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

                                    FORM 10-Q


[ X ]    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND
         EXCHANGE ACT OF 1934

         For the period ended      March 31, 1998
                                   --------------
                                       OR

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

         For the transition period from                      to
                                         ----------------       --------------
         Commission file number   0-14671
                                  -------

                     REPUBLIC SECURITY FINANCIAL CORPORATION
              Exact name of registrant as specified in its charter)

       FLORIDA                                      59-2335075
     (State or other jurisdiction of             (I.R.S. Employer
     incorporation or organization)              Identification No.)


                 4400 Congress Avenue, West Palm Beach, FL 33407
               (Address of principal executive offices)(Zip Code)

            Registrant's telephone number, including area code (561)
               840-1200 Securities registered pursuant to Section
                                12(b) of the Act:


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


         Indicate  the  number of  shares  outstanding  of each of the  issuer's
classes of common stock as of the latest practicable date.


Class                                           Outstanding as of May 5, 1998
-----                                           -----------------------------
Common Stock
par value $.01                                                   24,022,192
Outstanding


<PAGE>


             REPUBLIC SECURITY FINANCIAL CORPORATION AND SUBSIDIARY

                                      INDEX


                                                                          Page
PART I:      FINANCIAL INFORMATION

Item 1:

  Condensed Consolidated Statements of Financial Condition
  March 31, 1998 and December 31, 1997.......................................1

  Condensed Consolidated Statements of Income for the
  three months ended March 31, 1998 and 1997.................................2

  Condensed Consolidated Statements of Comprehensive Income for the
  three months ended March 31, 1998 and 1997.................................3

  Condensed Consolidated Statements of Shareholders' Equity
  for the three months ended March 31, 1998
  and the year ended December 31, 1997.......................................4

  Condensed Consolidated Statements of Cash Flows for the
  three months ended March 31, 1998 and 1997.................................5

  Notes to Condensed Consolidated Financial Statements.......................6

Item 2

  Management's Discussion and Analysis of Financial Condition and
  Results of Operations......................................................9

PART II:     OTHER INFORMATION

Item 6       Exhibits and Reports on Form 8-K...............................11


 Signatures..................................................................12


<PAGE>



PART I - FINANCIAL INFORMATION
ITEM 1:
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
======================================================================================================================
                                                                                      March 31,        December 31,
                                                                                        1998               1997
(amounts in thousands except share and per share data)                               (unaudited)
--------------------------------------------------------------------------------- -----------------  -----------------
<S>                                                                                     <C>                <C>    
Assets
Cash and amounts due from depository institutions                                           $33,817            $59,723
Interest-bearing deposits in other financial institutions                                   109,185             66,886
Federal funds sold                                                                              850              7,665
--------------------------------------------------------------------------------- -----------------  -----------------
        Total cash and cash equivalents                                                     143,852            134,274
Investments available-for-sale                                                              133,283            116,762
Investments held to maturity (market value of $9,771 and $10,305 at
      March 31, 1998 and December, 31, 1997, respectively)                                    9,735             10,277
Loans - net                                                                                 660,828            617,392
Loans held for sale (Market value of $9,098 and $13,828 at March 31, 1998
      and December 31, 1997, respectively)                                                    9,000             13,565
Property and equipment - net                                                                 22,461             21,625
Other real estate owned - net                                                                 2,333              2,519
Goodwill - net                                                                                6,970              7,110
Loan servicing rights - net                                                                   1,390              1,519
Accrued interest receivable                                                                   5,324              4,782
Other assets                                                                                 20,930             19,455
--------------------------------------------------------------------------------- -----------------  -----------------
Total                                                                                    $1,016,106           $949,280
================================================================================= =================  =================
Liabilities and Shareholders' Equity
Deposits                                                                                   $752,751           $742,263
Federal Home Loan Bank advances                                                             140,000             85,000
Securities sold under agreements to repurchase                                                9,771             14,443
Advances from borrowers for taxes and insurance                                               3,762              1,835
Bank drafts payable                                                                           8,948              5,769
Other liabilities                                                                            12,476             13,814
--------------------------------------------------------------------------------- -----------------  -----------------
Total liabilities                                                                           927,708            863,124
--------------------------------------------------------------------------------- -----------------  -----------------
Commitments and Contingencies
Preferred stock $10.00 stated value; 10,000,000 shares authorized:  Series "C" -
  867,347 and 948,996 shares issued and outstanding at March 31, 1998
        and December 31, 1997, respectively                                                   8,674              9,490
Common stock $.01 par value; 100,000,000 shares authorized;  22,908,001 and
        22,685,403 shares issued and outstanding at  March 31, 1998 
and December 31, 1997, respetively                                                              229                227
Additional paid-in capital                                                                   54,944             53,781
Retained earnings                                                                            23,943             22,090
Unrealized gain on investments available-for-sale, net of taxes                                 608                568
--------------------------------------------------------------------------------- -----------------  -----------------
Total shareholders' equity                                                                   88,398             86,156
--------------------------------------------------------------------------------- -----------------  -----------------
Total                                                                                    $1,016,106           $949,280
================================================================================= =================  =================
<FN>
See notes to condensed consolidated financial statements.
</FN>
</TABLE>



