  million,  or
$0.20 per  diluted  share,  in the first half of 2000.  Net income for the three
month  period  ended June 30, 2001 was  $843,000,  or $0.14 per  diluted  share,
compared to $674,000,  or $0.11 per diluted share, for the comparable  period in
2000.  These results  reflect growth in net interest income and in non- interest
income.  Non-interest  expenses  continue to reflect the  Company's  strategy to
expand the CNB franchise into new markets.  Included in results for a portion of
the first  half of 2001 is the  impact of the  acquisition  of the Lake City and
Live Oak branches of Republic Bank in May 2001. In connection with the purchase,
the Company  acquired  loans and deposits of  approximately  $12 million and $64
million, respectively.

Net Interest Income

         Net interest  income is a major  component of the  Company's net income
and is the  single  largest  source  of  revenue  for the Bank and  consists  of
interest and fee income generated by earning assets,  less interest expense paid
on interest bearing liabilities.  Net interest income for the first half of 2001
was $9.8  million,  compared  to $8.4  million  in the  first  half of 2000,  an
increase of 17%. Loan growth  continued to fuel the increases in interest income
which rose 32%, or $2.5 million, and 35%, or $5.1 million, for the three and six
month  periods  in 2001,  respectively,  compared  to the same  periods in 2000.
Partially  offsetting these increases,  interest expense rose 50% and 59% in the
2001 second  quarter  and first half,  respectively,  from the  comparable  2000
periods.  This increase  reflects the Company's  greater reliance on higher cost
deposits  and  short-term  borrowings  to meet loan  demand  and  mitigated  the
positive impact of loan growth on net interest income.

         Net  interest  margin  declined  to 4.25%  from  4.94%  reflecting  the
increase in borrowing costs  necessary to fund loan growth.  Total earning asset
yields  decreased  to 8.53% in 2001 from  8.59%,  and rates on  interest-bearing
liabilities  increased to 4.96% from 4.42% in 2000. The decline in earning asset
yields is reflective of a drop in interest  rates of 275 basis points during the
first half of 2001.  The higher rate on interest  bearing  liabilities is due to
the Company's  increased  reliance on higher-cost  short term borrowings to meet
loan  demand.  Table 1:  "Average  Balances  - Yields and  Rates"  provides  the
Company's  average  volume of  interest  earning  assets  and  interest  bearing
liabilities for the first half of 2001 and 2000.  Table 1a: "Analysis of Changes
in Interest  Income and  Expense"  indicates  that the  increase in net interest
income  was due  mainly to volume  increases  in the loan  portfolio,  while the
increase in interest expense was due to higher time deposit volumes and rates as
well as higher balances of short-term borrowings.

                                       10
<PAGE>
<TABLE>


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

                                          Six Months Ended June 30, 2001          Six Months Ended June 30, 2000
                                        -------------------------------------   ----------------------------------
                                                     Interest                               Interest
                                        Average     Income or       Average     Average    Income or     Average
                                         Balance      Expense         Rate       Balance     Expense        Rate
                                        ---------   -----------    ----------   ---------  -----------    ---------
                                                                       (dollars in thousands)
<S>                                    <C>           <C>              <C>      <C>           <C>            <C>
ASSETS:
  Federal funds sold                   $    1,154    $      28        4.89%    $    5,417    $    160       5.92%
  Investment securities
    available for sale                     33,128          979        5.96         33,549       1,061       6.34
  Investment securities
    held to maturity                        7,039          215        6.16         10,438         297       5.71
  Loans (1)                               423,274       18,447        8.79        290,303      13,042       9.01
  Interest bearing deposits                   213            2        1.90          1,276          40       6.29
                                          -------       ------      ------        -------     -------     ------

TOTAL EARNING ASSETS                      464,808       19,671        8.53        340,983      14,600       8.59
  All other assets                         44,822                                  34,607
                                          -------                                 -------

TOTAL ASSETS                           $  509,630                              $  375,590
                                          =======                                 =======

