UNITED FINANCIAL HOLDINGS, INC.
AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND REPORT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
December 31, 1999, 1998 and 1997








































                                     -F1-
<PAGE>
                         UNITED FINANCIAL HOLDINGS, INC.
                          INDEX TO FINANCIAL STATEMENTS

                                                                         PAGE
                                                                       --------
    Report of Independent Certified Public Accountants                    F-3

    Consolidated Balance Sheets at December 31, 1999 and 1998             F-4

    Consolidated Statements of Earnings for the years ended
    December 31, 1999, 1998 and 1997                                      F-5

    Consolidated Statements of Comprehensive Income for the years
    ended December 31, 1999, 1998 and 1997                                F-7

    Consolidated Statement of Stockholders' Equity for the years
    ended December 31, 1999, 1998 and 1997                                F-8

    Consolidated Statements of Cash Flows for the years ended
    December 31, 1999, 1998 and 1997                                      F-9

    Notes to Consolidated Financial Statements                            F-11




































                                      -F2-
<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, 1999 and 1998, 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, 1999. 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 generally accepted auditing standards. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

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,
1999 and the consolidating statement of earnings for the year ended December 31,
1999,  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, 1999 and 1998, and
the consolidated  results of their operations and their  consolidated cash flows
for each of the three years in the period ended  December 31, 1999 in conformity
with generally accepted accounting principles.

Grant Thornton, LLP

Tampa, Florida
January 24, 2000








                                      -F3-
<PAGE>
                United Financial Holdings, Inc. and Subsidiaries
                           CONSOLIDATED BALANCE SHEETS

                                                    DECEMBER 31,
                                                1999             1998
                                             ------------    ------------
       ASSETS
Cash and due from banks                       $  8,866,336    $  7,966,757
Federal funds sold                               2,917,000       4,011,000
Trading securities                                  81,600         157,354
Securities held to maturity, market value of
 $14,072,208 and $11,435,699, respectively      14,540,677      11,205,629
Securities available for sale, at market         9,923,820      14,527,487
Loans, net                                     153,497,408     116,545,851
Premises and equipment, net                      9,618,536       9,274,501
Federal Home Loan Bank stock                       506,600         433,500
Federal Reserve Bank stock                         203,800         158,800
Accrued interest receivable                      1,190,200         995,458
Intangible assets, less accumulated
  amortization of $1,725,395 and
  $1,642,935, respectively                       1,748,527       1,451,031
Other real estate owned                          1,528,311       1,015,255
Other assets                                     4,858,493       4,159,556
                                              ------------    ------------
          Total assets                        $209,481,308    $171,902,179
                                              ============    ============
       LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits
  Demand                                      $ 32,936,185    $ 27,741,896
  NOW and money market                          67,913,763      48,550,267
  Savings                                        4,872,802       4,686,318
  Time, $100,000 and over                       16,679,300      11,462,762
  Other time                                    52,695,991      46,654,262
                                              ------------    ------------
          Total deposits                       175,098,041     139,095,505

Securities sold under agreements to repurchase   7,307,044       8,795,715
Accrued interest payable                           448,378         391,769
Convertible subordinated debentures                630,000         630,000
Long-term debt                                        -             33,750
Other liabilities                                2,425,862       2,184,334
                                              ------------    ------------
          Total liabilities                    185,909,325     151,131,073












                               (Continued on F4b)

        The accompanying notes are an integral part of these statements.
                                      -F4a-
<PAGE>
                United Financial Holdings, Inc. and Subsidiaries
                           CONSOLIDATED BALANCE SHEETS
                              (Continued from F4a)

                                                    December 31,
                                                1999             1998
                                              ------------    ------------

Company-obligated Mandatory Redeemable Capital
 Securities of Subsidiary Trust Holding Solely
 Subordinated Debentures Of The Company          6,749,600       6,000,000

STOCKHOLDERS' EQUITY
  7%convertible  preferred  stock,  $10 par
    value;  150,000  shares  authorized;
    10,000 and 20,850  shares  issued and
    outstanding  at December 31, 1999 and
    1998, respectively                             100,000         208,500
  Common stock, $.01 par value; 20,000,000
    shares authorized; 4,192,771 and
    4,045,563 shares issued and outstanding
    at December 31, 1999 and 1998,
    respectively                                    41,928          40,455
  Paid-in capital                                9,672,634       9,192,103
  Common stock subscription receivable                -           (393,260)
  Accumulated other comprehensive income          (232,362)        141,313
  Retained earnings                              7,240,183       5,581,995
                                              ------------    ------------
          Total stockholders' equity            16,822,383      14,771,106
                                              ------------    ------------

          Total liabilities and
           stockholders' equity               $209,481,308    $171,902,179
                                              ============    ============























        The accompanying notes are an integral part of these statements.
                                      -F4b-
<PAGE>
                United Financial Holdings, Inc. and Subsidiaries
                       CONSOLIDATED STATEMENTS OF EARNINGS
                                       For the Years Ended December 31,
                                    1999              1998            1997
                                 -----------       -----------     ------------
Interest income
  Loans and loan fees            $12,783,696       $10,381,551     $  8,960,703
  Securities
    U.S. Treasury                    391,772           552,623          598,549
    Obligations of other U.S.
       Government agencies and
       corporations                  782,669           880,517          746,786
    Obligations of states and
       political subdivisions        203,298           104,137           39,570
    Other                            279,342           207,938          151,612
    Federal funds sold and secur-
      ities purchased under reverse
      repurchase agreements          269,736           532,014          295,297
                                 -----------       -----------     ------------
          Total interest income   14,710,513        12,658,780       10,792,517

Interest expense
  NOW and money market             1,627,761         1,563,767          794,997
  Savings                            107,028            96,920           96,656
  Time deposits, $100,000 and over   699,673           534,471          419,007
  Other time                       2,528,119         2,668,754        2,603,631
  Long-term debt                      50,400           250,057          130,547
  Subordinated debentures issued
    to subsidiary trust              632,700            28,198                -
  Federal funds purchased and
    securities sold under
    agreements to repurchase         193,548           126,152           56,248
                                 -----------       -----------     ------------
          Total interest expense   5,839,229         5,268,319        4,101,086
                                 -----------       -----------     ------------
          Net interest income      8,871,284         7,390,461        6,691,431
Provision for loan losses            785,000           752,000           90,000
                                 -----------       -----------     ------------
          Net interest income
          after provision for
          loan losses              8,086,284         6,638,461        6,601,431
Other income
  Service charges on deposit
    accounts                         797,181           706,839          674,637
  Trust and investment
    management income              3,175,514         2,355,156        1,886,534
  Net trading account profit          41,808            87,354                -
  Gain on sales of loans             442,227           239,498          289,720
  Gain on sale of held to
    maturity security                      -            78,498                -
  Loan servicing fees                165,897           147,881          164,368
  Income on cash value
    life insurance                   135,354           136,728                -
  All other fees and income          362,862           336,549          224,993
                                 -----------       -----------     ------------
          Total other income       5,120,843         4,088,503        3,240,252

                               (Continued on F6)
                                      -F5-
<PAGE>
                United Financial Holdings, Inc. and Subsidiaries
                       CONSOLIDATED STATEMENTS OF EARNINGS
                               (Continued from F5)