                                        1

<PAGE>
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
======================================================================================================================
                                                                                          Three months ended March 31,
                                                                                              (unaudited)
 (amounts in thousands except per share data)                                                  1998               1997
-------------------------------------------------------------------------------- ------------------  -----------------
<S>                                                                                        <C>                <C>    
Interest Income:
Interest and fees on loans                                                                  $14,765            $12,800
Interest and dividends on investments                                                         2,289              2,875
-------------------------------------------------------------------------------- ------------------  -----------------
                                                                                             17,054             15,675
-------------------------------------------------------------------------------- ------------------  -----------------
Interest Expense:
Interest on deposits                                                                          5,686              5,362
Interest on borrowings                                                                          898                496
-------------------------------------------------------------------------------- ------------------  -----------------
                                                                                              6,584              5,858
-------------------------------------------------------------------------------- ------------------  -----------------
Net interest income                                                                          10,470              9,817
Provision for loan losses                                                                        30                 31
-------------------------------------------------------------------------------- ------------------  -----------------
Net interest income after  provision for loan losses                                         10,440              9,786
Non-interest Income:
Service charge on deposit accounts                                                            1,637              1,550
Gain on sale of loans                                                                           245                 71
Gain on sale of investments                                                                     168                167
Other income                                                                                    725                680
-------------------------------------------------------------------------------- ------------------  -----------------
                                                                                              2,775              2,468
Operating Expenses:
Employee compensation and benefits                                                            4,183              4,004
Occupancy and equipment                                                                       1,684              1,591
Professional fees                                                                               231                368
Advertising and promotions                                                                      130                164
Communications                                                                                  296                287
Data processing                                                                                 409                250
Insurance                                                                                       132                121
Other                                                                                         1,161              1,270
-------------------------------------------------------------------------------- ------------------  -----------------
                                                                                              8,226              8,055
Income before income taxes                                                                    4,989              4,199
Provision for income taxes                                                                    1,845              1,115
-------------------------------------------------------------------------------- ------------------  -----------------
Net income                                                                                   $3,144             $3,084
================================================================================ ==================  =================
PER SHARE DATA:
Basic earnings per common share                                                               $0.13              $0.13
Diluted earnings per common share                                                             $0.13              $0.13
Dividends per common share                                                                    $0.05              $0.04
Average common shares and common stock equivalents outstanding                               24,835             22,766
================================================================================ ==================  =================
<FN>
See notes to condensed consolidated financial statements.
</FN>
</TABLE>


                                        2

<PAGE>
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
======================================================================================================================
                                                                                          Three months ended March 31,
                                                                                              (unaudited)
 (amounts in thousands)                                                                        1998               1997
-------------------------------------------------------------------------------- ------------------  -----------------
<S>                                                                                         <C>                <C>   
Net income                                                                                   $3,144             $3,084
Other comprehensive income, net of tax:
    Unrealized gain (loss) on investments available-for-sale
    arising during the period                                                                    40              (668)
-------------------------------------------------------------------------------- ------------------  -----------------
Comprehensive income                                                                         $3,184             $2,416
================================================================================ ==================  =================
<FN>
See notes to condensed consolidated financial statements.
</FN>
</TABLE>