LIABILITIES AND
  SHAREHOLDERS' EQUITY:
  NOW and money markets                $  128,930    $   1,940        3.03%    $  106,850    $  1,714       3.16%
  Savings                                  17,535          109        1.25         17,594         122       1.39
  Time deposits                           208,841        6,594        6.37        144,489       4,000       5.55
  Repurchases and federal
     funds purchased                       14,918          359        4.85          6,950         190       5.48
 Short term borrowings                     31,077          866        5.62          5,275         169       6.43
                                          -------       ------      ------        -------      ------     ------
TOTAL INTEREST BEARING
  LIABILITIES                             401,301        9,868        4.96        281,158       6,195       4.42
  Demand deposits                          57,351                                  47,744
  Other liabilities                         5,676                                   3,442
  Shareholders' equity                     45,302                                  43,246
                                          -------                                 -------

TOTAL LIABILITIES AND
  SHAREHOLDERS' EQUITY                 $  509,630                              $  375,590
                                          =======                                 =======
                                                                    ------                                ------
INTEREST SPREAD (2)                                                   3.57%                                 4.17%
                                                                    ======                                ======
                                                        ------                                 ------
NET INTEREST INCOME                                  $   9,803                               $  8,405
                                                        ======                                 ======

NET INTEREST MARGIN (3)                                               4.25%                                   4.94%
                                                                    ======                                =========

-------------------------------------------------------
<FN>
(1) Interest  income on average loans includes loan fee  recognition of $726,000
    and $517,000 in 2001 and 2000,  respectively.
(2) Represents  the average rate earned minus average rate paid.
(3) Represents  net interest  income divided by total earning assets.
</FN>
</TABLE>
                                       11
<PAGE>
<TABLE>
          Table 1a: Analysis of Changes in Interest Income and Expense
                                   (Unaudited)

                                               NET CHANGE JUNE 30,                    NET CHANGE JUNE  30,
                                            2000-2001 ATTRIBUTABLE TO:             1999-2000 ATTRIBUTABLE TO:
                                            --------------------------             --------------------------
                                                                     Net                                    Net
                                            Volume (1)    Rate (2)  Change         Volume (1)   Rate (2)  Change
                                            ----------    --------  ------         ----------   --------  ------
                                                                         (thousands)
<S>                                          <C>       <C>        <C>             <C>           <C>       <C>
INTEREST INCOME:
   Federal funds sold                        $  (125)  $     (7)  $   (132)       $    (251)    $    35   $  (216)
   Investment securities available for sale      (13)       (69)       (82)            (522)        104      (418)
   Investment securities held to maturity        (96)        14        (82)              80          15        95
   Loans                                       5,941       (536)     5,405            4,024          (9)    4,015
   Interest bearing deposits                     (33)        (5)       (38)            (237)         10      (227)
                                              ------    -------    -------         --------       -----     -----
      Total                                    5,674       (603)     5,071            3,094         155     3,249
                                              ------    -------    -------         --------       -----     -----

INTEREST EXPENSE:
   NOW and money markets                         346       (120)       226              307         633       940
   Savings                                         -        (13)       (13)               2          (4)       (2)
   Time deposits                               1,771        823      2,594              327         281       608
   Repurchases and federal funds
     purchased                                   217        (48)       169               22          41        63
   Short term borrowings                         823       (126)       697                -         169       169
                                              ------    -------    -------         --------       -----     -----
      Total                                    3,157        516      3,673              658       1,120     1,778
                                              ------    -------    -------         --------       -----     -----
         Net interest income                 $ 2,517   $ (1,119)  $  1,398        $   2,436     $  (965)  $ 1,471
                                              ======    =======    =======         ========       ======    =====
<FN>
(1)  The volume variance reflects the change in the average balance  outstanding
     multiplied by the actual average rate during the prior period.
(2)  The rate variance reflects the change in the actual average rate multiplied
     by the average balance  outstanding during the prior period.  Changes which
     are not solely due to volume  changes  or solely due to rate  changes  have
     been attributed to rate changes.
</FN>
</TABLE>

Non-Interest Income

         Non-interest  income for the three and six months  ended June 30,  2001
increased  $657,000,  or  84%  and  $905,000,  or  58%,  respectively,  for  the
comparable  periods in 2000. The increase was primarily  attributed to growth in
mortgage loan  originations and the increased  deposit base.  Service charges on
deposit accounts increased $159,000,  or 15% for the first half of 2001 compared
to the same period in 2000.  Other fee income,  which includes credit card fees,
credit life insurance income, safe deposit box fees, fees from loans sold in the
secondary  market,  net  gains and  losses  from  sale of  securities  and other
miscellaneous  fees,  had an  increase  of  $746,000,  or 152% for the first six
months of 2001 compared to the comparable 2000 period.

