FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

         (Mark One)
  X      QUARTERLY  REPORT  PURSUANT  TO  SECTION  13 OR 15(d) OF THE SECURITIES
 ---     EXCHANGE ACT OF 1934

                  For the quarterly period ended June 30, 2002

                                       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 0-24683

                               FLORIDA BANKS, INC.
             (Exact name of registrant as specified in its charter)

         FLORIDA                                                 58-2364573
(State or other jurisdiction of                               (I.R.S. Employer
  incorporation or organization)                             Identification No.)

                          5210 BELFORT ROAD, SUITE 310
                                JACKSONVILLE, FL
                                      32256
                    (Address of principal executive offices)

                                 (904) 332-7770
              (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 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 registrant's classes of
common stock, as of the latest practicable date.

    Title                                           Outstanding
    COMMON STOCK, $.01 PAR VALUE                    OUTSTANDING AT JUNE 28, 2002
    PER SHARE                                       6,727,158



                                       1
<PAGE>




<TABLE>
Item 1.  Financial Statements
FLORIDA BANKS, INC.
CONDENSED BALANCE SHEETS  (Unaudited)
--------------------------------------------------------------------------------------------------------------------------
                                                                                         June 30,             December 31,
ASSETS                                                                                     2002                   2001

<S>                                                                                    <C>                   <C>
CASH AND DUE FROM BANKS                                                                $  20,380,434         $  19,332,159
FEDERAL FUNDS SOLD AND REPURCHASE AGREEMENTS                                              84,452,000            54,657,000
                                                                                       -------------         -------------
           Total cash and cash equivalents                                               104,832,434            73,989,159
INVESTMENT SECURITIES:
  Available for sale, at fair value (cost $35,235,616  and $33,562,507
    at June 30, 2002 and  December 31, 2001)                                              36,132,511            33,954,045
  Held to maturity, at cost (fair value $1,831,352 and $2,934,245
    at June 30, 2002 and  December 31, 2001)                                               1,791,329             2,867,163
  Other investments                                                                        2,253,350             2,064,550
                                                                                       -------------         -------------
           Total investment securities                                                    40,177,190            38,885,758
LOANS:
  Commercial real estate                                                                 271,033,885           210,373,284
  Commercial                                                                             155,664,855           142,910,691
  Residential mortgage                                                                    22,376,599            22,308,820
  Consumer                                                                                35,196,872            23,158,053
  Credit card and other loans                                                              1,894,557             2,911,884
                                                                                       -------------         -------------
           Total loans                                                                   486,166,768           401,662,732
  Allowance for loan losses                                                               (5,969,585)           (4,692,216)
  Net deferred loan fees                                                                    (364,439)             (218,821)
                                                                                       -------------         -------------
           Net loans                                                                     479,832,744           396,751,695
PREMISES AND EQUIPMENT, NET                                                                4,143,414             3,361,882
ACCRUED INTEREST RECEIVABLE                                                                1,956,583             1,722,746
DEFERRED INCOME TAXES, NET                                                                 3,434,531             4,016,786
DERIVATIVE INSTRUMENTS                                                                                             279,784
OTHER REAL ESTATE OWNED                                                                    3,187,348             2,777,827
OTHER ASSETS                                                                                 400,843               537,588
                                                                                       -------------         -------------
TOTAL ASSETS                                                                           $ 637,965,087         $ 522,323,225
                                                                                       =============         =============
LIABILITIES AND SHAREHOLDERS' EQUITY
DEPOSITS:
  Noninterest-bearing demand                                                           $  67,669,174         $  99,899,425
  Interest-bearing demand                                                                 27,025,147            19,164,133
  Regular savings                                                                         62,995,557            64,338,080
  Money market accounts                                                                    8,044,065             6,342,009
  Time $100,000 and over                                                                 249,032,569           194,016,109
  Other time                                                                             110,235,035            67,489,519
                                                                                       -------------         -------------
          Total deposits                                                                 525,001,547           451,249,275
REPURCHASE AGREEMENTS SOLD                                                                38,205,776             4,495,547
OTHER BORROWED FUNDS                                                                       9,703,688             9,714,692
ACCRUED INTEREST PAYABLE                                                                   2,247,513             2,863,882
DERIVATIVE INSTRUMENTS                                                                       171,037
ACCOUNTS PAYABLE AND ACCRUED EXPENSES                                                      2,107,534             2,038,795
                                                                                       -------------         -------------
          Total liabilities                                                              577,437,095           470,362,191
                                                                                       -------------         -------------
COMPANY OBLIGATED MANDATORILY REDEEMABLE PREFERRED SECURITIES
   OF SUBSIDIARY TRUST                                                                    13,525,201             5,819,000
                                                                                       -------------         -------------
SHAREHOLDERS' EQUITY:
  Series B Preferred Stock, $68.00 par value, 1,000,000 shares authorized, 102,283
    shares issued and outstanding at December 31, 2001                                                           6,955,244
  Common stock, $.01 par value; 30,000,000 shares authorized;
    7,029,358  and 5,979,860 shares issued, respectively                                      70,294                59,799
  Additional paid-in capital                                                              53,923,409            46,828,142
  Accumulated deficit (deficit of $8,434,037
     eliminated upon quasi-reorganization on December 31, 1995)                           (5,684,108)           (6,079,156)
  Treasury stock 302,200 shares at cost                                                   (1,866,197)           (1,866,197)
  Accumulated other comprehensive income, net of tax                                         559,393               244,202
                                                                                       -------------         -------------
          Total shareholders' equity                                                      47,002,791            46,142,034
                                                                                       -------------         -------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                                             $ 637,965,087         $ 522,323,225
                                                                                       =============         =============
</TABLE>

See notes to condensed financial statements.




                                       2
<PAGE>

<TABLE>
FLORIDA BANKS, INC.
CONDENSED STATEMENTS OF OPERATIONS (Unaudited)
------------------------------------------------------------------------------------------------------------------------------------

                                                                        Three-Month Period Ended          Six-Month Period Ended
                                                                                June 30,                         June 30,
                                                                      ----------------------------      ---------------------------
                                                                          2002             2001            2002            2001
                                                                          ----             ----            ----            ----
 INTEREST INCOME:
<S>                                                                   <C>              <C>              <C>             <C>
  Loans, including fees                                               $ 7,947,575      $ 6,643,186      $15,177,735     $13,410,101
  Investment securities                                                   571,360          655,886        1,146,494       1,353,715
  Federal funds sold                                                      156,728          239,248          359,587         531,216
                                                                      -----------      -----------      -----------     -----------
          Total interest income                                         8,675,663        7,538,320       16,683,816      15,295,032
                                                                      -----------      -----------      -----------     -----------

INTEREST EXPENSE:
  Deposits                                                              3,454,760        3,756,127        6,940,273       7,701,825
  Repurchase agreements                                                   125,323          349,675          251,458         741,334
  Borrowed funds                                                          107,967           92,477          225,103         188,634
                                                                      -----------      -----------      -----------     -----------

          Total interest expense                                        3,688,050        4,198,279        7,416,834       8,631,793
                                                                      -----------      -----------      -----------     -----------

NET INTEREST INCOME                                                     4,987,613        3,340,041        9,266,982       6,663,239

PROVISION FOR LOAN LOSSES                                               1,027,516          384,029        1,407,950         623,413
                                                                      -----------      -----------      -----------     -----------

NET INTEREST INCOME AFTER
   PROVISION FOR LOAN LOSSES                                            3,960,097        2,956,012        7,859,032       6,039,826
                                                                      -----------      -----------      -----------     -----------

NONINTEREST INCOME:
  Service fees                                                            401,070          291,333          769,518         515,580
  Loss on sale of available for sale investment  securities                                    (12)                             (12)
  Other noninterest income                                                167,477          112,111          336,237         206,783
                                                                      -----------      -----------      -----------     -----------