                                        3

<PAGE>
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
==========================================================================================================================
                                                                                                                Unrealized
                                                                                                                      Gain
                                                                                                                 (Loss) On
                                                                                                               Investments
                                                                             Additional                        Investments
                                                  Preferred        Common       Paid-in       Retained Available-for-Sale,
(amounts in thousands except share data)              Stock         Stock       Capital       Earnings        net of taxes
--------------------------------------------  ------------- ------------- -------------  ------------- -------------------
<S>                                                 <C>              <C>        <C>           <C>                   <C>  
Balance, December 31, 1996                          $10,350          $216       $50,864        $25,927               ($54)
Exercise of options - 847,189 shares                                    9         2,032
Issuance of stock  grants - 3,000 shares                                             27
Conversion of preferred stock series "C"
         into common stock - 133,306 shares           (860)             2           858
Cash dividends - common stock                                                                  (2,175)
Cash dividends paid by pooled companies - common stock                                         (2,760)
Cash dividends - preferred stock series " C"                                                     (708)
Net income                                                                                       1,806
Change in unrealized gain (loss) on investments
    available-for-sale, net of taxes                                                                                   622
--------------------------------------------  ------------- ------------- -------------  ------------- -------------------
Balance, December 31, 1997                            9,490           227        53,781         22,090                 568
Exercise of options - 91,568 shares                                     1           305
401(k) plan - 4,474 shares                                                           43
Conversion of preferred stock series "C"
        into common stock - 126,556 shares            (816)             1           815
Cash dividends - common stock                                                                  (1,139)
Cash dividends - preferred stock series "C"                                                      (152)
Net income                                                                                       3,144
Change in unrealized gain (loss) on  investments
    available-for-sale, net of taxes                                                                                    40
--------------------------------------------  ------------- ------------- -------------  ------------- -------------------
Balance, March 31, 1998 (unaudited)                  $8,674          $229       $54,944        $23,943                $608
==========================================================================================================================
<FN>
See notes to condensed consolidated financial statements.
</FN>
</TABLE>


                                        4

<PAGE>
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
===================================================================================================================
                                                                                       Three Months Ended March 31,
                                                                                                (unaudited)
(amounts in thousands)                                                                    1998                 1997
-------------------------------------------------------------------------------------------------------------------
<S>                                                                                   <C>                  <C>   
Operating Activities:
Net income                                                                              $3,144               $3,084
Adjustments to reconcile net income to net cash
  provided by operating activities:
Provision for loan losses                                                                   30                   31
Depreciation and amortization                                                              871                  761
Gain on sale of investments available-for-sale                                           (168)                (167)
Gain on sale of loans                                                                    (245)                 (71)
Loans originated for sale                                                              (5,235)              (4,222)
Sale of loans and loan participation certificates                                       10,045                9,856
Other - net                                                                              3,272              (3,483)
-------------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities                                               11,714                5,789
-------------------------------------------------------------------------------------------------------------------
Investing Activities:
Purchases of investments available-for-sale                                           (48,845)             (15,769)
Proceeds from sales and maturities of investments available-for-sale                    28,551               18,985
Maturities and calls of investments held to maturity                                       540                2,578
Purchases of investments held to maturity                                                                   (5,613)
Loans purchased for investment                                                        (31,024)             (16,155)
Net increase in loans                                                                 (12,447)             (12,724)
Other - net                                                                              1,215                  493
-------------------------------------------------------------------------------------------------------------------
Net cash used in investing activities                                                 (62,010)             (28,205)
-------------------------------------------------------------------------------------------------------------------
Financing Activities:
Net increase (decrease) in demand deposits, NOW accounts,
  Money Market accounts and savings accounts                                             9,284              (5,465)
Net increase (decrease) in certificates of deposits                                      1,204              (6,889)
Increase in FHLB advances                                                               55,000               15,000
Other - net                                                                            (5,614)              (2,504)
-------------------------------------------------------------------------------------------------------------------
Net cash provided by financing activities                                               59,874                  142
-------------------------------------------------------------------------------------------------------------------
Increase (decrease)  in cash and cash equivalents                                        9,578             (22,274)
Cash and cash equivalents at beginning of period                                       134,274              100,299
-------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of period                                            $143,852              $78,025
===================================================================================================================
<FN>
For purposes of reporting cash flows, cash and cash equivalents  include cash on
hand,  amounts due from banks and federal funds sold.  Generally,  federal funds
are  purchased  and sold for one-day  periods.  The  Company  made no income tax
payments  during the quarter  ended  March 31, 1998 and paid  $420,000 in income
taxes during the three months ended March 31, 1997.  The Company paid $6,667 and
$6,426 in interest  on deposits  and other  borrowings  during the three  months
ended  March 31, 1998 and 1997,  respectively.  The Company had $246 and $777 of
transfers  from loans to OREO during the three  months  ended March 31, 1998 and
1997, respectively.

