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      June 30, 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 July 31, 1998
-----                                  -------------------------------
Common Stock
par value $.01                                          25,532,325
Outstanding


<PAGE>



[GRAPHIC OMITTED]

             REPUBLIC SECURITY FINANCIAL CORPORATION AND SUBSIDIARY

                                      INDEX


                                                                           Page
PART I:      FINANCIAL INFORMATION

Item 1:

  Condensed Consolidated Statements of Financial Condition
  June 30, 1998 and December 31, 1997.........................................1

  Condensed Consolidated Statements of Income for the
  three months ended June 30, 1998 and 1997...................................2

  Condensed Consolidated Statements of Income for the
  six months ended June 30, 1998 and 1997.....................................3

  Condensed Consolidated Statements of Comprehensive Income for the
  six months ended June 30, 1998 and 1997.....................................4

  Condensed Consolidated Statements of Shareholders' Equity
  for the six months ended June 30, 1998
  and the year ended December 31, 1997........................................5

  Condensed Consolidated Statements of Cash Flows for the
  six months ended June 30, 1998 and 1997.....................................6

  Notes to Condensed Consolidated Financial Statements........................7

Item 2

   Management's Discussion and Analysis of Financial Condition and
   Results of Operations.....................................................10

PART II:     OTHER INFORMATION

Item 6       Exhibits and Reports on Form 8-K................................13


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


<PAGE>

PART I - FINANCIAL INFORMATION
ITEM 1:

<TABLE>
<CAPTION>
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
======================================================================================================================
                                                                                           June 30,       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                                           $28,998            $59,723
Interest-bearing deposits in other financial institutions                                    95,166             66,886
Federal funds sold                                                                                               7,665
--------------------------------------------------------------------------------- -----------------  -----------------
        Total cash and cash equivalents                                                     124,164            134,274
Investments available-for-sale                                                              135,894            116,762
Investments held to maturity (market value of $7,802 and $10,305 at
      June 30, 1998 and December, 31, 1997, respectively)                                     7,778             10,277
Loans - net                                                                                 664,044            617,392
Loans held for sale (Market value of $19,326 and $13,828 at June 30, 1998
      and December 31, 1997, respectively)                                                   19,294             13,565
Property and equipment - net                                                                 25,549             21,625
Other real estate owned - net                                                                 3,431              2,519
Goodwill - net                                                                                6,830              7,110
Loan servicing rights - net                                                                   1,586              1,519
Accrued interest receivable                                                                   5,078              4,782
Other assets                                                                                 26,116             19,455
--------------------------------------------------------------------------------- -----------------  -----------------
Total                                                                                    $1,019,764           $949,280
================================================================================= =================  =================
Liabilities and Shareholders' Equity
Deposits                                                                                   $779,678           $742,263
Federal Home Loan Bank advances                                                             115,000             85,000
Securities sold under agreements to repurchase                                                9,382             14,443
Advances from borrowers for taxes and insurance                                               5,718              1,835
Bank drafts payable                                                                           7,571              5,769
Other liabilities                                                                            12,241             13,814
--------------------------------------------------------------------------------- -----------------  -----------------
Total liabilities                                                                           929,590            863,124
--------------------------------------------------------------------------------- -----------------  -----------------
Commitments and Contingencies
Preferred stock $10.00 stated value; 10,000,000 shares authorized:
  Series "C" - 948,996 shares issued and  outstanding at December 31, 1997                                       9,490
Common stock $.01 par value; 100,000,000 shares authorized; 24,286,639 and
        22,685,403 shares issued and outstanding at June 30, 1998 and December 31, 1997,        243                227
        respectively
Additional paid-in capital                                                                   63,642             53,781
Retained earnings                                                                            25,951             22,090
Unrealized gain on investments available-for-sale, net of taxes                                 338                568
--------------------------------------------------------------------------------- -----------------  -----------------
Total shareholders' equity                                                                   90,174             86,156
--------------------------------------------------------------------------------- -----------------  -----------------
Total                                                                                    $1,019,764           $949,280
================================================================================= =================  =================
<FN>
See notes to condensed consolidated financial statements.
</FN>
</TABLE>




