Quarterly Report Under Section 13 or 15(d)
                     of the Securities Exchange Act of 1934

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

                                    FORM 10-Q

                                   (MARK ONE)

[ X ]     Quarterly Report Pursuant to Section 13 or 15(d) of the Securities 
          and Exchange Act of 1934

          For the period ended:    September 30, 1996
                                   ------------------
                                          or

[   ]     Transition Report Pursuant to Section 13 or 15(d) of the Securities 
          and 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, Florida 33402
              ----------------------------------------------------
               (Address of principal executive offices)(Zip Code)

                                 (407) 840-1200
                                  -------------
              (Registrant's telephone number, including area code)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 1 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.

                                               [ X ]  YES  [  ]  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 October 30, 1996
-----                                         ----------------------------------
Common Stock
par value $.01                                           7,828,100
outstanding


<PAGE>

            REPUBLIC SECURITY FINANCIAL CORPORATION AND SUBSIDIARIES

                                      INDEX

                                                                           Page
                                                                          Number
Part I: Financial Information

        Item 1:

        Condensed Consolidated Statements of Financial
        Condition - September 30, 1996 and December 31, 1995..................1

        Condensed Consolidated Statements of Income
        for the three months ended September 30, 1996 and 1995................2

        Condensed Consolidated Statements of Income for
        the nine months ended September 30, 1996 and 1995.....................3

        Condensed Consolidated Statements of Shareholders'
        Equity for the nine month transition period ended
        December 31, 1995 and for the nine months
        ended September 30, 1996..............................................4

        Condensed Consolidated Statements of Cash Flows
        for the nine months ended September 30, 1996 and 1995.................5

        Notes to Condensed Consolidated Financial Statements................6-8

        Item 2:

        Management's Discussion and Analysis...............................9-11

Part II:    Other Information

        Item 6:  Exhibits and Reports Filed............................... ..12
                 Exhibit 11 - Computation of Per Share Earnings..............13

        Signatures...........................................................14



<PAGE>

PART I.  FINANCIAL INFORMATION
<TABLE>
<CAPTION>
====================================================================================================================================
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                                                                                      September 30,          December 31,
                                                                                          1996                   1995
(amounts in thousands except share and per share data)                                (unaudited)
====================================================================================================================================
<S>                                                                                    <C>                   <C>      
Assets
Cash and amounts due from depository institutions                                      $   3,937             $   3,211
Interest-bearing deposits in other financial institutions                                 23,688                51,162
Investments held to maturity (market value of $6,987 and $10,779 at
  September 30, 1996 and December 31, 1995, respectively)                                  6,877                10,622
Investments available for sale                                                            15,989
Loans - net                                                                              235,388               216,756
Loans held for sale (market value of $10,130 at September 30, 1996)                        9,980
Property and equipment - net                                                               8,779                 7,192
Other real estate owned - net                                                              1,944                 1,340
Goodwill - net                                                                             7,816                 2,994
Loan servicing rights - net                                                                2,161                 2,546
Accrued interest receivable                                                                1,892                 1,796
Other assets                                                                               7,968                 6,042
------------------------------------------------------------------------------------------------------------------------------------
Total                                                                                   $326,419              $303,661
====================================================================================================================================
Liabilities and Shareholders' Equity
Liabilities:
Deposits                                                                                $253,904              $223,535
Federal Home Loan Bank advances                                                           12,000                25,000
Securities sold under agreements to repurchase                                             1,724                 2,350
Advances from borrowers for taxes and insurance                                            5,332                 2,105
Bank drafts payable                                                                        2,654                 3,155
Other liabilities                                                                          5.640                 3,682
------------------------------------------------------------------------------------------------------------------------------------
Total liabilities                                                                        281,254               259,827
------------------------------------------------------------------------------------------------------------------------------------
Commitments and Contingencies
Shareholders' equity:
Preferred stock $10.00 stated value; 10,000,000 shares authorized:
  Series "A": 401,500 shares issued and outstanding at December 31, 1995                                         4,015
  Series "C" - 1,035,000 shares issued and outstanding at
     September 30, 1996 and December 31, 1995.                                            10,350                10,350
Common stock $.01 par value; 20,000,000 shares authorized;
    7,852,040 and  6,587,653 shares issued and outstanding at
    September 30, 1996 and December 31, 1995, respectively                                    78                    66
Additional paid-in capital                                                                31,089                26,035
Retained earnings                                                                          3,589                 3,368
Unrealized appreciation on investments available for sale, net of taxes                       59
------------------------------------------------------------------------------------------------------------------------------------
Total shareholders' equity                                                                45,165                43,834
------------------------------------------------------------------------------------------------------------------------------------
Total                                                                                   $326,419              $303,661
====================================================================================================================================
<FN>
See notes to condensed consolidated financial statements.
</FN>
</TABLE>

