UNITED FINANCIAL HOLDINGS, INC.
AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS
AND REPORT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
December 31, 2000, 1999 and 1998








































                                      F-1
<PAGE>
                         UNITED FINANCIAL HOLDINGS, INC.

                          INDEX TO FINANCIAL STATEMENTS

                                                                         Page
                                                                        ------

    Report of Independent Certified Public Accountants                    F-3

    Consolidated Balance Sheets at December 31, 2000 and 1999             F-4

    Consolidated Statements of Earnings for the years ended
    December 31, 2000, 1999 and 1998                                      F-5

    Consolidated Statements of Comprehensive Income for the years
    ended December 31, 2000, 1999 and 1998                                F-7

    Consolidated Statement of Stockholders' Equity for the years
    ended December 31, 2000, 1999 and 1998                                F-8

    Consolidated Statements of Cash Flows for the years ended
    December 31, 2000, 1999 and 1998                                      F-9

    Notes to Consolidated Financial Statements                            F-11


































                                      F-2
<PAGE>
               Report of Independent Certified Public Accountants
               --------------------------------------------------
Board of Directors
United Financial Holdings, Inc.
St. Petersburg, Florida

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

We conducted our audits of the consolidated  financial  statements in accordance
with  auditing  standards  generally  accepted in the United  States of America.
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.

Our audits of the  consolidated  financial  statements  referred to above,  were
conducted  for the purpose of forming an opinion on the  consolidated  financial
statements taken as a whole. The consolidating  balance sheet as of December 31,
2000 and the consolidating statement of earnings for the year ended December 31,
2000,  are  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 audit 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.

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material respects,  the consolidated financial position of United
Financial Holdings,  Inc. and Subsidiaries as of December 31, 2000 and 1999, and
the consolidated  results of their operations and their  consolidated cash flows
for each of the three years in the period ended  December 31, 2000 in conformity
with accounting principles generally accepted in the United States of America.

Tampa, Florida
January 26, 2001














                                      F-3
<PAGE>
                United Financial Holdings, Inc. and Subsidiaries
                         CONSOLIDATED BALANCE SHEETS
                                                           December 31,
                      ASSETS                           2000           1999
                                                  --------------  --------------
Cash and due from banks                           $    9,420,453  $   8,866,336
Federal funds sold                                     4,961,000      2,917,000
Trading securities                                             -         81,600
Securities held to maturity                           16,035,904     14,540,677
Securities available for sale, at market              11,296,338      9,923,820
Loans, net                                           182,027,520    153,497,408
Premises and equipment, net                           10,137,624      9,618,536
Federal Home Loan Bank stock                             506,600        506,600
Federal Reserve Bank stock                               226,300        203,800
Accrued interest receivable                            1,458,482      1,190,200
Intangible assets, less accumulated amortization
 of $1,843,665 and $1,725,395, respectively            1,960,244      1,748,527
Other real estate owned                                  175,000      1,528,311
Other assets                                           5,255,348      4,858,493
                                                  --------------  -------------
          Total assets                            $  243,460,813  $ 209,481,308
                                                  ==============  =============
                        LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits
  Demand                                          $   37,050,971  $  32,936,185
  NOW and money market                                78,887,097     67,913,763
  Savings                                              4,572,993      4,872,802
  Time, $100,000 and over                             28,013,356     16,679,300
  Other time                                          53,627,545     52,695,991
                                                  --------------  -------------
          Total deposits                             202,151,962    175,098,041

Securities sold under agreements to repurchase        10,162,858      7,307,044
Accrued interest payable                                 568,491        448,378
Convertible subordinated debentures                      630,000        630,000
Other liabilities                                      3,661,819      2,425,862
                                                  --------------   ------------
          Total liabilities                          217,175,130    185,909,325
Company-obligated Mandatory Redeemable Capital Securities
 of Subsidiary Trust Holding Solely Subordinated Debentures
 of the Company                                        6,749,600      6,749,600
STOCKHOLDERS' EQUITY
  7%convertible  preferred  stock,  $10 par value; 150,000 shares
  authorized; 6,667 and 10,000  shares issued and outstanding  at
  December  31, 2000 and 1999, respectively               66,670        100,000
  Common stock, $.01 par value; 20,000,000 shares authorized;
  4,255,869 and 4,192,771 shares issued and outstanding at
  December 31, 2000 and 1999, respectively                42,727         41,928
  Paid-in capital                                     10,051,755      9,672,634
  Treasury shares; 16,831 at December 31, 2000          (116,446)             -
  Accumulated other comprehensive income                 (32,047)      (232,362)
  Retained earnings                                    9,523,424      7,240,183
                                                    ------------   -------------
     Total stockholders' equity                       19,536,083     16,822,383
                                                    ------------   -------------
     Total liabilities and stockholders' equity     $243,460,813   $209,481,308
                                                    ============   =============
        The accompanying notes are an integral part of these statements.
                                      F-4
<PAGE>
                United Financial Holdings, Inc. and Subsidiaries
                       CONSOLIDATED STATEMENTS OF EARNINGS

                                                    December 31,
                                             2000         1999         1998
                                          -----------  -----------  -----------
Interest income
  Loans and loan fees                     $17,030,353  $12,783,696  $10,381,551
  Securities
    U.S. Treasury                             264,542      391,772      552,623
    Obligations of other U.S. Government
     agencies and corporations                918,183      782,669      880,517
    Obligations of states and political
    subdivisions                              208,634      203,298      104,137
    Other                                     263,470      279,342      207,938
    Federal funds sold and securities
    purchased under reverse repurchase
    agreements                                451,524      269,736      532,014
                                          -----------  -----------  -----------
          Total interest income            19,136,706   14,710,513   12,658,780

Interest expense
  NOW and money market                      2,413,320    1,627,761    1,563,767
  Savings                                     101,889      107,028       96,920
  Time deposits, $100,000 and over          1,338,376      699,673      534,471
  Other time                                2,978,835    2,528,119    2,668,754
  Long-term debt                               50,400       50,400      250,057
  Subordinated debentures issued to
  subsidiary trust                            634,462      632,700       28,198
  Federal funds purchased and securities
  sold under agreements to repurchase         422,226      193,548      126,152
                                          -----------  -----------  -----------
          Total interest expense            7,939,508    5,839,229    5,268,319
                                          -----------  -----------  -----------

          Net interest income              11,197,198    8,871,284    7,390,461

Provision for loan losses                     650,000      785,000      752,000
                                          -----------  -----------  -----------
          Net interest income after
          provision for loan losses        10,547,198    8,086,284    6,638,461

Other income

  Service charges on deposit accounts       1,014,543      797,181      706,839
  Trust and investment management income    3,171,996    3,175,514    2,355,156
  Net trading account profit (loss)            (6,472)      41,808       87,354
  Gain on sales of loans                      285,622      442,227      239,498
  Gain on sale of held to maturity security         -            -       78,498
  Loan servicing fees                         210,351      165,897      147,881
  Income on cash value life insurance         141,057      135,354      136,728
  All other fees and income                   266,980      362,862      336,549
                                          -----------  -----------  -----------
          Total other income                5,084,077    5,120,843    4,088,503


                                   (contined)
        The accompanying notes are an integral part of these statements.
                                      F-5
<PAGE>
                United Financial Holdings, Inc. and Subsidiaries

                 CONSOLIDATED STATEMENTS OF EARNINGS - CONTINUED

                                            For the Years Ended December 31,
                                          -------------------------------------
                                             2000         1999         1998
                                          -----------  -----------  -----------
Other expense
  Salaries and employee benefits          $ 6,501,202  $ 5,361,048  $ 4,630,580
  Occupancy expense                           514,514      520,406      522,472
  Furniture and equipment expense             603,789      606,453      512,000
  Data processing expense                     586,781      487,317      436,767
  Consulting fees                             151,460      274,733       41,149
  Legal and professional fees                 207,921      174,811      120,702
  Amortization of intangible assets           118,271       85,115       79,443
  Marketing and business development          366,703      352,055      301,611
  Directors fees                              242,950      191,350      190,662
  Telephone expense                           188,683      184,999      171,535
  Stationery, printing and supplies           180,874      176,706      137,092
  Postage expense                             108,199      111,965       90,373
  Other operating expenses                  1,073,026    1,025,091      724,700
                                          -----------  -----------  -----------
                                           10,844,373    9,552,049    7,959,086
                                          -----------  -----------  -----------
          Earnings before income taxes      4,786,902    3,655,078    2,767,878

Income tax expense (benefit)
  Current                                   1,976,660    1,559,391    1,192,177
  Deferred                                   (243,276)    (237,206)    (181,607)
                                          -----------  -----------  -----------
                                            1,733,384    1,322,185    1,010,570
                                          -----------  -----------  -----------
          NET EARNINGS                    $ 3,053,518  $ 2,332,893  $ 1,757,308
                                          ===========  ===========  ===========

Earnings Per Share:

  Basic                                   $       .72  $       .56  $       .49
  Diluted                                 $       .69  $       .54  $       .46

















        The accompanying notes are an integral part of these statements.
                                      F-6
<PAGE>
                United Financial Holdings, Inc. and Subsidiaries

                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

                                                Year Ended December 31,
                                          -------------------------------------
                                             2000         1999         1998
                                          -----------  -----------  -----------
Net earnings                              $ 3,053,518  $ 2,332,893  $ 1,757,308
Other comprehensive income
  Unrealized holding gains (losses)           303,508     (566,174)     126,991
  Income tax (expense) benefit related
   to items of other comprehensive income    (103,193)     192,499      (43,177)
                                          -----------  -----------  -----------

Comprehensive income                      $ 3,253,833  $ 1,959,218  $ 1,841,122
                                          ===========  ===========  ===========








































        The accompanying notes are an integral part of these statements.
                                      F-7
<PAGE>
                United Financial Holdings, Inc. and Subsidiaries
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

                                     7%
                                 Convertible
                                  Preferred   Common     Paid-In      Treasury
                                   Stock      Stock      Capital       Shares
                                 -----------  --------  -----------  ----------
Balance at December 31, 1997     $   233,500  $ 34,443  $ 5,789,932  $        -
  Net Earnings                             -         -            -           -
  Conversion of 7% Preferred to
  Common Stock                       (25,000)      210       24,770           -
  Dividends on Common Stock                -         -            -           -
  Dividends on Preferred Stock             -         -            -           -
  Accumulated other comprehensive
  income                                   -         -            -           -
  Issuance of Common Stock in IPO          -     5,077    2,799,334           -
  Performance shares issued                -       320      263,787           -
  Issuance of Common Stock for cash        -       405      314,280           -
                                 -----------  --------  -----------  ----------

Balance at December 31, 1998         208,500    40,455    9,192,103           -
  Net Earnings                             -         -            -           -
  Conversion of 7% Preferred to
  Common Stock                      (108,500)      916      107,580           -
  Dividends on Common Stock                -         -            -           -
  Dividends on Preferred Stock             -         -            -           -
  Accumulated other comprehensive
  income                                   -         -            -           -
  Issuance of Common Stock in IPO          -         -      (25,565)          -
  Performance shares issued                -       557      398,516           -
                                 -----------  --------  -----------  ----------

Balance at December 31, 1999         100,000    41,928    9,672,634           -
  Net Earnings                             -         -            -           -
  Conversion of 7% Preferred to
  Common Stock                       (33,330)      281       33,047           -
  Dividends on Common Stock                -         -            -           -
  Dividends on Preferred Stock             -         -            -           -
  Accumulated other comprehensive
  income                                   -         -            -           -
  Purchase of Treasury Shares              -         -            -    (116,446)
  Performance shares issued                -       518      346,074           -
                                 -----------  --------  -----------   ----------
Balance at December 31, 2000     $    66,670  $ 42,727  $10,051,755   $(116,446)
                                 ===========  ========  ===========   ==========










                               (continued on F-8b)
        The accompanying notes are an integral part of these statements.
                                         F-8a
<PAGE>
                United Financial Holdings, Inc. and Subsidiaries
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY - CONTINUED

