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

                                    FORM 10-K
(Mark One)
[X]       ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
          SECURITIES EXCHANGE ACT OF 1934.

                   For the fiscal year ended December 31, 2000

                                       OR

[ ]       TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
          SECURITIES EXCHANGE ACT OF 1934.

                         Commission File Number 0-24433

                          POINTE FINANCIAL CORPORATION
                          ----------------------------
             (Exact name of Registrant as specified in its charter)

          Florida                                             65-0451402
          -------                                             ----------
(State or other jurisdiction of                             (I.R.S. Employer
incorporation or organization)                            Identification Number)

21845 Powerline Road, Boca Raton, Florida                        33433
-----------------------------------------                        -----
(Address of principal executive offices)                     (Zip Code)

       Registrant's telephone number, including area code: (561) 368-6300

Securities registered pursuant to Section 12(b) of the Act:  None.

Securities registered pursuant to Section 12(g) of the Act:  Common Stock, $.01
                                                             par value

         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, and (2) has been subject to such filing
requirements for the past 90 days.       Yes   X      No
                                             -----       -----

         Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.

         The aggregate market value of the Common Stock held by non-affiliates
of the Registrant, based upon the average bid and asked prices as quoted on the
NASDAQ Stock Market on March 14, 2001, was $14,824,737*.

         The Registrant had 2,030,053 shares of Common Stock outstanding on
March 14, 2001.


                       DOCUMENTS INCORPORATED BY REFERENCE

         The Registrant's Definitive Proxy Statement for its 2000 Annual Meeting
of Stockholders will be filed with the Securities and Exchange Commission not
later than 120 days after the end of the fiscal year covered by this Form 10-K
pursuant to Rule G(3) of the General Instructions for Form 10-K. Information
from such Definitive Proxy Statement will be incorporated by reference into Part
III, Items 10, 11, 12 and 13 hereof.

         * Based on reported beneficial ownership of all directors and executive
         officers of the Registrant; this determination does not, however,
         constitute an admission of affiliated status for any of these
         individual stockholders.


<PAGE>


                                      INDEX

PART I                                                                     Page
                                                                           ----
Item I.  Description of Business

         Business                                                           3
         Investment Banking Joint Venture                                   4
         Pending Acquisition                                                4
         Market Area and Competition                                        4
         Market Risk                                                        4
         Employees                                                          5
         Year 2000 Complianc                                                5
         Forward-Looking Statements                                         5

Item 2.  Properties                                                         6

Item 3.  Legal Proceedings                                                  6

Item 4.  Submission of Matters to a Vote of Security Holders                6

PART II

Item 5.  Market for Registrant's Common Equity and Related
           Stockholder Matters                                              7

Item 6.  Selected Financial Data                                            8-9

Item 7.  Management's Discussion and Analysis of Financial Condition
                           and Results of Operations                      10-28

Item 7A. Quantitative and Qualitative Disclosure About Market Risk           29

Item 8.  Financial Statements and Supplementary Data
           (See Index - Page 29)                                             29

Item 9.  Change In and Disagreements with Accountants on
                           Accounting and Financial Disclosure               30

PART III

Item 10. Directors and Executive Officers of the Registrant                  30

Item 11. Executive Compensation                                              31

Item 12. Security Ownership of Certain Beneficial Owners and Management      31

Item 13. Certain Relationships and Related Transactions                      31

PART IV

Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K  32-33

Supplemental Information                                                     34

SIGNATURES                                                                   35

                                       2
<PAGE>

                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS

Business

Pointe Financial Corporation, a Florida corporation, is a bank holding company
headquartered in Boca Raton. Pointe Financial Corporation's ("Pointe" or the
"Company") fundamental business consists of operating its commercial bank
subsidiary, Pointe Bank ("the Bank"), a Florida state chartered commercial bank.
At December 31, 2000, the Company has total assets of $244.508 million and
stockholders equity of $26.730 million.

As a bank holding company registered under the Bank Holding Company Act (BHCA),
the Company was subject to the regulation and supervision of the Board of
Governors of the Federal Reserve System ("FRB"). The Company is required to file
with the FRB annual reports and other information regarding its business
operations and those of its subsidiaries.

There are a number of obligations and restrictions imposed on bank holding
companies and their depository institution subsidiaries by law and regulatory
policy that are designed to minimize potential loss to the depositors of such
depository institutions and the FDIC insurance funds in the event the depository
institution becomes in danger of default. Under a policy of the FRB with respect
to bank holding company operations, a bank holding company is required to serve
as a source of financial strength to its subsidiary depository institutions and
to commit resources to support such institutions in circumstances where it might
not do so absent such policy. The FRB also has the authority under the BHCA to
require a bank holding company to terminate any activity or to relinquish
control of a non-bank subsidiary upon the FRB's determination that such activity
or control constitutes a serious risk to the financial soundness and stability
of any bank subsidiary of the bank holding company.

The BHCA has been substantially amended by the Gramm-Leach-Bliley Financial
Modernization Act of 1999 (the "Modernization Act"). The portion of the
Modernization Act affecting the powers of the Company became effective March 13,
2000. Prior to the Modernization Act, the BHCA prohibited a bank holding
company, with certain limited exceptions, from:

         (i)      Acquiring or retaining direct or indirect ownership or
                  control of more than 5% of the outstanding voting stock of any
                  company which is not a bank or bank holding company;

         (ii)     Engaging directly or indirectly in activities other than
                  those of banking, managing or controlling banks, or performing
                  services for its subsidiaries, unless such non-banking
                  business is determined by the FRB to be so closely related to
                  banking or managing or controlling banks as to be properly
                  incident thereto.

The Modernization Act, among other things:

         Allows bank holding companies meeting management, capital and Community
         Reinvestment Act standards to elect the status of financial holding
         company and thereafter engage in a substantially broader range of
         non-banking activities, including insurance underwriting and making
         merchant banking investments in commercial and financial companies;

         Allows insurers and other financial services companies to acquire banks
         or bank holding companies;

         Removes various restrictions that currently apply to bank holding
         company ownership of securities firms and mutual fund advisory
         companies; and

         Establishes the overall regulatory structure applicable to bank holding
         companies that also engage in insurance and securities operations.

The Company filed a declaration with the Federal Reserve Bank to become a
financial holding company under the Modernization Act. The Board of Governors of
the Federal Reserve System advised Pointe Financial that its election to become
a financial holding company was effective on March 13, 2000.

The Company was incorporated under the laws of the State of Florida on September
29, 1993 for the dual purpose of serving as a holding company for Pointe Federal
Savings Bank, a federally chartered thrift (the "Thrift"), and to facilitate the
acquisition of the Bank, then known as Flamingo Bank, in mid-1994. Both the Bank
and the Thrift were established in the mid-1980's. The Thrift, headquartered in
Boca Raton, had been a mortgage banking thrift highly focused on residential
mortgage lending. The Bank had focused on small business commercial lending,
with emphasis on originating Small Business Administration ("SBA") guaranteed
loans. After the acquisition of the Bank in mid-1994, the Company had been both
a bank holding company (subject to regulation by the FRB and a thrift holding
company (subject to regulation by the Office of Thrift Supervision (the "OTS")).
This was a very complex regulatory environment for the Company. The Company
streamlined its operations through the merger in April 1997 of the Thrift into
the Bank. As a result of the merger of the Thrift into the Bank, the Company is
no longer subject to regulation by the OTS, thus the merger allowed the Company
to alleviate some of its regulatory burdens without negatively impacting its
ability


                                       3
<PAGE>

to service its customers. On June 12, 1998 the Company completed an
initial public offering issuing 869,565 shares of its common stock. The proceeds
totaled $12.076 million of which $6.000 million was invested in the Bank; the
remainder was retained by the Company for general corporate purposes.

The Company's principal business, conducted through the Bank, is making
commercial, consumer and real estate loans. Attracting deposits from the general
public, along with utilizing Federal Home Loan Bank advances and other
borrowings, are the primary sources of funds used to make these loans, and to a
lesser extent, purchase security investments. The Bank conducts business through
its five full service facilities located in Palm Beach, Broward and Miami-Dade
counties. The Company derives revenues principally from interest income earned
on loans and securities, fee income associated with loans serviced and
originated, service charges on depository accounts, and the sale of assets
designated as available for sale.

Investment Banking Joint Venture

In July, 2000, the Company formed Pointe Capital, LLC an Investment Banking
Joint Venture with First Integrated Capital. Pointe Capital offers Investment
Banking services to customers who are overlooked by larger investment banking
firms. Pointe Capital had negligible effect on the Company's performance during
2000.

Pending Acquisition

On January 4, 2001, the Company has entered into a definitive agreement with
Republic Bank, headquartered in St. Petersburg, Florida, to acquire their
banking offices located in Miami-Dade County. The branch offices have a combined
deposit base of approximately $57.2 million. In addition, Pointe Bank will
acquire approximately $6.5 million of Consumer Loans related to the Miami-Dade
offices and acquire approximately $25.0 million of Commercial Real Estate Loans
originated by Republic. The acquisition is expected to close in the first half
of 2001 pending regulatory approvals and satisfaction of other customary closing
conditions.

Market Area and Competition

The financial services industry in which the Company operates is highly
competitive. The Bank competes with national and state banks, savings and loan
associations and credit unions for loans and deposits. In addition, the Bank
competes with other providers of financial services, from both inside and
outside Florida, including finance companies, institutional buyers of commercial
paper, money market funds, brokerage firms, investment companies, insurance
companies, insurance agencies and governmental agencies. These competitors are
actively engaged in marketing various types of loans, commercial paper,
short-term obligations, investments, insurance and other products and services.
The Company anticipates that the intensity of competition among financial
institutions will be increased with the provisions in the Modernization Act. The
Modernization Act permits banks, securities firms, and insurance companies to
affiliate which could then serve its customers' varied financial needs through a
single corporate structure. The Company has become a financial holding company
in order to take advantage of the opportunities afforded under the Modernization
Act.

The consolidation of the financial services industry has continued to create
opportunities and challenges for the Company. Mergers among institutions have
disrupted many customer relationships and created opportunities for the Bank to
acquire new customers. The Bank's objective is to compete for deposits and loans
by offering the customers a higher level of personal service, together with a
wide range of products offered at competitive rates. Management continues to
evaluate market needs and products to meet those needs, which would also allow
Pointe to control the growth of its assets and liabilities.

Market Risk

Market risk is the uncertainty of loss from adverse changes in market prices and
rates. The Company's market risk arises primarily from interest-rate risk
inherent in its lending and deposit taking activities. To that end, management
actively monitors and manages its interest-rate risk exposure. The measurement
of market risk associated with financial instruments is meaningful
only when all related and offsetting on- and off-balance-sheet
transactions are aggregated, and the resulting net positions are identified.
Disclosures about the fair value of financial instruments, which reflect changes
in market prices and rates, can be found in Note 9 of Notes to Consolidated
Financial Statements.

The Company's primary objective in managing interest-rate risk is to minimize
the adverse impact of changes in interest rates on the bank's net interest
income and capital, while adjusting the company's asset-liability structure to
obtain the maximum yield-cost spread on that structure. The Company relies
primarily on its asset-liability structure to control interest-rate risk.
However, a sudden and substantial increase or decrease in interest rates may
impact the company's earnings, to the extent that the interest rates borne by
assets and liabilities do not change at the same speed, to the same extent, or
on the same basis. The Company does not engage in trading activities.


                                       4
<PAGE>

Employees

As of December 31, 2000, the Company employed 79 employees of which 74 were
full-time and 5 part-time, including 3 executive officers. The company's
employees are not represented by a collective bargaining group, and the Company
considers its relations with its employees to be good. The Company provides
employees with benefits customary in the banking industry, which include major
medical insurance, group term life insurance, dental insurance, long term
disability insurance, a 401(k) plan, and vacation and sick leave.

Year 2000 Compliance

The Company's operating and financial systems have been found to be compliant
with the year 2000 issue. The "Y2K problem" has not adversely affected the
Company's operations nor does management expect that it will. The most
significant vendor to the Bank, which provides the software support for the
in-house system, Information Technology, Inc., has proven compliant.

Forward-Looking Statements

When used in this Form 10-K or future filings by the Company with the Securities
and Exchange Commission, in the Company's press releases or other public or
shareholder communications, or in oral statements made with the approval of an
authorized executive officer, the word or phrases "will likely result",
"expect", "will continue", "anticipate", "estimate", "project", "believe" and
similar expressions are intended to identify "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995. The Company
wishes to caution readers not to place undue reliance on any such
forward-looking statements, which speak only as of the date made, and to advise
readers that various factors, including general economic factors and conditions,
changes in levels of market interest rates, credit risks of lending activities,
competitive and regulatory factors, and expansion strategies could affect the
Company's financial performance and could cause the Company's actual results for
future periods to differ materially from those anticipated or projected. The
Company does not undertake, and specifically disclaims any obligation, to
publicly release the result of any revisions which may be made to any
forward-looking statements to reflect the occurrence of anticipated or
unanticipated events or circumstances after the date of such statements.




                                       5
<PAGE>

ITEM 2.  PROPERTIES

The Bank conducts its business through its main office and four branch offices.
The following table sets forth certain information regarding the Bank's office
properties:
<TABLE>
<CAPTION>

                                                                                           Book Value
                                                                                          Of Leasehold
                                                                                          Improvements
                                 Date                                  Book               and Furniture
                              Acquired/       Lease Expiration     Value of Land           Fixtures and
                               Leased              and             and building at        Equipment at       Square
Location                  December 31, 2000    Renewal Terms      December 31, 2000     December 31, 2000    Footage
--------                  -----------------    -------------      -----------------     -----------------    -------
                                                                 (Dollars in thousands)
<S>                            <C>             <C>                      <C>                     <C>           <C>
Main Office (1)
21845 Powerline Road                           08/31/2002
Boca Raton, Florida 33433      1992            1 - 5 year period        $   -                   $929          18,929

Pembroke Pines (1)
One S.W. 129th Avenue
Pembroke Pines,                                02/28/2006
Florida 33027                  1994                -                        -                    130           5,719

Aventura (1)
2690 N.E. 203rd Street                         07/31/2002
Aventura, Florida 33180        2000                -                        -                     33           3,050

Boca Raton
19645 State Road 7
Boca Raton, Florida 33498      1998                -                      541                    113           3,200

Ocean Ridge (1)                1999            05/31/2004                   -                    114           2,500
5112 N. Ocean Boulevard                        1 - 5 year period
Ocean Ridge, Florida 33435

Future branch location:
Coral Springs (2)
4697 State Road 7              1999                -                      581                    401           3,000
Coral Springs, Florida  33067
</TABLE>

(1) Leased branch office
(2) During 1999, the Company purchased vacant land for a branch site in Coral
Springs, Florida. Construction will be completed and the branch open by
end of first quarter of 2001.

The branch offices to be acquired from Republic Bank are not reflected in the
above table.

The Bank owns and operates personal computers, teller terminals and associated
equipment. At December 31, 2000, such equipment had a net book value of
$439,019, included above.

ITEM 3.    LEGAL PROCEEDINGS

The Company and the Bank are parties to various legal proceedings in the
ordinary course of business. Management does not believe that there is any
pending or threatened proceeding against the Company and the Bank which, if
determined adversely, would have a material adverse effect on the business,
results of operations, or financial position of the Company or the Bank.

ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of the stockholders during the fourth
quarter of the fiscal year ended December 31, 2000, through the solicitation of
proxies or otherwise.

                                       6
<PAGE>

                                     PART II

ITEM 5.    MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
           MATTERS

Market Price and Dividends

(a) The common stock of the Company, par value $.01 per share, has been traded
on the Nasdaq National Market System under the symbol "PNTE" since June 12,
1998. Prior to June 12, 1998 there was no established public trading market for
the Company's common stock. The following table sets forth the high and low bids
for the common stock for the periods indicated as reported by Nasdaq.
<TABLE>
<CAPTION>
                                                                             Year Ended
                                            ---------------------------------------------------------------------------
                                               December 31, 2000          December 31, 1999          December 31, 1998
                                            ---------------------------------------------------------------------------
                                                High        Low            High      Low             High           Low

<S>                                         <C>            <C>         <C>          <C>           <C>             <C>
          Quarter ended March 31            $  9.500       8.000       $  12.250    9.750         $   N/A           N/A
          Quarter ended June 30                9.375       8.750          11.250    9.375            15.875       14.625
          Quarter ended September 30           9.500       8.438          11.250   10.313            15.375       11.375
          Quarter ended December 31           10.000       8.000          10.563    7.250            11.000        7.625
</TABLE>

Currently the Company has five market makers in its common stock:
          Keefe, Bruyette & Woods, Inc.                McConnell Budd & Downes
          Advest, Inc.                                 Instinet Corporation
          Spear, Leeds & Kellogg

As of December 31, 2000 there were 2,022,227 common shares issued and
outstanding held by approximately 124 shareholders of record and 338 beneficial
shareholders, not including persons or entities where stock is held in nominee
or "street" name through various brokerage firms or banks.

The following table sets forth cash dividends paid during the years ended 2000
and 1999.

                          2000                                   1999
               ----------------------------          ---------------------------
               Quarter Ended       Dividend          Quarter Ended     Dividend
               ----------------------------          ---------------------------
               March 31            $  .05            March 31          $   --
               June 30             $  .05            June 30           $  .05
               September 30        $  .05            September 30      $  .05
               December 31         $  .05            December 31       $  .05

Future payments of dividends are subject to determination and declaration by the
Board of Directors. See Note 18 to the Audited Consolidated Financial Statements
for discussion of restrictions on dividend payments.




                                       7
<PAGE>


ITEM 6.    SELECTED FINANCIAL DATA

                             SELECTED FINANCIAL DATA
                (Dollars in thousands, except per share figures)

<TABLE>
<CAPTION>

                                                                      At December 31,
                                                  ----------------------------------------------------
                                                      2000       1999       1998       1997       1996
                                                  --------   --------   --------   --------   --------

<S>                                               <C>         <C>        <C>        <C>        <C>
Cash and cash equivalents .....................   $  7,616      6,909      3,471      2,575      6,663
Securities ....................................     56,631     48,389     52,989     32,079     42,790
Loans .........................................    173,129    150,852    128,005    105,653     90,973
Loans held for sale ...........................        719      2,696        617      4,443      4,396
All other assets ..............................      6,413      4,810      4,193      3,090      6,436
                                                  --------   --------   --------   --------   --------

    Total assets ..............................   $244,508    213,656    189,275    147,840    151,258
                                                  ========   ========   ========   ========   ========

Deposits ......................................   $161,136    146,176    141,212    124,995    112,498
Other borrowings ..............................     53,067     40,454     18,446      6,191     23,746
All other liabilities .........................      3,575      2,443      2,582      2,809      2,593
Stockholders' equity ..........................     26,730     24,583     27,035     13,845     12,421
                                                  --------   --------   --------   --------   --------

    Total liabilities and stockholders' equity    $244,508    213,656    189,275    147,840    151,258
                                                  ========   ========   ========   ========   ========

                                                                 Year Ended December 31,
                                                  ----------------------------------------------------
                                                      2000       1999       1998       1997       1996
                                                  --------   --------   --------   --------   --------

Total interest income .........................   $ 18,545     15,044     13,113     11,932     12,186
Total interest expense ........................      9,305      6,904      6,498      6,329      7,616
                                                  --------   --------   --------   --------   --------


Net interest income ...........................      9,240      8,140      6,615      5,603      4,570
Provision for loan losses .....................        685        610        950         80        185
                                                  --------   --------   --------   --------   --------


Net interest income after provision
    for loan losses ...........................      8,555      7,530      5,665      5,523      4,385

Noninterest income ............................      1,092      1,131      1,650      1,412      2,434
Noninterest expense ...........................      7,185      6,720      5,631      5,471      6,847
SAIF recapitalization assessment (1) ..........         --         --         --         --        926
                                                  --------   --------   --------   --------   --------


Earnings (loss) before income taxes ...........      2,462      1,941      1,684      1,464       (954)

Income taxes (benefit) ........................        821        718        631        550       (355)

Extraordinary item (4) ........................         78         --         --         --         --
                                                  --------   --------   --------   --------   --------

Net earnings (loss) ...........................   $  1,719      1,223      1,053        914       (599)
                                                  ========   ========   ========   ========   ========

Earnings (loss) per share (2):
    Basic .....................................   $    .85        .56        .56        .68       (.52)
                                                  ========   ========   ========   ========   ========


    Diluted ...................................   $    .85        .56        .55        .62       (.52)
                                                  ========   ========   ========   ========   ========


Without SAIF Assessment (1)
Net earnings (loss) ...........................   $  1,719      1,223      1,053        914        (18)
                                                  ========   ========   ========   ========   ========

Earnings (loss) per common share - basic (2) ..   $    .85        .56        .56        .68       (.01)
                                                  ========   ========   ========   ========   ========

Earnings (loss) per common share - diluted (2).   $    .85        .56        .55        .62       (.01)
                                                  ========   ========   ========   ========   ========
</TABLE>

                                       8
<PAGE>


                       SELECTED FINANCIAL DATA, continued
                (Dollars in thousands, except per share figures)
<TABLE>
<CAPTION>

                                                                              At or For the
                                                                           Year Ended December 31,
                                                      -----------------------------------------------------------
                                                        2000          1999         1998         1997        1996
                                                        ----          ----         ----         ----        ----
<S>                                                     <C>           <C>          <C>          <C>        <C>
For the Period:
Return on average assets........................        0.73%         .60%         .61%         .60%       (.38%)
Return on average equity........................        6.84%        4.67%        5.02%        7.04%      (5.20%)
Average equity to average assets................       10.73%       12.95%       12.19%        8.59%       7.26%
Interest rate spread during the
    period (3)..................................        3.15%        3.30%        3.10%        3.30%       2.83%
Net interest margin.............................        4.14%        4.22%        4.05%        3.93%       3.19%
Noninterest income to average assets............        0.47%         .56%         .96%         .93%       1.53%
Noninterest expense to average assets...........        3.07%        3.32%        3.27%        3.62%       4.90%
Efficiency ratio................................       69.55%       72.78%       70.68%       78.31%     112.42%

At the End of the Period:
Ratio of average interest-earning assets to
    average interest-bearing liabilities                1.24         1.26         1.24         1.14        1.07
Nonperforming loans, and foreclosed real
    estate as a percentage of total assets......         .63%         .83%        1.60%        1.76%       1.15%
Allowance for loan losses as a percentage
    of total loans..............................        1.02%         .87%         .83%         .80%        .85%
Allowance for loan losses as a percentage
    of nonperforming loans                            117.37%       87.45%       40.19%       33.97%      52.97%
Total number of offices                                    5            5            3             3           3
Full-service banking offices....................           5            5            3             3           3
Total shares outstanding at
    end of period (2)                              2,022,227    2,013,018    2,266,972     1,247,592   1,219,092
Book value per share (2)........................   $   13.22        12.21        11.93        10.23        9.54
</TABLE>

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

(1)  The Bank was subject to a one-time special assessment that was paid by all
     financial institutions insured by the SAIF in 1996. The Bank's pre-tax
     assessment was $926,000 ($581,000 after taxes).

