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:       June 30, 1997
                     --------------------------
                                  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)

                                 (561) 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 August 11, 1997
-----                                         ---------------------------------
Common Stock                                        16,147,107
par value $.01
outstanding
<PAGE>
[GRAPHIC OMITTED]

            REPUBLIC SECURITY FINANCIAL CORPORATION AND SUBSIDIARIES

                                      INDEX
                                                                         Page
                                                                        Number
Part I: Financial Information

 Item 1:

      Condensed Consolidated Statements of Financial
      Condition - June 30, 1997 and December 31, 1996......................1

      Condensed Consolidated Statements of Income
      for the three months ended June 30, 1997 and 1996....................2

      Condensed Consolidated Statements of Income for
      the six months ended June 30, 1997 and 1996..........................3

      Condensed Consolidated Statements of Shareholders'
      Equity for the year ended December 31, 1996 and for the
      six months ended June 30, 1997.......................................4

      Condensed Consolidated Statements of Cash Flows
      for the six months ended June 30, 1997 and 1996......................5

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

 Item 2:

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

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

Part II:    Other Information

 Item 6:   Exhibits and Reports Filed......................................13
      Exhibit 3(ii) - Amended and Restated Bylaws
      Exhibit 11 - Computation of Per Share Earnings



<PAGE>
PART I.  FINANCIAL INFORMATION
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
======================================================================================================================
                                                                                         JUNE 30,         DECEMBER 31,
                                                                                             1997                 1996
(amounts in thousands except share and per share data)                                                        (Note 1)
----------------------------------------------------------------------------- ------------------- --------------------
<S>                                                                                   <C>                    <C>    
Assets                                                                                (unaudited)
Cash and amounts due from depository institutions                                         $17,633              $17,642
Interest-bearing deposits in other financial institutions                                  28,351               34,430
Federal funds sold                                                                          8,000               13,025
Investments available-for-sale                                                             81,782               49,670
Investments held-to-maturity (market value of $13,348 and $46,003 at
  June 30, 1997 and December 31, 1996, respectively)                                       13,377               45,818
Loans receivable - net                                                                    434,653              400,574
Loans held for sale (market value of $7,850)                                                                     7,773
Property and equipment - net                                                               15,191               14,289
Other real estate owned - net                                                                 517                1,499
Goodwill - net                                                                              7,391                7,675
Loan servicing rights - net                                                                 1,776                2,032
Accrued interest receivable                                                                 3,661                3,572
Other assets                                                                               12,527                9,160
----------------------------------------------------------------------------- ------------------- --------------------
Total                                                                                    $624,859             $607,159
============================================================================= =================== ====================
Liabilities and Shareholders' Equity
Liabilities:
Deposits                                                                                 $488,206             $489,056
Federal Home Loan Bank advances                                                            41,000               30,000
Securities sold under agreements to repurchase                                             13,207                8,633
Advances from borrowers for taxes and insurance                                             4,055                1,613
Bank drafts payable                                                                         5,300                4,158
Other liabilities                                                                           8,489                7,535
----------------------------------------------------------------------------- ------------------- --------------------
Total liabilities                                                                         560,257              540,995
----------------------------------------------------------------------------- ------------------- --------------------
Commitments and Contingencies
Shareholders' equity:
Preferred stock $10.00 stated value; 20,000,000 shares authorized:  Series "C" -
  1,035,000 shares issued and outstanding at June 30, 1997
     and December 31, 1996                                                                 10,350               10,350
Common stock $.01 par value; 100,000,000 and 20,000,000 shares authorized
     at June 30, 1997 and December 31, 1996, respectively;
     16,147,107 and 15,532,664  shares issued and outstanding at
     June 30, 1997 and December 31, 1996, respectively                                        161                  155
Additional paid-in capital                                                                 38,647               37,350