                                           Accumulated
                                 Stock        Other
                              Subscription Comprehensive Retained
                              Receivables     Income     Earnings     Total
                              ------------ ------------- ---------- -----------
Balance at December 31, 1997  $          - $     57,499  $4,375,788 $10,491,162
  Net Earnings                           -            -   1,757,308   1,757,308
  Conversion of 7%
  Preferred to Common Stock              -            -           -         (20)
  Dividends on Common Stock              -            -    (535,631)   (535,631)
  Dividends on Preferred Stock           -            -     (15,470)    (15,470)
  Accumulated other
  comprehensive income                   -       83,814           -      83,814
  Issuance of Common
  Stock in IPO)                   (393,260)           -           -   2,411,151
  Performance shares issued              -            -           -     264,107
  Issuance of Common Stock
  for Cash                               -            -           -     314,685
                              ------------ ------------- ---------- -----------

Balance at December 31, 1998      (393,260)     141,313   5,581,995  14,771,106
  Net Earnings                           -            -   2,332,893   2,332,893
  Conversion of 7% Preferred to
  Common Stock                           -            -           -          (4)
  Dividends on Common Stock              -            -    (663,907)   (663,907)
  Dividends on Preferred Stock           -            -     (10,798)    (10,798)
  Accumulated other comprehensive
  income                                 -     (373,675)          -    (373,675)
  Issuance of Common Stock in IPO  393,260            -           -     367,695
  Performance shares issued              -            -           -     399,073
                              ------------ ------------- ---------- -----------

Balance at December 31, 1999             -     (232,362)  7,240,183  16,822,383
  Net Earnings                           -            -   3,053,518   3,053,518
  Conversion of 7% Preferred to
  Common Stock                           -            -           -          (2)
  Dividends on Common Stock              -            -    (763,277)   (763,277)
  Dividends on Preferred Stock           -            -      (7,000)     (7,000)
  Accumulated other comprehensive
  income                                 -      200,315           -     200,315
  Purchase of Treasury Shares            -            -           -    (116,446)
  Performance shares issued              -            -           -     346,592
                              ------------ ------------- ---------- -----------
Balance at December 31, 2000  $          - $    (32,047) $9,523,424 $19,536,083
                              ============ ============= ========== ===========









        The accompanying notes are an integral part of these statements.
                                       F-8b
<PAGE>
                United Financial Holdings, Inc. and Subsidiaries
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                           For the Years Ended December 31,
                                       ---------------------------------------
                                            2000         1999           1998
                                       ------------  ------------  -------------
Cash flows from operating activities:
    Net earnings                       $  3,053,518  $  2,332,893  $  1,757,308
    Adjustments to reconcile net
      earnings to net cash provided
      by operating activities
        Provision for loan losses           650,000       785,000       752,000
        Provision for depreciation
          and amortization                  781,551       787,996       650,669
        Unrealized gain on trading
          securities                              -       (41,808)      (87,354)
        Gain on sale of held to
          maturity security                       -             -       (78,498)
        Accretion of securities discount    (15,045)      (22,123)      (58,715)
        Amortization of unearned
          loan fees                        (292,937)     (121,730)     (149,954)
        Amortization of securities
          premiums                           11,938        18,251        26,125
        Gain on sales of loans             (432,448)     (774,100)     (372,500)
        Increase in accrued
          interest receivable              (268,282)     (194,742)      (45,416)
        Increase (decrease) in
          interest payable                  120,112        56,610        (4,415)
        Decrease (increase) in
          other assets                      973,058    (1,592,850)   (1,558,741)
        Increase in other liabilities     1,235,959       241,527       360,997
                                       ------------  ------------  -------------
         Net cash provided by
         operating activities             5,817,424     1,474,924     1,191,506





















                               (continued on F-9b)
        The accompanying notes are an integral part of these statements.
                                         F-9a
<PAGE>
                United Financial Holdings, Inc. and Subsidiaries
                CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED

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

Cash flows from investing activities:
  Purchase of Federal Reserve Bank
    stock and FHLB stock                    (22,500)     (118,100)      (73,650)
  Net (increase) decrease in
    Federal funds sold                   (2,044,000)    1,094,000     3,430,000
  Principal repayments of held
    to maturity securities                  476,304     2,422,366       580,646
  Proceeds from sale of held
    to maturity security                          -             -       110,906
  Principal repayments of available
    for sale securities                     820,849       403,391       900,182
  Proceeds from sale of trading
    securities                               75,108             -             -
  Proceeds from maturities of available
    for sale securities                   1,500,000     1,500,778     3,260,000
  Proceeds from maturities of held
    to maturity securities                1,420,000     2,732,843     4,567,408
  Purchases of available for
    sale securities                      (3,177,376)   (4,895,000)   (7,153,908)
  Purchases of held to maturity
    securities                           (3,697,609)   (1,148,000)   (6,304,138)
  Proceeds from sales of loans            5,547,639     8,890,919     3,243,766
  Net increase in loans                 (34,002,367)  (45,731,646)   25,197,839)
  Capital expenditures                   (1,182,367)   (1,048,670)     (310,722)
                                       ------------  ------------  -------------

        Net cash used in
        investing activities            (34,286,319)  (35,897,119)  (22,947,349)




















                               (continued on F-10)
        The accompanying notes are an integral part of these statements.
                                         F-9b
<PAGE>
                United Financial Holdings, Inc. and Subsidiaries
                CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
                                           For the Years Ended December 31,
                                       ---------------------------------------
                                            2000         1999           1998
                                       ------------  ------------  -------------
Cash flows from financing activities:
  Net increase in demand deposits,
    NOW accounts, money market accounts
    and savings accounts               $ 14,788,311  $ 24,744,269  $ 11,317,459
  Net increase (decrease) in
   certificates of deposit               12,265,610    11,258,267    (2,441,058)
  Net increase (decrease) in
   securities sold under
   agreements to repurchase               2,855,814    (1,488,671)    7,714,970
  Repayment of long-term debt                     -       (33,750)   (2,644,402)
  Issuance of Company-obligated
   mandatory redeemable capital
   securities  of subsidiary trust
   holding solely subordinated
   debentures of the Company                      -       749,600     6,000,000
  Issuance of common stock                        -       766,764     2,989,923
  Dividend paid on preferred stock           (7,000)      (10,798)      (15,470)
  Dividend paid on common stock            (763,277)     (663,907)     (535,631)
  Purchase of Treasury Shares              (116,446)            -             -
                                       ------------  ------------  -------------
         Net cash provided by
         financing activities            29,023,012    35,321,774    22,385,791
                                       ------------  ------------  -------------

Net increase in cash and cash
  equivalents                               554,117       899,579       629,948

Cash and cash equivalents at
  beginning of year                       8,866,336     7,966,757     7,336,809
                                       ------------  ------------  -------------

Cash and cash equivalents at
  end of year                          $  9,420,453  $  8,866,336  $  7,966,757
                                       ============  ============  =============

Cash paid during the year for:
  Interest                             $  7,819,396  $  5,782,619  $  5,263,904
  Income taxes                         $  2,287,567  $  1,288,470  $  1,108,451

Supplemental Disclosure of Non-Cash Activity
Reclassification of loans to
 foreclosed real estate                $    100,000  $  1,038,266   $ 1,253,160
                                       ============  ============   ===========

Reclassification of
 foreclosed real estate to loans       $          -  $          -   $   262,500
                                       ============  ============   ===========

Performance shares issued              $    346,592  $    399,073   $   264,107
                                       ============  ============   ===========

        The accompanying notes are an integral part of these statements.
                                         F-10
<PAGE>
                United Financial Holdings, Inc. and Subsidiaries

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

United  Financial  Holdings,  Inc. (the  "Company") is a registered bank holding
company  formed  in 1982,  the  principal  subsidiary  of which is  United  Bank
("Bank"),  a Florida-chartered  commercial bank headquartered in St. Petersburg,
Florida. The Bank was founded in 1979 and is a community-oriented,  full service
commercial  bank with six branch offices  serving the southern  Pinellas  County
area of the State of Florida.

Following is a summary of the  significant  accounting  policies  that have been
consistently applied in the preparation of the consolidated financial statements
of United Financial Holdings, Inc. and Subsidiaries.

1.     Principles of Consolidation

The consolidated  financial  statements include the accounts of United Financial
Holdings,  Inc. (the "Company") and its  Subsidiaries,  the Bank, EPW Investment
Management  ("EPW"),  United Trust  Company  ("Trust")  and UFH Capital  Trust I
("UFHCT"),  after all significant  intercompany  accounts and transactions  have
been eliminated.

2.     Cash and Cash Equivalents

For the purpose of  presentation in the  Consolidated  Statements of Cash Flows,
cash and cash equivalents includes cash on hand and non-interest bearing amounts
due from correspondent banks.

3.     Use of Estimates in Financial Statements

In preparing  financial  statements in  conformity  with  accounting  principles
generally  accepted in the United States of America,  management makes estimates
and assumptions  that affect the reported  amounts of assets and liabilities and
disclosures  of contingent  assets and  liabilities at the date of the financial
statements,  as well as the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

4.     Securities

The Company's  investment  securities are classified in the following categories
and accounted for as follows:

*   Trading Securities.  Government and corporate bonds and corporate securities
    held  principally  for  resale in the near term are  classified  as  trading
    securities  and recorded at their fair  values.  The Company had one trading
    security,  which was transferred  from securities  available for sale during
    the year ended  December  31,  1998,  at which time book value  approximated
    market value.  The security has an unrealized gain of $24,737 and $87,354 at
    December 31, 1999 and 1998, respectively.

    The security was sold during 2000 for a minimal gain.




                                       F-11
<PAGE>
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

*   Securities  Held to  Maturity.  Bonds,  notes and  debentures  for which the
    Company has the positive intent and ability to hold to maturity are reported
    at cost,  adjusted for  amortization  of premiums and accretion of discounts
    which are recognized in interest  income using the interest  method over the
    period  to  maturity.  Such  securities  may be sold or  transferred  to the
    available for sale or trading securities  classification only as a result of
    isolated,  non-recurring,  or  unusual  changes in  circumstances  which the
    Company could not have reasonably anticipated, such as a change in statutory
    or regulatory requirements regarding investment limitations or a significant
    deterioration in a security issuer's credit-worthiness.

*   Securities  Available  for Sale.  Securities  available  for sale consist of
    bonds,  notes,  debentures,  and certain equity securities not classified as
    trading  securities  nor as securities  held to maturity,  which may be sold
    prior to maturity as part of  asset/liability  management  or in response to
    other factors,  and are carried at fair value with any valuation  adjustment
    reported in a separate  component of  stockholders'  equity,  net of the tax
    effect.

Declines in the fair value of individual held-to-maturity and available-for-sale
securities  below their cost that are other than  temporary  are  recognized  as
write downs of the individual  securities to their fair value.  Such write-downs
are  included in earnings as  realized  losses.  There were no such  write-downs
during 2000, 1999 and 1998.

Gains and losses on the sale of  securities  available  for sale are  determined
using the specific-identification method.

5.     Loans and Allowance for Loan Losses

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   balance.   These  receivables  are  adjusted  for  any
charge-offs,  the allowance  for loan losses,  and any deferred fees or costs on
originated loans and un-amortized premiums or discounts on purchased loans.

Loan origination fees and certain direct  origination  costs are capitalized and
recognized  as an adjustment to the related  loan's  yield,  generally  over the
contractual life of the loan.

The accrual of interest on impaired loans is discontinued  when, in management's
opinion,  the borrower may be unable to meet  payments as they become due.  When
interest  accrual is  discontinued,  all unpaid  accrued  interest is  reversed.
Interest income is subsequently  recognized only to the extent cash payments are
received.

The allowance for loan losses is increased by charges to income and decreased by
charge-offs  (net  of  recoveries).  Management's  periodic  evaluation  of  the
adequacy  of the  allowance  is based on the Bank's  past loan loss  experience,
known and inherent risks in the portfolio,  adverse  situations  that may affect
the  borrower's  ability  to  repay,  the  estimated  value  of  any  underlying
collateral, and current economic conditions.




                                       F-12
<PAGE>
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

6.     Accounting for Impairment of Loans

The  Company's  measurement  of  impaired  loans  includes  those loans that are
non-performing  and have been placed on non-accrual  status and those loans that
are performing  according to all contractual terms of the loan agreement but may
have substantive indication of potential credit weakness.

Residential  mortgages and consumer  loans and leases  outside the scope of SFAS
No. 114 are collectively evaluated for impairment.