(2)  All per share information is presented to reflect a three-for-two stock
     split effective February 1998. The per share information also reflects the
     consummation of an initial public offering issuing 869,565 shares of common
     stock on June 12, 1998.

(3)  Difference between weighted-average yield on all interest-earning assets
     and weighted-average rate on all interest-bearing liabilities.


                                       9
<PAGE>


ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

General

Pointe Financial Corporation (the "Company") owns 100% of the outstanding stock
of Pointe Bank (the "Bank"). The Bank is a State (Florida) chartered commercial
bank. The Bank, through five banking offices, provides a wide range of banking
services to individuals and businesses located primarily in South Florida. The
Company owns an inactive subsidiary, Pointe Financial Service and also is a 50%
owner of Pointe Capital, LLC, an investment banking joint venture.

On June 12, 1998, the Company consummated an initial public offering (the
"Offering") of 869,565 shares of common stock, par value $.01 per share. The
shares were sold at an offering price of $15.375 per share. Keefe, Bruyette &
Woods, Inc. and McGinn, Smith & Co. acted as the representatives of the
underwriters of the Offering. The net proceeds of the Offering totaled $12.076
million of which $6.000 million was invested in its bank subsidiary, Pointe
Bank. The remaining proceeds retained by the Company will continue to fund
branch expansion and support growth in the loan and security portfolio.

At December 31, 2000, the Company had total consolidated assets of $244.508
million, an increase of $30.852 million or 14.4% over total assets of $213.656
million at December 31, 1999. The majority of asset growth is reflected in the
loans receivable ending December 31, 2000 at $173.848 million, an increase of
$20.300 million or 13.2% over December 31, 1999, $153.548 million. The Company's
portfolio of securities increased $7.513 million or 16.3% to $53.670 million as
of December 31, 2000 from $46.157 million as of December 31, 1999. The Bank's
deposits increased to $161.136 million as of December 31, 2000 from $146.176
million as of December 31, 1999, a 10.2% increase. The Company had consolidated
net earnings of $1.719 million or earnings per basic and diluted share of $.85
for the year ended December 31, 2000 compared to a consolidated net earnings of
$1.223 million or $.56 basic and diluted earnings per share for 1999.

Regulation and Legislation

As a state-chartered commercial bank, the Bank is subject to extensive
regulation by the Florida Department of Banking and Finance ("Florida DBF"), the
Federal Reserve Board and the Federal Deposit Insurance Corporation ("FDIC").
The Bank files reports with the Florida DBF and the FDIC concerning its
activities and financial condition, in addition to obtaining regulatory
approvals prior to entering into certain transactions such as mergers with or
acquisitions of other financial institutions. Periodic examinations and
inspections are performed by the Florida DBF and the Federal Reserve Board to
monitor the Bank's compliance with the various regulatory requirements.


                                       10
<PAGE>


Credit Risk

The Bank's primary business is making commercial, business, consumer and real
estate loans. That activity entails potential loan losses, the magnitude of
which depend on a variety of economic factors affecting borrowers which are
beyond the control of the Bank. While management has instituted underwriting
guidelines and credit review procedures to protect the Bank from avoidable
credit losses, some losses will inevitably occur.

The following table sets forth certain information regarding nonaccrual loans
and foreclosed real estate, including the ratio of such loans and foreclosed
real estate to total assets as of the dates indicated, and certain other related
information.
<TABLE>
<CAPTION>
                                                                          At December 31,
                                                         ----------------------------------------------
                                                          2000      1999      1998      1997      1996
                                                        ------    ------    ------    ------    ------
                                                                    (Dollars in thousands)
<S>                                                    <C>           <C>     <C>       <C>       <C>
Nonaccrual loans:
   Residential real estate ..........................  $    74       294     1,376     1,918     1,282
   Commercial real estate ...........................      432        --        --        --        --
   Commercial .......................................      988     1,228     1,306       577       182
   Consumer and other ...............................       32        --        --         1         3
                                                       -------    ------    ------    ------    ------


       Total nonaccrual loans .......................  $ 1,526     1,522     2,682     2,496     1,467
                                                       -------    ------    ------    ------    ------

       Total nonperforming loans ....................    1,526     1,522     2,682     2,496     1,467
                                                       -------    ------    ------    ------    ------

       Total nonperforming loans to total loans .....     0.88%     1.00%     2.08%     2.34%     1.60%
                                                       =======    ======    ======    ======    ======


Foreclosed real estate-
   Real estate acquired by foreclosure or deed
     in lieu of foreclosure .........................       18       257       353       105       270
                                                        ------    ------    ------    ------    ------


       Total nonperforming loans and foreclosed
       real estate ..................................    1,544     1,779     3,035     2,601     1,737
                                                        ======    ======    ======    ======    ======
       Total nonperforming and foreclosed real estate
       to total assets ..............................     0.63%      .83%     1.60%     1.76%     1.15%
                                                        ======    ======    ======    ======    ======


Interest income that would have been recorded under the original terms of
nonaccrual loans and the interest income actually recognized are summarized
below:

                                                                    Year Ended December 31,
                                                         ----------------------------------------------
                                                          2000      1999      1998      1997     1996
                                                        ------    ------    ------    ------    ------
                                                                    (In thousands)


   Interest income that would have been recognized ..   $  158       169       302       343       200
   Interest income recognized .......................      109        42       146       123         3
                                                        ------    ------    ------    ------    ------

   Interest income foregone .........................   $   49       127       156       220       197
                                                        ======    ======    ======    ======    ======
</TABLE>

                                       11

<PAGE>


The following table sets forth information with respect to activity in the
Bank's allowance for loan losses during the periods indicated:
<TABLE>
<CAPTION>
                                                                                    Year Ended December 31,
                                                     -----------------------------------------------------------------------------
                                                          2000             1999             1998             1997             1996
                                                     ---------        ---------        ---------        ---------        ---------
                                                                                 (Dollars in thousands)

<S>                                                  <C>                <C>              <C>              <C>               <C>
Average loans outstanding .....................      $ 163,247          143,882          116,499          102,315           96,307
                                                     =========        =========        =========        =========        =========

Allowance at beginning of year ................          1,331            1,078              848              777              840
                                                     ---------        ---------        ---------        ---------        ---------

Charge-offs:
     Residential real estate ..................             --               --               --               --               (2)
     Commercial ...............................           (184)            (335)            (682)             (48)            (238)
     Consumer and other .......................            (55)             (26)             (40)             (10)              (8)
                                                     ---------        ---------        ---------        ---------        ---------


         Total loans charged-off ..............           (239)            (361)            (722)             (58)            (248)
                                                     ---------        ---------        ---------        ---------        ---------

Recoveries ....................................             15                4                2               49               --
                                                     ---------        ---------        ---------        ---------        ---------


Net charge-offs ...............................           (224)            (357)            (720)              (9)            (248)
                                                     ---------        ---------        ---------        ---------        ---------


Provision for loan losses charged
     to operating expenses ....................            685              610              950               80              185
                                                     ---------        ---------        ---------        ---------        ---------


Allowance at end of year ......................      $   1,792            1,331            1,078              848              777
                                                     =========        =========        =========        =========        =========


Net charge-offs to
     average loans outstanding ................           0.14%             .25%             .62%             .01%             .25%
                                                     =========        =========        =========        =========        =========

Allowance as a percent of total
     loans ....................................           1.02%             .87%             .83%             .80%             .85%
                                                     =========        =========        =========        =========        =========

Allowance as a percentage of
     nonperforming loans ......................         117.43%           87.45%           40.19%           33.97%           52.97%
                                                     =========        =========        =========        =========        =========

Total loans at end of year ....................      $ 175,131          152,349          129,156          106,659           91,925
                                                     =========        =========        =========        =========        =========
</TABLE>

In the Company's $1.526 million of non-performing loans $251,000 are partially
guaranteed by the United States Small Business Administration. The guaranteed
portion of such loans totals $195,000. The provision for loan losses for the
year ended December 31, 2000, was $685,000 as compared to $610,000 for the year
ended December 31, 1999. The Company continues to make significant provisions
for loan losses. The Company has historically had strong asset quality as
evidenced by the low percentage of net charge-offs to average loans outstanding
over the last five years of .25%. Management believes that the allowance for
loan losses of $1.792 million is adequate at December 31, 2000.

                                       12
<PAGE>


The following table presents information regarding the Bank's total allowance
for loan losses as well as the allocation of such amounts to the various
categories of loans:
<TABLE>
<CAPTION>
                                                                           At December 31,
                                        -----------------------------------------------------------------------------------------
                                             2000             1999             1998                1997                 1996
                                        --------------   --------------   ---------------    -----------------   ----------------
                                                % of              % of              % of               % of                 % of
                                      Amount  Loans to  Amount  Loans to  Amount  Loans to  Amount   Loans to    Amount   Loans to
                                        of      Total     of      Total     of      Total     of       Total       of      Total
                                     Allowance  Loans  Allowance  Loans  Allowance  Loans  Allowance   Loans    Allowance  Loans
                                     ---------  ------ --------   -----  --------   -----  ---------   ------   ---------  ------
                                                                      (Dollars in thousands)

<S>                                     <C>      <C>     <C>      <C>     <C>       <C>      <C>         <C>      <C>       <C>
Commercial loans ....................   $1,122   23.59%  $ 791    22.35%  $  641    16.64%   $ 158       18.59%   $ 135     18.18%
Commercial real
  estate loans ......................      367   16.96     295    16.84      213    16.19      140       16.53       88     11.85
Residential real
  estate loans ......................      142   50.62     100    53.05      109    59.56      492       57.97      525     66.05
Consumer and other
  loans .............................      161    8.83     145     7.76      115     7.61       58        6.91       29      3.92
                                        ------  ------   ------  ------   -------  ------    -----      ------   ------    ------

  Total allowance
        for loan
        losses ......................   $1,792  100.00%  $1,331  100.00%  $ 1,078  100.00%   $ 848      100.00%  $  777    100.00%
                                        ======  ======   ======  ======   =======  ======    =====      ======   ======    ======
</TABLE>

Management evaluates currently available information in order to establish the
allocation of the allowance for loan losses. Future adjustments to the allowance
may be necessary if conditions change in the portfolio. Among these changes are
risk characteristics of the loan portfolio, the quality of specific loans, the
level of nonaccruing loans, current economic conditions, trends in delinquencies
or charge-offs and the value of underlying collateral, all of which are subject
to change. Management believes that the allowance for loan losses of $1.792
million is adequate at December 31, 2000.


                                       13
<PAGE>


Results of Operations

The operating results of the Company depend primarily on its net interest
income, which is the difference between interest income on interest-earning
assets and interest expense on interest-bearing liabilities, consisting
primarily of deposits. Net interest income is determined by the difference
between yields earned on interest-earning assets and rates paid on
interest-bearing liabilities ("interest-rate spread") and the relative amounts
of interest-earning assets and interest-bearing liabilities. The Company's
interest-rate spread is affected by regulatory, economic and competitive factors
that influence interest rates, loan demand and deposit flows. In addition, the
Company's net earnings are also affected by the level of nonperforming loans and
foreclosed real estate, as well as the level of its noninterest income, and its
noninterest expenses, such as salaries and employee benefits, occupancy and
equipment costs and losses on foreclosed real estate and income taxes.

The following table sets forth for the periods indicated, information regarding
(i) the total dollar amount of interest and dividend income of the Company from
interest-earning assets and the resultant average yields; (ii) the total dollar
amount of interest expense on interest-bearing liabilities and the resultant
average cost; (iii) net interest/dividend income; (iv) interest-rate spread; (v)
interest margin; and (vi) ratio of average interest-earning assets to average
interest-bearing liabilities.
<TABLE>
<CAPTION>

                                                                     Year Ended December 31,
                                   -----------------------------------------------------------------------------------------------
                                               2000                           1999                               1998
                                   -----------------------------   ------------------------------    -----------------------------
                                             Interest    Average              Interest    Average              Interest    Average
                                    Average    and       Yield/     Average      and       Yield/    Average     and        Yield/
                                    Balance  Dividends    Rate      Balance   Dividends     Rate     Balance   Dividends     Rate
                                   --------   --------  --------   ---------  ---------   -------    -------  ----------   -------
                                                                       (Dollars in thousands)
<S>                                <C>          <C>         <C>     <C>         <C>          <C>     <C>          <C>         <C>
Interest-earning assets:
   Loans .......................   $163,247     14,864      9.11%   $143,882    12,361       8.59%   $116,499     10,459      8.98%
   Securities (1) ..............     56,241      3,439      6.11      46,943     2,581       5.50      45,634      2,581      5.66
    Other interest-earning
     assets (2) ................      3,798        242      6.37       1,981       102       5.15       1,313         73      5.56
                                   --------   --------              --------    -------              --------     ------
       Total interest-earning
          assets ...............    223,286     18,545      8.31     192,806    15,044       7.80     163,446     13,113      8.02
                                              --------                          ------                            ------
Noninterest-earning
         assets (3) ............     10,903                            9,471                            8,642
                                    -------                         --------                       ----------

       Total assets ............   $234,189                         $202,277                       $  172,088
                                   ========                         ========                       ==========

Interest-bearing liabilities:
   Savings and NOW deposits ....   $ 13,249        195      1.47    $ 12,826       191       1.49  $   11,147        170      1.53
   Money-market deposits .......     37,317      1,586      4.25      40,103     1,510       3.77      39,822      1,748      4.39
   Time deposits ...............     80,037      4,553      5.69      69,447     3,630       5.23      67,135      3,841      5.72
   Borrowings ..................     49,713      2,971      5.98      31,086     1,573       5.06      14,055        739      5.26
                                   --------   --------             ---------    ------             ----------     ------

          Total interest-bearing
              liabilities ......    180,316      9,305      5.16    153,462      6,904       4.50     132,159      6,498      4.92
                                                                                                                  ------

Demand deposits ................     25,150                           19,619                           15,730
Noninterest-bearing liabilities       3,583                            3,003                            3,216
Stockholders' equity ...........     25,140                           26,193                           20,983
                                    -------                          -------                          -------

          Total liabilities and
              stockholders'
              equity ...........   $234,189                         $202,277                       $  172,088
                                   ========                         ========                       ==========

Net interest income ............              $  9,240                         $ 8,140                        $  6,615
                                              ========                         =======                        --------
Interest-rate spread (4) .......                            3.15%                            3.30%                            3.10%
                                                            ====                             ====                             ====
Net interest margin (5) ........                            4.14%                            4.22%                            4.05%
                                                            ====                             ====                             ====
Ratio of average interest-
   earning assets to
   average interest-
   bearing liabilities .........       1.24                             1.26                             1.24
                                       ====                             ====                             ====
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1)  Does not include the tax equivalent yield on tax exempt municipal bonds
     purchased in 2000.

(2)  Includes interest-bearing deposits, federal funds sold and securities
     purchased under agreements to resell.

(3)  Includes nonaccrual loans.

(4)  Interest rate spread represents the difference between the weighted-average
     yield on interest-earning assets and the weighted-average cost of
     interest-bearing liabilities.

(5)  Net interest margin is net interest income divided by average
     interest-earning assets.

                                       14
<PAGE>

Rae/Volume Analysis

The following table sets forth certain information regarding changes in interest
income and interest expense of the Company for the periods indicated. For each
category of interest-earning assets and interest-bearing liabilities,
information is provided on changes attributable to (1) changes in rate (change
in rate multiplied by prior volume), (2) changes in volume (change in volume
multiplied by prior rate) and (3) changes in rate-volume (change in rate
multiplied by change in volume).
<TABLE>
<CAPTION>
                                                                                      Year Ended December 31,
                                                                                          2000 vs. 1999
                                                                   ----------------------------------------------------------------
                                                                                   Increase  (Decrease)  Due to
                                                                   ----------------------------------------------------------------
                                                                                                            Rate/
                                                                      Rate             Volume              Volume             Total
                                                                   -------            -------            -------            -------
                                                                                             (In thousands)
<S>                                                                <C>                  <C>                   <C>             <C>
Interest earning assets:
    Loans ..............................................           $   748              1,663                 92              2,503
    Securities .........................................               286                511                 61                858
    Other interest-earning assets ......................                24                 94                 22                140
                                                                   -------            -------            -------            -------

      Total ............................................             1,058              2,268                175              3,501
                                                                   -------            -------            -------            -------


Interest-bearing liabilities:
    Deposits:
      Savings and NOW deposits .........................                (3)                 6                  1                  4
      Money-market deposits ............................               192               (105)               (11)                76
      Time deposits ....................................               319                554                 50                923
    Other borrowings ...................................               286                943                169              1,398
                                                                   -------            -------            -------            -------
      Total ............................................               794              1,398                209              2,401
                                                                   -------            -------            -------            -------


Net change in net interest income ......................           $   264                870                (34)             1,100
                                                                   =======            =======            =======            =======


                                                                                      Year Ended December 31,
                                                                                          1999 vs. 1998
                                                                   ----------------------------------------------------------------
                                                                                   Increase  (Decrease)  Due to
                                                                   ----------------------------------------------------------------
                                                                                                           Rate/
                                                                      Rate             Volume              Volume             Total
                                                                   -------            -------            -------            -------
                                                                                             (In thousands)
Interest earning assets:
    Loans ..............................................           $  (454)             2,459               (103)             1,902
    Securities .........................................               (73)                74                 (1)                 0
    Other interest-earning assets ......................                (5)                37                 (3)                29
                                                                   -------            -------            -------            -------

      Total ............................................              (532)             2,570               (107)             1,931
                                                                   -------            -------            -------            -------

Interest-bearing liabilities:
    Deposits:
      Savings and NOW deposits .........................                (4)                26                 (1)                21
      Money-market deposits ............................              (247)                12                 (3)              (238)
      Time deposits ....................................              (329)               132                (14)              (211)
    Other borrowings ...................................               (28)               896                (34)               834
                                                                   -------            -------            -------            -------

      Total ............................................              (608)             1,066                (52)               406
                                                                   -------            -------            -------            -------

Net change in net interest income ......................           $    76              1,504                (55)             1,525
                                                                   =======            =======            =======            =======
</TABLE>



                                       15

<PAGE>


Liquidity and Capital Resources

A Florida chartered commercial bank is required to maintain a liquidity reserve
of at least 15% of its total transaction accounts and 8% of its total
nontransaction accounts. The liquidity reserve may consist of cash on hand, cash
on demand with other correspondent banks and other investments and short-term
marketable securities as determined by the rules of the Florida DBF, such as
federal funds sold and United States securities or securities guaranteed by the
United States or agencies thereof. As of December 31, 2000 and December 31,
1999, the Bank had liquidity of approximately $38.218 million and $33.551
million, or approximately 24.59% and 24.72%, respectively.

During the year ended December 31, 2000, the Company's primary sources of funds
consisted of principal payments on loans and securities, from sales and
maturities of securities, net increases in deposits, increase in Federal Home
Loan Bank advances and net cash flows from operating activities. The Company
used its capital resources principally to purchase securities and fund existing
and continuing loan commitments. At December 31, 2000, the Company had
commitments to originate loans totaling $16.476 million. Scheduled maturities of
certificates of deposit during the 12 months following December 31, 2000 totaled
$65.770 million. Management believes the Company has adequate resources to fund
all of its commitments, that substantially all of its existing commitments will
be funded within the next twelve months and, if so desired, that it can adjust
the rates on certificates of deposit to attract deposits in a changing
interest-rate environment.

