U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                              --------------------
                                   FORM 10-KSB
                              --------------------
            [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000
                                       OR
            [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF
                       THE SECURITIES EXCHANGE ACT OF 1934
                        COMMISSION FILE NUMBER 005-55641
                         UNITED FINANCIAL HOLDINGS, INC.
                 (NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)
                 FLORIDA                                  59-2156002
     (State or Other Jurisdiction of                    (IRS Employer
     Incorporation or Organization)                   Identification No.)
    333 THIRD AVENUE NORTH, SUITE 200                      33701-3346
         ST. PETERSBURG, FLORIDA                           (Zip Code)
  (Address of Principal Executive Offices)
                                 (727) 898-2265
                (Issuer's Telephone Number, Including Area Code)
                             ----------------------
        Securities registered pursuant to Section 12(b) of the Exchange Act:
                                                        Name of Each Exchange
                   Title of each class                   on Which Registered
                          None                                  None

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

Check whether the issuer:(1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2)has been subject to such filing requirements for the past 90 days. Yes X
No

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure  will be contained,  to
the  best  of  registrant's   knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part III of this Form  10-KSB or any
amendments to this Form 10-KSB. [ ]

The issuer's gross revenues for its most recent fiscal year was $24,220,783.

The  aggregate  market  value  of  the  Common  Stock  of  the  issuer  held  by
non-affiliates  as of February  21,  2001,  was  approximately  $12,587,052,  as
computed by reference to the closing  price of the Common Stock as quoted on the
Nasdaq National Market System on such date. As of February 21, 2001,  there were
4,448,373 issued and outstanding shares of Common Stock of the issuer.

Transitional Small Business Disclosure Format (check one): Yes ___ No   X

                       DOCUMENTS INCORPORATED BY REFERENCE
Portions of the  definitive  Proxy  Statement  of the issuer for the 2001 Annual
Meeting of Shareholders to be filed with the Securities and Exchange  Commission
no later  than 120 days  after  the end of the  issuer's  2000  fiscal  year are
incorporated by reference into Part III of this Form 10-KSB.

<PAGE>
                         UNITED FINANCIAL HOLDINGS, INC.

                                   FORM 10-KSB

                       Fiscal Year Ended December 31, 2000

Item Number in
Form 10-KSB                                                            Page
================================================================================
                                     PART I

     1.  Description of Business                                         1

     2.  Description of Property                                         20

     3.  Legal Proceedings                                               20

     4.  Submission of Matters to a Vote of Security-Holders             20

                                     PART II

     5.  Market for Common Equity and Related Stockholder Matters        21

     6.  Management's Discussion and Analysis or Plan of Operation       23

     7.  Consolidated Financial Statements                               45

     8.  Changes in and Disagreements with Accountants on Accounting
           and Financial Disclosure                                      45

                                    PART III

     9.  Directors, Executive Officers, Promoters and Control Persons
           Compliance with Section 16(a) of the Exchange Act             45

    10.  Executive Compensation                                          46

    11.  Security Ownership of Certain Beneficial
           Owners and Management                                         46

    12.  Certain Relationships and Related Transactions                  46

    13.  Exhibits and Reports on Form 8-K                                46
















<PAGE>
                                     PART I

ITEM 1.  DESCRIPTION OF BUSINESS

GENERAL

     United  Financial  Holdings,  Inc.  (the  "Company")  is a registered  bank
holding company formed in 1982, the principal subsidiary of which is United Bank
and  Trust   Company  (the  "Bank"),   a   Florida-chartered   commercial   bank
headquartered in St. Petersburg,  Florida. The Bank was founded in 1979 and is a
community-oriented, full service commercial bank with six branch offices serving
Pinellas County, Florida. The Bank provides a broad range of traditional banking
services with emphasis on commercial  loans and loans under the lending  program
of the U.S. Small Business  Administration (the "SBA"). The Company's operations
include  three  business  segments:  commercial  banking,  trust  services,  and
investment  advisory  services,   which  constituted  94.2%,  8.3%  and  (2.5%),
respectively, of the Company's 2000 pre-tax income before corporate overhead. At
December 31, 2000, the Company had consolidated  total assets of $243.5 million,
net loans of $182.0 million, deposits of $202.2 million and stockholders' equity
of $19.5 million.

     The Bank is a  community-oriented  full service,  commercial bank currently
operating from six branch offices serving  Pinellas County,  Florida.  It offers
consumer and  commercial  loans,  ATM cards,  credit cards,  and a full range of
deposit account types,  including  demand deposits,  NOW accounts,  money market
accounts, savings accounts, and certificates of deposit.  Additionally, the Bank
offers  Internet  banking and a bill payment  service.  The primary focus of the
Bank's  commercial  lending  activities  is on loans to small and  medium  sized
businesses and  professional  firms.  The Bank's  commercial loans include loans
secured by real  estate or other  assets,  loans  made  under the SBA's  lending
program  and  secured  and  unsecured  loans to small  businesses.  The  Company
believes the Bank is the largest  originator,  among  similarly  sized financial
institutions, of SBA loans in the State of Florida (measured by dollar volume of
loans originated).

     The Company's other operating  subsidiaries are EPW Investment  Management,
Inc., formerly Eickhoff, Pieper, & Willoughby, Inc., an investment advisory firm
registered  under the Investment  Advisers Act of 1940 ("EPW")  headquartered in
Tampa,  Florida,  with an office in  Jacksonville,  Florida,  and  United  Trust
Company, a Florida-chartered  trust company ("United Trust") registered with the
Florida  Department  of Banking  and  Finance  and  located  in St.  Petersburg,
Florida. EPW offers investment  management services to corporate,  municipal and
high net  worth  individual  clients  throughout  the  State of  Florida.  As of
December 31, 2000,  EPW had $352.1  million in assets under  management.  United
Trust is a wholesale provider of data processing,  administrative and accounting
support and asset  custody  services to  professionals  holding  assets in trust
(primarily legal and accounting firms).  United Trust also provides retail trust
and investment  management  services to individual and corporate clients.  As of
December 31, 2000, United Trust had $326.7 million in assets under trust.

BACKGROUND

     In 1986 a group of  investors,  headed  by Neil W.  Savage,  the  Company's
President  and  Chief  Executive  Officer  and the  Bank's  Chairman  and  Chief
Executive  Officer,  acquired  control of the  Company,  then known as  Pinellas
Bancshares  Corporation.  The Company's  name was changed to its present name in
1995 and the Bank's name was changed from United Bank of Pinellas to its present
name that same year.
                                     - 1 -
<PAGE>
     In September 1995 the Company  purchased  FSC, a trust data  processing and
accounting service for  professionals,  and merged this entity into the Company.
In January  1996,  the Company  acquired  EPW. The Company  formed  United Trust
during the fourth  quarter of 1997 and effective  December 31, 1997  transferred
all of the Bank's trust assets to United Trust.

BUSINESS STRATEGY

     The principal  elements of the Company's  business strategy are to increase
its  market  share in its  existing  business  segments  and to seek  out  niche
business  segments  in which the Company  can  compete  effectively  in order to
create new sources of  non-interest  income and  increase  traditional  interest
income from new lending  opportunities.  The Company has sought to implement its
strategy of  increasing  its market share in its existing  business  segments by
expanding the Bank's market coverage  through de novo branching,  increasing the
Bank's emphasis on originating loans secured by real estate and other assets for
its own portfolio, pursuing small business secured and unsecured lending for its
own portfolio,  and continuing to originate a high volume of SBA loans, both for
its own portfolio and for sale in the secondary market. A primary element of the
Company's  business strategy as a community  banking  organization is to seek to
provide  customers with a level of personalized  service exceeding that provided
by its competitors, including the local banking operations of large regional and
national banking companies.

     The Company has sought to add new sources of  non-interest  income  through
the  creation of United  Trust,  which  receives  fees for the  wholesale  trust
services  it offers  to legal and  accounting  firms  and the  retail  trust and
investment  management services it offers to other clients,  and the acquisition
of EPW, which  generates fee income from the investment  management  services it
offers  to  corporate,  municipal  and high net  worth  individual  clients.  By
expanding the range of trust and investment  management  services it offers, the
Company  seeks to  differentiate  itself from other  similarly  sized  community
banking  organizations  operating in the Company's market.  While pursuing these
strategies,  management  remains committed to improving asset quality,  managing
interest rate risk,  enhancing  profitability  and  maintaining  its status as a
well-capitalized institution for regulatory capital purposes.

     As a result of this  business  strategy,  the  Company's  total assets have
increased  from  approximately  $122.7  million at  December  31, 1996 to $243.5
million at December 31, 2000. The Company's  consolidated net revenues increased
from $10.7 million for the year ended December 31, 1996 to $15.6 million for the
year ended  December 31, 2000.  During this period of asset and revenue  growth,
the Company's net income increased from $1.5 million for the year ended December
31, 1996 to $3.1 million for the year ended December 31, 2000.

     The Company intends to continue  selectively  adding branches in its market
area,  and to that end  completed  its  purchase  and opening of a new branch in
November 2000. The Company has no current plans to add Bank branches  outside of
the Pinellas County market. The Company's current goal is to open one new branch
each year.  Accordingly,  in the  future,  the Company  may  consider  strategic
expansion  though the  acquisition of other banks or bank branches or by de novo
branching.  Similar  to the  Company's  previous  efforts  that  resulted  in it
establishing  United Trust and acquiring EPW, the Company may consider from time
to time expansion  opportunities into other business lines that might add to the
Company's  non-interest  income  and the  acquisition  or  development  of other
businesses that the Company  considers  complementary to its existing  business.
For example,  in March 1999, the Company acquired a 5% equity interest in United

                                     - 2 -
<PAGE>
Insurance Holding, LC, a property and casualty insurance company, and in 2000 it
increased  its minority  investment in that company to  approximately  16%. From
time to time, the Company may commence similar  exploratory  efforts to evaluate
the  possibility  of acquiring or  establishing  similar or additional  lines of
business.

     In September  2000,  the Company  signed a definitive  agreement to acquire
First Security Bank ("Security") in Sarasota, Florida. Security, opened in 1999,
has one office  located in the  downtown  section of  Sarasota.  Total assets at
December  31,  2000  were  $26.7  million.  The  purchase  of  Security  will be
facilitated by a combination of the Company's  issuance of "Series One Preferred
Stock" and cash,  based on an agreed value of $5.5  million,  subject to certain
adjustments  to be  determined  at closing.  Up to $2.2  million of the purchase
price may be paid in cash at the seller's election. The shares of the Series One
Preferred  Stock are deemed to be equal to $8.00 per share and can be  converted
into Common Stock of the company upon Security's  achieving certain net interest
income targets.  The Agreement  contemplates  the Company  expanding  Security's
community  banking  services  in  the  Sarasota  and  adjoining  markets.  It is
anticipated that the transaction will close sometime in early 2001.

MARKET AREA

     Currently,  the Bank has six offices located in Pinellas  County,  Florida,
which is the Bank's primary  market area. The population of Pinellas  County was
estimated to be 899,000 on April 1, 1999 by the  University of Florida's  Bureau
of Economic and Business Research. This compares with a population of 852,000 at
the 1990  census and  729,000  at the 1980  census.  Pinellas  County has been a
retirement  and  tourism  destination  for  many  years,  and  over  25%  of its
population is over 65 years of age, compared with a state-wide average of 18%.

     According to information  published by the Florida Bankers Association,  as
of September 30, 2000,  Pinellas County was the fourth largest county in Florida
in terms of bank and thrift deposits,  with total deposits of $13.3 billion,  or
6.53% of the state's total deposits.  There is a significant seasonal population
increase during the months of November to April of each year; seasonal residents
are not included in the cited population  statistics.  The Company believes that
while the  population  of  Pinellas  County will  continue to grow,  the rate of
growth is likely to be lower  than the  population  growth  rate of the State of
Florida as a whole,  and is likely to slow due to the nature of the market area.
As a peninsula surrounded on the south, east and west by water,  Pinellas County
has limited room for future  development.  The local  economy is dependent  upon
service industries,  manufacturing, tourism, and medical facilities as its major
sources of employment and commerce.

     United Trust's primary market for retail business is also Pinellas  County.
Its  wholesale  services  are  marketed  more  widely  to the  Tampa  Bay  Area,
consisting of Pinellas,  Hillsborough,  Pasco and Manatee Counties.  EPW markets
its services to high net worth  individuals  and to commercial and  governmental
clients  throughout  the State of Florida and  secondarily  in the  Southeastern
United States.

     Pinellas  County is a highly  competitive  market for financial,  trust and
investment  services.  The  Bank  faces  competition  for  deposits  from  other
commercial  banks,  thrift  institutions,  money market funds and credit unions.
Competition  for  loans of the  types  originated  by the  Bank is also  strong.
Management  believes that Pinellas County is considered an attractive  market by


                                     - 3 -
<PAGE>
financial  institutions  seeking to obtain  deposits,  as  evidenced  by the 293
offices of commercial banks and thrift institutions  existing in Pinellas County
at September 30, 2000.

OPERATING STRATEGY

     Management  believes that the consolidation of the banking industry and the
emergence  of large  regional and national  bank holding  companies  has created
opportunities  for  locally-owned   and  operated   financial   institutions  to
effectively  compete for  customers who desire a level of  personalized  banking
services that the large banking organizations may not be able to offer. The Bank
was organized as a community  financial  institution owned and managed by people
who are actively  involved in the Bank's local market area and  committed to the
area's economic growth and development. With local ownership and management, the
Company  believes  that the Bank can be more  responsive to the banking needs of
the community it serves and can tailor its services to meet its customers' needs
rather than  providing  the  standardized  services  that  larger  bank  holding
companies tend to offer.

     Local ownership and operation  allows the Bank faster,  more responsive and
flexible decision-making which may not be available at the branch offices of the
large bank holding  companies  that  constitute  the  majority of the  financial
institution offices located in the Bank's market area.

     The principal  business of the Bank is to attract deposits from the general
public  and  to  invest  those  funds  in  various  types  of  loans  and  other
interest-earning   assets.   The  Bank's  earnings  depend  primarily  upon  the
difference  between (i) the interest  and fees  received by the Bank from loans,
the securities held in its investment portfolio and other investments;  and (ii)
expenses  incurred by the Bank in connection  with  obtaining  funds for lending
(including interest paid on deposits and other borrowings) and expenses relating
to day-to-day operations.

     The  Bank's  customers  are  primarily   individuals   (including  seasonal
residents),   professionals  and  small  and  medium  size  businesses,  located
predominantly  in  Pinellas  County,  Florida.  The Bank  seeks to  develop  new
business  through  an ongoing  program of  personal  calls on both  present  and
potential customers.  As a local independent bank, the Bank utilizes traditional
local  advertising  media as well as direct mailings,  telephone  contacts,  and
brochures to promote the Bank and develop loans and deposits.  In addition,  the
Bank's  directors all have worked or lived in or near the Bank's market area for
a number  of  years,  contributing  to the  Bank's  image as a  locally-oriented
independent institution, which management believes is an important factor to its
targeted customer base.

SOURCES OF FUNDS

     The  primary  source of funds for  lending,  investment  and other  general
business  purposes  is  deposit  accounts.  Other  sources  of  funds  are  loan
repayments,  proceeds  from the sale of loans  and  investment  securities,  and
borrowings.  The Bank expects that loan repayments  will be a relatively  stable
source  of  funds,  while  levels  of  deposits  maintained  at the Bank will be
significantly  influenced by general interest rate and money market  conditions.
Generally,   the  Company  may  use  short-term  borrowings  to  compensate  for
reductions in sources of funds normally available,  while longer term borrowings
may be used to support expanded lending activities. Management believes that the


                                     - 4 -
<PAGE>
Company's  funding  requirements  can  be met  through  retail  deposits  in the
Company's  local  market  area  without  reliance  on  brokered  deposits.   For
additional discussion of asset and liability management policies and strategies,
see "Liquidity and Asset/Liability Management."

