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

                                    FORM 10-Q

         (Mark One)
  X      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
-----    EXCHANGE ACT OF 1934
         For the quarterly period ended June 30, 1998

         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.)

                         SUITE 212 SOUTHPOINT SQUARE II
                            4110 SOUTHPOINT BOULEVARD
                                JACKSONVILLE, FL
                                   32216-0925
                    (Address of principal executive offices)

                                 (904) 296-2329
              (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   No X
                                           ---

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the close of the latest practicable date.

                Class                           Outstanding at September 4, 1998
Common Stock, $.01 par value per share                      5,852,756



                                     - 1 -

<PAGE>



                               FLORIDA BANKS, INC.

                                      INDEX

                                                                      PAGE NO.

PART 1.       Financial Information

   Item 1.        Financial Statements:

              Condensed Balance Sheets
                  June 30, 1998 and December 31, 1997                        3

              Condensed Statements of Operations
                  for the Three and Six Month Periods Ended
                  June 30, 1998 and 1997                                     4

              Condensed Statement of Changes in
                  Shareholders' Equity for the Six Month Period
                  Ended June 30, 1998                                        5

              Condensed Statements of Cash Flows
                  for the Six Month Periods Ended June 30, 1998
                  and 1997                                                   6

              Notes to Condensed Financial Statements
                  for the Three and Six Month Periods
                  Ended June 30, 1998 and 1997                               7

      Item 2.     Management's Discussion and Analysis of
                  Financial Condition and Results of Operations             11

      Item 3.     Quantitative and Qualitative Disclosure about
                  Market Risk                                               13

PART 2.       OTHER INFORMATION

      Item 1.     Legal Proceedings                                         13

      Item 2.     Changes in Securities                                     13

      Item 3.     Defaults Upon Senior Securities                           14

      Item 4.     Submission of Matters to a Vote of Security Holders       15

      Item 5.     Other Information                                         15

      Item 6.     Exhibits and Reports on Form 8-K                          15

      Signatures                                                            17



                                      - 2 -


<PAGE>


<TABLE>
Item 1. Financial Statements

Florida Banks, Inc.

Condensed Balance sheets (Unaudited)    
---------------------------------------------------------------------------------------------------
                                                                         June 30     December 31
                                                                           1998         1997
<CAPTION>
<S>                                                                   <C>            <C>
CASH AND DUE FROM BANKS                                               $ 1,915,823    $ 2,788,211
FEDERAL FUNDS SOLD                                                      8,665,000     10,245,000
                                                                      -----------    -----------
    
    Total cash and cash equivalents                                    10,580,823     13,033,211

INVESTMENT SECURITIES:
  Available for sale, at fair value (cost $10,473,061 and
  $10,445,885 at June 30, 1998 and December 31, 1997, respectively)    10,455,232     10,452,185
Other investments                                                         291,850        313,050

LOANS:
Commercial real estate                                                 14,566,519     15,281,442
Commercial                                                             15,087,266     13,157,905
Residential mortgage                                                    3,542,152      3,268,704
Consumer                                                                1,086,588      1,222,045
Credit card and other loans                                             1,089,098        869,031
                                                                      -----------    -----------
    Total loans                                                        35,371,623     33,799,127
Allowance for loan losses                                                (527,153)      (481,462)
Net deferred loan fees                                                    (94,411)       (78,765)
                                                                      -----------    -----------

    Net loans                                                          34,750,059     33,238,900

PREMISES AND EQUIPMENT, NET                                               584,867        511,503

ACCRUED INTEREST RECEIVABLE                                               345,557        332,031

DEFERRED INCOME TAXES, NET                                              2,403,716      2,420,271

OTHER ASSETS                                                              103,883         94,628
                                                                      -----------    -----------
TOTAL ASSETS                                                          $59,515,987    $60,395,779
                                                                      ===========    ===========
                                                                       

LIABILITIES AND SHAREHOLDERS' EQUITY

DEPOSITS
  Noninterest-bearing demand                                            6,227,664      6,441,785
  Interest-bearing demand                                               2,816,591      3,073,535
  Regular savings                                                       6,117,007      5,874,911
  Money market accounts                                                 1,413,391      1,348,431
  Time $100,000 and over                                               11,053,397     10,214,403
  Other time                                                           16,749,672     18,507,107
                                                                      -----------    -----------
    Total deposits                                                     44,377,702     45,460,172