The following table sets forth, by maturity distribution, certain information
pertaining to the securities portfolio (dollars in thousands):
<TABLE>
<CAPTION>

                                                                         After One Year
                                                  One Year or Less       to Five Years       After Five Years          Total
                                                 -----------------    -------------------   -------------------  ------------------
                                                Carrying    Average   Carrying    Average   Carrying    Average  Carrying    Average
                                                  Value      Yield      Value      Yield      Value      Yield     Value      Yield
                                                 -------      ----     -------      ----     -------      ----     -------     ----
<S>                                              <C>          <C>      <C>          <C>      <C>          <C>      <C>         <C>
At December 31, 2000:
   U.S. Government agency
     securities ............................     $    --        --%    $21,950      6.29%    $    --        --%    $21,950     6.29%
   U.S. Treasury securities ................       3,998      5.85       7,068      5.67          --        --      11,066     5.74
   Mortgage-backed securities ..............         122      8.32       6,156      6.94       5,893      5.06      12,171     6.04
Tax-exempt Municipal bonds .................          --        --          --        --       6,284      5.54       6,284     5.53
Mutual funds ...............................       1,940      5.55          --        --          --        --       1,940     5.55
Other ......................................          25      8.00          26      8.50         208      6.94         259     7.20

   Total ...................................     $ 6,085      5.82%    $35,200      6.28%    $12,385      5.33%    $53,670     6.01%
                                                 =======      ====     =======      ====     =======      ====     =======     ====

At December 31, 1999:
   U.S. Government agency
     securities ............................     $    --        --%    $14,947      5.95%    $    --        --%    $14,947     5.95%
   U.S. Treasury securities ................       5,000      5.92       8,851      5.52          --        --      13,851     5.66
   Mortgage-backed securities ..............         252      6.82       2,345      6.70      10,712      6.18      13,309     6.28
   Mutual funds ............................       3,875      5.28          --        --          --        --       3,875     5.28
   Other ...................................          25      7.75          50      7.69         100      6.50         175     7.02
                                                 -------      ----     -------      ----     -------      ----     -------     ----

   Total ...................................     $ 9,152      5.68%    $26,193      5.87%    $10,812      6.19%     46,157     5.90%
                                                 =======      ====     =======      ====     =======      ====     =======     ====
</TABLE>

Regulatory Capital Requirements

Federal and state banking regulations place certain restrictions on dividends
paid and loans or advances made by the Bank to the Holding Company.

The Company (on a consolidated basis) and the Bank are subject to various
regulatory capital requirements administered by the federal and state banking
agencies. Failure to meet minimum capital requirements can initiate certain
mandatory and possibly additional discretionary actions by regulators that, if
undertaken, could have a direct material effect on the Company's and the Bank's
financial statements. Under capital adequacy guidelines and the regulatory
framework for prompt corrective

<PAGE>


action, the Company and the Bank must meet specific capital guidelines that
involve quantitative measures of their assets, liabilities, and certain
off-balance-sheet items as calculated under regulatory accounting practices. The
capital amounts and classification are also subject to qualitative judgements by
the regulators about components, risk weightings, and other factors. Prompt
corrective action provisions are not applicable to bank holding companies.

Quantitative measures established by regulation to ensure capital adequacy
require the Company and the Bank to maintain minimum amounts and percentages
(set forth in the following table) of total and Tier 1 capital (as defined in
the regulations) to risk-weighted assets (as defined) and of Tier 1 capital (as
defined) to average assets (as defined). Management believes, as of December 31,
2000 and 1999, that the Company and the Bank met all capital adequacy
requirements to which they are subject.

Under FDIC regulations, the Bank is required to meet certain minimum regulatory
capital requirements. This is not a valuation allowance and has not been created
by charges against earnings. It represents a restriction on stockholders'
equity.

As of December 31, 2000, the most recent notification from the regulatory
authorities categorized the Bank as well capitalized under the regulatory
framework for prompt corrective action. To be categorized as well capitalized,
an institution must maintain minimum total risk-based, Tier I risk-based, and
Tier I leverage percentages as set forth in the following tables. There are no
conditions or events since that notification that management believes have
changed the Bank's category. The Company and the Bank's actual capital amounts
and percents as of December 31, 2000 and 1999 are also presented in the table
(dollars in thousands).
<TABLE>
<CAPTION>

                                                                                                    Minimum
                                                                                                   To Be Well
                                                                                                Capitalized Under
                                                                      Minimum Capital           Prompt Corrective
                                              Actual                    Requirement             Action Provisions:
                                       ---------------------        --------------------       ----------------------
                                       Amount           %           Amount          %           Amount           %
                                       ------         ------        ------        ------        ------         ------
<S>                                  <C>                <C>        <C>              <C>         <C>          <C>
     As of December 31, 2000:
         Total capital to Risk-
          Weighted assets:
              Consolidated.......... $ 28,842           17.84%     $12,933          8.00%           N/A        N/A
              Bank..................   25,870           15.99       12,941          8.00        $16.176      10.00%
         Tier I Capital to Risk-
          Weighted Assets:
              Consolidated..........   27,050           16.73        6,467          4.00            N/A        N/A
              Bank                     24,078           14.88        6,470          4.00          9,706       6.00

         Tier I Capital
          to Average Assets
              Consolidated..........   27,050           11.55        9,368          4.00            N/A        N/A
              Bank                     24,078           10.30        9,354          4.00          11,692      5.00

     As of December 31, 1999:
         Total capital to Risk-
          Weighted assets:
              Consolidated.......... $ 26,871           19.42     $ 11,069          8.00            N/A        N/A
              Bank                     23,476           16.68       11,259          8.00        $14,074      10.00
         Tier I Capital to Risk-
          Weighted Assets:
              Consolidated..........   25,540           18.46        5,534          4.00            N/A        N/A
              Bank..................   22,145           15.74        5,627          4.00          8,441       6.00
         Tier I Capital
          to Average Assets
              Consolidated..........   25,540           12.03        8,492          4.00            N/A        N/A
              Bank..................   22,145           10.37        8,542          4.00         10,677       5.00
</TABLE>

                                       17
<PAGE>

Asset - Liability Structure

As part of its asset and liability management, the Company has emphasized
establishing and implementing internal asset-liability decision processes, as
well as communications and control procedures to aid in managing the Company's
earnings. Management believes that these processes and procedures provide the
Company with better capital planning, asset mix and volume controls,
loan-pricing guidelines, and deposit interest-rate guidelines which should
result in tighter controls and less exposure to interest-rate risk.

The matching of assets and liabilities may be analyzed by examining the extent
to which such assets and liabilities are "interest-rate sensitive" and by
monitoring an institution's interest-rate sensitivity "gap." An asset or
liability is said to be interest-rate sensitive within a specific time period if
it will mature or reprice within that time period. The interest-rate sensitivity
gap is defined as the difference between interest-earning assets and
interest-bearing liabilities maturing or repricing within a given time period.
The gap ratio is computed as dividing rate-sensitive assets by rate-sensitive
liabilities. A gap ratio of 1.0% represents perfect matching. A gap is
considered positive when the amount of interest-rate sensitive assets exceeds
interest-rate sensitive liabilities. A gap is considered negative when the
amount of interest-rate sensitive liabilities exceeds interest-rate sensitive
assets. During a period of rising interest rates, a negative gap would adversely
affect net interest income, while a positive gap would result in an increase in
net interest income. During a period of falling interest rates, a negative gap
would result in an increase in net interest income, while a positive gap would
adversely affect net interest income.

In order to minimize the potential for adverse effects of material and prolonged
increases in interest rates on the results of operations, the Company's
management continues to monitor asset and liability management policies to
better match the maturities and repricing terms of its interest-earning assets
and interest-bearing liabilities. Such policies have consisted primarily of: (i)
emphasizing the origination of adjustable-rate loans; (ii) maintaining a stable
core deposit base; and (iii) maintaining a significant portion of liquid assets
(cash and short-term investments).


                                       18
<PAGE>

The following table sets forth certain information relating to the Company's
interest-earning assets and interest-bearing liabilities at December 31, 2000
that are estimated to mature or are scheduled to reprice within the period
shown.
<TABLE>
<CAPTION>
                                                                    More
                                                                    Than           More
                                                                   Three         Than Six         More
                                                                   Months         Months        Than One
                                                   Three           to Six         to One        Year to       More Than
                                                   Months          Months          Year        Five Years     Five Years      Total
                                                  --------        --------       --------       --------      --------      --------
                                                                                       ($ in thousands)

<S>                                               <C>              <C>           <C>          <C>             <C>           <C>
Loans (1),(2) ..............................      $ 62,257           5,823         10,951         49,793        47,026       175,850
Securities (3) .............................        12,720           3,175             96         31,290         9,350        56,631
Interest bearing deposits ..................         1,134              --             --             --            --         1,134
                                                  --------        --------       --------       --------      --------      --------

     Total rate-sensitive assets ...........        76,111           8,998         11,047         81,083        56,376       233,615
                                                  --------        --------       --------       --------      --------      --------
Deposit accounts (4):
  Savings and NOW ..........................        12,048              --             --             --            --        12,048
  Money market .............................        33,920              --             --             --            --        33,920
  Time deposits ............................        15,490          14,566         35,714         19,571            --        85,341
                                                  --------        --------       --------       --------      --------      --------

Total deposit accounts .....................        61,458          14,566         35,714         19,571            --       131,309

Borrowings (5) .............................        33,067              --             --         10,000        10,000        53,067
                                                  --------        --------       --------       --------      --------      --------

     Total rate-sensitive
         liabilities .......................        94,525          14,566         35,714         29,571        10,000       184,376
                                                  --------        --------       --------       --------      --------      --------

Gap (repricing differences) ................      $(18,414)         (5,568)       (24,667)        51,512        46,376      $ 49,239
                                                  ========        ========       ========       ========      ========      ========


Cumulative GAP .............................      $(18,414)        (23,982)       (48,649)         2,863        49,239
                                                  ========        ========       ========       ========      ========

Cumulative GAP/total assets ................         -7.53%          -9.81         -19.90           1.17         20.14
                                                   ========       ========       ========       ========      ========
</TABLE>
--------------------------------------------------------------------------------

(1)  In preparing the table above, adjustable-rate loans are included in the
     period in which the interest rates are next scheduled to adjust rather than
     in the period in which the loans mature. Fixed-rate loans are scheduled,
     including repayment, according to their contractual maturities.

(2)  Includes nonaccrual loans and loans held for sale.

(3)  Securities are scheduled according to their respective repricing and
     maturity dates, includes Federal Home Loan Bank (FHLB) stock and Federal
     Reserve Bank stock.

(4)  Savings, NOW and money-market accounts are regarded as readily accessible
     withdrawable accounts. All other time accounts are scheduled according to
     their respective maturity dates.

(5)  Borrowings include FHLB convertible advances which have a call option. For
     the purposes of the table above, the advances are categorized at their
     contractual maturity dates.

                                       19
<PAGE>


The following table reflects the contractual principal repayments of the
Company's loan portfolio at December 31, 2000:
<TABLE>
<CAPTION>


                                                        Commercial       Residential
                                         Commercial     Real Estate        Mortgage         Consumer
                                           Loans           Loans             Loans            Loans          Total
                                         ----------     -----------      -----------        --------        -------
                                                                         (In thousands)
<S>                                         <C>              <C>              <C>             <C>            <C>
Due within one year ....................    $25,138          15,627           7,415           4,800          52,980
Due after one through five years .......     15,377          13,204          14,741           9,814          53,136
Due after five years ...................        790             868          66,503             854          69,015
                                            -------         -------         -------         -------         -------

       Total ...........................    $41,305          29,699          88,659          15,468         175,131
                                            =======          ======          ======          ======         =======
</TABLE>

Of the $122.2 million in loans due after one year, 66.8% of such loans have
fixed rates of interest and 33.2% have adjustable rates.

The following table displays loan originations by type of loan and principal
reductions during the periods indicated.
<TABLE>
<CAPTION>

                                                                         Year Ended December 31,
                                                   -----------------------------------------------------------------
                                                     2000         1999            1998           1997           1996
                                                     ----         ----            ----           ----           ----
                                                                              (In thousands)
<S>                                              <C>             <C>            <C>            <C>             <C>
   Originations:
     Commercial loans.....................       $ 13,931        26,960         13,854         19,720          1,085
     Commercial real estate loans.........         13,527        12,668          7,020          8,360          3,205
     Residential real estate..............         24,467        20,804         33,498         10,507          7,480
     Consumer loans.......................          6,802         4,139          2,959          3,564          1,497
                                                 --------        ------         ------         ------          -----


     Total loans originated...............         58,728        64,571         57,331         42,151         13,267

   Principal reductions...................        (35,946)      (41,378)       (34,834)       (27,417)       (27,657)
                                                 --------       -------        -------        -------        -------


     Increase (decrease) in gross
       loans............................         $ 22,782        23,193         22,497         14,734        (14,390)
                                                 ========        =======        =======        =======       =======
</TABLE>


The originations noted in the table above exclude originations of loans held for
sale of $7.082 million, $2.496 million, $1.994 million, $9.005 million, and
$51.533 million for periods ended December 31, 2000, 1999, 1998, 1997 and 1996,
respectively.

                                       20
<PAGE>


The following table summarizes the loan portfolio of the Company by type of loan
as of December 31, 2000, 1999, 1998, 1997 and 1996.
<TABLE>
<CAPTION>

                                                                      At December 31,
                            -------------------------------------------------------------------------------------------------------
                                   2000                   1999                  1998               1997                   1996
                            --------------------    -----------------     ----------------    ---------------       ---------------
                                            % of                % of                 % of               % of                  % of
                                Amount     Total     Amount     Total      Amount    Total     Amount   Total       Amount    Total
                               -------     -----     ------     -----      ------    -----     ------   -----       ------    -----
                                                                     (Dollars in thousands)
<S>                         <C>            <C>      <C>         <C>      <C>         <C>      <C>       <C>       <C>         <C>
   Commercial.............  $   41,305     23.59%  $ 34,054     22.35%   $ 21,487    16.64%   $19,832   18.59%    $ 16,711    18.18%
   Commercial
     real estate..........      29,699     16.96     25,655     16.84      20,904    16.19     17,628   16.53       10,894    11.85
   Residential
     real estate..........      88,659     50.62     80,814     53.05      76,938    59.56     61,827   57.97       60,716    66.05
   Consumer....                 15,468      8.83     11,826      7.76       9,827     7.61      7,372    6.91        3,604     3.92
                            ----------    ------   --------    ------     -------   ------    -------  ------       ------   ------


       Total loans........  $  175,131    100.00%   152,349    100.00%    129,156   100.00%   106,659  100.00%      91,925   100.00%
                                          ======               ======               ======             ======                ======

   Less:
     Deferred loan
       fees...............        (210)                (166)                  (73)               (158)                (175)
     Allowance for
       loan losses........      (1,792)              (1,331)               (1,078)               (848)                (777)
                                ------             --------                ------                ----                 ----



       Loans, net.........  $  173,129             $150,852             $ 128,005           $ 105,653             $ 90,973
                            ==========             ========             =========           =========             ========
</TABLE>


The Bank originates, purchases and participates in loans for its own portfolio
and for sale in the secondary market. The Bank provides commercial business
loans, commercial and residential real estate loans, and consumer loans. Loans
secured by real estate generally include commercial and residential real estate,
loans to refinance or purchase existing properties and home equity loans. The
gradual change in the composition of the loan portfolio is evident by the growth
in the commercial and the commercial real estate categories.

Commercial business loans totaled $41.305 million or 23.59% of the Bank's loan
portfolio, as of December 31, 2000. Commercial business loan underwriting
practices assess the borrower's creditworthiness and ability to repay, including
an evaluation of the value of any collateral securing the proposed loan. While
commercial business loans generally are made for shorter terms and at higher
yields than one-to-four family residential loans, such loans generally involve a
higher level of risk than one-to-four family residential loans. To a lesser
extent, the bank originates and services Small Business Administration (SBA)
loans, which are underwritten in accordance with the guidelines of the SBA.
These loans are made to small businesses and usually require that significant
collateral be assigned to the Bank from the borrower. Typically, the SBA
guarantees 70% to 90% of the loan balance with the remaining portion
unguaranteed. The Bank is permitted to sell the SBA-guaranteed portion of the
loan in secondary markets, with the Bank retaining the portion that is not
guaranteed. The Bank is compensated by the premium derived from the sale into
the secondary market and a 1% servicing fee on the sold guaranteed portion. SBA
loans are similar to commercial business loans in yield and credit risk.

The Bank's commercial real estate loans at December 31, 2000 totaled $29.699
million or 16.96% of the Bank's portfolio. The portfolio primarily consisted of
owner-occupied commercial properties and generally have terms ranging from
fifteen to twenty years and interest rate adjustment periods ranging from
monthly to five years. Amortization periods for commercial mortgage loans
generally do not exceed 25 years. Commercial real estate loans originated by the
Bank are primarily secured by income-producing properties such as office
buildings, warehouse buildings, retail space and to a lessor extent multi-family
property. Generally, in underwriting commercial real estate loans, the Bank
requires the personal guaranty of borrowers, a maximum loan to value ratio of
75%, and a cash flow to debt service ratio of 1.25 to 1.

The Bank's real estate mortgage loans, which totaled $88.659 million or 50.62%
of the Bank's total loan portfolio as of December 31, 2000, consist of
residential mortgage loans secured by existing properties. The Bank's
residential mortgage loans have terms which do not exceed 30 years and are
secured by one-to-four family residences. Loans made for an amount in excess of
80% of the appraised value of the financed residences are generally originated
with private mortgage insurance, which essentially insures that portion of the
loan which is in excess of 80% of the appraised value of the financed
residences. As of December 31, 2000, the residential loan portfolio of the Bank
consisted of approximately 25% in ARMs and 75% in fixed rate loans. Residential
mortgage loans generally are underwritten by the Bank in accordance with
guidelines of the Federal National Mortgage Association (the "FNMA") and the
Federal Home Loan Mortgage Corporation (the "FHLMC").

Consumer loans are extended for a variety of purposes including the purchase of
automobiles, home improvement, lines of credit and unsecured personal loans. As
of December 31, 2000, consumer loans were approximately $15.468 million or 8.83%
of total loans.

                                       21
<PAGE>

Consumer loan underwriting standards include an examination of
the applicant's payment history on other debts and an evaluation of the
applicant's ability to meet existing obligations and payments on the proposed
loan. Although creditworthiness of the applicant is of primary importance, the
underwriting process also includes a comparison of the value of the security, if
any, in relation to the proposed loan amount. While consumer loans generally
involve a higher element of credit risk than one-to-four family residential
loans, consumer loans are typically made at higher interest rates and for
shorter terms, or at adjustable rates, and are helpful in maintaining a
profitable spread between the Bank's loan yield and its cost of funds.