                                       1

<PAGE>
<TABLE>
<CAPTION>
====================================================================================================================================
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                                                                        Three Months Ended September 30,
                                                                                               1996           1995
(amounts in thousands except per share data)                                                        (Unaudited)
====================================================================================================================================
INTEREST INCOME:                                                                             
<S>                                                                                           <C>            <C>   
  Interest and fees on loans                                                                  $5,713         $5,236
  Interest and dividends on investments                                                          510            302
------------------------------------------------------------------------------------------------------------------------------------
                                                                                               6,223          5,538
------------------------------------------------------------------------------------------------------------------------------------
INTEREST EXPENSE:
  Interest on deposits                                                                         2,551          2,334
  Interest on borrowings                                                                          83            370
------------------------------------------------------------------------------------------------------------------------------------
                                                                                               2,634          2,704
------------------------------------------------------------------------------------------------------------------------------------
  Net interest income                                                                          3,589          2,834
  Provision for loan losses                                                                       50             50
------------------------------------------------------------------------------------------------------------------------------------
  Net interest income after provision for loan losses                                          3,539          2,784
------------------------------------------------------------------------------------------------------------------------------------
NON-INTEREST INCOME:
  Mortgage trading income                                                                                       259
  Gain on sale of loans                                                                          426            270
  Other income                                                                                   854            754
------------------------------------------------------------------------------------------------------------------------------------
                                                                                               1,280          1,283
------------------------------------------------------------------------------------------------------------------------------------
OPERATING EXPENSES:
  Employee compensation and benefits                                                           1,457          1,252
  Occupancy and equipment                                                                        657            511
  Professional fees                                                                              183            146
  Advertising and promotions                                                                      77             55
  Communications                                                                                 120            100
  Data processing                                                                                172            108
  Insurance                                                                                    1,296            173
  Other                                                                                          492            551
------------------------------------------------------------------------------------------------------------------------------------
                                                                                               4,454          2,896
------------------------------------------------------------------------------------------------------------------------------------
  Income before taxes                                                                            365          1,171
  Provision for income taxes                                                                     153            421
------------------------------------------------------------------------------------------------------------------------------------
  Net income                                                                                    $212           $750
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA:
  Primary earnings per common share                                                               **         $  .15
  Fully diluted earnings per common share                                                         **         $  .13
  Dividends per common share                                                                    $.03          $.025
  Average common shares and common stock equivalents outstanding:
  Primary                                                                                      7,823          4,629
  Fully diluted                                                                                7,823          5,610
====================================================================================================================================
<FN>
** Less than $.01 per share
See notes to condensed consolidated financial statements.
</FN>
</TABLE>