                                        1

<PAGE>
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
======================================================================================================================
                                                                                          Three  months ended June 30,
                                                                                              (unaudited)
 (amounts in thousands except per share data)                                                  1998               1997
-------------------------------------------------------------------------------- ------------------  -----------------
<S>                                                                                        <C>                <C>    
Interest Income:
Interest and fees on loans                                                                  $15,548            $13,364
Interest and dividends on investments                                                         2,311              2,867
-------------------------------------------------------------------------------- ------------------  -----------------
                                                                                             17,859             16,231
-------------------------------------------------------------------------------- ------------------  -----------------
Interest Expense:
Interest on deposits                                                                          5,868              5,492
Interest on borrowings                                                                        1,202                657
-------------------------------------------------------------------------------- ------------------  -----------------
                                                                                              7,070              6,149
-------------------------------------------------------------------------------- ------------------  -----------------
Net interest income                                                                          10,789             10,082
Provision for loan losses                                                                       150                806
-------------------------------------------------------------------------------- ------------------  -----------------
Net interest income after  provision for loan losses                                         10,639              9,276
Non-interest Income:
Service charge on deposit accounts                                                            1,652              1,541
Gain on sale of loans                                                                           402                126
Gain (loss) on sale of investments                                                              213               (31)
Other income                                                                                    872                842
-------------------------------------------------------------------------------- ------------------  -----------------
                                                                                              3,139              2,478
Operating Expenses:
Employee compensation and benefits                                                            4,187              4,618
Occupancy and equipment                                                                       1,830              1,755
Professional fees                                                                               223                562
Advertising and promotions                                                                      279                196
Communications                                                                                  322                298
Data processing                                                                                 408                249
Insurance                                                                                       134                160
Other                                                                                         1,153              1,445
Merger expenses                                                                                  50              3,979
-------------------------------------------------------------------------------- ------------------  -----------------
                                                                                              8,586             13,262
Income (loss) before income taxes                                                             5,192            (1,508)
Provision (benefit) for income taxes                                                          1,921              (818)
-------------------------------------------------------------------------------- ------------------  -----------------
Net income (loss)                                                                            $3,271             ($690)
================================================================================ ==================  =================
PER SHARE DATA:
Basic earnings (loss)  per common share                                                       $0.14            ($0.04)
Diluted earnings (loss)  per common share                                                     $0.13            ($0.04)
Dividends per common share                                                                    $0.05              $0.05
Average common shares and common stock equivalents outstanding                               25,422             22,849
================================================================================ ==================  =================
<FN>
See notes to condensed consolidated financial statements.
</FN>
</TABLE>