7.     Premises and Equipment

Premises and  equipment  are stated at cost less  accumulated  depreciation  and
amortization.   Depreciation  and  amortization  are  provided  for  in  amounts
sufficient to relate the cost of  depreciable  assets to  operations  over their
estimated service lives.  Leasehold improvements are amortized over the lives of
the  respective  leases or the service lives of the  improvements,  whichever is
shorter.  The straight-line method of depreciation is followed for substantially
all assets for financial  reporting  purposes,  but accelerated methods are used
for tax purposes.

8.     Other Real Estate Owned (ORE)

Other  real  estate  owned is  initially  recorded  at fair value at the date of
foreclosure,  less estimated  selling costs.  Costs relating to development  and
improvement of property are  capitalized,  whereas costs relating to the holding
of property are expensed.

Valuations  are   periodically   performed  by  management,   or  obtained  from
independent appraisers,  and an allowance for loss is established by a charge to
operations if the value of the property  declines  below its original  estimated
fair value.

If a sale of real estate owned  results in a gain,  the gain is accounted for in
accordance  with FASB  Statement  No. 66,  Accounting  for Sales of Real Estate.
Accordingly,  gains may be deferred or  recognized  currently  depending  on the
terms of the sale. Losses are charged to operations as incurred.

9.     Intangible Assets

Intangible assets include core deposit premiums paid to acquire certain customer
deposit  bases  and the  remaining  excess  of cost  over  net  tangible  assets
acquired.  These assets are being amortized on a straight-line  basis over their
estimated lives of 10-40 years.












                                       F-13
<PAGE>
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

10.    Income Taxes

Deferred income tax assets and liabilities are computed annually for differences
between  the  consolidated  financial  statements  and tax basis of  assets  and
liabilities  that will  result in  taxable or  deductible  amounts in the future
based  on  enacted  tax  laws and  rates  applicable  to  periods  in which  the
differences  are expected to affect  taxable  income.  Valuation  allowances are
established  when necessary to reduce deferred tax assets to the amount expected
to be  realized.  Income tax  expense is the tax payable or  refundable  for the
period  plus or minus the change  during the period in net  deferred  assets and
liabilities.

11.    Stock Based Compensation

The Company  accounts for its stock-based  compensation  plans under  Accounting
Principles Board Opinion No. 25,  Accounting for Stock Issued to Employees.  The
Company  follows  the  disclosure  option  of  SFAS  No.  123,   Accounting  for
Stock-Based Compensation,  which requires that companies not electing to account
for stock-based  compensation  as prescribed by the statement,  disclose the pro
forma  effects on earnings  and  earnings  per share as if SFAS No. 123 had been
adopted.  Additionally,  certain other  disclosures are required with respect to
stock  compensation  and the assumptions used to determine the pro forma effects
of SFAS No. 123.

12.    Loan Fees

Net loan fees and processing  costs are deferred and amortized over the lives of
the loans using the interest method of amortization.

13.    Accounting for Impairment of Long-Lived Assets

The  Company   periodically   reviews  its  long-lived  assets  for  impairment.
Impairment  losses on  long-lived  assets  are  recognized  when  indicators  of
impairment are present and the undiscounted cash flows estimated to be generated
by those assets are less than the assets' carrying amounts.  The Company did not
record any impairment losses during the years ended December 31, 2000 and 1999.

14.    Earnings per Share

The Company follows the standards of SFAS No. 128,  Earnings Per Share. SFAS No.
128  requires  dual  presentation  of basic and  diluted  EPS on the face of the
income statement for all entities with complex capital structures and requires a
reconciliation  of the numerator and denominator of the basic EPS computation to
the numerator and denominator of the diluted EPS computation.












                                       F-14
<PAGE>
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

15.      Reclassifications

Certain  reclassifications  have been  made to the  December  31,  1999 and 1998
balances to conform to the December 31, 2000 presentation.

16.      Recently Issued Accounting Pronouncements

Accounting for Transfers and Servicing of Financial  Assets and  Extinguishments
of Liabilities

The FASB has issued SFAS No. 125,  Accounting  for  Transfers  and  Servicing of
Financial Assets and Extinguishments of Liabilities, which was effective for the
Company's fiscal year beginning January 1, 1997. SFAS No. 125 provides standards
for  distinguishing  transfers of financial assets that are sales from transfers
that are  secured  borrowings.  A  transfer  of  financial  assets  in which the
transferor  surrenders  control over those assets is accounted  for as a sale to
the extent that consideration other than beneficial interests in the transferred
assets is received in exchange.  After a transfer of financial assets, an entity
recognizes the financial and servicing assets it controls and the liabilities it
has incurred,  de-recognizes financial assets when control has been surrendered,
and de-recognizes liabilities when extinguished.

SFAS  125 will be  replaced  by SFAS  No.  140,  Accounting  for  Transfers  and
Servicing of Financial Assets and  Extinguishments  of Liabilities.  SFAS 140 is
effective for transfers and servicing of financial assets and extinguishments of
liabilities  occurring  after March 31, 2001. SFAS 140 revises the standards for
accounting  for  securitizations  and other  transfers of  financial  assets and
collateral  and requires  certain  disclosures,  but it carries over most of the
provisions of SFAS 125 without reconsideration. The Company does not expect SFAS
140 to have a  material  impact on the  Company's  statement  of  operations  or
balance sheet.

Derivation Instruments and Hedging Activities

In June 1998, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial  Accounting  Standards ("SFAS") No. 133,  Accounting for Derivative
Instruments and Hedging  Activities ("SFAS 133"),  which was amended by SFAS No.
137, Accounting for Derivative  Instruments and Hedging Activities - Deferral of
the Effective Date of FASB Statement No. 133. SFAS 133 is effective, as amended,
for fiscal  quarters of fiscal years  beginning  after June 15, 2000 (January 1,
2001 for the Company).  SFAS 133 requires  that all  derivative  instruments  be
recorded on the balance sheet at their fair value.  Changes in the fair value of
derivatives are recorded each period in current earnings or other  comprehensive
income,  depending on whether a  derivative  was  designated  as part of a hedge
transaction and, if it was, the type of hedge transaction.  For fair-value hedge
transactions  in which the Company hedges changes in the fair value of an asset,
liability  or firm  commitment,  changes  in the fair  value  of the  derivative
instrument  will  generally be offset in the income  statement by changes in the
hedged item's fair value.  The ineffective  portion of hedges will be recognized
in  current-period  earnings.  The  Company  has no  present  plans to engage in
hedging  activities  and does not  anticipate the adoption of SFAS 133 to have a
material impact on the Company's statement of operations or balance sheet.




                                       F-15
<PAGE>
NOTE B - ACQUISITIONS

On September  30,  1995,  the Company  purchased  100% of the stock of Fiduciary
Services Corp.  ("FSC") for $450,000,  issuing 150,000 shares at $3.00 per share
of common stock of the Company plus a contingent  payment of performance  shares
based upon net earnings of the trust department through 2001. The acquisition of
FSC was  accounted  for as a purchase.  The purchase  price was allocated to net
tangible  assets  acquired based upon their  estimated  fair market values.  The
performance  shares will be recorded as additional  purchase price.  Included in
intangible  assets  is  $395,706  of excess  of cost  over net  tangible  assets
acquired at date of acquisition.

On  January  31,  1996,  the  Company  completed  the  acquisition  of  EPW,  an
independent  investment  management firm. The acquisition was facilitated by the
issuance  of  $630,000  of  8%  convertible  subordinated  debentures,   plus  a
contingent  payment of performance shares based upon net earnings of EPW through
2001. The performance shares will be recorded as compensation.

For the above  acquisitions,  the Company has reserved from its  authorized  but
un-issued Common Stock,  225,000 shares as performance shares and 204,564 shares
have been  paid out as of  December  31,  2000,  of which  132,967  shares  were
accounted for as additional  consideration  and 71,597 shares were accounted for
as compensation.

NOTE C - INITIAL PUBLIC OFFERING

On December 16, 1998, the Company  completed an Initial Public Offering (IPO) in
which it issued  507,705  shares of common  stock at a price of $7.25 per share.
The common stock trades on the NASDAQ Small Cap Market under the symbol  "UFHI".
Concurrent  with the common  stock  offering,  the  Company  issued  through UFH
Capital Trust I, 1,349,920 shares of $5.00 par value Trust Preferred  securities
with a coupon rate of 9.40%. The Trust Preferred  securities trade on the NASDAQ
Small Cap Market under the symbol  "UFHIP".  Proceeds from the offering  totaled
$9,554,011 net of underwriting fees and Trust Preferred costs of $876,450.

NOTE D - UFH CAPITAL TRUST I

On December  16,  1998,  UFH Capital  Trust I  ("UFHCT"),  a Delaware  statutory
business  trust  created by the Company,  issued  $6,749,600  (including an over
allotment of $749,600 that closed on January 14, 1999) of 9.40% Cumulative Trust
Preferred  Securities  ("Securities")  which will mature on December  10,  2028,
subject to earlier redemption in certain  circumstances.  The principal asset of
UFHCT is a $6,959,200  subordinated  debenture of the Company.  The subordinated
debenture  bears  interest at the rate of 9.40% and matures  December  16, 2028,
subject to earlier redemption in certain circumstances.  The Company owns all of
the common securities of UFHCT.












                                       F-16
<PAGE>
NOTE D - UFH CAPITAL TRUST I - Continued

The Securities,  the assets of UFHCT, and the common securities issued by UFHCT,
are redeemable in whole or in part on or after December 10, 2003 or at any time,
in whole (but not in part) within 180 days  following the  occurrence of certain
events.  The Securities are included in Tier I Capital for regulatory  purposes,
subject to certain limitations.

The  obligations  of the Company with respect to the issuance of the  Securities
constitute  a full  and  unconditional  guarantee  by  the  Company  of  UFHCT's
obligation with respect to the Securities.

Subject to certain  exceptions  and  limitations,  the Company may, from time to
time, defer subordinated  debenture  interest payments,  which would result in a
deferral of  distribution  payments on the related  securities and, with certain
exceptions,  prevent the Company from declaring and paying cash distributions on
the Company's  common stock or debt securities that rank pari passu or junior to
the subordinated debentures.

NOTE E - BUSINESS SEGMENT INFORMATION

United  Financial  has three  reportable  segments:  Commercial  Banking,  Trust
Services, and Investment Management Services. Commercial Banking delivers a full
range of financial services to individuals and small to medium sized businesses.
Services include loan products such as commercial mortgages,  business equipment
loans  and  lines of  credit,  equity  lending,  credit  cards,  and  loans  for
automobile and other personal  financing needs, and various products designed to
meet the credit  needs of small  businesses.  In  addition,  Commercial  Banking
offers various  deposit  products that meet  customers'  savings and transaction
needs.  Trust  Services is comprised of client  fiduciary  services and provides
primarily  fee-based  income.  This area  includes  not only  traditional  trust
services,  but  also is a  wholesale  provider  of trust  services  such as data
processing,  administrative and accounting support and asset custody services to
professionals  holding  assets in trust,  such as legal  and  accounting  firms.
Investment Services offers investment  management services through an investment
advisory  firm  registered  under  the  Investment  Advisers  Act of 1940.  Such
investment management services are offered to corporate, municipal, and high net
worth  individual  clients  throughout the State of Florida and the southeastern
United States. Corporate and Other includes corporate expenses such as corporate
overhead,  intercompany  transactions,  and certain goodwill  amortization.  The
accounting  policies of the reportable  segments are the same as those described
in Note A.
















