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 March 31, 2003

                                       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  by check mark  whether  the  Registrant  is an  accelerated  filer (as
defined in Exchange Act Rule 12b-2). Yes |_| No |X|

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             6,784,935 OUTSTANDING AT April 28, 2003
PER SHARE

                                      -1-

<PAGE>


                                Table of Contents
Part I  Financial Information

Item 1.  Financial Statements ........................................   Page 3


Item 2.  Management's discussion and Analysis of Financial
         Condition and Results of Operations .........................   Page 13

Item 3.   Quantitative and Qualitative Disclosures about
           Market Risk ...............................................   Page 20

Item 4.  Controls and Procedures .....................................   Page 21


Part II   Other Information

Item 1.  Legal Proceedings ...........................................   Page 22

Item 2.  Changes in Securities .......................................   Page 22

Item 3.  Defaults Upon Senior Securities .............................   Page 22

Item 4.  Submission of Matters to a Vote of Security Holders .........   Page 22

Item 5.  Other Information ...........................................   Page 22

Item 6.  Exhibits and Reports on Form 8-K ............................   Page 22


                                      -2-

<PAGE>


PART I.  Financial Information
Item 1.  Financial Statements
FLORIDA BANKS, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS  (Unaudited)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                                        March 31,      December 31,
ASSETS                                                                                                    2003             2002
<S>                                                                                                  <C>              <C>
CASH AND DUE FROM BANKS                                                                              $  29,036,219    $  26,964,504
FEDERAL FUNDS SOLD AND REPURCHASE AGREEMENTS                                                            62,528,000       62,515,000
                                                                                                     -------------    -------------
           Total cash and cash equivalents                                                              91,564,219       89,479,504
INVESTMENT SECURITIES:
  Available for sale, at fair value (cost $47,162,231 and $50,155,158
    at March 31, 2003 and December 31, 2002)                                                            47,687,248       50,930,650
  Held to maturity, at cost (fair value $0 and $229,475
    at March 31, 2003 and December 31, 2002)                                                                                227,925
  Other investments                                                                                      3,299,050        2,493,350
                                                                                                     -------------    -------------
           Total investment securities                                                                  50,986,298       53,651,925
MORTGAGE LOANS HELD FOR SALE                                                                            89,959,868       54,674,248
LOANS:
  Commercial real estate                                                                               336,271,629      313,120,588
  Commercial                                                                                           173,183,597      166,122,230
  Residential mortgage                                                                                  30,062,883       23,080,140
  Consumer                                                                                              48,313,260       45,859,704
  Credit card and other loans                                                                            1,953,203        2,791,678
                                                                                                     -------------    -------------
           Total loans                                                                                 589,784,572      550,974,340
  Allowance for loan losses                                                                             (7,503,368)      (7,263,029)
  Net deferred loan fees                                                                                  (650,837)        (519,271)
                                                                                                     -------------    -------------
           Net loans                                                                                   581,630,367      543,192,040
PREMISES AND EQUIPMENT, NET                                                                              5,500,030        5,466,332
ACCRUED INTEREST RECEIVABLE                                                                              2,295,876        2,375,102
DEFERRED INCOME TAXES, NET                                                                               3,580,648        3,908,751
DERIVATIVE INSTRUMENTS                                                                                   2,917,062        2,321,643
OTHER REAL ESTATE OWNED                                                                                    652,500          652,500
OTHER ASSETS                                                                                            10,969,827          343,505
                                                                                                     -------------    -------------
TOTAL ASSETS                                                                                         $ 840,056,695    $ 756,065,550
                                                                                                     =============    =============
LIABILITIES AND SHAREHOLDERS' EQUITY
DEPOSITS:
  Noninterest-bearing demand                                                                         $  95,019,075    $ 141,395,150
  Interest-bearing demand                                                                               55,654,059       52,803,427
  Regular savings                                                                                       72,413,780       66,940,672
  Money market accounts                                                                                 25,107,294       19,210,512
  Time $100,000 and over                                                                               361,112,204      314,852,717
  Other time                                                                                            87,375,751       69,707,230
                                                                                                     -------------    -------------
          Total deposits                                                                               696,682,163      664,909,708
REPURCHASE AGREEMENTS SOLD                                                                              51,316,707        4,653,878
OTHER BORROWED FUNDS                                                                                    14,461,385        9,921,898
ACCRUED INTEREST PAYABLE                                                                                 2,624,990        2,377,963
ACCOUNTS PAYABLE AND ACCRUED EXPENSES                                                                    4,701,395        4,765,136
                                                                                                     -------------    -------------
          Total liabilities                                                                            769,786,640      686,628,583
                                                                                                     -------------    -------------
COMPANY OBLIGATED MANDATORILY REDEEMABLE PREFERRED SECURITIES
   OF SUBSIDIARY TRUST                                                                                  16,503,668       16,473,092
                                                                                                     -------------    -------------
SHAREHOLDERS' EQUITY:
  Series C Preferred Stock, $100.00 par value, 50,000 shares authorized,
    50,000 shares issued and outstanding                                                                 5,000,000        5,000,000
  Common stock, $.01 par value; 30,000,000 shares authorized; 6,784,935 and
    6,768,362 shares issued, respectively                                                                   67,850           67,684
  Additional paid-in capital                                                                            52,453,167       52,287,390
  Accumulated deficit (deficit of $8,434,037
     eliminated upon quasi-reorganization on December 31, 1995)                                         (4,082,083)      (4,874,873)
  Accumulated other comprehensive income, net of tax                                                       327,453          483,674
                                                                                                     -------------    -------------
          Total shareholders' equity                                                                    53,766,387       52,963,875
                                                                                                     -------------    -------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                                                           $ 840,056,695    $ 756,065,550
                                                                                                     =============    =============
</TABLE>

See notes to condensed financial statements.