See notes to condensed consolidated financial statements
</FN>
</TABLE>


                                        5

<PAGE>
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                 MARCH 31, 1998

1.       Basis of Presentation

                  The accompanying  unaudited condensed  consolidated  financial
         statements   include  the  accounts  of  Republic  Security   Financial
         Corporation (the "Company" or "RSFC") and its wholly-owned  subsidiary,
         Republic  Security Bank (the  "Bank").  In the opinion of the Company's
         management,   the   financial   statements   contain  all   adjustments
         (consisting  of normal  recurring  accruals)  considered  necessary  to
         present fairly the consolidated financial position of Republic Security
         Financial  Corporation  and its  subsidiary  as of March  31,  1998 and
         December 31, 1997,  and the results of operations  for the three months
         ended March 31, 1998 and March 31, 1997, and the comprehensive  results
         of  operations  for the three months ended March 31, 1998 and March 31,
         1997, and changes in cash flows for the three months then ended.

                  The accompanying  unaudited condensed  consolidated  financial
         statements  have been prepared in accordance  with  generally  accepted
         accounting  principles for interim  financial  information and with the
         instructions   to  Form  10-Q  and  Article  10  of   Regulation   S-X.
         Accordingly,  they do not include all of the  information and footnotes
         required by  generally  accepted  accounting  principles  for  complete
         financial  statements.  Operating  results for the three  months  ended
         March 31, 1998 are not  necessarily  indicative of the results that may
         be  expected  for the  year  ending  December  31,  1998.  For  further
         information,   refer  to  the  consolidated  financial  statements  and
         footnotes thereto included in Republic Security Financial Corporation's
         annual report on Form 10-K for the year ended December 31, 1997.

                  The balance  sheet at December  31, 1997 has been derived from
         the audited financial  statements at that date but does not include all
         of  the  information  and  footnotes  required  by  generally  accepted
         accounting principles for complete financial statements.

2.       Potential Merger

                  On March 26,  1998,  the Company and the Bank  entered  into a
         definitive agreement with Unifirst Federal Savings Bank ("Unifirst"), a
         federally  chartered,  savings bank,  whereby  Unifirst will merge with
         Republic Security Bank. At the effective time of the merger, each share
         of Unifirst common stock will be converted into the number of shares of
         RSFC common  stock,  equal to the  "Conversion  Rate" as defined by the
         definitive  agreement.  The  Conversion  Rate is  equal  to the  number
         determined  by  dividing  Unifirst's  stock  value by the RSFC  average
         closing  price  at the  effective  time of the  merger.  Unifirst  is a
         Federal Savings Bank, headquartered in Hollywood,  Florida. As of March
         31, 1998, Unifirst had assets of $140 million, deposits of $130 million
         and shareholder's equity of $8 million.