                                                         2

<PAGE>
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
======================================================================================================================
                                                                                             Six months ended June 30,
                                                                                              (unaudited)
 (amounts in thousands except per share data)                                                  1998               1997
-------------------------------------------------------------------------------- ------------------  -----------------
<S>                                                                                         <C>                <C>    
Interest Income:
Interest and fees on loans                                                                  $30,313            $26,164
Interest and dividends on investments                                                         4,600              5,742
-------------------------------------------------------------------------------- ------------------  -----------------
                                                                                             34,913             31,906
-------------------------------------------------------------------------------- ------------------  -----------------
Interest Expense:
Interest on deposits                                                                         11,554             10,854
Interest on pborrowings                                                                       2,100              1,153
-------------------------------------------------------------------------------- ------------------  -----------------
                                                                                             13,654             12,007
-------------------------------------------------------------------------------- ------------------  -----------------
Net interest income                                                                          21,259             19,899
Provision for loan losses                                                                       180                837
-------------------------------------------------------------------------------- ------------------  -----------------
Net interest income after  provision for loan losses                                         21,079             19,062
Non-interest Income:
Service charge on deposit accounts                                                            3,289              3,091
Gain on sale of loans                                                                           647                197
Gain on sale of investments                                                                     381                136
Other income                                                                                  1,597              1,522
-------------------------------------------------------------------------------- ------------------  -----------------
                                                                                              5,914              4,946
Operating Expenses:
Employee compensation and benefits                                                            8,370              8,622
Occupancy and equipment                                                                       3,514              3,346
Professional fees                                                                               454                930
Advertising and promotions                                                                      409                360
Communications                                                                                  618                585
Data processing                                                                                 817                499
Insurance                                                                                       266                281
Other                                                                                         2,211              2,715
Merger expenses                                                                                 153              3,979
-------------------------------------------------------------------------------- ------------------  -----------------
                                                                                             16,812             21,317
Income before income taxes                                                                   10,181              2,691
Provision for income taxes                                                                    3,766                297
-------------------------------------------------------------------------------- ------------------  -----------------
Net income                                                                                   $6,415             $2,394
================================================================================ ==================  =================
PER SHARE DATA:
Basic earnings per common share                                                               $0.27              $0.09
Diluted earnings per common share                                                             $0.26              $0.09
Dividends per common share                                                                    $0.10              $0.09
Average common shares and common stock equivalents outstanding                               25,141             22,435
================================================================================ ==================  =================
<FN>
See notes to condensed consolidated financial statements.
</FN>
</TABLE>


                                                         3

<PAGE>
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
======================================================================================================================
                                                                                           Three Months Ended June 30,
                                                                                                      (unaudited)
 (amounts in thousands)                                                                        1998               1997
-------------------------------------------------------------------------------- ------------------  -----------------
<S>                                                                                          <C>                <C>   
Net income                                                                                   $3,271             ($690)
Other comprehensive income, net of tax:
    Unrealized gain (loss) on investments available-for-sale arising during the period,
         net of tax of ($100) and $358, respectively                                          (270)                633
Reclassification adjustment for amounts realized on sale of investments
     included in net income
-------------------------------------------------------------------------------- ------------------  -----------------
Comprehensive income                                                                         $3,001              ($57)
================================================================================ ==================  =================
<CAPTION>
                                                                                             Six Months Ended June 30,
                                                                                                     (unaudited)
 (amounts in thousands)                                                                        1998               1997
-------------------------------------------------------------------------------- ------------------  -----------------
<S>                                                                                          <C>                <C>   
Net income                                                                                   $6,415             $2,394
Other comprehensive income, net of tax:
    Unrealized gain (loss) on investments available-for-sale arising during the period,       (230)                (7)
         net of tax of ($85) and ($1), respectively
Reclassification adjustment for amounts realized on sale of investments
     included in net income, net of taxes of ($79) and $3, respectively                       (134)                 28
-------------------------------------------------------------------------------- ------------------  -----------------
Comprehensive income                                                                         $6,051             $2,415
================================================================================ ==================  =================
<FN>
See notes to condensed consolidated financial statements.
</FN>
</TABLE>


                                                         4

<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 -                                                    (2,760)
common stock
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 - 133,415 shares                                 1            392
401(k) plan - 4,474 shares                                                         43
Conversion of preferred stock series "C"
        into common stock - 1,463,347 shares      (9,440)           15          9,426
Cash redemption of preferred stock series "C"        (50)
Cash dividends - common stock                                                                (2,352)
Cash dividends - preferred stock series "C"                                                    (202)
Net income                                                                                     6,415
Change in unrealized gain (loss) on  investments
    available-for-sale, net of taxes                                                                                 (230)
------------------------------------------  ------------- ------------  ------------- -------------- ---------------------
Balance, June 30, 1998 (unaudited)                $     -         $243        $63,642        $25,951                  $338
------------------------------------------  ------------- ------------  ------------- -------------- ---------------------
<FN>
See notes to condensed consolidated financial statements.
</FN>
</TABLE>