     As of December 31, 2000,  the scheduled  maturities of deposits of $100,000
or more were as follows (dollars in thousands):

          Three months or less................................ $      11,276
          Over three through six months.......................         3,872
          Six through twelve months...........................         7,415
          Over twelve months..................................         5,450
                                                               -------------
                                                               $      28,013
                                                               =============
     The Bank offers a full range of deposit  services,  including  checking and
other transaction  accounts,  savings accounts and time deposits.  The following
table  sets  forth the  principal  types of  deposit  accounts  offered  and the
aggregate amounts of such accounts at December 31, 2000 (dollars in thousands):

                                           Weighted                     Percent
                                           Average                      of Total
                                           Interest Rate   Amount       Deposits
                                           -------------   ------       --------
   Non-interest bearing.............          0.00%        $  37,051      18.3%
   NOW and Money Market accounts....          3.49            78,887      39.0
   Savings..........................          2.05             4,573       2.3
   Time deposits with original maturities of:
      One year or less..............          5.94            66,429      32.9
      Over 1 year through 5 years...          6.39            15,212       7.5
                                                            --------    -------
      Total time deposits...........          6.09            81,641      40.4
                                                            --------    -------
      Total deposits................          3.65%        $ 202,152     100.0%
                                                           =========    =======

     At December 31, 2000, scheduled maturities of time deposits were as follows
(dollars in thousands):
     Period Ended December 31,                                      Percent of
                                                     Time              Time
                                                    Deposits         Deposits
                                                   ----------       -----------
           2001................................... $   66,429          81.3%
           2002...................................      9,635          11.8
           2003...................................      3,236           4.0
           2004...................................        706            .9
           2005...................................      1,635           2.0
                                                   ----------        ----------
             Total time deposits.................. $   81,641         100.0%
                                                   ==========        ==========








                                     - 5 -
<PAGE>
LENDING ACTIVITIES

Overview

     The primary  source of income  generated by the Bank is interest  earned on
loans held in the Bank's loan portfolio.  The Bank's lending  activities include
commercial,  real estate and consumer  loans.  During 2000, the Bank's net loans
increased $28.5 million.

Commercial Loans

     The Bank offers  commercial  loans for working capital  purposes,  business
expansion,  seasonal needs,  acquisition of equipment, and other business needs.
Collateral  pledged  to secure  these  loans  may  include  equipment,  accounts
receivable,  or other assets.  The Bank often  requires  personal  guarantees of
these loans.

SBA Loans

     The SBA lending  program was  established by Congress in 1953 to assist new
and established  small  businesses in obtaining  necessary  capital.  Under this
program,  the SBA  guarantees  up to 90% of the  principal  balance of the loan,
subject  to a maximum  guarantee  per loan of  $1,000,000,  thereby  removing  a
portion of the credit risk to the lending  financial  institution  and generally
enabling  lenders to offer loans under this program at more attractive  interest
rates for borrowers than other available financing.  The SBA loans originated by
the  Company  typically  have  SBA  guarantees  for 60% to 90% of the  principal
balance of the loan.  The  existence  of a secondary  market for the  guaranteed
portion of the SBA loans provides the Bank an opportunity to sell the guaranteed
portion  of the loans and  obtain  additional  liquidity  and  income.  The Bank
typically  services such loans and receives  servicing fees with respect to such
loans.

     The only loans sold by the Bank during 2000,  1999 and 1998 were SBA loans.
When  the Bank  sells an SBA loan and  retains  the  servicing  of the  loan,  a
servicing  asset is recorded.  The book value of such assets,  which the Company
believes approximates the fair value of such assets, at December 31, 2000, 1999,
1998  was  $392  thousand,  $408  thousand,  and  $141  thousand,  respectively.
Amortization  expense  relating to such  servicing  assets of $43 thousand,  $25
thousand and $13 thousand  was recorded for 2000,  1999 and 1998,  respectively.
The Company periodically  reviews these assets for impairment.  No valuation for
impairment of these assets was deemed necessary for the periods presented.

     At December  31,  1998,  the Bank had $6.6  million of SBA loans,  of which
approximately  22.0%  was  guaranteed  by the SBA.  During  1998,  the Bank sold
guaranteed  portions of its SBA loans  totaling  $2.9  million.  At December 31,
1999, the Bank had $10.6 million of SBA loans, of which  approximately 27.4% was
guaranteed by the SBA. During 1999, the Bank sold guaranteed portions of its SBA
loans totaling $8.1 million.  At December 31, 2000 the Bank had $12.5 million of
SBA loans, of which  approximately 32.7% was guaranteed by the SBA. During 2000,
the Bank sold  guaranteed  portions of its SBA loans totaling $5.1 million.  The
Bank  recognized  gains on the sale of SBA loans during  1998,  1999 and 2000 of
$239  thousand,  $442  thousand and $286  thousand,  respectively,  and had loan
servicing fees on SBA loans during 1998,  1999 and 2000 of $148  thousand,  $166
thousand and $210 thousand, respectively.



                                     - 6 -
<PAGE>
Real Estate Loans

     The Bank offers commercial and, on a limited basis, residential real estate
loans.  Commercial  real estate loans are made for general  corporate  purposes,
construction and expansion of facilities. Residential loans are made in the form
of fixed and variable rate mortgages and home equity loans.

     The following tables set forth  information  concerning the loan portfolio,
based on total  dollars and percent of portfolio,  by collateral  type as of the
dates indicated (dollars in thousands):
                                                  At December 31,
                                            2000          1999          1998
                                       ----------    ----------   -----------
Real estate mortgage loans:
  Commercial real estate...............$   84,556    $   82,622    $   60,693
  One-to-four family residential.......     9,685         7,933         7,075
  Multifamily residential..............    16,185        13,603         6,673
  Construction and land development....     6,382         4,585         3,572
                                       ----------    ----------    ----------
     Total real estate mortgage loans..   116,808       108,743        78,013

Commercial loans.......................    61,970        41,358        34,904
Consumer loans.........................     5,501         5,930         4,438
Other loans............................     1,551           839         1,803
                                       ----------    ----------    ----------
  Gross loans..........................   185,830       156,870       119,158
Allowances for loan losses.............    (2,761)       (2,341)       (1,984)
Unearned fees                              (1,041)       (1,032)         (628)
                                       ----------    ----------    ----------
     Total loans net of allowance
     and unearned fees.................$  182,028    $  153,497    $  116,546
                                       ==========    ==========    ==========

                                                  At December 31,
                                            2000          1999          1998
Real estate mortgage loans:
  Commercial real estate...............     45.6%         52.7%         50.9%
  One-to-four family residential.......      5.2           5.1           5.9
   Multifamily residential.............      8.7           8.7           5.6
  Construction and land development....      3.4           2.9           3.1
                                       ----------    ----------    ----------
     Total real estate mortgage loans..     62.9          69.4          65.5

Commercial loans.......................     33.3          26.4          29.3
Consumer loans.........................      3.0           3.7           3.7
Other Loans............................      0.8           0.5           1.5
                                       ----------    ----------    ----------
  Gross loans..........................    100.0%        100.0%        100.0%
                                       ==========    ==========    ==========









                                     - 7 -
<PAGE>
The following table sets forth the contractual  amortization of real estate
and commercial loans at December 31, 2000 and December 31, 1999. Loans having no
stated  schedule of repayments and no stated maturity are reported as due in one
year or less. The table also sets forth the dollar amount of loans  scheduled to
mature after one year, according to their interest rate characteristics (dollars
in thousands):
                                  December 31, 2000      December 31, 1999
                                  ---------------------  ----------------------
                                  Real                   Real
                                  Estate     Commercial  Estate      Commercial
                                  ---------------------  ----------------------
Amounts due:
  One year or less..............  $  35,389  $  46,451   $  38,999   $  29,181
  After one through five years..     70,706     11,653      54,665       8,578
  More than five years..........     10,713      3,866      15,079       3,599
                                  ---------  ---------   ---------   ---------
      Total.....................  $ 116,808  $  61,970   $ 108,743   $  41,358
                                  =========  =========   =========   =========

Interest rate terms on amounts due after one year:
  Adjustable....................  $  50,930  $   2,502   $  40,533   $     701
  Fixed.........................     30,489     13,017      29,208      11,476
                                  ---------  ---------   ---------   ---------
      Total.....................  $  81,419  $  15,519   $  69,741   $  12,177
                                  =========  =========   =========   =========
INVESTMENT MANAGEMENT SERVICES

     EPW offers investment  management  services to high net worth  individuals,
corporate pension and profit sharing plans,  charitable entities,  and state and
local  government  pension plans.  EPW receives fees for its services which vary
according to the amount of assets in the account under  management.  EPW markets
its services throughout the State of Florida.

TRUST SERVICES

     United Trust offers  wholesale  trust  services that include  on-line trust
account information  processing,  asset custody and investment support services.
These  services  are  offered  to  legal  and  accounting  firms  and  to  other
custodians.  United Trust also offers retail trust services including investment
management,  probate and custodian  services  which are marketed  principally to
customers of the Bank and EPW and clients of local attorneys and accountants.

CREDIT ADMINISTRATION

     The loan  approval  process  consists of a combination  of  individual  and
committee loan authority.  Individual lending authority is based upon experience
and is broken down into  secured and  unsecured  requests.  The  Officers'  Loan
Committee (the "Officers' Loan Committee") is made up of commercial  lenders and
credit  administration  personnel.  The Officers' Loan  Committee  currently has
final  approval on all unsecured  credit for $100,000 to $1,000,000  and secured
credits for $250,000 to  $1,000,000.  The General Loan  Committee  (the "General
Loan Committee") is made up of four non-employee directors, the CEO of the Board
of  Directors of the Company  ("Board of  Directors")  and the  President of the
Bank. The General Loan Committee has final approval authority for all loans over
$1,000,000 to the legal lending  limit of the Bank,  except for loans  involving
directors  of the Company  which must be approved by a vote of the full Board of
Directors of the Bank with the  interested  director not present during the loan
discussion and vote.
                                     - 8 -
<PAGE>
     The Bank has a policies and  procedures  manual that addresses the specific
underwriting  guidelines for specific types of credits. Any deviation from these
guidelines is considered to be a policy  exception that must be outlined  during
the approval process and voted upon by the appropriate  committee or approved by
a loan officer with sufficient  lending  authority.  The guidelines are reviewed
and approved by the Board of Directors of the Bank on an annual basis.

     The  Bank's  lending  philosophy  is to  extend  credit  to  businesses  or
individuals in the Bank's market area who  demonstrate  sufficient  cash flow to
repay the debt and whose track record  indicate they are borrowers with whom the
Bank desires to establish an ongoing lending relationship.

     The loan portfolio is under continued review in order to monitor  potential
credit deterioration.  Loans are graded at their inception by the loan officers.
Credit  administration  reviews  existing credits on an on-going basis. The Bank
also  employs an  independent  third-party  loan  review  company  that  reviews
specific  larger size credits on a quarterly  basis.  This  quarterly  review is
presented to the General Loan Committee for its further review.

ASSET QUALITY

Allowance/Provision for Loan Losses

     The allowance for loan losses represents management's estimate of an amount
adequate to provide for potential losses within the existing loan portfolio. The
allowance  is  based  upon  an  ongoing  quarterly  assessment  of the  probable
estimated losses inherent in the loan portfolio,  and to a lesser extent, unused
commitments to provide financing.

     The  methodologies  for  assessing  the  appropriateness  of the  allowance
consists of several key elements,  which include:  1) the formula allowance;  2)
review of the underlying  collateral on specific  loans;  and 3) historical loan
losses.  The  formula  allowance  is  calculated  by  applying  loss  factors to
outstanding  loans and unused  commitments,  in each case based on the  internal
risk  grade of those  loans.  Changes  in risk  grades  of both  performing  and
non-performing  loans affect the amount of the formula allowance.  On the larger
criticized  or  classified  credits,  a review is  conducted  of the  underlying
collateral  that secures each credit.  A worse case scenario review is conducted
on  those  loans to  calculate  the  amount,  if any,  of  potential  loss.  The
historical  loan loss method is a review of the last six years of actual losses.
The loss percentage is calculated and applied to the current  outstanding  loans
in total.

     Various conditions that would affect the loan portfolio are also evaluated.
General economic and business conditions that affect the portfolio are reviewed,
including:  1)  credit  quality  trends,   including  trends  in  past  due  and
non-performing  loans;  2)  collateral  values in general;  3) loan  volumes and
concentration;   4)  recent  loss  experience  in  particular  segments  of  the
portfolio;  5) duration  and  strength of the current  business  cycle;  6) bank
regulatory  examination  results;  and 7) findings of the  external  loan review
process.  Senior  management  and the Directors'  General Loan Committee  review
these conditions quarterly. If any of these conditions presents a problem to the
loan portfolio, an additional allocation may be recommended.





                                     - 9 -
<PAGE>
     The following table sets forth  information  concerning the activity in the
allowance for loan losses during the periods indicated (dollars in thousands):

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

Allowance at beginning of period...... $    2,341    $    1,984   $     1,647
Charge-offs:
  Real estate loans...................         26           144           195
  Commercial loans....................        250           274           212
  Consumer loans......................         38            42            19
                                       ----------    ----------   -----------
      Total charge-offs...............        314           460           426
Recoveries:
  Real estate loans...................         25             -             -
  Commercial loans....................         54            31             9
  Consumer loans......................          5             1             2
                                       ----------    ----------   -----------
      Total recoveries................         84            32            11
Net charge-offs.......................        230           428           415
Provision for loan losses.............        650           785           752
                                       ----------    ----------   -----------
Allowance at end of period............ $    2,761    $    2,341   $     1,984
                                       ==========    ==========   ===========

     The following  table  presents  information  regarding the Company's  total
allowance  for loan losses as well as its general  allocation  of such amount to
the  various  loan  categories  based upon  management's  estimates  (dollars in
thousands):
                                        At December 31,
                             2000                1999                1998
                      ------------------  ------------------  ------------------
Allowance Allocation          Percentage          Percentage          Percentage
                               of Loan             of Loan             of Loan
                      Amount  Portfolio   Amount  Portfolio   Amount  Portfolio
                      ------------------  ------------------  ------------------
Performing/not classified:
Commercial Loans....  $   570       30%   $   448       24%   $   485        27%
Real Estate Loans...    1,116       59      1,063       64        607        59
Consumer Loans......      105        5         78        7        121         7
                      -------    ------   -------    ------   -------    -------
    Subtotal            1,791       94      1,589       95      1,213        93

Non-performing/ classified:
Marginal............      127        3        112        3         29         3
Substandard.........      836        3        362        2        677         4
Doubtful............        -        -          -        -         51         -
Loss................        -        -          -        -          -         -
                      -------    ------   -------    ------   -------    -------
Subtotal............      963        6        474        5        757         8
Unallocated.........        7        -        278        -         14         -
                      -------    ------   -------    ------   -------    -------
    Total             $ 2,761      100%   $ 2,341      100%   $ 1,984       100%
                      =======    ======   =======    ======   =======    =======



                                     - 10 -
<PAGE>
Nonperforming Assets
     Nonperforming  assets  include (i) loans which are 90 days or more past due
and have been placed into  non-accrual  status,  (ii) accruing loans that are 90
days or more delinquent  that are deemed by management to be adequately  secured
and in the process of  collection,  and (iii) ORE (i.e.,  real  estate  acquired
through  foreclosure or deed in lieu of  foreclosure).  All delinquent loans are
reviewed on a regular  basis and are placed on  non-accrual  status when, in the
opinion of  management,  the  possibility of collecting  additional  interest is
deemed insufficient to warrant further accrual. As a matter of policy,  interest
is not  accrued on loans  past due 90 days or more  unless the loan is both well
secured  and in  process  of  collection.  When a loan is placed in  non-accrual
status, interest accruals cease and uncollected accrued interest is reversed and
charged  against  current  income.  Additional  interest income on such loans is
recognized only when received.

     The following  table sets forth  information  regarding  the  components of
nonperforming assets at the dates indicated (dollars in thousands):
                                                  At December 31,
                                            2000          1999          1998
                                       ----------    ----------   ----------
Real estate loans................      $      309    $    1,462   $    2,820
Commercial loans.................             277           453        1,181
Consumer loans...................               -             -            -
                                       ----------    ----------   ----------
   Total non-accrual loans.......             586         1,915        4,001
Other Real Estate................             175         1,528        1,015
Accruing Loans 90 days past due..             107           441          449
                                       ----------    ----------   ----------
   Total nonperforming assets....      $      868    $    3,884   $    5,465
                                       ==========    ==========   ==========
     The  amount  of gross  interest  income  that  would  have  been  earned on
nonperforming loans was $48 thousand at December 31, 2000.