                                                                          568,547          403,432        1,105,755         722,351
                                                                      -----------      -----------      -----------     -----------
NONINTEREST EXPENSES:
  Salaries and benefits                                                 2,522,202        2,003,631        4,711,045       4,164,968
  Occupancy and equipment                                                 506,740          426,887          973,290         863,372
  Data processing                                                         200,282          168,178          397,196         331,447
   Dividends on preferred security of subsidiary trust                    140,758                           223,740
  Other                                                                   899,734          658,274        1,597,604       1,203,886
                                                                      -----------      -----------      -----------     -----------

                                                                        4,269,716        3,256,970        7,902,875       6,563,673
                                                                      -----------      -----------      -----------     -----------


INCOME  BEFORE PROVISION
  FOR INCOME TAXES                                                        258,928          102,474        1,061,912         198,504

PROVISION FOR INCOME TAXES                                                 97,427           39,495          404,089          74,965
                                                                      -----------      -----------      -----------     -----------

NET INCOME                                                            $   161,501      $    62,979      $   657,823     $   123,539
                                                                      ===========      ===========      ===========     ===========

PREFERRED STOCK DIVIDENDS                                                  20,008                           140,058
                                                                      -----------      -----------      -----------     -----------

NET INCOME APPLICABLE TO COMMON SHARES                                $   141,493      $    62,979      $   517,765     $   123,539
                                                                      ===========      ===========      ===========     ===========

INCOME PER COMMON SHARE:
  Basic                                                               $      0.02      $      0.01      $      0.08     $      0.02
                                                                      ===========      ===========      ===========     ===========

  Diluted                                                             $      0.02      $      0.01      $      0.08     $      0.02
                                                                      ===========      ===========      ===========     ===========
</TABLE>

 See notes to condensed financial statements.



                                       3
<PAGE>
<TABLE>
FLORIDA BANKS, INC.
CONDENSED STATEMENTS OF SHAREHOLDERS' EQUITY  (Unaudited)
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                        Accumulated
                                                                                                                           Other
                                                     Preferred Stock       Common Stock       Additional               Comprehensive
                                                   ----------------------------------------    Paid-In    Accumulated  (loss) income
                                                   Shares   Par Value    Shares   Par Value    Capital      Deficit     Net of Tax


<S>                                                <C>       <C>        <C>         <C>       <C>          <C>            <C>
BALANCE, JANUARY 1, 2001                                                5,929,751  $59,298   $46,750,329  $(6,760,222)   $ 13,870
Comprehensive income:

 Net Income                                                                                                   808,439
 Unrealized gain on available for sale
    investment securities, net of tax of $160,168                                                                         230,332
     Comprehensive income
Issuance of common stock to Employee
    Stock Purchase Plan                                                    50,109      501       226,587
Issuance of Series B Preferred Stock               102,283  $6,955,244                          (148,774)
Series B Preferred Stock Dividends Paid                                                                      (127,373)
Purchase of treasury stock

                                                   _______  __________  _________  _______   ___________  ___________    ________

BALANCE, DECEMBER 31, 2001                         102,283   6,955,244  5,979,860   59,799    46,828,142   (6,079,156)    244,202
Comprehensive income:
   Net Income                                                                                                 657,823
  Unrealized gain on available for sale
     investment securities, net of tax of $337,502                                                                        315,191
      Comprehensive income
Issuance of common stock to Employee
    Stock Purchase Plan                                                    16,871      169        86,380
Series B preferred stock dividends paid                                                                      (262,775)
Conversion of Series B preferred stock to
common                                            (102,283) (6,955,244) 1,022,830   10,228     6,945,015
Exercise of stock options and issue of stock
grants                                                                      9,797       98        63,872
                                                   _______  _________   __________  _______   ___________  ___________    ________

BALANCE, June 30, 2002                                   -  $   -       7,029,358  $70,294   $53,923,409  $(5,684,108)   $559,393
                                                   =======  =========   =========  =======   ===========  ===========    ========



                                                                  Treasury
                                                                   Stock               Total

BALANCE, JANUARY 1, 2001                                        $(1,506,836)        $38,556,439
Comprehensive income:

 Net Income                                                                             808,439
 Unrealized gain on available for sale
    investment securities, net of tax of $160,168                                       230,332
                                                                                    ___________

     Comprehensive income                                                             1,038,771
Issuance of common stock to Employee
    Stock Purchase Plan                                                                 227,088

Issuance of Series B Preferred Stock                                                 6,806,470

Series B Preferred Stock Dividends Paid                                                (127,373)

Purchase of treasury stock                                         (359,361)           (359,361)

                                                                 __________         ___________

BALANCE, DECEMBER 31, 2001                                       (1,866,197)         46,142,034
Comprehensive income:

   Net Income                                                                           657,823
  Unrealized gain on available for sale
     investment securities, net of tax of
$337,502                                                                                315,191
                                                                                    ___________

      Comprehensive income                                                              973,014
Issuance of common stock to Employee

    Stock Purchase Plan                                                                  86,548

Series B preferred stock dividends paid                                                (262,775)
Conversion of Series B preferred stock to
common
Exercise of stock options and issue of stock grants                                      63,970
                                                                 __________         ___________

BALANCE, June 30, 2002                                          $(1,866,197)        $47,002,791
                                                                ===========         ===========
</TABLE>

See notes to condensed financial statements.

                                       4
<PAGE>

<TABLE>
FLORIDA BANKS, INC.
CONDENSED STATEMENTS OF CASH FLOWS  (Unaudited)
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           Six-Month Period Ended
                                                                                                                   June 30,
                                                                                                     -------------------------------
OPERATING ACTIVITIES:                                                                                        2002             2001
                                                                                                     -------------------------------
<S>                                                                                                  <C>              <C>
  Net income                                                                                         $     657,823    $     123,539
  Adjustments to reconcile net income to net cash provided by (used in) operating activities:
      Depreciation and amortization                                                                        417,627          372,441
      Reinvested dividends on investment securities                                                        (69,062)
      Deferred income tax provision                                                                        392,089           74,965
      Loss on disposition of furniture and equipment                                                                          6,577
      Accretion of premium on investments, net                                                             (39,124)        (113,285)
      Amortization of premium on loans                                                                      42,223
      Provision for loan losses                                                                          1,407,950          623,413
      Loss on foreign currency translation                                                                  17,349
      Loss on derivative instruments                                                                        49,643            4,620
      Increase in accrued interest receivable                                                             (233,837)         (84,614)
      Decrease in accrued interest payable                                                                (616,369)        (442,083)
      Decrease (increase) in other assets                                                                  136,745          (20,396)
      Increase in other liabilities                                                                         68,739           30,424
                                                                                                     -------------    -------------
           Net cash provided by operating activities                                                     2,231,796          575,601
                                                                                                     -------------    -------------
INVESTING ACTIVITIES:
  Proceeds from sales, paydowns and maturities of investment securities:
    Available for sale                                                                                  12,600,564        6,314,181
    Held to maturity                                                                                     1,110,385        2,579,079
  Purchases of investment securities:
    Available for sale                                                                                 (14,200,037)      (7,950,301)
    Held to maturity                                                                                                     (3,361,015)
    Other investments                                                                                     (188,800)        (136,700)
  Net increase in loans                                                                                (84,993,268)     (46,432,802)
  Proceeds from sale of other real estate owned                                                            242,979
  Purchases of premises and equipment                                                                   (1,199,159)        (439,152)
                                                                                                     -------------    -------------
           Net cash used in investing activities                                                       (86,627,336)     (49,426,710)
                                                                                                     -------------    -------------

FINANCING ACTIVITIES:
  Net (decrease) increase in demand deposits, money market accounts and savings accounts               (23,729,780)      19,661,131
  Net increase in time deposits                                                                         97,761,976       26,535,565
  Increase in repurchase agreements                                                                     33,710,229       21,844,123
  Increase (decrease) in borrowed funds                                                                 (3,011,004)          17,615
  Proceeds from FHLB advances                                                                            3,000,000
  Proceeds from exercise of stock options                                                                   63,969
  Preferred dividends paid                                                                                (262,776)
  Proceeds from sale of Series B preferred stock                                                                          6,690,918
                                                                                                                       -------------
  Issuance cost of trust preferred securities                                                            7,706,201
                                                                                                     -------------
           Net cash provided by financing activities                                                   115,238,815       74,749,352
                                                                                                     -------------    -------------

 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                                   30,843,275       25,898,243
CASH AND CASH EQUIVALENTS:
  Beginning of period                                                                                   73,989,159       43,687,964
                                                                                                     -------------    -------------

  End of period                                                                                      $ 104,832,434    $  69,586,207
                                                                                                     =============    =============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
    Cash paid for interest                                                                           $   8,033,203    $   4,772,436
                                                                                                     =============    =============
NONCASH FINANCING ACTIVITIES:
Proceeds from demand deposits used to purchase shares of
     common stock under Employee Stock Purchase Plan                                                 $      86,549    $     161,497
                                                                                                     =============    =============
</TABLE>


See notes to condensed financial statements.