                                        5

<PAGE>
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
===================================================================================================================
                                                                                          Six Months Ended June 30,
                                                                                         (unaudited)
(amounts in thousands)                                                                    1998                 1997
-------------------------------------------------------------------------------------------------------------------
<S>                                                                                   <C>                  <C>   
Operating Activities:
Net income                                                                              $6,415               $2,394
Adjustments to reconcile net income to net cash
  provided by operating activities:
Provision for loan losses                                                                  180                  837
Depreciation and amortization                                                            1,683                1,212
Gain on sale of investments available-for-sale                                           (381)                (136)
Gain on sale of loans                                                                    (647)                (183)
Loans originated for sale                                                             (15,148)              (7,808)
Sale of loans and loan participation certificates                                       27,941               22,583
Other - net                                                                                 80                  367
-------------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities                                               20,123               19,266
-------------------------------------------------------------------------------------------------------------------
Investing Activities:
Purchases of investments available-for-sale                                           (95,556)             (23,964)
Proceeds from sales and maturities of investments available-for-sale                    65,787               27,037
Maturities and calls of investments held to maturity                                     2,564                3,492
Purchases of investments held to maturity                                                                   (8,944)
Loans purchased for investment                                                        (56,350)
Net increase in loans                                                                 (10,339)             (38,616)
Other - net                                                                              3,474              (3,255)
-------------------------------------------------------------------------------------------------------------------
Net cash used in investing activities                                                 (90,420)             (42,450)
-------------------------------------------------------------------------------------------------------------------
Financing Activities:
Net increase (decrease) in demand deposits, NOW accounts,
  Money Market accounts and savings accounts                                            11,123              (3,801)
Net increase in certificates of deposits                                                26,292                5,771
Increase in FHLB advances                                                               30,000               11,000
Other - net                                                                            (7,228)              (6,776)
-------------------------------------------------------------------------------------------------------------------
Net cash provided by financing activities                                               60,187                6,194
-------------------------------------------------------------------------------------------------------------------
Decrease in cash and cash equivalents                                                 (10,110)             (16,990)
Cash and cash equivalents at beginning of period                                       134,274              100,399
-------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of period                                            $124,164              $83,409
-------------------------------------------------------------------------------------------------------------------
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 $2,304 and $1,863
in income tax  payments  during the six months  ended June 30, 1998 and June 30,
1997,  respectiviely.  The  Company  paid  $14,058  and  $12,075 in  interest on
deposits  and other  borrowings  during the six months  ended June 30,  1998 and
1997,  respectively.  The Company had $2,109 and $895 of transfers from loans to
OREO during the six months ended June 30, 1998 and 1997, respectively.
-------------------------------------------------------------------------------------------------------------------
<FN>
See notes to condensed consolidated financial statements
</FN>
</TABLE>


                                                         6

<PAGE>
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                  JUNE 30, 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 June  30,  1998  and
         December 31, 1997,  and the results of operations for the three and six
         months  ended June 30, 1998 and June 30,  1997,  and the  comprehensive
         results of  operations  for the six months ended June 30, 1998 and June
         30, 1997, and changes in cash flows for the six 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 six months ended June
         30, 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.       Mergers

                  On July 2, 1998, RSFC acquired  Unifirst FSB  ("Unifirst"),  a
         federally  chartered savings bank headquartered in Hollywood,  Florida.
         Unifirst  was merged into  Republic on July 2, 1998.  Unifirst  had two
         branch  locations in Broward county.  RSFC issued 1.2 million shares of
         its common  stock in exchange for all the  outstanding  common stock of
         Unifirst.   The   business   combination   was   accounted   for  as  a
         pooling-of-interests  and resulted in RSFC  acquiring  assets of $141.9
         million, liabilities of $132.7 million and equity of $9.2 million.