                                         For the Years Ended December 31,
                                        1999           1998           1997
                                    ------------   ------------   ------------
Other expense
  Salaries and employee benefits    $  5,361,048   $  4,630,580   $  4,047,859
  Occupancy expense                      520,406        522,472        514,374
  Furniture and equipment expense        606,453        512,000        494,360
  Data processing expense                487,317        436,767        417,522
  Consulting fees                        274,733         41,149         28,615
  Legal and professional fees            174,811        120,702        176,778
  Amortization of intangible assets       85,115         79,443         66,802
  Marketing and business development     352,055        301,611        265,472
  Directors fees                         191,350        190,662        198,750
  Telephone expense                      184,999        171,535        149,367
  Stationery, printing and supplies      176,706        137,092        151,327
  Postage expense                        111,965         90,373         79,834
  Headquarter relocation expense               -              -        138,314
  Securities write down                        -              -        255,000
  Other operating expenses             1,025,091        724,700        587,621
                                    ------------   ------------   ------------
                                       9,552,049      7,959,086      7,571,995
                                    ------------   ------------   ------------
      Earnings before income taxes     3,655,078      2,767,878      2,269,688

Income tax expense (benefit)
  Current                              1,559,391      1,192,177        957,932
  Deferred                              (237,206)      (181,607)       (97,986)
                                    ------------   ------------   ------------
                                       1,322,185      1,010,570        859,946
                                    ------------   ------------   ------------

      NET EARNINGS                  $  2,332,893   $  1,757,308   $  1,409,742
                                    ============   ============   ============


Earnings Per Share:
  Basic                             $        .56   $        .49   $        .41
  Diluted                           $        .54   $        .46   $        .38















        The accompanying notes are an integral part of these statements.
                                      -F6-
<PAGE>
                United Financial Holdings, Inc. and Subsidiaries
                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

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

Net earnings                        $2,332,893     $1,757,308     $1,409,742
Other comprehensive income
  Unrealized holding gains
   (losses)                           (566,174)       126,991         18,642
  Income tax (expense) benefit
    related to items of other
    comprehensive income               192,499        (43,177)        (7,015)
                                    ------------   ------------   ------------

Comprehensive income                $1,959,218     $1,841,122     $1,421,369
                                    ============   ============   ============







































        The accompanying notes are an integral part of these statements.
                                      -F7-
<PAGE>
                United Financial Holdings, Inc. and Subsidiaries
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

                                               7%           6%
                                           Convertible  Convertible
                                   Common  Preferred    Preferred    Paid-In
                                   Stock   Stock        Stock        Capital
                                 --------  -----------  -----------  ----------
Balance at December 31, 1996     $ 34,308  $ 233,500    $        -   $5,737,567

  Net Earnings                          -          -             -            -
  Dividends on Common Stock             -          -             -            -
  Dividends on Preferred Stock          -          -             -            -
  Accumulated other comprehensive
    income                              -          -             -            -
  Issuance of Common Stock for
    cash                              135          -             -       52,365
                                 --------  -----------  -----------  ----------

Balance at December 31, 1997       34,443    233,500             -    5,789,932
  Net Earnings                          -          -             -            -
  Conversion of 7% Preferred
    to Common Stock                   210    (25,000)            -       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       40,455    208,500             -    9,192,103
  Net Earnings                          -          -             -            -
  Dividends on Common Stock             -          -             -            -
  Dividends on Preferred Stock          -          -             -            -
  Accumulated other comprehensive
    income                              -          -             -            -
  Issuance of Common Stock in IPO       -          -             -      (25,565)
                                 --------  -----------  -----------  ----------


Balance at December 31, 1999     $ 41,928  $ 100,000    $        -   $9,672,634
                                 ========  =========    ===========  ==========












                               (Continued on F8b)
        The accompanying notes are an integral part of these statements.
                                      -F8a-
<PAGE>
                United Financial Holdings, Inc. and Subsidiaries
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                              (Continued from F8a)

                               Accumulated
                                Other         Stock
                             Comprehensive Subscription Retained
                                 Income     Receivable  Earnings     Total
                             ------------- ------------ ----------- ------------
Balance at December 31, 1996 $  45,872     $        -   $3,440,408  $ 9,491,655
  Net Earnings                       -              -    1,409,742    1,409,742
  Dividends on Common Stock          -              -     (458,017)    (458,017)
  Dividends on Preferred Stock       -              -      (16,345)     (16,345)
  Accumulated other
    comprehensive income        11,627              -            -       11,627
  Issuance of Common Stock
    for cash                         -              -            -       52,500
                             ------------- ------------ ----------- ------------

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   141,313       (393,260)   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
                             ============= ============ =========== ============








        The accompanying notes are an integral part of these statements.
                                     -F8b-
<PAGE>
                United Financial Holdings, Inc. and Subsidiaries
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                               Year Ended December 31,
                                        1999           1998             1997
                                    ------------   ------------   ------------
Cash flows from operating
 activities:
    Net earnings                    $  2,332,893   $  1,757,308   $  1,409,742
    Adjustments to reconcile net
     earnings to net cash provided by
     (used in) operating activities
        Provision for loan losses        785,000        752,000         90,000
        Provision for depreciation
           and amortization              787,996        650,669        566,344
        Unrealized gain on
           trading securities            (41,808)       (87,354)             -
        Gain on sale of held to
           maturity security                   -        (78,498)             -
        Write down of investment
           security                            -              -        255,000
        Write-off of leasehold
           improvements                        -              -        130,065
        Accretion of securities
           discount                      (22,123)       (58,715)       (44,317)
        Amortization of unearned
           loan fees                    (121,730)      (149,954)       (64,941)
        Amortization of securities
           premiums                       18,251         26,125         38,874
        Gain on sales of loans          (774,100)      (372,500)      (422,831)
        Increase in interest
           receivable                   (194,742)       (45,416)      (171,487)
        (Decrease) increase in
           interest payable               56,610         (4,415)        59,399
        Increase in other assets      (1,592,850)    (1,558,741)    (2,641,922)
        Decrease in other liabilities    241,527        360,997        276,211
                                    ------------   ------------   ------------

              Net cash provided by
                 (used in) operating
                 activities            1,474,924      1,191,506       (519,863)















                               (Continued on F9b)

                                     -F9a-
<PAGE>
                United Financial Holdings, Inc. and Subsidiaries
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (Continued from F9a

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

Cash flows from investing activities:
  Purchase of Federal Reserve Bank
    stock and FHLB stock                (118,100)       (73,650)       (46,100)
  Net decrease (increase)
    in Federal funds sold              1,094,000      3,430,000       (380,000)
  Principal repayments of held
    to maturity securities             2,422,366        580,646        388,715
  Proceeds from sale of held
    to maturity security                       -        110,906              -
  Principal repayments of
    available for sale securities        403,391        900,182        494,729
  Proceeds from maturities of
    available for sale securities      1,500,778      3,260,000      4,491,876
  Proceeds from maturities of held
    to maturity securities             2,732,843      4,567,408      4,987,969
  Purchases of available for
    sale securities                   (4,895,000     (7,153,908)    (6,937,869)
  Purchases of held to
    maturity securities               (1,148,000)    (6,304,138)    (6,526,492)
  Proceeds from sales of loans         8,890,919      3,243,766      3,969,174
  Net increase in loans              (45,731,646)   (25,197,839)   (19,130,218)
  Capital expenditures                (1,048,670)      (310,722)    (4,185,913)
                                    ------------   ------------   ------------

            Net cash used in
            investing activities     (35,897,119)   (22,947,349)   (22,874,129)






















                                  (Continued)

                                      -F9b-
<PAGE>
                United Financial Holdings, Inc. and Subsidiaries
                CONSOLIDATED STATEMENTS OF CASH FLOWS - Continued