The following table shows the distribution of, and certain other information
relating to, deposit accounts by type:
<TABLE>
<CAPTION>

                                                                     At  December  31,
                                             ---------------------------------------------------------------------
                                                    2000                      1999                      1998
                                             -----------------        ------------------        -------------------
                                                         % of                      % of                       % of
                                             Balance     Total        Balance      Total        Balance       Total
                                             -------     -----        -------      -----        -------       -----
                                                                    (Dollars in thousands)
<S>                                        <C>           <C>         <C>           <C>         <C>            <C>
     Demand deposits...................... $  29,827     18.51%      $ 21,370      14.62%      $  18,316      12.97%
     Savings and NOW deposits.............    12,048      7.48         13,640       9.33          12,940        9.16
     Money-market deposits................    33,920     21.05         38,146      26.10          38,721       27.42
     Time deposits........................    85,341     52.96         73,020      49.95          71,235       50.45
                                           ---------     -----       --------     ------       ---------     -------

     Total deposits....................... $ 161,136    100.00%      $146,176     100.00%      $ 141,212     100.00%
                                           =========    ======       ========     ======       =========     ======
</TABLE>


Jumbo certificates ($100,000 and over) included above mature as follows:
<TABLE>
<CAPTION>
                                                                                                     At December 31,
                                                                                                     ---------------
                                                                                                          2000
                                                                                                          ----
                                                                                                     (In thousands)
<S>                                                                                                   <C>
     Due three months or less...............................................................          $   4,444
     Due over three months to six months.....................................................             3,283
     Due over six months to one year.........................................................            19,818
     Due over one year.......................................................................             4,040
                                                                                                      ---------

       Total................................................................................          $  31,585
                                                                                                      =========
</TABLE>


                                       22
<PAGE>



The scheduled maturities of time deposits are as follows:
<TABLE>
<CAPTION>

                                                                                              At December 31,
                                                                                              ---------------
                                                                                                   2000
                                                                                                   ----
                                                                                              (In thousands)
<S>                                                                                            <C>
     Due in one year or less................................................................   $  65,770
     Due in more than one but less than three years.........................................      19,021
     Due in more than three but less than five years........................................         550
                                                                                               ---------


       Total...............................................................................    $  85,341
                                                                                               =========
</TABLE>

The following table sets forth the net deposit flows of the Company during the
period indicated:
<TABLE>
<CAPTION>

                                                                                        Year Ended December 31,
                                                                                        -----------------------
                                                                                       2000       1999       1998
                                                                                       ----       ----       ----
                                                                                               (In thousands)

<S>                                                                                 <C>          <C>        <C>
   Net increase (decrease) before interest credited..........................       $ 13,310      (548)     10,344
   Net interest credited.....................................................          1,650     5,512       5,873
                                                                                    ---------     -----       -----

   Net deposit increase......................................................       $ 14,960      4,964     16,217
                                                                                    ========      =====     ======
</TABLE>

The following table indicates the daily average balances and weighted average
interest rates paid on interest bearing deposits for each of the three years
ended December 31, 2000, 1999 and 1998:
<TABLE>
<CAPTION>

                                                                Years Ended December 31,
                              ---------------------------------------------------------------------------------------------
                                         2000                               1999                             1998
                              ---------------------------       --------------------------       --------------------------
                              Average     % of     Average      Average    % of     Average      Average   % of      Average
                              Balance     Total     Yield       Balance    Total     Yield       Balance   Total      Yield
                              -------     -----     -----       -------    -----     -----       -------   -----      -----
                                                                  (Dollars in thousands)
<S>                          <C>           <C>      <C>        <C>         <C>       <C>         <C>         <C>       <C>
Savings and NOW
   deposits...............   $ 13,249      8.51     1.47%      $ 12,826    9.03      1.49%       $ 11,147    8.33      1.53%

Money-market
   deposits...............     37,317     23.96     4.25         40,103   28.25      3.77          39,822   29.76      4.39
Time deposits.............     80,037     51.39     5.69         69,447   48.91      5.23          67,135   50.16      5.72
                             --------     -----                --------   -----                  --------  ------

Total interest-bearing
   deposits...............    130,603     83.86     4.85        122,376   86.19      4.36        118,104    88.25      4.88

Noninterest bearing
   deposits...............     25,150     16.14                  19,619   13.81                    15,730   11.75
                             --------     -----                --------   -----                  --------  ------

Total.....................   $155,753    100.00                $141,995  100.00                  $133,834  100.00
                             ========    ======                ========  ======                  ========  ======
</TABLE>




                                       23
<PAGE>


               Comparison of Year Ended December 31, 2000 and 1999
General

Net earnings for the year ended December 31, 2000 were $1.719 million or $.85
per basic and diluted share compared to net earnings of $1.223 million or $.56
per basic and diluted share for the year ended December 31, 1999. The increase
in income was primarily due to an increase in net interest income partially
offset by increases in noninterest expenses and decreases in noninterest income.

Interest Income and Expense

Interest income increased from $15.044 million for the year ended December 31,
1999 to $18.545 million for the year ended December 31, 2000. Interest income on
loans increased $2.503 million due to an increase in the average loan portfolio
balance from $143.882 million for the year ended December 31, 1999 to $163.247
million for the year ended December 31, 2000, and an increase in the
weighted-average yield earned on the portfolio from 8.59% to 9.11%. Interest on
securities increased to $3.439 million for the year ended December 31, 2000 from
$2.581 million for the year ended December 31, 1999. The average security
portfolio increased to $56.241 million in 2000 from $46.943 million in 1999. The
weighted average yield increased from 5.50% in 1999 to 6.11% in 2000. Interest
on other interest-earning assets increased $140,000 due to an increase in
average other interest-earning assets from $1.981 million in 1999 to $3.798
million in 2000.

Interest expense increased to $9.305 million for the year ended December 31,
2000 from $6.904 million for the year ended December 31, 1999. Interest expense
on deposit accounts increased $1.003 million from $5.331 million in 1999 to
$6.334 million during 2000, primarily attributed to an increase in the weighted
average yield from 4.36% in 1999 to 4.85% in 2000. The average interest-bearing
deposit balances increased from $122.376 million during the year ended December
31, 1999 to $130.603 million for 2000, a $8.227 million increase. Interest
expense on other borrowings increased $1.398 million from $1.573 million in 1999
to $2.971 million in 2000, primarily due to an increase in average borrowings
from $31.086 million during the year ended December 31, 1999 to $49.713 million
in 2000. The average cost of all interest-bearing liabilities increased to 5.16%
for the year ended December 31, 2000 from 4.50% for the year ended December 31,
1999.

Provision for Loan Losses

The provision for loan losses is charged to earnings to bring the total
allowance to a level deemed appropriate by management and is based upon
historical experience, the volume and type of lending conducted by the Bank,
industry standards, the amounts of nonperforming loans, general economic
conditions, particularly as they relate to the Bank's market areas, and other
factors related to the collectability of the Bank's loan portfolio. The
provision increased to $685,000 for the year ended December 31, 2000 from
$610,000 for the year ended December 31, 1999. The increase in the provision is
a result of management's decision to increase reserves as the composition of the
loans continues to shift from residential mortgage dominance to a more
traditional commercial bank portfolio. Net loan charge-offs for the period
ending December 31, 2000 of $224,000 as compared to the $357,000 for the period
ending December 31, 1999. Management believes that the allowance for loan losses
of $1.792 million is adequate at December 31, 2000.

Noninterest Income

Total noninterest income for the period ended December 31, 2000 was $1.092
million as compared to the $1.131 million for the period ended December 31,
1999. The decrease of noninterest income of $39,000, is primarily attributed to
net losses realized on the sale of investments available for sale as the Company
repositioned its earning assets.

Noninterest Expenses

Total noninterest expenses increased $465,000 to $7.185 million for the year
ended December 31, 2000 from $6.720 million for the year ended December 31,
1999. The increases are primarily attributed to the Company's increased staffing
levels as we continue to focus on providing the required service to our
customers.


                                       24
<PAGE>

Provision for Income Taxes

The provision for income taxes increased from $718,000 (an effective rate at
37.0%) during the year ended December 31, 1999 to $821,000 (an effective rate at
33.3%) during the year ended December 31, 2000. The decrease in the income tax
is directly related to the purchases of Bank Qualified Municipal Investments
during the year ending December 31, 2000.

Extraordinary Item

During the period ending December 31, 2000, the Bank successfully completed the
sale of a $5.000 million Federal Home Loan Bank advance. The Company recorded a
pre-tax gain of $125,000 on the sale of the liability. The transaction is
considered an extraordinary item - a gain on extinguishment of debt, net of a
$47,000 tax.


               Comparison of Year Ended December 31, 1999 and 1998
General

Net earnings for the year ended December 31, 1999 were $1.223 million or $.56
per basic and diluted share compared to net earnings of $1.053 million or $.56
per basic share ($.55 per diluted share) for the year ended December 31, 1998.
The increase in income was primarily due to an increase in net interest income
partially offset by increases in noninterest expenses and decreases in
noninterest income.

Interest Income and Expense

Interest income increased from $13.113 million for the year ended December 31,
1998 to $15.044 million for the year ended December 31, 1999. Interest income on
loans increased $1.902 million due to an increase in the average loan portfolio
balance from $116.499 million for the year ended December 31, 1998 to $143.882
million for the year ended December 31, 1999, partially offset by a decrease in
the weighted-average yield earned on the portfolio from 8.98% to 8.59%. Interest
on securities remained constant for the two years ended December 31 at $2.581
million as the average security portfolio increased to $46.943 million in 1999
from $45.634 million in 1998; however, the weighted average yield decreased from
5.66% in 1998 to 5.50% in 1999. Interest on other interest-earning assets
increased $29,000 due to an increase in average other interest-earning assets
from $1.313 million in 1998 to $1.981 million in 1999.

Interest expense increased to $6.904 million for the year ended December 31,
1999 from $6.498 million for the year ended December 31, 1998. Interest expense
on deposit accounts decreased $428,000 from $5.759 million in 1998 to $5.331
million during 1999, primarily attributed to a decrease in the weighted average
yield from 4.88% in 1998 to 4.36% in 1999. The average interest-bearing deposit
balances increased from $118.104 million during the year ended December 31, 1998
to $122.376 million for 1999, a $4.272 million increase. Interest expense on
other borrowings increased $834,000 from $739,000 in 1998 to $1.573 million in
1999, primarily due to an increase in average borrowings from $14.055 million
during the year ended December 31, 1998 to $31.086 million in 1999. The average
cost of all interest-bearing liabilities decreased from 4.92% for the year ended
December 31, 1998 to 4.50% for the year ended December 31, 1999.

Provision for Loan Losses

The provision for loan losses is charged to earnings to bring the total
allowance to a level deemed appropriate by management and is based upon
historical experience, the volume and type of lending conducted by the Bank,
industry standards, the amounts of nonperforming loans, general economic
conditions, particularly as they relate to the Bank's market areas, and other
factors related to the collectability of the Bank's loan portfolio. The
provision decreased to $610,000 for the year ended December 31, 1999 from the
provision of $950,000 for the year ended December 31, 1998. The decrease is a
result of the Company's improved credit quality and net loan charge-offs for the
period ending December 31, 1999 of $357,000 as compared to the $720,000 for the
period ending December 31, 1998. Management believes that the allowance for loan
losses of $1.331 million is adequate at December 31, 1999.

                                       25
<PAGE>

Noninterest Income

Total noninterest income for the period ended December 31, 1999 was $1.131
million as compared to the $1.650 million for the period ended December 31,
1998. The Company continues to focus on core earnings and is less dependent on
non-recurring sources of revenues as illustrated by net gains on asset sales for
the period ending December 31, 1998 of $456,000 as compared to $70,000 for the
period ended December 31, 1999.

Noninterest Expenses

Total noninterest expenses increased $1.089 million to $6.720 million for the
year ended December 31, 1999 from $5.631 million for the year ended December 31,
1998. The increases are primarily attributed to the Company's planned branch
expansions, opening an additional two offices during 1999.

Provision for Income Taxes

The provision for income taxes increased from $631,000 (an effective rate at
37.5%) during the year ended December 31, 1998 to $718,000 (an effective rate at
37.0%) during the year ended December 31, 1999.

Impact of Inflation and Changing Prices

The financial statements and related data presented herein have been prepared in
accordance with GAAP, which requires the measurement of financial position and
operating results in terms of historical dollars, without considering changes in
the relative purchasing power of money over time due to inflation. Unlike most
industrial companies, substantially all of the assets and liabilities of the
Company are monetary in nature. As a result, interest rates have a more
significant impact on the Company's performance than the effects of general
levels of inflation. Interest rates do not necessarily move in the same
direction or in the same magnitude as the prices of goods and services, since
such prices are affected by inflation to a larger extent than interest rates.

Future Accounting Requirements

Financial Accounting Standards 133 - Accounting for Derivative Investments and
Hedging Activities requires companies to record derivatives on the balance sheet
as assets or liabilities, measured at fair value. Gains or losses resulting from
changes in the values of those derivatives would be accounted for depending on
the use of the derivatives and whether they qualify for hedge accounting. The
key criterion for hedge accounting is that the hedging relationship must be
highly effective in achieving offsetting changes in fair value or cash flows.
The Company will be required to adopt this Statement effective January 1, 2001.
Management does not anticipate that this Statement will have a material impact
on the Company.

                                       26
<PAGE>


The following table presents summarized quarterly data (in thousands, except per
share amounts):
<TABLE>
<CAPTION>

                                                                                   Year Ended December 31, 2000
                                                                       ---------------------------------------------------
                                                                        First         Second         Third         Fourth
                                                                       Quarter        Quarter        Quarter       Quarter
                                                                       ------         ------         ------         ------
<S>                                                                    <C>             <C>            <C>            <C>
Interest income ................................................       $4,244          4,558          4,813          4,930

Interest expense ...............................................        2,025          2,266          2,431          2,583
                                                                       ------         ------         ------         ------

Net interest income ............................................        2,219          2,292          2,382          2,347

Provision for loan losses ......................................          165            165            175            180
                                                                       ------         ------         ------         ------

     Net interest income after provision
         for loan losses .......................................        2,054          2,127          2,207          2,167
                                                                       ------         ------         ------         ------

Noninterest income .............................................          298            189            277            328
Noninterest expense ............................................        1,776          1,824          1,783          1,802
                                                                       ------         ------         ------         ------

Net earnings before income taxes and extraordinary item ........          576            492            701            693
         Income taxes ..........................................          204            154            232            231

Net earnings before extraordinary item .........................          372            338            469            462


   Extraordinary item ..........................................           --             78             --             --
                                                                       ------         ------         ------         ------
Net Earnings ...................................................       $  372            416            469            462
                                                                       ======         ======         ======         ======

Basic earnings per common share ................................       $ 0.18         $ 0.21         $ 0.23         $ 0.23
                                                                       ======         ======         ======         ======


Diluted earnings per common share ..............................       $ 0.18         $ 0.21         $ 0.23         $ 0.23
                                                                       ======         ======         ======         ======


                                                                                   Year Ended December 31, 1999
                                                                       ---------------------------------------------------
                                                                        First         Second         Third         Fourth
                                                                       Quarter        Quarter        Quarter       Quarter
                                                                       ------         ------         ------         ------

Interest income ................................................       $3,530          3,655          3,868          3,991
Interest expense ...............................................        1,592          1,653          1,801          1,858
                                                                       ------         ------         ------         ------

     Net interest income .......................................        1,938          2,002          2,067          2,133

Provision for loan losses ......................................          155            155            165            135
                                                                       ------         ------         ------         ------

     Net interest income after provision
         for loan losses .......................................        1,783          1,847          1,902          1,998
                                                                       ------         ------         ------         ------

Noninterest income .............................................          282            329            261            259
Noninterest expense ............................................        1,585          1,651          1,747          1,737
                                                                       ------         ------         ------         ------

Net earnings before income taxes ...............................          480            525            416            520

Income taxes ...................................................          178            194            154            192
                                                                       ------         ------         ------         ------

                                       27
<PAGE>

Net earnings ...................................................       $  302            331            262            328
                                                                       ======         ======         ======         ======

Basic earnings per common share ................................       $  .13            .15            .12            .16
                                                                       ======         ======         ======         ======

Diluted earnings per common share ..............................       $  .13            .15            ,12            .16
                                                                       ======         ======         ======         ======
</TABLE>

                                       28
<PAGE>
Item 7A. Quantitative and Qualitative Disclosure About Market Risk
See Part I, Item 1. DESCRIPTION OF BUSINESS,  Market Risk.

Item 8. Financial Statements and Supplementary Data.
Pointe Financial Corporation

                                      INDEX

Audited Consolidated Financial Statement                               Page(s)

Report of Independent Certified Public Accounts
(Hacker, Johnson & Smith PA) .....................................     F-1

Consolidated Balance Sheets as of December 31, 2000 and 1999 .....     F-2

Consolidated Statements of Earnings for the years ended
December 31, 2000, 1999 and 1998 .................................     F-3, F-4

Consolidated Statements of Stockholder's Equity for the
years ended December 31, 2000, 1999 and 1998 .....................     F-5, F-6

Consolidated Statements of Cash Flows for the years ended
December 31, 2000, 1999 and 1998 .................................     F-7, F-8

Notes to Consolidated Financial Statements .......................     F-9, F-28

Independent Auditors' Report on  Supplementary
Information ......................................................     F-29

Consolidated Balance Sheets as of December 31, 2000 ..............     F-30

Consolidated Statements of Operations for the year ended
December 31, 2000 .................................................     F-31


Schedules are omitted because the conditions requiring their filing are not
applicable or because the required information is provided in the Consolidated
Financial Statements, including the Notes thereto.









                                       29


<PAGE>


                          Independent Auditors' Report



Board of Directors
Pointe Financial Corporation
Boca Raton, Florida

         We have audited the consolidated balance sheets of Pointe Financial
Corporation and Subsidiaries (the "Company") at December 31, 2000 and 1999, and
the related consolidated statements of earnings, changes in stockholders'
equity, and cash flows for each of the years in the three-year period ended
December 31, 2000. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

         We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

         In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of the Company
at December 31, 2000 and 1999, and the results of its operations and its cash
flows for each of the years in the three-year period ended December 31, 2000 in
conformity with generally accepted accounting principles.




HACKER, JOHNSON & SMITH PA
Fort Lauderdale, Florida
January 19, 2001



                                       F-1
<PAGE>


                  POINTE FINANCIAL CORPORATION AND SUBSIDIARIES

                           Consolidated Balance Sheets
                     ($ in thousands, except share amounts)
<TABLE>
<CAPTION>



                                                                                                At December 31,
                                                                                          ----------------------------
         Assets                                                                                2000               1999
                                                                                               ----               ----
<S>                                                                                       <C>                    <C>
Cash and due from banks .........................................................         $   6,482              6,822
Interest-bearing deposits with banks ............................................             1,134                 87
                                                                                          ---------          ---------

       Total cash and cash equivalents ..........................................             7,616              6,909

Securities available for sale ...................................................            53,670             46,157
Loans receivable, net of allowance for loan losses of $1,792
   in 2000 and $1,331 in 1999 ...................................................           173,129            150,852
Loans held for sale .............................................................               719              2,696
Accrued interest receivable .....................................................             2,035              1,375
Premises and equipment, net .....................................................             2,842              2,225
Federal Home Loan Bank stock, at cost ...........................................             2,482              1,753
Federal Reserve Bank stock, at cost .............................................               479                479
Foreclosed real estate ..........................................................                18                257
Deferred income tax asset .......................................................               591                348
Other assets ....................................................................               927                605
                                                                                          ---------          ---------

       Total ....................................................................         $ 244,508            213,656
                                                                                          =========          =========

   Liabilities and Stockholders' Equity

Liabilities:
   Noninterest-bearing demand deposits ..........................................            29,827             21,370
   Savings and NOW deposits .....................................................            12,048             13,640
   Money-market deposits ........................................................            33,920             38,146
   Time deposits ................................................................            85,341             73,020
                                                                                          ---------          ---------

       Total deposits ...........................................................           161,136            146,176

   Official checks ..............................................................             1,660              1,075
   Other borrowings .............................................................             8,067              5,394
   Advances from Federal Home Loan Bank .........................................            45,000             35,060
   Accrued interest payable .....................................................               989                688
   Advance payments by borrowers for taxes and insurance ........................               365                451
   Other liabilities ............................................................               561                229
                                                                                          ---------          ---------

       Total liabilities ........................................................           217,778            189,073
                                                                                          ---------          ---------

Commitments and contingencies (Notes 4, 8 and 9)

Stockholders' equity:
   Preferred stock, $.01 par value, 1,000,000 shares authorized, none issued ....                --                 --
   Common stock, $.01 par value, 5,000,000 shares authorized; 2,319,227 and
     2,310,018 shares issued at December 31, 2000 and 1999, respectively ........                23                 23
   Additional paid-in capital ...................................................            23,835             23,753
   Retained earnings ............................................................             6,274              4,959
   Accumulated other comprehensive income (loss) ................................              (373)            (1,102)
   Treasury stock, at cost (297,000 shares at December 31, 2000 and 1999) .......            (3,000)            (3,000)
   Stock incentive plan .........................................................               (29)               (50)
                                                                                          ---------          ---------

       Total stockholders' equity ...............................................            26,730             24,583
                                                                                          ---------          ---------

       Total ....................................................................         $ 244,508            213,656
                                                                                          =========          =========
</TABLE>




See Accompanying Notes to Consolidated Financial Statements.