                  In the three months  ended  September  30, 1998  non-recurring
         costs of approximately $1.4 million,  net of taxes, will be recorded in
         connection with the merger of Unifirst.  These costs consist  primarily
         of  electronic  data  processing  and  personnel  costs to combine  the
         operations,  employee severance  payments,  employment contract buyouts
         and professional  fees. In addition,  upon consummation of the Unifirst
         merger,  management  expects to record an adjustment  of  approximately
         $1.2  million to the  allowance  for loan losses to conform  Unifirst's
         accounting and credit  policies  regarding loan  valuations to those of
         Republic,  all  merger  related  costs will be charged to income in the
         quarter  ended  September  30,  1998 (the period in which the merger is
         consummated).

                  On May 27, 1998,  RSFC  entered  into a  definitive  agreement
         whereby First Palm Beach  Bancorp,  Inc.  ("FPBB"),  parent  company of
         First Bank of Florida ("First Bank"), headquartered in West Palm Beach,
         Florida, would merge into RSFC and First Bank will merge into the Bank,
         in    a    stock-for-stock    transaction    accounted    for    as   a
         pooling-of-interests.  First Bank has assets of $1.8 billion,  loans of
         $1.0 billion and deposits of $1.3 billion.

                  Under the terms of the agreement,  shareholders  of First Bank
         will receive 4.194 shares of RSFC's common stock for each share of FPBB
         common stock. RSFC will issue  approximately 21.3 million shares of its
         common stock for all of the outstanding  shares of FPBB. RSFC currently
         has 25.5 million shares of common stock outstanding. The transaction is
         subject to shareholder approvals of RSFC and FPBB, receipt of state and
         federal  regulatory  approvals and other customary closing  conditions.
         The merger is expected to close in the fourth quarter of 1998.


                                        7

<PAGE>
3.       Non-Performing Assets and Allowance for Loan Losses

                  At June 30, 1998, the Bank had $8.4 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 $180,000 and
         $837,000 for the six months ended June 30, 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 $6.3 million at
         June 30, 1998.

                  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 Bank'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 June 30, 1998, the Bank had adjustable rate  commitments to
         extend  credit  of   approximately   $129.9   million,   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 flows.







                                        8

<PAGE>
5.       Earnings per Common Share

                  The following  table sets forth the  computation  of basic and
diluted earnings per share:
<TABLE>
<CAPTION>
=================================================================================================================
                                                                   Three Months Ended           Six Months Ended
                                                                             June 30,                   June 30,
                                                                          (unaudited)                (unaudited)
----------------------------------------------------------- ------------  ----------- ------------  ------------
<C>                                                              <C>         <C>          <C>           <C> 
( in thousands except per share data)                               1998         1997         1998          1997
----------------------------------------------------------- ------------  ----------- ------------  ------------
Numerator:
Net income (loss)                                                 $3,271       ($690)       $6,415        $2,394
Preferred stock dividends                                           (50)        (181)        (202)         (362)
----------------------------------------------------------- ------------  ----------- ------------  ------------
Numerator for basic earnings per share -
     income available to common stockholders                       3,221        (871)        6,213         2,032
Effect of dilutive securities:
     Preferred stock dividends                                        50                       202
----------------------------------------------------------- ------------  ----------- ------------  ------------
Numerator for diluted earnings per share - income available to
     common stockholders after assumed conversions                $3,271       ($871)       $6,415        $2,032
=========================================================== ============  =========== ============  ============
Denominator:
Denominator for basic earnings per share
      - weighted-average shares                                   23,827       22,849       23,367        21,715
Effective of dilutive securities:
     Employee stock options                                          699                       654           720
     Convertible preferred stock                                     896                     1,120
----------------------------------------------------------- ------------  ----------- ------------  ------------
Dilutive potential common shares                                   1,595                     1,774           720
----------------------------------------------------------- ------------  ----------- ------------  ------------
Denominator for diluted earnings per share
      - adjusted weighted-average shares and assumed conversions  25,422       22,849       25,141        22,435
=========================================================== ============  =========== ============  ============
Basic earnings (loss)  per share                                   $0.14      ($0.04)        $0.27         $0.09
Diluted earnings (loss)  per share                                 $0.13      ($0.04)        $0.26         $0.09
==================================================================================================================
</TABLE>