                                      -3-

<PAGE>

 FLORIDA BANKS, INC.
 CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
 (Unaudited)
 -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                                   Three-Month Period Ended
                                                                                                            March 31,
                                                                                               ------------------------------------

                                                                                                  2003                     2002
                                                                                               -----------              -----------
<S>                                                                                            <C>                      <C>
INTEREST INCOME:
  Loans, including fees                                                                        $ 9,285,628              $ 7,230,160
  Investment securities                                                                            408,679                  575,134
  Federal funds sold                                                                               104,362                  202,859
                                                                                               -----------              -----------
          Total interest income                                                                  9,798,669                8,008,153
                                                                                               -----------              -----------

INTEREST EXPENSE:
  Deposits                                                                                       3,734,228                3,485,513
  Repurchase agreements                                                                            100,892                  126,135
  Borrowed funds                                                                                   104,663                  117,136
                                                                                               -----------              -----------
          Total interest expense                                                                 3,939,783                3,728,784
                                                                                               -----------              -----------

NET INTEREST INCOME                                                                              5,858,886                4,279,369

PROVISION FOR LOAN LOSSES                                                                          889,039                  380,434
                                                                                               -----------              -----------
NET INTEREST INCOME AFTER
   PROVISION FOR LOAN LOSSES                                                                     4,969,847                3,898,935
                                                                                               -----------              -----------

NONINTEREST INCOME:
  Service fees                                                                                     518,445                  368,448
  Gain on sale of mortgage loans                                                                 2,271,626
  Mortgage loan processing fees                                                                    477,553
  Mortgage loan origination fees                                                                   181,937                   92,436
  Other noninterest income                                                                         234,248                   76,324
                                                                                               -----------              -----------

                                                                                                 3,683,809                  537,208
                                                                                               -----------              -----------

NONINTEREST EXPENSES:
  Salaries and benefits                                                                          5,113,894                2,188,843
  Occupancy and equipment                                                                          628,804                  466,550
  Data processing                                                                                  258,986                  196,914
  Dividends on preferred security of subsidiary trust                                              222,076                   82,982
  Other                                                                                          1,211,324                  697,870
                                                                                               -----------              -----------

                                                                                                 7,435,084                3,633,159
                                                                                               -----------              -----------

INCOME  BEFORE PROVISION
  FOR INCOME TAXES                                                                               1,218,572                  802,984

PROVISION FOR INCOME TAXES                                                                         425,782                  306,662
                                                                                               -----------              -----------
NET INCOME                                                                                     $   792,790              $   496,322
                                                                                               ===========              ===========

PREFERRED STOCK DIVIDENDS                                                                          (61,644)                (120,049)
                                                                                               -----------              -----------

NET INCOME APPLICABLE TO COMMON SHARES                                                         $   731,146              $   376,273
                                                                                               ===========              ===========
INCOME PER COMMON SHARE:
  Basic                                                                                        $      0.11              $      0.07
                                                                                               ===========              ===========
  Diluted                                                                                      $      0.11              $      0.07
                                                                                               ===========              ===========
</TABLE>

 See notes to condensed financial statements.

                                      -4-
<PAGE>

FLORIDA BANKS, INC.
CONSOLIDATED CONDENSED STATEMENTS OF SHAREHOLDERS' EQUITY  (Unaudited)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                    Preferred Stock       Common Stock         Additional
                                                ---------------------   --------------------    Paid-In      Accumulated
                                                Shares    Par Value     Shares     Par Value    Capital        Deficit


<S>                                             <C>       <C>           <C>        <C>        <C>           <C>
BALANCE, JANUARY 1, 2002                        102,283   $ 6,955,244   5,677,660  $  56,777  $44,964,967   $ (6,079,156)
Comprehensive income:

   Net Income                                                                                                  1,467,058
  Unrealized gain on available for sale
     investment securities, net of tax of
$144,482

      Comprehensive income
Conversion of Series B Preferred Stock into
     common stock                              (102,283)   (6,955,244)  1,022,830     10,228    6,945,016
Exercise of stock options                                                   7,063         71       46,401
Issuance of common stock under employee

    stock purchase plan                                                    41,133        411      210,359
Issuance of restricted stock                                               19,676        197      120,647

Issuance of Series C Preferred Stock, net        50,000   $ 5,000,000

Series B Preferred Stock dividends paid                                                                         (262,775)

                                                _______   ___________   _________  _________  ___________   ____________

BALANCE, DECEMBER 31, 2002                       50,000     5,000,000   6,768,362     67,684   52,287,390     (4,874,873)
Comprehensive income:

   Net Income                                                                                                    792,790
  Unrealized gain on available for sale
     investment securities, net of tax of
$94,254
      Comprehensive income
Issuance of common stock to Employee

    Stock Purchase Plan                                                    14,842        148      101,816
Expenses of Series C Preferred Stock offering                                                     (10,677)
Exercise of stock options and issue of stock
grants                                                                      1,731         18       74,638

                                                _______   ___________   _________  _________  ___________   ____________

BALANCE, March 31, 2003  (Unaudited)             50,000   $ 5,000,000   6,784,935  $  67,850  $52,453,167   $ (4,082,083)
</TABLE>


                                               Accumulated
                                                  Other
                                              Comprehensive
                                              (loss) income
                                               Net of Tax            Total


BALANCE, JANUARY 1, 2002                      $     244,202       $46,142,034
Comprehensive income:

   Net Income                                                       1,467,058
  Unrealized gain on available for sale
     investment securities, net of tax of
$144,482                                            239,472           239,472

      Comprehensive income                                          1,706,530
Conversion of Series B Preferred Stock into
     common stock
Exercise of stock options                                              46,472
Issuance of common stock under employee

    stock purchase plan                                               210,770
Issuance of restricted stock                                          120,844

Issuance of Series C Preferred Stock, net                           5,000,000

Series B Preferred Stock dividends paid                              (262,775)

                                              _____________      ______________

BALANCE, DECEMBER 31, 2002                          483,674        52,963,875
Comprehensive income:

   Net Income                                                         792,790
  Unrealized gain on available for sale
     investment securities, net of tax of
$94,254                                            (156,221)         (156,221)
      Comprehensive income                                            636,579
Issuance of common stock to Employee

    Stock Purchase Plan                                               101,964
Expenses of Series C Preferred Stock offering                         (10,677)
Exercise of stock options and issue of stock
grants                                                                 74,656

                                                 __________       ___________

BALANCE, March 31, 2003  (Unaudited)             $  327,453       $53,766,387



See notes to condensed financial statements.