                                               Year Ended December 31,
                                        1999           1998             1997
                                    ------------   ------------   ------------
Cash flows from financing
  activities:
  Net increase in demand deposits,
    NOW accounts, money market
    accounts and savings accounts   $ 24,744,269   $ 11,317,459   $ 10,754,834
  Net (decrease) increase in
    certificates of deposit           11,258,267     (2,441,058)    11,319,353
  Net increase (decrease) in
    securities sold under
    agreements to repurchase          (1,488,671)     7,714,970       (688,114)
  Increase in borrowings                       -              -      2,004,202
  Repayment of long-term debt            (33,750)    (2,644,402)      (140,000)
  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         52,500
  Dividend paid on preferred stock       (10,798)       (15,470)       (16,345)
  Dividend paid on common stock         (663,907)      (535,631)      (458,017)
                                    ------------   ------------   ------------
           Net cash provided
           by financing activities    35,321,774     22,385,791     22,828,413
                                    ------------   ------------   ------------

Net increase (decrease) in cash
  and cash equivalents                   899,579        629,948       (565,579)

Cash and cash equivalents at
  beginning of year                    7,966,757      7,336,809      7,902,388
                                    ------------   ------------   ------------

Cash and cash equivalents at
  end of year                       $  8,866,336   $  7,966,757   $  7,336,809
                                    ============   ============   ============

Cash paid during the year for:
  Interest                          $  5,782,619   $  5,263,904   $  4,041,687
  Income taxes                      $  1,288,470   $  1,108,451   $    927,817

SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITY
Reclassification of loans to
  foreclosed real estate            $  1,038,266   $  1,253,160   $    408,113
                                    ============   ============   =============

Reclassification of foreclosed
  real estate to loans              $          -   $    262,500   $     124,000
                                    ============   ============   =============

Performance shares issued           $    399,073   $    264,107   $           -
                                    ============   ============   =============
        The accompanying notes are an integral part of these statements.
                                     -F10-
<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 four 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, Eickhoff, Pieper
& Willoughby  ("EPW"),  United Trust  Company  ("Trust") and UFH Capital Trust I
("UFHCT"),  after all significant  intercompany  accounts and transactions  have
been  eliminated.  United Trust was formed on November 30, 1997. On December 31,
1997, the Bank  transferred all assets of the trust division to the newly formed
United Trust Company.

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  generally  accepted
accounting  principles,  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.  The Company had no trading  securities  for the
    year ended December 31, 1997.




                                     -F11-
<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. The Company had a write down of one
investment  security  totaling  $255,000  for the year ended  December 31, 1997.
There were no such write-downs during 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.



                                     -F12-
<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,  which are
non-performing and have been placed on non-accrual status and those loans, which
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.












                                     -F13-
<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.
Effective in 1996, the Company  adopted 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 are 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, 1999 and 1998.

14.  ACCOUNTING   FOR   TRANSFERS   AND   SERVICING  OF  FINANCIAL   ASSETS  AND
     EXTINGUISHMENT OF LIABILITIES

The FASB has issued SFAS No. 125,  Accounting  for  Transfers  and  Servicing of
Financial Assets and Extinguishment 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.





                                     -F14-
<PAGE>
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

15.    REPORTING COMPREHENSIVE INCOME

In June 1997, the FASB issued SFAS No. 130, Reporting Comprehensive Income. SFAS
No. 130 establishes standards for reporting and display of comprehensive income.
A specific reporting format is not required,  provided the financial  statements
show the amount of total comprehensive income for the period. Those items, which
are not  included  in net  income  are  required  to be shown  in the  financial
statements with  appropriate  footnote  disclosure and the aggregate  balance of
such  items must be shown  separately  from  retained  earnings  and  additional
paid-in  capital in the equity  section of the  balance  sheet.  SFAS No. 130 is
effective for fiscal years beginning  after December 15, 1997.  Reclassification
of financial  statements for earlier  periods is required.  The Company  adopted
SFAS No. 130 effective January 1, 1998.

16.    DISCLOSURES ABOUT BUSINESS SEGMENTS

In June 1997,  the FASB adopted SFAS No. 131,  Disclosures  About Segments of an
Enterprise and Related Information.  SFAS No. 131 establishes  standards for the
way the Company reports information about operating segments in annual financial
statements  and  requires  reporting  of selected  information  about  operating
segments in interim  financial  reports.  SFAS No. 131 is effective  for periods
beginning after December 15, 1997.  Management has  implemented  SFAS No. 131 in
the year ended December 31, 1997.

17.    EARNINGS PER SHARE

In February 1997, the FASB issued SFAS No. 128, Earnings Per Share. SFAS No. 128
simplified  the method for computing and  presenting  earnings per share ("EPS")
previously  required by APB Opinion No. 15,  Earnings Per Share,  and makes them
comparable to international EPS standards. SFAS No. 128 is effective for periods
ending after December 15, 1997, and requires restatement of all prior period EPS
data and has been  implemented by the Company.  It replaces the  presentation of
primary EPS with a presentation of basic EPS. It also 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.

18.      RECLASSIFICATIONS

Certain  reclassifications  have been made to the December  31,  1998,  and 1997
balances to conform to the December 31, 1999 presentation.














                                     -F15-
<PAGE>
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

19.      RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

The FASB recently issued SFAS No. 133, Accounting for Derivative Instruments and
Hedging Activities.  SFAS No. 133 requires entities to recognize all derivatives
in their financial  statements as either assets or liabilities  measured at fair
value.  SFAS No. 133 also  specified  new  methods  of  accounting  for  hedging
transactions,  prescribes  the items and  transactions  that may be hedged,  and
specifies  detailed  criteria  to be met to  qualify  for hedge  accounting.  On
adoption, entities are permitted to transfer held-to-maturity debt securities to
the available-for-sale or trading category. SFAS No. 133 is effective for fiscal
years  beginning  after June 15, 1999. The adoption of SFAS No. 133 for the year
ended December 31, 2000 is not expected to have a material impact on the results
of operations for the Company.


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.  Pro  forma  information  is  not  presented,  as  the  effect  of the
acquisition is immaterial to the financial statements.

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 120,215 shares
have  been  paid out as of  December  31,  1999,  of which  78,140  shares  were
accounted for as additional  consideration  and 42,075 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.





                                     -F16-
<PAGE>
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.

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.





                                     -F17-
<PAGE>
                United Financial Holdings, Inc. and Subsidiaries
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE E - BUSINESS SEGMENT INFORMATION - Continued

The following table presents the Company's Business Segment  Information for the
years ended December 31, 1999, 1998 and 1997, respectively:

                  Commercial    Investment  Trust       Corporate
                  Banking       Management  Services    & Overhead    Total
    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 revenue        2,000,774   1,593,054    1,630,459   (103,444)  5,120,843
                  ------------  ----------  ----------- ---------- ------------
Total revenue       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
  income          $  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
                  ============  ==========  =========== ========== ============



















                           (Continued on F18b & F18c)
                                     -F18a-
<PAGE>
                United Financial Holdings, Inc. and Subsidiaries
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE E - BUSINESS SEGMENT INFORMATION - Continued from F18a

                  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 revenue        1,645,718   1,447,113      956,042     39,630    4,088,503
                  ------------  ----------  ----------- ---------- ------------
Total revenue        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
  income          $  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 $        - $    315,950
                  ============  ==========  =========== ========== ============






















                              (Continued on F18c)
                                     -F18b-
<PAGE>
                United Financial Holdings, Inc. and Subsidiaries
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE E - BUSINESS SEGMENT INFORMATION - Continued from F18b

                  Commercial    Investment  Trust       Corporate
                  Banking       Management  Services    & Overhead    Total
    1997          ------------  ----------  ----------- ---------- ------------
Interest income   $ 10,785,371  $        -  $         - $    7,146 $ 10,792,517
Interest expense     3,970,539       4,848            -    125,699    4,101,086
                  ------------  ----------  ----------- ---------- ------------
Net interest
  income             6,814,832      (4,848)           -   (118,553)   6,691,431
Other revenue        1,286,174   1,237,571      764,507    (48,000)   3,240,252
                  ------------  ----------  ----------- ---------- ------------
Total revenue        8,101,006   1,232,723      764,507   (166,553)   9,931,683
Loan loss
  provision             90,000           -            -          -       90,000
Non interest
  expense            5,522,949   1,084,197      878,884     85,965    7,571,995
                  ------------  ----------  ----------- ---------- ------------
Pre-tax income       2,488,057     148,526     (114,377)  (252,518)   2,269,688
Income taxes
 (benefit)             925,149      41,163      (43,005)   (63,361)     859,946
                  ------------  ----------  ----------- ---------- ------------
Segment net
  income          $  1,562,908  $  107,363  $   (71,372)$ (189,157)$  1,409,742
                  ============  ==========  =========== ========== ============

Total assets      $144,482,343  $  231,565  $ 2,363,338 $  241,438 $147,318,684
                  ============  ==========  =========== ========== ============

Capital
  expenditures    $  3,949,336  $   32,173  $   201,254 $        - $  4,182,763
                  ============  ==========  =========== ========== ============























                                     -F18c-
<PAGE>
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.