             At June 30, 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 three and six months  ended June 30,  1998.  The
     effect of these shares is  antidilutive  to diluted  earnings per share for
     the three and six months ended June 30, 1998.

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.

                                        9

<PAGE>

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

       Comparison of the Three and Six Months Ended June 30, 1998 and 1997

Results of Operations

         The Company had net income of $3.3 million or $.13 diluted earnings per
common share for the three months ended June 30, 1998, compared to a net loss of
$690,000 or ($.04) diluted  earnings per common share for the three months ended
June 30, 1997.  Net  interest  income  increased  $707,000 or 7.0% for the three
months  ended June 30, 1998  compared to the three  months  ended June 30, 1997.
Non-interest  income  increased  $661,000  or  26.7%  while  operating  expenses
(excluding  merger  expenses)  decreased  $747,000 or 8.0% for the three  months
ended June 30, 1998 compared to the three months ended June 30, 1997.

         The Company had net income of $6.4 million or $.26 diluted earnings per
common share for the six months  ended June 30, 1998,  compared to net income of
$2.4 million or $.09 diluted  earnings per common share for the six months ended
June 30, 1997.  Net interest  income  increased $1.4 million or 6.8% for the six
months  ended June 30,  1998  compared  to the six months  ended June 30,  1997.
Non-interest  income  increased  $968,000  or  19.6%  while  operating  expenses
(excluding merger expenses)  decreased $679,000 or 3.9% for the six months ended
June 30, 1998 compared to the six months ended June 30, 1997.

Net Interest Income

         Net interest  income for the three months ended June 30, 1998 increased
$707,000  compared to the three months ended June 30, 1997 due to an increase of
$1.6  million in interest  income  offset by an increase of $921,000 in interest
expense. Interest income increased primarily due to an increase of $42.5 million
in  interest-earning  assets  due to an  increase  in loans as a result  of loan
originations and  approximately  $29.1 million in average loan outstandings as a
result of loan purchases net of loan sales. Interest expense increased primarily
due to an increase in interest-bearing  liabilities. The net interest margin and
net interest spread of 5.11% and 4.22%, respectively, for the three months ended
June 30, 1998  decreased  slightly  compared to the quarter ended June 30, 1997.
The decrease in interest  margin and interest  spread is due to a $25.0  million
additional leverage transaction.  The Bank purchased approximately $25.0 million
in residential loans which was funded with FHLB advances.

         Net  interest  income  increased  $1.4 million for the six months ended
June 30,  1998  compared  to the six months  ended June 30,  1997 due to an 9.0%
increase   in   interest-earning   assets   offset  by  a  12.2%   increase   in
interest-bearing  liabilities  resulting in a decrease in net interest margin of
10 basis  points for the six  months  ended June 30,  1998  compared  to the six
months ended June 30, 1997.

Provision for Loan Losses

         The  provision  for  loan  losses   decreased   $656,000  and  $657,000
respectively,  for the three and six months ended June 30, 1998  compared to the
three and six months ended June 30, 1997,  due primarily to an adjustment to the
allowance  for  loan  losses  to  conform  Family's  loan  loss  reserves  to be
consistent with the Bank's policies and an increase in  non-performing  loans at
June 30, 1997.