COMPETITION
     The banking industry in general,  and the Bank's market area in particular,
are  characterized  by  significant  competition  for both  deposits and lending
opportunities.  In its market  area,  the Bank  competes  with other  commercial
banks,  thrift  institutions,  credit unions,  finance companies,  mutual funds,
insurance  companies,  brokerage and investment banking firms, and various other
non-bank providers of financial services.  Competition for deposits may have the
effect of increasing the rates of interest the Bank will pay on deposits,  which
would  increase the Bank's cost of funds and possibly  reduce its net  earnings.
Competition  for loans may have the effect of lowering  the rate of interest the
Bank will receive on its loans,  which would lower the Bank's return on invested
assets and possibly reduce its net earnings. Many of the Bank's competitors have
been in existence for a  significantly  longer period of time than the Bank, are
larger and have greater  financial and other  resources and lending  limits than
the Bank, and may offer certain services that the Bank does not provide.

 There are  approximately  293 branch offices of commercial banks and thrift
institutions operating in Pinellas County. In order to compete effectively,  the
Bank  seeks  to  differentiate   its  services  from  those  offered  by  larger
institutions,  including the branch  offices of large regional and national bank
holding companies.  The Bank seeks to provide banking products and services that
are customized to its market area and target customers on a personalized  basis,
which management  believes cannot be matched by many of the larger  institutions
that tend to offer many banking  products and services on an  impersonal  basis.

                                     - 11 -
<PAGE>
Management  believes  that,  as  the  banking  industry  has  undergone  further
consolidation, the opportunity to attract customers seeking personalized service
has been  enhanced.  The Bank seeks to tailor its  products  and services to its
specific  geographic market and targeted  customers,  and to thereby attract the
business of professionals,  entrepreneurs,  and small to medium sized commercial
businesses  while continuing to provide  exceptional  banking services to all of
its customers. The profitability of the Bank depends upon its ability to compete
effectively in its market area. While management  believes that the Bank's local
ownership,  community  oriented  operating  philosophy and personalized  service
enhances  the Bank's  ability to  compete  in its market  area,  there can be no
assurance that the Bank will be able to continue to compete  effectively or that
competitive  factors  will not have an adverse  effect on the  Bank's  operating
results or financial condition.

EMPLOYEES
     At  December  31,  2000,  the  Company  had 96  full-time  and 8  part-time
employees,  none of whom were  represented by a union or subject to a collective
bargaining  agreement.  The Company believes its relations with its employees to
be good.

SUPERVISION AND REGULATION
Overview

     The Company and the Bank are  extensively  regulated under both federal and
state law.  The  following  is a brief  summary of certain  statutes,  rules and
regulations affecting the Company and the Bank. This summary is qualified in its
entirety by reference to the  particular  statutory  and  regulatory  provisions
referenced  below and is not  intended to be an  exhaustive  description  of the
statutes or  regulations  applicable  to the  Company's  business.  Supervision,
regulation and  examination  of the Company and the Bank by the bank  regulatory
agencies are intended  primarily  for the  protection  of  depositors  and other
customers rather than shareholders.

Regulation of the Company
     The Company is a bank holding  company  registered with the Federal Reserve
under the Bank Holding Company Act of 1956, as amended ("BHC Act"). As such, the
Company is subject to the supervision, examination and reporting requirements of
the BHC Act and the regulations of the Federal Reserve.

     The BHC Act  requires  every  bank  holding  company  to  obtain  the prior
approval of the Federal  Reserve  before:  (i) it may acquire direct or indirect
ownership  or  control  of  any  voting  shares  of  any  bank  if,  after  such
acquisition, the bank holding company will directly or indirectly own or control
more  than  5% of  the  voting  shares  of  the  bank;  (ii)  it or  any  of its
subsidiaries,  other than a bank,  may acquire all or  substantially  all of the
assets of the bank;  or (iii) it may merge or  consolidate  with any other  bank
holding company.  Similar federal  statutes  require bank holding  companies and
other companies to obtain the prior approval of the Office of Thrift Supervision
("OTS") before acquiring ownership or control of a federal savings association.

     The BHC Act further  provides that the Federal  Reserve may not approve any
transaction  that would result in a monopoly or would be in  furtherance  of any
combination or conspiracy to monopolize or attempt to monopolize the business of
banking  in any  section  of the  United  States,  or the effect of which may be
substantially  to  lessen  competition  or to tend to create a  monopoly  in any
section of the  country,  or that in any other  manner  would be in restraint of
trade, unless the  anti-competitive  effects of the  proposed  transaction  are
clearly  outweighed by the public  interest in meeting the convenience and needs
                                     - 12 -
<PAGE>
of the community  served.  The Federal  Reserve is also required to consider the
financial  and  managerial  resources  and future  prospects of the bank holding
companies and banks  concerned and the  convenience and needs of the communities
to be served.  Consideration of financial resources generally focuses on capital
adequacy,  and  consideration  of  convenience  and needs  issues  includes  the
parties'  performance  under the Community  Reinvestment Act of 1977, as amended
(the "CRA").

     The BHC  Act,  as  amended  by the  interstate  banking  provisions  of the
Riegle-Neal  Interstate  Banking  and  Branching  Efficiency  Act of  1994  (the
"Interstate  Banking  Act"),  authorizes  (i) the  Company,  and any other  bank
holding company located in Florida to acquire a bank located in any other state,
and (ii) any bank  holding  company  located  outside  Florida  to  acquire  any
Florida-based  bank,  regardless  of state law to the  contrary,  in either case
subject   to  certain   deposit-percentage,   aging   requirements,   and  other
restrictions.  The Interstate  Banking Act also generally provides that national
and state-chartered banks may branch interstate through acquisitions of banks in
other  states,  unless  a state  has  "opted  out" of the  interstate  branching
provisions of the Interstate  Banking Act prior to June 1, 1997. Neither Florida
nor  any  other  state  in the  southeastern  United  States  has  "opted  out".
Accordingly,  the Company would have the ability to acquire a bank in a state in
the Southeast and thereafter  consolidate  all of its bank  subsidiaries  into a
single bank with interstate branches.

     The BHC Act  generally  prohibits  the Company from  engaging in activities
other  than  banking  or  managing  or  controlling  banks or other  permissible
subsidiaries  and from acquiring or retaining  direct or indirect control of any
company engaged in any activities other than those activities  determined by the
Federal  Reserve to be so closely  related to banking or managing or controlling
banks as to be a proper incident thereto.

     In determining  whether a particular  activity is permissible,  the Federal
Reserve must consider whether the performance of such an activity reasonably can
be expected to produce  benefits  to the  public,  such as greater  convenience,
increased  competition,  or gains in efficiency,  that outweigh possible adverse
effects,  such  as  undue  concentration  of  resources,   decreased  or  unfair
competition, conflicts of interest, or unsound banking practices. The investment
management,  data processing,  administrative  and accounting  support and asset
custody  services  offered by EPW and United Trust have been  determined  by the
Federal Reserve to be permissible activities of bank holding companies.  The BHC
Act does not place territorial  limitations on permissible nonbanking activities
of bank holding companies.  Despite prior approval,  the Federal Reserve has the
power to order a bank holding company or its non-bank  subsidiaries to terminate
any activity or to terminate its ownership or control of any subsidiary  when it
has  reasonable  cause to believe  that  continuation  of such  activity or such
ownership  or  control  constitutes  a  serious  risk to the  financial  safety,
soundness, or stability of any bank subsidiary of the holding company.

Under Federal Reserve policy, bank holding companies are expected to act as
a source of  financial  strength  and support to their  subsidiary  banks.  This
support may be required at times when,  absent such Federal Reserve policy,  the
holding  company may not be inclined  to provide  it. In  addition,  any capital
loans by a bank holding  company to any bank subsidiary are subordinate in right
of payment to deposits  and to certain  other  indebtedness  of such  subsidiary
bank. In the event of a bank holding company's bankruptcy, any commitment by the
bank holding company to a federal bank regulatory agency to maintain the capital
of a subsidiary bank will be assumed by the bankruptcy trustee and entitled to a
priority payment.
                                     - 13 -
<PAGE>
Financial Services Modernization Legislation
     On November 12, 1999 the President  signed into law the  Gramm-Leach-Bliley
Act ("Act"),  a sweeping piece of financial services reform legislation that for
the first time will permit  commercial  banks to affiliate with investment banks
and insurance  companies  through a holding  company  structure and will greatly
expand the range of activities in which bank  affiliates  and  subsidiaries  may
engage.  The Act repeals key provisions of the  Glass-Steagall  Act of 1933 that
have  heretofore   prohibited  banks  from  affiliating  with  entities  engaged
principally in securities underwriting activities and overrides those state laws
that  prohibit   affiliations  of  banks  and  insurance   companies  or  either
discriminate  against or have a  substantially  adverse  effect on banks selling
insurance.

     The Act amends the BHC Act to authorize new "financial  holding  companies"
("FHCs").  Under the FHC  provisions  of the Act, a BHC can qualify to become an
FHC if all of its bank and thrift  subsidiaries  are well  capitalized  and well
managed and have a CRA rating of "satisfactory" or better. Once a BHC becomes an
FHC, it is permitted to conduct any securities,  insurance and merchant  banking
activities,  as well as any other  activities  that are "financial in nature" or
incidental  or  complementary  to  a  financial  activity,  such  as  developing
financial software, hosting internet web sites relating to financial matters and
operating a travel agency. Under the regulatory structure prescribed by the Act,
the Federal Reserve will act as the "umbrella  regulator" for the FHC, with each
FHC  subsidiary  subject to  supervision  and  regulation by its own  functional
regulator or agency.

     The Act also gives banks the option of conducting  certain  newly-permitted
financial  activities  in a  subsidiary  rather  than  using an FHC.  Banks that
satisfy the well  capitalized  well managed and CRA  requirements  applicable to
FHCs will be able to establish  "financial  subsidiaries"  that are permitted to
conduct all  financial  activities  as agency and some  financial  activities as
principal  such  as  securities  underwriting.  The  main  activities  in  which
financial subsidiaries are prohibited from engaging are insurance  underwriting,
real estate development and, at least for the next five years, merchant banking.

     In addition to enabling banks and their holding companies to conduct a wide
range of  financial  activities,  the Act also  contains  a  number  of  privacy
requirements  with which banks and other  financial  institutions  must  comply.
Under the Act, all financial  institutions  must adopt a privacy policy and make
its policy known to those who become new customers and provide annual disclosure
of its policy to all of its customers.  They must also give their  customers the
right to "opt out" whenever they want to disclose nonpublic customer information
to  non-affiliates.  An exception to this opt out  requirement is made where the
third party is  performing  services on behalf of the financial  institution  or
pursuant to a joint agreement.  Financial institutions are also required to take
such  steps as are  necessary  to insure the  security  and  confidentiality  of
customer records and information and to protect against  unauthorized  access to
or use of such records or information.

Regulation of the Bank
     The  Bank  is  organized  as a  Florida-chartered  commercial  bank  and is
regulated and  supervised by the Florida  Department of Banking and Finance (the
"Department").  In addition, the Bank is regulated and supervised by the Federal
Reserve,  which serves as its primary federal regulator and, to a lesser extent,
by the Federal Deposit  Insurance  Corporation  ("FDIC") as the administrator of
the fund that insures the Bank's deposits.  Accordingly,  the Department and the
Federal Reserve conduct regular examinations of the Bank, reviewing the adequacy

                               - 14 -
<PAGE>
of the loan loss  reserves,  quality  of loans  and  investments,  propriety  of
management practices, compliance with laws and regulations, and other aspects of
the Bank's operations. In addition to these regular examinations,  the Bank must
furnish to the Federal Reserve quarterly reports  containing  detailed financial
statements  and  schedules.  The capital ratios of the Bank at December 31, 2000
all exceed the current  regulatory  minimum  guidelines for a "well capitalized"
bank.

     Federal and Florida  banking laws and  regulations  govern all areas of the
operations of the Bank, including reserves, loans, mortgages, capital, issuances
of  securities,  payment of dividends,  and  establishment  of branches.  As its
primary  federal  regulator,   the  Federal  Reserve  has  authority  to  impose
penalties,  initiate  civil and  administrative  actions  and take  other  steps
intended to prevent the Bank from engaging in unsafe or unsound  practices.  The
Bank is a member of the Bank  Insurance  Fund ("BIF") and, as such,  deposits in
the Bank are insured by the FDIC to the maximum extent permissible by law.

     The Bank is subject to the  provisions of the CRA.  Under the CRA, the Bank
has a continuing and affirmative  obligation  consistent with its safe and sound
operation  to help meet the credit  needs of its entire  communities,  including
low- and  moderate-income  neighborhoods.  The CRA does not  establish  specific
lending  requirements or programs for financial  institutions  nor does it limit
the Bank's  discretion  to develop the types of products  and  services  that it
believes are best suited to their  particular  communities,  consistent with the
CRA. The CRA requires the  appropriate  federal bank  regulatory  agency (in the
case of the Bank,  the  Federal  Reserve),  in  connection  with  their  regular
examinations,  to assess a financial  institution's record in meeting the credit
needs of the  community  serviced  by it,  including  low-  and  moderate-income
neighborhoods.   A  federal   banking   agency's   assessment   of  a  financial
institution's  CRA  record  is  made  available  to the  public.  Further,  such
assessment is required whenever the institution  applies to, among other things,
establish a new branch that will accept deposits, relocate an existing office or
merge or  consolidate  with, or acquire the assets of or assume the  liabilities
of, a federally-regulated  financial institution.  In the case where the Company
applies  for  approval  to acquire a bank or other  bank  holding  company,  the
federal regulator  approving the transaction will also assess the CRA records of
the Bank.  The Bank  received a  "Satisfactory"  CRA  rating in its most  recent
examination.

     In April 1995, the federal banking  agencies  adopted  amendments  revising
their  CRA  regulations,   with  a  phase-in  schedule   applicable  to  various
provisions. Among other things, the amended CRA regulations,  which became fully
effective on July 1, 1997,  substitute  for the prior  process-based  assessment
factors a new  evaluation  system  that will  rate an  institution  based on its
actual  performance in meeting  community  needs. In particular,  the system now
focuses on three tests: (i) a lending test, to evaluate the institution's record
of making loans in its service areas;  (ii) an investment  test, to evaluate the
institution's record of investing in community development projects; and (iii) a
service test,  to evaluate the  institution's  delivery of services  through its
branches  and other  offices.  The amended CRA  regulations  also clarify how an
institution's CRA performance will be considered in the application process. The
Company  does not  anticipate  that the  revised CRA  regulations  will have any
material impact on the Bank's operations or its CRA rating.





                                     - 15 -
<PAGE>
Deposit Insurance

     The Bank is subject to FDIC deposit insurance assessments. The Bank is also
subject to a risk-based  assessment system for insured  depository  institutions
that takes into  account the risks  attributable  to  different  categories  and
concentrations  of assets and liabilities.  The system assigns an institution to
one  of  three  capital  categories:  (i)  well  capitalized,   (ii)  adequately
capitalized, and (iii) undercapitalized. An institution is also assigned, by the
FDIC,  to one of three  supervisory  subgroups  within each capital  group.  The
supervisory  subgroup  to  which  an  institution  is  assigned  is  based  on a
supervisory evaluation provided to the FDIC by the institution's primary federal
regulator  and   information   the  FDIC   determines  to  be  relevant  to  the
institution's  financial  condition and the risk posed to the deposit  insurance
funds  (which  may  include,   if  applicable,   information   provided  by  the
institution's state supervisor).  An institution's  insurance assessment rate is
then determined based on the capital category and supervisory  category to which
it  is  assigned.  Under  the  risk-based  assessment  system,  there  are  nine
assessment  risk  classifications  (i.e.,  combinations  of  capital  groups and
supervisory   subgroups)  to  which  different  assessment  rates  are  applied.
Assessment  rates on deposits for an institution in the highest  category (i.e.,
"well capitalized" and "healthy") are less than assessment rates on deposits for
an institution in the lowest category (i.e., "undercapitalized" and "substantial
supervisory  concern").  The Bank is  categorized  as "well  capitalized"  as of
December 31, 2000.

     In  addition to FDIC  insurance  assessments,  the Bank is also  subject to
assessments  used to pay interest on bonds issued by the  Financing  Corporation
(the "FICO") under the Deposit  Insurance Funds Act (the "Funds Act").  Prior to
enactment of the Funds Act, only insurance payments by SAIF-member  institutions
were available to satisfy FICO's interest payment  obligations.  Through the end
of 2000, the FICO assessment rate on BIF-assessable  deposits is required by the
statute to be one-fifth of the SAIF rate. Thereafter,  FICO assessment rates for
members of both insurance funds will presumably be equalized.

     Currently,  the FICO assessment rate for BIF-assessable  deposits is 0.0021
percent (or 2.1 basis points) and the FICO  assessment  rate for SAIF assessable
deposits is 0.0021 percent (or 2.1 basis points). In 2000, the Bank's total FICO
payment   obligation  was  $36,286,   all  of  which  was  attributable  to  the
BIF-assessable deposits.