3.       Non-Performing Assets and Allowance for Loan Losses

                  At March 31, 1998, the Bank had $8.6 million in non-performing
         assets  (loans 90 days or more past due,  other real  estate  owned and
         repossessed  assets).  The  provision  for loan  losses was $30,000 and
         $31,000  for  the  three   months   ended  March  31,  1998  and  1997,
         respectively.

                  Although  management  uses its best judgement in  underwriting
         each loan, industry  experience  indicates that a portion of the Bank's
         loans will become delinquent.  Regardless of the underwriting  criteria
         utilized by  financial  institutions,  losses may be  experienced  as a
         result of many factors  beyond  their  control  including,  among other
         things,  changes in market  conditions  affecting the value of security
         and unrelated problems affecting the credit of the borrower. Due to the
         concentration of loans in South Florida, adverse economic conditions in
         this area  could  result in a  decrease  in the value of a  significant
         portion of the Bank's collateral.

                  In the normal course of business,  the Bank has recognized and
         will  continue to  recognize  losses  resulting  from the  inability of
         certain borrowers to repay loans and the insufficient  realizable value
         of  collateral  securing  such  loans.   Accordingly,   management  has
         established an allowance for loan losses, which totaled $6.6 million at
         March 31, 1998.


                                        6

<PAGE>

                  The  allowance  for  credit  losses is  maintained  at a level
         believed  adequate by management to absorb  estimated  probable  credit
         losses.  Management's  periodic  evaluation  of  the  adequacy  of  the
         allowance is based on the Company's  past loan loss  experience,  known
         and inherent risks in the portfolio, adverse situations that may affect
         the  borrower's  ability  to repay  (including  the  timing  of  future
         payments),   the  estimated   value  of  any   underlying   collateral,
         composition of the loan portfolio,  current  economic  conditions,  and
         other relevant factors.  This evaluation is inherently subjective as it
         requires material estimates  including the amounts and timing of future
         cash  flows  expected  to be  received  on  impaired  loans that may be
         susceptible to significant change.

4.       Commitments and Contingencies

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

                  At March 31, 1998, the Bank had adjustable rate commitments to
         extend credit of approximately  $103,000,000  excluding the undisbursed
         portion  of  loans-in-process.  These  commitments  are  primarily  for
         commercial  lines of credit secured by commercial  real estate or other
         business assets and for one-to-four family residential properties.

                  In addition to the above commitments and contingencies,  there
         are various  matters of  litigation  pending  against the Company  that
         management  has  reviewed  with  legal  counsel.   In  the  opinion  of
         management of the Company, amounts accrued for awards of assessments in
         connection  with these matters are adequate and ultimate  resolution of
         these  matters  will  not  have a  material  effect  on  the  Company's
         consolidated financial position, results of operations or cash flow.

5.       Earnings per Common Share

                  The following  table sets forth the  computation  of basic and
diluted earnings per share:
<TABLE>
<CAPTION>
=============================================================================================================
                                                                                           Three Months Ended
                                                                                                    March 31,
( in thousands except per share data)                                               1998                 1997
------------------------------------------------------------ --------------------------- --------------------
<S>                                                                              <C>                  <C>   
Numerator:
Net income                                                                        $3,144               $3,084
Preferred stock dividends                                                          (152)                (181)
------------------------------------------------------------ --------------------------- --------------------
Numerator for basic earnings per share - income available to common stockholders   2,992                2,903
Effect of dilutive securities:
         Preferred stock dividends                                                   152
------------------------------------------------------------ --------------------------- --------------------
Numerator for diluted earnings per share - income available to common
         stockholders after assumed conversions                                   $3,144               $2,903
============================================================ =========================== ====================
Denominator:
Denominator for basic earnings per share - weighted-average shares                22,908               21,611
Effective of dilutive securities:
         Employee stock options                                                      583                1,155
         Convertible preferred stock                                               1,344
------------------------------------------------------------ --------------------------- --------------------
Dilutive potential common shares                                                   1,927                1,155
------------------------------------------------------------ --------------------------- --------------------
Denominator for diluted earnings per share - adjusted weighted-average shares
         and assumed conversions                                                  24,835               22,766
============================================================ =========================== ====================
Basic earnings per share                                                           $0.13                $0.13
Diluted earnings per share                                                         $0.13                $0.13
=============================================================================================================
</TABLE>

                  At March 31, 1998,  133,000 stock options at an exercise price
         of $10.38 were outstanding that could potentially dilute basic earnings
         per share in the future but were not  included  in the  computation  of
         diluted  earnings per share for the quarter  ended March 31, 1998.  The
         effect of these shares is  antidilutive  to diluted  earnings per share
         for the quarter ended March 31, 1998.