         Non-interest income,  annualized, as a percentage of average assets was
0.97%  for the six  months  ended  June 30,  2001,  compared  to  0.83%  for the
comparable period in 2000.

Non-Interest Expense

         Non-interest  expenses were $4.7 million and $9.1 million for the three
and six month  periods  ended June 30, 2001  compared  to $3.8  million and $7.5
million  for  the  respective  2000  periods,   an  increase  of  26%  and  22%,
respectively.  Non-interest  expenses reflect the increased costs resulting from
the  opening of the  Mandarin  Branch in  Jacksonville  during the first half of
2001, the relocation during 2000 into new facilities for CNB in Jacksonville and
Gainesville,  operating expenses from the Company's new data processing platform

                                       12
<PAGE>

converted  in late  2000,  expansion  of the Lake  City  Operations  Center  and
increased  commissions  resulting  from  mortgage  originations.  Non-  interest
expense,  annualized, as a percentage of average assets for the six month period
ending June 30, 2001 and 2000 was 3.61% and 3.99%,  respectively.  Salaries  and
employee benefits  increased  $818,000 or 20% to $5.0 million for the first half
of 2001,  compared to $4.2  million for the same period in 2000.  This  increase
reflects  implementation of the Company's business plan to build an organization
structure  supporting  expansion in the First Coast and Gainesville  markets and
increased  commissions resulting from mortgage  originations.  Average full-time
equivalent  employees  increased by 31 during the first half of 2001 as compared
to the same period in 2000.

         Occupancy  expense  (including   premises,   furniture,   fixtures  and
equipment) increased $221,000, or 43% and $378,000, or 37%,  respectively,  over
the  comparable  three and six month periods in 2000.  The increase is primarily
attributable to costs associated with the additional branches, relocation during
2000 into new facilities for CNB in  Jacksonville  and Gainesville and expansion
of the CNB  Operations  Center in Lake City.  During the first half of 2001, the
Bank opened two new  branches,  one in the  Mandarin  area of  Jacksonville  and
another in St. Augustine. The Bank also acquired two branches from Republic Bank
in May 2001 and, in connection with that transaction,  closed an existing branch
in Live Oak.

         Other operating expenses increased $470,000,  or 21%, in the first half
of 2001  compared to the same period in 2000.  The  following  table details the
areas of significance in other operating expenses.

                        Table 2: Other Operating Expenses
                                                  Six Months Ended June 30,
                                                    2001              2000
                                                 ------------     ------------
                                                         (thousands)
         Data processing                         $   492            $   322
         Postage and delivery                        290                268
         Supplies                                    289                205
         Advertising and promotion                   281                305
         Telephone                                   269                271
         Legal and professional                      220                228
         Amortization of intangible assets           141                 90
         Loan expenses                               131                 85
         Administrative                               99                109
         Regulatory fees                              86                 71
         Insurance and bonding                        70                 39
         Dues and subscriptions                       45                 52
         Education expense                            41                 38
         Directors fees                               38                 32
         Other general operating                      28                 89
         Other                                       228                 74
                                                  ------             ------
         Total other operating expenses           $2,748             $2,278
                                                  ======             ======

Income Taxes
         The  Company's  income  tax  expense in  interim  reporting  periods is
determined by estimating the combined  federal and state  effective tax rate for
the year and  applying  such  rate to  interim  pre-tax  income.  The  Company's
estimated effective tax rate for 2001 is approximately 35%.

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

                                       13

<PAGE>

and  demands  for funds on a daily and weekly  basis.  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 $54.4
million and  represented  13% of average total deposits during the first half of
2001,  compared to $55.7  million and 18% for 2000.  Average loans were 103% and
92% of average  deposits  for the six month period ended June 30, 2001 and 2000,
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,  lines for the purchase of federal  funds by the Company
from its principal  correspondent banks. In addition.  the Company has a 364-day
$10 million line of credit with one of its  correspondent  banks. The Company is
also a member of the FHLB and has  access to  short-term  and  long-term  funds.
Outstanding  borrowings  at June 30,  2001  with the  FHLB and  other  financial
institutions were $20.0 million and $5.0 million, respectively.