The Bank has no SAIF assessable deposits.

Capital Requirements

     The Company and the Bank are  required to comply with the capital  adequacy
standards established by the Federal Reserve.  There are three basic measures of
capital  adequacy for banks that have been  promulgated by the Federal  Reserve;
two risk-based measures and a leverage measure. All applicable capital standards
must be satisfied  for a bank  holding  company and a bank to be  considered  in
compliance.

     The risk-based  capital  standards are designed to make regulatory  capital
requirements  more sensitive to differences in risk profile among banks and bank
holding companies,  to account for off-balance-sheet  exposure,  and to minimize
disincentives for holding liquid assets. Assets and off-balance-sheet  items are
assigned to broad risk categories,  each with appropriate weights. The resulting
capital ratios represent capital as a percentage of total  risk-weighted  assets
and off-balance-sheet items.
                                     - 16 -
<PAGE>
     The minimum  guidelines for the ratio of total capital ("Total Capital") to
risk-weighted assets (including certain off-balance-sheet items, such as standby
letters  of  credit)  is 8%.  At  least  half  of  Total  Capital  (i.e.,  4% of
risk-weighted  assets) must  comprise  common stock,  minority  interests in the
equity accounts of consolidated subsidiaries,  noncumulative perpetual preferred
stock,  and a limited  amount of  cumulative  perpetual  preferred  stock,  less
goodwill and certain other intangible  assets ("Tier 1 Capital").  The remainder
may consist of subordinated debt, other preferred stock, and a limited amount of
loan loss  reserves  ("Tier 2 Capital").  In addition,  the Federal  Reserve has
established minimum leverage ratio guidelines for bank holding companies.  These
guidelines provide for a minimum ratio of Tier 1 Capital to average assets, less
goodwill and certain other intangible  assets, of 3% for banks that meet certain
specified  criteria,  including having the highest  regulatory rating. All other
bank holding companies generally are required to maintain a leverage ratio of at
least 3%, plus an additional  cushion of 100 to 200 basis points. The guidelines
also provide that bank holding companies  experiencing internal growth or making
acquisitions will be expected to maintain strong capital positions substantially
above the minimum supervisory levels, without significant reliance on intangible
assets.  Furthermore,  the Federal Reserve has indicated that it will consider a
"tangible Tier 1 Capital  leverage ratio"  (deducting all intangibles) and other
indicators  of capital  strength in  evaluating  proposals  for expansion or new
activities. As of December 31, 2000 the Company's leverage ratio was 10.26%.

     The FDIC  Improvement Act of 1991 ("FDICIA")  contains  "prompt  corrective
action" provisions  pursuant to which banks are to be classified into one of the
five categories based upon capital adequacy,  ranging from "well capitalized" to
"critically undercapitalized", and which require (subject to certain exceptions)
the  appropriate  federal banking agency to take prompt  corrective  action with
respect to an  institution  that  becomes  "significantly  undercapitalized"  or
"critically undercapitalized".

     The Federal  Reserve has issued final  regulations to implement the "prompt
corrective action" provisions of the FDICIA. In general,  the regulations define
the five capital categories as follows: (i) an institution is "well capitalized"
if it has a total  risk-based  capital  ratio  of 10% or  greater,  has a Tier 1
risk-based capital ratio of 6% or greater, has a leverage ratio of 5% or greater
and is not  subject  to any  written  capital  order  or  directive  to meet and
maintain a specific capital level for any capital measures;  (ii) an institution
is "adequately  capitalized" if it has a total risk-based capital ratio of 8% or
greater,  has a Tier 1  risk-based  capital  ratio of 4% or  greater,  and has a
leverage ratio of 4% or greater;  (iii) an institution is  "undercapitalized" if
it has a total risk-based capital ratio of less than 8%, has a Tier 1 risk-based
capital ratio that is less than 4% or has a leverage ratio that is less than 4%;
(iv)  an  institution  is  "significantly  undercapitalized"  if it has a  total
risk-based capital ratio that is less than 6%, a Tier 1 risk-based capital ratio
that is less  than 3% or a  leverage  ratio  that is less  than  3%;  and (v) an
institution is "critically  undercapitalized"  if its "tangible equity" is equal
to or less than 2% of its total  assets.  The  Federal  Reserve  also,  after an
opportunity for a hearing,  has authority to downgrade an institution from "well
capitalized"   to  "adequately   capitalized"   or  to  subject  an  "adequately
capitalized"  or  "undercapitalized"  institution  to  the  supervisory  actions
applicable to the next lower category,  for supervisory concerns.  The degree of
regulatory  scrutiny  of  a  financial   institution  will  increase,   and  the
permissible  activities of the institution  will decrease,  as it moves downward
through the  capital  categories.  Institutions  that fall into one of the three
undercapitalized  categories may be required to (i) submit a capital restoration


                                     - 17 -
<PAGE>
plan;  (ii) raise  additional  capital;  (iii)  restrict  their growth,  deposit
interest  rates,  and other  activities;  (iv) improve  their  management;  (iv)
eliminate  management  fees;  or (vi) divest  themselves of all or part of their
operations.  Bank holding companies  controlling  financial  institutions can be
called upon to boost the  institutions'  capital and to partially  guarantee the
institutions'  performance under their capital restoration plans. As of December
31, 2000, the Company met the criteria to be considered well  capitalized,  with
Tier 1 and total  capital  equal to 11.90%  and 13.28% of its  respective  total
risk-weighted  assets. While the Company's capital levels have been in excess of
those required to be maintained by a "well capitalized"  financial  institution,
rapid growth, poor loan portfolio performance,  or poor earnings performance, or
a combination of these factors, could change the Company's capital position in a
relative short period of time, making an additional capital infusion necessary.

Dividends

     As a Florida-chartered  commercial bank, the Bank is subject to the laws of
Florida as to the payment of dividends. Under the Florida Financial Institutions
Code, the prior approval of the Department is required if the dividend  declared
by a bank in any quarter or  semiannual  or annual period will exceed the sum of
the bank's net  profits  for that  period and its  retained  net profits for the
preceding two years.

     Under Federal law, if, in the opinion of the federal banking  regulator,  a
bank or thrift under its  jurisdiction is engaged in or is about to engage in an
unsafe or unsound practice (which,  depending on the financial  condition of the
depository institution,  could include the payment of dividends), such regulator
may require,  after notice and hearing,  that such institution  cease and desist
from such  practice.  The federal  banking  agencies have  indicated that paying
dividends that deplete a depository  institution's capital base to an inadequate
level  would be an unsafe  and  unsound  banking  practice.  Under the  FDICIA's
"prompt corrective action"  regulations adopted by the federal banking agencies,
a  depository  institution  may not pay any  dividend to its holding  company if
payment  would  cause  it  to  become  undercapitalized  or  if  it  already  is
undercapitalized.

Federal Reserve System

     The   Federal    Reserve    regulations    require    banks   to   maintain
non-interest-earning  reserves against their transaction accounts (primarily NOW
and regular  checking  accounts).  The Federal  Reserve  regulations,  effective
November  28,  2000,  generally  require  that  reserves be  maintained  against
aggregate  transaction  accounts as follows:  (i) for accounts aggregating $42.8
million or less the reserve  requirement  is 3%; and (ii) for  accounts  greater
than $42.8 million, the reserve requirement is $1.284 million plus 10.0% against
that portion of total transaction accounts in excess of $42.8 million. The first
$5.5 million of  otherwise  reservable  balances  are exempted  from the reserve
requirements.  As of December  31,  2000,  the Bank was in  compliance  with the
foregoing requirements. The balances maintained to meet the reserve requirements
imposed by the  Federal  Reserve may be used to satisfy  liquidity  requirements
imposed by the  Department.  These  reserve  requirements  are subject to annual
adjustments  by the  Federal  Reserve  and higher  reserve  requirements  may be
imposed in the future.  Because required reserves must be maintained in the form
of either vault cash, a noninterest-bearing account at a Federal Reserve Bank or
a  pass-through  account as defined by the Federal  Reserve,  the effect of this
reserve requirement is to reduce the Bank's interest-earning assets.


                                     - 18 -
<PAGE>
Liquidity

     Under Florida banking regulations, the Bank is required to maintain a daily
liquidity  position equal to at least 15% of its total transaction  accounts and
8% of its total nontransaction accounts, less those deposits of public funds for
which  security  has been  pledged as provided by law.  The Bank may satisfy its
liquidity  requirements  with cash on hand  (including  cash items in process of
collection),  deposits held with the Federal  Reserve,  demand deposits due from
correspondent banks, Federal funds sold,  interest-bearing  deposits maturing in
31  days  or  less  and  the  market  value  of  certain  unencumbered,   rated,
investment-grade  securities  and  securities  issued by Florida or any  county,
municipality  or other  political  subdivision  within  the State.  The  Federal
Reserve also reviews the Bank's  liquidity  position as part of its  examination
and imposes similar requirements on the Bank. Any  Florida-chartered  commercial
bank that fails to comply  with its  liquidity  requirements  generally  may not
further  diminish  liquidity  either by  making  any new  loans  (other  than by
discounting  or  purchasing  bills of  exchange  payable  at sight) or by paying
dividends.  At December  31,  2000,  the Bank's net liquid  assets  exceeded the
minimum amount required under the applicable Florida regulations.

Monetary Policy and Economic Controls

     The banking business is affected not only by general  economic  conditions,
but  also by the  monetary  policies  of the  Federal  Reserve.  Changes  in the
discount  rate on  member  bank  borrowing,  availability  of  borrowing  at the
"discount window", open market operations,  the imposition of changes in reserve
requirements  against bank deposits and the imposition of and changes in reserve
requirements  against certain  borrowings by banks and their affiliates are some
of the  instruments of monetary  policy  available to the Federal  Reserve.  The
monetary  policies  have had a significant  effect on the  operating  results of
commercial  banks and are  expected  to  continue  to do so in the  future.  The
monetary  policies of the Federal  Reserve are  influenced  by various  factors,
including  inflation,  unemployment  and  short-  and  long-term  changes in the
international  trade  balance and in the fiscal  policies  of the United  States
Government.  Future  monetary  policies  and the effect of such  policies on the
future business and earnings of the Bank cannot be predicted.

Future Legislation

     Various  legislation  is from time to time  introduced  in  Congress.  Such
legislation  may change  banking  statutes and the operating  environment of the
Company and its bank and non-bank  subsidiaries in substantial and unpredictable
ways.  There is no  assurance  that any  legislation  will be  enacted  and,  if
enacted, the ultimate effect that any such potential legislation or implementing
regulations would have upon the financial  condition or results of operations of
the Company.

CHANGES IN ACCOUNTING STANDARDS

     The FASB has issued SFAS No. 125, Accounting for Transfers and Servicing of
Financial Assets and Extinguishments of Liabilities, which was effective for the
Company's fiscal year beginning January 1, 1997. SFAS No. 125 provides standards
for  distinguishing  transfers of financial assets that are sales from transfers
that are  secured  borrowings.  A  transfer  of  financial  assets  in which the
transferor  surrenders  control over those assets is accounted  for as a sale to
the extent that consideration other than beneficial interests in the transferred


                                     - 19 -
<PAGE>
assets is received in exchange.  After a transfer of financial assets, an entity
recognizes the financial and servicing assets it controls and the liabilities it
has incurred,  de-recognizes financial assets when control has been surrendered,
and de-recognizes liabilities when extinguished.

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

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

ITEM 2.       DESCRIPTION OF PROPERTY

     The principal  executive offices of the Company,  the Bank and United Trust
are located in an office  building at 333 Third Avenue  North,  St.  Petersburg,
Florida 33701.  This facility was renovated in 1997, is owned by the Company and
has a total of five floors and approximately 47,400 square feet of usable space.
The Company and its subsidiaries  occupy a total of approximately  25,000 square
feet on the first two floors and a portion of the third  floor of the  building.
As of December  31,  2000,  the balance of the  building  was leased to tenants.
Adequate  parking,  lobby,  safe deposit boxes,  and  drive-thru  facilities are
provided to customers of the Bank at this location.

     The Bank has additional  branch  locations at 5801 49th Street North (North
Office),  5601 Park Street North (Five Towns  Office),  6500 Gulf Boulevard (St.
Pete  Beach  Office),  7490 Bryan  Dairy  Road  (Bryan  Dairy  Office)  and 3029
Enterprise Road (Enterprise Office), all in Pinellas County Florida.  Except for
the Five  Towns  and  Enterprise  offices,  these  facilities  are  owned by the
Company.  All offices offer both lobby and drive-thru  banking facilities except
for Five Towns which offers only lobby facilities to the Bank's  customers.  The
Five Towns  Office is leased for a term  expiring  October 31,  2001,  with four
renewal options. The Enterprise offices is leased for a term expiring on October
21, 2013, with 15 renewal options of 5 years each.

                                     - 20 -
<PAGE>
     EPW's main  office is located in an office  building  in Tampa,  Florida in
which EPW leases  approximately  3,190 square feet of space  pursuant to a lease
expiring February 28, 2003, with no renewal option. EPW's Jacksonville,  Florida
office operates out of a private home owned by an officer of EPW.

ITEM 3.       LEGAL PROCEEDINGS

     The Company is a party to various legal  proceedings in the ordinary course
of its business.  Based on information presently available,  management does not
believe that the ultimate outcome of such proceedings,  in the aggregate,  would
have a material adverse effect on the Company's financial  position,  results of
operations or liquidity.

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

     There were no matters submitted to a vote of the Company's security-holders
during the fourth quarter of its fiscal year ended December 31, 2000.

                                     PART II

ITEM 5.       MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     Shares of the Company's Common Stock, par value $.01 per share (the "Common
Stock"),  are quoted on the Nasdaq SmallCap Market under the symbol UFHI. At the
close of business on February 21, 2001, there were outstanding  4,448,323 shares
of Common  Stock  which were held by  approximately  375  record and  beneficial
shareholders.

     The  following  table sets forth the high and low closing  sales prices for
the Common Stock as quoted by Nasdaq for the period indicated:

                                                            High         Low
                                                          --------     -------
                  YEAR ENDED DECEMBER 31, 1998:
                  Fourth Quarter (from December 11, 1998)  $7.63        $7.25

                  YEAR ENDED DECEMBER 31, 1999:
                  First Quarter                            $7.75        $6.50
                  Second Quarter                           $7.50        $6.38
                  Third Quarter                            $7.25        $6.63
                  Fourth Quarter                           $7.19        $6.69

                  YEAR ENDED DECEMBER 31, 2000:
                  First Quarter                            $7.00        $6.50
                  Second Quarter                           $7.38        $6.63
                  Third Quarter                            $7.82        $7.25
                  Fourth Quarter                           $7.63        $7.00

     Since 1995,  the Company has declared and paid  quarterly cash dividends on
the Common Stock to record holders of the Common Stock at each calendar  quarter
end,  payable  on the last day of the  following  month.  Starting  in the first
quarter of 1997,  such  dividends  were paid at the rate of $0.0333 per share of
Common Stock until the third quarter of 1998, when a dividend of $0.04 per share
was  declared.  The dividend  rate was increased to $0.05 per share in the third
quarter of 2000. Regular quarterly cash dividends were declared throughout 2000.
The  Company  currently  has no plans to  modify  the  amount  or timing of such
dividends.

                                     - 21 -
<PAGE>
     The  Company is  primarily  a holding  company  with no  material  business
operations,  sources of income or assets of its own other than the shares of its
subsidiaries.   Because  substantially  all  of  the  Company's  operations  are
conducted through subsidiaries,  the Company's cash flow and, consequently,  its
ability to pay dividends or make other  distributions  is dependent  upon either
third-party  borrowings made by the Company or the cash flow of its subsidiaries
and the  payment  of funds by those  subsidiaries,  including  the Bank,  to the
Company  in the form of  loans,  dividends,  fees or  otherwise.  The  Company's
subsidiaries  are  separate  and  distinct  legal  entities  and  will  have  no
obligation, contingent or otherwise, to make any funds available, whether in the
form of  loans,  dividends  or  otherwise.  Regulatory  limitations  on the Bank
restrict its ability to make loans or distributions to the Company.