                                      -5-

<PAGE>

FLORIDA BANKS, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS  (Unaudited)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                                         Three-Month Period Ended
                                                                                                               March 31,
                                                                                                  ----------------------------------
OPERATING ACTIVITIES:                                                                                     2003             2002
                                                                                                  ----------------------------------
<S>                                                                                                 <C>                <C>
  Net income                                                                                        $    792,790       $    496,322
  Adjustments to reconcile net income to net cash provided by operating activities:
      Depreciation and amortization                                                                      223,657            206,930
      Reinvested dividends on investment securities                                                      (30,226)           (40,686)
      Deferred income tax provision                                                                      422,357            294,662
      Accretion of discounts on investments, net                                                        (286,903)           (25,488)
      Amortization of premium on loans                                                                    21,229             42,223
      Provision for loan losses                                                                          889,039            380,434
      (Gain) loss on foreign currency translation                                                        (11,515)            23,594
      Loss on derivative instruments                                                                       4,148             13,277
      Net increase in mortgage loans held for sale                                                   (35,285,620)
      Decrease (increase) in accrued interest receivable                                                  79,226           (196,816)
      Increase (decrease) in accrued interest payable                                                    247,027           (128,132)
      Decrease (increase) in other assets                                                               (626,322)            41,558
      Decrease in other liabilities                                                                      (63,741)          (739,719)
                                                                                                    ------------       ------------
           Net cash provided by operating activities                                                 (33,624,854)           368,159
                                                                                                    ------------       ------------
INVESTING ACTIVITIES:
  Proceeds from sales, paydowns and maturities of investment securities:
    Available for sale                                                                                17,662,829          2,745,158
    Held to maturity                                                                                     227,925
  Purchases of investment securities:
    Available for sale                                                                               (14,352,772)       (13,140,037)
    Other investments                                                                                   (805,700)
  Net increase in loans held for investment                                                          (39,337,080)       (33,436,437)
  Purchase of bank owned life insurance                                                              (10,000,000)
  Proceeds from sale of other real estate owned                                                                             242,979
  Purchases of premises and equipment                                                                   (257,355)          (119,799)
                                                                                                    ------------       ------------
           Net cash used in investing activities                                                     (46,862,153)       (43,708,136)
                                                                                                    ------------       ------------
FINANCING ACTIVITIES:
  Net decrease in demand deposits, money market accounts and savings accounts                        (32,653,157)        (9,394,866)
  Net increase in time deposits                                                                       63,928,008          2,534,269
  Increase in repurchase agreements                                                                   46,662,829         34,682,234
  Increase in borrowed funds                                                                           4,539,487             16,516
  Proceeds from FHLB advances                                                                                             3,000,000
  Proceeds from exercise of stock options and issuance of stock grants                                    74,656
  Preferred dividends paid                                                                                                 (122,718)
  Issuance cost of trust preferred securities                                                             30,576            (29,190)
  Issuance cost of Series C preferred stock                                                              (10,677)
                                                                                                    ------------       ------------
           Net cash provided by financing activities                                                  82,571,722         30,686,245
                                                                                                    ------------       ------------
 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                                  2,084,715        (12,653,732)
CASH AND CASH EQUIVALENTS:
  Beginning of period                                                                                 89,479,504         73,989,159
                                                                                                    ------------       ------------

  End of period                                                                                     $ 91,564,219       $ 61,335,427
                                                                                                    ============       ============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
    Cash paid for interest                                                                          $  3,692,756       $ 12,653,732
NONCASH FINANCING ACTIVITIES:
                                                                                                    ============       ============
Proceeds from demand deposits used to purchase shares of
     common stock under Employee Stock Purchase Plan                                                $    101,964       $     86,549
                                                                                                    ============       ============
</TABLE>
See notes to condensed financial statements

                                      -6-

<PAGE>

FLORIDA BANKS, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
FOR THE THREE-MONTH PERIODS ENDED
MARCH 31, 2003 AND 2002 (UNAUDITED)
--------------------------------------------------------------------------------


1.   BASIS OF PRESENTATION

     Florida Banks,  Inc. (the "Company") was  incorporated  October 15, 1997 to
     become a bank holding company and acquire 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,  2002.  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- month period
     ended March 31, 2003 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.

                                                 Three-Month Period Ended
                                                         March 31,
                                              --------------------------------
                                                   2003             2002
                                              ---------------  ---------------

     Weighted average number of common
       shares outstanding - Basic                 6,782,579      5,692,094

     Incremental shares from the assumed
       conversion of stock options                  111,871         16,497
                                                  ---------      ---------

     Total - Diluted                              6,894,450      5,708,591

     The incremental shares from the assumed conversion of stock options for the
     three-month periods ended March 31, 2003 and 2002 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 Company's  average market value
     for the period.

                                      -7-

<PAGE>

FLORIDA BANKS, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
FOR THE THREE-MONTH PERIODS ENDED
MARCH 31, 2003 AND 2002 (UNAUDITED) (Continued)
--------------------------------------------------------------------------------


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:

                                                          March 31, 2003
                                          --------------------------------------
                                          Contract/Notional          Fair
                                               Amount               Value

     Interest rate swap agreements              $ 103,500,000        $ 2,908,611
     Foreign currency swap agreements             $ 2,000,000            $ 8,451
     Commitments to fund mortgage loans         $ 146,000,000        $ 1,000,000

     Interest  rate  swap  agreements  at March 31,  2003  consist  of  eighteen
     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.
     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  gains  of  $7,367  during  the
     three-month  period ended March 31, 2003 as a result of changes in the fair
     value  of the  foreign  currency  agreement  and  the  related  translation
     adjustment.

     The Company has adopted the  provisions of the  Derivatives  Implementation
     Group,  Implementation Issue C13, When a Loan Commitment is Included in the
     Scope of  Statement  No.  133  ("DIG  C13").  DIG C13  requires  that  loan
     commitments that relate to the origination or acquisition of mortgage loans
     that  will  be  held  for  resale  must  be  accounted  for  as  derivative
     instruments in accordance  with SFAS No. 133. The fair value of commitments
     to fund mortgage loans is included in mortgage loans held for sale.