                                       5
<PAGE>

FLORIDA BANKS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND SIX-MONTH PERIODS ENDED
JUNE 30, 2002 AND 2001 (UNAUDITED)
--------------------------------------------------------------------------------


1.    BASIS OF PRESENTATION

      Florida Banks,  Inc. (the "Company") was  incorporated on October 15, 1997
      for the purpose of becoming a bank  holding  company and  acquiring  First
      National  Bank of Tampa  (the  "Bank").  On August 4,  1998,  the  Company
      completed its initial  public  offering and its merger (the "Merger") with
      the Bank  pursuant to which the Bank was merged with and into Florida Bank
      No. 1, N.A., a wholly-owned subsidiary of the Company, and renamed Florida
      Bank, N.A.

      The condensed  financial  statements have been prepared in accordance with
      the  rules and  regulations  of the  Securities  and  Exchange  Commission
      related  to  interim  financial  statements.   These  unaudited  condensed
      financial statements do not include all disclosures provided in the annual
      financial statements. The condensed financial statements should be read in
      conjunction with the financial  statements and notes thereto  contained in
      the Company's Annual Report to Shareholders incorporated by reference into
      the  Company's  Form  10-K for the  year  ended  December  31,  2001.  All
      adjustments  of a  normal  recurring  nature  which,  in  the  opinion  of
      management,  are  necessary  to fairly  present the results of the interim
      periods have been made. Results of operations for the three- and six-month
      periods ended June 30, 2002, are not necessarily indicative of the results
      to be expected for the full year.

      The consolidated  financial statements include the accounts of the Company
      and  its   subsidiaries.   All  significant   intercompany   balances  and
      transactions have been eliminated in consolidation.

2.    EARNINGS PER COMMON SHARE

      The  following  is  a  reconciliation  of  the  denominator  used  in  the
      computation of basic and diluted earnings per common share.

<TABLE>
                                            Three-Month Period Ended            Six-Month Period Ended
                                                    June 30,                           June 30,
                                         --------------------------------   -------------------------------
                                              2002             2001              2002            2001
                                         ---------------  ---------------   ---------------  --------------

<S>                                          <C>              <C>               <C>               <C>
Weighted average number of common
  shares outstanding - Basic                 6,552,607        5,709,004         6,124,728         5,681,919

Incremental shares from the assumed
  conversion of stock options                   16,497            2,817            16,497             2,817
                                             ---------        ---------         ---------         ---------

Total - Diluted                              6,569,104        5,711,821         6,141,225         5,684,736
                                             =========        =========         =========         =========

</TABLE>



      The  incremental  shares from the assumed  conversion of stock options for
      the  three-  and  six-month  periods  ended  June 30,  2002 and 2001  were
      determined  using the  treasury  stock  method,  under  which the  assumed
      proceeds  were equal to (1) the amount that the Company would receive upon
      exercise of the options  plus (2) the amount of tax benefit  that would be
      credited to additional  paid-in capital assuming  exercise of the options.
      The assumed proceeds are used to purchase outstanding common shares at the



                                       6
<PAGE>


FLORIDA BANKS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND SIX-MONTH PERIODS ENDED
JUNE 30, 2002 AND 2001 (UNAUDITED)  (Continued)
--------------------------------------------------------------------------------


      Company's average market value for the period.  The convertible  preferred
      stock  outstanding at June 30, 2001 was considered to be anti-dilutive and
      is therefore excluded from the computation of diluted earnings per share.

3.    DERIVATIVE INSTRUMENTS

      The Company  adopted  Statement of  Accounting  Standards  (SFAS) No. 133,
      Accounting for Derivative Instruments and Hedging Activities,  as amended,
      on January 1, 2001. This statement requires all derivative  instruments to
      be recorded on the balance sheet at fair value.

      The following  instruments  qualify as  derivatives as defined by SFAS No.
      133:

                                                           June 30, 2002
                                                 -------------------------------
                                                 Contract/Notional       Fair
                                                      Amount             Value


      Interest rate swap agreements                $ 42,500,000        $497,805
      Foreign currency swap agreements             $  2,000,000        $ 22,338

      Interest rate swap agreements at June 30, 2002 consist of seven agreements
      which  effectively  convert the interest rate on certain  certificates  of
      deposit  from a fixed rate to a variable  rate to more  closely  match the
      interest rate  sensitivity of the Company's  assets and  liabilities.  The
      Company has  designated and assessed the  derivatives as highly  effective
      fair value  hedges,  as defined by SFAS No. 133.  The  Company  recognized
      losses of $21,281 and $49,643 during the three-month and six-month periods
      ended  June 30,  2002 as a result  of  changes  in the fair  value of loan
      participation  agreements which contained imbedded derivatives at December
      31, 2001 and March 31, 2002, and were no longer in place at June 30, 2002.
      Additionally,  the Company entered into a foreign  currency swap agreement
      during the first quarter of 2001. This swap agreement does not qualify for
      hedge accounting under SFAS No. 133. Accordingly,  all changes in the fair
      value of the foreign currency swap agreement are reflected in the earnings
      of the Company. The Company recognized losses of $8,840 and $17,349 during
      the three-month  and six-month  periods ended June 30, 2002 as a result of
      changes in the fair value of the foreign currency agreement.

4.    PREFERRED STOCK

      On June 29, 2001 the Company  issued  100,401 shares of Series B Preferred
      stock. On July 24, 2001, the Company issued an additional  1,882 shares of
      Series B Preferred  Stock.  All Series B Preferred  shares were issued for
      $68.00  per share  through a private  placement.  On April 16,  2002,  all
      102,283 shares of preferred stock  automatically  converted into 1,022,830
      shares of common  stock as a result of the  average  closing  price of the
      Company's  common stock  closing  above $8.00 for the period from March 4,
      2002 through April 15, 2002.




                                       7
<PAGE>

FLORIDA BANKS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND SIX-MONTH PERIODS ENDED
JUNE 30, 2002 AND 2001 (UNAUDITED)  (Continued)
--------------------------------------------------------------------------------


5.    RECENT ACCOUNTING PRONOUNCEMENTS

      In July of 2001, the Financial  Accounting Standards Board ("FASB") issued
      Statement of Financial  Accounting  Standards  ("SFAS") No. 141, "Business
      Combinations"  and SFAS No. 142,  "Goodwill and Other Intangible  Assets".
      SFAS No. 141 establishes  accounting and reporting  standards for business
      combinations.    This    Statement    eliminates    the    use    of   the
      pooling-of-interests  method  of  accounting  for  business  combinations,
      requiring  future  business  combinations  to be  accounted  for using the
      purchase  method of accounting.  The provisions of this Statement apply to
      all business  combinations  initiated  after June 30, 2001. This Statement
      also applies to all business combinations accounted for using the purchase
      method of accounting  for which the date of acquisition is July 1, 2001 or
      later. The Statement had no impact on the Company's consolidated financial
      position and results of operations.