REPURCHASE AGREEMENTS                                                   5,863,549      5,911,513

OTHER BORROWED FUNDS                                                    2,404,196      2,405,604

ACCRUED INTEREST PAYABLE                                                  183,508        198,817

ACCOUNTS PAYABLE AND ACCRUED EXPENSES                                     101,642        106,038
                                                                      -----------    -----------
    Total liabilities                                                  52,930,597     54,082,144

SHAREHOLDERS' EQUITY:
Common Stock                                                               13,750         12,152
Additional paid-in capital                                              5,776,398      5,537,996
Retained earnings (deficit of $8,434,037 eliminated 
upon quasi-reorganization on December 31, 1995)                           806,296        759,707
Unrealized gain (loss) on available for sale
investment securities, net of tax                                         (11,054)         3,780
                                                                      -----------    -----------

   Total shareholders' equity                                           6,585,390      6,313,635
                                                                      -----------    -----------

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                            $59,515,987    $60,395,779
                                                                      ===========    ===========
</TABLE>

See notes to condensed financial statements.

                                      - 3 -


<PAGE>


FLORIDA BANKS, INC.

CONDENSED STATEMENTS OF OPERATIONS  (Unaudited)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>

                                                 Three Month Period Ended           Six Month Period Ended
                                                          June 30,                         June 30,
                                                 ------------------------          ------------------------
                                                     1998         1997                 1998         1997
                                                 -----------  -----------          -----------  -----------
<S>                                              <C>          <C>                  <C>          <C>

INTEREST INCOME:
  Loans, including fees                          $  868,882   $  856,586           $ 1,676,700  $ 1,653,118
  Investment securities                             157,580      138,534               320,296      278,666
  Federal funds sold                                 81,150       98,271               177,439      199,028
                                                 ----------   ----------           -----------  -----------
          Total interest income                   1,107,612    1,093,391             2,174,435    2,130,812
                                                 ----------   ----------           -----------  -----------
INTEREST EXPENSE:
  Deposits                                          506,112      527,175             1,015,598    1,036,151
  Repurchase agreements                              59,030       47,726               119,732       88,206
  Borrowed funds                                     22,853        8,785                47,568       15,419
                                                 ----------   ----------           -----------  -----------
          Total interest expense                    587,995      583,686             1,182,898    1,139,776
                                                 ----------   ----------           -----------  -----------
NET INTEREST INCOME                                 519,617      509,705               991,537      991,036

PROVISION FOR LOAN LOSSES                            15,000       15,000                30,000       30,000
                                                 ----------   ----------           -----------  -----------
NET INTEREST INCOME AFTER
   PROVISION FOR LOAN LOSSES                        504,617      494,705               961,537      961,036
                                                 ----------   ----------           -----------  -----------
NONINTEREST INCOME:
  Service fees                                       91,276       65,470               186,239      151,596
  Gain on sale of loans                                           44,550                19,709      108,925
  Gain on sale of other real estate owned                                                8,197        7,391
  Other noninterest income                           24,314       11,499                53,677       22,093
                                                 ----------   ----------           -----------  -----------
                                                    115,590      121,519               267,822      290,005
                                                 ----------   ----------           -----------  -----------
NONINTEREST EXPENSES:
  Salaries and benefits                             335,017      274,103               634,887      512,885
  Occupancy and equipment                            87,735       60,480               163,445      120,645
  Data processing                                    23,774       23,332                49,239       46,099
  Other                                             182,066      103,984               306,649      237,219
                                                 ----------   ----------           -----------  -----------
                                                    628,592      461,899             1,154,220      916,848
                                                 ----------   ----------           -----------  -----------
INCOME (LOSS) BEFORE PROVISION
  (BENEFIT) FOR INCOME TAXES                         (8,385)     154,325                75,139      334,193

PROVISION (BENEFIT) FOR
  INCOME TAX EXPENSES                                (3,180)      58,890                28,550      127,527
                                                 ----------   ----------           -----------  -----------
NET INCOME (LOSS)                                $   (5,205)  $   95,435           $    46,589  $   206,666
                                                 ==========   ==========           ===========  ===========

EARNINGS (LOSS) PER SHARE:
  Basic                                          $     0.00   $     0.07           $      0.03   $     0.16
                                                 ==========   ==========           ===========   ==========
  Diluted                                        $     0.00   $     0.07           $      0.03   $     0.16
                                                 ==========   ==========           ===========   ==========
</TABLE>


See notes to condensed financial statements.