4.   PREFERRED STOCK

     On  December  31,  2002,  the  Company  issued  50,000  shares  of Series C
     Preferred  stock for $100.00  per share  through a private  placement.  The
     Series C preferred  stock is not  convertible  or  redeemable,  except as a
     result  of a change in  control.  Non-cumulative  dividends  accrue at five
     percent annually and are payable quarterly in arrears.  In the event of any
     liquidation,  dissolution or winding up of affairs of the Company,  holders
     of Series C  preferred  stock at the time shall  receive  $100.00 per share
     plus an amount equal to accrued and unpaid  dividends  thereon  through and
     including the date of distribution  prior to any distribution to holders of
     common stock. The liquidation preference at March 31, 2003 was $5,061,644.


                                      -8-

<PAGE>

FLORIDA BANKS, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
FOR THE THREE-MONTH PERIODS ENDED
MARCH 31, 2003 AND 2002 (UNAUDITED) (Continued)
--------------------------------------------------------------------------------


     The Company and shareholder  have agreed that they will cooperate in filing
     an  application  with the Board of Governors of the Federal  Reserve System
     seeking  approval  for an  exchange  of the Series C  preferred  shares for
     shares of a new series of  preferred  stock,  which would be  substantially
     similar to the Series C Preferred  shares,  except the new shares  would be
     convertible into the Company's common stock at $10.00 per share.

5.   RECENT ACCOUNTING PRONOUNCEMENTS

     In November  2002, the FASB issued FASB  Interpretation  No. 45 ("FIN 45"),
     Guarantor's   Accounting  and  Disclosure   Requirements   for  Guarantees,
     Including   Guarantees  of  Indebtedness  of  Others.  This  Interpretation
     addresses  the  disclosures  to be made by a  guarantor  in its interim and
     annual financial  statements  about its obligations  under  guarantees.  In
     addition,  the  Interpretation  clarifies the  requirements  related to the
     recognition  of a liability by a guarantor at the  inception of a guarantee
     for the  obligations  that the  guarantor  has  undertaken  in issuing  the
     guarantee.  The Company  adopted the disclosure  requirements of FIN 45 for
     the fiscal year ended December 31, 2002, and the recognition  provisions on
     January 1, 2003.  Adoption of this  Interpretation  did not have a material
     impact on the Company's  consolidated  financial  position and consolidated
     results of operations.

     In January  2003,  the FASB issued FASB  Interpretation  No. 46 ("FIN 46"),
     Consolidation of Variable Interest Entities. This Interpretation applies to
     variable  interest entities created after January 31, 2003, and to variable
     interest  entities in which an  enterprise  obtains an interest  after that
     date. It applies in the first fiscal year or interim period beginning after
     June 15, 2003, to variable  interest entities in which an enterprise held a
     variable  interest  that is acquired on or before  January  31,  2003.  The
     Company will adopt the Interpretation as of July 31, 2003, however since it
     does  not  have  any  variable  interests,   or  situations  with  majority
     interests,  there will be no impact on its consolidated  financial position
     and consolidated results of operations.


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 trust
     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.


                                      -9-

<PAGE>


FLORIDA BANKS, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
FOR THE THREE-MONTH PERIODS ENDED
MARCH 31, 2003 AND 2002 (UNAUDITED) (Continued)
--------------------------------------------------------------------------------


     On June 28, 2002, the Company  participated  in an additional  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. The
     trust  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.

     On December 19, 2002, the Company  participated in a pooled trust preferred
     offering.  In connection  with the  transaction,  the Company,  through its
     subsidiary  trust,  Florida Banks Statutory Trust II (the "Statutory  Trust
     II"), issued $3,000,000 in trust preferred securities.  The Statutory Trust
     II also  issued  $93,000 of common  securities  to the Company and used the
     total proceeds to purchase $3,093,000 in 30-year subordinated debentures of
     the Company.  The trust  preferred  securities  pay dividends at an initial
     rate of 4.66% through March 25, 2003. 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 26, June 26,  September 26
     and December 26 of each year. There is a par call option beginning December
     26, 2007. The subordinated  debentures are the sole assets of the Statutory
     Trust II and are  eliminated,  along  with  the  related  income  statement
     effects, in the Company's consolidated financial statements.

7.   GUARANTEES

     The Company issues standby  letters of credit to provide credit support for
     some  creditors  in case of default.  As of March 31,  2003,  the  carrying
     amount  of the  liability  was $0 and the  maximum  potential  payment  was
     $10,029,404.

8.   SEGMENT REPORTING

     Prior to  October  1, 2002,  the  Company  had one  reporting  segment.  In
     October,  2002, the Company  started a mortgage  banking  division which is
     managed as a segment.  Accordingly,  from October 2002 forward, the Company
     has two reporting segments,  the commercial bank and the mortgage bank. The
     commercial bank segment provides its commercial  customers such products as
     working capital loans,  equipment loans and leases,  commercial real estate
     loans and other business related  products and services.  This segment also
     offers  mortgage  loans to  principals  of its  commercial  customers.  The
     mortgage  bank  segment  originates  mortgage  loans  through a network  of
     mortgage  brokers and sells  these  loans (on a  wholesale  basis) into the
     secondary market.

                                      -10-

<PAGE>


FLORIDA BANKS, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
FOR THE THREE-MONTH PERIODS ENDED
MARCH 31, 2003 AND 2002 (UNAUDITED) (Continued)
--------------------------------------------------------------------------------


     Information  about  reportable   segments,   and   reconciliation  of  such
     information  to the  consolidated  financial  statements  as of and for the
     three-month period ended March 31, 2003 follows:

<TABLE>
<CAPTION>
                                  Commercial         Mortgage                          Intersegment         Consolidated
                                     Bank              Bank            Other           Eliminations            Total
                               ------------------  ---------------  ---------------  -------------------  -------------------

<S>                                  <C>                <C>             <C>                                      <C>
Net interest income                  $ 5,426,970        $ 596,153       $ (164,237)                              $ 5,858,886

Noninterest income                       924,975        2,749,180            9,654                                 3,683,809

Provision for loan losses                889,039                                                                     889,039

Noninterest expense                    4,018,892        2,368,852        1,047,340                                 7,435,084

Net income (loss) before taxes         1,444,014          976,481       (1,201,923)                                1,218,572

Assets                               747,045,603       91,167,106       71,039,877          (69,195,891)       $ 840,056,695

Expenditures for additions
  to premises and equipment              229,002           28,231              122                                   257,355
</TABLE>

     The accounting  policies of the segments are the same as those described in
     the summary of significant  accounting  policies found in footnote 1 of the
     Company's  consolidated  financial  statements for the years ended December
     31, 2000,  2001 and 2002 filed in  conjunction  with the  Company's  annual
     report on form 10-K for the year  ended  December  31,  2002.  The  Company
     evaluates performance based on profit or loss from operations before income
     taxes.