      SFAS No. 142 establishes  accounting and reporting  standards for goodwill
      and other intangible assets. With the adoption of this Statement, goodwill
      is no longer  subject to  amortization  over its  estimated  useful  life.
      Rather,  goodwill  will be  subject to at least an annual  assessment  for
      impairment by applying a fair-value  based test. The Company  adopted SFAS
      No. 142 on January 1, 2002.  As the Company  currently  has no goodwill or
      intangible assets, the adoption of the Statement did not have an impact on
      the Company's consolidated financial position and results of operations.

      In June  2001,  the  FASB  issued  SFAS No.  143,  "Accounting  for  Asset
      Retirement Obligations". SFAS No. 143 requires entities to record the fair
      value of a liability for an asset  retirement  obligation in the period in
      which it is incurred and requires that the amount  recorded as a liability
      be capitalized by increasing the carrying amount of the related long-lived
      assets.  Subsequent to initial  measurement,  the liability is accreted to
      the  ultimate  amount  anticipated  to be paid,  and is also  adjusted for
      revisions to the timing or amount of estimated cash flows. The capitalized
      cost is  depreciated  over the  useful  life of the  related  asset.  Upon
      settlement of the  liability,  an entity either settles the obligation for
      its recorded amount or incurs a gain or loss upon settlement. SFAS No. 143
      is required to be adopted for fiscal years  beginning after June 15, 2002,
      with earlier application encouraged. The Statement will not have an impact
      on  the  Company's   consolidated   financial   position  and  results  of
      operations.

      In  August,  2001,  the FASB  issued  SFAS No.  144,  "Accounting  for the
      Impairment or Disposal of Long-Lived  Assets".  This statement  supersedes
      SFAS No. 121  "Accounting  for  Impairment  of  Long-Lived  Assets and for
      Long-Lived Assets to be Disposed of". SFAS No. 144 retains the fundamental
      provisions  of SFAS No. 121 for (a)  recognition  and  measurement  of the
      impairment of long-lived assets to be held and used and (b) measurement of
      long-lived assets to be disposed of by sale. SFAS No. 144 is effective for
      fiscal  years  beginning  after  December  15,  2001.  The adoption of the
      Statement  did not have a material  impact on the  Company's  consolidated
      financial position and results of operations.


                                       8
<PAGE>


FLORIDA BANKS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND SIX-MONTH PERIODS ENDED
JUNE 30, 2002 AND 2001 (UNAUDITED)  (Continued)
--------------------------------------------------------------------------------


      In April 2002, the Financial  Accounting  Standards  Board issued SFAS No.
      145,  "Rescission of FASB Statements No. 4, 44, and 64,  Amendment of FASB
      Statement No. 13, and Technical Corrections". This Statement rescinds SFAS
      No. 4, "Reporting  Gains and Losses from  Extinguishment  of Debt", and an
      amendment of that Statement, SFAS No. 64, "Extinguishments of Debt Made to
      Satisfy Sinking-Fund Requirements".  This Statement also rescinds SFAS No.
      44,  "Accounting for Intangible Assets of Motor Carriers".  This Statement
      amends SFAS No. 13, "Accounting for Leases", to eliminate an inconsistency
      between the required  accounting for  sale-leaseback  transactions and the
      required  accounting  for certain lease  modifications  that have economic
      effects that are similar to  sale-leaseback  transactions.  This Statement
      also amends other existing  authoritative  pronouncements  to make various
      technical  corrections,  clarify meanings, or describe their applicability
      under changed  conditions.  This  Statement will be effective for the year
      ended  December 31, 2003 and for  transactions  entered into after May 15,
      2002. It does not appear that this statement  will have a material  effect
      on the financial position, operations or cash flows of the Company.

      In June 2002,  the Financial  Accounting  Standards  Board issued SFAS No.
      146,  "Accounting for Costs Associated with Exit or Disposal  Activities".
      This Statement nullifies Emerging Issues Task Force (EITF) Issue No. 94-3,
      "Liability Recognition for Certain Employee Termination Benefits and Other
      Costs  to  Exit  an  Activity  (including  Certain  Costs  Incurred  in  a
      Restructuring)."  Under  Issue  94-3,  a  liability  for an exit  cost was
      recognized  at the date of an entity's  commitment  to an exit plan.  This
      Statement  requires that a liability for a cost associated with an exit or
      disposal  activity be recognized when the liability is incurred.  SFAS No.
      146 is effective for exit or disposal  activities that are initiated after
      December 31, 2002, with early application  encouraged.  It does not appear
      that this statement will have a material effect on the financial position,
      operations or cash flows of the Company.

6.    TRUST PREFERRED SECURITIES

      On April 10, 2002, the Company  participated  in a pooled trust  preferred
      offering.  In connection with the  transaction,  the Company,  through its
      subsidiary  trust,  Florida  Banks  Capital II (the  "Trust  II"),  issued
      $4,000,000  in  trust  preferred  securities.  The  Trust  II also  issued
      $124,000 of common  securities to the Company and used the total  proceeds
      to purchase $4,124,000 in 30-year subordinated  debentures of the Company.
      The preferred securities pay dividends at an initial rate of 6.02% through
      October 22, 2002.  The rate then becomes a floating  rate based on 6-month
      LIBOR plus 3.70%, adjusted semi-annually after each dividend payment date.
      Dividend  payment dates are April 22 and October 22 of each year. There is
      a par call option  beginning April 22, 2007. The  subordinated  debentures
      are the sole  assets of the Trust II and are  eliminated,  along  with the
      related income statement effects, in the Company's  consolidated financial
      statements.

      On June 28, 2002,  the Company  participated  in a pooled trust  preferred
      offering.  In connection with the  transaction,  the Company,  through its
      subsidiary  trust,  Florida  Banks  Capital  I  (the  "Trust  I"),  issued
      $4,000,000 in trust preferred securities. The Trust I also issued $124,000
      of  common  securities  to the  Company  and used the  total  proceeds  to
      purchase  $4,124,000  in 30-year subordinated  debentures  of the Company.



                                       9
<PAGE>


FLORIDA BANKS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND SIX-MONTH PERIODS ENDED
JUNE 30, 2002 AND 2001 (UNAUDITED)  (Continued)
--------------------------------------------------------------------------------

      The preferred securities pay dividends at an initial rate of 5.48% through
      September 30, 2002. The rate then becomes a floating rate based on 3-month
      LIBOR plus 3.75%,  adjusted  quarterly  after each dividend  payment date.
      Dividend payment dates are March 30, June 30, September 30 and December 30
      of each year.  There is a par call option  beginning  June 30,  2007.  The
      subordinated  debentures  are  the  sole  assets  of the  Trust  I and are
      eliminated,  along  with the  related  income  statement  effects,  in the
      Company's consolidated financial statements.














                                       10
<PAGE>


 Item 2.  Management's  Discussion  and  Analysis  of  Financial  Condition  and
          Results of Operations

The  following  discussion  should  be read in  conjunction  with the  financial
statements and related notes  appearing  elsewhere in this  Quarterly  Report on
Form 10-Q.

Critical Accounting Policies

The accounting and reporting  policies for the Company and its  subsidiaries are
in accordance with accounting principles generally accepted in the United States
and conform to general practices within the banking industry.  The more critical
accounting  and  reporting  policies  include the Company's  accounting  for the
allowance for loan losses,  other real estate owned and derivative  instruments.
In particular,  the accounting for these areas requires significant judgments to
be made  by  management.  Different  assumptions  in the  application  of  these
policies  could  result  in  material  changes  in  the  Company's  consolidated
financial  position or  consolidated  results of operations.  See "Allowance for
Loan Losses"  herein for a complete  discussion.  Please also refer to Note 1 in
the "Notes to Consolidated  Financial Statements" in the Company's Annual Report
and "Critical Accounting Policies" in the management  discussion and analysis on
Form  10-K on file with the  Securities  and  Exchange  Commission  for  details
regarding all of the Company's critical and significant accounting policies.