USE OF PROCEEDS

     On December  10,  1998,  UFH Capital  Trust I ("UFH  Capital"),  a Delaware
statutory  business trust, all of the common equity interests of which are owned
by the Company,  and the  Company's  joint  Registration  Statement on Form SB-2
(Nos.   333-60431  and  333-60431-01)  (the  "Registration   Statement")  became
effective,  registering  the initial  public  offering by the Company of 450,000
shares of the  Company's  common  stock,  par value  $.01 per  share,  and up to
1,200,000  shares  of  9.4%  Cumulative   Trust  Preferred   Securities  with  a
liquidation  amount of $5 per share (the "Preferred  Securities"),  representing
preferred  undivided   beneficial  interests  in  the  assets  of  UFH  Capital.
Furthermore,  pursuant to such Registration Statement, the Company registered up
to an additional 67,500 shares of its common stock and UFH Capital registered up
to an additional  180,000  shares of Preferred  Securities in the event that the
managing   underwriter   for  the   offering,   William  R.  Hough  &  Co.  (the
"Underwriter"),   exercised   its  option  to  purchase  such  shares  to  cover
over-allotments.

     All of the gross proceeds  received by UFH Capital from the offering of the
Preferred  Securities and certain other funds of UFH Capital were invested in an
equivalent  amount of the Company's  9.4% Junior  Subordinated  Debentures  (the
"Junior Subordinated Debentures") totaling $6,959,200,  which were issued by the
Company  to  UFH  Capital.  All  of  the  Junior  Subordinated  Debentures  were
registered as part of the Registration  Statement.  In addition,  a guarantee of
the Company relating to the Preferred  Securities was also registered as part of
the  Registration  Statement.  The Company's and UFH  Capital's  initial  public
offerings  terminated on January 8, 1999, upon the exercise of the Underwriter's
over-allotment  option  with  respect  to the  Common  Stock  and the  Preferred
Securities.

     From  December 10, 1998,  through  December  31, 1998,  approximately  $2.7
million of the  estimated net offering  proceeds of $9,528,446  were used by the
Company to repay debt to the lender under the Company's  senior credit  facility
and $1.5 million was contributed to the capital of the Bank.

     In March  1999,  the  Company  purchased  a $273,000  equity  position,  or
approximately  5  percent,   in  United  Insurance   Holdings,   LC  ("Insurance
Holdings").  In  October  2000,  the  Company  increased  its  ownership  by  an
additional $892,000,  bringing its total investment to approximately  $1,165,000
or 16  percent.  Insurance  Holdings  is the parent  company of United  Property
Insurance and Casualty Company,  Inc. The Company has the option to acquire,  at
its election, up to an aggregate of 20 percent of the common equity of Insurance
Holdings,   if  and  when  bank  holding  company  regulations  permit  such  an
investment.  Additionally, the Company originally made a $1 million loan advance

                                    - 22 -
<PAGE>
to  Insurance  Holdings  with a  maturity  date of June 8,  1999.  The  loan was
subsequently  renewed for $0.5 million and was paid in full in January 2001. One
director of the Company also serves as a director of Insurance Holdings.

     In April  1999,  the  Company  purchased  a $500,000  equity  position,  or
approximately  2.2%  of the  outstanding  capital  stock,  in  Nexity  Financial
Corporation  ("Nexity").  Nexity  acquired an Alabama state  chartered  bank and
intends to pursue an Internet  banking  business  strategy and ultimately  raise
additional capital in an initial public offering.

     The  remaining  net  offering  proceeds  are on deposit  in a  non-interest
bearing demand  deposit  account of the Company  established  with the Bank. The
Bank in turn is  using  those  funds  to fund  its  assets,  such as  loans  and
overnight investments.

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

YEARS ENDED DECEMBER 31, 2000 AND 1999

COMPARISON OF BALANCE SHEETS AT DECEMBER 31, 2000 AND DECEMBER 31, 1999

Overview

     Total  assets of the Company  were $243.5  million at  December  31,  2000,
compared to $209.5 million at December 31, 1999, an increase of $34.0 million or
16.2%.  This increase was primarily the result of the Company's  internal growth
of earning assets (primarily loans) funded by an increase in deposits.

Investment Securities

     Investment  securities,  consisting  of U.S.  Treasury  and federal  agency
securities,  obligations of state and political subdivisions and mortgage-backed
and corporate debt securities, were $27.3 million at December 31, 2000, compared
to $24.4 million at December 31, 1999, an increase of $2.9 million or 11.9%.  At
December 31, 2000, the Company held certain securities totaling $11.3 million as
available for sale. These securities have been recorded at market value.

Loans

     Total loans were $185.8  million at December 31,  2000,  compared to $156.9
million at December 31,  1999,  an increase of $28.9  million or 18.4%.  For the
same  period,  real estate  mortgage  loans  increased  by $8.1 million or 7.4%,
commercial  loans  increased  by $20.6  million  or 49.8%,  and all other  loans
including  consumer  loans  increased  by $0.3  million or 4.2%.  Net loans were
$182.0 million at December 31, 2000,  compared to $153.5 million at December 31,
1999.

Asset Quality and Allowance for Loan Losses

     The  allowance  for loan losses  amounted to $2.8  million at December  31,
2000, compared to $2.3 million at December 31, 1999, an increase of $0.5 million
or 21.7%.  During 2000,  $314  thousand in loans were charged off, $650 thousand
was  added to the  allowance  for loan  losses  through a  provision,  which was
accounted for as an expense, reducing net income, and $85 thousand was recovered
from loans previously charged off.


                                     - 23 -
<PAGE>
Nonperforming Assets

     Nonperforming  assets were $.9 million at December  31,  2000,  compared to
$3.9  million at December 31,  1999.  Nonperforming  assets at December 31, 2000
consisted  of  nonperforming  loans of $.7 million  and other real estate  owned
(ORE) of $.2 million.  ORE owned consists of two properties,  both of which have
been listed for sale.  Management  believes that these properties are carried at
values that are equal to their current market value.

Bank Premises and Equipment

     Bank  premises  and  equipment  were $10.1  million at December  31,  2000,
compared to $9.6  million at December  31,  1999,  an increase of $.5 million or
5.2%.  This increase was primarily due to the  acquisition  of a new branch site
and related  equipment,  less the  depreciation  of buildings  and equipment and
amortization of leasehold improvements.

Deposits

     Total deposits were $202.2 million at December 31, 2000, compared to $175.1
million at  December  31,  1999,  an increase  of $27.1  million or 15.5%.  From
December 31, 1999 to December 31, 2000, demand deposits  increased $4.1 million,
NOW  and  money  market  deposits  increased  $11.0  million,  savings  deposits
decreased  $0.3 million,  time  deposits of $100  thousand or greater  increased
$11.3 million, and other time deposits increased $.9 million.

Convertible Subordinated Debentures

     Convertible subordinated debentures of $630 thousand were outstanding as of
December 31, 2000 and December 31, 1999. The debentures were subsequently called
on January 15, 2001,  and the full balance was converted  into 152,783 shares of
Common Stock.

Mandatory Redeemable Capital Securities of Subsidiary Trust

     In December 1998, the Company,  through a statutory  business trust created
and owned by the Company,  issued  $6,749,600  (including  an  overallotment  of
$749,600 that closed on January 14, 1999) of 9.40%  Cumulative  Trust  Preferred
Securities  that will mature on December 10, 2028.  The principal  assets of the
statutory  business trust are  debentures  issued to the Company in an aggregate
amount of $6.96  million,  with an interest rate of 9.40% and a maturity date of
December 10,  2028.  See Note D of the  Consolidated  Financial  Statements  for
additional information.

Stockholders' Equity

     Stockholders'  equity was $19.5  million at December 31, 2000,  or 8.02% of
total assets,  compared to $16.8  million,  or 8.02% of total assets at December
31,  1999.  At December  31, 2000,  the Bank's Tier I (core)  Capital  ratio was
7.21%,  its Tier I Risk-based  Capital ratio was 9.27%, and its Total Risk-based
Capital  ratio  was  10.53%.  The  capital  ratios  of the Bank at that date all
exceeded the minimum  regulatory  guidelines for an institution to be considered
"well  capitalized".  The  increase  in  stockholders'  equity  was  due  to the
Company's 2000 net income, less dividends declared.




                                     - 24 -
<PAGE>
COMPARISON OF RESULTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2000
AND 1999

Overview
     Net income for the year ended  December  31, 2000 was $3.1 million or $0.69
per share  diluted,  compared to $2.3 million or $0.54 per share diluted for the
same period in 1999.  On a pre-tax  basis,  United Trust earned $476 thousand in
2000 versus $679  thousand in 1999,  EPW's  pre-tax  operating  profits  (before
deducting  $495  thousand  of costs  associated  with the  issuance  of  certain
performance  shares issued pursuant to the acquisition of EPW) increased to $350
thousand from $302 thousand  during this period and the Bank's  pre-tax  profits
increased to $5.4 million from $3.8 million during this same period.

Business Segment Information
     The  Company's  operations  include  three  business  segments:  commercial
banking,   trust  services   (operated  through  United  Trust)  and  investment
management  services  (operated  through EPW).  The following are the results of
operations  for these three  segments for the years ended  December 31, 2000 and
1999 (dollars in thousands).

                                   Years Ended December 31,
                            2000                             1999
               -------------------------------  --------------------------------
               Comm'l   United         Company  Comm'l   United         Company
               Banking  Trust   EPW    Total    Banking  Trust    EPW   Total
               -------- ------ ------- -------- -------- ------ ------- --------
Interest
 income....... $ 19,034 $  244 $     - $ 19,278 $ 14,580 $  196 $    -  $ 14,776
Interest
 expense......    7,438      -       -    7,438    5,264      -      -     5,264
               -------- ------ ------- -------- -------- ------- ------ --------
Net interest
 income.......   11,596    244       -   11,840    9,316     196     -     9,512
Loan loss
 provision....      650      -       -      650      785       -     -       785
               -------- ------ ------- -------- -------- ------- ------ --------
Net interest income
 after loan loss
 provision....   10,946    244       -   11,190    8,531     196     -     8,727
Noninterest
 income.......    2,024  1,519   1,701    5,244    2,001   1,630  1,593    5,224
General and
 Administrative
 expenses.....    7,571  1,214   1,846   10,631    6,760   1,108  1,588    9,456
Amortization of
 goodwill.....       14     73       -       87       15      39      -       54
               -------- ------ ------- -------- -------- ------- ------ --------
Total noninterest
 expense......    7,585  1,287   1,846   10,718    6,775   1,147  1,588    9,510
               -------- ------ ------- -------- -------- ------- ------ --------
Net income (loss)
 before taxes..$  5,385 $  476 $  (145)   5,716 $  3,757 $   679 $    5    4,441
               ======== ====== =======          ======== ======= ======
Net corporate overhead expense......        929                              786
Income tax expense......                  1,733                            1,322
                                       --------                         --------
Net income....                         $  3,054                         $  2,333
                                       ========                         ========
                                     - 25 -
<PAGE>
     Commercial Banking Activities.  The Company's commercial banking activities
are  conducted  through the Bank.  Net interest  income of the Bank for the year
ended December 31, 2000 was $11.6 million, compared to $9.3 million for the same
period  in 1999,  a $2.3  million  or  24.7%  increase.  Based on the  Company's
analysis of its loan  portfolio and loan loss reserve,  the loan loss  provision
was  decreased to $650  thousand for 2000,  compared to $785  thousand for 1999.
Non-interest  income  for 2000 was $2.0  million,  unchanged  from  1999.  Total
non-interest  expense was $7.6  million for 2000,  compared to $6.8  million for
1999,  an 11.8%  increase.  Net income  before  taxes was $5.4 million for 2000,
compared to $3.8 million for 1999, a 42.1% increase.

     Trust  Activities.  United Trust  reported net income  before taxes of $476
thousand for the year ended  December 31,  2000,  compared to $679  thousand for
1999, a decrease of $203 thousand.  Results from 1999 included an  extraordinary
fee of $350 thousand from a trust account for services  provided in  conjunction
with the sale of a closely held company.

     Investment  Advisory  Activities.  Net loss  before  taxes for EPW was $145
thousand for the year ended  December 31,  2000,  compared to net income  before
taxes of $5 thousand for the same period of 1999, a $150 thousand  decrease.  In
2000,   expenses  of  $495  thousand  were  incurred  due  to  the  issuance  of
"performance  shares" pursuant to the acquisition of EPW as compared to expenses
of $297  thousand in 1999.  At December 31, 2000 all  liability  relating to the
acquisition of EPW has been recognized and no more "performance  shares" will be
issued.  Income before taxes without this expense would have been $350 thousand,
an increase of $48 thousand over 1999.  This increase  would have been primarily
due to an increase in the volume of assets under management by EPW.

Analysis of Net Interest Income

     Net interest income for the year ended December 31, 2000 was $11.2 million,
compared to $8.9  million for the same period in 1999,  a $2.3  million or 25.8%
increase.  Interest  income was $19.1  million for the year ended  December  31,
2000,  compared to $14.7  million for the same period in 1999, a $4.4 million or
29.9%  increase.  Interest  expense was $7.9 million for the year ended December
31,  2000,  compared to $5.8 million for the same period in 1999, a $2.1 million
or 36.2% increase.





















                                     - 26 -
<PAGE>
The   following   table   summarizes   the   average   yields   earned   on
interest-earning   assets  and  the  average  rates  paid  on   interest-bearing
liabilities  for the  years  ended  December  31,  2000  and  1999  (dollars  in
thousands):
                                      Years Ended December 31,
                                   2000                       1999
                        --------------------------- ----------------------------
                          Average           Average  Average           Average
                          Balance  Interest  Rate    Balance  Interest  Rate
                         --------- -------- ------- --------- -------- -------
Summary of average
rates/interest earning
assets:
Interest earning assets:
  Loans, net(1)......... $ 166,605 $ 17,030  10.22% $ 133,243 $ 12,784  9.59%
  Securities:
  Investment securities
   - taxable............    25,496    1,618   6.35     25,344    1,613  6.36
  Investment securities
  - non-taxable (2).....       744       37   7.89        854       43  7.99
  Federal funds sold....     7,211      452   6.27      5,454      270  4.95
                         --------- --------         --------- --------
  Total earning assets..   200,056 $ 19,137   9.58%   164,895 $ 14,710  8.94%

  Non-earning assets....    28,279                     26,534
                         ---------                  ---------
Total average assets.... $ 228,335                  $ 191,429
                         =========                  =========
Interest bearing liabilities:
  NOW & money market.... $  69,137  $ 2,414   3.49% $  57,058 $  1,628  2.85%
  Savings...............     4,974      102   2.05      5,230      107  2.05
  Time, $100,000 & over..   22,053    1,338   6.07     13,437    7,004  5.21
  Time other............    53,188    2,980   5.60     50,911    2,527  4.96
  Convertible subordinated
    debentures..........       630       50   8.00        630       50  8.00
  Long-term debt........         -        -      -         11        1  9.09
  Trust preferred
   securities...........     6,750      633   9.40      6,750      633  9.40
  Other borrowings......    12,512      423   3.38      7,296      193  2.65
                         --------- --------         --------- --------
Total interest bearing
  liabilities...........   169,244 $  7,940   4.69%   141,323 $  5,839  4.13%

Non-Interest bearing
 liabilities:
  Deposits..............    37,841                     31,779
  Other.................     3,006                      2,354
  Stockholders' equity..    18,244                     15,973
                         ---------                  ---------
Total liabilities and
  stockholders' equity   $ 228,335                  $ 191,429
                         =========                  =========
  Net interest & net
   interest spread......           $  11,197  4.89%           $   8,871 4.80%
                                   =========  =====           ========= =====
  Net interest margin...                      5.61%                     5.40%
                                             ======                     =====
(1)   Includes non-accrual loans. (2) Yield calculated on a tax adjusted basis.
                                     - 27 -
<PAGE>
     The  following  table  reflects  the change in net  interest  income due to
changes in the volume and rate of the Company's  assets and  liabilities for the
twelve-month period ended December 31, 2000:

                                               Increase (Decrease)
                               -------------------------------------------------
Changes in net interest income
(dollars in thousands)                                   Combination
                                  Volume        Rate     Rate/Volume    Total
                               ------------ ------------ -----------  ----------
Interest earning assets:
  Loans, net...................$      3,201 $        836 $       209  $   4,246
  Securities:
  Investment securities
  - taxable....................          10           (5)         (0)         5
  Investment securities
  - non-taxable................          (9)          (1)          4         (6)
  Federal funds sold...........          87           72          23        182
                               ------------ ------------ -----------  ----------
Total change in interest
  income.......................       3,289          902         236      4,427

Interest bearing liabilities:
  NOW & money market...........         345          364          77        786
  Savings......................          (5)           0           0         (5)
  Time, $100,000 & over........         449          115          74        638
  Time other...................         113          325          15        453
  Convertible subordinated
   debentures..................           -            -           -          -
  Long-term debt...............          (1)          (1)          1         (1)
  Trust preferred securities...           -            -           -          -
                                                                   -
  Other borrowings.............         138           54          38        230
                               ------------- ----------- -----------  ----------
Total change in interest
 expense.......................       1,039          857         205      2,101
                               ------------- ----------- -----------  ----------
Increase in net interest
 income........................$      2,250  $        45 $        31  $   2,326
                               ============= =========== ===========  ==========

Noninterest Income

     Noninterest  income for the year ended  December 31, 2000 was $5.1 million,
unchanged from the same period in 1999. Increases in service charges on deposits
and loan  servicing  fees of $261  thousand were offset by decreases in gains on
sale of SBA loans and other service charges.