Non-Interest Income

         Non-interest  income increased $661,000 for the three months ended June
30, 1998  compared to the three months ended June 30, 1997 due to an increase of
$276,000 in gain on sale of loans, an increase of $111,000 in service charges on
deposit accounts and an increase of $244,000 in gain on sale of investments. The
increase in service charges on deposit accounts is primarily due to the increase
in deposit accounts as no significant fee increases have occurred.  The increase
in gain on sale of loans is due to an  increase  in the  amount of loans sold in
the three months ended June 30, 1998 compared to June 30, 1997.  The increase in
the gain on the sale of investments  for the three months ended June 30, 1998 is
due to an increase in the amount of  investments  sold in the three months ended
June 30, 1998 compared to the three months ended June 30, 1997.




                                       10

<PAGE>


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

         Non-interest  income  increased  $968,000 for the six months ended June
30,  1998,  compared to the six months ended June 30, 1997 due to an increase of
$450,000 in gain on sale of loans, an increase of $198,000 in service charges on
deposit accounts and an increase of $245,000 in gain on sale of investments. The
increase  in gain on sale of loans is due to an  increase in the amount of loans
sold in the six months  ended  June 30,  1998  compared  to June 30,  1997.  The
increase  in service  charges  on  deposit  accounts  is due to an  increase  in
transaction  accounts.  The increase in the gain on the sale of investments  for
the six  months  ended  June 30,  1998 is due to an  increase  in the  amount of
investments  sold in the six months  ended June 30,  1998  compared  to June 30,
1997.

Operating Expenses

         Operating  expenses  decreased  $4.7 million for the three months ended
June 30, 1998 compared to the three months ended June 30, 1997  primarily due to
merger expenses associated with the Family Bank acquisition which closed on June
30, 1997. Operating expenses,  excluding the merger expenses, decreased $747,000
or 8% for the three  months  ended June 30, 1998  compared  to the three  months
ended June 30,  1997.  The decrease in  operating  expenses is primarily  due to
decreases  of  $431,000  in  employee  compensation  and  benefits,  $339,000 in
professional  fees and a decrease  of $292,000  in other  expenses  offset by an
increase  of  $159,000  in data  processing  fees,  an  increase  of  $75,000 in
occupancy  expense  and an  increase  of $83,000 in  advertising  and  promotion
expense. The decrease in employee  compensation and benefits is due to synergies
recognized in relation to the Family Bank and County National Bank  acquisitions
and a decrease of $180,000 to the accrual for Stock  Appreciation  Rights (SARs)
for the three months ended June 30, 1998 compared to the three months ended June
30, 1997.  Professional  fees decreased for the three months ended June 30, 1998
compared  to the  three  months  ended  June  30,  1997  primarily  due to  fees
associated  with  County National Bank's litigation  matter which was settled in
December 1996. Other operating expenses decreased primarily due to non-recurring
expenses of $100,000  associated with the startup of the Trust Services division
and a $150,000  fixed  asset  write-off   associated  with the  relocation  of a
branch.  The  increase  in data  processing  fees is  primarily  due to the data
conversion of Family Bank from their  in-house EDP system to M & I Data Services
in September 1997.

         Operating  expenses,  excluding merger costs,  decreased $679,000 or 4%
for the six months ended June 30, 1998 compared to the six months ended June 30,
1997.  The  decrease in  operating  expenses is  primarily  due to  decreases of
$252,000 in employee compensation and benefits $476,000 in professional fees and
a decrease of $504,000  in other  expenses  offset by an increase of $318,000 in
data  processing  fees and an increase of $168,000  in  occupancy  expense.  The
decrease in employee  compensation and benefits is primarily due to cost savings
realized as a result of the mergers with Family Bank on June 30, 1997 and County
National  Bank on  December  2, 1997,  offset by an  increase  to the accrual of
$115,000 for Stock Appreciation  Rights (SARs) for the six months ended June 30,
1998.  The  decrease  in  professional  fees is  primarily  due to fees  paid in
relation  to County  National  Bank's  litigation matter which  was  settled  in
December  1996 and a decrease in legal fees paid in relation to  pre-foreclosure
expenses.  Other operating  expenses  decreased  primarily due to  non-recurring
expenses of $100,000  associated with the startup of the Trust Services division
and a $150,000 fixed asset write-off associated with the relocation of a branch,
in addition,  other real estate owned expenses  decreased due to the disposition
of the assets. The increase in data processing fees is primarily due to the data
conversion  of Family Bank from an in-house EDP system to M & I Data Services in
September 1997 and the data  conversion of County National Bank from FISERV to M
& I Data Services in March 1998.  Occupancy expense increased for the six months
ending June 30, 1998  primarily due to the opening of four new branches  located
in Palm Beach and Broward counties.