         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  which 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  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.  Included in the review is
an internal  analysis of the possible impact of changes in interest rates on net
interest income.

         In Table 3, "Rate  Sensitivity  Analysis",  rate  sensitive  assets and
liabilities are shown by maturity, separating fixed and variable interest rates.
The estimated fair value of each instrument category is also shown in the table.
While  these  fair  values  are  based  on  management's  judgment  of the  most
appropriate  factors,  there is no  assurance  that,  were the  Company  to have
disposed of such  instruments  at June 30, 2001, the estimated fair values would
necessarily  have been  achieved at that date,  since  market  values may differ
depending on various circumstances.












                                       14

<PAGE>
<TABLE>

Table 3: Rate Sensitivity Analysis
 June 30, 2001

(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>
Loans
     Fixed rate loans              $  31,641  $  29,785  $  33,830  $  29,112   $  25,097  $  87,975  $ 237,440  $ 237,137
       Average interest rate           8.79%      8.96%      8.84%      8.76%       8.94%      8.14%      8.59%

     Variable rate loans              50,634     32,189     24,840     11,882      17,515    105,565    242,625    242,625
       Average interest rate           7.36%      7.26%      7.54%      7.78%       7.51%      8.09%      7.71%

Investment securities (1)
     Fixed rate investments            4,604         90     17,900      4,337       6,213        758     33,902     34,384
       Average interest rate           5.04%      4.10%      5.64%      5.31%       6.15%      5.40%      5.60%

     Variable rate investments             -          -          -          -           -      1,337      1,337      1,354
       Average interest rate                                                                   6.73%      6.73%

Federal funds sold                       475          -          -          -           -          -        475        475
       Average interest rate           4.90%                                                              4.90%

Other earning assets (2)               3,943          -          -          -           -          -      3,943      4,059
       Average interest rate           6.12%                                                              6.12%
                                     -------   --------    -------   --------     -------   --------   --------   --------

Total interest-earning assets      $  91,297  $  62,064  $  76,570  $  45,331   $  48,825  $ 195,635  $ 519,722  $ 520,034
       Average interest rate           7.67%      8.07%      7.67%      8.17%       8.07%      8.09%      7.96%
                                     =======   ========    =======   ========     =======   ========    =======   ========


INTEREST-BEARING LIABILITIES:

NOW                                $  38,372  $       -  $       -  $       -   $       -  $  56,570  $  94,942  $  94,942
       Average interest rate           3.16%                                                   1.00%      1.87%

Money market (3)                      51,548          -          -          -           -      7,624     59,172     59,172
       Average interest rate           4.24%                                                   3.12%      4.10%

Savings                                    -          -          -          -           -     19,526     19,526     19,526
       Average interest rate                                                                   1.01%      1.01%

CD's $100,000 and over                92,783      5,836        988        308         114          -    100,029     99,442
       Average interest rate           6.07%      6.31%      6.11%      6.42%       6.55%                 6.09%

CD's under $100,000                  131,788     12,356      2,543      1,009         591          -    148,287    147,420
       Average interest rate           5.75%      5.51%      5.58%      5.76%       6.05%                 5.73%

Securities sold under
   repurchase agreements              11,501          -          -          -           -          -     11,501     11,501
       Average interest rate           3.77%                                                              3.77%

Short term borrowings                 25,000          -          -          -           -          -     25,000     25,000
       Average interest rate           4.38%                                                              4.38%
                                     -------   --------    -------   --------     -------   --------   --------   --------

Total interest-bearing liabilities  $350,992  $  18,192  $   3,531  $   1,317   $     705  $  83,720  $ 458,457  $ 457,003
       Average interest rate           5.17%      5.77%      5.73%      5.91%       6.13%      1.20%      4.48%
                                     =======   ========    =======   ========     =======   ========   ========   ========
<FN>
(1)  Securities  available for sale are shown at their amortized cost, excluding
     market value adjustment for unrealized gains of $615,000.
(2)  Represents interest bearing deposits with other banks, Federal Reserve Bank
     Stock, Federal Home Loan Bank Stock and other marketable equity securities.
(3)  All Money Market accounts $25,000 and over and 30% of Money Market accounts
     under $25,000 have been designated as maturing within one year.
</FN>
</TABLE>
                                       15
<PAGE>