                                     - 28 -
<PAGE>
     The following table indicates the components of noninterest  income for the
years ended December 31, 2000 and 1999 (dollars in thousands):

                                               For the Years Ended
                                                   December 31,
                                                                Increase/
                                             2000     1999      (Decrease)
                                           -------  -------    ------------
Service charges on deposit accounts....... $ 1,014  $   797    $    217
Trust and investment management income....   3,172    3,176          (4)
Other service charges, fees, and income...     267      363         (96)
Loan servicing fees.......................     210      166          44
Net trading account profit................      (6)      42         (48)
Income on cash value life insurance.......     141      135           6
Gain on sale of SBA loans.................     286      442        (156)
                                           -------  -------     -------
Total noninterest income.................. $ 5,084  $ 5,121     $   (37)
                                           =======  =======     =======

Noninterest Expense

     Total  noninterest  expense for the year ended  December 31, 2000 was $10.8
million,  compared to $9.6  million for the same period in 1999,  an increase of
$1.2  million  or 12.5%.  Substantially  all of the  increase  was in salary and
benefits,  and includes the expense of staffing new branch offices as well as an
increase in expense related to the EPW "performance shares."

     The following table reflects the components of noninterest  expense for the
years ended December 31, 2000 and 1999 (dollars in thousands):

                                               For the Years Ended
                                                   December 31,
                                                                Increase/
                                             2000     1999      (Decrease)
                                           -------  -------    ------------
Salaries and employee benefits............ $ 6,501  $ 5,361    $     1,140
Occupancy expense.........................     514      520             (6)
Furniture and equipment expense...........     604      607             (3)
Data processing expense...................     587      487            100
Legal and professional fees...............     208      175             33
Amortization of intangible assets.........     118       85             33
Advertising...............................     367      352             15
Telephone expense.........................     189      185              4
Stationery and supplies...................     181      177              4
Directors fees............................     243      191             52
Postage expense...........................     108      112             (4)
Consulting fees...........................     151      275           (124)
Other operating expenses..................   1,073    1,025             48
                                           -------  -------    -----------
Total noninterest expense................. $10,844  $ 9,552    $     1,292
                                           =======  =======    ===========







                                     - 29 -
<PAGE>
YEARS ENDED DECEMBER 31, 1999 AND 1998

COMPARISON OF BALANCE SHEETS AT DECEMBER 31, 1999 AND DECEMBER 31, 1998

Overview

     Total  assets of the Company  were $209.5  million at  December  31,  1999,
compared to $171.9 million at December 31, 1998, an increase of $37.6 million or
21.9%.  This increase was primarily the result of the Company's  internal growth
of earning assets (primarily loans) funded by an increase in deposits.

Investment Securities

     Investment  securities,  consisting  of U.S.  Treasury  and federal  agency
securities,  obligations of state and political subdivisions and mortgage-backed
and corporate debt securities, were $24.4 million at December 31, 1999, compared
to $25.7  million at December 31,  1998, a decrease of $1.3 million or 5.1%.  At
December 31, 1999, the Company held certain securities  totaling $9.9 million as
available for sale. These securities have been recorded at market value.

Loans

     Total loans were $156.9  million at December 31,  1999,  compared to $119.2
million at December 31,  1998,  an increase of $37.7  million or 31.6%.  For the
same period,  real estate  mortgage loans  increased by $30.7 million or 39.47%,
commercial  loans  increased  by $6.5  million  or 18.6%,  and all  other  loans
including  consumer  loans  increased  by $0.5  million or 8.4%.  Net loans were
$153.5 million at December 31, 1999,  compared to $116.5 million at December 31,
1998.

Allowance for Loan Losses

     The  allowance  for loan losses  amounted to $2.3  million at December  31,
1999, compared to $2.0 million at December 31, 1998, an increase of $0.3 million
or 15.0%.  During 1999,  $460  thousand in loans were charged off, $785 thousand
was  added to the  allowance  for loan  losses  through a  provision,  which was
accounted for as an expense, reducing net income, and $33 thousand was recovered
from loans previously charged off.

Nonperforming Assets

     Nonperforming  assets were $3.9 million at December  31, 1999,  compared to
$5.5  million at December 31,  1998.  Nonperforming  assets at December 31, 1999
consisted of nonperforming  loans of $2.4 million and ORE owned of $1.5 million.
A  nonperforming  loan in the amount of $1.3  million is being paid on a monthly
basis on a  pre-judgment  stipulation  and  interest  and  principal  are  being
recorded on a cash basis as received.  ORE owned consisted of one property which
has been listed for sale. Management believes that this property is carried at a
value that is equal to its current market value.

Bank Premises and Equipment

     Bank  premises  and  equipment  were $9.6  million at  December  31,  1999,
compared to $9.3  million at December  31,  1998,  an increase of $.3 million or
3.2%.  this increase was primarily due to the  acquisition  of a new branch site
and related  equipment,  less the  depreciation  of buildings  and equipment and
amortization of leasehold improvements.

                                     - 30 -
<PAGE>
Deposits

     Total deposits were $175.1 million at December 31, 1999, compared to $139.1
million at  December  31,  1998,  an increase  of $36.0  million or 25.9%.  From
December 31, 1998 to December 31, 1999, demand deposits  increased $5.3 million,
NOW  and  money  market  deposits  increased  $19.4  million,  savings  deposits
increased $0.2 million, time deposits of $100 thousand or greater increased $5.3
million, and other time deposits decreased $6.0 million.

Long-term Debt and Convertible Subordinated Debentures

     Long-term debt outstanding (excluding convertible  subordinated debentures)
was $0 thousand at December 31,  1999,  compared to $34 thousand at December 31,
1998, a decrease of $34  thousand.  The decrease was due to the repayment of the
debt of a subsidiary of the Company.  In addition,  $630 thousand in convertible
subordinated debentures were outstanding during both periods.

Mandatory Redeemable Capital Securities of Subsidiary Trust

     In December 1998, the Company,  through a statutory  business trust created
and owned by the Company,  issued  $6,749,600  (including  an  overallotment  of
$749,600 that closed on January 14, 1999) of 9.40%  Cumulative  Trust  Preferred
Securities  that will mature on December 10, 2028.  The principal  assets of the
statutory  business trust are  debentures  issued to the Company in an aggregate
amount of $6.96  million,  with an interest rate of 9.40% and a maturity date of
December 10,  2028.  See Note D of the  Consolidated  Financial  Statements  for
additional information.

Stockholders' Equity

     Stockholders'  equity was $16.8  million at December 31, 1999,  or 8.02% of
total assets,  compared to $14.8  million,  or 8.61% of total assets at December
31,  1998.  At December  31, 1999,  the Bank's Tier I (core)  Capital  ratio was
7.16%,  its Tier I Risk-based  Capital ratio was 9.16%, and its Total Risk-based
Capital  ratio  was  10.41%.  The  capital  ratios  of the Bank at that date all
exceeded the minimum  regulatory  guidelines for an institution to be considered
"well  capitalized".  The  increase  in  stockholders'  equity  was  due  to the
Company's net income, less dividends declared.

COMPARISON OF RESULTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 1999
AND 1998

Overview

      Net income for the year ended  December 31, 1999 was $2.3 million or $0.54
per share  diluted,  compared to $1.8 million or $0.46 per share diluted for the
same period in 1998.  On a pre-tax  basis,  United Trust earned $679 thousand in
1999 versus $176  thousand in 1998,  EPW's  pre-tax  operating  profits  (before
deducting  $297  thousand  of costs  associated  with the  issuance  of  certain
performance  shares issued pursuant to the acquisition of EPW) increased to $302
thousand from $210 thousand  during this period and the Bank's  pre-tax  profits
increased to $3.8 million from $2.7 million during this same period.

Business Segment Information

      The Company's  operations  include  three  business  segments:  commercial
banking,   trust  services   (operated  through  United  Trust)  and  investment

                                     - 31 -
<PAGE>
management  services  (operated  through EPW).  The following are the results of
operations  for these three  segments for the years ended  December 31, 1999 and
1998 (dollars in thousands).

                                     Years Ended December 31,
                            1999                             1998
               -------------------------------  --------------------------------
               Comm'l   United         Company  Comm'l   United         Company
               Banking  Trust   EPW    Total    Banking  Trust    EPW   Total
               -------- ------ ------- -------- -------- ------ ------- --------
Interest
 income....... $ 14,580 $  196 $    -  $ 14,776 $ 12,561 $  171 $     - $ 12,732
Interest
 expense......    5,264      -      -     5,264    5,066      -       4    5,070
               -------- ------ ------  -------- -------- ------ ------- --------
Net interest
 income.......    9,316    196      -     9,512    7,495    171     (4)    7,662
Loan loss
 provision....      785      -      -       785      752      -      -       752
               -------- ------ ------  -------- -------- ------ ------- --------
Net interest
 income after
 loan loss
 provision....    8,531    196      -     8,727    6,743    171      (4)   6,910
Noninterest
 income.......    2,001  1,630  1,593     5,224    1,646    956   1,447    4,049
General and
 administrative
 expenses.....    6,760  1,108  1,588     9,456    5,637    926   1,356    7,919
Amortization
 of goodwill..       15     39       -       54       15     25       1       41
               -------- ------ ------  -------- -------- ------ ------- --------
Total noninterest
 expense......    6,775  1,147  1,588     9,510    5,652    951   1,357    7,960
               -------- ------ ------  -------- -------- ------ ------- --------
Net income
 before taxes..$  3,757 $  679 $    5     4,441 $  2,737 $  176 $    86    2,999
               ======== ====== ======           ======== ====== =======
Net corporate
 overhead
 expense......                              786                              232
Income tax
 expense......                            1,322                            1,010
                                       --------                         --------
Net income....                         $  2,333                         $  1,757
                                       ========                         ========

      Commercial Banking Activities. The Company's commercial banking activities
are  conducted  through the Bank.  Net interest  income of the Bank for the year
ended December 31, 1999 was $9.3 million,  compared to $7.5 million for the same
period  in 1998,  a $1.8  million  or  24.0%  increase.  Based on the  Company's
analysis of its loan  portfolio and loan loss reserve,  the loan loss  provision
was  increased to $785  thousand for 1999,  compared to $752  thousand for 1998.
Non-interest  income for 1999 was $2.0  million,  compared  to $1.6  million for
1998, an increase of $0.4 million or 25.0%. Total non-interest  expense was $6.8
million for 1999,  compared  to $5.7  million for 1998,  a 19.3%  increase.  Net
income  before  taxes was $3.8  million for 1999,  compared to $2.7  million for
1998, an 40.7% increase.
                                     - 32 -
<PAGE>
      Trust  Activities.  United Trust  reported net income before taxes of $679
thousand for the year ended  December 31,  1999,  compared to $176  thousand for
1998,  an   improvement  of  $503  thousand.   This   improvement   includes  an
extraordinary fee of $350 thousand from a trust account for services provided in
conjunction  with the sale of a closely  held  company as well as an increase in
the volume of trust accounts.

      Investment  Advisory  Activities.  Net income  before taxes for EPW was $5
thousand for the year ended December 31, 1999,  compared to $86 thousand for the
same  period  of 1998,  an $81  thousand  decrease.  In 1999,  expenses  of $297
thousand were incurred due to the issuance of "performance  shares"  pursuant to
the acquisition of EPW as compared to expenses of $124 thousand in 1998.  Income
before taxes without this expense would have been $302 thousand,  an increase of
$92  thousand  over 1998.  This  increase  would have been  primarily  due to an
increase in the volume of assets under  management by EPW resulting in part from
higher market values of the assets under management.

Analysis of Net Interest Income

      Net interest income for the year ended December 31, 1999 was $8.9 million,
compared to $7.4  million for the same period in 1998,  a $1.5  million or 20.3%
increase.  Interest  income was $14.7  million for the year ended  December  31,
1999,  compared to $12.7  million for the same period in 1998, a $2.0 million or
15.7%  increase.  Interest  expense was $5.8 million for the year ended December
31,  1999,  compared to $5.3 million for the same period in 1998, a $0.5 million
or 9.4% increase.

      The   following   table   summarizes   the   average   yields   earned  on
interest-earning   assets  and  the  average  rates  paid  on   interest-bearing
liabilities  for the  years  ended  December  31,  1999  and  1998  (dollars  in
thousands):



























                                     - 33 -
<PAGE>
                                      Years Ended December 31,
                                   1999                       1998
                        --------------------------- ----------------------------
                          Average           Average  Average           Average
                          Balance  Interest  Rate    Balance  Interest  Rate
                         --------- -------- ------- --------- -------- -------
Summary of average
rates/interest earning
assets:
Interest earning assets:
  Loans, net(1)......... $ 133,243 $ 12,784   9.59% $ 102,197 $ 10,382   10.16%
  Securities:
  Investment securities
  - taxable.............    25,344    1,613   6.36     26,325    1,714    6.51
  Investment securities
  - non-taxable (2).....       854       43   7.99        570       31    8.63
  Federal funds sold....     5,454      270   4.95      9,821      532    5.42
                         --------- -------- ------- --------- -------- -------
  Total earning assets..   164,895   14,710   8.94%   138,913   12,659    9.13%
  Non-earning assets....    26,534                     22,711
                         ---------                  ---------
Total average assets.... $ 191,429                  $ 161,624
                         =========                  =========

Interest bearing liabilities:
  NOW & money market.... $  57,058    1,628   2.85% $  50,328    1,564    3.11%
  Savings...............     5,230      107   2.05      4,742       97    2.05
  Time, $100,000 & over..   13,437    7,004   5.21      9,850      534    5.42
  Time other............    50,911    2,527   4.96     49,455    2,669    5.40
  Convertible subordinated
    debentures..........       630       50   8.00        630       50    8.00
  Long-term debt........        11        1   9.09      2,329      200    8.59
  Trust preferred
   securities...........     6,750      633   9.40        300       28    9.40
  Other borrowings......     7,296      193   2.65      4,736      126    2.66
                         --------- -------- ------- --------- -------- -------
Total interest bearing
  liabilities...........   141,323    5,839   4.13%   122,370    5,268    4.30%

Non-Interest bearing
 liabilities:
  Deposits..............    31,779                     25,276
  Other.................     2,354                      2,152
  Stockholders' equity..    15,973                     11,826
                         ---------                  ---------
Total liabilities and
 stockholders'equity.... $ 191,429                  $ 161,624
                         =========                  =========
  Net interest & net
   interest spread......            $  8,871  4.80%            $ 7,391   4.82%
                                    ========  =====            =======   =====
  Net interest margin...                      5.40%                      5.33%
                                              =====                      =====

(1)    Includes non-accrual loans.
(2)    Yield calculated on a tax adjusted basis.


                                     - 34 -
<PAGE>
      The  following  table  reflects the change in net  interest  income due to
changes in the volume and rate of the Company's  assets and  liabilities for the
twelve month period ended December 31, 1999:

                                               Increase (Decrease)
                               -------------------------------------------------
Changes in net interest income
(dollars in thousands)                                   Combination
                                  Volume        Rate     Rate/Volume    Total
                               ------------ ------------ -----------  ----------
Interest earning assets:
  Loans, net.................. $      3,154 $      (577) $     (175)  $   2,402
  Securities:
  Investment securities
  - taxable...................          (64)        (38)          1        (101)
  Investment securities
  - non-taxable...............           25          (4)         (9)         12
  Federal funds sold..........         (237)        (45)         20        (262)
                               ------------ ------------ ------------ ----------
Total change in
  interest income.............        2,878        (664)       (163)      2,051

Interest bearing liabilities:
  NOW & money market..........          209        (128)        (17)         64
  Savings.....................           10           -           -          10
  Time, $100,000 & over.......          194         (21)         (7)        166
  Time other..................           79        (214)         (7)       (142)
  Convertible subordinated
   debentures.................            -           -           -           -
  Long-term debt..............         (199)         12         (12)       (199)
  Trust preferred securities..          606           -          (1)        605
  Other borrowings............           68          (1)          -          67
                               ------------ ------------- ----------- ----------
Total change in interest
  expense.....................          967        (352)        (44)        571
                               ------------ ------------- ----------- ----------
Increase (decrease) in net
 interest income.............. $      1,911 $      (312)  $    (119)  $   1,480
                               ============ ============= =========== ==========

Noninterest Income

      Noninterest  income for the year ended  December 31, 1999 was $5.1 million
compared  to $4.1  million  for the same  period in 1998,  an  increase  of $1.0
million or 24.4%. This increase was primarily due to increased revenues from EPW
and United Trust whose combined  revenues  increased  $821 thousand  during this
period and include an  extraordinary  fee of $350  thousand from a trust account
for services  provided in  conjunction  with the sale of a closely held company.
Gain on sale of loans increased $203 thousand from the prior year.