                                        2

<PAGE>

<TABLE>
<CAPTION>
====================================================================================================================================
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                                                                           Nine Months Ended September 30,
                                                                                             1996            1995
(amounts in thousands except per share data)                                                      (Unaudited)
====================================================================================================================================
INTEREST INCOME:                                                                                        
<S>                                                                                          <C>            <C>    
  Interest and fees on loans                                                                 $17,074        $15,255
  Interest and dividends on investments                                                        1,565          1,021
------------------------------------------------------------------------------------------------------------------------------------
                                                                                              18,639         16,276
------------------------------------------------------------------------------------------------------------------------------------
INTEREST EXPENSE:
  Interest on deposits                                                                         7,785          6,911
  Interest on borrowings                                                                         174            993
------------------------------------------------------------------------------------------------------------------------------------
                                                                                               7,959          7,904
------------------------------------------------------------------------------------------------------------------------------------
  Net interest income                                                                         10,680          8,372
  Provision for loan losses                                                                      105            100
------------------------------------------------------------------------------------------------------------------------------------
  Net interest income after provision for loan losses                                         10,575          8,272
------------------------------------------------------------------------------------------------------------------------------------
NON-INTEREST INCOME:
  Mortgage trading income                                                                                       304
  Gain on sale of loans                                                                          729            551
  Other income                                                                                 2,564          1,977
------------------------------------------------------------------------------------------------------------------------------------
                                                                                               3,293          2,832
------------------------------------------------------------------------------------------------------------------------------------
OPERATING EXPENSES:
  Employee compensation and benefits                                                           4,645          3,832
  Occupancy and equipment                                                                      1,821          1,587
  Professional fees                                                                              545            560
  Advertising and promotions                                                                     267            207
  Communications                                                                                 346            314
  Data processing                                                                                516            317
  Insurance                                                                                    1,535            476
  Other                                                                                        1,564          1,386
------------------------------------------------------------------------------------------------------------------------------------
                                                                                              11,239          8,679
------------------------------------------------------------------------------------------------------------------------------------
  Income before taxes                                                                          2,629          2,425
  Provision for income taxes                                                                   1,093            870
------------------------------------------------------------------------------------------------------------------------------------
  Net income                                                                                  $1,536         $1,555
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA:
  Primary earnings per common share                                                           $  .11        $   .31
  Fully diluted earnings per common share                                                     $  .11        $   .30
  Dividends per common share                                                                   $.085          $.065
  Average common shares and common stock equivalents outstanding:
  Primary                                                                                      7,297          4,269
  Fully diluted                                                                                7,297          5,260
====================================================================================================================================
<FN>
See notes to condensed consolidated financial statements.
</FN>
</TABLE>

                                       3

<PAGE>


<TABLE>
<CAPTION>
====================================================================================================================================
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                                                                                                                          Unrealized
                                                                                                                     Appreciation on
                                                                                        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, March 31, 1995                                        $4,025           $37        $14,362        $2,022
Exercise of equity contracts - 634,476 shares                                     6          1,745
Exercise of warrants - 211,300 shares                                             2            818
Exercise of stock options - 2,668 shares                                                         7
Issuance of stock grants - 12,000 shares                                                        52
Conversion of preferred stock into common stock-
  2,469 shares                                                   (10)                           10
401(k) plan - 1,997 shares                                                                       8
Issuance of series "C" preferred stock -
  1,035,000 shares                                             10,350                        (850)
Issuance of common stock - 2,070,000 shares                                      21          9,883
Cash dividends - common stock                                                                              (302)
Cash dividends-preferred stock series "A" and "C"                                                          (329)
Net income for nine month transition period
  ended December 31, 1995                                                                                  1,977
------------------------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1995                                     14,365            66         26,035         3,368
Exercise of warrants - 268,126 shares                                             3          1,039
Conversion of preferred stock series "A"
  into common stock - 982,995 shares                          (3,980)             9          3,971
Issuance of stock grants - 9,000 shares                                                         32
Exercise of stock options - 4,266 shares                                                        12
Cash redemption of preferred stock series "A"                    (35)
Cash dividends - common stock                                                                              (612)
Cash dividends - preferred stock series "A" and "C"                                                        (703)
Net income for nine months ended September 30, 1996                                                        1,536
Change in appreciation on investments available for sale,
  net of taxes                                                                                                                   59
------------------------------------------------------------------------------------------------------------------------------------
Balance, September 30, 1996                                   $10,350           $78        $31,089        $3,589                $59
====================================================================================================================================
<FN>
The information for the nine months ended September 30, 1996 is unaudited.