                                        7

<PAGE>
6.       Comprehensive Income

                  On January 1, 1998, the Company adopted  Financial  Accounting
         Standards No. 130 ("FAS 130"), Reporting  Comprehensive Income. FAS 130
         establishes standards for reporting and displaying comprehensive income
         and its  components.  The  adoption  of FAS 130 did not have a material
         impact on the Company.  All of the Company's other comprehensive income
         relates  to  net  unrealized   gains  (losses)  on   available-for-sale
         investments.

                                        8

<PAGE>
ITEM 2:      MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS

          Comparison of the Three Months Ended March 31, 1998 and 1997

Results of Operations

The  Company  had net income of $3.14  million or $.13 per common  share for the
three months ended March 31,  1998,  compared to net income of $3.08  million or
$.13 per common share for the three  months  ended March 31, 1997.  Net interest
income  increased  $653,000  or 6% for the three  months  ended  March 31,  1998
compared to the three months ended March 31, 1997. Non-interest income increased
$307,000 or 12% while operating  expenses  increased 171,000 or 2% for the three
months ended March 31, 1998 compared to the three months ended March 31, 1997.

Net Interest Income

         The  increase in net  interest  income for the quarter  ended March 31,
1998 compared to the quarter ended March 31, 1997 is due to an increase of $1.38
million in  interest  income  offset by an  increase  of  $726,000  in  interest
expense.  Interest  income  increased  primarily  due to an  increase  of $57.10
million in  interest-earning  assets due to an  increase in loans as a result of
loan originations and  approximately  $15.4 million in average loan outstandings
as a result of loan purchases.  Interest expense  increased  primarily due to an
increase  in  interest-bearing  liabilities.  The net  interest  margin  and net
interest  spread of 5.22% and 4.36%,  respectively,  for the three  months ended
March 31, 1998 remained relatively flat compared to the three months ended March
31, 1997.

Provision for Loan Losses

         The  provision  for loan losses of $30,000 for the three  months  ended
March 31, 1998 is consistent  with the provision of $31,000 for the three months
ended March 31, 1997.

Non-Interest Income

         Non-interest income increased $307,000 for the three months ended March
31, 1998 compared to the three months ended March 31, 1997 due to an increase of
$174,000 in gain on sale of loans,  an increase of $87,000 in service charges on
deposit  accounts  and an increase of $45,000 in other  income.  The increase in
service charges on deposit  accounts is primarily due to the increase in deposit
accounts  and the increase in other income is primarily a result of increases in
the volume of ATM fees and merchant services.

Operating Expenses

         Operating  expenses  increased $171,000 for the quarter ended March 31,
1998 compared to the quarter ended March 31, 1997  primarily due to increases of
$179,000 in employee compensation and benefits, $159,000 in data processing fees
and $93,000 in occupancy and equipment  expense offset by a decrease of $137,000
in professional fees and a decrease of $109,000 in other expenses.  The increase
in employee  compensation and benefits  expenses is primarily due to the accrual
of $340,000 for Stock Appreciation Rights (SARs) for the quarter ended March 31,
1998 and additional  personnel  associated  with two new branches opened late in
1997 as well as the new Trust and  Investment  division  offset by cost  savings
realized as a result of the mergers with Family Bank on June 30, 1997 and County
Financial  Corporation on December 2, 1997. The increase in data processing fees
is due to an  increase  in volume as a result of growth  and the  conversion  of
Family  Bank from an in-house  data  processing  system to the  service  bureau.
Occupancy and  equipment  expense  increased due to an increase in  depreciation
expense associated with additional equipment for new branches and departments as
well as upgraded equipment related to the Family Bank merger.  Professional fees
were  higher in 1997 due to the  Premium  litigation  case which was  settled by
County  Financial  Corporation  in  1997.  Other  operating  expenses  decreased
primarily  due to a decrease in other real  estate  owned  expense  offset by an
increase of approximately  $100,000 of restructure  expenses associated with the
integration  of systems for County  Financial  Corporation  in the three  months
ended March 31, 1998.