                                     - 35 -
<PAGE>
      The following table indicates the components of noninterest income for the
years ended December 31, 1999 and 1998 (dollars in thousands):
                                               For the Years Ended
                                                   December 31,
                                                                Increase/
                                             1999     1998      (Decrease)
                                           -------  -------    ------------
Service charges on deposit accounts....... $   797  $   707    $         90
Trust and investment management income....   3,176    2,355             821
Other service charges, fees, and income...     363      415             (52)
Loan servicing fees.......................     166      148              18
Net trading account profit................      42       87             (45)
Income on cash value life insurance.......     135      137              (2)
Gain on sale of SBA loans.................     442      239             203
                                           -------  -------    ------------
Total noninterest income.................. $ 5,121  $ 4,088    $      1,033
                                           =======  =======    ============

Noninterest Expense

      Total  noninterest  expense for the year ended  December 31, 1999 was $9.6
million,  compared to $8.0  million for the same period in 1998,  an increase of
$1.6 million or 20.0%.

      The following table reflects the components of noninterest expense for the
years ended December 31, 1999 and 1998 (dollars in thousands):
                                               For the Years Ended
                                                   December 31,
                                                                Increase/
                                             1999     1998      (Decrease)
                                           -------  -------    ------------
Salaries and employee benefits............ $ 5,361  $ 4,631    $        730
Occupancy expense.........................     520      522              (2)
Furniture and equipment expense...........     607      512              95
Data processing expense...................     487      437              50
Legal and professional fees...............     175      121              54
Amortization of intangible assets.........      85       79               6
Advertising...............................     352      302              50
Telephone expense.........................     185      171              14
Stationery and supplies...................     177      137              40
Directors fees............................     191      191               -
Postage expense...........................     112       90              22
Consulting fees...........................     275       41             234
Other operating expenses..................   1,025      725             300
                                           -------  -------    ------------
Total noninterest expense................. $ 9,552  $ 7,959    $      1,593
                                           =======  =======    ============

LIQUIDITY AND ASSET/LIABILITY MANAGEMENT

     The Investment and  Asset/Liability  Committee of the Board of Directors of
the Bank  reviews  the  Bank's  liquidity,  which  is its  ability  to  generate
sufficient  cash to meet the  funding  needs of  current  loan  demand,  deposit
withdrawals,  and other cash  demands.  The primary  sources of funds consist of
deposits,  amortization  and prepayments of loans,  sales of investments,  other
funds  from  operations  and the  Bank's  capital.  The Bank is a member  of the
Federal  Home Loan Bank of  Atlanta  ("FHLB")  and has the  ability to borrow to
supplement its liquidity needs.
                                     - 36 -
<PAGE>
     When the Bank's primary sources of funds are not sufficient to meet deposit
outflows, loan originations and purchases and other cash requirements,  the Bank
may supplementally  borrow funds from the FHLB and from other sources.  The FHLB
acts as an additional  source of funding for banks and thrift  institutions that
make residential mortgage loans.

     FHLB  borrowings,  known as "advances",  are secured by the Bank's mortgage
loan  portfolio,  and the terms  and rates  charged  for FHLB  advances  vary in
response to general economic conditions.  As a shareholder of the FHLB, the Bank
is  authorized to apply for advances from this bank. A wide variety of borrowing
plans are offered by the FHLB, each with its own maturity and interest rate. The
FHLB will  consider  various  factors,  including  an  institution's  regulatory
capital  position,  net  income,  quality  and  composition  of assets,  lending
policies and practices,  and level of current  borrowings  from all sources,  in
determining the amount of credit to extend to an institution. As of December 31,
2000, the Company had no FHLB advances outstanding.

     A Florida  chartered  commercial  bank is  required to maintain a liquidity
reserve of at least 15% of its total  transaction  accounts  and 8% of its total
nontransaction  accounts  less deposits of certain  public funds.  The liquidity
reserve  may consist of cash on hand,  cash on demand  with other  correspondent
banks and other investments and short-term  marketable  securities as determined
by the rules of the  Department,  such as federal  funds sold and United  States
securities  or securities  guaranteed by the United States or agencies  thereof.
The Company  complies with  applicable  liquidity  reserve  requirements.  As of
December 31, 2000,  the Bank had  liquidity of  approximately  $19.7  million or
approximately  9.3% of total deposits  combined with  borrowings.  The Company's
primary  sources of funds consist of principal  payments on loans and investment
securities,  proceeds from sales and maturities of securities available for sale
and net  increases  in  deposits.  The  Company  uses its funds  principally  to
purchase   investment   securities  and  fund  existing  and   continuing   loan
commitments.  At December 31,  2000,  the Company had  commitments  to originate
loans totaling $32.3 million.  Scheduled  maturities of  certificates of deposit
during the 12 months  following  December  31,  2000 total  $66.4  million as of
December 31,  2000.  Management  believes the Company has adequate  resources to
fund all its  commitments,  and, if so desired,  that it can adjust the rates on
certificates  of  deposit  to  retain  deposits  in  a  changing   interest-rate
environment.

Asset/Liability Management

      One of the primary objectives of the Company is to reduce  fluctuations in
net interest income caused by changes in interest rates. To manage interest rate
risk,  the Board of Directors has  established  interest-rate  risk policies and
procedures  which delegate to the Investment and  Asset/Liability  Committee the
responsibility to monitor and report on interest-rate risk, devise strategies to
manage  interest-rate risk, monitor loan originations and deposit activity,  and
approve all pricing strategies.

      The  management  of  interest-rate  risk  is one of the  most  significant
factors  affecting the ability to achieve  future  earnings.  The measure of the
mismatch of assets maturing or repricing within certain periods, and liabilities
maturing or  repricing  within the same period,  is commonly  referred to as the
"gap" for such period. Controlling the maturity or repricing of an institution's
assets and  liabilities  in order to  minimize  interest  rate risk is  commonly
referred to as gap  management.  "Negative  gap" occurs when,  during a specific


                                     - 37 -
<PAGE>
time period, an institution's  liabilities are scheduled to reprice more rapidly
than its assets, so that,  barring other factors  affecting  interest income and
expense, in periods of rising interest rates the institution's  interest expense
would increase more rapidly than its interest income,  and in periods of falling
interest rates the  institution's  interest  expense would decrease more rapidly
than its interest income. "Positive gap" occurs when an institution's assets are
scheduled to reprice more rapidly than its liabilities,  so that,  barring other
factors  affecting  interest income and expense,  in periods of falling interest
rates,  the  institution's  interest income would decrease more rapidly than its
interest  expense,  and in periods of rising interest rates,  the  institution's
interest  income would  increase more rapidly than its interest  expense.  It is
common to focus on the one-year gap, which is the difference  between the dollar
amount of assets and the dollar  amount of  liabilities  maturing  or  repricing
within the next 12 months.

      To the  extent  market  conditions  permit,  the Bank  follows a  strategy
intended to protect its net  interest  income from  adverse  changes in interest
rates by maintaining  spreads through the  adjustability of its interest earning
assets  and its  interest  bearing  liabilities.  The Bank  employs  a number of
strategies  designed to protect its net interest income. The Bank calculates its
net interest  margin on a monthly basis and compares it to a quarterly  national
peer group  ratio.  Historically,  the Bank has enjoyed a higher than peer group
average  net  interest  margin  as  well as a  higher  margin  than  most of the
community banks operating in Pinellas County.

      Additionally,  the Investment  and  Asset/Liability  Committee  meets on a
quarterly  basis to review the most recent margin  analysis,  the Bank's overall
pricing  strategies,  and a monthly  gap  report  measuring  its  interest  rate
sensitivity position.

      The Bank is also a member  of the  FHLB.  Member  banks  have  access to a
variety of fixed and variable rate  borrowings,  ranging from overnight to up to
20 years or  longer.  Access to these  instruments  can permit the Bank to match
maturities  of  either  specific  groups  of  loans  or  larger,  single  loans.
Currently, the Bank has no FHLB advances outstanding.

      The  cumulative  one-year  gap at December  31, 2000 was a positive  $28.1
million or a positive  11.5%  (expressed as a percentage of total  assets).  The
Company  performs an income  simulation  analysis to measure net interest income
volatility  when the  portfolio is subjected to a 200 basis point  interest rate
shock.  Based on the results of this  simulation  and the current  interest rate
environment (taking into account  competitive  pricing and generally  increasing
interest  rates),  the Company believes that its gap position as of December 31,
2000 was  appropriate,  and currently  anticipates  that a similar  positive gap
position will continue in the subsequent one year time period.

      The   following   table   presents   the   maturities   or   repricing  of
interest-earning  assets and interest-bearing  liabilities at December 31, 2000.
The balances shown have been derived based on the financial  characteristics  of
the various  assets and  liabilities.  Adjustable and  floating-rate  assets are
included  in the period in which  interest  rates are next  scheduled  to adjust
rather than their scheduled  maturity dates.  Fixed-rate  loans are shown in the
periods  in which  they are  scheduled  to be repaid  according  to  contractual
amortization and, where appropriate,  prepayment assumptions based on the coupon
rates in the portfolio have been used to adjust the repayment amounts. Repricing
of time deposits is based on their scheduled maturities.


                                     - 38 -
<PAGE>
                          INTEREST SENSITIVITY ANALYSIS
                             (dollars in thousands)

                    0 to 3    4 to 12  13 to 36  37 to 60    60+
                    Months    Months    Months    Months    Months    Total
                   --------  --------  --------  --------  --------  --------
ASSETS:
  Federal funds
  sold...........  $ 4,961   $     -   $     -   $     -   $      -  $ 4,961
  Securities.....    1,606     2,092     4,587     8,827    10,220    27,332
  Total Loans....   86,427    40,988    37,048    12,450     8,916   185,829
                   --------  --------  --------  --------  --------  --------
Total rate
  sensitive
  assets.........  $92,994   $43,080   $41,635   $21,277   $19,136   $218,122
                   =======   =======   =======   =======   =======   ========

LIABILITIES:
  Interest
   demand........  $30,162   $     -   $     -   $48,725   $     -   $ 78,887
  Savings........      640         -         -     3,933         -      4,573
  Time deposits..   30,437    35,992    12,871     2,341         -     81,641
  Other
   borrowings....   10,162         -         -         -         -     10,162
  Long term debt..     630         -         -         -     6,749      7,379
                   --------  --------  --------  --------  --------  --------
Total rate sensitive
  liabilities..... $72,031   $35,992   $12,871   $54,999   $ 6,749   $182,642
                   =======   =======   =======   =======   =======   ========

Dollar gap........ $20,963   $ 7,088   $28,764  $(33,722)  $12,387   $ 35,480
Cumulative
 dollar gap....... $20,963   $28,051   $56,815  $ 23,093   $35,480   $ 35,480
Cumulative gap/total
 assets(1)........   8.61%    11.52%    23.33%     9.49%    14.57%     14.57%
-------------------
(1) Calculated based on total assets of $243,461.


The following  tables presents  various  operating ratios at the period ended or
for the period ended:

                                                December 31,
                                         2000            1999          1998
                                      ------------   ------------- ------------
Return on average assets............     1.34%           1.22%         1.09%
Return on average equity............    16.74%          14.61%        14.86%
Equity to total assets..............     8.02%           8.03%         8.59%
Dividend payout.....................    25.00%          28.46%        30.51%
Net interest margin.................     5.61%           5.40%         5.33%


      The following  table  summarizes the Company's  securities by maturity and
weighted  average yields at December 31, 2000.  Yields on tax exempt  securities
are  stated  at their  nominal  rates  and have not been  adjusted  for tax rate
differences.  Refer  to  Note  G -  Securities  in  the  Company's  Consolidated
Financial  Statements  for  additional   information  regarding  the  Securities
portfolio.
                                     - 39 -
<PAGE>
                                            After One Year      After 5 Years
                                                 But                 But
                           Within One Year   Within 5 Years     Within 10 Years
                          Carrying Average   Carrying Average   Carrying Average
                           Value    Yield    Value    Yield     Value    Yield
                          -------- -------   -------- -------   -------- -------
Securities held to
maturity:
  U.S. Treasury
  securities and
  obligations of U.S.
  government
  corporations and
  agencies............... $ 1,000   6.38%    $ 6,890   6.29%    $ 2,909   7.01%

  Obligations of State
  and political
  Subdivisions                160   6.00%        200   7.50%        794   6.19%

Corporate obligations....       -   0.00%          -   0.00%          -   0.00%

Other....................     100   5.75%          -   0.00%          -   0.00%
                          ------------------------------------------------------
                            1,260   6.05%      7,090   6.21%      3,703   6.59%
Mortgage Backed
Securities...............
                          ======================================================
Total                     $ 1,260   0.00%    $ 7,090   6.21%     $ 3,703  6.59%
                          ======================================================

                                 After 10 Years         Total
                                Carrying Average   Carrying Average
                                Value    Yield     Value    Yield
                                -------- -------   -------- -------
Securities held to
maturity:
  U.S. Treasury
  securities and
  obligations of U.S.
  government
  corporations and
  agencies...............       $     -    0.00%   $ 10,799   6.49%

  Obligations of State
  and political
  Subdivisions                      519    5.50%      1,672   6.12%

Corporate obligations....             -    0.00%          -   0.00%

Other....................             -    0.00%        100   5.75%
                                -----------------------------------
                                    519    4.62%     12,571   6.25%
Mortgage Backed
Securities...............                             3,465   6.98%
                                ===================================
Total                           $   519    4.62%   $ 16,036   6.55%
                                ===================================

                                     - 40 -
<PAGE>
                                            After One Year      After 5 Years
                                                 But                 But
                           Within One Year   Within 5 Years     Within 10 Years
                          Carrying Average   Carrying Average   Carrying Average
                           Value    Yield    Value    Yield     Value    Yield
                          -------- -------   -------- -------   -------- -------
Securities available for sale:
  U.S. Treasury
  securities and
  obligations of U.S.
  government
  corporations and
  agencies............... $     -  0.00%    $ 2,573   6.93%     $ 1,491  6.62%

Obligations of State and
  political
  Subdivisions..........        -  0.00%        311   5.80%       1,681  7.16%
                          -----------------------------------------------------
                                -  0.00%      2,884   6.33%       3,172  6.47%
Mortgage Backed
Securities..............
Equity Securities.......
                          -----------------------------------------------------
Total...................  $      -  0.00%    $ 2,884   6.33%     $ 3,172  6.47%
                          =====================================================

                                 After 10 Years         Total
                                Carrying Average   Carrying Average
                                Value    Yield     Value    Yield
                                -------- -------   -------- -------
Securities available for sale:
  U.S. Treasury
  securities and
  obligations of U.S.
  government
  corporations and
  agencies...............       $     -    0.00%   $  4,064   6.81%

Obligations of State and
  political
  Subdivisions..........              -    0.00%      1,992   6.95%
                                -----------------------------------
                                      -    0.00%      6,056   6.43%
Mortgage Backed
Securities..............                              2,508   7.05%
Equity Securities.......                              2,733   1.78%
                                -----------------------------------
Total...................        $     -    0.00%   $ 11,297   5.64%
                                ===================================









                                     - 41 -
<PAGE>
FORWARD LOOKING STATEMENTS

      This Form 10-KSB  contains  statements  that  constitute  "forward-looking
statements"  within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The
words  "believe,"  "estimate,"  "expect,"  "intend,"  "anticipate"  and  similar
expressions  and variations  thereof  identify  certain of such  forward-looking
statements,  which  speak  only as of the  dates on which  they were  made.  The
Company   undertakes   no   obligation   to   publicly   update  or  revise  any
forward-looking  statements,  whether  as a result  of new  information,  future
events,  or  otherwise.  Readers  are  cautioned  that any such  forward-looking
statements  are not  guarantees  of future  performance  and  involve  risks and
uncertainties,  and  that  actual  results  may  differ  materially  from  those
indicated in the forward-looking statements as a result of various factors. Such
factors include competition,  general economic conditions,  potential changes in
interest  rates,  and changes in the value of real estate securing loans made by
the issuer.