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.

Following is condensed financial information of the Company.

                                               December 31,
                                        1999           1998           1997
                                    ------------   ------------   -------------
BALANCE SHEETS
Cash and cash equivalents           $  2,975,207   $  4,451,859   $    203,278
Trading securities                        81,600        157,354              -
Equity securities                        773,000              -              -
Note receivable                          500,000              -              -
Due from subsidiaries                    499,183        192,432        197,014
Investment in Bank                    15,872,307     13,617,578     10,428,370
Investment in EPW                        154,259        136,275        102,723
Investment in United Trust             3,399,823      2,646,885      2,360,985
Investment in UFH Cap Trust I            209,600        209,600              -
Intangible assets                        499,011        546,230        561,063
Receivable from UFH Cap Trust I                -        774,476              -
Other assets                              38,431        120,530        125,291
                                    ------------   ------------   ------------
                                    $ 25,002,421   $ 22,853,219   $ 13,978,724
                                    ============   ============   ============

Note payable                        $          -   $          -   $  2,629,402
Convertible subordinated
 debentures                              630,000        630,000        630,000
Junior subordinated
 debentures issued
 to UFH Cap Trust I                    6,959,200      6,959,200              -
Other liabilities                        590,838        492,913        228,160
Stockholders' equity                  16,822,383     14,771,106     10,491,162
                                    ------------   ------------   ------------
                                    $ 25,002,421   $ 22,853,219   $ 13,978,724
                                    ============   ============   ============













                                     -F19-
<PAGE>
NOTE F - UNITED FINANCIAL HOLDINGS, INC. (Parent Only) CONDENSED FINANCIAL
         INFORMATION - Continued

                                               December 31,
                                        1999           1998           1997
                                    ------------   ------------   -------------
STATEMENTS OF EARNINGS
Equity in earnings of Bank          $  2,428,237   $  1,767,421   $  1,492,207
Equity in earnings of EPW                 17,985         48,551        107,363
Equity in earnings of
  United Trust                           404,031         95,599              -
Gains on trading account                  41,808         87,354              -
Other income                              64,308        100,345         26,611
Interest expense                        (702,748)      (275,116)      (125,699)
Other expense                           (189,052)      (144,123)      (156,235)
                                    ------------   ------------   -------------
Earnings before income taxes           2,064,569      1,680,031      1,344,247
Income tax benefit                       268,324         77,277         65,495
                                    ------------   ------------   -------------
Net earnings                        $  2,332,893   $  1,757,308   $  1,409,742
                                    ============   ============   =============

NOTE G - SECURITIES

At December 31, 1999 and 1998, the carrying value and estimated  market value of
investments in debt and equity securities were as follows:

                                 Carrying
                                   Value       Gross       Gross     Estimated
                                (Amortized  Unrealized  Unrealized    Market
                                   Cost)      Gains       Losses      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
                                ===========  =========== =========  ===========













                                     -F20-
<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
                              =========== ==========  ==========  ============

                               Carrying
                                 Value      Gross       Gross
                              (Amortized  Unrealized  Unrealized   Estimated
                                 Cost)      Gains       Losses    Market Value
                              ----------- ----------  ---------- --------------
DECEMBER 31, 1998
Securities held to maturity:
U.S. Treasury securities and
  obligations of U.S.
  governmentcorporations
  and agencies                $ 5,975,832  $ 227,918   $ 31,563   $  6,172,187
Obligations of State and
  political subdivisions        1,179,373     13,869     10,174      1,183,068
Mortgage-backed securities      3,448,531     22,630         92      3,471,069
Corporate obligations             501,893      7,482          -        509,375
Other                             100,000          -          -        100,000
                              ----------- ----------  ----------  ------------
Total                         $11,205,629  $ 271,899   $ 41,829   $ 11,435,699
                              =========== ==========  ==========  ============




















                                     -F21-
<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                $ 8,747,092  $ 139,132  $        -   $  8,886,224
Obligations of State and
  political subdivisions        1,444,917     55,011           -      1,499,928
Mortgage-backed securities      3,035,227     31,795         577      3,066,445
Equity securities               1,086,140          -      11,250      1,074,890
                              ----------- ----------  ----------   ------------
Total                         $14,313,376  $ 225,938  $   11,827   $ 14,527,487
                              =========== ==========  ==========  =============

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, 1999 and 1997.

The amortized cost and estimated market value of debt securities at December 31,
1999, 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           Securities available
                           maturity                      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         $  867,095 $  859,234   7.03%  $1,499,659  $1,502,032  6.06%

Due after one
  year through
  five years       7,781,001  7,626,822   6.17%   1,967,461   1,944,357  6.46%

Due after five
  years through
  ten years        2,793,965  2,676,041   6.58%   2,927,395   2,783,273  5.44%

Due after ten
  years            1,094,824  1,026,170   5.62%     811,952     775,590  6.64%





                                     -F22-
<PAGE>
NOTE G - SECURITIES - Continued

                       Securities held to           Securities available
                           maturity                      for sale
                  -----------------------------  -----------------------------
                    Carrying                                 Carrying
                    Value     Estimated          Historical  Value
                  (Amortized   Market    Average Amortized   Market     Average
                     Cost)      Value    Yield     Cost      Value)      Yield
                 ----------- ----------- ------- ----------- ---------- -------
Mortgage-
  backed
  securities       2,003,792   1,883,941  7.49%    1,146,820  1,135,978   6.71%

Equity securities          -   1,922,590     -            -   1,782,590   3.67%
                 ----------- ----------- ------- ----------- ----------- -------
     Total       $14,540,677 $14,072,208         $10,275,877 $9,923,820
                 =========== ===========         =========== ==========

Investment securities with a carrying value (which approximates market value) of
approximately  $8,406,000  and  $13,447,000  at  December  31,  1999  and  1998,
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,
                                            1999               1998
                                      -----------------  ------------------
Real estate mortgage                     $ 108,742,717      $  78,013,492
Commercial                                  41,358,490         34,903,429
Installment and other                        6,768,611          6,240,676
                                      -----------------  ------------------
                                           156,869,818        119,157,597
  Less:  Allowance for loan losses           2,340,857          1,983,753
         Unearned fees                       1,031,553            627,993
                                      -----------------  ------------------
  Loans, net                              $153,497,408       $116,545,851
                                      =================  ==================

Changes in the allowance for loan losses were as follows:

                                           For the Years Ended December 31,
                                    1999              1998             1997
                                 ----------        ----------       ----------
Balance at beginning of year     $1,983,753        $1,647,355       $1,609,785
Provision charged to operating
  expenses                          785,000           752,000           90,000
Recoveries on loans previously
  charged off                        32,596            10,536           38,510
Loans charged off                  (460,492)         (426,138)         (90,940)
                                 ----------        ----------       ----------
       Balance at end of year    $2,340,857        $1,983,753       $1,647,355
                                 ==========        ==========       ==========