Retained earnings                                                                          15,438               18,306
Unrealized gain on investments available-for-sale, net of taxes                                 6                    3
----------------------------------------------------------------------------- ------------------- --------------------
Total shareholders' equity                                                                 64,602               66,164
----------------------------------------------------------------------------- ------------------- --------------------
Total                                                                                    $624,859             $607,159
============================================================================= =================== ====================
<FN>
See notes to condensed consolidated financial statements.
</FN>
</TABLE>
                                        1
<PAGE>
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
===================================================================================================================
                                                                                        Three Months Ended June 30,
(amounts in thousands except per share data)                                                    1997           1996
-------------------------------------------------------------------------------------------------------------------
<S>                                                                                         <C>             <C>
INTEREST INCOME:                                                                                  (Unaudited)            
  Interest and fees on loans                                                                  $9,872         $9,282
  Interest and dividends on investments                                                        1,769          1,194
-------------------------------------------------------------------------------------------------------------------
                                                                                              11,641         10,476
-------------------------------------------------------------------------------------------------------------------
INTEREST EXPENSE:
  Interest on deposits                                                                         4,156          3,911
  Interest on borrowings                                                                         622             69
-------------------------------------------------------------------------------------------------------------------
                                                                                               4,778          3,980
-------------------------------------------------------------------------------------------------------------------
  Net interest income                                                                          6,863          6,496
  Provision for loan losses                                                                      800             80
-------------------------------------------------------------------------------------------------------------------
  Net interest income after provision for loan losses                                          6,063          6,416
NON-INTEREST INCOME:
  Gain on sale of loans                                                                          137            266
  Service charges on deposit accounts                                                          1,043          1,014
  Other income                                                                                   536            397
-------------------------------------------------------------------------------------------------------------------
                                                                                               1,716          1,677
-------------------------------------------------------------------------------------------------------------------
OPERATING EXPENSES:
  Employee compensation and benefits                                                           3,085          2,805
  Occupancy and equipment                                                                      1,073            880
  Professional fees                                                                              274            308
  Advertising and promotions                                                                     187            170
  Communications                                                                                 201            153
  Data processing                                                                                191            207
  Insurance                                                                                       99            200
  Other                                                                                        1,159            765
  Merger expenses                                                                              3,979
-------------------------------------------------------------------------------------------------------------------
                                                                                              10,248          5,488
-------------------------------------------------------------------------------------------------------------------
 (Loss) income before taxes                                                                  (2,469)          2,605
 (Benefit) provision for income taxes                                                          (818)            975
-------------------------------------------------------------------------------------------------------------------
  Net (loss) income                                                                         $(1,651)         $1,630
===================================================================================================================
PER SHARE DATA:
  Primary (loss) earnings per common share                                                    $(.11)           $.09
  Dividends per common share                                                                  $  .06           $.05
  Avg. common shares and common stock equivalents outstanding                                 16,008         15,526
===================================================================================================================
<FN>
See notes to condensed consolidated financial statements.
</FN>
</TABLE>
                                        2

