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

                                   FORM 10-KSB

       [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                                    EXCHANGE
                                   ACT OF 1934

                   For the fiscal year ended December 31, 1998

   [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                                   ACT OF 1934

                For the transition period from ______ to ________

                         Commission File Number: 0-22911

                       SOUTHERN SECURITY BANK CORPORATION
             (Exact name of registrant as specified in its charter)


                        Delaware                    65-0325364
             (State or other jurisdiction         (IRS Employer
                     of incorporation)          Identification No.)

           3475 Sheridan Street, Hollywood, Florida       33021
           (Address of principal executive offices)     (Zip Code)


        Registrant's telephone number, including area code (954) 985-3900

            Securities registered pursuant to Section 12(g) of the Act:

                      Class A Common Stock, $.01 par value
                               Title of each class

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the past 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_____
   ---

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation  S-B is not  contained  in  this  form,  and no  disclosure  will  be
contained  to the  best  of  registrant's  knowledge,  in  definitive  proxy  or
information  statements,  incorporated  by  reference  in Part III of this  Form
10-KSB or any amendment to this Form 10-KSB. [ ]

State issuer's revenues for the most recent fiscal year $2,043,261

State the aggregate market value of the voting and non voting common equity held
by non-affiliates  computed by reference to the price at which the common equity
was  sold,  or the  average  bid and  asked  price of such  common  equity  as a
specified  date within the past 60 days:  - - There is no public  market for the
registrant's  common  equity.  Based solely upon the  offering  price in certain
private  sales of the  registrant's  common equity made within the last 90 days,
the  approximate  market  value of common  equity held by non  affiliates  as of
February  28, 1999 would have been  $11,437,000.  Solely for the purpose of this
calculation,  all  directors,  officers  and  holders  of  more  than  5% of the
registrant's outstanding common stock have been deemed to be affiliates.

The  number of shares  outstanding  of each of the  issuer's  classes  of common
equity, as of February 28, 1999 is as follows: (i) Class A Voting Common Stock -
4,567,641; (ii) Class B Non-Voting Common Stock None.


     DOCUMENTS INCORPORATED BY REFERENCE: None

Transitional Small Business Disclosure Format (check one):

         Yes___; No X

                                     PART I

Item 1.  Description of Business

General

     Southern  Security Bank Corporation  (the "Holding  Corporation") is a bank
holding  company  that  owns  97.5% of  outstanding  capital  stock of  Southern
Security Bank (the "Bank").  The Holding  Corporation is organized under the law
of Delaware,  while the Bank is a Florida State  Chartered Bank that is a member
of the Federal  Reserve System whose deposits are insured by the Federal Deposit
Insurance  Corporation  ("FDIC").  The Bank  provides a full range of commercial
banking and consumer banking services to businesses and individuals. On December
31,  1998,  the  Holding  Corporation  and its  subsidiary  Bank  (collectively,
referred  to  herein  as  the  "Company")  had  consolidated   total  assets  of
$22,260,841,  total  deposits  of  $20,244,046,  net loans of  $14,612,998,  and
stockholders equity of $1,216,120.

     The Company, including the Bank and the offices of the Holding Corporation,
is located at 3475 Sheridan  Street,  Hollywood,  Florida  33021.  Its telephone
number is (954) 985-3900.

Historical Development

     The  predecessor of the Holding Corporation was incorporated  under the law
of Florida on April 8, 1992 under the name PCM Acquisition Group, Inc ("PCM").  
PCM was reorganized under the Florida law under the name Southern Security  Bank
Corporation  ("SSB") on June 28, 1993,  for the purpose of acquiring  control of
the Bank, which was then known as Florida First  International Bank. The Holding
Corporation  completed  the  acquisition  of the Bank on December  16, 1993 (the
"Acquisition")  through the purchase of 96.6% of its  outstanding  common stock.
Subsequent  to the date of  Acquisition,  the name of the  Bank was  changed  to
Southern Security Bank. During the period since the Acquisition,  management has
strived to bring the Bank into  compliance  with  regulatory  guidelines  and to
position  the Company  for growth.  Classified  and  non-performing  assets were
liquidated as quickly as possible consistent with the avoidance of undue losses.
New procedures  were adopted and old  procedures  were updated and rewritten for
the purpose of verifying the quality of all new loans.  Management believes that
the  following  Bank  statistics  are  indicative  of the progress that has been
achieved since the time of the Acquisition.

                                                     At 12/16/93   At 12/31/98

Net Loan Portfolio Balance at end of Period        $  6,951,096   $ 14,612,998
Charge-Off Devalued/Impaired Earning Assets        $  1,202,000   $     57,303
Total Classified Assets and Owned Real Estate      $  3,970,999   $    931,742
Total Assets of Bank affiliate                     $ 13,089,724   $ 22,248,024
Total Capital of Bank affiliate                    $    288,381   $  1,608,356
   
Total Classified Assets as a Percent of Total Loans       48.46%          6.26%

     On November 10, 1997, SSB was merged (the "Merger") with Southern  Security
Financial  Corporation,   a  Delaware  corporation  ("SSF"),  with  the  Holding
Corporation  being the surviving  corporation  under the name Southern  Security
Bank  Corporation.  Prior to the Merger,  SSF had 279 shareholders of record, no
substantial assets and no operating history. The Class A Common Stock of SSF was
registered under the Securities  Exchange Act of 1934, as amended (the "Exchange
Act"), on September 29, 1997. The Merger was effected for the purpose of placing
the Holding  Corporation  in a posture to aid in the eventual  development  of a
trading market in the Company's  Class A Common Stock through:  (i)  registering
the Class A Common  Stock  under the 1934 Act;  (ii)  increasing  the  number of
stockholders from 110 to 389; and (iii)  reincorporating the Holding Corporation
under the law of Delaware.