FACTORS AFFECTING FUTURE RESULTS

IMPACT OF CHANGES IN REAL ESTATE VALUES

      A significant  portion of the Company's loan  portfolio  consists of loans
secured by real estate.  At December 31, 2000,  5.2% of the Company's loans were
secured by one-to-four  family  residential  real estate,  54.2% were secured by
commercial and multifamily residential real estate, 3.4% were construction loans
and the Company had ORE acquired  through  foreclosure with a book value of $0.2
million. The properties securing these loans are located in Florida. Real estate
values and real estate  markets  generally  are affected by, among other things,
changes in national,  regional or local  economic  conditions,  fluctuations  in
interest rates and the availability of loans to potential purchasers, changes in
the tax laws and other governmental statutes,  regulations and policies and acts
of nature.  Any decline in real estate prices,  particularly  in Florida,  could
significantly  reduce  the  value of the real  estate  collateral  securing  the
Company's real estate loans,  increase the level of the Company's  nonperforming
loans,  require  write-downs  in the book value of its ORE,  and have a material
negative impact on the Company's financial performance.

NONPERFORMING ASSETS
      The Company's  ratio of  nonperforming  assets to total assets was .36% at
December  31,  2000,  which  is  somewhat  below  the  average  level  of  other
similarly-sized financial institutions.  While the Company carefully manages its
loan portfolio with a view to minimizing its nonperforming  assets, there can be
no assurance that the Company's  ratio of  nonperforming  assets to total assets
will  improve  or not  increase,  particularly  if general  economic  conditions
deteriorate.

ADEQUACY OF ALLOWANCE FOR LOAN LOSSES
      Industry  experience  indicates that a portion of the Company's loans will
become  delinquent  and a portion  of the loans will  require  partial or entire
charge-off.  Regardless of the  underwriting  criteria  utilized by the Company,
losses may be  experienced  as a result of various  factors beyond the Company's
control,  including,  among other things, changes in market conditions affecting
the value of properties and problems  affecting the credit of the borrower.  The
Company's  determination  of the  adequacy of its  allowance  for loan losses is
based  on  various   considerations,   including   an   analysis   of  the  risk
characteristics  of  various   classifications  of  loans,  previous  loan  loss

                                     - 42 -
<PAGE>
experience,  specific  loans which would have loan loss  potential,  delinquency
trends,  estimated fair value of the  underlying  collateral,  current  economic
conditions,  the view of the Company's  regulators,  and geographic and industry
loan concentration. If, however, delinquency levels were to increase as a result
of adverse general  economic  conditions,  especially in Florida,  the loan loss
reserve so determined by the Company may not be adequate. To the extent that the
Company's  loan losses  exceed its  allowance  for loan  losses,  the  Company's
results of  operations  would be adversely  affected.  There can be no assurance
that the Company's  allowance for loan losses will be adequate to cover its loan
losses or that the  Company  will not  experience  losses in its loan  portfolio
which may require significant  increases to the allowance for loan losses in the
future.

POTENTIAL IMPACT OF CHANGES IN INTEREST RATES

      The  Company's  profitability  is  dependent  to a large extent on its net
interest  income,  which  is the  difference  between  its  interest  income  on
interest-earning   assets  and  its   interest   expense   on   interest-bearing
liabilities.  The  Company,  like most  financial  institutions,  is affected by
changes in general  interest rate levels,  which are currently at relatively low
levels,  and by other economic  factors  beyond its control.  Interest rate risk
arises from mismatches  (i.e., the interest  sensitivity gap) between the dollar
amount of repricing or maturing assets and liabilities, and is measured in terms
of the ratio of the interest rate  sensitivity gap to total assets.  More assets
repricing or maturing  than  liabilities  over a given time frame is  considered
asset-sensitive  and is  reflected  as a  positive  gap,  and  more  liabilities
repricing  or  maturing  than  assets  over a given  time  frame  is  considered
liability-sensitive  and is  reflected  as a negative  gap.  An  asset-sensitive
position  (i.e.,  a positive gap) will  generally  enhance  earnings in a rising
interest  rate  environment  and will  negatively  impact  earnings in a falling
interest  rate  environment,  while  a  liability-sensitive  position  (i.e.,  a
negative  gap)  will  generally  enhance  earnings  in a falling  interest  rate
environment   and  negatively   impact   earnings  in  a  rising  interest  rate
environment. Fluctuations in interest rates are not predictable or controllable.
The  Company has  attempted  to  structure  its asset and  liability  management
strategies  to mitigate the impact on net  interest  income of changes in market
interest  rates.  At December  31, 2000,  the Company had a one-year  cumulative
positive gap of 11.5%.  This positive one-year gap position may, as noted above,
have a negative impact on earnings in a falling interest rate environment.

REGULATORY OVERSIGHT

      The Bank is subject to extensive  regulation,  supervision and examination
by the  Department as its  chartering  authority and primary  regulator,  by the
Federal Reserve as its federal regulator and by the FDIC as administrator of the
insurance fund that insures the Bank's deposits up to applicable  limits. As the
holding  company of the Bank, the Company is subject to regulation and oversight
by the Federal Reserve.  Such regulation and supervision  governs the activities
in which an institution may engage and is intended  primarily for the protection
of the FDIC insurance funds and  depositors.  Regulatory  authorities  have been
granted   extensive   discretion  in  connection  with  their   supervisory  and
enforcement   activities  and  regulations  have  been  implemented  which  have
increased capital  requirements,  increased insurance premiums and have resulted
in increased administrative,  professional and compensation expenses. Any change
in the regulatory structure or the applicable statutes or regulations could have
a material  impact on the  Company,  the Bank and their  operations.  Additional


                                     - 43 -
<PAGE>
legislation  and regulations may be enacted or adopted in the future which could
significantly  affect the powers,  authority and  operations of the Bank and the
Bank's  competitors  which in turn could have a material  adverse  affect on the
Bank and its operations.

DEPENDENCE ON EXISTING MANAGEMENT

     The Company's  business  depends in large part upon the availability of the
services of its senior  management,  including  Neil W. Savage,  Ward J. Curtis,
Jr.,  Harold J. Winner and William A.  Eickhoff.  If the services of any of such
senior  management  personnel  were to become  unavailable  to the Company,  the
Company's business and operating results could be adversely affected.  While the
Company  maintains  key-man  life  insurance  policies  on certain of its senior
management  personnel,  naming  the  Company  as  beneficiary,  there  can be no
assurance that the proceeds of any such policies would adequately compensate the
Company for the loss of the services of any of such persons.  Neither Mr. Savage
nor Mr. Winner has entered into a non-competition  agreement with the Company or
the Bank.  Although both Mr.  Eickhoff's and Mr. Curtis's  employment  contracts
contain   non-competition   clauses,  the  provisions  terminate  under  certain
conditions.

CONTROL BY EXISTING SHAREHOLDERS

      The  Company's  directors and  executive  officers  (and their  respective
affiliates  and  immediate  family  members)  own  approximately  50.7%  of  the
outstanding  Common  Stock.  As a result of such  ownership,  these persons will
likely be able to  effectively  control the election of the Company's  directors
and the outcome of matters requiring shareholder  approval,  and thereby control
the management and policies of the Company.

COMPETITION

      The  Company  competes  with  various  types  of  financial  institutions,
including  other  commercial  banks and savings  institutions,  and with finance
companies,  mortgage banking  companies,  money market mutual funds,  investment
advisory firms and companies and credit unions, many of which have substantially
greater financial  resources than the Company and, in some cases,  operate under
fewer regulatory constraints.

ANTI-TAKEOVER CONSIDERATIONS

      The Company's articles of incorporation and bylaws and Florida law contain
certain  provisions  that may discourage or make more difficult any attempt by a
person or group to obtain  control of the  Company.  In  addition,  the board of
directors  of the  Company is  empowered  to issue from time to time one or more
series of Undesignated  Preferred Stock without shareholder approval,  the terms
of which could have the effect of delaying or  preventing a change in control of
the Company.

POSSIBLE VOLATILITY OF SHARE PRICE

      The market price of the Common Stock may experience  fluctuations that are
unrelated to the operating  performance of the Company.  The market price of the
Common Stock may be affected by conditions in the securities  markets  generally
as well as  developments  in the banking  industry or the United States or world
economy.  Any  securities  exchange on which the Common  Stock may be traded may


                                     - 44 -
<PAGE>
from time to time experience  significant price and volume fluctuations that may
be unrelated to the operating  performance of particular  companies.  The market
price of the Common Stock,  like the stock prices of many  publicly  traded bank
holding companies, may prove to be highly volatile.

RESTRICTIONS ON ABILITY TO PAY DIVIDENDS

      The Company is  primarily  a holding  company  with no  material  business
operations,  sources of income or assets of its own other than the shares of its
subsidiaries.   Because  substantially  all  of  the  Company's  operations  are
conducted through subsidiaries,  the Company's cash flow and, consequently,  its
ability to pay dividends or make other  distributions  is dependent  upon either
third-party  borrowings made by the Company or the cash flow of its subsidiaries
and the  payment  of funds by those  subsidiaries,  including  the Bank,  to the
Company  in the form of  loans,  dividends,  fees or  otherwise.  The  Company's
subsidiaries  are  separate  and  distinct  legal  entities  and  will  have  no
obligation, contingent or otherwise, to make any funds available, whether in the
form of  loans,  dividends  or  otherwise.  Regulatory  limitations  on the Bank
restrict its ability to make loans or distributions to the Company.

ITEM 7.         FINANCIAL STATEMENTS

The following  financial  statements  are contained on pages F-1 through F-46 of
this Report:

   Report of Independent Certified Public Accountants;

   Consolidated Balance Sheets - December 31, 2000 and 1999

   Consolidated Statements of Earnings - Years ended December 31, 2000, 1999
   and 1998;

   Consolidated  Statements of  Comprehensive  Income - Years ended December 31,
   2000, 1999 and 1998;

   Consolidated  Statement of  Stockholders'  Equity - Years ended  December 31,
   2000, 1999 and 1998;

   Consolidated  Statements of Cash Flows - Years ended December 31, 2000,  1999
   and 1998;

   Notes to Consolidated Financial Statements

ITEM 8.        CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
               FINANCIAL DISCLOSURE

Not Applicable.

                                    PART III

ITEM 9.         DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
                COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

     Information  required  by Item 9 of Form 10-KSB is  incorporated  herein by
reference  to the  Company's  definitive  Proxy  Statement  for the 2001  Annual
Meeting of  Shareholders  which will be filed with the  Securities  and Exchange
Commission no later than 120 days after the close of the Company's fiscal year.

                                     - 45 -
<PAGE>
ITEM 10.        EXECUTIVE COMPENSATION

     Information  required by Item 10 of Form 10-KSB is  incorporated  herein by
reference  to the  Company's  definitive  Proxy  Statement  for the 2001  Annual
Meeting of  Shareholders  which will be filed with the  Securities  and Exchange
Commission no later than 120 days after the close of the Company's fiscal year.

ITEM 11.        SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     Information  required by Item 11 of Form 10-KSB is  incorporated  herein by
reference  to the  Company's  definitive  Proxy  Statement  for the 2001  Annual
Meeting of  Shareholders  which will be filed with the  Securities  and Exchange
Commission no later than 120 days after the close of the Company's fiscal year.

ITEM 12.        CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     Information  required by Item 12 of Form 10-KSB is  incorporated  herein by
reference  to the  Company's  definitive  Proxy  Statement  for the 2001  Annual
Meeting of  Shareholders  which will be filed with the  Securities  and Exchange
Commission no later than 120 days after the close of the Company's fiscal year.

ITEM 13.        EXHIBITS AND REPORTS ON FORM 8-K
(a)   Exhibits
           3.1  Amended and Restated Articles of Incorporation of the Company*
           3.2  Bylaws of the Company*
          10.1 UFH Stock  Option  and  Incentive  Compensation  Plan*
          10.2 Trust Department Stock Option Plan*
          10.3 Eickhoff, Pieper & Willoughby Stock Option Plan*
          10.4 Modification  Agreement*
          10.5 Property  Management Agreement between Imaginative Investments,
               Inc. and the Southeast Companies of Tampa Bay, Inc.*
          10.6  Employment Agreement of Charles O. Lowe*
          10.7  Employment Agreement of Ward J. Curtis, Jr.*
          10.8  Employment Agreement of Harold J. Winner*
          10.9  Employment Agreement of John H. Pieper**
          10.10 Employment Agreement of Neil W. Savage*
          10.11 Employment Agreement of William A. Eickhoff*
          10.12 Salary Continuation Agreement of Harold J. Winner*
          10.13 Salary Continuation Agreement of Neil W. Savage*
          10.14 Agreement  between  Willow  Green  Partnership,  LTD  and  Irwin
                Contracting  relating to foreclosed  property acquired by United
                Bank**
          10.15 Pinellas Bancshares Corporation 8% Convertible Debentures held
                by Eickhoff & Pieper, a Florida General Partnership*
          10.16 Loan Agreement between AmSouth f/k/a AmSouth Bank of Florida and
                UFH f/k/a Pinellas Bancshares Corporation*
             21  List of Subsidiaries*
             27  Financial Data Schedule
     *This  information  is  incorporated  herein by reference to the  Company's
      Amendment  No. 2 to  Registration Statement on Form SB-2 (File No.
      333-60431) previously filed with the Commission on October 7, 1998.
     **This information is incorporated herein by reference to the Company's
       Form 10KSB filed on March 31, 1999.
(b)  Reports on Form 8-K
     One Form 8-K was filed on October 6, 2000  announcing  the  execution  of a
definitive  agreement to acquire 100% of the outstanding stock of First Security
Bank in a  transaction  expected to close during the first  quarter of 2001.  No
financial statements were filed with the Form 8-K.
                                     - 46 -
<PAGE>
                                   SIGNATURES

     In accordance  with Section 13 or 15(d) of the  Securities  Exchange Act of
1934,  the  Registrant  has caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

                                                UNITED FINANCIAL HOLDINGS, INC.

Date:    February 27, 2001                      By: /s/ Neil W. Savage
                                                    ------------------
                                                        Neil W. Savage
                                                        President and
                                                        Chief Executive Officer

     In accordance  with the  Securities  Exchange Act of 1934,  this report has
been signed below by the following  persons on behalf of the  Registrant  and in
the capacities and on the dates indicated.

Signature                Title                                 Date

/s/ John B. Norrie       Chairman of the Board                 February 27, 2001
------------------
    John B. Norrie

/s/ Neil W. Savage       President, Chief Executive Officer    February 27, 2001
------------------       and Director (Principal Executive Officer)
    Neil W. Savage

/s/ Ronald E. Clampitt   Director                              February 27, 2001
----------------------
    Ronald E. Clampitt

/s/ Ward J. Curtis       Director                              February 27, 2001
------------------
    Ward J. Curtis

/s/ David K. Davis       Director                              February 27, 2001
------------------
    David K. Davis

/s/ William A. Eickhoff  Director                              February 27, 2001
-----------------------
    William A. Eickhoff

/s/ Edward D. Foreman    Director                              February 27, 2001
---------------------
    Edward D. Foreman

/s/ Ian F. Irwin         Director                              February 27, 2001
----------------
    Ian F. Irwin

/s/ Charles O. Lowe      Director                              February 27, 2001
-------------------
    Charles O. Lowe



                                     - 47 -
<PAGE>

/s/ Jack A. MaCris, M.D. Director                              February 27, 2001
------------------------
    Jack A. MaCris, M.D.

/s/ William B. McQueen   Director                              February 27, 2001
----------------------
    William B. McQueen

/s/ Ronald R. Petrini    Director                              February 27, 2001
---------------------
    Ronald R. Petrini

/s/ John B. Wier, Jr.    Director                              February 27, 2001
---------------------
    John B. Wier, Jr.

/s/ Harold J. Winner     Director                              February 27, 2001
--------------------
    Harold J. Winner

/s/ C. Peter Bardin      Chief Financial Officer               February 27, 2001
-------------------      (Principal Financial Officer)
    C. Peter Bardin


































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