<PAGE>
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
===================================================================================================================
                                                                                          Six Months Ended June 30,
(amounts in thousands except per share data)                                                    1997           1996
-------------------------------------------------------------------------------------------------------------------
<S>                                                                                          <C>            <C>    
INTEREST INCOME:                                                                                  (Unaudited)
  Interest and fees on loans                                                                 $19,213        $18,295
  Interest and dividends on investments                                                        3,583          2,556
-------------------------------------------------------------------------------------------------------------------
                                                                                              22,796         20,851
-------------------------------------------------------------------------------------------------------------------
INTEREST EXPENSE:
  Interest on deposits                                                                         8,227          7,818
  Interest on borrowings                                                                       1,081            182
-------------------------------------------------------------------------------------------------------------------
                                                                                               9,308          8,000
-------------------------------------------------------------------------------------------------------------------
  Net interest income                                                                         13,488         12,851
  Provision for loan losses                                                                      825            155
-------------------------------------------------------------------------------------------------------------------
  Net interest income after provision for loan losses                                         12,663         12,696
-------------------------------------------------------------------------------------------------------------------
NON-INTEREST INCOME:
  Gain on sale of loans                                                                          183            281
 Gain on sale of investments available-for-sale                                                  163
  Service charges on deposit accounts                                                          2,003          1,859
  Other income                                                                                   976            983
-------------------------------------------------------------------------------------------------------------------
                                                                                               3,325          3,123
-------------------------------------------------------------------------------------------------------------------
OPERATING EXPENSES:
  Employee compensation and benefits                                                           5,588          5,389
  Occupancy and equipment                                                                      2,012          1,738
  Professional fees                                                                              488            556
  Advertising and promotions                                                                     323            316
  Communications                                                                                 380            339
  Data processing                                                                                382            356
  Insurance                                                                                      160            320
  Other                                                                                        1,883          1,576
  Merger expenses                                                                              3,979
-------------------------------------------------------------------------------------------------------------------
                                                                                              15,195         10,590
-------------------------------------------------------------------------------------------------------------------
  Income before taxes                                                                            793          5,229
  Provision for income taxes                                                                     297          1,898
-------------------------------------------------------------------------------------------------------------------
  Net income                                                                                    $496         $3,331
===================================================================================================================
PER SHARE DATA:
  Primary earnings per common share                                                             $.01           $.18
  Dividends per common share                                                                    $.11           $.10
  Avg. common shares and common stock equivalents outstanding                                 16,635         15,493
===================================================================================================================
<FN>
See notes to condensed consolidated financial statements.
</FN>
</TABLE>
                                        3
<PAGE>
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATED  STATEMENTS OF SHAREHOLDERS' EQUITY
====================================================================================================================================
                                                                                                                         Unrealized
                                                                                       Additional                Gain on Securities
                                                             Preferred       Common       Paid-in    Retained   Available-for-Sale,
(amounts in thousands except share and per share data)         Stock          Stock       Capital    Earnings          Net of Taxes
-------------------------------------------------------  ------------- ------------  ------------ ----------- ----------------------
<S>                                                            <C>             <C>        <C>         <C>                     <C> 
Balance, December 31, 1995 (restated)                          $14,365         $141       $32,058     $15,262                  $150
Exercise of warrants - 268,126 shares                                             3         1,039
Conversion of preferred stock series "A"
   into common stock - 982,995 shares                          (3,980)           10         3,970
Issuance of stock grants - 9,000 shares                                                        32
Issuance of stock for Dividend Reinvestment and
  Optional Stock Purchase Plan - 2,586 shares                                                  13
Exercise of stock options - 4,622 shares                                                       12
Cash redemption of preferred stock series "A"                     (35)
Issuance of common stock - 110,812                                                1           226
Cash dividends - common stock                                                                         (2,910)
Cash dividends - preferred stock series "A" and "C"                                                     (886)
Net income                                                                                              6,840
Change in unrealized gain on investments
   available-for-sale, net of taxes                                                                                           (147)
-------------------------------------------------------  ------------- ------------  ------------ ----------- ---------------------
Balance, December 31, 1996                                      10,350          155        37,350      18,306                     3
Exercise of warrants - 614,228 shares                                             6         1,270
Issuance of stock grants - 3,000 shares                                                        27
Cash dividends - common stock                                                                           (546)
Cash dividends paid by pooled company - common stock                                                  (2,456)
Cash dividends - preferred stock series "C"                                                             (362)
Net income                                                                                                496
Change in unrealized gain on investments
    available-for-sale, net of taxes                                                                                              3
-------------------------------------------------------  ------------- ------------  ------------ ----------- ---------------------
Balance, June 30, 1997                                         $10,350         $161       $38,647     $15,438                    $6
===================================================================================================================================
<FN>
See notes to condensed consolidated financial statements.
</FN>
</TABLE>