                                     -F23-
<PAGE>
NOTE H - LOANS - Continued

Changes in unearned fees were as follows:

                                        For the Years Ended December 31,
                                          1999         1998         1997
                                       -----------  -----------  -----------
Balance at beginning of year           $   627,993  $   520,862  $   341,439
Points deferred on loans                   525,290      257,085      244,364
Points recognized in income               (121,730)    (149,954)     (64,941)
                                       -----------  -----------  -----------
      Balance at end of year           $ 1,031,553  $   627,993  $   520,862
                                       ===========  ===========  ===========

Impaired loans were as follows:

                                        For the Years Ended December 31,
                                          1999         1998         1997
                                       -----------  -----------  -----------
Balance at end of period               $ 1,914,536  $ 4,001,964  $   400,049
Average balance during period            3,016,132    2,808,974      440,927
Total related allowance for losses         231,000      602,000       13,000
Interest income recognized on
  impaired loans                           103,600       86,700            -

The only loans sold by the Bank during  1999,  1998 and 1997 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. The book value of such assets, which
the Bank  believes  approximates  the fair value of such assets at December  31,
1999,   1998  and  1997  was  $408,000   $141,000  and  $78,000,   respectively.
Amortization expense relating to such servicing assets of $25,000,  $13,000, and
$2,000  was  recorded  for  1999,  1998  and  1997,  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,
                                                  1999             1998
                                              ------------     ------------
Land                                          $  1,688,779     $  1,396,779
Land improvements                                   64,746           64,746
Leasehold improvements                             115,811          115,812
Building and building improvements               7,623,685        7,404,878
Furniture, fixtures and equipment                3,017,053        2,666,993
                                              ------------     ------------
                                                12,510,074       11,649,208
   Less accumulated depreciation
   and amortization                              2,891,538        2,374,707
                                              ------------     ------------
                                              $  9,618,536     $  9,274,501
                                              ============     ============


                                     -F24-
<PAGE>
NOTE I - PREMISES AND EQUIPMENT - Continued

Depreciation  of premises and  equipment  and  amortization  of  leaseholds  was
$704,823, $576,515, and $501,475 for the years ended December 31, 1999, 1998 and
1997, 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,
                                                  1999         1998
                                              -----------   -----------
Deferred tax assets
  Allowance for loan losses                     $ 815,000     $ 680,000
  Deferred loan fees                              325,000       158,000
  Deferred compensation                           143,000       118,000
  Securities available for sale                   133,000             -
  Net operating loss carryforward (1)              15,000        34,000
                                               ----------     ---------
                                                1,431,000       990,000

Deferred tax liabilities
  Fixed assets                                    225,000       133,000
  Securities available for sale                         -        81,000
                                               ----------     ---------
                                                  225,000       214,000

Net deferred tax asset,
included with other assets                     $1,206,000     $ 776,000
                                               ==========     =========

(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,
        1999 are approximately  $38,000 and begin to expire in 2010. The Company
        believes  that it will obtain the future income to fully utilize the net
        operating  loss  carryforwards,  thus no  valuation  allowance  has been
        recorded.

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, 1999, 1998 and 1997.









                                     -F25-
<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,
                                             1999        1998          1997
                                          ----------  ----------   ----------
Computed "expected" tax provision         $1,242,700  $  941,000   $  771,700
Tax exempt interest income - securities      (22,800)    (14,800)      (7,500)
Tax exempt income - life insurance           (46,000)    (46,500)           -
Goodwill amortization                         29,000      24,000       22,100
State taxes net of federal benefit           104,300      70,600       58,600
Other, net                                    14,985      36,270       15,046
                                          ----------  ----------   ----------
   Total                                  $1,322,185  $1,010,570   $  859,946
                                          ==========  ==========   ==========


NOTE K - DEPOSITS

At December 31, 1999, the scheduled maturities of time deposits are as follows:

          2000                            $51,016,253
          2001                             13,552,025
          2002                              3,446,577
          2003                                704,141
          2004                                656,295
                                          -----------
                                          $69,375,291
                                          ===========

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,
                                             1999        1998          1997
                                          ----------  ----------   ----------
Average balance                           $6,391,928  $3,983,959   $2,029,453
Average interest rate                          3.52%       3.55%        2.49%
Maximum month-end balance                 $7,307,044  $8,795,715   $2,860,141

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








                                     -F26-
<PAGE>
NOTE L - SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE - Continued

Securities underlying the agreements are as follows:

                                                  At December 31,
                                                 1999          1998
                                              ----------    ----------
     Carrying value                           $7,445,000    $8,644,000
     Estimated fair value                     $7,340,000     8,804,000


NOTE M - LONG-TERM DEBT

Long-term debt of the Company consists of the following:

                                                  At December 31,
                                                 1999          1998
                                              ----------    ----------
     Note payable to an unrelated bank
     providing for quarterly  principal
     payments of $3,750 and quarterly
     interest  payments at 8.5% fixed, due
     in 2001.  The note is  collateralized
     by certain  pieces of data  processing
     equipment.                               $        -    $   33,750



     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
                                              ----------    ----------
                                              $  630,000    $  663,750
                                              ==========    ==========









                                     -F27-
<PAGE>
NOTE M - LONG-TERM DEBT - Continued

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

          2000                                  $            -
          2001                                               -
          2002                                               -
          2003                                               -
          2004                                               -
          Thereafter                                   630,000
                                                --------------
                                                $      630,000
                                                ==============

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, 1999, that the Bank
meets all capital adequacy requirements to which it is subject.

As of December 31, 1999 and 1998, 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.
















                                     -F28-
<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
                         ========













                                     -F29-
<PAGE>
NOTE N - REGULATORY MATTERS - Continued

The Bank's  actual  capital  amounts and ratios as of  December  31, 1998 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                 $ 13,617  8.06%
Intangible assets            (404)
                         --------
Tangible capital and
  ratio to adjusted
  total assets           $ 13,213  7.52%  $   2,636    1.5%
                         ========         =========

Tier I (core) capital and
  ratio to adjusted
  total assets           $ 13,073  7.44%  $  5,272     3.0%  $  8,787     5.0%
                         ========         ========           ========

Tier I capital and ratio
  to risk-weighted
  assets                 $ 13,073  9.52%  $  4,118     3.0%  $  8,236     6.0%
                         ========         ========           ========

Tier II capital -
  allowance for loan
  and lease losses          1,719
Total risk-based capital
  and ratio to risk-
  weighted assets        $ 14,792 10.78%  $ 10,981     8.0%  $ 13,727    10.0%
                         ========         ========           ========
Total assets             $168,837
                         ========
Adjusted total assets     175,739
                         ========
Risk-weighted assets     $137,267
                         ========













                                     -F30-
<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 D. 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, 1999 and 1998,  less than 3% of the
Company's loans are unsecured.

At December  31, 1999,  no single  customer  represented  more than 10% of total
deposits.  At December 31, 1998,  the Company held deposits for a customer equal
to  approximately  10%  of  total  deposits.  Such  deposits  were  invested  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,
                                                  1999              1998
                                              ------------      ------------
    Commitments to extend credit              $23,967,359       $20,182,057
    Standby letters of credit and
      financial guarantees written            $ 2,032,288       $ 1,595,882








                                     -F31-
<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 2004.