                                       F-2
<PAGE>

                  POINTE FINANCIAL CORPORATION AND SUBSIDIARIES

                       Consolidated Statements of Earnings
                    ($ in thousands except per share amounts)
<TABLE>
<CAPTION>


                                                                                               Year Ended December 31,
                                                                                      ---------------------------------------
                                                                                          2000            1999           1998
                                                                                          ----            ----           ----
<S>                                                                                   <C>               <C>            <C>
Interest income:
   Loans receivable ............................................................      $ 14,864          12,361         10,459
   Securities available for sale ...............................................         3,439           2,581          2,311
   Securities held to maturity .................................................            --              --            270
   Other interest earning assets ...............................................           242             102             73
                                                                                      --------        --------       --------

       Total interest income ...................................................        18,545          15,044         13,113
                                                                                      --------        --------       --------

Interest expense:
   Deposits ....................................................................         6,334           5,331          5,759
   Borrowings ..................................................................         2,971           1,573            739
                                                                                      --------        --------       --------

       Total interest expense ..................................................         9,305           6,904          6,498
                                                                                      --------        --------       --------

Net interest income ............................................................         9,240           8,140          6,615

       Provision for loan losses ...............................................           685             610            950
                                                                                      --------        --------       --------

Net interest income after provision for loan losses ............................         8,555           7,530          5,665
                                                                                      --------        --------       --------

Noninterest income:
   Service charges on deposit accounts .........................................           815             663            729
   Loan servicing fees .........................................................            47              55             61
   Net gains from sale of loans ................................................             6              32            158
   Net realized gain (loss) on sale of securities ..............................          (123)             38            298
   Other .......................................................................           347             343            404
                                                                                      --------        --------       --------

       Total noninterest income ................................................         1,092           1,131          1,650
                                                                                      --------        --------       --------

Noninterest expenses:
   Salaries and employee benefits ..............................................         3,831           3,374          2,858
   Occupancy expense ...........................................................         1,161           1,133            992
   Advertising and promotion ...................................................           263             325            297
   Professional fees ...........................................................           207             273            191
   Federal deposit insurance premiums ..........................................            31             102             94
   Data processing .............................................................           413             363            287
   Other .......................................................................         1,279           1,150            912
                                                                                      --------        --------       --------

       Total noninterest expenses ..............................................         7,185           6,720          5,631
                                                                                      --------        --------       --------

       Earnings before income taxes and extraordinary item .....................         2,462           1,941          1,684

Income taxes ...................................................................           821             718            631
                                                                                      --------        --------       --------

       Earnings before extraordinary item ......................................         1,641           1,223          1,053

Extraordinary item - gain on extinguishment of debt, net of taxes of $47 .......            78              --             --
                                                                                      --------        --------       --------

       Net earnings ............................................................      $  1,719           1,223          1,053
                                                                                      ========        ========       ========

</TABLE>
(continued)

                                       F-3
<PAGE>


                  POINTE FINANCIAL CORPORATION AND SUBSIDIARIES

                 Consolidated Statements of Earnings, Continued
                    ($ in thousands except per share amounts)
<TABLE>
<CAPTION>


                                                                                             Year Ended December 31,
                                                                                   -------------------------------------------------
                                                                                     2000                  1999                 1998
                                                                                     -----                 ----                 ----
<S>                                                                           <C>                  <C>                  <C>
Net earnings per share - basic:
   Earnings before extraordinary item ..............................                   .81                  .56                  .56

   Extraordinary gain from extinguishment of debt ..................                   .04                   --                   --
                                                                             -------------         ------------         ------------

       Net earnings per share - basic ..............................         $         .85                  .56                  .56
                                                                             =============         ============         ============

Net earnings per share - diluted:
   Earnings before extraordinary item ..............................                   .81                  .56                  .55

   Extraordinary gain from extinguishment of debt ..................                   .04                   --                   --
                                                                             -------------         ------------         ------------

       Net earnings per share - diluted ............................         $         .85                  .56                  .55
                                                                             =============         ============         ============

   Weighted-average shares outstanding for basic ...................             2,019,567            2,197,503            1,826,613
                                                                             =============         ============         ============

   Weighted-average shares outstanding for diluted .................             2,019,632            2,204,244            1,854,611
                                                                             =============         ============         ============

   Dividends per share .............................................         $         .20                  .15                   --
                                                                             =============         ============         ============
</TABLE>









See Accompanying Notes to Consolidated Financial Statements

                                       F-4
<PAGE>


                  POINTE FINANCIAL CORPORATION AND SUBSIDIARIES

           Consolidated Statements of Changes in Stockholders' Equity
                                ($ In thousands)
<TABLE>
<CAPTION>


                                  Accumulated
                                                                                                                  Other
                                                                                                                  Compre-   Total
                                                                     Additional    Stock                          hensive   Stock-
                                                 Preferred   Common    Paid-In   Incentive  Treasury  Retained    Income    holders'
                                                  Stock      Stock     Capital     Plan      Stock    Earnings     (Loss)   Equity
                                                 -------    -------    -------    -------    -------    -------    -------  -------
<S>                                             <C>         <C>       <C>       <C>         <C>       <C>         <C>        <C>
Balance at December 31, 1997 ................   $     1          8    10,935         --         --      3,039       (138)    13,845
                                                                                                                            -------

Comprehensive income:
   Net earnings .............................        --         --        --         --         --      1,053         --      1,053

   Net change in unrealized loss on available
     for-sale securities, net of taxes ......        --         --        --         --         --         --       (239)      (239)
                                                                                                                            -------

   Comprehensive income .....................        --         --        --         --         --         --         --        814
                                                                                                                            -------
Three-for-two stock split
   (416,626 shares) .........................        --          4        (4)        --         --         --         --         --

Stock dividends on preferred stock
   (1,410 shares) ...........................        --         --        27         --         --        (27)        --         --

Proceeds from issuance of preferred stock,
   net of  offering costs (500 shares) ......        --         --        10         --         --         --         --         10

Conversion of preferred stock
   (56,026 shares) to common
   stock (126,026 shares) ...................        (1)         1        --         --         --         --         --         --

Proceeds from issuance of
   common stock, net of offering
   costs (869,565 shares) ...................        --          8    12,068         --         --         --         --     12,076

Common stock options exercised
   (11,982 shares) ..........................        --          1       119         --         --         --         --        120

Issuance of common stock to directors
   as compensation (11,045 shares) ..........        --          1       169         --         --         --         --        170
                                                -------    -------   -------    -------    -------    -------    -------    -------

Balance at December 31, 1998 ................   $    --         23    23,324         --         --      4,065       (377)    27,035
                                                -------    -------   -------    -------    -------    -------    -------    -------
</TABLE>

                                                                    (continued)
                                       F-5
<PAGE>
                  POINTE FINANCIAL CORPORATION AND SUBSIDIARIES

           Consolidated Statements of Changes in Stockholders' Equity
                                ($ In thousands)
<TABLE>
<CAPTION>


                                  Accumulated
                                                                                                                  Other
                                                                                                                  Compre-   Total
                                                                     Additional    Stock                          hensive   Stock-
                                                 Preferred   Common    Paid-In   Incentive  Treasury  Retained    Income    holders'
                                                  Stock      Stock     Capital     Plan      Stock    Earnings     (Loss)   Equity
                                                 -------    -------    -------    -------    -------    -------    -------  -------

<S>                                            <C>         <C>       <C>       <C>         <C>       <C>         <C>        <C>
Balance at December 31, 1998 ................   $    --         23    23,324         --         --      4,065       (377)    27,035
                                                                                                                            -------
Comprehensive income:
   Net earnings .............................        --         --        --         --         --      1,223         --      1,223

   Net change in unrealized loss on
     available-for-sale
     securities, net of taxes ...............        --         --        --         --         --         --       (725)      (725)
                                                                                                                            -------

   Comprehensive income .....................        --         --        --         --         --         --         --        498
                                                                                                                            -------

Cash dividends paid on common stock .........        --         --        --         --         --       (329)        --       (329)

Purchase of Treasury Stock
   (297,000 shares) .........................        --         --        --         --     (3,000)        --         --     (3,000)

Common stock options exercised
   (25,458 shares) ..........................        --         --       258         --         --         --         --        258

Issuance of common stock to directors
   as compensation (11,228 shares) ..........        --         --       109         --         --         --         --        109

Shares issued in stock incentive plan
   (6,935 shares) ...........................        --         --        68        (68)        --         --         --         --

Shares committed to participants in
   stock incentive plan .....................        --         --        --         12         --         --         --         12

Shares cancelled in stock incentive
   plan (575 shares) ........................        --         --        (6)         6         --         --         --         --
                                                -------    -------   -------    -------    -------    -------    -------    -------

Balance at December 31, 1999 ................        --         23    23,753        (50)    (3,000)     4,959     (1,102)    24,583
                                                                                                                            -------

Comprehensive income:
   Net earnings .............................        --         --        --         --         --      1,719         --      1,719

   Net change in unrealized loss on
     available-for-sale securities,
     net of taxes ...........................        --         --        --         --         --         --        729        729
                                                                                                                            -------

   Comprehensive income .....................        --         --        --         --         --         --         --      2,448
                                                                                                                            -------

Shares committed to participants in
   stock incentive plan .....................        --         --        --         11         --         --         --         11

Committed shares cancelled in stock
   incentive plan (1,010 shares) ............        --         --       (10)        10         --         --         --         --

Cash dividends paid .........................        --         --        --         --         --       (404)        --       (404)

Issuance of common stock to directors
   as compensation (12,164 shares) ..........        --         --       109         --         --         --         --        109

Cancellation of common stock issued to
   directors as compensation (1,945 shares)..        --         --       (17)        --         --         --         --        (17)
                                                -------    -------   -------    -------    -------    -------    -------    -------

Balance at December 31, 2000 ................   $    --         23    23,835        (29)    (3,000)     6,274       (373)    26,730
                                                =======    =======   =======    =======    =======    =======    =======    =======
</TABLE>





See Accompanying Notes to Consolidated Financial Statements

                                       F-6
<PAGE>


                  POINTE FINANCIAL CORPORATION AND SUBSIDIARIES

                      Consolidated Statements of Cash Flows
                                ($ in thousands)
<TABLE>
<CAPTION>

                                                                                             Year Ended December 31,
                                                                                     --------------------------------------
                                                                                         2000           1999           1998
                                                                                         ----           ----           ----
<S>                                                                                  <C>               <C>            <C>
Cash flows from operating activities:
     Net earnings ..............................................................     $  1,719          1,223          1,053
     Adjustments to reconcile net earnings to net cash provided by
       operating activities:
        Provision for loan losses ..............................................          685            610            950
        Depreciation ...........................................................          423            447            389
        Net amortization of fees, premiums, discounts and other ................          131            293            101
        (Credit) provision for deferred income taxes ...........................         (243)          (127)             3
        Common stock issued as compensation for services .......................           92            109            170
        Shares committed to participants in incentive stock plan ...............           11             12             --
        Loss (gain) on sale of securities ......................................          123            (38)          (298)
        Gain on sale of loans ..................................................           (6)           (32)          (158)
        Originations of loans held for sale ....................................       (7,082)        (2,496)        (1,994)
        Proceeds from sale of loans held for sale ..............................        9,065            449          5,978
        (Increase) decrease in other assets ....................................         (687)           423             64
        Increase in accrued interest receivable ................................         (660)          (105)          (243)
        Increase (decrease) in official checks .................................          585           (173)           (72)
        Increase (decrease) in accrued interest payable ........................          301             (7)            22
        Increase (decrease) in other liabilities ...............................          332              1           (255)
                                                                                     --------       --------       --------

           Net cash provided by operating activities ...........................        4,789            589          5,710
                                                                                     --------       --------       --------

Cash flows from investing activities:
     Purchase of securities available for sale .................................      (26,731)       (29,952)       (61,703)
     Proceeds from sale of securities ..........................................        8,955         17,083         34,225
     Maturities and calls of securities available for sale .....................       10,100         14,285          7,950
     Purchase of securities held to maturity ...................................           --             --         (2,100)
     Principal repayments on securities available for sale .....................        1,123          2,376            632
     Principal repayments on securities held to maturity .......................           --             --            259
     Net increase in loans .....................................................      (23,007)       (23,560)       (24,213)
     Purchase of premises and equipment, net ...................................       (1,040)          (912)          (924)
     Cash paid for foreclosed real estate ......................................          (99)            --             --
     Proceeds from sale of foreclosed real estate ..............................          263            106            448
     Net increase in other securities ..........................................         (729)          (518)          (144)
                                                                                     --------       --------       --------

           Net cash used in investing activities ...............................      (31,165)       (21,092)       (45,570)
                                                                                     --------       --------       --------

Cash flows from financing activities:
     Net increase in deposits ..................................................       14,960          4,964         16,217
     Net increase in Federal Home Loan Bank advances ...........................        9,940         20,060         10,600
     Net increase in other borrowings ..........................................        2,673          1,948          1,655
     (Decrease) increase in advance payments for taxes and insurance ...........          (86)            40             78
     Net proceeds from issuance of preferred stock, net of offering costs ......           --             --             10
     Net proceeds from issuance of common stock, net of offering costs .........           --             --         12,076
     Proceeds from exercise of stock options ...................................           --            258            120
     Cash dividends paid on common stock .......................................         (404)          (329)            --
     Purchase of treasury stock ................................................           --         (3,000)            --
                                                                                     --------       --------       --------

           Net cash provided by financing activities ...........................       27,083         23,941         40,756
                                                                                     --------       --------       --------
</TABLE>

                                      F-7

<PAGE>


                 POINTE FINANCIAL CORPORATION AND SUBSIDIARIES

                Consolidated Statements of Cash Flows, Continued
                                ($ in thousands)
<TABLE>
<CAPTION>

                                                                                             Year Ended December 31,
                                                                                     --------------------------------------
                                                                                         2000           1999           1998
                                                                                         ----           ----          -----
<S>                                                                                  <C>               <C>            <C>
           Net increase in cash and cash equivalents ...........................          707          3,438            896

Cash and cash equivalents at beginning of year .................................        6,909          3,471          2,575
                                                                                     --------       --------       --------

Cash and cash equivalents at end of year .......................................     $  7,616          6,909          3,471
                                                                                     ========       ========       ========

Supplemental disclosure of cash flow information: Cash paid during the year for:
        Interest ...............................................................     $  9,004          6,911          6,476
                                                                                     ========       ========       ========

        Income taxes ...........................................................     $    998            414            650
                                                                                     ========       ========       ========

     Noncash transactions:
        Reclassification of loans receivable to foreclosed real estate .........     $     --            257            725
                                                                                     ========       ========       ========

        Reclassification of foreclosed real estate to loans receivable .........     $     --            247             29
                                                                                     ========       ========       ========

        Accumulated other comprehensive income (loss), change in unrealized
           loss on securities available for sale ...............................     $    729           (725)          (239)
                                                                                     ========       ========       ========

        Stock dividends paid on preferred stock ................................     $     --             --             27
                                                                                     ========       ========       ========

        Activity in stock incentive plan, net ..................................     $     21             50             --
                                                                                     ========       ========       ========

        Transfer of securities from held to maturity to available for sale
           category ............................................................     $     --             --          8,456
                                                                                     ========       ========       ========

        Reclassification of foreclosed real estate to other assets .............     $     75             23             --
                                                                                     ========       ========       ========

        Transfer of loans to loans held for sale ...............................     $  6,736             --             --
                                                                                     ========       ========       ========
</TABLE>





See Accompanying Notes to Consolidated Financial Statements



                                       F-8
<PAGE>


                  POINTE FINANCIAL CORPORATION AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

              For the Years Ended December 31, 2000, 1999 and 1998


(1) Description of Business and Summary of Significant Accounting Policies
     General. Pointe Financial Corporation (the "Holding Company") is a
          Financial Holding Company. The Holding Company owns 100% of Pointe
          Bank (the "Bank"), a state-chartered commercial bank and Pointe
          Financial Services, Inc., (collectively the "Company"). The Bank
          provides a variety of community banking services to small and
          middle-market businesses and individuals through its five banking
          offices located in Broward, Miami-Dade and Palm Beach counties,
          Florida. Pointe Financial Services, Inc. is an inactive subsidiary.

          In 2000, the Company formed Pointe Capital, an investment banking
          joint venture with First Integrated Capital Corporation, a subsidiary
          of McGinn, Smith & Company, Inc., a related party. Pointe Capital
          offers investment banking services to small and medium-size businesses
          in South Florida. The Company accounts for its investment in Pointe
          Capital using the equity method of accounting. Activity was minimal
          during the year ended December 31, 2000 and the Company's investment
          of approximately $500,000 in Pointe Capital is included in other
          assets in the consolidated balance sheet.

          On January 4, 2001, the Company entered into an agreement to purchase
          four branch offices in Miami-Dade County from another financial
          institution. The branches have a combined deposit base of
          approximately $57.2 million. The Company will also acquire in this
          transaction consumer loans of approximately $6.5 million and $25.0
          million of participation interests in existing commercial real estate
          loans in the seller's portfolio.

     Basis of Presentation. The accompanying consolidated financial statements
          include the Holding Company and its subsidiaries. All significant
          intercompany accounts and transactions have been eliminated in
          consolidation.

          The accounting and reporting policies of the Company conform to
          generally accepted accounting principles and to general practices
          within the banking industry. The following summarizes the more
          significant of these policies and practices.

     Use of Estimates. In preparing consolidated financial statements in
          conformity with generally accepted accounting principles, management
          is required to make estimates and assumptions that affect the reported
          amounts of assets and liabilities as of the date of the balance sheet
          and reported amounts of revenues and expenses during the reporting
          period. Actual results could differ from those estimates. Material
          estimates that are particularly susceptible to significant change in
          the near term relate to the determination of the allowance for loan
          losses and deferred tax assets.

     Cash and Cash Equivalents. For purposes of the consolidated statements of
          cash flows, cash and cash equivalents include cash and balances due
          from banks and interest-bearing deposits with banks.

     Securities. The Company may classify its securities as either trading,
          held to maturity or available for sale. Trading securities are held
          principally for resale and recorded at their fair values. Unrealized
          gains and losses on trading securities are included immediately in
          earnings. Held-to-maturity securities are those which the Company has
          the positive intent and ability to hold to maturity and are reported
          at amortized cost. Available-for-sale securities consist of securities
          not classified as trading securities nor as held-to-maturity
          securities. Unrealized holding gains and losses, net of tax, on
          available-for-sale securities are excluded from earnings and reported
          in other comprehensive income. Gains and losses on the sale of
          available-for-sale securities are recorded on the trade date and are
          determined using the specific-identification method. Premiums and
          discounts on securities available for sale are recognized in interest
          income using the interest method over the period to maturity.

                                                                     (continued)

                                       F-9
<PAGE>

                  POINTE FINANCIAL CORPORATION AND SUBSIDIARIES

              Notes to Consolidated Financial Statements, Continued


(1) Description of Business and Summary of Significant Accounting Policies,
    Continued
     Loans Held for Sale. Loans held for sale are carried at the lower of cost
          or estimated market value in the aggregate. Net unrealized losses are
          recognized through a valuation allowance by charges to earnings. At
          December 31, 2000 and 1999 the book value of loans held for sale
          approximated market value in the aggregate.

          Loan origination fees and direct loan origination costs are deferred
          until the related loan is sold, at which time the net fees are
          included in the gain on sale of loans in the consolidated statements
          of earnings.

     Loans Receivable. Loans receivable that management has the intent and
          ability to hold for the foreseeable future or until maturity or
          pay-off are reported at their outstanding principal adjusted for any
          charge-offs, the allowance for loan losses, and any deferred fees or
          costs on originated loans.

          Loan origination fees and certain direct origination costs are
          capitalized and recognized as an adjustment of the yield of the
          related loan.

          The accrual of interest on loans is discontinued at the time the loan
          is ninety days delinquent unless the credit is well-secured and in
          process of collection. In all cases, loans are placed on nonaccrual or
          charged-off at an earlier date if collection of principal or interest
          is considered doubtful.

          All interest accrued but not collected for loans that are placed on
          nonaccrual or charged-off is reversed against interest income. The
          interest on these loans is accounted for on the cash-basis or
          cost-recovery method, until qualifying for return to accrual. Loans
          are returned to accrual status when all the principal and interest
          amounts contractually due are brought current and future payments are
          reasonably assured.

     Allowance for Loan Losses. The allowance for loan losses is established as
          losses are estimated to have occurred through a provision for loan
          losses charged to earnings. Loan losses are charged against the
          allowance when management believes the uncollectibility of a loan
          balance is confirmed. Subsequent recoveries, if any, are credited to
          the allowance.

          The allowance for loan losses is evaluated on a regular basis by
          management and is based upon management's periodic review of the
          collectibility of the loans in light of historical experience, the
          nature and volume of the loan portfolio, adverse situations that may
          affect the borrower's ability to repay, estimated value of any
          underlying collateral and prevailing economic conditions. This
          evaluation is inherently subjective as it requires estimates that are
          susceptible to significant revision as more information becomes
          available.

          A loan is considered impaired when, based on current information and
          events, it is probable that the Company will be unable to collect the
          scheduled payments of principal or interest when due according to the
          contractual terms of the loan agreement. Factors considered by
          management in determining impairment include payment status,
          collateral value, and the probability of collecting scheduled
          principal and interest payments when due. Loans that experience
          insignificant payment delays and payment shortfalls generally are not
          classified as impaired. Management determines the significance of
          payment delays and payment shortfalls on a case-by-case basis, taking
          into consideration all of the circumstances surrounding the loan and
          the borrower, including the length of the delay, the reasons for the
          delay, the borrower's prior payment record, and the amount of the
          shortfall in relation to the principal and interest owed. Impairment
          is measured on a loan by loan basis for commercial and commercial real
          estate loans by either the present value of expected future cash flows
          discounted at the loan's effective interest rate, the loan's
          obtainable market price, or the fair value of the collateral if the
          loan is collateral dependent.

                                                                     (continued)

                                       F-10
<PAGE>

                  POINTE FINANCIAL CORPORATION AND SUBSIDIARIES

         Notes to Consolidated Financial Statements, Continued


(1) Description of Business and Summary of Significant Accounting Policies,
    Continued
     Allowance for Loan Losses, Continued. Large groups of smaller balance
          homogeneous loans are collectively evaluated for impairment.
          Accordingly, the Company does not separately identify individual
          consumer and residential loans for impairment disclosures.

     Foreclosed Real Estate. Real estate properties acquired through, or in
          lieu of, loan foreclosure are to be sold and are initially recorded at
          fair value at the date of foreclosure establishing a new cost basis.
          After foreclosure, valuations are periodically performed by management
          and the real estate is carried at the lower of carrying amount or fair
          value less cost to sell. Revenue and expenses from operations and
          changes in the valuation allowance are included in the consolidated
          statements of earnings.

     Premises and Equipment. Premises, furniture, fixtures, equipment and
          leasehold improvements are carried at cost, less accumulated
          depreciation and amortization computed using the straight-line method.