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


                                       4

<PAGE>

<TABLE>
<CAPTION>
====================================================================================================================================
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                                                                                          Nine Months Ended September 30,
                                                                                                 (unaudited)
(amounts in thousands)                                                                    1996                 1995
====================================================================================================================================
Operating Activities:
<S>                                                                                    <C>                  <C>   
Net income                                                                              $1,536               $1,555
Adjustments to reconcile net income to net cash
  provided by operating activities, net of effects of merger
Provision for loan losses                                                                  105                  100
Provision for depreciation                                                                 508                  450
Amortization of goodwill and other intangibles                                             440                  165
Gain on sale of loans and mortgage trading                                                (729)                (551)
Loan costs deferred                                                                       (147)                (176)
Loans originated or acquired for sale                                                   (8,480)             (23,290)
Sale of loans and loan participation certificates                                       29,472               40,645
Other - net                                                                              3,047                  271
------------------------------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities                                               25,752               19,169
------------------------------------------------------------------------------------------------------------------------------------
Investing Activities:
Cash and cash equivalents acquired in merger-net                                        15,235
Maturities and calls of investments held-to-maturity                                     8,492                4,200
Purchases of investments available for sale                                            (15,960)
Purchases of investments held-to-maturity                                               (4,493)
Loans originated or acquired for investment                                            (62,796)             (75,507)
Principal collected on loans                                                            47,976               60,069
Other - net                                                                               (994)              (2,680)
------------------------------------------------------------------------------------------------------------------------------------
Net cash used in investing activities                                                  (12,540)             (13,918)
------------------------------------------------------------------------------------------------------------------------------------
Financing Activities:
Net decrease in demand deposits, NOW accounts,
  Money Market accounts and savings accounts                                            (5,133)              (7,178) 
Proceeds from sales
of  certificates  of deposit                                                            19,714               43,984
Payment for maturing  certificates of
deposits                                                                               (40,651)             (42,461)
Decrease)  increase in FHLB advances                                                   (13,000)               7,000
Other - net                                                                               (890)                (565) 
------------------------------------------------------------------------------------------------------------------------------------
Net cash (used in)  provided  by  financing  activities                                (39,960)                 780  
------------------------------------------------------------------------------------------------------------------------------------
(Decrease)  increase in cash and cash  equivalents                                     (26,748)               6,031
Cash and cash  equivalents  at beginning of period                                      54,373               21,192 
------------------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents  at end of period                                            $27,625              $27,223
====================================================================================================================================
<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 paid  $1,236,000
and $498,000 in income taxes during the nine months ended September 30, 1996 and
1995,  respectively.  The Company paid  $8,069,000 and $7,778,000 in interest on
deposits and other  borrowings  during the nine months ended  September 30, 1996
and 1995,  respectively.  The Company had  $1,101,000  and $488,000 of transfers
from loans to OREO during the nine  months  ended  September  30, 1996 and 1995,
respectively.  Assets of $62 million were  acquired and $57 million  liabilities
assumed  related  to the merger of Banyan  Bank  during  the nine  months  ended
September 30, 1996.
====================================================================================================================================
See notes to condensed consolidated financial statements.
</FN>
</TABLE>



                                       5

<PAGE>
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                               September 30, 1996

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 September 30, 1996 and
         December 31, 1995, and the results of operations for the three and nine
         months ended September 30, 1996 and 1995, and changes in cash flows for
         the nine 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  Regulations   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 and nine months
         ended September 30, 1996 are not necessarily  indicative of the results
         that may be expected for the year ending December 31, 1996. For further
         information,   refer  to  the  consolidated  financial  statements  and
         footnotes thereto included in Republic Security Financial Corporation's
         annual report on Form 10-KT for the nine month transition  period ended
         December 31, 1995.

                  The balance  sheet at December  31, 1995 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.       Non-Performing Assets and Allowance for Loan Losses

                  At  September   30,   1996,   the  Bank  had   $5,092,000   in
         non-performing  assets  (loans  90 days or more past  due,  other  real
         estate owned and repossessed assets). The provision for loan losses was
         $105,000 and $100,000 for the nine months ended  September 30, 1996 and
         1995, respectively.

                  The  allowance  for  loan  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.

3.       Merger

                  On  January  19,  1996,  the  Company   acquired  Banyan  Bank
         ("Banyan") for  $9,701,320,  plus $60,000 in merger related costs.  The
         purchase  price,  which  was paid in the form of cash,  was  determined
         based upon a multiple of Banyan's  shareholder equity balance,  limited
         to a  specified  amount,  as of the  last  day of the  month  prior  to
         closing.