                                       F-17
<PAGE>
NOTE E - BUSINESS SEGMENT INFORMATION - Continued
The following table presents the Company's Business Segment  Information for the
years ended December 31, 2000, 1999 and 1998, respectively:
                  Commercial  Investment   Trust      Corporate
                   Banking    Management  Services    & Overhead       Total
                 ------------ ----------- ----------- ------------ ------------
    2000
Interest income  $ 19,033,678 $         - $   244,035 $  (141,007) $ 19,136,706
Interest expense    7,437,915           -           -     501,593     7,939,508
                 ------------ ----------- ----------- ------------ ------------
Net interest
 income            11,595,763           -     244,035    (642,600)   11,197,198
Other income        2,024,007   1,700,927   1,519,069    (159,926)    5,084,077
                 ------------ ----------- ----------- ------------ ------------
Total income       13,619,770   1,700,927   1,763,104    (802,526)   16,281,275
Loan loss provision   650,000           -           -           -       650,000
Non interest
 expense            7,584,527   1,845,550   1,287,234      127,062   10,844,373
                 ------------ ----------- ----------- ------------ ------------
Pre-tax income      5,385,243    (144,623)    475,870     (929,588)   4,786,902
Income taxes
 (benefit)          1,913,021     (53,655)    212,146     (338,128)   1,733,384
                 ------------ ----------- ----------- ------------ ------------
Segment net
 earnings        $  3,472,222 $   (90,968)$   263,724 $   (591,460)$  3,053,518
                 ============ =========== =========== ============ ============
Total assets     $237,554,967 $   601,844 $ 3,369,367 $  1,934,635 $243,460,813
                 ============ =========== =========== ============ ============
Capital
 expenditures    $  1,003,242 $    26,115 $   153,010 $          - $  1,182,367
                 ============ =========== =========== ============ ============

    1999
Interest income  $ 14,579,861 $         - $   196,196 $    (65,544)$ 14,710,513
Interest expense    5,263,836           -           -      575,393    5,839,229
                 ------------ ----------- ----------- ------------ ------------
Net interest
 income             9,316,025           -     196,196     (640,937)   8,871,284
Other income        2,000,774   1,593,054   1,630,459     (103,444)   5,120,843
                 ------------ ----------- ----------- ------------ ------------
Total income       11,316,799   1,593,054   1,826,655     (744,381)  13,992,127
Loan loss provision   785,000           -           -            -      785,000
Non interest
 expense            6,774,763   1,588,305   1,147,680       41,301    9,552,049
                 ------------ ----------- ----------- ------------ ------------
Pre-tax income      3,757,036       4,749     678,975     (785,682)   3,655,078
Income taxes
 (benefit)          1,328,800     (13,235)    274,944     (268,324)   1,322,185
                 ------------ ----------- ----------- ------------ ------------
Segment net
 earnings        $  2,428,236 $    17,984 $   404,031 $   (517,358)$  2,332,893
                 ============ =========== =========== ============ ============
Total assets     $205,178,434 $   462,832 $ 3,422,100 $    417,942 $209,481,308
                 ============ =========== =========== ============ ============
Capital
 expenditures    $    973,121 $    35,457 $    45,927 $          - $  1,054,505
                 ============ =========== =========== ============ ============

                                       F-18
<PAGE>
NOTE E - BUSINESS SEGMENT INFORMATION - Continued

                  Commercial  Investment   Trust      Corporate
                   Banking    Management  Services    & Overhead       Total
                 ------------ ----------- ----------- ------------ ------------
        1998
Interest income  $ 12,561,480 $         - $   170,611 $   (73,311) $ 12,658,780
Interest expense    5,066,193       4,015           -     198,111     5,268,319
                 ------------ ----------- ----------- ------------ ------------

Net interest
 income             7,495,287      (4,015)    170,611    (271,422)    7,390,461
Other income        1,645,718   1,447,113     956,042      39,630     4,088,503
                 ------------ ----------- ----------- ------------ ------------
Total income        9,141,005   1,443,098   1,126,653    (231,792)   11,478,964
Loan loss provision   752,000           -           -           -       752,000
Non interest
 expense            5,652,029   1,356,633     950,676        (252)    7,959,086
                 ------------ ----------- ----------- ------------ ------------
Pre-tax income      2,736,976      86,465     175,977    (231,540)    2,767,878
Income taxes
 (benefit)            969,555      37,914      71,073     (67,972)    1,010,570
                 ------------ ----------- ----------- ------------ ------------

Segment net
 earnings        $  1,767,421 $    48,551 $   104,904 $  (163,568) $  1,757,308
                 ============ =========== =========== ============ ============

Total assets     $168,837,452 $   396,682 $ 2,666,328 $     1,717  $171,902,179
                 ============ =========== =========== ============ ============

Capital
 expenditures    $    389,634 $    24,151 $     2,165 $         -  $    415,950
                 ============ =========== =========== ============ ============

NOTE F - UNITED FINANCIAL HOLDINGS, INC. (Parent Only) CONDENSED
         FINANCIAL INFORMATION

The Bank, EPW, Trust and UFHCT are wholly-owned subsidiaries of United Financial
Holdings,  Inc.  The majority of the  Company's  assets are  represented  by its
investment  in the Bank and its primary  source of income is dividends  from the
Bank and Trust.

During 1989,  the Company  authorized  the issuance of 150,000 shares of $10 par
value  cumulative,  convertible,  7% preferred stock. The shares are convertible
into common shares at $1.19 per share.












                                       F-19
<PAGE>
NOTE F - UNITED FINANCIAL HOLDINGS, INC. (Parent Only) CONDENSED
         FINANCIAL INFORMATION - Continued

Following is condensed financial information of the Company.

                                           For the Years Ended December 31,
                                       ---------------------------------------
                                            2000         1999           1998
                                       ------------  ------------  -------------
Balance Sheets
   Cash and cash equivalents           $  2,017,268  $  2,975,207  $  4,451,859
   Trading securities                             -        81,600       157,354
   Equity securities                      1,665,061       773,000             -
   Note receivable                          500,000       500,000             -
   Due from subsidiaries                    258,628       499,183       192,432
   Investment in Bank                    18,861,637    15,872,307    13,617,578
   Investment in EPW                         63,291       154,259       136,275
   Investment in United Trust             3,338,742     3,399,823     2,646,885
   Investment in UFH Cap Trust I            209,600       209,600       209,600
   Intangible assets                        467,984       499,011       546,230
   Receivable from UFH Cap Trust I                -             -       774,476
   Other assets                              62,709        38,431       120,530
                                       ------------  ------------  -------------
                                       $ 27,444,920  $ 25,002,421  $ 22,853,219
                                       ============  ============  ============

   Note payable                        $          -  $          -  $          -
   Convertible subordinated
            debentures                      630,000       630,000       630,000
   Junior subordinated debentures
       issued to UFH Cap Trust I          6,959,200     6,959,200     6,959,200
   Other liabilities                        319,637       590,838       492,913
   Stockholders' equity                  19,536,083    16,822,383    14,771,106
                                       ------------  ------------  -------------
                                       $ 27,444,920  $ 25,002,421  $ 22,853,219
                                       ============  ============  ============






















                                       F-20
<PAGE>
NOTE F - UNITED FINANCIAL HOLDINGS, INC. (Parent Only) CONDENSED
         FINANCIAL INFORMATION - Continued

                                                  December 31,
                                       ---------------------------------------
                                            2000         1999           1998
                                       ------------  ------------  -------------
Statements of Earnings
   Equity in earnings of Bank          $  3,472,222  $  2,428,237  $  1,767,421
   Equity in earnings (loss) of EPW         (90,968)       17,985        48,551
   Equity in earnings of United Trust       263,724       404,031        95,599
   Gain (loss) on trading account            (6,492)       41,808        87,354
   Other income                              42,339        64,308       100,345
   Interest expense                        (684,864)     (702,748)     (275,116)
   Other expense                           (280,571)     (189,052)     (144,123)
                                       ------------  ------------  -------------
   Earnings before income taxes           2,715,390     2,064,569     1,680,031
   Income tax benefit                       338,128       268,324        77,277
                                       ------------  ------------  -------------
          Net earnings                 $  3,053,518  $  2,332,893  $  1,757,308
                                       ============  ============  =============

NOTE G - SECURITIES

At December 31, 2000 and 1999, the carrying value and estimated  market value of
investments in debt and equity securities were as follows:

                                Carrying
                                  Value      Gross      Gross
                               (Amortized  Unrealized Unrealized   Estimated
                                  Cost)      Gains      Losses    Market Value
                               ----------- ---------- ---------- -------------
DECEMBER 31, 2000
Securities held to maturity:
U.S. Treasury securities and
  obligations of U.S.Government
  corporations and agencies    $10,798,927 $  103,311 $   46,545  $ 10,855,693
Obligations of State and
 political subdivisions          1,672,400     11,580     11,509     1,672,471
Mortgage-backed securities       3,464,577      4,098     18,860     3,449,815
Other                              100,000          -          -       100,000
                               ----------- ---------- ---------- -------------
Total                          $16,035,904 $  118,989 $   76,914 $  16,077,979
                               =========== ========== ========== =============














                                       F-21
<PAGE>
NOTE G - SECURITIES - Continued

                               Historical    Gross       Gross      Carrying
                               Amortized   Unrealized  Unrealized     Value
                                Cost         Gains      Losses    (Market Value)
                               ----------- ---------- ----------- --------------
Securities available for sale:
U.S. Treasury securities and
 obligations of U.S. government
 corporations and agencies     $ 4,026,257 $   43,618 $    6,215  $  4,063,660
Obligations of State and
 political subdivisions          2,015,155          -     23,208     1,991,947
Mortgage-backed securities       2,488,828     19,349        222     2,507,955
Equity securities                2,814,651          -     81,875     2,732,776
                               ----------- ---------- ----------- --------------
Total                          $11,344,891 $   62,967 $  111,520  $ 11,296,338
                               =========== ========== ==========  ==============


                                Carrying
                                  Value      Gross      Gross
                               (Amortized  Unrealized Unrealized   Estimated
                                  Cost)      Gains      Losses    Market Value
                               ----------- ---------- ---------- -------------
DECEMBER 31, 1999
Securities held to maturity:
U.S. Treasury securities and
  obligations of U.S. government
  corporations and agencies    $10,111,441 $    1,655 $  276,011 $    9,837,085
Obligations of State and
 political subdivisions          1,825,423     11,692     77,183      1,759,932
Mortgage-backed securities       2,003,792      1,763    121,614      1,883,941
Corporate obligations              500,021          -      8,771        491,250
Other                              100,000          -          -        100,000
                               ----------- ---------- ---------- -------------
Total                          $14,540,677 $   15,110 $  483,579 $   14,072,208
                               =========== ========== ========== ==============





















                                       F-22
<PAGE>
NOTE G - SECURITIES - Continued

                               Historical    Gross       Gross      Carrying
                               Amortized   Unrealized  Unrealized     Value
                                Cost         Gains      Losses    (Market Value)
                               ----------- ---------- ----------- --------------
Securities available for sale:
U.S. Treasury securities and
  obligations of U.S. government
  corporations and agencies    $ 5,403,131 $   10,373 $   117,425  $  5,296,079
Obligations of State and
  political subdivisions         1,803,336          -      94,164     1,709,172
Mortgage-backed securities       1,146,820      3,368      14,209     1,135,979
Equity securities                1,922,590          -     140,000     1,782,590
                               ----------- ---------- -----------  -------------
Total                          $10,275,877 $   13,741 $   365,798  $  9,923,820
                               =========== ========== ===========  =============

Proceeds from the sale of investments in debt  securities  totaled  $110,906 for
the year ended  December  31,  1998 with a resulting  gain of $78,498,  which is
included in other service  charges,  fees and income.  The sale of these held to
maturity debt  securities  during the year ended  December 31, 1998 was due to a
significant  deterioration  in the  issuer's  credit-worthiness.  There  were no
proceeds  from  sales of  investments  in debt  securities  for the years  ended
December 31, 2000 and 1999.

The amortized cost and estimated market value of debt securities at December 31,
2000 by contractual maturity, are shown below. Actual maturities may differ from
contractual  maturities  due to  borrowers  having  the  right to call or prepay
obligations with or without call or prepayment penalties.

                  Securities held to maturity     Securities available for sale
                 ------------------------------- -------------------------------
                   Carrying                                   Carrying
                    Value    Estimated            Historical   Value
                 (Amortized    Market    Average  Amortized   (Market   Average
                    Cost)      Value      Yield      Cost       Value)   Yield
                 ----------  ----------  -------  ----------  ---------- -------
Due in one year
  or less        $1,259,911  $1,262,983   6.221%  $        -  $        -      -

Due after one
  year through
  five years      7,089,769   7,126,172   6.470%   2,847,643   2,883,848  6.709%

Due after five
  years through
  ten years       3,703,115   3,730,670   6.892%   3,193,769   3,171,759  6.948%

Due after ten
  years             518,532     508,340   4.620%   1,130,749   1,151,278  7.635%







                                       F-23
<PAGE>
NOTE G - SECURITIES - Continued

                Securities held to maturity      Securities available for sale
                -------------------------------- -------------------------------
                   Carrying                                  Carrying
                    Value   Estimated           Historical   Value
                 (Amortized   Market    Average Amortized   (Market    Average
                    Cost)     Value      Yield     Cost      Value)    Yield
                ----------- ----------- ------- ----------- ---------- -------
Mortgage-
  backed
  securities      3,464,577   3,449,814  6.940%   1,358,079   1,356,677  6.619%

Equity securities         -           -       -   2,814,651   2,732,776  2.538%
                ----------- ----------- ------- ----------- ----------- -------
     Total      $16,035,904 $16,077,979         $11,344,891 $11,296,338
                =========== ===========         =========== ===========

Investment securities with a carrying value (which approximates market value) of
approximately  $13,418,000  and  $8,406,000  at  December  31,  2000  and  1999,
respectively,  were  pledged to secure  public funds and  securities  sold under
agreements to repurchase.