       Core deposits,  which  represent all deposits other than time deposits in
excess  of  $100,000,  were 80% of total  deposits  at June 30,  2001 and 81% at
December 31, 2000.  The Bank closely  monitors its reliance on time  deposits in
excess of $100,000, which are generally considered less stable and less reliable
than core  deposits.  Table 11,  below,  sets forth the amounts of time deposits
with balances of $100,000 or more that mature within indicated periods. The Bank
does not, nor has it ever, solicited brokered deposits.

             Table 4: Maturity of Time Deposits of $100,000 or More
                                  June 30, 2001
                             (dollars in thousands)
                                                             Amount

            Three months or less                           $ 20,783
            Three through six months                         28,274
            Six through twelve months                        43,726
            Over twelve months                                7,246
                                                            -------
            Total                                          $100,029
                                                            =======


EARNING ASSETS

Loans
         During the first half of 2001,  average  loans were $423.3  million and
were 103% of average  deposits,  compared  to $290.3  million  and 92% for 2000.
Total loans have  increased by $99.2  million,  or 26%, since December 31, 2000.
Loan growth has  occurred in all of the  portfolios,  with the most  significant
increase  in  commercial,  financial  and  agricultural  loans and real estate -
mortgage loans.  Average loans as a percent of average earning assets  increased
to 91% for the first half of 2001,  compared  to 85% for the first half of 2000.
The following  table reflects the composition of the Company's loan portfolio as
of June 30, 2001 compared to December 31, 2000.


                  Table 5: Loan Portfolio Composition
                                                   June 30,         December 31,
                                                     2001               2000
                                                 -----------        ------------
                                                          (thousands)
    Commercial, financial and agricultural      $   238,986      $    192,540
    Real estate - mortgage                          155,218           120,663
    Real estate - construction                       46,919            33,648
    Installment and consumer                         38,942            33,970
                                                   --------          --------

    Total loans, net of unearned income             480,065           380,821
    Less: allowance for loan losses                  (4,558)           (3,670)
                                                   --------          --------

    Net loans                                   $   475,507      $    377,151
                                                   ========          ========


         The following table sets forth the maturity  distribution  for selected
components of the Company's  loan  portfolio on June 30, 2001.  Demand loans and
overdrafts  are reported as due in one year or less,  and loan maturity is based
upon scheduled principal payments.


                                       16

<PAGE>
<TABLE>
                  Table 6: Maturity Schedule of Selected Loans
                                  June 30, 2001

                                               0-12      1-5              Over 5
                                              Months     Years            Years       Total
                                             --------  ---------       ----------   ---------
                                                                (thousands)

<S>                                         <C>        <C>            <C>          <C>
Commercial, financial and agricultural      $  46,677  $  101,792     $   90,517   $  238,986
Real estate - construction                     19,128      27,791              -       46,919
All other loans                                16,470      74,667        103,023      194,160
                                              -------     -------        -------      -------

Total                                       $  82,275  $  204,250     $  193,540   $  480,065
                                              =======     =======        =======      =======

Fixed interest rate                         $  31,641  $  117,824     $   87,975   $  237,440
Variable interest rate                      $  50,634  $   86,426     $  105,565   $  242,625
</TABLE>

         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
three largest  concentration  categories are: Land Development,  Commercial Real
Estate and Professional.

Loan Quality

          The  allowance  for loan losses  represents  a reserve  for  potential
losses in the loan  portfolio.  The adequacy of the allowance for loan losses is
evaluated  periodically  based  on a review  of all  significant  loans,  with a
particular  emphasis  on past  dues and other  loans  that  management  believes
require attention.  The provision for loan losses is a charge to earnings in the
current  period to maintain the allowance for loan losses at an adequate  level.
Loans are charged against the allowance when it is recognized that collection of
the principal is unlikely.  Management  considers the allowance  appropriate and
adequate to cover  potential  losses  inherent in the loan  portfolio;  however,
management's judgment is based upon a number of assumptions about future events,
which are believed to be reasonable, but which may or may not prove to be valid.
Thus,  there can be no assurance  that  charge-offs  in future  periods will not
exceed  the  allowance  for loan  losses  or that  additional  increases  in the
allowance for loan losses will not be required. The allowance for loan losses on
June 30,  2001,  was 0.95% of total  loans,  compared to 1.02% at June 30, 2000.
Table 7: "Allocation of Allowance for Loan Losses",  set forth below,  indicates
the specific reserves allocated by loan type.