                                        4

<PAGE>
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
===================================================================================================================
                                                                                              SIX MONTHS JUNE 30,
                                                                                                 (unaudited)
(amounts in thousands)                                                                   1997                 1996
-------------------------------------------------------------------------------------------------------------------
<S>                                                                                  <C>                  <C>
Operating Activities:
Net income                                                                                $496               $3,331
Adjustments to reconcile net income to net cash
  provided by operating activities:
Provision for loan losses                                                                  825                  155
Depreciation                                                                               624                  528
Amortization of goodwill                                                                   284                  180
Gain on sale of loans -trading, loans and servicing                                      (183)                (281)
Loan costs deferred                                                                        166                  145
Loans originated for sale                                                              (7,808)              (7,014)
Sale of loans and loan participation certificates                                       22,583               15,313
Other - net                                                                              3,568              (2,070)
-------------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities                                               20,555              10,287
-------------------------------------------------------------------------------------------------------------------
Investing Activities:
Cash and cash equivalents acquired in merger-net                                                             15,235
Purchases of investments available-for-sale                                           (11,665)              (2,086)
Proceeds from sale and maturities of investments available-for-sale                     17,305                1,457
Maturities and calls  of investments held-to-maturity                                    3,492               12,020
Purchases of investments held-to-maturity                                              (8,944)             (13,768)
Net increase in loans                                                                 (41,787)              (4,903)
Purchases of property and equipment                                                    (2,531)              (1,139)
Other - net                                                                              (201)                1,217
-------------------------------------------------------------------------------------------------------------------
Net cash (used in) provided by investing activities                                   (44,331)                8,033
-------------------------------------------------------------------------------------------------------------------
Financing Activities:
Net (decrease) increase in demand deposits, NOW accounts,
  Money Market accounts and savings accounts                                             (824)               9,401
Net decrease in certificates of deposit                                                   (26)             (17,942)
Increase (decrease) in FHLB advances                                                    11,000             (20,000)
Increase (decrease) in securities sold under agreements to repurchase                    4,574              (2,265)
Cash dividend payments                                                                 (3,364)              (2,945)
Other - net                                                                              1,303               1,274
-------------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) financing activities                                     12,663             (32,477)
-------------------------------------------------------------------------------------------------------------------
Decrease in cash and cash equivalents                                                  (11,113)              (4,157)
Cash and cash equivalents at beginning of period                                        65,097               69,647
-------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of period                                             $53,984              $55,490
====================================================================================================================================
<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 $1,678,000 and $1,880,000 in income taxes 
during the six months ended June 30, 1997 and 1996, respectively.  The Company paid $9,220,000 and $6,256,000 in interest on 
deposits and other borrowings during the six months ended June 30, 1997 and 1996, respectively.  The Company had $895,000 and 
$736,000 of transfers from loans to OREO during the six months ended June 30, 1997 and 1996, respectively. Assets of $62 million
were  acquired  and $57  million  liabilities  assumed  related to the merger of Banyan Bank during the six months ended
June 30, 1996.
====================================================================================================================================
See notes to condensed consolidated financial statements.
</FN>
</TABLE>
                                       5
<PAGE>
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                  June 30, 1997

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  except for merger  expenses
         (See Note 2)) considered  necessary to present fairly the  consolidated
         financial position of Republic Security  Financial  Corporation and its
         subsidiary  as of June 30, 1997 and December 31, 1996,  and the results
         of  operations  for the three and six months  ended  June 30,  1997 and
         1996,  and  changes in cash flows for the six months  then  ended.  The
         unaudited  condensed   consolidated   financial  statements  have  been
         restated to include the  accounts and results of  operations  of Family
         Bank (see Note 2).

                  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 six months
         ended June 30, 1997 are not necessarily  indicative of the results that
         may be expected  for the year ending  December  31,  1997.  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, 1996.

                  The balance  sheet at December  31, 1996 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.       Merger

                  On June 30, 1997, RSFC issued  8,289,125  shares of its common
         stock in  exchange  for all  outstanding  common  stock of Family  Bank
         ("Family") a Florida  commercial  bank.  This business  combination has
         been  accounted  for  as  a   pooling-of-interests   combination   and,
         accordingly,  the unaudited condensed consolidated financial statements
         for periods prior to the combination  have been restated to include the
         accounts and results of operations  of Family Bank. In connection  with
         the Family  merger the  Company  incurred  approximately  $4 million in
         merger expenses.