NOTE H - LOANS

Major classifications of loans were as follows:

                                                      December 31,
                                                   2000           1999
                                              ------------    ------------
          Real estate mortgage                $116,808,030    $108,742,717
          Commercial                            61,970,060      41,358,490
          Installment and other                  7,051,507       6,768,611
                                              ------------    ------------
                                               185,829,597     156,869,818
          Less:  Allowance for loan losses       2,760,968       2,340,857
                    Unearned fees                1,041,109       1,031,553
                                              ------------    ------------
          Loans, net                          $182,027,520    $153,497,408
                                              ============    ============

Changes in the allowance for loan losses were as follows:

                                              For the Years Ended December 31,
                                              --------------------------------
                                                  2000      1999      1998
                                              ----------- ---------- ----------
     Balance at beginning of year             $2,340,857  $1,983,753 $1,647,355
     Provision charged to operating expenses     650,000     785,000    752,000
     Recoveries on loans previously charged off   84,525      32,596     10,536
     Loans charged off                          (314,414)   (460,492)  (426,138)
                                              ----------- ---------- ----------
          Balance at end of year              $2,760,968  $2,340,857 $1,983,753
                                              ==========  ========== ==========




                                       F-24
<PAGE>
NOTE H - LOANS - Continued

Changes in unearned fees were as follows:
                                         For the Years ended December 31,
                                       ---------------------------------------
                                            2000         1999           1998
                                       ------------  ------------  -------------
          Balance at beginning of year $  1,031,553  $    627,993  $    520,862
          Points deferred on loans          302,493       525,290       257,085
          Points recognized in income      (292,937)     (121,730)     (149,954)
                                       ------------  ------------  -------------
          Balance at end of year       $  1,041,109  $  1,031,553  $    627,993
                                       ============  ============  ============
Impaired loans were as follows:
                                                     December 31,
                                        ---------------------------------------
                                          2000            1999           1998
                                        -----------   ------------  -----------
  Balance at end of period              $   586,339   $ 2,325,172   $ 4,001,964
  Average balance during period           1,623,304     3,016,132     2,808,974
  Total related allowance for losses         95,000       231,000       602,000
  Interest income recognized on
   impaired loans                            22,588       103,600        86,700

The only loans sold by the Bank during  2000,  1999 and 1998 were SBA loans.  In
accordance  with  SFAS No.  125,  Accounting  for  Transfers  and  Servicing  of
Financial  Assets  and  Extinguishment  of  Liabilities,  a  servicing  asset is
recorded when the Bank sells the SBA loans and retains the  servicing.  The book
value of such assets,  which the Bank  believes  approximates  the fair value of
such assets at December  31, 2000,  1999 and 1998 was  $392,000,  $408,000,  and
$141,000,  respectively.  Amortization expense relating to such servicing assets
of  $43,000,  $25,000  and  $13,000  was  recorded  for  2000,  1999  and  1998,
respectively.   The  Company   periodically   reviews   prepayment  and  default
assumptions to determine impairment. No valuation for impairment of these assets
was deemed necessary for the periods presented.

NOTE I - PREMISES AND EQUIPMENT

Major classifications of premises and equipment are as follows:
                                                     December 31,
                                        ---------------------------------------
                                          2000            1999         Life
                                        ------------  ------------  -----------
          Land                          $  1,688,779  $  1,688,779            -
          Land improvements                   64,746        64,746            -
          Leasehold improvements             512,976       115,811        3-16
          Building and building
            improvements                   7,763,995     7,623,685       10-40
          Furniture, fixtures
            and equipment                  3,624,126     3,017,053        3-10
                                        ------------  ------------
                                          13,654,622    12,510,074
          Less accumulated depreciation
            and amortization               3,516,998     2,891,538
                                        ------------  ------------
                                        $ 10,137,624  $  9,618,536
                                        ============  ============

                                     F-25
<PAGE>
NOTE I - PREMISES AND EQUIPMENT - Continued

Depreciation  of premises and  equipment  and  amortization  of leaseholds  was
$663,279,  $704,823 and $576,515 for the years ended  December 31, 2000,  1999
and 1998, respectively.

NOTE J - INCOME TAXES

The tax effects of temporary  differences that give rise to significant portions
of the  deferred  tax  assets  and  deferred  tax  liabilities,  consist  of the
following:

                                                        December 31,
                                               --------------------------------
                                                    2000             1999
                                               ------------     -------------
          Deferred tax assets
            Allowance for loan losses           $   931,000      $   815,000
            Deferred loan fees                      320,000          325,000
            Deferred compensation                   188,000          143,000
            Securities available for sale            18,000          133,000
            Net operating loss carryforward (1)           -           15,000
                                                -----------      -------------
                                                  1,457,000        1,431,000

          Deferred tax liabilities
            Fixed assets                            131,000          225,000
                                                -----------      -------------

          Net deferred tax asset,
            included with other assets          $ 1,326,000      $  1,206,000
                                                ===========      ============

(1)     Relates  to net  operating  losses  of two  acquired  subsidiaries.  The
        acquisitions  resulted in ownership  changes for purposes of Section 382
        of the Internal Revenue Code of 1986, as amended.  Consequently, the net
        operating loss carryforwards are subject to a yearly limitation on their
        utilization  and can  only  be  applied  against  future  income  of the
        acquired subsidiaries. Such operating loss carryforwards at December 31,
        2000 have been fully utilized.

Management  believes  that it is more likely than not that the net  deferred tax
asset will be  realized  and,  therefore,  a  valuation  allowance  has not been
recorded against the deferred asset at December 31, 2000 and 1999.














                                     F-26
<PAGE>
NOTE J - INCOME TAXES - Continued

The  Company's  effective  tax rate varies from the  statutory  rate of 34%. The
reasons for this difference are as follows:

                                         For the Years ended December 31,
                                       ---------------------------------------
                                            2000         1999           1998
                                       ------------  ------------  -------------
  Computed "expected" tax provision    $  1,628,000  $  1,242,700  $   941,000
  Tax exempt interest income
  - securities                              (20,000)      (22,800)     (14,800)
  Tax exempt income - life insurance        (48,000)      (46,000)     (46,500)
  Goodwill amortization                      40,200        29,000       24,000
  State taxes net of federal benefit         98,100       104,300       70,600
  Other, net                                 35,084        14,985       36,270
                                       ------------  ------------  -------------
               Total                   $  1,733,384  $  1,322,185  $  1,010,570
                                       ============  ============  ============

NOTE K - DEPOSITS

At December 31, 2000, the scheduled maturities of time deposits are as follows:

          2001                                                     $66,428,775
          2002                                                       9,634,874
          2003                                                       3,236,138
          2004                                                         706,176
          2005                                                       1,634,938
                                                                   -----------
                                                                   $81,640,901
                                                                   ===========
NOTE L - SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE

The  Company  enters  into  retail  repurchase  agreements  with  certain of its
customers.  These agreements mature daily. All securities  collateralizing these
agreements  were under the Company's  control for each  respective  time period.
Information  concerning  securities  sold  under  agreements  to  repurchase  is
summarized as follows:

                                             Year Ended December 31,
                                       ---------------------------------------
                                            2000         1999           1998
                                       ------------  ------------  -------------
          Average balance              $11,223,767   $ 6,391,928   $ 3,983,959
          Average interest rate               4.35%         3.52%        3.55%
          Maximum month-end balance    $14,877,029   $ 7,307,044   $ 8,795,715

The average  rate was  determined  by dividing  the total  interest  paid by the
average outstanding borrowings.








                                       F-27
<PAGE>
NOTE L - SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE - Continued

Securities underlying the agreements are as follows:

                                                      At December 31,
                                                 --------------------------
                                                   2000             1999
                                                 ------------  ------------
          Carrying value                         $10,198,819   $ 7,445,000
          Estimated fair value                   $10,163,566   $ 7,340,000


NOTE M - CONVERTIBLE SUBORDINATED DEBENTURES AND OTHER DEBT

Company debt consists of the following:

                                                       December 31,
                                                 --------------------------
                                                   2000             1999
                                                 ------------  ------------
    8% Convertible  Subordinated Debentures issued in conjunction with the
    acquisition  of EPW.  The holder can convert to common  stock at $4.12
    per share at any time. Upon conversion, the common stock issued cannot
    be traded for a period of two years. Interest is payable semi-annually
    and the  debentures  mature  January  31,  2006.  The  debentures  are
    callable by the Company, in whole or part, as follows:

    Year                              Price
    2001                              103%
    2002                              102%
    2003                              101%
    2004 and thereafter               100%

                                                 $   630,000   $   630,000
                                                 ===========   ===========
The annual  principal  reductions of the long-term  debt during each of the next
five years ended December 31 are as follows:

          2001                                                 $          -
          2002                                                            -
          2003                                                            -
          2004                                                            -
          2005                                                            -
          Thereafter                                                630,000
                                                                -----------

                                                                $   630,000
                                                                ===========










                                       F-28
<PAGE>
NOTE M - LONG-TERM DEBT - Continued

In January 2001, the Company  called the  Convertible  Subordinated  Debentures.
Upon receiving the call notice, the debenture holders elected to convert all the
Debentures into common stock.

Line of Credit

On January 3, 2001,  the Company  signed a  Commitment  Letter with an unrelated
bank to establish a revolving line of credit for $5,000,000. The Company expects
to finalize the line of credit during the first quarter of 2001.

NOTE N - REGULATORY MATTERS

The Bank is subject to various regulatory capital  requirements  administered by
the federal 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
Bank's financial statements.  Under capital adequacy guidelines and a regulatory
framework for prompt  corrective  action,  the Bank must meet  specific  capital
guidelines that involve quantitative measures of the Bank's assets, liabilities,
and certain  off-balance-sheet  items as calculated under regulatory  accounting
practices.  The Bank's capital  amounts and  classification  are also subject to
qualitative  judgments by the regulators about components,  risk weighting,  and
other factors.

Quantitative  measures  established  by  regulation to ensure  capital  adequacy
require the Bank to maintain  minimum amounts and ratios (set forth in the table
below) to total and Tier I  capital  (as  defined  in the  regulations)  to risk
weighted  assets (as  defined),  and of Tier I capital  (as  defined) to average
assets (as defined).  Management believes as of December 31, 2000, that the Bank
meets all capital adequacy requirements to which it is subject.

As of December 31, 2000 and 1999, the most recent  notification from the Federal
Reserve categorized the Bank as well capitalized under the regulatory  framework
for prompt corrective  action.  To be categorized as well capitalized,  the Bank
must maintain minimum total risk-based,  Tier I risk-based,  and Tier I leverage
ratios as set forth in the table.  There are no  conditions or events since that
notification that management believes have changed the institution's category.



