The minimum  annual  rentals under these leases as of December 31, 1999,  are as
follows:

       Year                                                 Amount
      ------                                              ----------
      2000                                                $  82,996
      2001                                                   83,730
      2002                                                   74,189
      2003                                                   27,690
      2004                                                   28,806
      Thereafter                                             24,828
                                                          ----------
      Total minimum lease payments                        $ 322,239
                                                          ==========






                                     -F32-
<PAGE>
NOTE P - COMMITMENTS AND CONTINGENT LIABILITIES - Continued

The  Company's  rent expense was $96,788,  $102,342,  and $189,096 for the years
ended December 31, 1999, 1998 and 1997, respectively.


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.

    Off-balance-sheet   instruments:  The  Company's  loan  commitments,   which
    approximate  $26,000,000  and  $21,800,000  at  December  31, 1999 and 1998,
    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.














                                     -F33-
<PAGE>
NOTE Q - FAIR VALUE OF FINANCIAL INSTRUMENTS - Continued

    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, 1999      December 31, 1998
                                ---------------------  ---------------------
                                Carrying   Estimated   Carrying   Estimated
                                Amount     Fair Value  Amount     Fair Value
  Assets:                          (In Thousands)          (In Thousands)
                                ---------------------  ----------------------
  Cash and due from banks       $  8,866   $  8,866    $  7,967   $  7,967
     Federal funds sold            2,917      2,917       4,011      4,011
     Trading securities               82         82         157        157
     Securities held to
       maturity                   14,541     14,072      11,206     11,436
     Securities available
       for sale                    9,924      9,924      14,527     14,527
     Loans                       156,870    156,690     119,158    119,694
     Federal Home Loan
       Bank stock                    507        507         434        434
     Federal Reserve
       Bank stock                    204        204         159        159

  Liabilities:
     Demand deposits              32,936     32,936      27,742     27,742
     NOW and money market         67,914     67,914      48,550     48,550
     Savings                       4,873      4,873       4,686      4,686
     Time, $100,000 and over      16,679     16,720      11,463     11,492
     Other time                   52,696     52,832      46,654     46,789
     Securities sold under
       agreements to
       repurchase                  7,307      7,307       8,796      8,796
     Long-term debt                  630        630         664        664
     Cumulative trust
       preferred securities        6,750      6,412       6,000      6,000
     Off balance sheet items           -        260           -        218




                                     -F34-
<PAGE>
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  $6,194,000,  $5,277,500 and $4,462,400 at December 31, 1999,  1998
and 1997, 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, 1999, the space was 100% leased.

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 $112,500,  $110,000, and $99,996 for the years
ended December 31, 1999,  1998 and 1997,  respectively.  The plan was amended in
1993 to include  an  Employee  Stock  Ownership  Plan  (ESOP)  provision.  As of
December 31, 1999, the ESOP owned 152,297 shares of the Company's  common stock.
During 1999, the ESOP purchased an additional 17,500 shares on the open market.













                                     -F35-
<PAGE>
NOTE S - PROFIT-SHARING PLAN - Continued

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 $10,000 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 $182,040,  $184,204, and $173,262
for the  years  ended  December  31,  1999,  1998 and  1997,  respectively.  The
Company's matching contribution was $90,732,  $92,857, and $86,927 for the years
ended December 31, 1999, 1998 and 1997, 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
454,749 shares of common stock at $7.92 a share,  481,380 shares of common stock
at $7.96 a share and 495,000 shares at $7.96 a share at December 31, 1999,  1998
and 1997,  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 expire in 2000 and beyond.

For the Year Ended December 31,                                1999
                                                   -----------------------------
                                                               Weighted  Per
                                                               Average   Share
                                                   Earnings    Shares    Amount
                                                   ----------  --------- -------
Basic EPS Net earnings available to common
  stockholders                                     $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
    Preferred stock                                     10,798   129,476
    Stock options                                            -         -
                                                   ----------- ---------

Diluted EPS Net earnings available to common
stockholders and assumed conversions               $2,364,327  4,400,494  $.54
                                                    ========== =========   ====












                              (Continued on F36b)
                                     -F36a-
<PAGE>
                             (Continued from F36a)

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
                                                   =========== =========  ====


For the Year Ended December 31,                                1997
                                                   -----------------------------
                                                               Weighted  Per
                                                               Average   Share
                                                   Earnings    Shares    Amount
                                                   ----------  --------- -------
Basic EPS Net earnings available to common
  stockholders                                     $1,393,397  3,432,768  $.41
                                                                          ====
Effect of dilutive securities Incremental
  shares from  assumed exercise or conversion of:
    Convertible debt                                   31,434    152,790
    Preferred stock                                    16,345    196,947
    Stock options                                           -      3,207
                                                   ----------  ---------

Diluted EPS Net earnings available to common
stockholders and assumed conversions               $1,441,176  3,785,712  $.38
                                                   ==========  =========  ====














                                     -F36b-

<PAGE>
NOTE T - STOCKHOLDERS' EQUITY - Continued
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  beginning  after the  second
anniversary date.  During 1997,  156,000 and 312,000 options were granted to the
Company's Board of Directors and eligible executive officers,  respectively,  at
$7.94 per share,  the estimated fair value of the Company's  common stock at the
grant date. As such, no compensation expense was recorded in connection with the
grant of such options.
                               Range      Weighted      Average
                               Number     of per        Per       Aggregate
                               of         Option        Share     Option
                               Shares     Share         Price     Price
                               ---------  ------------  --------  -------------
   Outstanding at
     December 31, 1996            54,000  $  3.89-8.25     $6.21  $   335,340
   Options granted               468,000          7.94      7.94    3,715,920
   Options exercised             (13,500)            -     (3.89)     (52,515)
   Options forfeited                   -             -         -            -
                               ---------  ------------  --------  -------------

   Outstanding at
     December 31, 1997           508,500     3.89-8.25      7.88    3,998,745
   Options granted                     -             -         -            -
   Options exercised              (6,000)            -     (5.08)     (30,480)
   Options forfeited             (21,120)    5.08-7.94     (6.92)    (146,150)
                               ---------  ------------  --------  -------------

   Outstanding at
     December 31, 1998           481,380     7.63-8.25      7.94    3,822,115
   Options granted                 3,000         6.688     6.688       20,063
   Options exercised                   -             -         -            -
   Options forfeited             (29,631)    7.94-8.25     (8.08)    (239,418)
                               ---------  ------------  --------  -------------

   Outstanding at
     December 31, 1999           454,749   6.688-7.625      7.92  $ 3,602,760
                               =========  ============   =======  =============














                                     -F37-
<PAGE>
NOTE T - STOCKHOLDERS' EQUITY - Continued

The weighted-average remaining contractual life of the outstanding stock options
at December  31, 1999,  1998 and 1997 was 94 months,  103 months and 114 months,
respectively.

These options are exercisable as follows:

                                                                   Weighted
                                                                   Average
      Year Ending                                     Number of    Exercise
      December 31,                                    Shares       Price
    -----------------                                 ----------   ----------
        2000                                            448,749      7.93
        2001                                              3,300      7.71
        2002                                              1,200      7.31
        2003                                              1,500      6.94
                                                      ----------   ----------
                                                        454,749      7.92
                                                      ==========   ==========

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 1.68% over the
exercise  period,  the expected life of the options would be the entire exercise
period,  and stock  volatility  would  approximate  zero due to a thinly  traded
market for the stock.  The following  information  pertains to the fair value of
the options at December 31, 1999, 1998 and 1997.

                                           For the Years Ended December 31,
                                            1999         1998        1997
                                        ------------ ------------ ------------
   Weighted average-grant-date
   Fair value of options issued
     during the year                    $     NIL    $     NIL    $    705,120
                                        ============ ============ ============

   Pro forma net earnings               $  2,244,347 $  1,668,356 $  1,402,329
                                        ============ ============ ============

   Pro forma basic earnings
     per share                          $        .54 $        .47 $        .41
                                        ============ ============ ============
















                                     -F38-
<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
$2.55 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.
