                  The results of operations  previously reported by the separate
         companies  and  the  combined  amounts  presented  in the  accompanying
         unaudited condensed  consolidated  financial  statements are summarized
         below.
<TABLE>
<CAPTION>
===========================================================================================================
                                                Three Months Ended                 Six Months Ended
                                                     June 30,                          June 30,
                                                      1997            1996              1997           1996
-----------------------------------------------------------------------------------------------------------
Revenue:                                            (Unaudited)                       (Unaudited)
-----------------------------------------------------------------------------------------------------------
<S>                                               <C>             <C>              <C>            <C>    
         RSFC                                       $7,796          $7,310           $15,351        $14,429
         Family                                      5,561           4,843            10,770          9,545
-----------------------------------------------------------------------------------------------------------
         Combined                                  $13,357         $12,153           $26,121        $23,974
===========================================================================================================
Net Income (loss):
         RSFC (1)                                 $(2,911)            $655          $(2,045)         $1,324
         Family                                      1,260             975             2,541          2,007
-----------------------------------------------------------------------------------------------------------
         Combined                                 $(1,651)          $1,630              $496         $3,331
===========================================================================================================
<FN>
         (1) The three and six months ended June 30, 1997, includes merger costs
         of $2.5 million,  net of taxes, related to the Family Bank acquisition.
         The merger costs consist of approximately  $1.6 million in professional
         fees, $1 million in data processing  conversion  costs and $1.4 million
         in costs  associated  with the  integration  of  operations  and  other
         expenses.
</FN>
</TABLE>
                  Securities  held by Family with a book value of  approximately
         $39.4 million and a market value of approximately $39.5 million at June
         30, 1997, were transferred from  held-to-maturity to available-for-sale
         to  maintain  RSFC's  existing  interest  rate  risk  position  for the
         combined company.


                                       6

<PAGE>
3.       Potential Merger

                  On August 8, 1997,  the  Company and the Bank  entered  into a
         definitive  agreement  whereby  County  National  Bank of South Florida
         ("County"),  a national  chartered,  commercial  bank,  will merge with
         Republic Security Bank. The definitive  agreement  provides for a fixed
         exchange ratio whereby shareholders of County will receive 4.807 shares
         of Republic Security Financial  Corporation common stock for each share
         of County  common  stock.  The  Company  will issue  approximately  6.1
         million shares of Republic Security Financial  Corporation common stock
         for all  outstanding  common  shares  of  County  stock  in a tax  free
         exchange.  Management anticipates the transaction will be accounted for
         as a  pooling-of-interests.  County  is  headquartered  in North  Miami
         Beach,  Florida with 14 branch locations in Northern Dade,  Broward and
         Palm Beach  counties.  County has total  assets,  loans,  deposits  and
         equity of approximately  $238 million,  $139 million,  $210 million and
         $23 million,  respectively, at June 30, 1997 the transaction is subject
         to regulatory approvals and approval by the Companies' shareholders.

4.       Non-Performing Assets and Allowance for Loan Losses

                  At June 30, 1997, the Bank had $6.2 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 $825,000 and
         $155,000 for the six months ended June 30, 1997 and 1996, respectively.
         The increase in the  provision  for loan losses from the quarter  ended
         June 30, 1996 compared to the quarter ended June 30, 1997 is due to the
         realignment  of Family's loan loss reserve  policy to that of the Bank,
         an increase  from  December 31, 1996 of $1.6 million in non  performing
         loans  associated  with  one  single  family  residential  loan  and  a
         downgrade of a $330,000  commercial  loan in the quarter ended June 30,
         1997.

                  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 $4.8 million at
         June 30, 1997.

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

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

                                       7

<PAGE>
         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, 1997, the Bank had adjustable rate  commitments to
         extend credit of  approximately  $60 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 the
         Company's  management,  amounts  accrued for awards or  assessments  in
         connection  with these matters are adequate and ultimate  resolution of
         these  matters  will  not  have a  material  effect  on  the  Company's
         consolidated financial position, results of operations or cash flow.

                  On August 6, 1997, a final  judgement was ordered on a pending
         litigation  matter  against  the Company  whereby the Company  will pay
         approximately  $400,000 to the plaintiff in the matter. The Company had
         accrued  approximately  $400,000 related to this pending  litigation at
         June 30, 1997.

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  to  the  extent  those  shares  are   dilutive.   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.