                Table 7: Allocation of Allowance for Loan Losses

                                     June 30,                December 31,
                                       2001                      2000
                              -----------------------   ------------------------
                                        Percent of                  Percent of
                                       Loans in Each               Loans in Each
                                        Category to                 Category to
                              Amount   Total Loans        Amount   Total Loans
                              ------   -------------    ---------  -------------
                                            (dollars in thousands)
 Commercial, financial
    and agricultural         $  2,915         50%       $  2,607            50%
 Real estate - mortgage           463         32%            293            32%
 Real estate- construction         25         10%             15             9%
 Consumer                       1,064          8%            734             9%
 Unallocated                       91          -              21             -
                              -------     ------         -------        ------
 Total                       $  4,558        100%       $  3,670           100%
                              =======     ======         =======        ======

                                       17
<PAGE>

         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 increased $600,000 from December 31, 2000
to $2.1 million. Non-performing assets as a percentage of total assets increased
to 0.36% on June 30, 2001 from 0.32% on December 31, 2000.

                         Table 8: Non-Performing Assets

                                                  June 30,       December 31,
                                                    2001             2000
                                                 ----------      -----------
                                                    (dollars in thousands)
   Non-accrual loans                              $  1,048        $    579
   Past due loans 90 days or
      more and still accruing                        1,006             840
   Other real estate owned
      and repossessions                                 20              56
                                                    ------          ------
   Total non-performing assets                    $  2,074        $  1,475
                                                    ======          ======

   Percent of total assets                           0.36%           0.32%

<TABLE>

                 Table 9: Activity in Allowance for Loan Losses
                                                                             June 30,
                                                                   2001                  2000
                                                                 ----------            ----------
                                                                       (dollars in thousands)
  <S>                                                           <C>                   <C>
  Allowance for loan loss balance applicable to:
  Balance at beginning of year                                  $    3,670            $    2,671
  Allowance acquired by acquisition                                    110                     -
  Loans charged-off:
     Commercial, financial and agricultural                             50                    15
     Real estate, mortgage                                              34                    11
     Real estate, construction                                           -                     -
     Consumer                                                          174                   159
                                                                 ---------             ---------
        Total loans charged-off                                       (258)                 (185)
  Recoveries on loans previously charged-off:
     Commercial, financial and agricultural                             48                    24
     Real estate, mortgage                                              21                     -
     Real estate, construction                                           -                     -
     Consumer                                                           67                    91
                                                                 ---------             ---------
        Total loan recoveries                                          136                   115
                                                                 ---------             ---------
          Net loans charged-off                                       (122)                  (70)
                                                                 ---------             ---------

  Provision for loan losses charged to expense                         900                   600
                                                                 ---------             ---------
  Ending balance                                                $    4,558            $    3,201
                                                                 =========             =========

  Total loans outstanding                                       $  480,065            $  313,127
  Average loans outstanding                                     $  423,274            $  290,303

  Allowance for loan losses to loans outstanding                     0.95%                 1.02%
  Net charge-offs to average loans outstanding, annualized           0.06%                 0.05%

</TABLE>
                                       18
<PAGE>



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 $39.3  million at June 30,  2001,  a  decrease  of 3% from $40.7
million at the end of 2000.

         Securities    are    classified   as   either    held-to-maturity    or
available-for-sale.  Securities  available-for-sale,  which  made  up 84% of the
total  investment  portfolio  at June 30,  2001  had a value  of $33.1  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 tax, as a separate  component of shareholders'  equity. At
June 30, 2001,  shareholders' equity included a net unrealized gain of $385,000,
compared to a $33,000 net unrealized loss at December 31, 2000.

         The  Company  invests  primarily  in direct  obligations  of the United
States,  obligations  guaranteed  as to the principal and interest by the United
States and  obligations  of  agencies in the United  States.  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.