     The Company's  reportable  segments are strategic business units that offer
     different  products and services.  They are managed separately because each
     segment  appeals to different  markets and accordingly  requires  different
     technology and marketing strategies.

     The Company  derives a majority of its revenues  from  interest  income and
     gain on sale of  mortgage  loans and the  chief  operating  decision  maker
     relies  primarily on net income before taxes to assess the  performance  of
     the  segments  and make  decisions  about  resources to be allocated to the
     segments.  Therefore,  the  segments  are  reported  above using net income
     before taxes.  The Company does not allocate  income taxes to the segments.

     The Company does not have  operating  segments  other than those  reported.
     Parent  Company  financial  information  is included in the other  category
     above  and is deemed to  represent  an  overhead  function  rather  than an
     operating segment.

     The Company does not have a single external  customer from which it derives
     10 percent or more of its revenues and operates in one geographical area.

                                      -11-


<PAGE>

FLORIDA BANKS, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
FOR THE THREE-MONTH PERIODS ENDED
MARCH 31, 2003 AND 2002 (UNAUDITED) (Continued)
--------------------------------------------------------------------------------


9.   STOCK OPTIONS

     Pursuant to the  disclosure  requirements  of SFAS No. 148,  the  following
     table provides an expanded  reconciliation  for all periods  presented that
     adds back to reported  net income the  recorded  expense  under  Accounting
     Principles Board Opinion ("APB") No. 25, net of related income tax effects,
     deducts the total fair value  expense  under SFAS No.  123,  net of related
     income tax effects and shows the reported and pro forma  earnings per share
     amounts.


                                                       Three-Month Period Ended
                                                              March 31,
                                                    ----------------------------
                                                       2003              2002
Net income applicable to common shares
  As reported                                       $   731,146     $   376,273

Total stock-based employee compensation
  cost included in the determination of net
  income, net of related tax effects                     40,235

Total stock-based employee compensation
  cost determined under fair value method               (39,481)        (49,591)
  for all awards, net of related tax effects

Pro forma net income applicable
  to common shares                                  $   731,900     $   326,682

Earnings per share - Basic
  As reported                                       $      0.11     $      0.07
  Pro forma                                         $      0.11     $      0.06
Earnings per share - Diluted
  As reported                                       $      0.11     $      0.07
  Pro forma                                         $      0.11     $      0.06



                                      -12-

<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  preparation  of  the  financial  statements,  on  which  this  Management's
Discussion and Analysis is bases,  requires Management to make estimates,  which
impact these  financial  statements.  The most  critical of these  estimates and
accounting  policies relate to the allowance for loan losses,  other real estate
owned, and derivative financial  instruments.  For a more complete discussion of
these and other accounting  policies,  see Note 1 to the Company's  consolidated
financial statements.

Allowance for Loan Losses - The Company carefully monitors the credit quality of
loan  portfolios and makes estimates about the amount of credit losses that have
been  incurred  at  each  financial   statement  reporting  date.  This  process
significantly impacts the financial statements and involves complex,  subjective
judgments.  The allowance is largely  determined  based upon the market value of
the underlying collateral.  Market values of collateral are generally based upon
appraisals obtained from independent  appraisers.  If market conditions decline,
the  allowance  for loan losses  would be  negatively  impacted  resulting  in a
negative  impact on the Company's  earnings.  The allowance for loan losses is a
significant estimate that can and does change based on management's  assumptions
about specific borrowers and applicable  economic and environmental  conditions,
among other factors.

Other Real Estate Owned - The Company  obtains real estate through  foreclosure.
Such  property  is  recorded  based  upon  the  market  value  determined  by an
independent  appraisal less estimated selling cost. If market conditions decline
in the area in which the  property  is  located,  then the  value of other  real
estate owned will be negatively impacted,  resulting in a negative impact to the
Company's earnings.

Derivative  Instruments - The Company has entered into several interest swaps, a
foreign currency swap and had provided interest rate swaps to loan participants.
As a result of these  activities  the  Company  recognizes  income  and  expense
related to such  derivative  instruments as determined by the change in the fair
market  value of these  derivative  instruments.  The fair market value of these
instruments is determined by quotes obtained from the related counter parties in
combination  with  a  valuation  model  utilizing  discounted  cash  flows.  The
valuation of these  derivative  instruments  is a  significant  estimate that is
largely  affected by changes in interest rates. If interest rates  significantly
increase or decrease,  the value of these instruments will significantly change,
resulting in an impact on the earnings of the Company.

Commitments to Originate Mortgage Loans - The Company enters into commitments to
originate  mortgage  loans  whereby the interest rate on the loans is determined
prior to funding (rate lock  commitments).  Rate lock  commitments on loans that
are intended to be sold are  considered  to be  derivatives  and are  therefore,
recorded at fair value with changes in fair value recorded in earnings. The fair
value of these commitments is included in mortgage loans held for sale.

RESULTS OF OPERATIONS

Three Months Ended March 31, 2003 Compared to Three Months Ended March 31, 2002

The  Company's  net income  applicable to common shares for the first quarter of
2003 was $731,146, compared to $376,273 for the first quarter of 2002. Basic and
diluted  income per common share for the first quarter of 2003 was $.11 compared
to $.07 for the  first  quarter  of 2002.  The  increase  in net  income  can be

                                      -13-

<PAGE>

attributed to increased net interest income, and increased  non-interest income,
partially offset by an increase in the provision for loan losses and an increase
in non-interest expenses.