                  Banyan was a state chartered  commercial bank headquartered in
         Boca  Raton,  Florida.  Banyan had total  assets at January 19, 1996 of
         approximately $62,000,000, total deposits of approximately $56,000,000


                                       6

<PAGE>
         and two full service branches located in Boca Raton, and Boynton Beach,
         Florida.

                  The acquisition was accounted for as a purchase.  Accordingly,
         operations of Banyan Bank are included  since the  acquisition  date of
         January 19, 1996.  Approximately  $5,000,000 in goodwill was recognized
         representing  the purchase price in excess of the fair value of the net
         assets  acquired.  Goodwill  will be amortized  over 15 years using the
         straight-line method.

                 Pro forma financial information for Republic Security Financial
         Corporation, as if the Banyan Bank merger had taken place as of January
         1, 1995 for income and per share data is as follows:

<TABLE>
<CAPTION>
====================================================================================================================================
                                                      Three months ended,     Six months ended,      Nine months ended,
(in thousands)                                             March 31, 1995         June 30, 1995      September 30, 1995
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                <C>                  <C>                     <C>   
Total interest income                                              $6,263               $12,753                 $19,428
====================================================================================================================================
Net interest income after provision for  loan losses               $3,370                $6,665                 $10,079
====================================================================================================================================
Income before taxes                                                  $684                $1,781                  $3,256
====================================================================================================================================
Net income                                                           $394                $1,027                  $1,923
====================================================================================================================================
Net income per common share                                          $.02                  $.08                    $.18        
====================================================================================================================================
</TABLE>

                 The unaudited pro forma data is for  information  purposes only
         and  may not be indicative of  the  results that  actually  would  have
         occurred  if  the   transactions  had  been  consummated  on  the dates
         indicated and should not be construed as being representative of future
         periods.

4.       Redemption of 7.5% Cumulative Convertible Preferred Stock, Series A

                  On September 21, 1996, the Company called the 7.5%  Cumulative
         Convertible  Preferred  Stock  Series  A (the  "Preferred  Stock")  for
         redemption on July 26, 1996  ("Redemption  Date").  The Preferred Stock
         became  payable and ceased to accrue  dividends on that date,  and upon
         surrender  of  the  stock  certificates  for  redemption,  the  holders
         received the redemption price of $10 per share, or  alternatively,  the
         holders  surrendered  each of  their  shares  of  Preferred  Stock  for
         conversion  into  2.47  shares  of  the  Company's   common  stock.  In
         connection with the redemption,  982,995 shares of the Company's common
         stock were issued.

5.       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  counterparty.  At September  30, 1996,  the Bank had
         adjustable   rate   commitments  to  extend  credit  of   approximately
         $18,602,000  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,  there are various matters of litigation  pending
         against the Company that  management  has reviewed with legal  counsel.
         Management  believes  that the  aggregate  liability  or loss,  if any,
         resulting from such litigation will not be material to the consolidated
         financial statements.

                                       7
<PAGE>

6.       Income per Common Share

               Primary  income per common  share is  computed  by  dividing  net
          income less preferred stock  dividends by the weighted  average number
          of shares of common  stock and common  stock  equivalents  outstanding
          during the  period.  Fully  diluted  net  income  per common  share is
          calculated  by  dividing  net income by the  average  number of common
          stock and common stock equivalents  outstanding  during the year, plus
          the assumed conversion of all outstanding convertible preferred shares
          to common shares.  Common stock equivalents for both primary and fully
          diluted net income per share  include  stock  options,  warrants,  and
          equity  contracts and are included in the  computation of earnings per
          share using the treasury stock method.  Convertible preferred stock is
          computed using the "if converted" method, which assumes the conversion
          of all outstanding convertible preferred shares into common shares.

7.       Federal Deposit Insurance Corporation Special Savings Association 
         Insurance Fund Assessment

                  On September  30, 1996,  President  Clinton  signed into law a
         bill which calls for a one-time  Federal Deposit  Insurance Fund (FDIC)
         premium for deposits insured by the Savings Association Insurance Fund.
         Republic  Security Bank's one-time premium expense  associated with the
         bill was  $1,154,000,  which is  reflected  in the  September  30, 1996
         statements of income.