                                     -F39-
<PAGE>













                             SUPPLEMENTAL SCHEDULES












































                                     -F40-
<PAGE>
                United Financial Holdings, Inc. and Subsidiaries
                SUPPLEMENTAL CONSOLIDATING STATEMENT OF EARNINGS
                      For the Year Ended December 31, 1999
                           United
                           Financial
                           Holdings,     United
                           Inc.          Bank            EPW       Trust
                           ------------  ------------  --------  ----------
ASSETS
Cash and due from banks    $  2,975,207  $  8,866,336  $331,571  $  392,528
Federal funds sold                    -     2,917,000         -           -
Trading Securities               81,600             -         -           -
Securities held to
  maturity, market value
  of $14,072,208                      -    14,540,677         -           -
Securities available for
  sale, at market               773,000     7,895,856         -   2,004,964
Loans, net                      500,000   152,997,408         -           -
Premises and equipment, net           -     9,468,347    51,245      98,944
Federal Home Loan Bank stock          -       506,600         -           -
Federal Reserve Bank stock            -       203,800         -           -
Accrued interest receivable       2,285     1,166,906         -      21,009
Intangible assets, less
   accumulated amortization
   of $1,725,395                499,011       388,959         -     860,557
Other real estate owned               -     1,528,311         -           -
Other assets                 20,171,318     4,698,234    80,017      44,098
                           ------------  ------------  --------  ----------
     Total assets          $ 25,002,421  $205,178,434  $462,833  $3,422,100
                           ============  ============  ========  ==========



























                              (Continued on F41b)
                                     -F41a-
<PAGE>
                United Financial Holdings, Inc. and Subsidiaries
                SUPPLEMENTAL CONSOLIDATING STATEMENT OF EARNING
                              (Continued from F41a)

                     For the Year Ended December 31, 1999


                                                     Eliminating   Consolidated
                             UFHCT       Total          Entries        Total
                         ----------   ------------  -------------  ------------
ASSETS
Cash and due from banks  $        -   $ 12,565,642  $  (3,699,306) $  8,866,336
Federal funds sold                -      2,917,000              -     2,917,000
Trading Securities                -         81,600              -        81,600
Securities held to
  maturity, market value
  of $14,072,208                  -     14,540,677              -    14,540,677
Securities available for
  sale, at market                 -     10,673,820       (750,000)    9,923,820
Loans, net                        -    153,497,408              -   153,497,408
Premises and equipment, net       -      9,618,536              -     9,618,536
Federal Home Loan Bank stock      -        506,600              -       506,600
Federal Reserve Bank stock        -        203,800              -       203,800
Accrued interest receivable       -      1,190,200              -     1,190,200
Intangible assets, less
   accumulated amortization
   of $1,725,395                  -      1,748,527              -     1,748,527
Other real estate owned           -      1,528,311              -     1,528,311
Other assets              6,959,200     31,952,867    (27,094,374)    4,858,493
                         ----------   ------------   ------------  ------------
     Total assets        $6,959,200   $241,024,988  $ (31,543,680) $209,481,308
                         ==========   ============  =============  ============


























                                     -F41b-
<PAGE>
                United Financial Holdings, Inc. and Subsidiaries
                SUPPLEMENTAL CONSOLIDATING STATEMENT OF EARNINGS
                       For the Year Ended December 31, 1999

                         United Financial     United
                         Holdings, Inc.        Bank        EPW       Trust
                         ----------------  ------------  --------  ----------
LIABILITIES AND
  STOCKHOLDERS' EQUITY
  Deposits
    Demand                 $          -    $ 36,635,491  $      -  $        -
    NOW and money market              -      67,913,763         -           -
    Savings                           -       4,872,802         -           -
    Time, $100,000 and over           -      17,429,300         -           -
    Other time                        -      52,695,991         -           -
                           ------------    ------------  --------  ----------
         Total deposits               -     179,547,347         -           -
Securities sold under
  agreements to repurchase            -       7,307,044         -           -
Accrued interest payable         25,200         423,178         -           -
Convertible subordinated
  debentures                    630,000               -         -           -
Long-term debt                6,959,200               -         -           -
Other liabilities               565,638       2,028,558   308,573      22,276
                           ------------    ------------  --------  ----------
      Total liabilities       8,180,038     189,306,127   308,573      22,276
Company-obligated Mandatory
  Redeemable Capital
  Securities of Subsidiary
  Trust Holding Solely
  Subordinated Debentures
  Of The Company                      -               -         -           -
STOCKHOLDERS' EQUITY
  7% convertible preferred
    stock, $10 par value;
    150,000 shares authorized;
    10,000 shares issued
    and outstanding at
    December 31, 1999           100,000               -         -           -
 Common stock, $.01 par value;
    20,000,000 shares authorized,
    4,192,771 shares issued and
    outstanding at
    December 31, 1999            41,928         750,000    38,539   1,000,000
  Paid-in capital             9,672,634       6,792,746   775,814   1,825,065
  Common stock subscription
  receivable                          -               -         -           -
  Accumulated other compre-
  hensive income               (232,362)       (194,647)        -     (37,714)
  Retained earnings           7,240,183       8,524,208  (660,093)    612,473
                           ------------    ------------  --------  ----------
      Total stockholders'
      equity                 16,822,383      15,872,307   154,260   3,399,824
                           ------------    ------------  --------  ----------
      Total liabilities and
      stockholders' equity $ 25,002,421    $205,178,434  $462,833  $3,422,100
                           ============    ============  ========  ==========
                              (Continued on F42b)
                                     -F42a-
<PAGE>
                United Financial Holdings, Inc. and Subsidiaries
     SUPPLEMENTAL CONSOLIDATING STATEMENT OF EARNINGS - Continued from F42a
                      For the Year Ended December 31, 1999
                                                     Eliminating   Consolidated
                             UFHCT       Total         Entries        Total
                           ---------  ------------  -------------  ------------
LIABILITIES AND
  STOCKHOLDERS' EQUITY
  Deposits
    Demand                 $       -  $ 36,635,491  $ (3,699,306) $  32,936,185
    NOW and money market           -    67,913,763             -     67,913,763
    Savings                        -     4,872,802             -      4,872,802
    Time, $100,000 and over        -    17,429,300      (750,000)    16,679,300
    Other time                     -    52,695,991             -     52,695,991
                          ----------  ------------  -------------  ------------
         Total deposits            -   179,547,347    (4,449,306)   175,098,041
Securities sold under
  agreements to repurchase         -     7,307,044             -      7,307,044
Accrued interest payable           -       448,378             -        448,378
Convertible subordinated
  debentures                       -       630,000             -        630,000
Long-term debt                     -     6,959,200    (6,959,200)             -
Other liabilities                  -     2,925,045      (499,183)     2,425,862
                          ----------  ------------  -------------  ------------
      Total liabilities            -   197,817,014   (11,907,689)   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             -      6,749,600
STOCKHOLDERS' EQUITY
  7% convertible preferred
    stock, $10 par value;
    150,000 shares authorized;
    10,000 shares issued
    and outstanding at
    December 31, 1999              -       100,000             -        100,000
 Common stock, $.01 par value;
    20,000,000 shares
    authorized, 4,192,771
    shares issued and
    outstanding at
    December 31, 1999        209,600     2,040,067    (1,998,139)        41,928
  Paid-in capital                  -    19,066,259    (9,393,625)     9,672,634
  Common stock
    subscription receivable        -             -             -              -
  Accumulated other
    comprehensive income           -      (464,723)      232,361       (232,362)
  Retained earnings                -    15,716,771    (8,476,588)     7,240,183
                         -----------  ------------  ------------  -------------
      Total stockholders'
      equity             $   209,600    36,458,374   (19,635,991)    16,822,383
                         -----------  ------------  ------------  -------------
      Total liabilities
      and stockholders'
      equity             $ 6,959,200  $241,024,988  $(31,543,680) $ 209,481,308
                         ===========  ============  ============  =============
                                     -F42b-
<PAGE>
                United Financial Holdings, Inc. and Subsidiaries
                SUPPLEMENTAL CONSOLIDATING STATEMENT OF EARNINGS
                       For the Year Ended December 31, 1999