                                      - 4 -
<PAGE>


FLORIDA BANKS, INC.

CONDENSED STATEMENTS OF SHAREHOLDERS' EQUITY  (Unaudited)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                        Unrealized
                                                                                      (Loss) Gain on
                                                                                         Available
                                                                                         for sale
                                       Common Stock         Additional                  Investment
                                   ---------------------     Paid-In      Retained      Securities,
                                   Shares      Par Value     Capital      Earnings       Net of Tax        Total
<S>                               <C>           <C>         <C>           <C>              <C>          <C>

BALANCE, DECEMBER 31, 1997        1,215,194     $12,152     $5,537,996    $759,707        $  3,780      $6,313,635

Net income                                                                  46,589                          46,589
Exercise of stock options           159,806       1,598        238,402                                     240,000
Unrealized loss on available
  for sale investment securities,
  net                                                                                      (14,834)        (14,834)
                                  ---------     -------     ----------    --------         --------     ----------
BALANCE, JUNE 30, 1998
(UNAUDITED)                       1,375,000     $13,750     $5,776,398    $806,296        $(11,054)     $6,585,390
                                  =========     =======     ==========    ========        ========      ==========

See notes to condensed financial statements.                                    
</TABLE>
                                      
                                     - 5 -


<PAGE>
<TABLE>
FLORIDA BANKS, INC.

CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)
------------------------------------------------------------------------------------------------

                                                                     Six Month Period Ended
                                                                            June 30
                                                              ----------------------------------
                                                                 1998                    1997
                                                              ----------------------------------
<CAPTION>
<S>                                                          <C>                     <C>
OPERATING ACTIVITIES
Net income                                                   $  46,589                $206,666
Adjustments to reconcile net income to net
 cash provided by operating activities:
  Depreciation and amortization                                 68,502                  51,032
  Deferred income taxes                                         63,553                 127,527
  Gain on sale of securities                                    (8,197)                 (7,391)
  Amortization of premiums on investments, net                 (20,365)                 (8,074)
  Provision for loan losses                                     30,000                  30,000
  Increase in accrued interest receivable                      (13,527)                (26,566)
  (Decrease) increase in accrued interest payable              (15,309)                 12,642
  Increase in other assets                                     (44,258)                 (9,583)
  Decrease in other liabilities                                 (4,396)                (16,739)
                                                           -----------             -----------
    Net cash provided by operating activities                  102,592                 359,514
                                                           -----------             -----------
INVESTING ACTIVITIES:
  Proceeds from sales, paydowns and maturities
   of investment securities:
   Available for sale                                        5,499,797              10,077,091
   Other                                                        28,600                    -
  Purchases of investment securities:
   Available for sale                                       (5,501,110)            (10,556,657)
   Other investments                                            (7,400)                (17,000)
  Net increase in loans                                     (1,541,159)             (2,837,880)
  Purchases of premises and equipment                         (141,866)                (45,734)
    Net cash used in investing activities                   (1,663,138)             (3,380,180)


FINANCING ACTIVITIES:
  Net (decrease) increase in demand deposits,
   money market accounts and savings accounts                 (164,029)                845,693
  Net (decrease) increase in time deposits                    (918,441)                246,844
  Decrease in repurchase agreements                            (47,964)                (69,138)
  Decrease in other borrowed funds                              (1,408)               (906,450)
  Exercise of stock options                                    240,000                     -
                                                           -----------             -----------
    Net cash (used in) provided by financing activities       (891,842)                116,949
                                                           -----------             -----------

NET DECREASE IN CASH
  AND CASH EQUIVALENTS                                      (2,452,388)             (2,903,717)

CASH AND CASH EQUIVALENTS:

  Beginning of period                                       13,033,211              14,898,784

  End of period                                            $10,580,823             $11,995,067
                                                           ===========             ===========
</TABLE>

See notes to condensed financial statements.