     Transfer of Financial Assets. Transfers of financial assets are accounted
          for as sales, when control over the assets has been surrendered.
          Control over transferred assets is deemed to be surrendered when (1)
          the assets have been isolated from the Company, (2) the transferee
          obtains the right (free of conditions that constrain it from taking
          advantage of that right) to pledge or exchange the transferred assets,
          and (3) the Company does not maintain effective control over the
          transferred assets through an agreement to repurchase them before
          their maturity.

     IncomeTaxes. Deferred tax assets and liabilities are determined using the
          liability (or balance sheet) method. Under this method, the net
          deferred tax asset or liability is determined based on the tax effects
          of the temporary differences between the book and tax bases of the
          various balance sheet assets and liabilities and gives current
          recognition to changes in tax rates and laws.

     Stock Compensation Plans. Statement of Financial Accounting Standards
          (SFAS) No. 123, Accounting for Stock-Based Compensation, encourages
          all entities to adopt a fair value based method of accounting for
          employee stock compensation plans, whereby compensation cost is
          measured at the grant date based on the value of the award and is
          recognized over the service period, which is usually the vesting
          period. However, it also allows an entity to continue to measure
          compensation cost for those plans using the intrinsic value based
          method of accounting prescribed by Accounting Principles Board Opinion
          No. 25, Accounting for Stock Issued to Employees, whereby compensation
          cost is the excess, if any, of the quoted market price of the stock at
          the grant date (or other measurement date) over the amount an employee
          must pay to acquire the stock. Stock options issued under the
          Company's stock option plan have no intrinsic value at the grant date,
          and under Opinion No. 25 no compensation cost is recognized for them.
          The Company has elected to continue with the accounting methodology in
          Opinion No. 25 and, as a result, has provided proforma disclosures of
          net earnings and earnings per share and other disclosures, as if the
          fair value based method of accounting had been applied. (See Note 15).

     Earnings Per Share. Basic earnings per share is computed on the basis of
          the weighted-average number of common shares outstanding. Diluted
          earnings per share is computed based on the weighted-average number of
          shares outstanding plus the effect of outstanding stock options,
          computed using the treasury stock method.

     Off-Balance-Sheet Financial Instruments. In the ordinary course of
          business the Company has entered into off-balance-sheet financial
          instruments consisting of commitments to extend credit, unused lines
          of credit and stand-by letters of credit. Such financial instruments
          are recorded in the consolidated financial statements when they are
          funded.

                                                                    (continued)

                                       F-11
<PAGE>

                  POINTE FINANCIAL CORPORATION AND SUBSIDIARIES

              Notes to Consolidated Financial Statements, Continued


(1) Description of Business and Summary of Significant Accounting Policies,
    Continued
     Fair  Values of Financial Instruments. The fair value of a financial
          instrument is the current amount that would be exchanged between
          willing parties, other than in a forced liquidation. Fair value is
          best determined based upon quoted market prices. However, in many
          instances, there are no quoted market prices for the Company's various
          financial instruments. In cases where quoted market prices are not
          available, fair values are based on estimates using present value or
          other valuation techniques. Those techniques are significantly
          affected by the assumptions used, including the discount rate and
          estimates of future cash flows. Accordingly, the fair value estimates
          may not be realized in an immediate settlement of the instrument. SFAS
          107 excludes certain financial instruments and all nonfinancial
          instruments from its disclosure requirements. Accordingly, the
          aggregate fair value amounts presented may not necessarily represent
          the underlying fair value of the Company. The following methods and
          assumptions were used by the Company in estimating fair values of
          financial instruments:

               Cash and Cash Equivalents. The carrying amounts of cash and cash
               equivalents approximate their fair value.

               Securities. Fair values for securities available for sale are
               based on quoted market prices, where available. If quoted market
               prices are not available, fair values are based on quoted market
               prices of comparable instruments. The carrying value of Federal
               Home Loan Bank stock and Federal Reserve Bank stock approximates
               fair value.

               Loans Held for Sale. Fair values of loans held for sale are based
               on commitments on hand from investors or prevailing market
               prices.

               Loans. For variable-rate loans that reprice frequently and have
               no significant change in credit risk, fair values are based on
               carrying values. Fair values for fixed-rate mortgage (e.g.
               one-to-four family residential), commercial real estate and
               commercial loans are estimated using discounted cash flow
               analyses, using interest rates currently being offered for loans
               with similar terms to borrowers of similar credit quality. Fair
               values for nonperforming loans are estimated using discounted
               cash flow analysis or underlying collateral values, where
               applicable.

               Accrued Interest Receivable. Book value approximates fair value.

               Deposit Liabilities. The fair values disclosed for demand, NOW,
               money-market and savings deposits are, by definition, equal to
               the amount payable on demand at the reporting date (that is,
               their carrying amounts). Fair values for fixed-rate certificates
               of deposit are estimated using a discounted cash flow calculation
               that applies interest rates currently being offered on
               certificates to a schedule of aggregated expected monthly
               maturities of time deposits.

               Borrowed Funds. The carrying amounts of other borrowings
               approximate their fair values. Fair values of advances from
               Federal Home Loan Bank are estimated using discounted cash flow
               analysis based on the Company's current incremental borrowing
               rates for similar types of borrowings.

               Off-Balance-Sheet Instruments. Fair values for off-balance-sheet
               lending commitments are based on fees currently charged to enter
               into similar agreements, taking into account the remaining terms
               of the agreements and the counterparties' credit standing.

     Advertising.  The Company expenses all advertising as incurred.

                                                                    (continued)


                                       F-12

<PAGE>

                  POINTE FINANCIAL CORPORATION AND SUBSIDIARIES

              Notes to Consolidated Financial Statements, Continued


(1) Description of Business and Summary of Significant Accounting Policies,
    Continued
     Future Accounting Requirements. Financial Accounting Standards 133 -
          Accounting for Derivative Investments and Hedging Activities requires
          companies to record derivatives on the balance sheet as assets or
          liabilities, measured at fair value. Gains or losses resulting from
          changes in the values of those derivatives would be accounted for
          depending on the use of the derivatives and whether they qualify for
          hedge accounting. The key criterion for hedge accounting is that the
          hedging relationship must be highly effective in achieving offsetting
          changes in fair value or cash flows. The Company will be required to
          adopt this Statement January 1, 2001. Management does not anticipate
          that this Statement will have a material impact on the Company.

(2) Securities Available for Sale
     Securities have been classified according to management's intent. The
          carrying amount of securities and their approximate fair values are
          summarized as follows (in thousands):
<TABLE>
<CAPTION>

                                                                                     Gross        Gross
                                                                     Amortized    Unrealized   Unrealized      Fair
                                                                      Cost           Gains       Losses        Value
                                                                  ------------    ----------   ----------   -----------
<S>                                                                  <C>               <C>           <C>       <C>
           At December 31, 2000:
              U.S. Treasury securities.............................  $ 11,137          23            (94)      11,066
              Mortgage-backed securities...........................    12,771          53           (653)      12,171
              Mutual fund..........................................     2,025          --            (85)       1,940
              U.S. Government agency securities....................    22,049          13           (112)      21,950
              Tax exempt securities................................     6,037         247             --        6,284
              Other................................................       250           9             --          259
                                                                     --------        ----         ------      -------

                 Total ............................................  $ 54,269         345           (944)      53,670
                                                                     ========         ===         ======       ======

           At December 31, 1999:
              U.S. Treasury securities.............................    14,252          --           (401)      13,851
              Mortgage-backed securities...........................    13,894           2           (587)      13,309
              Mutual fund..........................................     4,108          --           (233)       3,875
              U.S. Government agency securities....................    15,495          --           (548)      14,947
              Other................................................       175          --             --          175
                                                                     --------         ---         ------      --------

                 Total ............................................  $ 47,924           2         (1,769)      46,157
                                                                     ========         ===          =====       =======
</TABLE>

     TheCompany currently invests in one mutual fund consisting of a Short U.S.
          Government Securities Portfolio. The Short U.S. Government
          Securities Portfolio pursues its investment objective by investing in
          high-quality assets, primarily in securities issued or guaranteed by
          the U.S. Government, its agencies or instrumentalties with remaining
          maturities of 5 years or less that qualify as "liquid assets."

     During the quarter ended September 30, 1998, the Company sold $1.2 million
          of securities from the held to maturity category. As required by
          Statement of Financial Accounting Standards No. 115 - Accounting for
          Certain Investments in Debt and Equity Securities, all the remaining
          securities classified as held to maturity totaling $8.5 million were
          transferred to the available for sale category.

     At December 31, 2000 and 1999, approximately $505,000 and $492,000
          respectively, of securities were pledged for the Company's treasury
          tax and loan account, approximately $11,262,000 and $6,251,000 were
          pledged as collateral for investment repurchase agreements and
          approximately $11,290,000 and $12,736,000 were pledged for public
          deposits.

                                                                    (continued)

                                       F-13
<PAGE>




                  POINTE FINANCIAL CORPORATION AND SUBSIDIARIES

              Notes to Consolidated Financial Statements, Continued


(2) Securities Available for Sale, Continued
    The following summarizes sales of securities (in thousands):
<TABLE>
<CAPTION>

                                                                                         Year Ended December 31,
                                                                                    ---------------------------------
                                                                                     2000           1999         1998
                                                                                     ----           ----         ----

<S>                                                                               <C>             <C>          <C>
           Proceeds from sale of securities...................................    $ 8,955         17,083       34,225
                                                                                  =======         ======       ======

           Gross gains from sale of securities................................         12             41          376
           Gross losses from sale of securities...............................       (135)            (3)         (78)
                                                                                  -------         ------       ------

           Net (losses) gains.................................................    $  (123)            38          298
                                                                                  =======         ======       ======
</TABLE>

    The scheduled maturities of securities available for sale at December 31,
    2000 are as follows (in thousands):
<TABLE>
<CAPTION>

                                                                                               Amortized       Fair
                                                                                                 Cost          Value
                                                                                               ---------       -----

<S>                                                                                            <C>             <C>
           Due in less than one year.....................................................      $  4,019        4,023
           Due from one to five years....................................................        29,217       29,045
           Due from five to ten years....................................................           200          207
           Due in over ten years.........................................................         6,037        6,284
           Mortgage-backed securities....................................................        12,771       12,171
           Mutual fund...................................................................         2,025        1,940
                                                                                               --------      -------
                                                                                               $ 54,269       53,670
                                                                                               ========      =======
</TABLE>

(3) Loans Receivable
    The components of loans are summarized as follows (in thousands):
<TABLE>
<CAPTION>

                                                                                                 At December 31,
                                                                                             -----------------------
                                                                                               2000               1999
                                                                                               ----               ----

<S>                                                                                       <C>                   <C>
              Residential real estate.................................................    $  88,659             80,814
              Commercial real estate..................................................       29,699             25,655
              Commercial loans........................................................       41,305             34,054
              Consumer loans..........................................................       15,468             11,826
                                                                                          ---------           --------

                                                                                            175,131            152,349

              Deferred loan fees......................................................         (210)              (166)
              Allowance for loan losses...............................................       (1,792)            (1,331)
                                                                                          ---------           --------

                                                                                          $ 173,129            150,852
                                                                                          =========           ========
</TABLE>

                                                                    (continued)

                                       F-14
<PAGE>


                  POINTE FINANCIAL CORPORATION AND SUBSIDIARIES

              Notes to Consolidated Financial Statements, Continued


(3) Loans Receivable, Continued
    An analysis of the change in the allowance for loan losses follows (in
    thousands):
<TABLE>
<CAPTION>

                                                                                           Year Ended December 31,
                                                                                     ---------------------------------
                                                                                     2000          1999           1998
                                                                                     ----          ----           ----

<S>                                                                               <C>             <C>              <C>
              Balance at beginning of year....................................    $ 1,331         1,078            848
                                                                                  -------         -----          -----

              Loans charged-off...............................................       (239)         (361)          (722)
              Recoveries......................................................         15             4              2
                                                                                  -------         -----          ------

                  Net loans charged-off.......................................       (224)         (357)          (720)
                                                                                  -------         -----          -----

              Provision for loan losses.......................................        685           610            950
                                                                                  -------         -----          -----

              Balance at end of year..........................................    $ 1,792         1,331          1,078
                                                                                  =======         =====          =====
</TABLE>

    The following summarizes the amount of impaired loans (in thousands):
<TABLE>
<CAPTION>

                                                                                                     At December 31,
                                                                                                    ----------------
                                                                                                     2000        1999
                                                                                                     ----        ----
<S>                                                                                               <C>           <C>
              Loans identified as impaired:
                  Gross loans with no related allowance for losses..............................  $    --          --
                  Gross loans with related allowance for losses recorded........................      150         440
                  Less:  Allowances on these loans..............................................      (75)       (220)
                                                                                                  -------        ----

              Net investment in impaired loans..................................................  $    75         220
                                                                                                  =======        ====
</TABLE>


    The average net investment in impaired loans and interest income recognized
      and received on impaired loans is as follows (in thousands):
<TABLE>
<CAPTION>

                                                                                             Year Ended December 31,
                                                                                         ----------------------------
                                                                                         2000        1999        1998
                                                                                         ----        ----        ----

<S>                                                                                   <C>             <C>       <C>
              Average investment in impaired loans..................................  $   109         220       1,665
                                                                                      =======      ======       =====

              Interest income recognized on impaired loans..........................  $    --          --         157
                                                                                      =======      ======      ======

              Interest income received on impaired loans............................  $    --          --         157
                                                                                      =======      ======      ======
</TABLE>

    No additional funds are committed to be advanced in connection with
    impaired loans.


                                                                     (continued)

                                       F-15
<PAGE>


                  POINTE FINANCIAL CORPORATION AND SUBSIDIARIES

              Notes to Consolidated Financial Statements, Continued


(4) Premises and Equipment
    Premises and equipment is summarized as follows (in thousands):
<TABLE>
<CAPTION>

                                                                                                At December 31,
                                                                                               ------------------
                                                                                               2000          1999
                                                                                               ----          ----

<S>                                                                                        <C>                  <C>
             Land.......................................................................   $    964             964
             Building...................................................................        180             180
             Leasehold improvements.....................................................        986           1,052
             Furniture, fixtures and equipment..........................................      2,992           2,433
             Construction in process....................................................        401              --
                                                                                           --------        --------

               Total, at cost...........................................................      5,523           4,629

             Less accumulated depreciation and amortization.............................     (2,681)         (2,404)
                                                                                           --------        --------

               Net book value...........................................................    $ 2,842           2,225
                                                                                            =======        ========
</TABLE>

    The Company leases four of its banking offices. Rental expense was
          approximately $534,000, $487,000 and $434,000 for the years ended
          December 31, 2000, 1999 and 1998, respectively. Approximate future
          minimum annual rental payments under noncancellable leases are as
          follows (in thousands):
<TABLE>
<CAPTION>

           Year Ending
           December 31,                                                                                     Amount
           ------------                                                                                     ------
<S>            <C>                                                                                         <C>
               2001................................................................................        $   741
               2002................................................................................            547
               2003................................................................................            237
               2004................................................................................            169
               2005................................................................................            140
               Thereafter..........................................................................             23
                                                                                                           -------

               Total...............................................................................       $ 1,857
                                                                                                            ======
</TABLE>

(5) Deposits
    The aggregate amount of jumbo certificates of deposit with a minimum
         denomination of $100,000, was approximately $31.6 million and $28.2
         million at December 31, 2000 and 1999, respectively.

    At December 31, 2000, the scheduled maturities of certificates of deposit
         are as follows (in thousands):
<TABLE>
<CAPTION>

           Year Ending
           December 31,                                                                                      Amount
           ------------                                                                                      ------
<S>            <C>                                                                                         <C>
               2001................................................................................        $ 65,770
               2002................................................................................          16,737
               2003................................................................................           2,284
               2004................................................................................              77
               2005 and thereafter.................................................................             473
                                                                                                          ---------

                                                                                                           $ 85,341
                                                                                                           ========
</TABLE>

(6) Other Borrowings
    The Company enters into investment repurchase agreements that require the
          Company to pledge securities as collateral for the balance in the
          accounts. At December 31, 2000 and 1999 the balance totaled $8,067,000
          and $5,394,000, respectively and the Company pledged securities as
          collateral for these agreements with a carrying value of approximately
          $11,262,000 and $6,251,000, respectively.

                                                                     (continued)

                                       F-16
<PAGE>


                  POINTE FINANCIAL CORPORATION AND SUBSIDIARIES

              Notes to Consolidated Financial Statements, Continued


(7) Advances from Federal Home Loan Bank
     Maturities and interest rates on advances from the Federal Home Loan Bank
          ("FHLB") were as follows (dollars in thousands):
<TABLE>
<CAPTION>

                 Year Ending                                                                      At December 31,
                                                                                Interest       ---------------------
                 December 31,                                                      Rate             2000         1999
                 ------------                                                   ---------           ----         ----

<S>                  <C>                                                          <C>          <C>             <C>
                     2000..............................................           4.55%        $      --       5,060
                     2003..............................................           6.53%           15,000          --
                     2005..............................................           6.23%           15,000          --
                     2007..............................................           5.47%               --       5,000
                     2008..............................................           5.09%            5,000      10,000
                     2009..............................................           4.61%               --       5,000
                     2009..............................................           4.95%               --      10,000
                     2010..............................................           5.98%           10,000          --
                                                                                               ---------      ------

                         Total..............................................                   $  45,000      35,060
                                                                                               =========     =======
</TABLE>

     The FHLB has the option to call the above advances at an earlier date than
          the maturity date. At December 31, 2000 and 1999, pursuant to the
          collateral agreement with the FHLB, advances are collateralized by the
          Company's FHLB stock and a blanket lien on the Company's qualifying
          first mortgage, one-to-four family residential loans.

     In 2000, the Company successfully completed the sale of a $5.0 million
          Federal Home Loan Bank advance. The Company recorded a pre-tax gain of
          $125,000 on the sale of the advance. This gain is reported as an
          extraordinary item - gain on extinguishment of debt, net of tax of
          $47,000.

(8) Commitments and Contingencies
     In the ordinary course of business, the Company has various outstanding
          commitments and contingent liabilities that are not reflected in the
          accompanying consolidated financial statements.

(9) Financial Instruments
     The Company is a party to financial instruments with off-balance-sheet risk
          in the normal course of business to meet the financing needs of its
          customers. These financial instruments are commitments to extend
          credit and standby letters of credit and may involve, to varying
          degrees, elements of credit and interest-rate risk in excess of the
          amount recognized in the consolidated balance sheet. The contract
          amounts of these instruments reflect the extent of involvement the
          Company has in these financial instruments.

     The Company's exposure to credit loss in the event of nonperformance by the
          other party to the financial instrument for commitments to extend
          credit and standby letters of credit is represented by the contractual
          amount of those instruments. The Company uses the same credit policies
          in making commitments as it does for on-balance-sheet instruments.

                                                                     (continued)

                                       F-17
<PAGE>


                  POINTE FINANCIAL CORPORATION AND SUBSIDIARIES

              Notes to Consolidated Financial Statements, Continued


(9) Financial Instruments, Continued
     Commitments to extend credit are agreements to lend to a customer as long
          as there is no violation of any condition established in the contract.
          Commitments generally have fixed expiration dates or other termination
          clauses and may require payment of a fee. Since some of the
          commitments are expected to expire without being drawn upon, the total
          commitment amounts do not necessarily represent future cash
          requirements. The Company evaluates each customer's credit worthiness
          on a case-by-case basis. The amount of collateral obtained if deemed
          necessary by the Company upon extension of credit is based on
          management's credit evaluation of the counterparty.

     Standby letters of credit are conditional commitments issued by the Company
          to guarantee the performance of a customer to a third party. The
          credit risk involved in issuing letters of credit is essentially the
          same as that involved in extending loans to customers.

     The estimated fair values of the Company's financial instruments were as
          follows (in thousands):
<TABLE>
<CAPTION>

                                                                        At December 31, 2000      At December 31, 1999
                                                                        --------------------      --------------------
                                                                          Carrying      Fair      Carrying       Fair
                                                                            Amount      Value       Amount       Value
                                                                            ------      -----       ------       -----
<S>                                                                     <C>             <C>          <C>         <C>
         Financial assets:
              Cash and cash equivalents..............................   $    7,616      7,616        6,909       6,909
              Securities available for sale..........................       53,670     53,670       46,157      46,157
              Loans receivable, net..................................      173,129    174,042      150,852     148,214
              Loans held for sale....................................          719        719        2,696       2,696
              Accrued interest receivable............................        2,035      2,035        1,375       1,375
              Other securities.......................................        2,961      2,961        2,232       2,232

         Financial liabilities:
              Deposit liabilities....................................      161,136    161,380      146,176     149,194
              Other borrowings.......................................        8,067      8,067        5,394       5,394
              Advances from Federal Home Loan Bank...................       45,000     44,647       35,060      32,545
</TABLE>

     A summary of the notional amounts of the Company's financial instruments,
          which approximate fair value, with off balance sheet risk at December
          31, 2000 follows (in thousands):

           Unfunded loan commitments at fixed rates..................  $  3,732
                                                                       ========

           Unfunded loan commitments at variable rates...............  $ 12,744
                                                                       ========

           Available lines of credit.................................  $ 18,374
                                                                       ========

           Standby letters of credit.................................  $  1,067
                                                                       ========

(10) Credit Risk
     The Company grants a majority of its loans to borrowers primarily in Palm
          Beach, Broward and Miami-Dade Counties, Florida. Although the Company
          has a diversified loan portfolio, a significant portion of its
          borrowers' ability to honor their contracts is dependent upon the
          economy of these counties in Florida. The contractual amounts of
          credit-related financial instruments such as commitments to extend
          credit and standby letters of credit represent the amounts of
          potential accounting loss should the contract be fully drawn upon, the
          customer default and the value of any existing collateral become
          worthless.