                                        9

<PAGE>
                                            Management's Discussion and Analysis
                    of Financial Condition and Results of Operations (Continued)
--------------------------------------------------------------------------------
Provision for Income Taxes

         Income tax expenses increased $730,000 for the three months ended March
31, 1998 compared to the three months ended March 31, 1997 due to an increase in
the  effective  tax rate to 37% from 27% and an  increase  of $790,000 in income
before  taxes.  The lower rate in the quarter  ended March 31, 1997 was due to a
reduction of the allowance for deferred tax assets.

Liquidity, Sources of Capital and Capital Requirements

         As a member of the Federal Home Loan Bank  System,  the Bank is subject
to regulations  which require it to maintain "long term" liquidity  ratios.  The
majority of the liquid  assets of the Bank are  investments  available-for-sale,
deposits with the Federal Home Loan Bank of Atlanta and federal funds sold.  The
Bank was in compliance with liquidity requirements during the three months ended
March 31, 1998.

         On certain  occasions,  demand for loan funds may exceed cash available
from  deposits.  On such  occasions,  the Bank may borrow funds from the Federal
Home Loan Bank of Atlanta,  draw on lines of credit with commercial banks and/or
enter into repurchase agreements on eligible investments.

         Cash and cash  equivalents  increased by  approximately  $9.58  million
during the three  months  ended  March 31,  1998.  The  increase  in cash is due
primarily  to an increase in FHLB  advances of $55.00  million,  $10.49  million
increase in deposits and $11.71 million in cash provided by operating activities
offset by $43.47  million of loan  purchases  and  originations,  an increase of
$16.60 million in net investments available-for-sale,  $4.67 million decrease in
securities  sold under  agreements to repurchase,  $1.84 million funding of life
insurance  policies  associated  with the  director  retirement  plan and  $1.29
million in dividends  paid. The majority of loan  originations  during the three
months ended March 31, 1998 related to commercial  business and commercial  real
estate loans.

     The following table shows the capital amounts and ratios of the Bank at 
March 31, 1998

===================================  ====================  =====================
(Dollars in thousands)                             Amount                Ratio
-----------------------------------  --------------------  ---------------------
Total risk based capital                          $77,902                11.20%



Tier 1 risk based capital                         $70,903                10.20%
Leverage capital                                  $70,903                 7.90%

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

         The Bank was in compliance with its' capital  requirements at March 31,
1998.

Financial Condition

         As of March 31,  1998,  total  assets  increased  approximately  $66.83
million or 7% from December 31, 1997.  Loans-net increased  approximately $43.44
million,  investments  increased  approximately $15.98 million and cash and cash
equivalents increased $9.58 million. The increase in assets was funded primarily
by an increase of $55.00 million in FHLB advances and an increase in deposits of
approximately $10.49 million.

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<PAGE>



PART II.  OTHER INFORMATION

ITEM 6:           Exhibits and Reports on Form 8-K

         (a) No exhibits required.

         (b) During the quarter ended March 31, 1998, the Company filed one Form
8-K. The Form 8-K filing, which was dated April 2, 1998, reported the definitive
agreement  whereby  Unifirst  Federal Savings Bank will merge into the Company's
wholly owned subsidiary in a stock-for-stock transaction.




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<PAGE>


                                      REPUBLIC SECURITY FINANCIAL CORPORATION


                                                    SIGNATURES


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





                                    Republic Security Financial Corporation
                                    (Registrant)






Date:  5/14/98                      /S/ Carla H. Pollard
       -------                      --------------------
                                    Carla H. Pollard
                                    Vice President/Controller










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