                                      - 6 -
<PAGE>



FLORIDA BANKS, INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTH AND SIX MONTH PERIODS ENDED
JUNE 30, 1998 AND 1997 (UNAUDITED)
--------------------------------------------------------------------------------


1.    BASIS OF PRESENTATION

      Florida Banks,  Inc. (the "Company") was  incorporated on October 15, 1997
      for the purpose of becoming a bank  holding  company and  acquiring  First
      National  Bank of Tampa  (the  "Bank").  On August 4,  1998,  the  Company
      completed its initial  public  offering and its merger (the "Merger") with
      the Bank  pursuant to which the Bank was merged with and into Florida Bank
      No. 1, N.A., a wholly-owned subsidiary of the Company, and renamed Florida
      Bank, N.A.  Shareholders of the Bank received  1,375,000  shares of common
      stock of the Company  valued at  $13,750,000.  The Merger was considered a
      reverse acquisition for accounting  purposes,  with the Bank identified as
      the accounting  acquiror.  The Merger will be accounted for as a purchase,
      but  no  goodwill  will  be  recorded  in the  Merger  and  the  financial
      statements of the Bank will become the historical  financial statements of
      the Company. Accordingly, the financial statements for the three month and
      six month periods ended June 30, 1998 and 1997,  presented  herein are the
      financial  statements  of the Bank and do not  reflect the Merger with the
      Company which was effective on August 4, 1998.

      The number of shares of common  stock,  the par value of common  stock and
      per share  amounts have been  restated to reflect the shares  exchanged in
      the Merger.

      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  Registration  Statement  on Form  S-1 as  filed  with  the
      Securities and Exchange Commission.  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  six  month  period  ended  June  30,  1998  are  not
      necessarily indicative of the results to be expected for the full year.

                                      - 7 -


<PAGE>



FLORIDA BANKS, INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTH AND SIX MONTH PERIODS ENDED
JUNE 30, 1998 AND 1997 (UNAUDITED)  (Continued)
--------------------------------------------------------------------------------


2.    MERGER

      The  Company's  operations  through  June 30,  1998  relate  primarily  to
      expenditures  for  incorporating  and  organizing  the Company and are not
      reflected in the financial statements presented herein. The following is a
      summary of the balance sheet and statement of operations of the Company as
      of June 30, 1998 and for the six month period then ended:


      BALANCE SHEET

      ASSETS
        Cash                                                        $    63,435
        Deferred public offering costs                                  340,318
                                                                     ----------
      TOTAL ASSETS                                                  $   403,753
                                                                     ==========

      LIABILITIES AND SHAREHOLDERS' EQUITY
        Accrued expenses and public offering costs                  $   251,030
                                                                     ----------
        Total liabilities                                               251,030
                                                                     ----------

      SHAREHOLDERS' EQUITY
        Preferred stock                                                 606,000
        Common stock                                                      3,778
        Additional paid-in capital                                    3,774,222
        Warrants to acquire common stock                                164,832
        Accumulated deficit                                          (4,396,109)
                                                                     ----------
          Total shareholders' equity                                    152,723
                                                                     ----------
      TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                    $   403,753
                                                                     ==========


      STATEMENT OF OPERATIONS

      EXPENSES
        Salaries and benefits                                       $ 3,210,568
        Financing costs                                                 972,024
        Occupancy and equipment                                          16,301
        Other                                                           170,774
                                                                     ----------
        Net loss before cumulative effect of
          change in accounting                                       (4,369,667)
        Cumulative effect of change in accounting
          for organizational costs                                      (26,442)
                                                                    ----------- 
          Net loss                                                  $(4,396,109)
                                                                    =========== 


                                      - 8 -
<PAGE>



FLORIDA BANKS, INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTH AND SIX MONTH PERIODS ENDED
JUNE 30, 1998 AND 1997 (UNAUDITED)  (Continued)
--------------------------------------------------------------------------------