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














                                       19

<PAGE>

<TABLE>

                           Table 10: Maturity Distribution of Investment Securities (1)
                                                   June 30, 2001

(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                      $          -   $            -          $      1,500   $      1,511
                                          -----------    -------------           -----------    -----------
Total U.S. Treasury                                 -                -                 1,500          1,511

 U.S. Government Agencies
 and Corporations:
   One year or less                                 -                -                 3,014          3,021
   Over one through five years                  6,213            6,205                22,000         22,425
                                          -----------    -------------           -----------    -----------
Total U.S. Government Agencies                  6,213            6,205                25,014         25,446
 and Corporations

Obligations of State and Political
 Subdivisions:
   One year or less                                 -                -                    90             90
   Over one through five years                      -                -                   327            331
   Over ten years                                   -                -                   608            642
                                          -----------    -------------           -----------    -----------
Total Obligations of State and                      -                -                 1,025          1,063
 Political Subdivisions

Mortgage-Backed Securities (2):
   Over five through ten years                      -                -                   348            350
   Over ten years                                   -                -                 1,139          1,155
                                          -----------    -------------           -----------    -----------
Total Mortgage-Backed Securities                    -                -                 1,487          1,505

Other Securities:
   Over ten years (3)                               -                -                 3,423          3,539
                                          -----------    -------------           -----------    -----------
Total Other Securities                              -                -                 3,423          3,539
                                          -----------    -------------           -----------    -----------
Total Securities                         $      6,213   $        6,205          $     32,449   $     33,064
                                          ===========    =============           ===========    ===========

<FN>
(1)  All securities,  excluding Obligations of State and Political Subdivisions,
     are taxable.
(2)  Represents  investments in mortgage-backed  securities which are subject to
     early repayment.
(3)  Represents  investment  in Federal  Reserve Bank and Federal Home Loan Bank
     stock and other marketable equity securities.
</FN>
</TABLE>
<TABLE>
             Table 11: Weighted Average Yield by Range of Maturities
                                   June 30, 2001   December 31, 2000   June 30, 2000
                                   -------------   -----------------   -------------
<S>                                    <C>               <C>                <C>
One Year or Less                       5.16%             6.49%              6.26%
More than One through Five Years       6.06%             6.00%              6.02%
More than Five through Ten Years       5.80%             6.18%              6.17%
More than Ten Years (1)                6.63%             6.45%              6.18%
<FN>
(1)  Represents adjustable rate mortgage-backed securities which are repriceable
     within one year.
</FN>
</TABLE>
                                       20
<PAGE>



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


FUNDING SOURCES

Deposits
         The Bank does not rely on purchased or brokered deposits as a source of
funds.  Instead,  competing  for  deposits  within its market area serves as the
Bank's  fundamental tool in providing a source of funds to be invested primarily
in loans.  The following  table sets forth certain  deposit  categories  for the
periods ended June 30, 2001 and December 31, 2000.

                            Table 12: Total Deposits

                                                  June 30,      December 31,
                                                    2001            2000
                                                 -----------    ------------
                                                          (thousands)
         Non-interest bearing:
                 Demand checking                $   67,520        $   52,082
         Interest bearing:
                 NOW checking                       94,942            74,589
                 Money market checking              59,172            38,797
                 Savings                            19,526            16,479
                 Certificates of deposit           248,316           185,739
                                                  --------          --------

         Total deposits                         $  489,476        $  367,686
                                                  ========          ========



CAPITAL RESOURCES

         Shareholders' equity at June 30, 2001 was $45.9 million, as compared to
$44.6  million at December  31,  2000.  During the first and second  quarters of
2001,  the Board of  Directors  declared  dividends  totaling  $0.10 per  share,
consistent  with 2000. At June 30, 2001,  the Company's  common stock had a book
value of $7.53 per share compared to $7.32 per share at December 31, 2000.

         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  judgements  by the  regulators
about component risk weightings and other factors.