RESULTS OF OPERATIONS

Three Months Ended June 30, 2002 Compared to Three Months Ended June 30, 2001

The Company's net income  applicable to common shares for the second  quarter of
2002 was $141,493, compared to $62,979 for the three-month period ended June 30,
2001.  Basic  income  per common  share for the second  quarter of 2002 was $.02
compared to $.01 for the second  quarter of 2001. The increase in net income can
be primarily attributed to increased net interest income.

The  increase in net interest  income of $1.6 million or 49.3%,  to $5.0 million
for the second  quarter of 2002  compared to $3.3 million the second  quarter in
2001,  consists of an increase in interest income of $1.1 million, or 15.1%, and
decrease in interest  expense of  $510,000,  or 12.2%.  The increase in interest
income in the second quarter of 2001 is primarily attributable to an increase of
$1.3 million in interest and fees on loans resulting from the growth in the loan
portfolio.  The decrease in interest expense resulted  primarily from a decrease
of $301,000  in  interest on deposits  and a decrease of $224,000 in interest on
repurchase  agreements.  These decreases in interest expense are attributable to
the decline in market interest rates on deposits and repurchase agreements.

The provision for loan losses charged to operations  increased  $643,000 to $1.0
million for the second  quarter of 2002 from  $384,000 in the second  quarter of
2001. This increase primarily reflects the growth of the overall loan portfolio.
For a more detailed  discussion of the provision for loan losses, see "Allowance
                                                                       ---------
for Loan Losses" in the "Financial Condition" section below.
---------------

Non-interest income increased 40.9% or $165,000 to $569,000 for the three months
ended June 30, 2002 from $403,000 for the three months ended June 30, 2001.  The
increase in non-interest  income primarily  resulted from an increase in service
fees of  $110,000  to  $401,000  for the three  months  ended June 30, 2002 from
$291,000 for the three months ended June 30, 2001.  The increase in service fees
resulted primarily from an increase in deposits.

Non-interest  expense  increased  $1.0  million or 31.1% to $4.3 million for the
three-month  period  ended  June  30,  2002  compared  to $3.3  million  for the
three-month  period ended June 30, 2001.  The increase in  non-interest  expense
resulted  primarily  from  increases  in salaries  and  benefits,  dividends  on
preferred  security  of  subsidiary  trust,  and other  expenses.  Salaries  and


                                       11
<PAGE>

benefits expenses  increased  $519,000 to $2.5 million for the second quarter of
2002 compared to $2.0 million for the second  quarter of 2001.  This increase is
primarily the result of additional  staff  associated with the overall growth of
the Company's business. Dividends on preferred security of subsidiary trust were
$141,000 for the second  quarter of 2002.  The Company had no  subsidiary  trust
securities  outstanding  during the second  quarter of 2001, so this expense for
that quarter was zero. Other expenses increased  $241,000,  or 36.7% to $900,000
for the second  quarter of 2002  compared to $658,000 for the second  quarter of
2001.  This  increase is primarily  attributed to the expenses  associated  with
supporting  operations  related to the overall  growth of the Company.  Specific
operational  expenses  which  increased  include   communications,   recruitment
expenses and expenses related to other real estate owned.

A provision  for income  taxes of $97,000  was  recognized  for the  three-month
period ended June 30, 2002 as compared to $39,000 for the same period ended June
30, 2001.  These  provisions for income taxes  represent an estimated  effective
annual tax rate of approximately 38%.


Six Months Ended June 30, 2002 Compared to Six Months Ended June 30, 2001

The Company's net income  applicable to common shares for the first half of 2002
was  $518,000,  compared to $124,000 for the  six-month  period  ending June 30,
2001.  Basic  income per share for the first half of 2001 was $.08  compared  to
$.02 for the first half of 2001.  The  increase  in net income can be  primarily
attributed to increased net interest income.

The  increase in net interest  income of $2.6 million or 39.1%,  to $9.3 million
for the first  half of 2002  compared  to $6.7  million  the first half in 2001,
consists  of an  increase in interest  income of $1.4  million,  or 9.1%,  and a
decrease in interest expense of $1.2 million, or 14.1%. The increase in interest
income in the first half of 2002 is  primarily  attributable  to an  increase of
$1.8 million in interest and fees on loans resulting from the growth in the loan
portfolio.  The  decrease  in  interest  expense  for the first  half of 2002 is
primarily  attributable  to a decrease of $762,000 in interest on deposits and a
decrease of $490,000 in interest on repurchase  agreements.  These  decreases in
interest  expense are  attributable  to the decline in market  interest rates on
deposits and repurchase agreements.

The provision for loan losses charged to operations  increased  $785,000 to $1.4
million for the first half of 2002 from $623,000 in the first half of 2001. This
increase primarily reflects the growth of the overall loan portfolio. For a more
detailed  discussion of the provision for loan losses,  see  "Allowance for Loan
                                                              ------------------
Losses" in the Financial Condition section below.
------

Non-interest  income  increased  53.1% or $383,000  to $1.1  million for the six
months ended June 30, 2002 from $722,000 for the six months ended June 30, 2001.
The  increase in  non-interest  income  primarily  resulted  from an increase in
service fees of $254,000 to $770,000 for the six months ended June 30, 2002 from
$516,000 for the six months  ended June 30,  2001.  The increase in service fees
resulted  primarily  from an  increase in  deposits.  Other  noninterest  income
increased  $129,000  to  $336,000  for the six months  ended June 30,  2002 from
$207,000 for the same period in 2001.  This increase was primarily  attributable
to an increase in mortgage loan referral fees.

Non-interest  expense  increased  $1.3  million or 20.4% to $7.9 million for the
six-month  period ended June 30, 2002 compared to $6.6 million for the six-month
period  ended June 30,  2001.  The  increase in  non-interest  expense  resulted
primarily  from  increases  in salaries  and  benefits,  dividends  on preferred
security of subsidiary trust, and other expenses. Salaries and benefits expenses
increased  $546,000 to $4.7 million for the first half of 2002  compared to $4.2
million for the first half of 2001.  This  increase is  primarily  the result of
additional staff  associated with the overall growth of the Company's  business.
Dividends on preferred  security of subsidiary trust were $224,000 for the first


                                       12
<PAGE>

half of 2002. The Company had no subsidiary trust securities  outstanding during
the first half of 2001, so this expense for that period was zero. Other expenses
increased $394,000, or 32.7% to $1.6 million for the first half of 2002 compared
to $1.2  million  for the  first  half  of  2001.  This  increase  is  primarily
attributed to the expenses associated with supporting  operations related to the
overall growth of the Company.  Specific  operational  expenses which  increased
included ACH expenses and expenses related to other real estate owned.

A provision for income taxes of $404,000 was recognized for the six-month period
ended June 30, 2002 as  compared  to $75,000 for the same period  ended June 30,
2001. These provisions for income taxes represent an estimated  effective annual
tax rate of approximately 38%.

FINANCIAL CONDITION

Total assets at June 30, 2002 were $638.0 million, an increase of $115.6 million
or 22.1%, from $522.3 million at December 31, 2001. The increase in total assets
primarily  resulted from the investment of new deposit growth and other borrowed
funds  in  loans  and  investment  securities.  Securities  available  for  sale
increased  $2.2 million or 6.4% to $36.1 million at June 30, 2002 as compared to
$34.0 million at December 31, 2001.  Federal funds sold increased  $29.8 million
or 54.5% to $84.5  million at June 30, 2002 from $54.7  million at December  31,
2001. The increase in federal funds sold reflects additional deposit growth late
in the second quarter that had not yet been deployed in loan growth.