3.    STOCK OPTIONS

      During 1994,  the Bank's  Board of Directors  approved a Stock Option Plan
      (the "Plan") for certain key officers,  employees  and  directors  whereby
      199,758  shares of the Bank's  common  stock were made  available  through
      qualified  incentive stock options and  non-qualified  stock options.  The
      Plan  specifies  that the  exercise  price per share of common stock under
      each option  shall not be less than the fair market  value of common stock
      on the date of the grant,  except for qualified  stock options  granted to
      individuals  who own either  directly or  indirectly  more than 10% of the
      Bank's  outstanding  stock.  For qualified  stock options granted to those
      individuals  owning  more than 10% of the Bank's  outstanding  stock,  the
      exercise price shall not be less than 110% of the fair market value of the
      common  stock on the date of grant.  Options  issued under the Plan expire
      ten years  after the date of grant,  except for  qualified  stock  options
      granted to  individuals  owning  more than 10% of the  Bank's  outstanding
      stock. For qualified stock options granted to more individuals owning more
      than 10% of the Bank's  outstanding  stock,  the expiration  date shall be
      five years from the date of grant or  earlier if  specified  in the option
      agreement. During 1994, the Bank granted stock options to purchase 159,806
      shares of the Bank's  common  stock at an exercise  price of $1.50182  per
      share.  No options were granted during 1995,  1996 or 1997. All 159,806 of
      the options were exercised on May 28, 1998.

4.    EARNINGS PER SHARE

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

                                         Three Month Period Ended       Six Month Period Ended
                                                 June 30,                       June 30,
                                         ------------------------       ----------------------
                                            1998          1997             1998        1997 
                                         ----------    ----------       ----------  ----------
<S>                                      <C>          <C>                <C>         <C>
Weighted average number of common 
  shares outstanding - Basic             1,272,013     1,215,194         1,243,604   1,215,194

Incremental shares from assumed
  conversion of stock options               87,519        85,903           111,663      85,903
                                         ---------     ---------         ---------   ---------
Total - Diluted                          1,359,532     1,301,097         1,355,267   1,301,097
                                         =========     =========         =========   =========
</TABLE>

      The incremental  shares from the assumed  conversion of stock options were
      determined  using the  treasury  stock  method  under  which  the  assumed
      proceeds were equal to (1) the amount that the Bank would receive upon the
      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  offering price of $10.00 per share for 1998 and an assumed fair
      value equal to the Bank's  average book value per common share for 1997 as
      the Bank's stock was not actively  traded and limited  trades  during 1997
      indicated that book value was a reasonable estimate of fair value.


                                      - 9 -


<PAGE>



FLORIDA BANKS, INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTH AND SIX MONTH PERIODS ENDED
JUNE 30, 1998 AND 1997 (UNAUDITED)  (Continued)
--------------------------------------------------------------------------------


5.    NEW ACCOUNTING PRONOUCEMENTS

      During the quarter  ended March 31, 1998,  the Bank  adopted  Statement of
      financial Accounting Standards No. 130, "Reporting  Comprehensive  Income"
      (SFAS 130). This Statement establishes standards for reporting and display
      of comprehensive income and its components (revenues, expenses, gains, and
      losses) in a full set of general-purpose  financial  statements.  SFAS 130
      requires  that  all  items  that  are  required  to  be  recognized  under
      accounting  standards as components of comprehensive income be reported in
      a financial  statement that is displayed with the same prominence as other
      financial statements.  SFAS 130 does not require a specific format for the
      financial  statement  but requires  that an  enterprise  display an amount
      representing  total  comprehensive  income for the period in the financial
      statement. Additionally, SFAS 130 requires that an enterprise (a) classify
      items  of  other  comprehensive  income  by their  nature  in a  financial
      statement and (b) display the accumulated  balance of other  comprehensive
      income separately from retained earnings and additional paid-in capital in
      the equity section of a statement of financial position. This Statement is
      effective  for fiscal years  beginning  after  December  15,  1997.  Total
      comprehensive income (loss) for the three months and six months ended June
      30, 1998 was  $(1,423)  and  $31,755,  respectively.  Other  comprehensive
      income was comprised  solely of the change in  unrealized  gains (loss) on
      available for sale investment securities, net.

6.    SUBSEQUENT EVENTS

      On August 4, 1998, the Company  completed its initial  public  offering of
      4,000,000  shares at an offering  price of $10.00 per share and  completed
      its Merger with the Bank. See Note 1.

      On  September  1,  1998,  the  Underwriters  exercised  a portion of their
      over-allotment  option and purchased an additional  100,000  shares of the
      Company's Common Stock, $.01 par value per share, at a price of $10.00 per
      share, less underwriting discounts and commissions.


                                     - 10 -


<PAGE>



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

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

LIQUIDITY

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,  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 1998.