         Quantitative  measures  as defined by  regulation  and  established  to
ensure capital  adequacy require the Bank to maintain minimum amounts and ratios
of Total and Tier 1  capital  to  risk-weighted  assets  and Tier 1  capital  to
average  assets.  If such  minimum  amounts  and  ratios  are  met,  the Bank is
considered  "adequately  capitalized."  If a bank  exceeds the  requirements  of
"adequately  capitalized" and meets even more stringent minimum standards, it is
considered  to be  "well  capitalized."  As of June 30,  2001,  the Bank met all
capital adequacy requirements to which it is subject.


                                       21

<PAGE>



         At June  30,  2001  and  2000,  the  Company's  Tier 1  capital,  total
risk-based capital and Tier 1 leverage ratios were are as follows:

<TABLE>

                            Table 13: Capital Ratios

                                          June 30,            Well-Capitalized   Regulatory
                                     2001         2000          Requirements       Minimums
                                  ----------  ------------    ----------------   ----------
<S>                                   <C>          <C>               <C>           <C>
Risk Based Capital Ratios:
     Tier 1 Capital Ratio             8.3%         13.9%             6.0%          4.0%

     Total Capital to
       Risk-Weighted Assets           9.2%         14.9%            10.0%          8.0%

Tier 1 Leverage Ratio                 7.3%         11.1%             5.0%          4.0%
</TABLE>



            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 (Securities Act
Release No. 7386) to clarify and expand  existing  requirements  for disclosures
about  derivatives  and market risks inherent in derivatives and other financial
instruments.  No derivative  financial  instruments are held by the Company, but
other  financial  instruments,  which  include  investments,  loans and  deposit
liabilities are included in the Company's  balance sheet.  The release  requires
quantitative and qualitative  disclosures  about market risk. See section titled
"Liquidity  and  Interest  Rate  Sensitivity"  for  further  discussion  on  the
Company's management of interest rate risk.

         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 judgement of the most appropriate factors, there
is no assurance that,  were the Company to have disposed of such  instruments at
June 30, 2001, the estimated fair values would necessarily have been achieved at
that date,  since market values may differ  depending on various  circumstances.
The estimated  fair values at June 30, 2001 would not  necessarily be considered
to apply at subsequent dates.


                                       22

<PAGE>


                                     PART II
                                OTHER INFORMATION

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

         Item 2.  Changes in Securities - Not applicable.

         Item 3.  Defaults Upon Senior Securities - Not applicable.

         Item 4.  Submission of Matters to a Vote of Security Holders - On May
                  16,   2001,   the  Company   held  its  Annual   Meeting  of
                  Shareholders,  whereby  the Board of  Directors  (Thomas  R.
                  Andrews,  Audrey S.  Bullard,  Raymon Land,  Sr.,  Marvin H.
                  Pritchett,  Halcyon E. Skinner,  William  Streicher and K. C.
                  Trowell) all were re-elected.  The  following  summarizes all
                  matters submitted  and voted upon at  this annual meeting:

         (a)      The following  directors were elected to serve on the Board of
                  Directors.  These individuals served on the Board of Directors
                  prior to the Annual Meeting.  The number of votes cast were as
                  follows:

                                                     Against/      Abstentions/
                                              For    Withheld   Broker Non-Votes
                                         ---------   --------   ----------------
                  Thomas R. Andrews      4,892,028     57,890               0
                  Audrey S. Bullard      4,892,028     57,890               0
                  Raymon Land, Sr.       4,892,028     57,890               0
                  Marvin H. Pritchett    4,892,028     57,890               0
                  Halcyon E. Skinner     4,892,028     57,890               0
                  William Streicher      4,892,028     57,890               0
                  K. C. Trowell          4,873,468     76,450               0

         (b)      The shareholders  approved the proposal to amend the Company's
                  Performance Based Incentive Plan. The amendment  increases the
                  number of  shares  which may be  granted  under the  long-term
                  incentive  component of the Plan from 540,000 to 800,000.  The
                  number of votes cast were as follows:

                                                      Against/     Abstentions/
                                              For     Withheld  Broker Non-Votes
                                         ---------    --------  ----------------
                                         4,823,116     125,312          1,490

         Item 5.  Other Information - Not applicable.

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

         (a)      Exhibits:

                  None

         (b)      Reports on Form 8-K:

                  None



                                       23

<PAGE>



                                   SIGNATURES



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

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


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

                                Date:   August 9, 2001














                                       24