                                       8

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



Results of Operations

         Net income for the three months ended  September  30, 1996 was $212,000
compared to $750,000 for the three months ended September 30, 1995. The decrease
of $538,000  in net income is  primarily  due to the  one-time  FDIC  premium of
$1,154,000, which resulted in a decrease of $669,000 in net income, offset by an
increase in net interest income.

         The Company had net income of $1,536,000 or $.11 fully diluted earnings
per common share for the nine months ended  September 30, 1996,  compared to net
income of  $1,555,000  or $.30 fully  diluted  earnings per common share for the
nine months ended  September 30, 1995.  Net income,  excluding the one-time FDIC
premium of $669,000,  net of tax effect, is $2,205,000 for the nine months ended
September 30, 1996 which  represents a $650,000 or 42% increase  compared to the
nine months ended September 30, 1995. The increase in net income,  excluding the
one-time FDIC premium, is a result of $2,303,000 increase in net interest income
after  provision for loan losses,  a $461,000  increase in  non-interest  income
offset by a $1,406,000  increase in operating  expenses  excluding  the one-time
FDIC premium, and a $708,000 increase in income taxes.

          Earnings per share for the three and nine months ended  September  30,
1996 were impacted by the $9.8 million  common equity  offering in November 1995
which resulted in an increase of 2,070,000 of common shares outstanding.

Net Interest Income

         Net interest  income for the quarter ended September 30, 1996 increased
$755,000 or 27% compared to the quarter  ended  September  30, 1995 due to a $33
million  increase  in average  interest-earning  assets  offset by an $8 million
increase in average interest-bearing  liabilities. In addition, the net interest
margin  increased  from 4.44% for the quarter ended  September 30, 1995 to 4.99%
for the quarter ended  September 30, 1996.  The Banyan Bank  acquisition  is the
primary   contributor   to  the   increases  in   interest-earning   assets  and
interest-bearing  liabilities.  In addition, the compositions of the Bank's loan
and deposit  portfolios  have  changed  since  September  30, 1995 to reflect an
increase in commercial  purpose and commercial real estate loans and an increase
in business and personal transaction deposit accounts.

         Net interest  income  increased  $2,308,000  or 28% for the nine months
ended  September 30, 1996 compared to the nine months ended  September 30, 1995.
Interest-earning  assets increased approximately $31 million, while net interest
margin  increased 56 basis  points to 5.00% for the nine months ended  September
30, 1996  compared to the nine months ended  September  30, 1995. In addition to
the Banyan Bank acquisition in January 1996, the Bank has continued to shift the
composition of it's loan and deposit portfolios to that of a commercial bank. As
a result,  net interest  margin has increased  since  September 30, 1995, due to
increases in commercial  real estate and commercial  purpose loans as well as an
increase in non-interest bearing deposit accounts.

Non-Interest Income

         Total non-interest income for the three months ended September 30, 1996
is comparable to total non-interest  income for the three months ended September
30, 1995. However,  other income increased $100,000 primarily due to an increase
in service charges on deposit  accounts as a result of an increase in the volume
of demand accounts and a minimal increase in fees charged. Gain on sale of loans
increased $156,000, while mortgage trading income decreased $259,000.

                                       9

<PAGE>



                                            Management's Discussion and Analysis
                    of Financial Condition and Results of Operations (Continued)
--------------------------------------------------------------------------------


         Non-interest  income  for the nine  months  ended  September  30,  1996
increased  $461,000 or 16% compared to the nine months ended  September 30, 1995
due to an  increase  of  approximately  $500,000  in service  charges on deposit
accounts,  $87,000  in other fee income  and  $178,000  in gain on sale of loans
offset by a $304,000  decrease in mortgage  trading income.  Increase in service
charges on deposit  accounts is due to an increase in the volume of  transaction
accounts  largely due to the Banyan Bank  acquisition  and a slight  increase in
fees  charged.  The  increase in other fee income  represents  increases in fees
related to loan accounts and ATM charges due to increases in volume.