RESULTS OF OPERATIONS

Three Months Ended June 30, 1998 Compared to three Months Ended June 30, 1997

The Bank's net income for the  second  quarter of 1998  decreased  $101,000,  or
106%,  to a net loss of $5,000 for the three month  period  ended June 30, 1998,
from net  income of  $95,000  for the  corresponding  period in 1997.  Basic and
diluted  earnings per share were $.00 for the second quarter of 1998 compared to
$.07 for the second  quarter in 1997.  The  increase in net  interest  income of
$10,000 and decrease in the  provision for income taxes of $62,000 was offset by
an increase in  noninterest  expense of $167,000  and a decrease in  noninterest
income of $6,000.

The increase in net interest income of $10,000,  or 1.9%, for the second quarter
in 1998  compared  to the second  quarter in 1997,  consists  of an  increase in
interest  income of $14,000,  or 1.3%,  and an  increase in interest  expense of
$4,000, or 0.7%.

The provision for loan losses  charged to operation in both the second  quarters
of 1998 and 1997 totaled $15,000.

Noninterest  income  decreased  $6,000,  or 4.8%, for the second quarter in 1998
compared  to the second  quarter in 1997.  Increases  in service  fees and other
noninterest  income  were  offset by a decrease in the gain on sale of loans for
the second  quarter or 1998. The decrease in the gain on sale of loans is due to
the timing of the sale of such loans.

Noninterest  expense  increased  $167,000,  or 36%, to  $629,000  for the second
quarter of 1998 from  $462,000 for the second  quarter in 1997.  The increase in
noninterest  expense resulted primarily from increases in salaries and benefits,
occupancy  and  equipment,  and other  expenses.  The  increase in salaries  and
benefits of $61,000,  or 22%,  to $335,000  for the second  quarter of 1998 from
$274,000 for the second  quarter in 1997,  results from normal salary  increases
and the  addition of lending and other staff for the  Jacksonville  branch.  The
increase in occupancy and equipment  expense of $27,000,  or 45%,  resulted from
the additional  leased space for the Bank's SBA  department,  start up costs for
the  Jacksonville  branch  and  from  additional  depreciation  and  maintenance
expenses  resulting  from the purchase of  additional  computer  equipment.  The
increase  in other  expenses of $78,000,  or 75%, to $182,000  results  from the
additional  expenses in relation to the opening of the  Jacksonville  branch and
legal,  accounting and other  professional  fees associated with the merger with
first National Bank of Tampa (the "Merger").

                                     - 11 -


<PAGE>



The  effective  tax rate for both the  second  quarter of 1998 and 1997 was 38%,
representing the estimated effective annual tax rates for both periods.

Six Months Ended June 30, 1998 Compared to Six Months Ended June 30, 1997

The Bank's net income for the six months ended June 30, 1998 decreased $160,000,
or 77%, to $47,000 from $207,000 for the corresponding period in 1997. Basic and
diluted  earnings per share were $.03 for the first six months of 1998  compared
to $.16 for the first six months of 1997. The increase in net interest income of
$1,000 and decrease in the  provision  for income taxes of $99,000 was partially
offset  by  decrease  in  noninterest  income  of  $22,000  and an  increase  in
noninterest expense of $237,000.

The increase in net  interest  income of $1,000 for the first six months of 1998
compared to the same period in 1997  consists of an increase in interest  income
of $44,000, or 2.0%, and an increase in interest expense of $43,000, or 3.8%.

The provision  for loan losses  charged to operation in both the first six month
periods of 1998 and 1997 totaled $30,000.

Noninterest income decreased $22,000,  or 7.6%, for the first six months in 1998
compared to the same period in 1997.  Increases in service  fees of $35,000,  or
23%, and other noninterest income of $32,000, or 143%, were offset by a decrease
in the  gain on sale of  loans of  $89,000  for the  first  six  months  of 1998
compared to the  corresponding  period of 1997. The decrease in the gain on sale
of loans is due to the  timing of the sale of such  loans  which  can  fluctuate
rather significantly on a quarterly basis.