                                                                     (continued)

                                       F-18
<PAGE>


                  POINTE FINANCIAL CORPORATION AND SUBSIDIARIES

              Notes to Consolidated Financial Statements, Continued


(11) Income Taxes

     Allocation of Federal and state income taxes between current and deferred
          portions is as follows (in thousands):


        Year Ended December 31, 2000:            Current     Deferred      Total
        -----------------------------            -------     --------      -----

             Federal .........................   $  903        (207)         696
             State ...........................      161         (36)         125
                                                 ------      ------       ------

                 Total .......................   $1,064        (243)         821
                                                 ======      ======       ======

        Year Ended December 31, 1999:
        -----------------------------                                     ------

             Federal .........................      756        (108)         648
             State ...........................       89         (19)          70
                                                 ------      ------       ------

                 Total .......................   $  845        (127)         718
                                                 ======      ======       ======

        Year Ended December 31, 1998:
                                                                          ------

             Federal .........................      566           3          569
             State ...........................       62          --           62
                                                 ------      ------       ------

                 Total .......................   $  628           3          631
                                                 ======      ======       ======

     The reasons for the differences between the statutory Federal income tax
         rate and the effective tax rate are summarized as follows:
<TABLE>
<CAPTION>

                                                                                         Year Ended December 31,
                                                                                         -----------------------
                                                                                      2000           1999        1998
                                                                                      ----           ----        ----
<S>                                                                                    <C>           <C>          <C>
              Tax provision at statutory Federal rate............................      34%           34%          34%
              Increase (decrease) in taxes resulting from:.......................
                  State taxes, net of Federal tax benefit........................       3             3            3
                  Tax-exempt income, net of disallowed interest expense..........      (3)           --           --
                                                                                       --           ---          ---

              Effective tax rates ...............................................      34%           37%          37%
                                                                                       ==            ==           ==
</TABLE>

                                                                    (continued)

                                       F-19
<PAGE>


                  POINTE FINANCIAL CORPORATION AND SUBSIDIARIES

              Notes to Consolidated Financial Statements, Continued


(11) Income Taxes, Continued
     The tax effects of temporary differences that give rise to significant
          portions of the deferred tax assets and liabilities relate to the
          following (in thousands):

                                                                 At December 31,
                                                                 ---------------
                                                                   2000     1999
                                                                   ----     ----
              Deferred tax assets:
                  Allowance for loan losses....................   $ 564      411
                  Depreciation.................................     156      131
                  Interest income from impaired loans..........      25       16
                  Other........................................      11       22
                                                                  -----     ----

                     Total gross deferred tax assets...........     756      580
                                                                  -----     ----

              Deferred tax liabilities:
                  Deferred loan fees...........................     140      210
                  Accrued dividends............................      18       12
                  Other........................................       7       10
                                                                  -----     ----

                     Total gross deferred tax liabilities......     165      232
                                                                    ---     ----

                     Net deferred tax asset....................   $ 591      348
                                                                  =====     ====

(12) Related Parties
     The Company has entered into transactions with officers, directors and
          principal stockholders in the ordinary course of business. Loans to
          such related parties amounted to approximately $3,343,000 and
          $3,483,000 at December 31, 2000 and 1999, respectively. During the
          year ended December 31, 2000, total principal additions were
          approximately $1,942,000 and total principal payments were
          approximately $2,082,000. Deposits from such related parties at
          December 31, 2000 and 1999 were approximately $3,708,000 and
          $5,176,000, respectively.

(13) Profit Sharing Plan
     The Company sponsors a 401(k) profit sharing plan (the "Plan"). The Plan is
          available to all employees electing to participate after meeting
          certain length-of-service requirements. The Company's contributions to
          the Plan are discretionary and are determined annually. Expense
          relating to the Company's contributions to the Plan included in the
          accompanying consolidated financial statements was $53,000, $26,000
          and $19,000 for 2000, 1999 and 1998, respectively.

(14) Deferred Compensation Plans
     In 1998 a directors deferred compensation plan was adopted by the Board of
          Directors. The plan permits the directors to receive common stock of
          the Company in lieu of cash as payment of their annual retainer fee
          for being directors and provides the directors the opportunity to
          defer portions of these retainers. The total number of shares
          available under this plan is 122,500. For the years ended December 31,
          2000, 1999 and 1998, a total of 12,164, 11,228 and 6,924 shares,
          respectively were paid in lieu of cash of $109,476, $109,500 and
          $106,456, respectively to the directors. For the year ended December
          31, 2000, 1,945 of these shares were cancelled.

     In addition in 1998 certain directors received a total of 1,595 shares of
          common stock in payment for director fees totaling $23,821 that were
          accrued at December 31, 1997.

     Prior to 1998, the Company had deferred compensation plans for certain
          directors that allowed for a portion of the participants earned
          compensation to be deferred and paid upon retirement, disability,
          death or termination of service at which time accrued benefits were
          payable in a lump-sum payment or in monthly installments for a period
          of 10 years. During 1998, the deferred compensation plans were
          terminated and all remaining obligations were paid in cash or through
          the issuance of 2,526 shares of common stock in lieu of cash of
          $38,837.


                                                                     (continued)

                                       F-20
<PAGE>



                  POINTE FINANCIAL CORPORATION AND SUBSIDIARIES

              Notes to Consolidated Financial Statements, Continued


(15) Stock Award Plans
     Certain key employees and directors of the Company have options to purchase
          shares of the Company's common stock under a nonqualified stock option
          plan adopted in 1994. Under the plan, the total number of shares which
          may be issued is 300,000. At December 31, 2000, 36,831 shares remain
          available for grant. In addition, in 1998 a new Incentive Compensation
          and Stock Award Plan was adopted under which both qualified and
          nonqualified options can be granted and stock can be awarded to
          employees as compensation. A total of 200,000 options or shares can be
          granted to directors and employees of the Company under this plan. As
          of December 31, 2000, 56,678 options or shares remain available for
          grant. A summary of stock option transactions follows ($ in thousands,
          except per share amounts):
<TABLE>
<CAPTION>

                                                                                    Range
                                                                                    of Per      Weighted-
                                                                                    Share        Average      Aggregate
                                                                    Number of       Option      Per Share      Option
                                                                     Shares         Price         Price         Price
                                                                   ----------    ------------  ----------    ----------

<S>                                                                  <C>         <C>    <C>         <C>         <C>
              Outstanding at December 31, 1997..................     205,581     $ 9.55-10.52       9.84        2,022

              Options granted...................................      75,551      10.03-15.38      12.21          923
              Options exercised.................................     (11,982)      9.55-10.52      10.02         (120)
              Options forfeited.................................      (1,200)            9.55       9.55          (11)
                                                                    --------                                   ------

              Outstanding at December 31, 1998..................     267,950       9.55-15.38      10.50        2,814

              Options granted...................................      55,250             9.75       9.75          539
              Options exercised.................................     (25,458)      9.67-10.52      10.15         (258)
              Options forfeited.................................      (5,580)           10.52      10.52          (59)
                                                                    --------                                   ------

              Outstanding at December 31, 1999..................     292,162       9.55-15.38      10.39        3,036

              Options granted...................................      89,352        8.62-9.50       9.02          806
              Options forfeited.................................     (46,313)      9.00-15.38      10.56         (490)
                                                                     -------                                    -----

              Outstanding at December 31, 2000..................     335,201     $ 8.62-15.38      10.00        3,352
                                                                     =======     ============      =====        =====
</TABLE>

                                                                   (continued)

                                       F-21
<PAGE>


                  POINTE FINANCIAL CORPORATION AND SUBSIDIARIES

              Notes to Consolidated Financial Statements, Continued


(15) Stock Award Plans, Continued

     The weighted-average remaining contractual life of the outstanding stock
          options at December 31, 2000, 1999 and 1998 was sixty-two months,
          thirty-five months and forty months, respectively.

     These options are exercisable as follows:
<TABLE>
<CAPTION>

                                                                                  Number           Weighted-Average
                  Year Ending                                                    of Shares          Exercise Price
                  -----------                                                    ---------          --------------

<S>                                                                               <C>                  <C>
                     Currently..............................................      213,895              $ 10.29
                     2001 ..................................................       50,328                 9.56
                     2002 ..................................................       45,084                 9.56
                     2003 ..................................................       25,894                 9.27
                                                                                 --------              -------

                                                                                  335,201              $ 10.00
                                                                                  =======              ========
</TABLE>

   FASB Statement 123 requires proforma information regarding net earnings and
      earnings per share. This proforma information has been determined as if
      the Company had accounted for its stock options under the fair value
      method of that Statement and is as follows ($ in thousands, except per
      share amounts):
<TABLE>
<CAPTION>

                                                                                         Year Ended December 31,
                                                                                         -----------------------
                                                                                    2000        1999         1998
                                                                                    ----        ----         ----

<S>                                                                              <C>             <C>          <C>
               Grant date fair value of options issued during the year.......... $   .93         1.32          3.24
                                                                                 =======       ======       =======

               Net earnings:
                     As reported................................................ $ 1,719        1,223         1,053
                                                                                 =======       ======       =======

                     Proforma................................................... $ 1,534        1,071           771
                                                                                 =======       ======       =======

               Basic earnings per share:
                     As reported................................................ $   .85          .56           .56
                                                                                 =======       ======       =======

                     Proforma .................................................. $   .76          .49           .41
                                                                                 =======       ======       =======

               Diluted earnings per share:
                     As reported................................................ $   .85          .56           .55
                                                                                 =======       ======       =======

                     Proforma................................................... $   .76          .49           .40
                                                                                 =======       ======       =======
</TABLE>

     The fair value of each option grant is estimated on the date of grant using
          the Black-Scholes option-pricing model with the following assumptions:
<TABLE>
<CAPTION>

                                                                                        Year Ended December 31,
                                                                                        -----------------------
                                                                                     2000          1999          1998
                                                                                     ----          ----          ----

<S>                                                                                   <C>           <C>          <C>
               Risk-free interest rate...........................................     6.0%          6.0%         6.0%
               Dividend yield....................................................     4.0%          4.0%        -   %
               Expected volatility...............................................    15.7%         16.0%         20.0%
               Expected life in years............................................  5 or 10       5 or 10       5 or 10
</TABLE>

                                                                    (continued)

                                       F-22
<PAGE>


                  POINTE FINANCIAL CORPORATION AND SUBSIDIARIES

              Notes to Consolidated Financial Statements, Continued


(15) Stock Award Plans, Continued
     Also in April 1999, the Company awarded 6,935 shares of restricted common
          stock to employees under the 1998 Incentive Compensation and Stock
          Award Plan. Four years following the date of grant these restricted
          stock awards become entirely vested. The Company is amortizing these
          restricted stock awards into salaries and employee benefits over the
          four-year period. From the date awarded, the employees are entitled to
          dividends paid on common stock and may vote these shares. During the
          years ended December 31, 2000 and 1999, 1,250 and 575 shares,
          respectively were forfeited due to employee termination and zero and
          240 shares, respectively became entirely vested.

(16) Preferred Stock
     At December 31, 1997, the Company had 54,116 outstanding shares of
          convertible, redeemable, cumulative preferred stock Series A, $.01 par
          value ("preferred stock"). During the first quarter of 1998 an
          additional 500 shares were sold by the Company and 1,410 shares were
          issued in the form of a stock dividend. In the second quarter of 1998
          all outstanding preferred shares were converted by the shareholders
          into 126,026 shares of common stock.

(17) Regulatory Matters

     Federal and state banking regulations place certain restrictions on
          dividends paid and loans or advances made by the Bank to the Holding
          Company.

     The Company (on a consolidated basis) and the Bank are subject to various
          regulatory capital requirements administered by the Federal and state
          banking agencies. Failure to meet minimum capital requirements can
          initiate certain mandatory and possibly additional discretionary
          actions by regulators that, if undertaken, could have a direct
          material effect on the Company's and the Bank's financial statements.
          Under capital adequacy guidelines and the regulatory framework for
          prompt corrective action, the Company and the Bank must meet specific
          capital guidelines that involve quantitative measures of their assets,
          liabilities, and certain off-balance-sheet items as calculated under
          regulatory accounting practices. The capital amounts and
          classification are also subject to qualitative judgements by the
          regulators about components, risk weightings, and other factors.
          Prompt corrective action provisions are not applicable to financial
          holding companies.

     Quantitative measures established by regulation to ensure capital adequacy
          require the Company and the Bank to maintain minimum amounts and
          percentages (set forth in the following table) of total and Tier 1
          capital (as defined in the regulations) to risk-weighted assets (as
          defined) and of Tier 1 capital (as defined) to average assets (as
          defined). Management believes, as of December 31, 2000 and 1999, that
          the Company and the Bank met all capital adequacy requirements to
          which they are subject.


                                                                     (continued)

                                       F-23
<PAGE>


                  POINTE FINANCIAL CORPORATION AND SUBSIDIARIES

              Notes to Consolidated Financial Statements, Continued


(17) Regulatory Matters, Continued
     As of December 31, 2000, the most recent notification from the regulatory
          authorities categorized the Bank as well capitalized under the
          regulatory framework for prompt corrective action. To be categorized
          as well capitalized, an institution must maintain minimum total
          risk-based, Tier I risk-based, and Tier I leverage percentages as set
          forth in the following tables. There are no conditions or events since
          that notification that management believes have changed the Bank's
          category. The Company and the Bank's actual capital amounts and
          percentages as of December 31, 2000 and 1999 are also presented in the
          table (dollars in thousands).
<TABLE>
<CAPTION>
                                                                                                  Minimum
                                                                                                 To Be Well
                                                                                               Capitalized Under
                                                                    Minimum Capital            Prompt Corrective
                                              Actual                  Requirement              Action Provisions:
                                      ----------------------    ------------------------    -------------------------
                                       Amount            %          Amount           %           Amount          %
                                       ------         ------        ------        ------         ------        ------
<S>                                    <C>              <C>         <C>             <C>        <C>                  <C>
     As of December 31, 2000:
         Total capital to Risk-
          Weighted assets:
              Consolidated.......... $ 28,842           17.84%    $ 12,933          8.00%           N/A           N/A
              Bank..................   25,870           15.99       12,941          8.00       $ 16,176         10.00%
         Tier I Capital to Risk-
          Weighted Assets:
              Consolidated..........   27,050           16.73        6,467          4.00            N/A           N/A
              Bank..................   24,078           14.88        6,470          4.00          9,706          6.00
         Tier I Capital
          to Average Assets
              Consolidated..........   27,050           11.55        9,368          4.00            N/A           N/A
              Bank..................   24,078           10.30        9,354          4.00         11,692          5.00

     As of December 31, 1999:
         Total capital to Risk-
          Weighted assets:
              Consolidated..........   26,871           19.42       11,069          8.00            N/A           N/A
              Bank .................   23,476           16.68       11,259          8.00         14,074         10.00
         Tier I Capital to Risk-
          Weighted Assets:
              Consolidated..........   25,540           18.46        5,534          4.00            N/A           N/A
              Bank..................   22,145           15.74        5,627          4.00          8,441          6.00
         Tier I Capital
          to Average Assets
              Consolidated..........   25,540           12.03        8,492          4.00            N/A           N/A
              Bank..................   22,145           10.37        8,542          4.00         10,677          5.00
</TABLE>

                                                                    (continued)

                                       F-24
<PAGE>


                  POINTE FINANCIAL CORPORATION AND SUBSIDIARIES

              Notes to Consolidated Financial Statements, Continued


(18) Stockholders' Equity
     In 1999, the Company's Board of Directors approved a stock repurchase
          program. The program was initially allocated $3.0 million and in the
          year 2000, the Board authorized up to an additional $3.0 million to be
          used to repurchase Company stock. As of December 31, 1999, the Company
          has repurchased 297,000 shares in treasury stock at a net cost of
          approximately $3.0 million.

     The Company's ability to pay cash dividends on its common stock is limited
          to the amount of dividends it could receive from the Bank plus its own
          cash and cash equivalents, which amounted to $1,704 at December 31,
          2000. The amount of dividends the Bank is permitted to pay to the
          Company is restricted to 100% of its calendar year-to-date net
          earnings plus retained earnings for the preceding two years. Twenty
          percent of the net earnings in the preceding two-year period may not
          be paid in dividends, but must be retained to increase capital surplus
          until such surplus equals the amount of the Bank's common stock then
          outstanding. In addition, no Bank may pay a dividend at any time that
          net earnings in the current year when combined with retained earnings
          from the preceding two years produce a loss. Under Florida law, a
          Florida chartered commercial bank may not pay cash dividends that
          would cause the Bank's capital to fall below the minimum amount
          required by Federal or Florida law.

(19) Earnings Per Share
     Basic earnings per share represents earnings available to common
          stockholders divided by the weighted-average number of common shares
          outstanding during the period. Diluted earnings per share reflects
          additional common shares that would have been outstanding if dilutive
          potential common shares had been issued, as well as any adjustment to
          earnings that would result from the assumed issuance. Potential common
          shares that may be issued by the Company relate solely to outstanding
          stock options, and are determined using the treasury stock method.
          Earnings per common share have been computed based on the following
          (dollars in thousands):
<TABLE>
<CAPTION>
                                                                                        Year Ended December 31,
                                                                                        -----------------------
                                                                                         2000         1999         1998
                                                                                         ----         ----         ----

<S>                                                                               <C>                <C>         <C>
              Net earnings before extraordinary item............................  $     1,641        1,223       1,053
              Less: Preferred stock dividends...................................           --           --         (27)
                                                                                  -----------    ---------   ---------

              Net earnings before extraordinary item applicable to
                  common stock..................................................  $     1,641        1,223       1,026
                                                                                  ===========    =========   =========

              Weighted-average number of common shares outstanding..............    2,019,567    2,197,503   1,826,613
              Effect of dilutive options........................................           65        6,741      27,998
                                                                                  ------------   ---------  ----------

              Weighted-average number of common shares outstanding used
                  to calculate diluted earnings per common share................    2,019,632    2,204,244   1,854,611
                                                                                  ===========    =========   =========
</TABLE>


                                                                  (continued)
                                       F-25

<PAGE>


                  POINTE FINANCIAL CORPORATION AND SUBSIDIARIES

              Notes to Consolidated Financial Statements, Continued


(20) Comprehensive Income
     The Company follows SFAS 130, Reporting Comprehensive Income. Accounting
          principles generally require that recognized revenue, expenses, gains
          and losses be included in net earnings. Although certain changes in
          assets and liabilities, such as unrealized gains and losses on
          available-for-sale securities, are reported as a separate component of
          the equity section of the balance sheet, such items along with net
          earnings, are components of comprehensive income. The adoption of SFAS
          130 had no effect on the Company's net earnings or stockholders'
          equity. The components of other comprehensive income and related tax
          effects are as follows (in thousands):
<TABLE>
<CAPTION>
                                                                                     Before        Tax          After
                                                                                      Tax         Effect         Tax
                                                                                      ---         ------         ---
<S>                                                                                <C>           <C>             <C>
         For the Year Ended December 31, 2000:

           Unrealized holding gains..............................................  $ 1,045       (393)           652
           Reclassification adjustment for losses included
             in net earnings.....................................................      123        (46)            77
                                                                                   -------        ---            ---

                                                                                   $ 1,168       (439)           729
                                                                                   =======        ===            ===

         For the Year Ended December 31, 1999:

           Unrealized holding losses.............................................   (1,125)       424           (701)
           Reclassification adjustment for gains included
             in net earnings.....................................................      (38)        14            (24)
                                                                                    ------        ---            ---

                                                                                   $(1,163)       438           (725)
                                                                                   =======        ===            ===

         For the Year Ended December 31, 1998:

           Unrealized holding losses.............................................      (85)        32            (53)
           Reclassification adjustment for gains included
             in net earnings.....................................................     (298)       112           (186)
                                                                                     -----        ---            ---

                                                                                   $  (383)       144           (239)
                                                                                   =======        ===            ===

</TABLE>
                                                                  (continued)

                                       F-26
<PAGE>


                  POINTE FINANCIAL CORPORATION AND SUBSIDIARIES

              Notes to Consolidated Financial Statements, Continued


(21) Holding Company Financial Information

     The Holding Company's unconsolidated financial information is as follows
          (in thousands):

                            Condensed Balance Sheets
<TABLE>
<CAPTION>
                                                                                                     At December 31,
                                                                                                     ---------------
                                                                                                     2000         1999
                                                                                                     ----         ----
                  Assets

<S>                                                                                              <C>             <C>
              Cash and cash equivalents......................................................    $  1,704        3,214
              Investment in subsidiaries.....................................................      23,765       21,195
              Other assets...................................................................       1,265          176
                                                                                                   ------      -------

                  Total assets...............................................................    $ 26,734       24,585
                                                                                                 ========       ======