                  In March 1997, the Financial Accounting Standards Board issued
         Statement  of  Financial  Accounting  Standards  No. 128 ("SFAS  128"),
         "Earnings Per Share".  SFAS 128 requires companies with complex capital
         structures  that  have  publicly  held  common  stock or  common  stock
         equivalents  to  present  both  basic and  diluted  earnings  per share
         ("EPS") on the face of the income statement.  The presentation of basic
         EPS  replaces the  presentation  of primary EPS  currently  required by
         Accounting  Principles  Board Opinion No. 15 ("APB No. 15"),  "Earnings
         Per  Share".  Basic EPS is  calculated  as income  available  to common
         stockholders  divided by the weighted  average  number of common shares
         outstanding during the period.  Diluted EPS (previously  referred to as
         fully diluted EPS) is calculated  using the "if  converted"  method for
         convertible  securities  and the treasury  stock method for options and
         warrants as prescribed  by APB No. 15. This  statement is effective for
         financial statements issued for interim and annual periods ending after
         December  15,  1997.  The Company does not believe the adoption of SFAS
         128 in  fiscal  1998 will have a  significant  impact on the  Company's
         reported EPS.


                                       8

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

       Comparison of the Three and Six Months Ended June 30, 1997 and 1996

Results of Operations

         The Company had a net loss of  $(1,651,000)  or $(.11) per common share
for the three months ended June 30, 1997 compared to net income of $1,630,000 or
$.09 per common share for the three  months ended June 30, 1996.  Net income for
the six  months  ended  June 30,  1997 was  $496,000  or $.01 per  common  share
compared to net income of $3,331,000 or $.18 per common share for the six months
ended June 30,  1996.  The  decrease  in net income for the three and six months
ended  June  30,  1997 is  primarily  due to the  one-time  merger  expenses  of
$3,979,000  ($2,500,000,  net of income taxes),  associated with the Family Bank
acquisition  which closed on June 30,  1997.  Net income for the quarter and six
months  ended June 30, 1997 was also  impacted  by an  increase of $720,000  and
$670,000,  respectively,  for the  provision  for loan losses and an increase of
$480,000 and  $510,000,  respectively,  in Stock  Appreciation  Rights  ("SARs")
accrual  compared  to the  quarter  and six months  ended June 30,  1996.  These
increases in expenses were partially  offset by a $367,000 or 6% increase in net
interest  income for the three months ended June 30, 1997  compared to the three
months ended June 30, 1996. Net interest income increased $637,000 or 5% and non
interest income increased  $202,000 or 7% for the six months ended June 30, 1997
compared to the six months ended June 30, 1996.

Net Interest Income

         Net  interest  income for the  quarter  ended June 30,  1997  increased
$367,000  compared  to the  quarter  ended June 30,  1996 due to an  increase of
$73,000,000  in  interest-earning  assets  offset by a decrease in net  interest
margin of 42 basis points.  Average  outstanding  loans increased  approximately
$40,000,000 and investments  increased  approximately  $33,000,000 while average
interest  bearing  deposits  increased  approximately  $25,000,000  and  average
borrowings increased  approximately  $35,000,000 for the three months ended June
30, 1997  compared to the three months ended June 30, 1996.  The Bank  purchased
$25,000,000 of mortgage-backed  securities in December 1996 which were funded by
a  $25,000,000  Federal  Home Loan Bank  advance.  The  decrease in net interest
margin for the three  months  ended June 30, 1997  compared to the three  months
ended  June  30,  1996  is  primarily  a  result  of  the  $25,000,000  leverage
transaction  and also a result  of a slight  decrease  in the  yield on the loan
portfolio.

Net interest income  increased  $637,000 or 5% for the six months ended June 30,
1997  compared to the six months ended June 30,  1996.  The increase is due to a
$61,000,000  or 12% increase in interest  earning assets offset by a decrease in
net interest margin of 42 basis points.