The increase in net interest  income of $1,580,000 or 36.9%, to $5.9 million for
the first  quarter of 2003  compared to $4.3  million  for the first  quarter of
2002,  consists of an increase in interest income of $1.8 million, or 22.4%, and
an increase in interest  expense of $211,000,  or 5.7%. The increase in interest
income in the first quarter of 2003 is primarily  attributable to an increase of
$2.1 million in interest and fees on loans resulting from the growth in the loan
portfolio, partially offset by decreases in interest income from investments and
federal funds sold. The increase in interest expense resulted  primarily from an
increase of $249,000 in interest on deposits,  partially  offset by decreases in
interest on repurchase  agreements and borrowed funds.  The increase in interest
expense on  deposits is  primarily  attributable  to an  increase  in  deposits,
partially  offset  by a  decrease  in market  interest  rates on  deposits.  The
decrease in interest  expense on  repurchase  agreements  and borrowed  funds is
primarily  attributable  to the  decline  in  market  interest  rates  on  these
instruments.

The  provision  for loan  losses  charged to  operations  increased  $509,000 to
$889,000  for the first  quarter of 2003 from  $380,000 in the first  quarter of
2002. This increase  primarily  reflects growth of the overall loan portfolio in
the first quarter of 2003 as compared to the first  quarter of 2002.  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  586.0% or $3.1 million,  to $3.7 million for the
three months ended March 31, 2003 from $537,000 for the three months ended March
31, 2002. The increase in non-interest  income primarily  resulted from gains on
sale of mortgage  loans of $2.3 million and  mortgage  loan  processing  fees of
$478,000 for the three  months ended March 31, 2003,  compared to zero for these
categories for the same period in 2002.  These income  categories  relate to the
Bank's  wholesale  mortgage  division,  which commenced  operation in the fourth
quarter of 2002. Due to the short time that this division has been in operation,
and the substantial  portion of its revenue  attributable to mortgage  refinance
activity,  there can be no  assurance  that the  current  levels of income  will
continue in the future.  Service fees on deposits increased $150,000 or 40.7% to
$518,000 for the three  months ended March 31, 2003 from  $368,000 for the three
months  ended March 31, 2002.  This  increase is  primarily  attributable  to an
increase in deposit  accounts.  Mortgage loan origination fees increased $90,000
or 97.0% to $182,000  for the three months ended March 31, 2003 from $90,000 for
the three months ended March 31, 2002.  This increase is primarily  attributable
to increased volume in residential  mortgage loans.  Other  non-interest  income
increased  $158,000,  or 207.0% to $234,000 for the three months ended March 31,
2003 from  $176,000 for the three  months ended March 31, 2002.  The increase in
other  non-interest  income is primarily  attributable to increases in Automated
Clearing House fees, and other non-deposit related service charges.

Non-interest  expense  increased  $3.8 million or 105.0% to $7.4 million for the
three-month  period  ended  March 31,  2003  compared  to $3.6  million  for the
three-month  period ended March 31, 2002. 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 $2.9 million to $5.1 million for the first quarter
of 2003 compared to $2.2 million for the first quarter of 2002. This increase is
primarily the result of additional  staff  associated with the overall growth of
the Company's  business and with the addition of the wholesale mortgage division
started in the third  quarter of 2002.  Dividends  on  preferred  securities  of
subsidiary trusts increased $139,000 or 167.6% to $222,000 for the first quarter
of 2003,  compared to $83,000 for the first  quarter of 2002.  This increase was
due to an increase in the amount of these securities outstanding. Other expenses
increased  $513,000,  or 73.6% to $1.2  million  for the first  quarter  of 2003
compared to $698,000 for the first  quarter of 2002.  This increase is primarily
attributed to the expenses associated with supporting  operations related to the

                                      -14-

<PAGE>

overall growth of the Company.  Specific  operational  expenses which  increased
include communications, recruitment expenses and postage/courier expenses.

A provision for income taxes of $426,000 was recognized for the first quarter of
2003  compared to $307,000  for the same period in 2002.  These  provisions  for
income taxes represent an estimated  effective  annual tax rate of approximately
35% and 38% respectively.

FINANCIAL CONDITION

Total assets at March 31, 2003 were $840.1 million, an increase of $84.0 million
or 11.1%, from $756.1 million at December 31, 2002. The increase in total assets
primarily  resulted from the growth in loans outstanding and mortgage loans held
for sale which were funded by new deposit growth and other borrowed funds. Total
investment  securities  decreased $2.7 million or 5.0% to $51.0 million at March
31, 2003 as compared to $53.7  million at December 31, 2002.  Federal funds sold
remained  consistent  at $62.5  million at both March 31, 2003 and  December 31,
2002.

Loans held for investment increased $38.8 million, or 7.0%, to $589.8 million at
March 31, 2003,  from $551.0  million at December 31, 2002.  Mortgage loans held
for sale  increased  $35.3  million or 64.5% to $90.0  million at March 31, 2003
from $54.7 million at December 31, 2002. These increases in loans were funded by
increases  in  depository  accounts,   repurchase   agreements  sold  and  other
borrowings.  The allowance for loan losses increased $240,000 or 3.3% during the
first three months of 2003. The increase  resulted from net charge-offs of loans
of $649,000  plus  additional  provisions  of $889,000  during that period.  The
allowance  for loan losses as a percent of total loans held for  investment  was
1.27% at March 31, 2003 and 1.32% at December 31, 2002. Management believes that
such  allowance for loan losses is sufficient to cover  estimated  losses in the
Bank's loan portfolio.

Deposits  increased $31.8 million,  or 4.8%, to $696.7 million at March 31, 2003
from $664.9  million at  December  31,  2002.  The  increase  in total  deposits
primarily  resulted  from an increase of $46.3 million or 14.7% in time deposits
$100,000 and over,  combined with an increase of $17.7 million or 25.3% in other
time  deposits.  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. Noninterest-bearing deposits decreased $46.4 million or 32.8%. This is
a result of the  transfer  of funds  into  demand  deposit  accounts  which were
previously  invested in repurchase  agreements sold. This transfer is related to
the customer's 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 March 31, 2003 and December
31, 2002. Savings deposits decreased $5.5 million or 8.2%. Money market accounts
increased $5.9 million or 30.7%.  Growth in money market  accounts are primarily
attributable to continued  expansion of the Company's  customer base as a result
of ongoing marketing activities.