Operating Expense

         Operating  expenses  increased  $1,558,000  for the three  months ended
September  30, 1996 compared to the three months ended  September 30, 1995.  The
increase in operating expenses is primarily related to the one-time FDIC premium
charge of  $1,154,000.  Excluding  the one-time FDIC  premium,  other  operating
expenses  increased  $404,000 or 14% for the three  months ended  September  30,
1996,  compared to the three  months  ended  September  30,  1995.  Compensation
expense  increased  $205,000 due to the Banyan Bank merger which  increased  the
banking  center  network  by two  full-service  offices  and "de  novo"  growth.
Occupancy and equipment  expenses  increased $146,000 for the three months ended
September 30, 1996 compared to the three months ended  September 30, 1995 due to
the increase in the number of banking  center offices and relocation of existing
offices as well as an increase in  equipment  purchases  to support the new data
service bureau.  Data processing expenses increased $64,000 for the three months
ended  September 30, 1996 compared to three months ended  September 30, 1995 due
to an  increase  in the number of deposit  and loan  accounts.  Other  operating
expenses  decreased  $59,000  for the three  months  ended  September  30,  1996
compared  to the three  months  ended  September  30,  1995 due to a decrease of
$123,000 in a one-time loss related to a processing  change of which $50,000 was
recovered in December  1995 and a decrease of $61,000 in other real estate owned
expenses offset by a $125,000 increase in goodwill amortization  associated with
the Banyan Bank acquisition and the Century Bank branch purchase.

         Operating expenses,  excluding the one-time FDIC premium of $1,154,000,
increased  $1,406,000  or 16% for the  nine  months  ended  September  30,  1996
compared  to the nine  months  ended  September  30,  1995 due to an increase in
employee  compensation  and benefits,  occupancy and  equipment  expenses,  data
processing  costs  and  other  operating  expenses.  The  increase  in  employee
compensation and benefits is a result of approximately $180,000 of non-recurring
employee  compensation  costs  associated with the absorption of the Banyan Bank
acquisition and the remaining  increase is due primarily to an increased banking
center network. Occupancy and equipment expenses increased $234,000 for the nine
months ended  September 30, 1996 compared to the nine months ended September 30,
1995 due to the  addition of two banking  centers as a result of the Banyan Bank
acquisition and property and equipment  additions of approximately  $2.6 million
during the period from December 1994 to September 1996.  Data  processing  costs
increased  for the nine months  ended  September  30, 1996  compared to the nine
months ended  September 30, 1995 due to an increase in the volume of deposit and
loan accounts and a $80,000 non-recurring expense associated with the conversion
of data service bureaus.  Other operating  expenses  increased  $178,000 for the
nine months ended September 30, 1996 compared to the nine months ended September
30, 1995 primarily due to a $275,000  increase in  amortization of goodwill as a
result  of the  Banyan  Bank and  Century  Bank  branch  purchases  offset  by a
non-recurring  loss in  September  1995  associated  with a  processing  change.
Overall,  operating  expenses,  excluding  the one-time FDIC premium in the nine
months  ended  September  30,  1996,  as a percent of total  average  assets has
remained stable at 3.1% for the nine months ended September 30, 1996 and 1995.

Provision for Income Taxes

         Provisions  for  income  taxes  decreased  for the three  months  ended
September 30, 1996,  compared to the three months ended  September 30, 1995, due
to a decrease of $806,000 in income  before  taxes  offset by an increase in the
effective  tax rate of 6% to 42% at September  30, 1996.  The effective tax rate
increased  primarily  due  to an  increase  in  non-deductible  amortization  of
goodwill associated with acquisitions.

                                       10

<PAGE>



                                            Management's Discussion and Analysis
                    of Financial Condition and Results of Operations (Continued)
--------------------------------------------------------------------------------


         Provision for income taxes increased $223,000 for the nine months ended
September 30, 1996,  compared to the nine months ended  September 30, 1995.  The
increase is  attributable  to an increase in income before taxes of $204,000 for
the nine months ended  September 30, 1996,  and an increase in the effective tax
rate to 42% for the nine months ended  September  30, 1996 from 36% for the nine
months  ended  September  30,  1995.  The  effective  income tax rate  increased
primarily  due  to  an  increase  in  non-deductible  amortization  of  goodwill
associated with acquisitions.