Noninterest  expense increased  $237,000 , or 26%, to $1.2 million for the first
six months of 1998 from $917,000 for the first six months of 1997.  The increase
in  noninterest  expenses  resulted  primarily  from  increases  in salaries and
benefits,  occupancy and equipment  costs,  and other expenses.  The increase in
salaries and benefits of $122,000,  or 24%, to $635,000 for the first six months
of 1998 from  $513,000  for the first six months in 1997  resulted  from  normal
salary   increases  and  the  addition  of  lending  and  other  staff  for  the
Jacksonville branch. The increase in occupancy and equipment expense of $43,000,
or 35%, resulted from the additional leased space for the Bank's SBA department,
start up costs for the Jacksonville branch and from additional  depreciation and
maintenance   expenses  resulting  from  the  purchase  of  additional  computer
equipment.  The increase in other expenses of $70,000,  or 29%, from $237,000 to
$307,000  resulted from the additional  expenses incurred in connection with the
opening of the Jacksonville branch and legal,  accounting and other professional
fees associated with the Merger.

The  effective  tax rate for both the first six months of 1998 and 1997 was 38%,
representing the estimated effective annual tax rates for both periods.

FINANCIAL CONDITION

Total assets at June 30, 1998 were $59.5  million,  a decrease of  $880,000,  or
1.5%,  from $60.4  million at December  31,  1997.  Total loans  increased  $1.6
million,  or 4.7%,  to $35.4  million  at June 30,  1998 from  $33.8  million at
December  31,  1997.  The  increase in total loans was funded by a reduction  in
Federal funds sold of $1.6 million, or 15.4%, from $10.2 million at December 31,
1997 to $8.7 million at June 30, 1998. 

Deposits decreased $1.1 million, or 2.4%,from $45.5 million at December 31, 1997
to $44.4  million at June 30,  1998.  The  decrease  in total  deposits  results
primarily from a decrease in other time deposits of $1.8 million which is offset

                                     - 12 -


<PAGE>



by an increase in time deposits of $100,000 and over of $839,000.  Time deposits
often  fluctuate  in  response  to  interest  rate  changes  and can vary rather
significantly on a quarterly basis.  Shareholder's equity increased by $272,000,
or 4.3% from $6.3 million at December 31, 1997 to $6.6 million at June 30, 1998.
This increase  results  primarily  from the exercise of stock options on May 28,
1998 whereby  240,000  shares of stock were  purchased  at an exercise  price or
$1.00 per share.

Nonaccrual loans increased $415,000 at June 30, 1998, compared to $0 at December
31, 1997. These nonaccrual loans represent five commercial  loans, four of which
are SBA loans of which  $303,000 are  guaranteed by the SBA,  subject to certain
conditions.  The Bank  reflected  these loans as  nonaccrual as they are over 90
days past-due and in liquidation at June 30, 1998.  These loans were  classified
as impaired  loans at December 31, 1997 which an  allowance  for loan losses for
the Bank's estimated exposure on these loans.

CAUTIONARY STATEMENT RELATING TO FORWARD LOOKING STATEMENTS

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

Item 3.  Quantitative and Qualitative Disclosure About Market Risk

         Not applicable.

PART II. OTHER INFORMATION

Item 1.  Legal Proceedings

         Not applicable.

Item 2.  Changes in Securities and Use of Proceeds

USE OF PROCEEDS FROM SALES OF REGISTERED SECURITIES

On August 4, 1998,  the  Company  completed  an initial  public  offering of its
Common  Stock,  $.01  par  value  per  share  (the  "Offering").   The  managing
underwriters  in the  Offering  were The  Robinson-  Humphrey  Company,  LLC and
Interstate/Johnson  Lane Corporation (the "Underwriters").  The shares of Common
Stock sold in the Offering were registered  under the Securities Act of 1933, as
amended, on a Registration Statement on Form S-1 (the "Registration  Statement,"
registration  number  333-50867).   The  Registration   Statement  was  declared
effective by the Securities and Exchange Commission on July 28, 1998.

On July 30, 1998, the Company commenced the Offering. The offering terminated on
August 4, 1998 after the Company had sold all  4,000,000  shares of Common Stock
registered under the Registration  Statement. In addition, on September 1, 1998,
the Underwriters  exercised a portion of their over-allotment option to purchase
an  additional  100,000  shares of Common  Stock at a price of $10.00 per share,
less underwriting  discounts and commissions.  The Company registered a total of


                                     - 13 -


<PAGE>


4,600,000  shares,  of  which  600,000  shares  were  registered  to  cover  the
Underwriters'  over-allotment,  at an assumed offering price of $12.00 per share
for an  aggregate  price  of the  amount  registered  of  $55,200,000.  From the
effective date of the Registration  Statement to September 1, 1998, 4,100,000 of
the  shares  were  sold at a price to the  public  of  $10.00  per  share for an
aggregate  offering  price  of  $41,000,000,  less  underwriting  discounts  and
commissions.