Provision for Income Taxes

         The  provision  for income taxes  increased  $2.7 million for the three
months ended June 30, 1998  compared to the three months ended June 30, 1997 due
to an increase of $6.7  million in income  before  taxes and a reduction  of the
allowance for deferred tax assets in the three months ended June 30, 1997.

         The  provision  for income  taxes  increased  $3.7  million for the six
months ended June 30, 1998 compared to the six months ended June 30, 1997 due to
an increase in income  before  income  taxes of $7.5  million and a $1.1 million
reduction in the  allowance for deferred tax assets in the six months ended June
30, 1997.

                                       11

<PAGE>


                                            Management's Discussion and Analysis
                    of Financial Condition and Results of Operations (Continued)
--------------------------------------------------------------------------------
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 and
deposits with the Federal Home Loan Bank of Atlanta.  The Bank was in compliance
with liquidity requirements during the six months ended June 30, 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  decreased by  approximately  $10.1  million
during the six months ended June 30, 1998. The decrease in cash is due primarily
to an increase in FHLB  advances of $30.0  million,  $37.4  million  increase in
deposits and $20.1  million in cash provided by operating  activities  offset by
$79.3  million of loan  purchases  and  originations  and an  increase  of $19.1
million in net investments available-for-sale.

     The  following  table shows the  capital  amounts and ratios of the Bank at
June 30, 1998

================================  ====================  ========================
(Dollars in thousands)                          Amount                  Ratio
--------------------------------  --------------------  ------------------------
Total risk based capital                       $79,895                 11.65%




Tier 1 risk based capital                      $73,240                 10.68%
Leverage capital                               $73,240                  7.81%
================================  ====================  ========================

         The Bank was in compliance  with its' capital  requirements at June 30,
1998.

Financial Condition

         As of June 30, 1998, total assets increased approximately $70.5 million
or 7% from  December  31,  1997.  Loans-net  and loans  held for sale  increased
approximately $52.4 million,  investments increased approximately $16.6 million,
cash and cash  equivalents  decreased $10.1 million,  and other assets increased
$6.6  million.  The  increase in assets was funded  primarily  by an increase of
$30.0  million in FHLB  advances  and an increase  in deposits of  approximately
$37.4 million.

                                       12

<PAGE>



PART II.  OTHER INFORMATION

ITEM 6:  Exhibits and Reports on Form 8-K

         (a) No exhibits required.

         (b) During the quarter ended June 30, 1998,  the Company filed two Form
8-Ks:

                  (i)      The Form 8-K  filing,  which was dated May 28,  1998,
                           reported the entering into of a definitive  agreement
                           whereby  First  Palm  Beach  Bancorp,   Inc.,  parent
                           company of First Bank of Florda  would merge into the
                           Company's wholly owned subsidiary  Republic  Security
                           Bank.

                  (ii)     The Form 8-K  filing,  which was dated  July 2, 1998,
                           reported the acquisition of Unifirst  Federal Savings
                           Bank  in  a  stock-for-stock  transaction.   Unifirst
                           merged into the  Company's  wholly  owned  subsidiary
                           Republic Security Bank.




                                       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: 
     ------------------                   --------------------------------------
                                          Carla H. Pollard
                                          Vice President/Controller




















                                       14