Provision for Loan Losses

         The provision for loan losses  increased  $720,000 for the three months
ended  June 30,  1997  compared  to the three  months  ended  June 30,  1996 due
primarily to (i) the realignment of Family's loan loss reserve policy to that of
the  Bank,  (ii)  an  increase  from  December  31,  1996 of  $1,600,000  in non
performing loans associated with one single family  residential loan and (iii) a
downgrade of a $330,000  commercial loan in the quarter ended June 30, 1997. For
the six months  ended June 30, 1997,  the  provision  for loan losses  increased
$670,000 compared to the six months ended June 30, 1996.

Non-Interest Income

         Non-interest  income  increased  $202,000 for the six months ended June
30,  1997  compared  to the six months  ended  June 30,  1996  primarily  due to
increases of $144,000 in service charge on deposit accounts and $163,000 in gain
on sale of  investments,  offset by a  decrease  of  $98,000  in gain on sale of
loans.  No  significant  change  occurred in  non-interest  income for the three
months ended June 30, 1997 compared to the three months ended June 30, 1996.

                                       9

<PAGE>


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

         Operating expenses increased  $3,979,000 for the quarter and six months
ended June 30, 1997  compared  to the quarter  ended June 30, 1996 due to merger
expenses  associated with the Family Bank  acquisition  which closed on June 30,
1997.  Operating expenses,  excluding the merger expenses,  increased 781,000 or
14% for the three months ended June 30, 1997  compared to the three months ended
June 30, 1996. The increase in operating  expenses is due primarily to increases
of  $280,000  in  employee  compensation  and  benefits  expenses,  $193,000  in
occupancy and equipment expenses and $394,000 in other operating expenses offset
by a decrease  of  $101,000  in  insurance  expense.  Other  operating  expenses
increased due primarily to non recurring  expenses of $100,000  associated  with
the start-up of the trust services  division and $150,000 fixed asset  write-off
associated   with  the  relocation  of  a  branch.   The  increase  in  employee
compensation  and benefits  expenses is due to the accrual of $480,000 for Stock
Appreciation Rights (SARs) which became  "in-the-money" during the quarter ended
June 30, 1997 offset by non recurring payroll expenses of $80,000 in the quarter
ended  June  30,  1996  associated  with  the  absorption  of  the  Banyan  Bank
acquisition which closed in January 1996 and employee  compensation savings as a
result of the  elimination of certain  positions  which took place in June 1996.
Occupancy and equipment  expenses  increased for the three months ended June 30,
1997  compared  to the three  months  ended June 30,  1996 due  primarily  to an
increase in depreciation  expense of $100,000 and a one-time  payment of $50,000
for early  cancellation of a lease. The increase in depreciation  expense is due
to an  increase  in  equipment  associated  with the  change in data  processing
bureaus which took place in August 1996.  Insurance expense  decreased  $101,000
for the three months ended June 30, 1997 compared to the three months ended June
30,  1996 due  primarily  to a  decrease  of  approximately  $ 65,000 in Federal
Deposit Insurance  Corporation  ("FDIC") premiums and $20,000 in other insurance
premiums.  The FDIC premiums were reduced for all deposits  effective January 1,
1997 after the one-time  special Savings  Insurance  Association Fund assessment
made in September 1996 to recapitalize the fund.

         Operating  expenses,  excluding merger costs,  increased $626,000 or 6%
for the six months ended June 30, 1997 compared to the six months ended June 30,
1996.  The  increase in  operating  expenses is due  primarily  to  increases of
$199,000 in employee  compensation and benefits,  $274,000 increase in occupancy
and  equipment  expenses and $307,000 in other  operating  expenses  offset by a
decrease of $160,000 in insurance  expense.  Employee  compensation and benefits
increased  approximately  $510,000 related to SARs accrual offset by $180,000 of
non recurring  employee  compensation  expenses in the six months ended June 30,
1996 associated with the absorption of the Banyan Bank  acquisition and employee
compensation  savings as a result of the elimination of certain  positions which
took place in June 1996.  Occupancy and equipment expenses increased for the six
months ended June 30, 1997 compared to the six months ended June 30, 1996 due to
an increase in equipment  associated with the change in data processing  bureaus
which took  place in August  1996 and a  one-time  payment of $50,000  for early
cancellation of a lease. Other operating expenses increased due primarily to non
recurring  expenses  of  $100,000  associated  with the  start-up  of the  trust
services  division  and  $150,000  fixed  asset  write-off  associated  with the
relocation  of a branch.  Insurance  expense  decreased for the six months ended
June  30,  1997  compared  to the six  months  ended  June  30,  1996  due to an
approximate  savings of $130,000 in FDIC premiums,  a decrease of  approximately
$40,000 in other  insurance  premiums and a $50,000 FDIC premium refund received
in January  1997  offset by an  increase  in FDIC  premiums  associated  with an
increased deposit base of approximately $40,000,000.