                                       F-29
<PAGE>
NOTE N - REGULATORY MATTERS - Continued

The Bank's  actual  capital  amounts and ratios as of  December  31, 2000 are as
follows (dollars in thousands):

                                                                 To Be Well
                                                 Minimum       Capitalized Under
                                               For Capital     Prompt Corrective
                               Actual        Adequacy Purposes Action Provisions
                           ----------------  ----------------- ----------------
                             Amount  Ratio    Amount  Ratio     Amount  Ratio
                           ----------------  ----------------- ---------------
Stockholders' equity and
  ratio to total asset s   $  18,862  7.94%
Intangible assets               (374)
                           ---------
Tangible capital and
  ratio to adjusted
  total assets             $  18,488  7.23%  $ 3,834   1.5%
                           =========         =======

Tier I (core) capital and
 ratio to adjusted total
 assets                    $  18,436  7.21%  $ 7,668   3.0%     $ 12,780   5.0%
                           =========         ========           ========

Tier I capital and ratio to
 risk-weighted assets      $  18,436  9.27%  $ 5,963   3.0%     $ 11,926   6.0%
                           =========         =======            ========

Tier II capital - allowance
 for loan and lease loses  $   2,488
                           ---------
Total risk-based capital
and ratio to risk-
weighted assets            $  20,924 10.53%  $15,903   8.0%     $ 19,878  10.0%
                           =========         =======            ========

Total assets               $ 237,555
                           =========
Adjusted total assets      $ 255,590
                           =========
Risk-weighted assets       $ 198,783
                           =========














                                       F-30
<PAGE>
NOTE N - REGULATORY MATTERS - Continued

The Bank's  actual  capital  amounts and ratios as of  December  31, 1999 are as
follows (dollars in thousands):

                                                                 To Be Well
                                                 Minimum       Capitalized Under
                                               For Capital     Prompt Corrective
                               Actual        Adequacy Purposes Action Provisions
                           ----------------  ----------------- ----------------
                             Amount  Ratio    Amount  Ratio     Amount  Ratio
                           ----------------  ----------------- ---------------
Stockholders' equity and
 ratio to total assets     $  15,872  7.74%
Intangible assets               (389)
Tangible capital and ratio
to adjusted total assets   $  15,483  7.14%  $  3,254  1.5%
                           =========         ========

Tier I (core) capital and
 ratio to adjusted total
 assets                    $  15,537  7.16%  $  6,508  3.0%     $10,846    5.0%
                           =========         ========           =======

Tier I capital and ratio to
 risk-weighted assets      $  15,537  9.16%  $  5,088  3.0%     $10,176    6.0%
                           =========         ========

Tier II capital - allowance
 for loan and lease losses     2,123
                           ---------

Total risk-based capital
 and ratio to risk-
 weighted assets           $  17,660 10.41%  $ 13,568  8.0%     $16,906   10.0%
                           =========         ========           =======

Total assets               $ 205,178
                           =========
Adjusted total assets      $ 216,918
                           =========
Risk-weighted assets       $ 169,599
                           =========















                                       F-31
<PAGE>
NOTE O - CONCENTRATIONS OF RISK

All of the Company's loans,  commitments,  and commercial and standby letters of
credit have been granted to customers who are  substantially  all located in the
Company's  market area. The majority of customers are depositors of the Company.
The  concentrations  of  credit  by type of loan  are set  forth  in Note H. The
distribution of commitments to extend credit  approximates  the  distribution of
loans  outstanding.  Commercial  and  standby  letters  of credit  were  granted
primarily to commercial borrowers.  The Company, as a matter of policy, does not
extend credit to any single borrower or group of related  borrowers in excess of
its legal  lending  limit.  At December  31, 2000 and 1999,  less than 4% of the
Company's loans are unsecured.

At December 31, 2000,  one customer  controlled  approximately  13% of the total
deposits of the Bank.  Such  deposits  were  invested  primarily  in  short-term
investments.

NOTE P - COMMITMENTS AND CONTINGENT LIABILITIES

Off balance-sheet risk

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  include  commitments to extend credit and standby
letters of credit.  Such  financial  instruments  are recorded in the  financial
statements  when they become  payable.  Those  instruments  involve,  to varying
degrees,  elements  of credit  and  interest  rate risks in excess of the amount
recognized  in the balance  sheet.  The  contract  or notional  amounts of those
instruments  reflect the extent of  involvement  the  Company has in  particular
classes of financial instruments.

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

Unless  noted  otherwise,  the  Company  does not  require  collateral  or other
security to support financial  instruments with  off-balance-sheet  credit risk.
The contract or notional amounts are as follows:

                                                             December 31,
                                                     ---------------------------
                                                        2000           1999
                                                     ------------  ------------
   Commitments to extend credit                      $ 29,546,146  $ 23,967,359
   Standby letters of credit and
   financial guarantees written                      $  2,723,906  $  2,032,288









                                       F-32
<PAGE>
NOTE P - COMMITMENTS AND CONTINGENT LIABILITIES - 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 many 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.

Standby letters of credit are conditional  commitments  issued by the Company to
guarantee the performance of a customer to a third party.  Those  guarantees are
primarily issued to support public and private borrowing arrangements, including
commercial  paper,  bond financing,  and similar  transactions.  The credit risk
involved in issuing  letters of credit is essentially  the same as that involved
in  extending  loan  facilities  to  customers.   The  Company  generally  holds
residential  or commercial  real estate,  accounts  receivable,  inventory,  and
equipment as collateral  supporting  those  commitments for which  collateral is
deemed necessary.

Litigation

The  Company is party to  certain  litigation  encountered  in the course of its
normal  operations,   a  portion  of  which  involves  actions  brought  against
borrowers,  generally  involving  foreclosure  proceedings.  In some  instances,
borrowers or interested  parties have filed or threatened  suit in  retaliation.
Management,  after  consulting  with legal  counsel,  believes that it has valid
defenses and intends to vigorously  defend these  matters.  Management is of the
opinion that an unfavorable  outcome,  if any, would not have a material  effect
upon the consolidated financial statements.

Operating Leases

The Company also has operating  leases  covering  certain  office  equipment and
office facilities expiring at various times through 2013.

The minimum  annual  rentals under these leases as of December 31, 2000,  are as
follows:

      Year                       Amount
      -------------            ----------
      2001                     $   252,707
      2002                         243,167
      2003                         196,667
      2004                         197,783
      2005                         193,806
      Thereafter                 1,144,664
                               -----------

 Total minimum lease payments  $ 2,228,794
                               ===========





                                       F-33
<PAGE>
NOTE P - COMMITMENTS AND CONTINGENT LIABILITIES - Continued

The  Company's  rent  expense was $99,896,  $96,788,  and $102,342 for the years
ended December 31, 2000, 1999 and 1998, respectively.

Pending Acquisition

In September  2000, the Company  signed a Definitive  agreement to acquire First
Security Bank in Sarasota,  Florida. The acquisition will be accounted for using
purchase  accounting  and the  Company  will pay up to $2.2  million  and  issue
preferred  convertible  stock.  It is  anticipated  that  the  purchase  will be
completed sometime in the first quarter of 2001. The acquisition is not expected
to result in any pro-forma disclosures.

NOTE Q - FAIR VALUE OF FINANCIAL INSTRUMENTS

The  assumptions  used in the  estimation  of the fair  value  of the  Company's
financial instruments are detailed below. Where quoted prices are not available,
fair  values  are  based on  estimates  using  discounted  cash  flows and other
valuation  techniques.  The use of  discounted  cash flows can be  significantly
affected by the assumptions  used,  including the discount rate and estimates of
future  cash  flows.  The  following  disclosures  should  not be  considered  a
surrogate  of the  liquidation  value of the  Company,  but rather  represent  a
good-faith   estimate  of  the  increase  or  decrease  in  value  of  financial
instruments held by the Company since purchase, origination or issuance.

The Company, in estimating the fair value of its financial instruments, used the
following methods and assumptions:

    Cash and due from banks and interest bearing deposits with other banks: Fair
    value equals the carrying value of such assets.

    Investment  securities and investment  securities  available for sale:  Fair
    values for investment securities are based on quoted market prices.

    Federal  funds  sold:  Due to the  short-term  nature of these  assets,  the
    carrying values of these assets approximate their fair value.

    Loans:  For variable rate loans,  those repricing within six months or less,
    fair values are based on carrying values. Fixed rate commercial loans, other
    installment  loans, and certain real estate mortgage loans were valued using
    discounted cash flows. The discount rate used to determine the present value
    of these loans was based on interest  rates  currently  being charged by the
    Company on comparable loans as to credit risk and term.














                                       F-34
<PAGE>
NOTE Q - FAIR VALUE OF FINANCIAL INSTRUMENTS - Continued

    Off-balance-sheet  instruments:  The  Company's  loan  commitments,  standby
    letters  of credit  and  financial  guarantees  written,  which  approximate
    $32,000,000 and $26,000,000 at December 31, 2000 and 1999, respectively, are
    negotiated at current market rates and are  relatively  short-term in nature
    and, as a matter of policy,  the Company  generally  makes  commitments  for
    fixed rate  loans for  relatively  short  periods  of time.  Therefore,  the
    estimated  value of the Company's  loan  commitments  approximates  the fees
    charged for entering into the commitments.

    Deposit liabilities:  The fair values of demand deposits are, as required by
    SFAS 107,  equal to the carrying  value of such  deposits.  Demand  deposits
    include non-interest-bearing demand deposits, savings accounts, NOW accounts
    and money market demand  accounts.  Discounted  cash flows have been used to
    value fixed rate term deposits.  The discount rate used is based on interest
    rates  currently  being offered by the Company on comparable  deposits as to
    amount and term.

    Short-term  borrowings:  The  carrying  value of  Federal  funds  purchased,
    securities  sold  under   agreements  to  repurchase  and  other  short-term
    borrowings approximate their carrying values.

    Long-term  debt:  The  carrying  value  of  the  Company's   long-term  debt
    approximates  its fair value since the interest  rates on these  instruments
    approximate market interest rates.

    Cumulative  trust  preferred  securities:  Fair value for  cumulative  trust
    preferred securities are based on quoted market prices.

                                      For the Years Ended
                               ---------------------------------
   Financial Instruments        December 31, 2000      December 31, 1999
                               --------------------  --------------------
                               Carrying  Estimated   Carrying   Estimated
                               Amount    Fair Value  Amount     Fair Value
Assets:                           (in thousands)        (in thousands)
                               --------------------  ----------------------
   Cash and due from banks     $  9,420  $  9,420    $  8,866   $  8,866
  Federal funds sold              4,961     4,961       2,917      2,917
  Trading securities                  -         -          82         82
  Securities held to maturity    16,036    16,078      14,541     14,072
  Securities available for sale  11,296    11,296       9,924      9,924
  Loans                         185,830   186,122     156,870    156,690
  Federal Home Loan Bank stock      507       507         507        507
  Federal Reserve Bank stock        226       226         204        204












                                       F-35
<PAGE>
NOTE Q - FAIR VALUE OF FINANCIAL INSTRUMENTS - Continued

                                      For the Years Ended
                               ---------------------------------
                                December 31, 2000      December 31, 1999
                               --------------------  --------------------
                               Carrying  Estimated   Carrying   Estimated
                               Amount    Fair Value  Amount     Fair Value
          Liabilities             (in thousands)        (in thousands)
                               --------------------  ----------------------
  Demand deposits                 37,051   37,051        32,936   32,936
  NOW and money market            78,887   78,887        67,914   67,914
  Savings                          4,573    4,573         4,873    4,873
  Time, $100,000 and over         28,013   27,979        16,679   16,720
  Other time                      53,628   53,538        52,696   52,832
  Securities sold under
    agreements to repurchase      10,163   10,163         7,307    7,307
  Convertible subordinated
    debentures                       630    1,165           630    1,022
  Cumulative trust preferred
    securities                     6,750    6,750         6,750    6,412
  Off balance sheet items              -      320             -      260

NOTE R - RELATED PARTIES

The  Bank  has  entered  into  transactions  with  its  directors,   significant
stockholders,  and their affiliates ("related parties").  Such transactions were
made in the  ordinary  course of  business on  substantially  the same terms and
conditions,  including interest rates and collateral, as those prevailing at the
same time for comparable  transactions  with other customers and did not, in the
opinion of  management,  involve more than normal  credit risk or present  other
unfavorable  features.  The  aggregate  amount of loans to such related  parties
approximated  $8,229,000,  $6,194,000 and $5,277,500 at December 31, 2000,  1999
and 1998, respectively.

During  November  1997, an affiliate of one of the Company's  directors  entered
into an  exclusive  right to a lease  agreement  (the  "Lease  Agreement")  with
Imaginative Investments,  Inc., a subsidiary of the Company and the owner of the
real property covering the Company's  principal  executive office (the "Owner").
Pursuant to the Lease Agreement,  the Owner granted to such entity the exclusive
right to lease 17,918 square feet of the Company's  principal  executive  office
for a total of $246,373 or $13.75 per rental square foot with annual escalations
of 3%, and three to five year lease terms in return for a commission of 3% if no
outside  broker is used and 6% in the event an outside broker is used. The Lease
Agreement  commenced  July 14, 1997 and terminated at midnight on July 14, 1998.
As of December 31, 2000, the space was 100% leased.