Repurchase  agreements  sold  increased  $46.7  million,  or 1,002.7%,  to $51.3
million at March 31, 2003 from $4.7 million at December  31,  2002,  for reasons
discussed in the previous  paragraph,  together with continued  expansion of the
Company's customer base. Other borrowed funds increased $4.5 million or 45.8% to
$14.5 million at March 31, 2003 from $9.9 million at December 31, 2002.  Accrued
interest payable increased  $247,000 or 10.4%, to $2.6 million at March 31, 2003
from $2.4  million at December 31, 2002.  This  increase is due  primarily to an
increase in  interest-bearing  deposits and other  interest-bearing  liabilities
highlighted herein.

Accounts payable and accrued expenses  decreased $64,000 or 1.3% to $4.7 million
at March 31, 2003 from $4.8 million at December 31, 2002.

                                      -15-

<PAGE>

Shareholders'  equity  increased by $803,000 to $53.8 million at March 31, 2003,
from $53.0  million at December  31,  2002.  This  increase is the result of net
income for the first three months of 2003 of $793,000,  combined  with the issue
of stock under the Company's  Employee Stock Purchase Plan of $102,000,  and the
issue of stock  related  to  exercise  of options  and issue of stock  grants of
$75,000.   These  increases  were  partially  offset  by  a  decrease  in  other
comprehensive  income  related  to an  unrealized  gain  in the  Company's  bond
portfolio  of $156,000 and the  recording  of offering  expenses of the Series C
Preferred Stock issue to additional paid-in capital of $11,000.

Non-accrual  loans were  $855,000 at March 31,  2003,  a decrease of $680,000 or
79.5%, compared to the balance of $1.5 million at December 31, 2002. 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 for a lending  institution the size of the Bank 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 the Bank.

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.  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.

                                      -16-

<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

References to "loans" in the following  two  paragraphs  refer to loans held for
investment.

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 $2.0 million at March 31, 2003. The
range for the  allowance for loan losses at March 31, 2003,  including  specific
allowances,  was  determined  to be between  $6.0 million or 1.01% of loans (low
range) and $10.0 million or 1.70% of loans (high range).

At March 31, 2003, the Bank's total allowance for loan losses is $7.5 million or
1.27% of loans as  compared to $7.3  million or 1.32% of loans at  December  31,
2002.  Criticized/Classified  assets have decreased when measured  against loans
outstanding.  This is primarily  attributable to the charge-off during the first
quarter of certain credits for which specific  reserves were  established at the
end of 2002. At March 31, 2003,  this  benchmark  was 3.9% of loans  outstanding
compared to 4.5% at December 31, 2002.  Past due loans have increased to .39% of
loans  outstanding  at March 31, 2003  compared to .14% at  December  31,  2002.
Non-Performing  Assets have  declined as a percentage  of total loans  including
other real estate  owned to .15% at March 31,  2003 versus .28% at December  31,
2002.  Net loan losses for the first three months of 2003 were  $649,000 or .11%
of average  loans  outstanding  for the period,  compared  to $8,000,  or .0% of
average loans for the same period in 2002.

                                      -17-

<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 the
remainder of 2003.

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 March 31,  2003
balance sheet evidences a satisfactory liquidity position as total cash and cash
equivalents  amounted  to $91.6  million,  representing  10.9% of total  assets.
Investment securities available for sale amounted to $47.7 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  three-month  period ended March 31, 2003,  total
deposits  increased from $664.9 million at December 31, 2002 to $696.7  million,
or 4.8%.  During this period,  repurchase  agreements  sold  increased from $4.7
million to $51.3 million,  or 1002.7%,  and other borrowed funds  increased $4.5
million from $9.9 million to $14.5 million,  or 45.8%. 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,  June 2002,  and  December  2002,  the Company
participated  in pooled trust  preferred  offerings.  By issuing trust preferred
securities  through its subsidiary  trusts, the Company was 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  securities
issues, please refer to footnote 6 of Item 1 above, together with footnote 13 of
the Company's consolidated financial statements for the years ended December 31,
2000,  2001 and 2002 filed in  conjunction  with the Company's  annual report on
form 10-K for the year ended  December  31,  2002.  At March 31,  2003,  the net
proceeds from pooled trust preferred trust offerings included in the calculation
of Tier 1 capital for regulatory purposes is $16.5 million.

The table below  illustrates the Bank's  regulatory  capital ratios at March 31,
2003:

                                        March 31,               Regulatory
Bank                                       2003                Requirement
                                   ---------------------   ---------------------

Tier 1 Capital                            9.50 %                  4.00 %
                                          ====                    ====

Total risk-based capital ratio            10.55 %                 8.00 %
                                          =====                   ====

Leverage ratio                            8.93 %                  4.00 %
                                          ====                    ====

                                      -18-

<PAGE>

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.

CAUTIONARY STATEMENT RELATING TO FORWARD LOOKING STATEMENTS

The Company and its  representatives  may from time to time make written or oral
statements  that  are   "forward-looking"  and  provide  other  than  historical
information,  including  statements  contained in the Form 10-Q,  the  Company's
other filings with the Securities and Exchange  Commission or in  communications
to  its  shareholders.   These  statements  involve  known  and  unknown  risks,
uncertainties  and other factors that may cause actual  results to be materially
different  from any results,  levels of activity,  performance  or  achievements
expressed or implied by any  forward-looking  statement.  These factors include,
among other things, the risk factors listed below.

In some case,  the Company has  identified  forward-looking  statements  by such
words or  phrases as "will  likely  result,"  "is  confident  that,"  "expects,"
"should,"  "could,"  "may,"  "will  continue  to,"  "believes,"   "anticipates,"
"predicts,"  "forecasts,"  "estimates,"  "projects,"  "potential,"  "intends" or
similar expressions identifying  "forward-looking statements" within the meaning
of the Private Securities  Litigation Reform Act of 1995, including the negative
of those  words  and  phrases.  These  forward-looking  statements  are based on
management's  current views and  assumptions  regarding  future  events,  future
business conditions and the outlook for the Company based on currently available
information.  These forward-looking  statements are subject to certain risks and
uncertainties  that could cause actual results to differ  materially  from those
expressed  in, or implied by, these  statements.  The Company  wishes to caution
readers not to place  undue  reliance  on any such  forward-looking  statements,
which speak only as of the date made.