                           United Financial     United
                           Holdings, Inc.        Bank        EPW       Trust
                           ----------------  -----------  --------  ----------
Interest income
  Loans and loan fees      $   61,811        $12,741,533  $      -  $        -
  Securities
    U.S. Treasury                   -            391,772         -           -
    Obligations of other
      U.S. Government
      agencies and
      corporations                  -            694,180         -      88,489
    Obligations of
      states and political
      subdivisions                  -            203,298         -           -
    Other                           -            279,342         -           -
    Federal funds sold and
      securities purchased
      under reverse
      repurchase agreements         -            269,736         -     107,707
                           ----------------  -----------  --------  ----------
        Total interest
          income               61,811         14,579,861         -     196,196

Interest expense
  NOW and money market              -          1,627,761         -           -
  Savings                           -            107,028         -           -
  Time deposits, $100,000
    and over                        -            699,673         -           -
  Other time                        -          2,555,958         -           -
  Long-term debt               50,400                  -         -           -
  Subordinated debentures
    issued to subsidiary
    trust                     652,348                  -         -           -
  Federal funds purchased
    and securities sold under
    agreements to repurchase        -            273,416         -           -
                           ----------------  -----------  --------  ----------
    Total interest expense    702,748          5,263,836         -           -
                           ----------------  -----------  --------  ----------
    Net interest income      (640,937)         9,316,025         -     196,196

Provision for loan losses           -            785,000         -           -
                           ----------------  -----------  --------  ----------
    Net interest income
    after provision for
    loan losses              (640,937)         8,531,025         -     196,196







                              (Continued on F43b)
                                     -F43a-
<PAGE>
                United Financial Holdings, Inc. and Subsidiaries
     SUPPLEMENTAL CONSOLIDATING STATEMENT OF EARNINGS - Continued from F43a
                      For the Year Ended December 31, 1999

                                                     Eliminating   Consolidated
                             UFHCT       Total         Entries        Total
                           ---------  ------------  -------------  ------------
Interest income
  Loans and loan fees      $ 652,348  $ 13,455,692  $    (671,996) $ 12,783,696
  Securities
    U.S. Treasury                  -       391,772              -       391,772
    Obligations of other
      U.S. Government
      agencies and
      corporations                 -       782,669              -       782,669
    Obligations of
      states and political
      subdivisions                 -       203,298              -       203,298
    Other                          -       279,342              -       279,342
    Federal funds sold and
      securities purchased
      under reverse
      repurchase agreements        -       377,443       (107,707)      269,736
                           ---------  ------------  -------------  ------------
        Total interest
          income             652,348    15,490,216       (779,703)   14,710,513

Interest expense
  NOW and money market             -     1,627,761              -     1,627,761
  Savings                          -       107,028              -       107,028
  Time deposits, $100,000
    and over                       -       699,673              -       699,673
  Other time                       -     2,555,958        (27,839)    2,528,119
  Long-term debt                   -        50,400              -        50,400
  Subordinated debentures
    issued to subsidiary
    trust                    652,348     1,304,696       (671,996)      632,700
  Federal funds purchased
    and securities sold under
    agreements to repurchase       -       273,416        (79,868)      193,548
                           ---------  ------------  -------------  ------------
    Total interest expense   652,348     6,618,932       (779,703)    5,839,229
                           ---------  ------------  -------------  ------------
    Net interest income            -     8,871,284              -     8,871,284

Provision for loan losses          -       785,000              -       785,000
                           ---------  ------------  -------------  ------------
    Net interest income
    after provision for
    loan losses                    -     8,086,284              -     8,086,284








                                     -F43b-
<PAGE>
                United Financial Holdings, Inc. and Subsidiaries
                SUPPLEMENTAL CONSOLIDATING STATEMENT OF EARNINGS
                       For the Year Ended December 31, 1999

                           United
                           Financial        United
                           Holdings, Inc.    Bank         EPW         Trust
                           -------------- -----------  ----------  ------------
Other income
  Service charges on
    deposit accounts       $          -   $   797,181  $        -  $
  Trust and investment
    management income                 -            -    1,593,054   1,630,460
  Net trading account
    profit                       41,808            -            -           -
  Equity in Earnings of
    Subsidiaries              2,850,253            -            -           -
  Other service charges,
    fees and income               2,497    1,203,593            -           -
                           -------------- -----------  ----------  ------------
    Total other income        2,894,558    2,000,774    1,593,054   1,630,460

Other expense
  Salaries and employee
    benefits                          -    3,544,432    1,231,927     584,689
  Occupancy expense                   -      450,967       67,433      59,516
  Furniture and equipment
    expense                           -      495,120       56,793      54,540
  Data processing expense             -      332,768       28,471     126,078
  Legal and professional
    fees                         59,237      115,573            -           -
  Amortization of
    intangible assets            31,027       14,724            -      39,365
  Other operating
    expenses                     98,788    1,821,178      203,681     283,492
                           -------------- -----------  ----------  ------------
                                189,052    6,774,762    1,588,305   1,147,680
                           -------------- -----------  ----------  ------------
    Earnings before
      income taxes            2,064,569    3,757,037        4,749     678,976

Income tax expense
  (benefit)                    (268,324)   1,328,800      (13,235)    274,944
                           -------------- -----------  ----------  ------------
    NET EARNINGS           $  2,332,893   $2,428,237   $   17,984  $  404,032
                           ============== ==========   ==========  ============











                              (Continued on F-44b)
                                     -F44a-
<PAGE>
                United Financial Holdings, Inc. and Subsidiaries
   SUPPLEMENTAL CONSOLIDATING STATEMENT OF EARNINGS - Continued from Page F44a
                       For the Year Ended December 31, 1999

                                                     Eliminating   Consolidated
                             UFHCT       Total         Entries        Total
                           ---------  ------------  -------------  ------------
Other income
  Service charges on
    deposit accounts       $       -  $    797,181  $           -  $   797,181
  Trust and investment
    management income              -     3,223,514        (48,000)   3,175,514
  Net trading account
    profit                         -        41,808              -       41,808
  Equity in Earnings of
    Subsidiaries                   -     2,850,253     (2,850,253)           -
  Other service charges,
    fees and income                -     1,206,090        (99,750)   1,106,340
                           ---------  ------------  -------------  ------------
    Total other income             -     8,118,846     (2,998,003)   5,120,843

Other expense
  Salaries and employee
    benefits                       -     5,361,048              -    5,361,048
  Occupancy expense                -       577,916        (57,510)     520,406
  Furniture and equipment
    expense                        -       606,453              -      606,453
  Data processing expense          -       487,317              -      487,317
  Legal and professional
    fees                           -       174,810              -      174,810
  Amortization of
    intangible assets              -        85,116              -       85,116
  Other operating
    expenses                       -     2,407,139        (90,240)   2,316,899
                           ---------  ------------  -------------  ------------
                                   -     9,699,799       (147,750)   9,552,049
                           ---------  ------------  -------------  ------------
    Earnings before
      income taxes                 -     6,505,331     (2,850,253)   3,655,078

Income tax expense
  (benefit)                        -     1,322,185              -    1,322,185
                           ---------  ------------  -------------  ------------
    NET EARNINGS        $          -  $  5,183,146  $  (2,850,253) $ 2,332,893
                           =========  ============  =============  ============












                                     -F44b-