                                       F-36
<PAGE>
NOTE R - RELATED PARTIES - Continued

During  March  1997,  an  affiliate  of  one  of the  Company's  directors  (the
"Manager")  entered  into  a  property  Management  Agreement  with  Imaginative
Investments, Inc., a subsidiary of the Company, pursuant to which the Manager is
employed to act as the sole and exclusive manager in the leasing,  operation and
management of the Company's  principal executive offices for total consideration
of  approximately  $19,000.  The Owner is  required  to  maintain  comprehensive
general public liability insurance in the amount of $2,000,000 naming as insured
parties the Owner,  Manager and such other parties as the Owner may direct.  The
Manager  must  maintain  its own  insurance  to protect  itself from any and all
claims under any workers' compensation laws or other employer's liability laws.

NOTE S - PROFIT-SHARING PLAN

The   Company  has  a  defined   contribution   profit-sharing   plan   covering
substantially  all employees.  The Board of Directors  determines  contributions
annually. The Company contributed $117,000,  $112,500 and $110,000 for the years
ended December 31, 2000,  1999 and 1998,  respectively.  The plan was amended in
1993 to include  an  Employee  Stock  Ownership  Plan  (ESOP)  provision.  As of
December 31, 2000, the ESOP owned 157,806 shares of the Company's  common stock.
During 2000, the ESOP purchased an additional 22,350 shares on the open market.

The  Company  sponsors a deferred  compensation  401(k)  Plan for the benefit of
eligible  full-time  employees.  The 401(k)  Plan,  which is  voluntary,  allows
employees  to  contribute  up to 10 percent of their  total  compensation  (or a
maximum of $10,500 as limited by federal  regulations)  on a pre-tax basis.  The
Company  makes a matching  contribution  of 100 percent of the first $500 and 40
percent  thereafter,  up to the  maximum  amount  allowed  by the  401(k)  Plan.
Employee contributions to the 401(k) Plan were $226,786,  $182,040, and $184,204
for the  years  ended  December  31,  2000,  1999 and  1998,  respectively.  The
Company's matching contribution was $110,692, $90,732, and $92,857 for the years
ended December 31, 2000, 1999 and 1998, respectively.

NOTE T - STOCKHOLDERS' EQUITY

The following is a  reconciliation  of the  numerators and  denominators  of the
basic and diluted  earnings  per share (EPS)  computations.  Options to purchase
452,749 shares of common stock at $7.90 a share,  454,749 shares of common stock
at  $7.92 a  share,  and  481,380  shares  of  common  stock at $7.96 a share at
December  31,  2000,  1999 and  1998,  respectively,  were not  included  in the
computation of diluted EPS because the options' exercise price was not less than
the value of the common  shares based on quoted  market price or an  independent
appraisal. All these options have various lives and begin to expire in 2000.














                                       F-37
<PAGE>
NOTE T - STOCKHOLDERS' EQUITY - Continued

                                    For the Year Ended December 31,
                  --------------------------------------------------------------
                              2000                             1999
                  -------------------------------  -----------------------------
                              Weighted   Per                   Weighted   Per
                              Average    Share                 Average    Share
                  Earnings    Shares     Amount    Earnings    Shares     Amount
                  ----------  ---------  --------  ----------  ---------  ------
Basic EPS
  Net earnings
  available to
  common
  stockholders    $3,046,518  4,232,304   $.72      $2,322,095  4,118,228  $.56
                                          ====                             ====

Effect of
 dilutive
 securities
 Incremental
 shares from
 assumed
 exercise or
 conversion
 of:
Convertible
 debt                 31,434    152,790                 31,434    152,790
Preferred
 stock                 7,000     81,196                 10,798    129,476
Stock
 options                   -      1,531                      -          -
                  ----------  ---------             ----------  ---------

Diluted EPS
  Net earnings
  available to
  common
  stockholders
  and assumed
  conversions     $3,084,952  4,467,821   $.69      $2,364,327  4,400,494  $.54
                  ==========  =========   ====      ==========  =========  ====















                              (continued on F-38b)
                                       F-38a
<PAGE>
NOTE T - STOCKHOLDERS' EQUITY - Continued

                  For the Year Ended December 31,
                 -------------------------------
                               1998
                 -------------------------------
                               Weighted  Per
                               Average   Share
                  Earnings     Shares    Amount
                  ----------  ---------  ------
Basic EPS
  Net earnings
  available to
  common
  stockholders    $1,741,838  3,523,364   $.49
                                          ====

Effect of
 dilutive
 securities
 Incremental
 shares from
 assumed
 exercise or
 conversion
 of:
Convertible
 debt                 31,434    152,790
Preferred
 stock                15,470    185,508
Stock
 options                   -          -
                  ----------  ---------

Diluted EPS
  Net earnings
  available to
  common
  stockholders
  and assumed
  conversions     $1,788,742  3,861,662   $.46
                  ==========  =========   ====

During  the year  ended  December  31,  1997,  the  Company  adopted  the United
Financial Holdings,  Inc. Stock Option and Incentive  Compensation Plan ("Plan")
under which 468,000  shares of common stock were  reserved.  Under the Plan, the
Company may grant its Board of Directors and certain  officers  incentive  stock
options or non-qualified  stock options to purchase a specified number of shares
of common  stock at a price not less than fair market value on the date of grant
and for a term not to exceed  10  years.  The  options  granted  to the Board of
Directors are 100% vested and the remaining options vest and become  exercisable
at 20% increments after each anniversary date of employment  beginning after the
second anniversary date.





                                       F-38b
<PAGE>
NOTE T - STOCKHOLDERS' EQUITY - Continued

During  the year  ended  December  31,  1998,  the  Company  adopted  the United
Financial Holdings, Inc. Stock Option Plan (the "1998 Plan") under which 250,000
shares of common  stock were  reserved.  Under the Plan,  the  Company may grant
stock options to key persons and other persons who contribute  materially of the
success and  profitability  of the  Company.  The Plan is also used to assist in
attracting and retaining key individuals.  The Company may grant incentive stock
options or non-qualified  stock options to purchase a specified number of shares
of common  stock at a price not less than the fair  market  value on the date of
grant and for a term not to exceed 10 years.  The options granted are subject to
a vesting schedule as set forth in each individual option agreement.  During the
year ended December 31, 1999, 3,000 options were granted at $6.69 per share, the
estimated  fair market  value of the  Company's  common stock at the grant date.
During the year ended  December  31,  2000,  53,000  options  were granted at an
average share price of $7.04.

                                                       Weighted
                                                       Range of      Average
                                            Number of  Per Share     Per Share
                                             Shares    Option Price  Price
                                            ---------  ------------  -----------
         Outstanding at December 31, 1997     508,500  $3.89-8.25    $ 7.88
         Options granted                            -       -             -
         Options exercised                     (6,000)      -         (5.08)
         Options forfeited                    (21,120)  5.08-7.94     (6.92)
                                            ---------

         Outstanding at December 31, 1998     481,380   7.63-8.25      7.94
         Options granted                        3,000        6.69      6.69
         Options exercised                          -       -             -
         Options forfeited                    (29,631)  7.94-8.25     (8.08)
                                            ---------

         Outstanding at December 31, 1999     454,749   6.69-7.63      7.92
         Options granted                       53,000   6.81-7.63      7.04
         Options exercised                          -       -             -
         Options forfeited                    (27,000)  7.63-7.94     (7.78)
                                            ---------

         Outstanding at December 31, 2000     480,749   6.69-7.94      7.83
                                            =========

The weighted-average remaining contractual life of the outstanding stock options
at December  31,  2000,  1999 and 1998 was 88 months,  94 months and 103 months,
respectively.












                                       F-39
<PAGE>
NOTE T - STOCKHOLDERS' EQUITY - Continued

These options are exercisable as follows:

                                                                   Weighted
                                                                   Average
       Year Ending                                Number of        Exercise
       December 31,                               Shares           Price
    ---------------------                     ----------------  --------------
            2001                                  435,049          $  7.92
            2002                                   11,800            27.07
            2003                                   11,500            27.05
            2004                                   22,400            27.02
                                                   ------
                                                  480,749          $  7.83
                                                  =======

At December 31, 2000,  in order to calculate  the fair value of the options,  it
was assumed that the risk-free  interest rate was 6.0%, the dividend yield would
be 2.36% over the exercise  period,  the expected  life of the options  would be
four years, and stock volatility would be 20%. At December 31, 1999 and 1998, it
was assumed the risk-free  rate was 6.0%,  the dividend yield was 1.68% over the
exercise  period,  the expected life of the option would be the entire  exercise
period, and stock volatility would approximate 20% due to a thinly traded market
for the stock for these periods. The following  information pertains to the fair
value of the options at December 31, 2000, 1999 and 1998.

                                           For the Years Ended December 31,
                                         -------------------------------------
                                            2000         1999         1998
                                         ----------   ----------   -----------
   Weighted average-grant-date
    Fair value of options issued
    during the year                      $   75,610   $      NIL   $      NIL
                                         ==========   ==========   ==========

   Pro forma net earnings                $2,919,103   $2,244,347   $1,668,356
                                         ==========   ==========   ==========

   Pro forma basic earnings per share    $      .69   $      .54   $      .47
                                         ==========   ==========   ==========

















                                       F-40
<PAGE>
NOTE U - EXECUTIVE COMPENSATION

The Company has  employment  contracts  with certain  executive  officers of the
Company,  providing for a total annual payment equal to their annual base salary
plus bonuses.  These  contracts are in effect until  termination (as defined) of
the related  employee.  If the  Company,  for other than just cause (as defined)
terminates the employee,  the affected  employee shall receive,  for a period of
twelve months,  continuing compensation equal to his compensation for the twelve
month period immediately prior to termination.

The Company has  established  a  non-qualified  defined  benefit  plan  covering
certain executive  employees.  The Plan specifies that upon reaching age 65, the
employee will receive an annual benefit (paid  monthly)  ranging from 40 percent
to 60 percent of their annual  salary,  for 240 months.  The Company will accrue
the present value of the estimated  future  retirement  payments over the period
from  the  date of  each  agreement  to the  retirement  date of the  respective
executive  officer.  To fund these benefit plans,  the Company  purchased single
premium cash value life insurance policies with current cash surrender values of
$2.8 million, which have been capitalized and included in other assets.

NOTE V - STOCK SPLIT

The Board of Directors  declared a  three-for-one  common stock split  effective
July 1, 1998 issued on July 31, 1998.  All amounts have been restated to reflect
this stock split.

































                                       F-41
<PAGE>







                             SUPPLEMENTAL SCHEDULES


















































                                       F-42
<PAGE>
                United Financial Holdings, Inc. and Subsidiaries

                    SUPPLEMENTAL CONSOLIDATING BALANCE SHEET

                                December 31, 2000

                            United
                            Financial       United
                            Holdings,Inc.    Bank         EPW       Trust
                            ------------- ------------  --------  ----------
        ASSETS
Cash and due from banks     $ 2,017,268   $  9,420,453  $420,208  $  140,912
Federal funds sold                    -      4,961,000       -             -
Securities held to maturity           -     15,625,314        -      410,590
Securities available for
  sale, at market             1,665,061      8,436,097        -    1,395,180
Loans, net                      500,000    181,527,520        -            -
Premises and equipment, net           -      9,877,129   48,695      211,800
Federal Home Loan Bank stock          -        506,600        -            -
Federal Reserve Bank stock            -        226,300        -            -
Accrued interest receivable      10,976      1,425,818        -       21,688
Intangible assets               467,985        374,235        -    1,118,024
Other real estate owned               -        175,000        -            -
Other assets                 22,783,630      4,999,501   132,941      71,173
                             -----------  ------------  --------  -----------
          Total assets       $27,444,920  $237,554,967  $601,844  $3,369,367
                             ===========  ============  ========  ==========


                                                    Eliminating    Consolidated
                             UFHCT       Total         Entries        Total
                          ----------  ------------  -------------- ------------
        ASSETS
Cash and due from banks   $        -  $ 11,998,841  $  (2,578,388) $  9,420,453
Federal funds sold                 -     4,961,000              -     4,961,000
Securities held to maturity        -    16,035,904              -    16,035,904
Securities available for
  sale, at market                  -    11,496,338       (200,000)   11,296,338
Loans, net                         -   182,027,520              -   182,027,520
Premises and equipment, net        -    10,137,624              -    10,137,624
Federal Home Loan Bank stock       -       506,600              -       506,600
Federal Reserve Bank stock         -       226,300              -       226,300
Accrued interest receivable        -     1,458,482              -     1,458,482
Intangible assets                  -     1,960,244              -     1,960,244
Other real estate owned            -       175,000              -       175,000
Other assets               6,959,200    34,946,445    (29,691,097)    5,255,348
                          ----------  ------------  -------------  -----------
          Total assets    $6,959,200  $275,930,298  $ (32,469,485) $243,460,813
                          ==========  ============  =============  ============