Total loans  increased  $84.5 million,  or 21.0%,  to $486.2 million at June 30,
2002,  from $401.7 million at December 31, 2001. The increase in total loans was
funded by increases in depository accounts, repurchase agreements sold and other
borrowings. The allowance for loan losses increased $1.3 million or 27.2% during
the first six months of 2002.  The increase  resulted  from net  charge-offs  of
loans of $131,000 plus additional provisions of $1.4 million during that period.
The  allowance for loan losses as a percent of total loans was 1.23% at June 30,
2002 and 1.17% at December 31, 2001. Management believes that such allowance for
loan  losses  is  sufficient  to  cover  estimated  losses  in the  Bank's  loan
portfolio.

Deposits  increased $73.8 million,  or 16.3%, to $525.0 million at June 30, 2002
from $451.2  million at  December  31,  2001.  The  increase  in total  deposits
primarily  resulted  from an increase of $55.0 million or 28.4% in time deposits
$100,000 and over,  combined with an increase of $42.7 million or 63.3% in other
time deposits.  Noninterest-bearing  deposits  decreased $32.2 million or 32.2%.
This is a result of the transfer of almost all repurchase  agreements  sold into
demand  deposit  accounts by our customers at December 31, 2001 as part of their
intangible  tax  strategy.  These funds flowed back into  repurchase  agreements
after  year-end,  as can be seen by comparing  the  relative  balances of demand
deposits and repurchase  agreements sold at June 30, 2002 and December 31, 2001.
Interest-bearing  demand  deposits  increased  $7.9  million  or 41.0%.  Savings
deposits  decreased $1.3 million or 2.1%.  Money market accounts  increased $1.7
million or 26.8%.  Time  deposits  often  fluctuate in response to interest rate
changes and can vary rather  significantly on a quarterly basis. The increase in
time deposits $100,000 and over resulted  primarily from an increase in brokered
deposits.  Growth in other  deposit  categories  are primarily  attributable  to
continued  expansion  of the  Company's  customer  base as a result  of  ongoing
marketing activities.

Repurchase  agreements sold increased $33.7 million, or 749.9%, to $38.2 million
at June 30, 2002 from $4.5 million at December 31, 2001,  for reasons  discussed
in the previous  paragraph.  Other borrowed funds decreased $11,000,  or 0.1% to
$9.7 million at June 30, 2002 from $9.7  million at December  31, 2001.  Accrued
interest payable  decreased  $616,000 or 21.5%, to $2.2 million at June 30, 2002
from $2.9  million at December  31, 2001.  This  decrease is due  primarily to a
reduction in overall interest rates.

                                       13
<PAGE>

Accounts payable and accrued expenses  increased $69,000 or 3.4% to $2.1 million
at June 30, 2002 from $2.0 million at December 31, 2001.

Shareholders'  equity  increased by $861,000 to $47.0  million at June 30, 2002,
from $46.1  million at December  31,  2001.  This  increase is the result of net
income for the first half of  $518,000,  combined  with the issue of stock under
the Company's employee stock purchase plan of $86,000,  and an increase in other
comprehensive  income  related  to an  unrealized  gain  in the  Company's  bond
portfolio of $315,000.  These increases were partially  offset by cash dividends
paid on Series B preferred stock of $263,000.

Non-accrual  loans were  $468,000  at June 30,  2002,  a decrease of $632,000 or
57.4%, compared to the balance of $1.1 million at December 31, 2001. These loans
were reclassified  under the Bank's policy of transferring  loans to non-accrual
status  when they  become  more than 90 days  past due on  either  principal  or
interest.  The Company believes the specific reserves placed against these loans
are adequate,  and payment is being sought from secondary  sources,  such as the
sale of collateral.

Allowance for Loan Losses

Management  determines  the allowance for loan losses by  establishing a general
allowance  by loan pool  determined  for  groups of  smaller,  homogenous  loans
possessing  similar  characteristics  and  non-homogeneous  loans  that  are not
classified. All classified loans are reviewed on an individual basis.

General Allowance

It is  difficult in a bank of our size to use  migration  analysis or other more
sophisticated  approaches due to the small size of the loan  portfolio,  and the
significant  changes in the lending  strategy and mix of the loan portfolio from
the date of the Merger.  For this reason,  a reasonable  indicator of the Bank's
potential future losses in the non-criticized and non-specialized pools of loans
is the historical performance of the Bank's peer group on a rolling four-quarter
basis. This information is gathered  quarterly from the Uniform Bank Performance
Report provided by the Federal Financial  Institutions  Examination  Council. As
the bank matures, and growth stabilizes, it is management's intention to replace
this peer group  methodology  with the actual loss  experience  of Florida Bank,
N.A.

Added to the peer group historical performance are those current conditions that
are  probable  to impact  future  loan  losses.  To  account  for these  current
conditions,  management has reviewed  various factors to determine the impact on
the current loan portfolio.  This methodology  involves  determining a range for
each current  condition  adjustment,  "lower range to upper  range".  The "lower
range" represents  management's  opinion of a higher near term probability.  The
"upper range" represents  management's  opinion of a lower near term probability
that allows  management  to "shock" the loan  portfolio and look at the level of
reserves  required should an "upper range" scenario start to unfold.  As long as
the reserves fall within this range, our primary regulator should be comfortable
with the adequacy of our reserves.  The following current condition factors were
considered in this analysis:

     o   Changes in lending  policies  and  procedures,  including  underwriting
         standards and collection, charge-off, and recovery practices.

     o   Changes  in  national  and  local  economic  and  business  conditions,
         including the condition of various market segments.

     o   Changes in the nature and volume of the portfolio.

     o   Changes in the experience, ability, and depth of lending management and
         staff.



                                       14
<PAGE>

     o   Changes in the volume and  severity of past due and  classified  loans;
         and the volume of non-accruals,  trouble debt  restructurings and other
         loan modifications.

     o   The existence and effect of any  concentrations of credit,  and changes
         in the level of such conditions.

     o   The  effect of  external  factors,  such as  competition  and legal and
         regulatory requirements, on the level of estimated credit losses in the
         Bank's portfolio.

Specific Allowance

Management  believes  that given the small number of classified  loans,  type of
historical loan losses,  and the nature of the underlying  collateral,  creating
specific  allowances  for  classified  assets  results in the most  accurate and
objective   allowance.   Should  the  number  of  these  types  of  assets  grow
substantially, other methods may have to be considered.

The method used in setting the specific  allowance uses current  appraisals as a
starting point, based on the Bank's possible  liquidation of the collateral.  On
assets other than real estate, which tend to depreciate rapidly, another current
valuation is used. For instance,  in the case of commercial loans collateralized
by automobiles,  the current NADA wholesale value is used. On collateral such as
over-the-road equipment,  trucks or heavy equipment,  valuations are sought from
firms or  persons  knowledgeable  in the area,  and  adjusted  for the  probable
condition of the collateral.  Other  collateral such as furniture,  fixtures and
equipment,  accounts receivable,  and inventory,  are considered separately with
more emphasis given to the borrower's financial condition and trends rather than
the  collateral  support.  The value of the  collateral is then  discounted  for
estimated selling cost.

Summary

The various methodologies  included in this analysis take into consideration the
historic  loan  losses and  specific  allowances.  In  addition,  the  allowance
incorporates the results of measuring impaired loans as provided by Statement of
Financial  Accounting  Standards  (SFAS) No. 114,  "Accounting  by Creditors for
Impairment of a Loan" and SFAS No. 118,  "Accounting by Creditors for Impairment
of a Loan - Income  Recognition and  Disclosures".  These  accounting  standards
prescribe the measurement methods, income recognition and disclosures related to
impaired loans.  Specific  allowances totaled $1.6 million at June 30, 2002. The
range for the  allowance  for loan losses at June 30, 2002,  including  specific
allowances,  was  determined  to be between  $5.5 million or 1.12% of loans (low
range) and $8.8 million or 1.82% of loans (high range).