From the effective date of the Registration  Statement to September 1, 1998, the
Company  paid  an  aggregate  of  $2,870,000  in   underwriting   discounts  and
commissions.  In  addition,  the  following  table sets forth an estimate of all
expenses  incurred in  connection  with the  Offering,  other than  underwriting
discounts and commissions. All of the amounts shown are estimated except for the
registration  fees of the  Securities  and  Exchange  Commission,  the  National
Association of Securities Dealers,  Inc. and the Nasdaq National Market. None of
the amounts shown were paid  directly or  indirectly  to any director,  officer,
general partner of the Company or their  associates,  persons owning ten percent
or more of any class of equity securities of the Company, or an affiliate of the
Company.

           SEC registration fee                     $  20,991
           NASD filing fee                              6,020
           Nasdaq national market filing fee           62,725
           Printing and engraving expenses            140,400
           Legal fees and expenses                    237,000
           Accounting fees and expenses               130,000
           Miscellaneous                              139,864
                                                    ---------
           Total                                    $ 737,000
                                                    =========

After deducting underwriting discounts and commissions and the Offering expenses
described   above,   net  proceeds  to  the  Company  from  the  Offering   were
approximately $37,100,000.  Of this amount, the Company infused $12 million into
the Bank's capital.  The remaining amount of approximately  $25,100,000 has been
allocated for the  redemption  of preferred  stock in the amount of $606,000 and
for general  working  capital.  The remaining  proceeds were invested as follows
(amounts are estimated):
          
           Temporary investments
             Repurchase agreements                $18,800,000
             Available for sale securities          6,300,000
                                                  -----------
           Total                                  $25,100,000
                                                  ===========

None of the net proceeds of the Offering were paid directly or indirectly to any
director,  officer, general partner of the Company or their associates,  persons
owning ten percent of more of any class of equity securities of the Company,  or
an affiliate of the  Company,  except that  $137,500 was paid to an affiliate of
the Company in connection with the Merger.

Item 3.  Defaults Upon Senior Securities

         Not applicable.

                                     - 14 -


<PAGE>



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

In lieu of a special  meeting of the  shareholders  of the  Company,  on June 6,
1998, the  shareholders of the Company by written consent approved the following
matters:

         (i)   an  amendment  to  the   Company's   Articles  of   Incorporation
               increasing the Company's authorized capital stock from 10,000,000
               shares  to  31,000,000   shares  and   increasing  the  Company's
               authorized  Common  Stock  from  9,000,000  shares to  30,000,000
               shares;

         (ii)  an amendment to the Company's Articles of Incorporation providing
               that a director  elected to fill a vacancy  shall be elected  for
               the unexpired term of his predecessor in office;

         (iii) an amendment to the Company's Articles of Incorporation providing
               that the Company  elects not to be governed by the  anti-takeover
               provisions  as  provided  in  Section  607.0901  of  the  Florida
               Business Corporation Act;

         (iv)  the  filing  of  the  Second  Amended  and  Restated  Articles of
               Incorporation  with  the  Secretary  of  State  of  the  State of
               Florida; and

         (v)   the adoption of the Florida  Banks,  Inc.  1998 Stock Option Plan
               providing  for the grant of  incentive  stock  options as well as
               non-qualified stock options to directors,  officers and employees
               of the  Company  and  certain  consultants  and  advisors  of the
               Company.


Item 5.  Other Information

         Not applicable.

Item 6.  Exhibits and Reports on Form 8-K

         (a)  Exhibits:
                 Exhibit 27  Financial Data Schedule

         (b) Reports on Form 8-K

         No report on Form 8-K was filed during the quarter ended June 30, 1998.


                                     - 15 -


<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: September 4, 1998              By: /s/ Charles E. Hughes, Jr.
                                         --------------------------
                                         Charles E. Hughes, Jr.
                                         President and Chief
                                         Executive Officer


Date: September 4, 1998              By: /s/  T. Edwin Stinson, Jr.
                                         --------------------------
                                         T. Edwin Stinson, Jr.
                                         Chief Financial Officer

                                       
                                     - 16 -


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