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  deposits  with the Federal  Home
Loan  Bank  of  Atlanta  (FHLB).  The  Bank  was in  compliance  with  liquidity
requirements during the nine months ended September 30, 1996.

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

         Cash and cash equivalents  decreased  approximately  $27 million during
the nine months ended  September  30, 1996  primarily due to $71 million of loan
production,  $20 million purchase of investments,  $13 million repayment of FHLB
advances and $26 million of deposit  run-off,  offset by principal  collected on
loans of $48 million,  proceeds from loan sales of $29 million and cash acquired
in merger of $15 million.  The decrease in deposits is  attributable to lowering
interest  rates paid on  certificates  of  deposits  since  March 1995 to become
aligned with the commercial bank market.

The following table shows the capital amounts of the Bank at September 30, 1996:

================================================================================
(Dollars in thousands)
--------------------------------------------------------------------------------
Tier 1 capital                                                           $27,505
Tier 2 capital                                                            $2,333
Tier 1 leverage ratio                                                      8.80%
Tier 1 risked based capital ratio                                         12.45%
Total risk based capital ratio                                            13.50%
================================================================================

The Bank was in compliance with all capital requirements at September 30, 1996.

Financial Condition

         As of September  30, 1996,  total assets  increased  approximately  $23
million from December 31, 1995.  Assets  increased $67 million due to the Banyan
Bank  acquisition  (including  $5 million  of  goodwill),  $1 million  due to an
increase in capital as a result of the exercise of  outstanding  warrants and $3
million due to an increase in advances from  borrowers for taxes and  insurance.
These increases were offset by a $13 million  repayment of FHLB advances,  a $26
million in deposit  run-off,  and a $9.7 million  payment of cash for the Banyan
purchase.  The decrease in deposits is attributable  to lowering  interest rates
paid on  certificates  of deposits  since March 1995 to become  aligned with the
commercial bank market.

                                       11
<PAGE>

PART II.  OTHER INFORMATION

Item 6.  Exhibits and Reports on Form 8-K

         (a)      The following exhibits are included herein:
                 (11)  Statement regarding Computation of Per Share Earnings

                                       12
<PAGE>

                                                                   EXHIBIT 11(a)
<TABLE>
<CAPTION>
STATEMENT 11. RE: Computation of Per Share Earnings
====================================================================================================================================
                                                                       Three Months Ended              Nine Months Ended
                                                                            September 30,                  September 30,
(Amounts in thousands except per share data)                           1996          1995            1996           1995
------------------------------------------------------------------------------------------------------------------------------------
PRIMARY EARNINGS:
<S>                                                                   <C>           <C>            <C>            <C>  
Average shares outstanding                                            7,698         4,366           7,161          4,104
Net effect of dilutive stock options,
     warrants and equity contracts based on the modified
     treasury stock method using average market price                   125           263             136            165
------------------------------------------------------------------------------------------------------------------------------------
Total weighted average number of shares outstanding                   7,823         4,629           7,297          4,269
------------------------------------------------------------------------------------------------------------------------------------
Net income                                                             $212          $750          $1,536         $1,555
Deduct preferred dividends                                              200            75             703            226
------------------------------------------------------------------------------------------------------------------------------------
Net income available to common shareholders                             $12          $675            $833         $1,329
====================================================================================================================================
Earnings per share                                                       **          $.15            $.11           $.31
====================================================================================================================================
FULLY DILUTED EARNINGS:
Average shares outstanding                                                          4,366                          4,104
Net effect of dilutive stock options,
     warrants and equity contracts based on the modified
     treasury stock method using the greater of the ending
     market price or the average market price                                         253                            165
Assumed coversion of convertible preferred stock - Series "A"                         991                            991
------------------------------------------------------------------------------------------------------------------------------------
Total weighted average number of shares outstanding                                 5,610                          5,260
------------------------------------------------------------------------------------------------------------------------------------
Net income                                                                           $750                         $1,555
====================================================================================================================================
Earnings per share                                                                   $.13                           $.30
====================================================================================================================================
<FN>
** Less than $.01 per share
</FN>
</TABLE>



                                       13
<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: November 12, 1996
      -----------------                           ------------------------------
                                                       Carla H. Pollard
                                                  Vice President/Controller




















                                       14