At June 30, 2002, our total allowance for credit losses is $5.9 million or 1.23%
of loans as compared to $4.7  million or 1.17% of loans at  December  31,  2001.
Criticized/Classified   assets  have  increased  when  measured   against  loans
outstanding.  This is primarily attributable to the classification of additional
credits during the second quarter of 2002. At June 30, 2002,  this benchmark was
3.87% of loans  outstanding  compared to 2.27% at December  31,  2001.  Past due
loans have  decreased  slightly  to .14% of loans  outstanding  at June 30, 2002
compared to .20% at December 31, 2001.  Non-Performing Assets have declined as a
percentage of total loans  including other real estate owned to .78% at June 30,
2002  versus .96% at December  31,  2001.  Net loan losses for the first half of
2002 were $130,581 or .03% of average loans outstanding for the period.



                                       15
<PAGE>

LIQUIDITY

The Company,  through its  subsidiary,  the Bank, has  traditionally  maintained
levels of liquidity above levels required by regulatory authorities.  The Bank's
operational needs, demand for loan disbursements, and savings withdrawals can be
met by loan principal and interest payments received,  new deposits,  and excess
liquid  assets.   Significant  loan  demand,   deposit   withdrawal,   increased
delinquencies  and increased  real estate  acquired in settlement of loans could
alter this  condition.  Management  does not foresee any liquidity  problems for
2002.

Liquidity and Sources of Capital

Liquidity is the Company's ability to meet all deposit withdrawals  immediately,
while  also  providing  for the credit  needs of  customers.  The June 30,  2002
financial  statements  evidence a satisfactory  liquidity position as total cash
and cash  equivalents  amounted to $104.8 million,  representing  16.4% of total
assets.  Investment  securities  available for sale  amounted to $36.1  million,
representing 5.7% of total assets.  These securities  provide a secondary source
of  liquidity  since they can be  converted  into cash in a timely  manner.  The
Company's  ability  to  maintain  and  expand  its  deposit  base and  borrowing
capabilities are also a source of liquidity. For the six-month period ended June
30, 2002,  total deposits  increased from $451.2 million at December 31, 2001 to
$525.0  million,  or 16.3%.  During  this  period,  repurchase  agreements  sold
increased  from $4.5 million to $38.2  million,  or 749.9%,  and other  borrowed
funds decreased from $11,000 from $9.7 million to $9.7 million,  or 0.1%.  There
can be no  assurance  that the Company  will be able to  maintain  this level of
growth.  The Company's  management  closely  monitors and maintains  appropriate
levels of interest  earning  assets and  interest  bearing  liabilities  so that
maturities of assets are such that adequate  funds are provided to meet customer
withdrawals and loan demand. There are no trends, demands,  commitments,  events
or uncertainties that will result in, or are reasonably likely to result in, the
Company's liquidity increasing or decreasing in any material way.

The Company's Board and executive officers are committed to maintaining  capital
at a level sufficient to protect depositors,  provide for reasonable growth, and
fully comply with all regulatory requirements.

In December,  2001,  April,  2002, and June,  2002, the Company  participated in
pooled trust preferred  offerings.  By issuing trust preferred  securities,  the
Company is able to increase its Tier 1 capital for regulatory  purposes  without
diluting the ownership  interests of its common  shareholders.  Also,  dividends
paid on trust preferred securities are deductible as interest expense for income
tax purposes. For the specific  transactions,  terms, and rates of the Company's
trust preferred issues, please refer to footnote 6 above, together with footnote
13 of the  Company's  consolidated  financial  statements  for the  years  ended
December 31, 1999, 2000 and 2001 files in conjunction  with the Company's annual
report on form 10-K.  At June 30,  2002,  the net  proceeds  from  pooled  trust
preferred  trust  offerings  included in the  calculation  of Tier 1 capital for
regulatory purposes is $13,525,000.

The table below  illustrates  the Bank's  regulatory  capital ratios at June 30,
2002:

                                                                     Minimum
                                                June 30,           Regulatory
Bank                                              2002             Requirement
----                                      -------------------    ---------------

        Tier 1 Capital                           9.44 %                4.00 %
                                                 ====                  ====

        Total risk-based capital ratio          10.54 %                8.00 %
                                                =====                  ====

        Leverage ratio                           9.24 %                4.00 %
                                                 ====                  ====


Neither the Company nor its subsidiaries have historically  incurred off-balance
sheet  obligations  through  the  use  of or  investment  in  off-balance  sheet
derivative  financial  instruments  or  structured  finance or  special  purpose
entities organized as corporations,  partnerships or limited liability companies
or trusts.



                                       16
<PAGE>

CAUTIONARY STATEMENT RELATING TO FORWARD LOOKING STATEMENTS

The foregoing  Management's  Discussion and Analysis  contains  various "forward
looking  statements"  within the meaning of Section 27A of the Securities Act of
1933,  as amended,  and Section 21E of the  Securities  Exchange Act of 1934, as
amended, which represent the Company's expectations or beliefs concerning future
events,  including,  but not limited to, statements regarding growth in sales of
the Company's products, profit margins and the sufficiency of the Company's cash
flow for its future liquidity and capital resource needs. These  forward-looking
statements  are further  qualified by important  factors that could cause actual
results to differ materially from those in the forward-looking statements.

Item 3.  Qualitative and Quantitative Disclosures About Market Risk

     The Company's  financial  performance is subject to risk from interest rate
fluctuations.  This  interest  rate risk arises due to  differences  between the
amount of interest-earning assets and the amount of interest-earning liabilities
subject  to  repricing  over a  specified  period  and the  amount  of change in
individual  interest  rates.  In the  current  interest  rate  environment,  the
liquidity and maturity  structure of the Company's  assets and  liabilities  are
important to the maintenance of acceptable performance levels. A decreasing rate
environment  negatively impacts earnings as the Company's  rate-sensitive assets
generally reprice faster than its rate-sensitive liabilities.  Conversely, in an
increasing   rate   environment,   earnings  are   positively   impacted.   This
asset/liability  mismatch in pricing is referred to as gap ratio and is measured
as rate sensitive  assets divided by rate  sensitive  liabilities  for a defined
time period. A gap ratio of 1.00 means that assets and liabilities are perfectly
matched as to  repricing.  Management  has targeted gap ratio  guidelines  for a
one-year  time  horizon of between .80 and 1.20 for the Bank.  At June 30, 2002,
the Bank had a  cumulative  gap  ratio of  approximately  1.32 for the  one-year
period ending June 30, 2003.  This is primarily due to the Bank's receipt at the
end of June of approximately  $22.8 million dollars in brokered deposits,  which
were temporarily invested in Federal Funds sold. These deposits were obtained to
take advantage of  historically  low funding costs.  It is anticipated  that the
bulk of these  deposits  will be deployed into loans in the coming  months,  and
prior to the end of the third quarter,  the Bank's one-year cumulative gap ratio
will again be within the targeted  range.  At June 30,  2002,  the Company had a
cumulative gap ratio of 2.42 for the  three-month  time period.  Given these gap
ratios,  over the next three-month  period,  rate-sensitive  assets will reprice
faster than rate-sensitive liabilities, and for the following nine-month period,
rate sensitive liabilities will reprice faster than rate-sensitive assets.

     Varying  interest  rate  environments  can  create  unexpected  changes  in
prepayment  levels of assets and  liabilities,  which are not  reflected  in the
interest sensitivity  analysis.  Prepayments may have significant effects on the
Company's  net  interest  margin.  Because of these  factors,  in a static test,
interest  sensitivity  gap reports may not provide a complete  assessment of the
Company's  exposure to changes in interest rates.  Accordingly,  management also
utilizes  computerized  interest  rate  simulation  analysis  to  determine  the
Company's  interest rate  sensitivity.  The Company is in an asset sensitive gap
position for the first year, then moves into a matched position through the five
year period.  Overall,  due to the factors  cited,  current  simulation  results
indicate a relatively low  sensitivity to parallel  shifts in interest  rates. A
liability  sensitive company will generally benefit from a falling interest rate
environment as the cost of  interest-bearing  liabilities  falls faster than the
yields on interest-bearing  assets, thus creating a widening of the net interest
margin.  Conversely,  an asset  sensitive  company  will  benefit  from a rising
interest rate  environment  as the yields on earning assets rise faster than the
costs  of  interest-bearing  liabilities.  Management  also  evaluates  economic
conditions,  the pattern of market  interest rates and  competition to determine
the  appropriate  mix and repricing  characteristics  of assets and  liabilities
required to produce a targeted net interest margin.