Provision for Income Taxes

         Income tax  expenses  decreased  $1,793,000  for the three months ended
June 30, 1997 compared to the three months ended June 30, 1996 due to a decrease
of $5,074,000 in income before taxes. Income taxes decreased  $1,601,000 for the
six months  ended June 30, 1997  compared to the six months  ended June 30, 1996
due to a decrease of $4,436,000  in income  before  taxes.  Income before income
taxes decreased for the three and six months ended June 30, 1997 compared to the
three and six months  ended June 30, 1996 due  primarily  to merger  expenses of
$3,979,000  associated with the Family Bank acquisition which closed on June 30,
1997.

                                       10

<PAGE>
Liquidity, Sources of Capital and Capital Requirements

         As a member of the Federal Home Loan Bank  System,  the Bank is subject
to regulations  which require it to maintain "long term" liquidity  ratios.  The
majority of the liquid  assets of the bank are  investments  available-for-sale,
deposits with the Federal Home Loan Bank of Atlanta and federal funds sold.  The
Bank was in compliance with liquidity  requirements  during the six months ended
June 30, 1997.

         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 $11,000,000 during
the six months  ended June 30, 1997.  The  decrease in cash is due  primarily to
loan  originations  and  purchases  net of principal  paydowns, of approximately
$50,000,000,  dividend  payments  of  approximately  $3,000,000  and fixed asset
purchases of approximately  $2,500,000  offset by  approximately  $22,500,000 in
loan sales and $15,5000,000 in an increase in FHLB advances and securities sold
under agreements to repurchase. A $16,000,000 purchase of 1-4 family residential
loans was made during the six months  ended June 30, 1997 while the  majority of
loan  originations  related to commercial  business and  commercial  real estate
loans.

     The  following  table shows the  capital  amounts and ratios of the Bank at
June 30, 1997

===============================================================================
(Dollars in thousands)                            Amount                  Ratio
-------------------------------------------------------------------------------
Total risk based capital                         $52,346                  12.3%
Tier 1 risk based capital                        $47,201                  11.1%
Leverage capital                                 $47,201                   7.8%
===============================================================================

         The Bank was in compliance  with its' capital  requirements at June 30,
1997.

Financial Condition

         As of June 30, 1997, total assets increased  approximately  $18,000,000
or 3% from  December 31, 1996.  Loans-net  increased  approximately  $34,000,000
which was funded by a decrease of approximately  $11,000,000 in interest bearing
deposits in other institutions and federal funds sold, the sale of approximately
$8,000,000 of loans held for sale,  an increase in FHLB advances of  $11,000,000
and  an  increase  in  securities   sold  under   agreements  to  repurchase  of
approximately $4,000,000.  The overall increase in total assets of approximately
$18,000,000 is primarily a result of an increase of $11,000,000 in FHLB advances
and a $4,000,000 increase in securities sold under agreements to repurchase.

                                       11

<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: August 14, 1997                    /s/ Carla H. Pollard
      ---------------                    ---------------------------------------
                                         Carla H. Pollard
                                         Vice President/Controller









                                       12

<PAGE>
PART II.  OTHER INFORMATION

Item 6.  Exhibits and Reports on Form 8-K

(a) The following exhibits are included herein:
      Ex-3 (ii) - Amended and Restated By-Laws of Republic Security 
                  Financial Corporation
      Ex-11 -   Statement regarding Computation of Earnings Per Share
(b) A report on Form 8-K was filed on July 10, 1997 for the merger with
    Family Bank on June 30, 1997



F:\DOCS\10Q\1997\10Q-JUN.97


                                       13