                                       F-43
<PAGE>
                United Financial Holdings, Inc. and Subsidiaries
              SUPPLEMENTAL CONSOLIDATING BALANCE SHEET - Continued

                                December 31, 2000

                            United
                            Financial        United
                            Holdings,Inc.     Bank         EPW       Trust
     LIABILITIES AND       ------------- -------------  --------  ----------
     STOCKHOLDERS' EQUITY

Deposits
  Demand                    $         -  $  39,629,359  $      -  $        -
  NOW and money market                -     78,887,097         -           -
  Savings                             -      4,572,993         -           -
  Time, $100,000 and over             -     28,213,356         -           -
  Other time                          -     53,627,545         -           -
                            ------------  ------------  --------  ----------
     Total deposits                   -    204,930,350         -           -

Securities sold under
 agreements to repurchase             -     10,162,858         -           -
Accrued interest payable         25,200        543,291         -           -
Convertible subordinated
 debentures                     630,000              -         -           -
Long-term debt                6,959,200              -         -           -
Other liabilities               294,437      3,056,832   538,553      30,625
                            ------------  ------------  --------  ----------
     Total liabilities        7,908,837    218,693,331   538,553      30,625

Company-obligated Mandatory
  Redeemable Capital
  Securities of Subsidiary
  Trust Holding
  Solely Subordinated
  Debentures of the Company           -              -         -           -

STOCKHOLDERS' EQUITY

  7% convertible
    preferred stock              66,670              -         -            -
  Common stock                   42,727        750,000    38,539    1,000,000
  Paid-in capital            10,051,755      6,792,746   775,813    2,155,053
  Treasury shares              (116,446)             -         -            -
  Accumulated other
    comprehensive income        (32,047)       (27,539)        -       (4,508)
  Retained earnings           9,523,424     11,346,429  (751,061)     188,197
                            ------------  ------------  --------   ----------
    Total stockholders'
      equity                 19,536,083     18,861,636    63,291    3,338,742
                            ------------  ------------  --------   ----------

    Total liabilities
      and stockholders'
      equity                $27,444,920   $237,554,967  $601,844   $3,369,367
                            ===========   ============  ========   ==========

                              (continued on F-44b)
                                       F-44a
<PAGE>
                United Financial Holdings, Inc. and Subsidiaries
              SUPPLEMENTAL CONSOLIDATING BALANCE SHEET - Continued

                                December 31, 2000
                                                    Eliminating    Consolidated
                             UFHCT       Total         Entries        Total
     LIABILITIES AND      ----------  ------------- -------------- ------------
     STOCKHOLDERS' EQUITY

Deposits
  Demand                  $       -   $  39,629,359  $ (2,578,388) $ 37,050,971
  NOW and money market            -      78,887,097             -    78,887,097
  Savings                         -       4,572,993             -     4,572,993
  Time, $100,000 and over         -      28,213,356      (200,000)   28,013,356
  Other time                      -      53,627,545                  53,627,545
                           ----------  ------------- -------------- ------------
     Total deposits               -     204,930,350    (2,778,388)  202,151,962

Securities sold under
 agreements to repurchase         -      10,162,858             -    10,162,858
Accrued interest payable          -         568,491             -       568,491
Convertible subordinated
 debentures                       -         630,000             -       630,000
Long-term debt                    -       6,959,200    (6,959,200)            -
Other liabilities                 -       3,920,447      (258,628)    3,661,819
                          ----------  ------------- -------------- ------------
     Total liabilities            -     227,171,346    (9,996,216)  217,175,130

Company-obligated Mandatory
  Redeemable Capital
  Securities of Subsidiary
  Trust Holding
  Solely Subordinated
  Debentures of the
  Company                 6,749,600       6,749,600             -     6,749,600

STOCKHOLDERS' EQUITY

  7% convertible
    preferred stock               -          66,670              -       66,670
  Common stock              209,600       2,040,866     (1,998,139)      42,727
  Paid-in capital                 -      19,775,367     (9,723,612)  10,051,755
  Treasury shares                 -        (116,446)             -     (116,446)
  Accumulated other
    comprehensive income          -         (64,094)        32,047      (32,047)
  Retained earnings               -      20,306,989    (10,783,565)   9,523,424
                          ----------  ------------- -------------- ------------
    Total stockholders'
      equity                209,600      42,009,352    (22,473,269)  19,536,083
                          ----------  ------------- -------------- ------------

    Total liabilities
      and stockholders'
      equity             $6,959,200    $275,930,298  $(32,469,485) $243,460,813
                         ==========    ============  ============  ============



                                       F-44B
<PAGE>
                United Financial Holdings, Inc. and Subsidiaries
                SUPPLEMENTAL CONSOLIDATING STATEMENT OF EARNINGS
                      For the Year Ended December 31, 2000

                            United
                            Financial       United
                            Holdings,Inc.    Bank         EPW       Trust
                            ------------- ------------  --------  ----------
Interest income
  Loans and loan fees       $     42,263  $ 16,988,090  $      -  $        -
  Securities
    U.S. Treasury                      -       264,542         -           -
    Obligations of other
      U.S. Government
      agencies and
      corporations                     -       857,418         -     121,899
    Obligations of states
      and political
      subdivisions                     -       208,634         -           -
    Other                              -       263,470         -           -
    Federal funds sold and
      securities purchased
      under reverse repurchase
      agreements                       -       451,524         -     122,136
                            ------------- ------------  --------  ----------
    Total interest income         42,263    19,033,678         -     244,035

Interest expense
  NOW and money market                 -     2,413,320         -           -
  Savings                              -       101,889         -           -
  Time deposits, $100,000
   and over                            -     1,338,376         -           -
  Other time                           -     3,009,401         -           -
  Long-term debt                  50,400             -         -           -
  Subordinated debentures
    issued to subsidiary
    trust                        634,462             -         -           -
  Federal funds purchased
    and securities sold
    under agreements to
    repurchase                         -       574,930         -           -
                            ------------- ------------  --------  ----------
   Total interest expense        684,862     7,437,916         -           -
                            ------------- ------------  --------  ----------
   Net interest income          (642,599)   11,595,762         -     244,035

Provision for loan losses        650,000             -         -           -
                            ------------- ------------  --------  ----------
   Net interest income
     provision for loan
     losses                     (642,599)   10,945,762         -     244,035






                              (continued on F-45b)
                                       F-45a
<PAGE>
                United Financial Holdings, Inc. and Subsidiaries
          SUPPLEMENTAL CONSOLIDATING STATEMENT OF EARNINGS - CONTINUED
                      For the Year Ended December 31, 2000

                                                     Eliminating   Consolidated
                             UFHCT       Total         Entries        Total
                          ----------  ------------- -------------- ------------
Interest income
  Loans and loan fees     $  654,165  $ 17,684,518  $   (654,165)  $ 17,030,353
  Securities
    U.S. Treasury                  -       264,542             -        264,542
    Obligations of other
      U.S. Government
      agencies and
      corporations                 -       979,317       (61,134)       918,183
    Obligations of states
      and political
      subdivisions                 -       208,634             -        208,634
    Other                          -       263,470             -        263,470
    Federal funds sold and
      securities purchased
      under reverse repurchase
      agreements                   -       573,660      (122,136)       451,524
                          ----------  ------------- -------------- ------------

    Total interest income    654,165    19,974,141      (837,435)    19,136,706

Interest expense
  NOW and money market             -     2,413,320             -      2,413,320
  Savings                          -       101,889             -        101,889
  Time deposits, $100,000
   and over                        -     1,338,376             -      1,338,376
  Other time                       -     3,009,401       (30,566)     2,978,835
  Long-term debt                   -        50,400             -         50,400
  Subordinated debentures
    issued to subsidiary
    trust                    654,165     1,288,627      (654,165)       634,462
  Federal funds purchased
    and securities sold
    under agreements to
    repurchase                     -       574,930      (152,704)       422,226
                          ----------  ------------- -------------- ------------
   Total interest expense    654,165     8,776,943      (837,435)     7,939,508
                          ----------  ------------- -------------- ------------
   Net interest income             -    11,197,198             -     11,197,198

Provision for loan losses          -       650,000             -        650,000
                          ----------  ------------- -------------- ------------
   Net interest income
     provision for loan
     losses                        -    10,547,198             -     10,547,198







                                       F-45B
<PAGE>
                United Financial Holdings, Inc. and Subsidiaries
          SUPPLEMENTAL CONSOLIDATING STATEMENT OF EARNINGS - Continued
                      For the Year Ended December 31, 2000

                            United
                            Financial       United
                            Holdings,Inc.    Bank         EPW       Trust
                            ------------- ------------ ----------  ----------
Other income
  Service charges on
    deposit accounts        $          -  $  1,014,543 $        -  $         -
  Trust and investment
    management income                  -             -  1,700,927    1,519,069
  Net trading account loss        (6,472)            -          -            -
  Equity in Earnings of
    Subsidiaries               3,644,978             -          -            -
  Other service charges,
    fees and income                   56     1,009,464          -            -
                            ------------- ------------ ----------  -----------
  Total other income           3,638,562     2,024,007  1,700,927    1,519,069

Other expense
  Salaries and employee
    benefits                           -     4,388,861  1,492,130      620,211
  Occupancy expense                    -       439,170     65,720       67,134
  Furniture and equipment
    expense                            -       506,020     37,291       60,478
  Data processing expense              -       407,953     24,253      154,575
  Legal and professional fees     93,895       106,823      4,297        2,906
  Amortization of intangible
    assets                        31,027        14,724          -       72,520
  Other operating expenses       155,651     1,720,976    221,859      309,410
                            ------------- ------------ ----------  -----------

                                 280,573     7,584,527  1,845,550    1,287,234
                            ------------- ------------ ----------  -----------

   Earnings (loss) before
     income taxes              2,715,390     5,385,242   (144,623)     475,870

Income tax expense (benefit)    (338,128)    1,913,021    (53,655)     212,146
                            ------------- ------------ ----------  -----------

      NET EARNINGS (LOSS)   $  3,053,518  $  3,472,221 $  (90,968) $   263,724
                            ============  ============ ==========  ===========












                              (continued on F-46b)
                                       F-46a
<PAGE>
                United Financial Holdings, Inc. and Subsidiaries
          SUPPLEMENTAL CONSOLIDATING STATEMENT OF EARNINGS - Continued
                      For the Year Ended December 31, 2000

                                                    Eliminating    Consolidated
                             UFHCT       Total         Entries        Total
                          ----------  ------------- -------------  ------------
Other income
  Service charges on
    deposit accounts      $        -  $   1,014,543 $          -   $  1,014,543
  Trust and investment
    management income              -      3,219,996      (48,000)     3,171,996
  Net trading account loss         -         (6,472)           -         (6,472)
  Equity in Earnings of
    Subsidiaries                   -      3,644,978   (3,644,978)             -
  Other service charges,
    fees and income                -      1,009,520     (105,510)       904,010
                          ----------  ------------- -------------  ------------
  Total other income               -      8,882,565   (3,798,488)     5,084,077

Other expense
  Salaries and employee
    benefits                       -      6,501,202            -      6,501,202
  Occupancy expense                -        572,024      (57,510)       514,514
  Furniture and equipment
    expense                        -        603,789            -        603,789
  Data processing expense          -        586,781            -        586,781
  Legal and professional fees      -        207,921            -        207,921
  Amortization of intangible
    assets                         -        118,271            -        118,271
                          ----------  ------------- -------------  ------------
  Other operating expenses         -      2,407,896      (96,001)     2,311,895


                                   -     10,997,884     (153,511)    10,844,373
                          ----------  ------------- -------------  ------------
   Earnings (loss) before
     income taxes                  -      8,431,879   (3,644,977)     4,786,902

Income tax expense (benefit)       -      1,733,384            -      1,733,384
                          ----------  ------------- -------------  ------------
      NET EARNINGS (LOSS) $        -     $6,698,495  $(3,644,977)   $ 3,053,518
                          ==========     ==========  ===========    ===========












                                       F-46b