                                       17
<PAGE>

     In addition to the gap analysis,  management uses rate shock  simulation to
measure the rate  sensitivity of its balance sheet.  Rate shock  simulation is a
modeling  technique  used to  estimate  the  impact of  changes  in rates on the
Company's net interest  margin.  The Company  measures its interest rate risk by
estimating the changes in net interest income resulting from  instantaneous  and
sustained  parallel  shifts in interest  rates of plus or minus 200 basis points
over a period of twelve months.  The Company's most recent rate shock simulation
analysis,  performed  as of June 30,  2002,  indicates  that a 200  basis  point
increase in rates would cause an increase in net interest  income of  $3,755,000
over the next  twelve-month  period.  Conversely,  a 200 basis point decrease in
rates  would  cause  a  decrease  in net  interest  income  of  $659,000  over a
twelve-month period.

     This  simulation  is based on  management's  assumption as to the effect of
interest rate changes on assets and  liabilities and assumes a parallel shift of
the yield curve. It also includes certain  assumptions  about the future pricing
of loans and  deposits in response to changes in  interest  rates.  Further,  it
assumes  that  delinquency  rates  would not  change as a result of  changes  in
interest  rates  although  there can be no assurance that this will be the case.
While this  simulation  is a useful  measure  of the  Company's  sensitivity  to
changing  rates, it is not a forecast of the future results and is based on many
assumptions that if changed,  could cause a different  outcome.  In addition,  a
change in U.S. Treasury rates in the designated amounts  accompanied by a change
in the shape of the  Treasury  yield curve would cause  significantly  different
changes to net interest income than indicated above.

     At June 30, 2002, the Company was not engaged in trading activities.

     The  Company  enters  into  interest  rate swap  agreements  to manage  its
exposure to changes in  interest  rates and to convert the fixed rate on certain
brokered  certificates  of deposit to a floating  rate in order to more  closely
match interest rate sensitivity  between  selected assets and  liabilities.  The
Company does not use derivative financial  instruments for speculative purposes.
As is  customary  for these types of  instruments,  the Company does not require
collateral or other security from other parties to these  instruments.  By their
nature  all  such  instruments  involve  risk,  including  the  credit  risk  of
nonperformance  by  counterparties.  However,  at June 30, 2002, in management's
opinion there was no significant risk of loss in the event of  nonperformance of
the counterparties to these financial instruments.



Part II.  Other Information

Item 1.  Legal Proceedings

         No disclosure required.

Item 2.  Changes in Securities

         No disclosure required.

Item 3.  Defaults Upon Senior Securities

         No disclosure required.

Item 4.  Submission of Matters to a Vote of Security Holders



                                       18
<PAGE>

     At the  annual  meeting of the  Company's  shareholders,  three  items were
submitted to a vote of the common shareholders:

     (a)    T.  Stephen  Johnson,  J.  Malcom  Jones,  Jr. and Nancy  LaFoy were
            re-elected as directors of the Company,  to succeed themselves for a
            term of three years,  expiring at the annual meeting of shareholders
            in 2005. Each of the directors received a minimum of 5,421,260 votes
            to re-elect, or 92% of the shares voted at the meeting.
     (b)    An amendment to the Company's 1998 Stock Option Plan was approved by
            the shareholders,  with 4,541,909 shares, or 80% of the shares voted
            at the meeting,  voting in favor of the  amendment,  773,625  shares
            voting against and 16,656 shares abstaining.
     (c)    The  shareholders  ratified  the  Audit  Committee's  engagement  of
            Deloitte & Touche, LLP as the Company's independent  auditors,  with
            5,322,620,  or 93% of the  shares  voted at the  meeting  voting for
            approval, 7,950 shares voting against and 1,620 shares abstaining..

Item 5.  Other Information

         No disclosure required.

Item 6.  Exhibits and Reports on Form 8-K

(a)      Exhibits.

           4.1    Indenture,  dated as of April 10, 2002, between Florida Banks,
                  Inc. and Wilmington Trust Company, as trustee

           4.2    The Amended and  Restated  Declaration  of Trust,  dated as of
                  April 10, 2002,  among Florida  Banks,  Inc., as sponsor,  the
                  Administrator(s)  named therein and Wilmington  Trust Company,
                  as Delaware Trustee and Institutional Trustee, and the holders
                  from time to time of  undivided  beneficial  interests  in the
                  assets of Florida Banks Capital Trust II

           4.3    Indenture,  dated as of June 27, 2002,  between Florida Banks,
                  Inc. and Wells Fargo Delaware Trust Company, as trustee

           4.4    The Amended and Restated Trust  Agreement dated as of June 27,
                  2002  among   Florida   Banks,   Inc.,   as   depositor,   the
                  Administrative  Trustees  named  therein and Wells Fargo Bank,
                  N.A., as property trustee, Wells Fargo Delaware Trust Company,
                  as  resident  trustee,  and the  holders  from time to time of
                  undivided  beneficial interests in the assets of Florida Banks
                  Capital Trust II;

           10.1   Placement  Agreement,  dated as of  March  26,  2002,  between
                  Florida  Banks,  Inc. and Florida  Banks  Capital Trust II and
                  Salomon Smith Barney Inc.

           10.2   Debenture Subscription Agreement,  dated as of April 10, 2002,
                  between Florida Banks, Inc. and Florida Banks Capital Trust II

           10.3   Capital  Securities  Subscription  Agreement,  dated March 26,
                  2002, among Florida Banks,  Inc.,  Florida Banks Capital Trust
                  II and MM Community Funding III, Ltd.

           10.4   Common  Securities  Subscription  Agreement,  dated  April 10,
                  2002,  between  Florida Banks,  Inc. and Florida Banks Capital
                  Trust II

           10.5   Guarantee  Agreement,  dated as of  April  10,  2002,  between
                  Florida Banks, Inc. and Wilmington Trust Company, as trustee


                                       19
<PAGE>

           10.6   Subscription  Agreement,  dated as of June 27,  2002,  between
                  Florida Banks,  Inc., Florida Banks Capital Trust II and Bear,
                  Stearns & Co.

           10.7   Placement  Agreement,  dated  as of  June  27,  2002,  between
                  Florida  Banks,  Inc. and Florida  Banks  Capital Trust II and
                  SAMCO Capital Markets,  a division of Service Asset Management
                  Company

           10.8   Trust Preferred Securities  Guarantee  Agreement,  dated as of
                  June 27, 2002, between Florida Banks, Inc. and Wells Fargo, as
                  trustee

           99.1   Certifying Statement of the Chief Executive Officer to Section
                  1350 of Title 18 of the United States Code

           99.2   Certifying  Statement of the Chief Financial  Officer pursuant
                  to Section 1350 of Title 18 of the United States Code

(b)      Reports on Form 8-K.

     On April 22, 2002,  the Company  filed a report on Form 8-K to announce the
conversion of the Company's Series B preferred stock to common stock.


                                   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.

                                           Florida Banks, Inc.


Date:  August 14, 2002            By:  /s/ Charles E. Hughes, Jr.
                                       -----------------------------------------
                                           Charles E. Hughes, Jr.
                                           President and Chief Executive Officer


Date:  August 14, 2002            By:  /s/ T. Edwin Stinson, Jr.
                                       -----------------------------------------
                                           T. Edwin Stinson, Jr.
                                           Chief Financial Officer








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