                  Liabilities and Stockholders' Equity

              Other liabilities..............................................................           4            2
              Stockholders' equity...........................................................      26,730       24,583
                                                                                                 --------       ------

                  Total liabilities and stockholders' equity.................................    $ 26,734       24,585
                                                                                                 ========       ======
</TABLE>

                        Condensed Statements of Earnings
<TABLE>
<CAPTION>

                                                                                       For the Year Ended December 31,
                                                                                       -------------------------------
                                                                                        2000          1999         1998
                                                                                        ----          ----         ----

<S>                                                                                  <C>           <C>              <C>
              Revenues...........................................................    $     2           --           16
              Expenses...........................................................       (124)        (113)         (64)
                                                                                     -------        -----       ------

                  Loss before earnings of subsidiaries...........................       (122)        (113)         (48)
                  Earnings of subsidiaries.......................................      1,841        1,336        1,101
                                                                                       -----        -----        -----

                  Net earnings...................................................    $ 1,719        1,223        1,053
                                                                                     =======        =====        =====
</TABLE>

                                                                   (continued)
                                       F-27
<PAGE>


                  POINTE FINANCIAL CORPORATION AND SUBSIDIARIES

              Notes to Consolidated Financial Statements, Continued


(21) Holding Company Financial Information, Continued


                       Condensed Statements of Cash Flows
<TABLE>
<CAPTION>

                                                                                       For the Year Ended December 31,
                                                                                       -------------------------------
                                                                                        2000         1999         1998
                                                                                        ----         ----         ----
<S>                                                                                  <C>            <C>          <C>
         Cash flows from operating activities:
              Net earnings ......................................................    $ 1,719        1,223        1,053
              Adjustments to reconcile net earnings to net cash provided
                by (used in) operating activities:
                  Undistributed earnings of subsidiaries.........................     (1,841)      (1,336)      (1,101)
                  Common stock issued as compensation for services...............         92          109          170
                  Shares committed to participants in incentive stock plan.......         11           12         -
                  Increase in other assets.......................................     (1,089)         (70)         (11)
                  Increase (decrease) in other liabilities.......................          2           (4)         (92)
                                                                                    --------      -------      -------

                     Net cash (used in) provided by operating activities.........     (1,106)         (66)          19
                                                                                    --------      -------      -------

         Cash flows provided by investing activities-
              Net increase in investment in subsidiaries.........................         --           --       (6,001)
                                                                                    --------     --------       ------

         Cash flows from financing activities:
              Proceeds from issuance of preferred stock..........................         --           --           10
              Proceeds from issuance of common stock.............................         --           --       12,076
              Cash dividends paid on common stock................................       (404)        (329)          --
              Purchase of Treasury Stock.........................................         --       (3,000)          --
              Proceeds from exercise of stock options............................         --          258          120
                                                                                    --------     --------       ------

                     Net cash (used in) provided by financing activities.........       (404)      (3,071)      12,206
                                                                                    --------     --------       ------

         Net (decrease) increase in cash and cash equivalents....................     (1,510)      (3,137)       6,224

         Cash and cash equivalents at beginning of the year......................      3,214        6,351          127
                                                                                       -----        -----      -------

         Cash and cash equivalents at end of year................................    $ 1,704        3,214        6,351
                                                                                     =======        =====      =======

         Noncash transactions:
              Change in investment in subsidiaries due to accumulated other
                  comprehensive income (loss), change in securities available
                  for sale.......................................................   $    729         (725)        (239)
                                                                                    ========        =====      =======

              Stock dividends paid on preferred stock............................   $     --           --           27
                                                                                    ========        =====      =======

              Activity in stock incentive plan, net..............................   $     21           50           --
                                                                                    ========        =====      =======
</TABLE>


                                       F-28
<PAGE>


            Independent Auditors' Report on Supplementary Information



Board of Directors
Pointe Financial Corporation
Boca Raton, Florida

    We have audited the accompanying consolidated financial statements of Pointe
Financial Corporation and Subsidiaries at and for the year ended December 31,
2000, and have issued our report thereon dated January 19, 2001. Our audit was
conducted for the purpose of forming an opinion on the basic consolidated
financial statements taken as a whole. The consolidating information in the
accompanying schedules is presented for purposes of additional analysis of the
consolidated financial statements rather than to present the financial position
and results of operations of the individual companies. The consolidating
information has been subjected to the auditing procedures applied in the audit
of the consolidated financial statements and, in our opinion, is fairly stated
in all material respects in relation to the consolidated financial statements
taken as a whole.




HACKER, JOHNSON & SMITH PA
Fort Lauderdale, Florida
January 19, 2001



                                       F-29
<PAGE>



                  POINTE FINANCIAL CORPORATION AND SUBSIDIARIES

                           Consolidating Balance Sheet
                                December 31, 2000
                                 (In thousands)
<TABLE>
<CAPTION>

                                                                    Pointe                     Pointe
                                                                   Financial      Pointe      Financial                 Consolidated
                                                                  Corporation      Bank        Services    Eliminations     Total
                                                                  -----------    --------     ---------    ------------  -----------
    Assets
<S>                                                                <C>              <C>               <C>      <C>            <C>
Cash and cash equivalents ....................................     $  1,704         7,616             7        (1,711)        7,616
Securities available for sale ................................           --        53,670            --            --        53,670
Loans receivable, net ........................................           --       173,129            --            --       173,129
Loans held for sale ..........................................           --           719            --            --           719
Accrued interest receivable ..................................           --         2,035            --            --         2,035
Premises and equipment, net ..................................           --         2,842            --            --         2,842
Other securities .............................................           --         2,961            --            --         2,961
Foreclosed real estate .......................................           --            18            --            --            18
Investment in subsidiaries ...................................       23,765            --            --       (23,765)           --
Deferred income tax asset ....................................            4           587            --            --           591
Other assets .................................................        1,261          (334)           --            --           927
                                                                   --------      --------      --------      --------      --------

         Total ...............................................     $ 26,734       243,243             7       (25,476)      244,508
                                                                   ========      ========      ========      ========      ========

                 Liabilities and Stockholders' Equity

Liabilities:
    Deposits .................................................           --       162,847            --        (1,711)      161,136
    Official checks ..........................................           --         1,660            --            --         1,660
    Other borrowings .........................................           --         8,067            --            --         8,067
    Advances from the Federal Home
         Loan Bank ...........................................           --        45,000            --            --        45,000
    Accrued interest payable .................................           --           989            --            --           989
    Advance payments for taxes and insurance .................           --           365            --            --           365
    Other liabilities ........................................            4           557            --            --           561
                                                                   --------      --------      --------      --------      --------

         Total liabilities ...................................            4       219,485            --        (1,711)      217,778
                                                                   --------      --------      --------      --------      --------

Stockholders' equity:
    Common stock .............................................           23           306             1          (307)           23
    Additional paid-in capital ...............................       23,835        15,662           220       (15,882)       23,835
    Retained earnings ........................................        6,274         8,163          (214)       (7,949)        6,274
    Accumulated other comprehensive income (loss) ............         (373)         (373)           --           373          (373)
    Treasury stock ...........................................       (3,000)           --            --            --        (3,000)
    Stock incentive plan .....................................          (29)           --            --            --           (29)
                                                                   --------      --------      --------      --------      --------

         Total stockholders' equity ..........................       26,730        23,758             7       (23,765)       26,730
                                                                   --------      --------      --------      --------      --------

         Total ...............................................     $ 26,734       243,243             7       (25,476)      244,508
                                                                   ========      ========      ========      ========      ========
</TABLE>



                                       F-30
<PAGE>



                  POINTE FINANCIAL CORPORATION AND SUBSIDIARIES

                      Consolidating Statement of Operations
                          Year Ended December 31, 2000
                                 (In thousands)
<TABLE>
<CAPTION>

                                                                      Pointe                    Pointe
                                                                     Financial       Pointe    Financial                Consolidated
                                                                   Corporation        Bank     Services   Eliminations      Total
                                                                   -----------      --------   ---------  ------------  ------------
<S>                                                                    <C>             <C>      <C>         <C>           <C>
Interest income:
    Loans receivable ...........................................       $    --         14,864       --            --         14,864
    Securities available for sale ..............................             2          3,437       --            --          3,439
    Other interest earning assets ..............................            --            242       --            --            242
                                                                       -------        -------      ---       -------        -------

         Total interest income .................................             2         18,543       --            --         18,545
                                                                       -------        -------      ---       -------        -------

Interest expense:
    Deposits ...................................................            --          6,334       --            --          6,334
    Borrowings .................................................            --          2,971       --            --          2,971
                                                                       -------        -------      ---       -------        -------

         Total interest expense ................................            --          9,305       --            --          9,305
                                                                       -------        -------      ---       -------        -------

Net interest income ............................................             2          9,238       --            --          9,240

         Provision for loan losses .............................            --            685       --            --            685
                                                                       -------        -------      ---       -------        -------

Net interest income after provision for loan losses ............             2          8,553       --            --          8,555
                                                                       -------        -------      ---       -------        -------

Noninterest income:
    Service charges on deposit accounts ........................            --            815       --            --            815
    Loan servicing fees ........................................            --             47       --            --             47
    Net gains from sale of loans ...............................            --              6       --            --              6
    Net realized loss on sale of securities ....................            --           (123)      --            --           (123)
    Earnings of subsidiaries ...................................         1,841             --       --        (1,841)            --
    Other ......................................................            --            347       --            --            347
                                                                       -------        -------      ---       -------        -------

         Total noninterest income ..............................         1,841          1,092       --        (1,841)         1,092
                                                                       -------        -------      ---       -------        -------

Noninterest expenses:
    Salaries and employee benefits .............................            11          3,820       --            --          3,831
    Occupancy expense ..........................................            --          1,161       --            --          1,161
    Advertising and promotion ..................................            54            209       --            --            263
    Professional fees ..........................................            40            167       --            --            207
    Federal deposit insurance premiums .........................            --             31       --            --             31
    Data processing ............................................             6            407       --            --            413
    Other ......................................................            85          1,194       --            --          1,279
                                                                       -------        -------      ---       -------        -------

         Total noninterest expenses ............................           196          6,989       --            --          7,185
                                                                       -------        -------      ---       -------        -------

         Earnings (loss) before income taxes and
             extraordinary item ................................         1,647          2,656       --        (1,841)         2,462

    Income tax (benefit) .......................................           (72)           893       --            --            821
                                                                       -------        -------      ---       -------        -------

         Earnings before extraordinary item ....................         1,719          1,763       --        (1,841)         1,641

    Extraordinary item - gain on extinguishment of
         debt, net of taxes of $47 .............................            --             78       --            --             78
                                                                       -------        -------      ---       -------        -------

              Net earnings .....................................       $ 1,719          1,841       --        (1,841)         1,719
                                                                       =======        =======      ===       =======        =======
</TABLE>


                                       F-31
<PAGE>





Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
None.

PART III

Item 10.  Directors and Executive Officers of the Company.

The information contained under the caption "Election of Directors" to appear in
the Company's definitive proxy statement relating to the Company's 2000 Annual
Meeting of Stockholders, which definitive proxy statement will be filed with the
Securities and Exchange Commission not later than 120 days after the end of the
Company's fiscal year covered by this report on Form 10-K (hereinafter referred
to as the "Annual Meeting Proxy Statement"), is incorporated herein by
reference. Information concerning the executive officers of the Company is
included in Part I of this Report on Form 10-K.

The following table sets forth information concerning the executive officers of
the Company and the Bank.

<TABLE>
<CAPTION>

Name                                     Position                                                       Age
----                                     --------                                                       ---
<S>                                 <C>                                                                 <C>
R. Carl Palmer, Jr.                 Chairman of Pointe Financial Corporation,
                                    President and Chief Executive Officer of the                         60
                                    Company and the Bank

Beverly P. Chambers                 Senior Vice President of the Company and the Bank                    50

Bradley R. Meredith                 Senior Vice President and Chief Financial Officer of the             47
                                    Company and the Bank
</TABLE>

R. Carl Palmer, Jr. Mr. Palmer joined the Company and Bank in 1995 as Chief
Executive Officer, President and director. He was elected to serve as Chairman
of the Company in November 2000. He began his banking career at Chemical Bank in
New York in 1964. In 1979, he moved to South Florida as an Executive Vice
President for Southeast Banking Corporation. During his tenure at that bank with
$17 billion in assets, he had responsibilities for business development,
business banking and community banking. From 1988 to 1991, he was President,
Chief Operating Officer and director of BancFlorida in Naples, Florida. He
became a Senior Associate with Martin W. Taplin & Associates, Inc., a real
estate investment firm, in 1991. Mr. Palmer received a B.A. from Dartmouth
College in 1962, an M.B.A. from Amos Tuck School in 1963 and a J.D. from New
York Law School in 1969. Mr. Palmer resides in Palm Beach County.

Beverly P. Chambers. Ms. Chambers joined the Company in 1995 with twenty-five
years of banking experience and manages marketing and human resources. Prior to
joining the Company, she spent three years as a Senior Vice President and
Manager of Private Banking for NationsBank of Florida. Prior to that position,
Ms. Chambers was a Senior Vice President of Southeast Banking Corporation
managing commercial banking, marketing and private banking departments. Ms.
Chambers received an M.S. from Florida State University in 1973. Ms. Chambers
resides in Broward County.

Bradley R. Meredith. Mr. Meredith joined the Company in 1997, after eight years
as Executive Vice President and Chief Financial Officer for First Family
Financial Corporation in Central Florida. The majority of his eighteen years of
banking experience has been with community banks. Mr. Meredith graduated from
DePaul University with a B.S. in Finance in 1982. Mr. Meredith received a
diploma from the Graduate School of Banking at the University of Wisconsin in
1989. Mr. Meredith resides in Palm Beach County.

                                       30
<PAGE>


Item 11.  Executive Compensation.

The information contained under the caption "Executive Compensation" to appear
in the Annual Meeting Proxy Statement is incorporated herein by reference.

Item 12.  Security Ownership of Certain Beneficial Owners and Management.

The information contained under the caption "Security Ownership of Certain
Beneficial Owners and Management" to appear in the Annual Meeting Proxy
Statement is incorporated herein by reference.

Item 13.  Certain Relationships and Related Transactions.

The information contained under the captions "Compensation Committee Interlocks
and Insider Participation" and "Certain Relationships and Related Transactions"
to appear in the Annual Meeting Proxy Statement is incorporated herein by
reference.


                                       31
<PAGE>

                                     PART IV

Item 14.  Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
     (a) The Following Documents Are Filed as Part of this Report:

         (1)      Financial Statements.

                  The following consolidated financial statements of the Company
                  and the report of the independent certified public accountants
                  thereon filed with this report:

                  Report of Independent Certified Public Accountants (Hacker,
                  Johnson & Smith, P.A.)

                  Consolidated Statements of Financial Condition as of December
                  31, 2000 and 1999.

                  Consolidated Statements of Earnings for the years ended
                  December 31, 2000, 1999 and 1998.

                  Consolidated Statements of Stockholder"s Equity for the years
                  ended December 31, 2000, 1999 and 1998.

                  Consolidated Statements of Cash Flows for the years ended
                  December 31, 2000, 1999 and 1998.

                  Notes to Consolidated Financial Statements.


         (2)      Financial Statement Schedules.

                  Schedules are omitted because the conditions requiring their
                  filing are not applicable or because the required information
                  is provided in the Consolidated Financial Statements,
                  including the Notes thereto.

         (3)      Exhibits.*

         2.1      Plan of Merger and Merger Agreement dated February 14, 1997 by
                  and between Pointe Federal Savings Bank and Pointe Bank
                  (Exhibit 2.1 to the Registrant's Form SB-2 Registration
                  Statement, File No. 333-49835, as initially filed with the
                  Securities and Exchange Commission on April 9, 1998 [the
                  "Registration Statement"]).

         3.1      Articles of Incorporation of the Registrant (Exhibit 3.1 to
                  the Registration Statement).

         3.2      By-Laws of the Registrant (Exhibit 3.2 to the Registration
                  Statement).

         4.1      Specimen Common Stock Certificate (Exhibit 4.1 to the
                  Registration Statement).*

         10.1**   1994 Non-Statutory Stock Option Plan (Exhibit 10.1 to the
                  Registration Statement).

         10.2**   Deferred Compensation Plan (Exhibit 10.2 to the Registration
                  Statement).

         10.3     Office Lease Agreement dated October 8, 1986 by and between
                  Centrum Pembroke, Inc. and Flamingo Bank (Exhibit 10.3 to the
                  Registration Statement).

         10.4     Lease dated as of July 15, 1992 between Konrad Ulmer and
                  Pointe Savings Bank (Exhibit 10.4 to the Registration
                  Statement).

         10.5     Lease Agreement dated January 23, 1995 by and between
                  Hollywood Associates VI and Pointe Bank (Exhibit 10.5 to the
                  Registration Statement).

         10.6     Credit Agreement dated August 18, 1997 between Independent
                  Bankers' Bank of Florida and Pointe Bank (Exhibit 10.6 to the
                  Registration Statement).

         10.7     Credit Agreement dated October 14, 1997 between SunTrust
                  Bank/Miami, N.A. and Pointe Bank (Exhibit 10.7 to the
                  Registration Statement).

         10.8     Agreement for Advances and Security Agreement with Blanket
                  Floating Lien dated November 24, 1997 between Pointe Bank and
                  the Federal Home Loan Bank of Atlanta (Exhibit 10.8 to the
                  Registration Statement).

         10.9     Equipment Sales and Software License Agreements between
                  Information Technology, Inc. and Pointe Financial Corporation
                  (Exhibit 10.9 to the Registration Statement).

         10.10    Master Equipment Lease Agreement dated May 7, 1997 between
                  Leasetec Corporation and Pointe Financial Corporation (Exhibit
                  10.10 to the Registration Statement).

                                       32
<PAGE>

         10.11*** Letter Agreement dated March 9, 1995 between Pointe Financial
                  Corporation and R. Carl Palmer, Jr. (Exhibit 10.11 to the
                  Registration Statement).

         10.12**  1998 Incentive Compensation and Stock Award Plan.
                  (Exhibit 10.12 to the Registration Statement).

         10.13*** Employment agreement between the company and R. Carl Palmer,
                  Jr. (Exhibit 10.13 to the 1999 Form 10-K filed February 23,
                  2000).

         10.14*** Employment agreement between the company and Beverly P.
                  Chambers (Exhibit 10.14 to the 1999 Form 10-K filed
                  February 23, 2000).

         10.15*** Employment agreement between the company and Bradley R.
                  Meredith (Exhibit 10.15 to the 1999 Form 10-K filed
                  February 23, 2000).

         11.1     Statement regarding calculation of earnings per common share
                  (included in the Audited Consolidated Financial Statements in
                  the 2000 Form 10-K).

         12.1     Statement regarding calculation of ratio of earnings to fixed
                  charges (included in the Management's Discussion and Analysis
                  of the Financial Condition and Results of Operation in the
                  2000 Form 10-K).

         21.1     Subsidiaries of the Registrant (included in the Audited
                  Consolidated Financial Statements in the 2000 Form 10-K).

         23.1     Consent of Hacker, Johnson & Smith, P.A.


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

*     Exhibits followed by a parenthetical reference are incorporated herein by
      reference from the documents described therein.

**    Exhibits 10.1, 10.2, 10.11 and 10.12 are compensatory plans or
      arrangements.

***   Contracts with Management.

      (b) Reports of Form 8-K.

          During the fourth quarter, no form 8-K's were filed by the Company.

                                       33
<PAGE>

Supplemental Information.
As of the date of filing of this report on Form 10-K no annual report or proxy
material has been sent to security holders. Such material will be furnished to
security holders and the Securities and Exchange Commission subsequent to the
filing of this report on Form 10-K.



                                       34
<PAGE>


Pursuant to the requirements of Section 13 or 15(d) 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.

                               POINTE FINANCIAL CORPORATION

                               By: /s/ R. Carl Palmer, Jr.
                                   ------------------------
                               R. Carl Palmer, Jr.
                               Chairman of the Board, Chief Executive Officer
                               and President

                               Dated: March 16, 2001

Pursuant to the requirements of the Securities and Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

<TABLE>
<CAPTION>

Name                                                 Title                                                 Date
----                                                 -----                                                 ----

<S>                                          <C>                                                    <C>
/s/ R. Carl Palmer, Jr.                      Chairman of the Board, Chief Executive Officer          March  16, 2001
-----------------------                      and President
R. Carl Palmer, Jr.

/s/ Timothy M. McGinn                        Vice Chairman of the Board                              March  16, 2001
-------------------------
Timothy M. McGinn

/s/Bradley R. Meredith                       Chief Financial Officer,                                March  16, 2001
----------------------                       Senior Vice President
Bradley R Meredith

/s/ Steven A. Elias                          Director                                                March  16, 2001
-------------------
Steven A. Elias

/s/ Clarita Kassin                           Director                                                March  16, 2001
-------------------
Clarita Kassin

/s/ Morris Massry                            Director                                                March  16, 2001
-----------------
Morris Massry

/s/ D. Richard Mead, Jr.                     Director                                                March  16, 2001
------------------------
D. Richard Mead, Jr.

/s/ Parker D. Thomson                        Director                                                March  16, 2001
---------------------
Parker D. Thomson
</TABLE>


                                       35