In  connection  with  the  safe  harbor  provisions  of the  Private  Securities
Litigation  Reform  Act of 1995,  the  Company is hereby  identifying  important
factors that could affect the Company's  financial  performance  and could cause
the Company's  actual results for future periods to differ  materially  from any
opinions or statements  expressed  with respect to future periods in any current
statements. Among the factors that could have an impact on the Company's ability
to achieve operating results and growth plan goals are:

o    Management's  ability to reduce and  effectively  manage interest rate risk
     and the  impact of  interest  rates in  general  on the  volatility  of the
     Company's net interest income;
o    Fluctuations in the value of the Company's investment securities;
o    The ability to attract and retain senior management  experienced in banking
     and financial services;
o    The sufficiency of allowances for possible loan losses to absorb the amount
     of actual future losses inherent in the existing portfolio of loans;
o    The Company's  ability to adapt  successfully to  technological  changes to
     compete effectively in the marketplace;
o    Credit  risks and risks  from  concentrations  (by  geographic  area and by
     industry) within the Bank's loan portfolio;
o    The effects of competition from other commercial banks,  thrifts,  mortgage
     banking  firms,  consumer  finance  companies,  credit  unions,  securities
     brokerage firms,  insurance companies,  money market and other mutual funds
     and other  financial  institutions  operating  in the  Company's  market or
     elsewhere or providing similar services;
o    The failure of  assumptions  underlying the  establishment  of reserves for
     loan losses and  estimations of values of collateral and various  financial
     assets and liabilities;
o    Volatility of rate sensitive deposits;
o    Operational risks, including data processing system failures or fraud;

                                      -19-

<PAGE>

o    Asset/liability matching risks and liquidity risks;
o    Changes in the economic environment,  competition or other factors that may
     influence the anticipated growth rate of loans and deposits, the quality of
     the loan  portfolio and loan and deposit  pricing and Company's  ability to
     successfully pursue acquisition and expansion strategies;
o    The  impact  from   liabilities   arising  from  legal  or   administrative
     proceedings the financial condition of the Company;
o    Governmental  monetary  and fiscal  policies,  as well as  legislative  and
     regulatory  changes,  that  may  result  in the  imposition  of  costs  and
     constraints  on  the  Company  through  higher  FDIC  insurance   premiums,
     significant   fluctuations   in  market   interest  rates  and  operational
     limitations;
o    Changes in general  economic or industry  conditions,  nationally or in the
     communities in which the Bank conducts business;
o    Changes in  accounting  principles,  policies or  guidelines  affecting the
     businesses conducted by the Company or its affiliates;
o    Acts of war or terrorism; and
o    Other economic, competitive, governmental, regulatory and technical factors
     affecting the Bank's operations, products, services, and prices.

The Company wishes to caution that the foregoing  list of important  factors may
not be all-inclusive  and  specifically  declines to undertake any obligation to
publicly update or revise any forward-looking  statements that have been made to
reflect events or circumstances  after the date of such statements or to reflect
the occurrence of anticipated or unanticipated events.


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 March 31, 2003,
the Bank had a  cumulative  gap  ratio of  approximately  1.04 for the  one-year
period  ending March 31, 2004.  At March 31, 2003,  the Company had a cumulative
gap ratio of 1.43 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

                                      -20-

<PAGE>

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.

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 March 31,  2003,  indicates  that a 200 basis  point
increase in rates would cause an increase in net interest income of $6.7 million
over the next  twelve-month  period.  Conversely,  a 200 basis point decrease in
rates would  cause a decrease  in net  interest  income of $1.6  million  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 March 31, 2003, 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 March 31, 2003, in management's
opinion there was no significant risk of loss in the event of  nonperformance of
the counterparties to these financial instruments.

Item 4.  Controls and Procedures

Evaluation of Disclosure  Controls and Procedures.  Our Chief Executive  Officer
and Chief Financial Officer have reviewed and evaluated the effectiveness of our
disclosure   controls  and   procedures   (as  defined  in  Exchange  Act  Rules
240.13a-14(c)  and 15a-14(c)) as of a date within 90 days before the filing date
of this quarterly report. Based on that evaluation,  the Chief Executive Officer
and the Chief  Financial  officer  have  concluded  that our current  disclosure
controls  and   procedures   are  effective  in  providing  them  with  material
information  required to be disclosed in reports  filed by the Company under the
Exchange Act.

Changes In  Internal  Controls.  There have been no  significant  changes in the
Company's internal controls or in other factors that could significantly  affect
internal controls subsequent to the date of this evaluation.

                                      -21-

<PAGE>

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

         No disclosure required.

Item 5. Other Information

         No disclosure required.

Item 6. Exhibits and Reports on Form 8-K

(a)  Exhibits.

          99.1 Certifying  Statement of the Chief Executive  Officer pursuant to
               Section  1350 of Title 18 of the  United  States  Code as adopted
               pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

          99.2 Certifying  Statement of the Chief Financial  Officer pursuant to
               Section  1350 of Title 18 of the  United  States  Code as adopted
               pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

          99.3 Certifying  Statement of the Chief Executive  Officer pursuant to
               Section  1350 of Title 18 of the  United  States  Code as adopted
               pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

          99.4 Certifying  Statement of the Chief Financial  Officer pursuant to
               Section  1350 of Title 18 of the  United  States  Code as adopted
               pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(b)  Reports on Form 8-K.

     On January 2, 2003,  the Company filed a report on Form 8-K  announcing the
     sale of $5 million in Series C Preferred Stock to The South Financial Group
     in a private placement on December 31, 2002. The Company filed an amendment
     to this Form 8-K on January 3, 2003.

                                      -22-

<PAGE>

                                   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:  May 12, 2003                        By:  /s/ Charles E. Hughes, Jr.
                                                --------------------------------
                                           Charles E. Hughes, Jr.
                                           President and Chief Executive Officer


Date:  May 12, 2003                        By:  /s/ T. Edwin Stinson, Jr.
                                                --------------------------------
                                           T. Edwin Stinson, Jr.
                                           Chief Financial Officer

                                      -23-