The Bank

     The Bank,  which is the sole  subsidiary of the Holding  Corporation,  is a
state  chartered  banking  association  engaging  in a  general  commercial  and
consumer  banking  business.  The  Bank's  services  are  provided  through  its
full-service  community banking office.  The Bank engages in general  commercial
banking providing a wide range of loan and deposit services.  As of December 31,
1998,  the  Bank  had  approximately   1,100  deposit  accounts  and  700  loans
outstanding.  Retail  services  offered by the Bank include  installment  loans,
credit cards,  checking accounts,  savings accounts,  NOW accounts,  and various
types  of  time-deposit   instruments.   Mortgage  lending   activities  include
commercial, industrial, and residential loans secured by real estate. Commercial
lending activities include  originating secured and unsecured loans and lines of
credit, and providing cash management and accounts receivable financing services
to a variety  of  businesses.  The Bank also  operates a  merchant  credit  card
program.  The Bank's installment loan department makes direct auto, home equity,
home improvement,  and personal loans to individuals.  The Bank also offers safe
deposit box services.

     Correspondent  Banking.  Correspondent  banking involves one bank providing
services  to another  bank which  cannot  provide  that  service  for itself for
economic or organizational  reasons. The Bank purchases  correspondent  services
offered by larger banks, including check collections, purchase of federal funds,
security safekeeping,  investment service, coin and currency supplies,  overline
and liquidity loan  participations,  and sales of loans to or loan participation
with   correspondent   banks.  The  Bank  also  sells  loan   participations  to
correspondent banks with respect to loans which exceed the Bank's lending limit.
The  Bank has  established  correspondent  relationships  with  Compass  Bank of
Birmingham,  Alabama  and  Independent  Bankers  Bank of Orlando,  Florida  with
respect to the foregoing  services.  As compensation for services  provided by a
correspondent,  the Bank maintains  certain  balances with the  correspondent in
non-interest  bearing accounts.  Such  compensating  balances are not considered
significant to the Bank's operations.

Market Area

     The Bank has one office,  which is located in Hollywood,  Florida. The Bank
considers  its primary  market and service area to be the City of Hollywood  and
surrounding  towns in  Broward  and  Palm  Beach  Counties.  The  population  of
Hollywood is approximately 125,000, with 53,000 households, and a civilian labor
force of 60,000.  The density of population is  approximately  4,463 persons per
square mile.  Public  school  enrollment  is at 20,000,  with a pupil to teacher
ratio of 19.5 to one. Real estate property assessed valuations are approximately
$5.8 billion.  Boca Raton, where the Company proposes to open a new main office,
has a population of approximately  66,000,  with 27,000 households,  and a total
civilian labor force of 32,000. The density of population is approximately 2,262
persons per square mile.  Public  school  enrollment  is12,800,  with a pupil to
teacher  ratio  of 17.6 to one.  Real  estate  property  assessed  valuation  is
approximately $8.3 billion.

Employees

     The  Company  has 12 full  time  employees  at the  Bank  level  and  three
employees at the Holding  Corporation  level.  The  Company's  employees are not
unionized, and the Company considers its employee relations to be excellent.

Supervision and Regulation

     Upon its initial  acquisition  (change of control  occurred  12/16/93) of a
financial  institution,  the  Company  "obtained"  a  charter  from the State of
Florida  for a State  bank and a member  of the  Federal  Reserve  System.  As a
Fed-member  State  Bank,  the Bank is subject to the  provisions  of the Federal
Reserve Bank  regulations and  administrative  practices and the Florida Banking
Code which is administered by the Florida Department of Banking and Finance (the
"FDBF").  The Bank has its deposit  obligations  insured by the Federal  Deposit
Insurance Company ("FDIC") in the maximum  individual  amounts of $100,000 each,
and is subject to regulation by the FDIC. The FDBF  supervises and regulates all
areas of the  Bank's  operations,  including,  without  limitation,  its  loans,
mortgages,   issuance  of  securities,  annual  shareholders  meetings,  capital
adequacy requirements, payment of dividends and the establishment or termination
of branches.  As a state-chartered  banking institution in the State of Florida,
the Bank is empowered by statute,  subject to limitations  expressed therein, to
take savings and time deposits,  to accept checking accounts, to pay interest on
such  deposits,  to make loans on  residential  and other real  estate,  to make
consumer and commercial loans, to invest,  with certain  limitations,  in equity
securities and in debt  obligations of Companies and to undertake  other various
banking services on behalf of its customers.

     Bank Holding  Company  Regulation.  The Holding  Corporation  is a one-bank
holding  company,  registered  with the  Federal  Reserve  Board  under the Bank
Holding  Company Act of 1956, as amended (the "BHC Act").  As such,  the Holding
Corporation  and the Bank  are  subject  to the  supervision,  examination,  and
reporting  requirements  of the  BHC Act and the  regulations  of the  Board  of
Governors of the Federal Reserve System (the "FRB"). The Holding  Corporation is
required to file semi-annual and annual reports with the FRB and such additional
information as the FRB may require  pursuant to the BHC Act. The FRB may conduct
examinations of the Holding Corporation and the Bank. Under FRB regulations, the
Holding Corporation is required to serve as a source of financial and managerial
strength to the Bank and may not conduct its  operations in an unsafe or unsound
manner.  In  addition,  it is the FRB's  policy  that in  serving as a source of
strength to its subsidiary  banks, a bank holding  company should stand ready to
use available  resources to provide  adequate  capital  funds to its  subsidiary
banks during  periods of financial  stress or adversity and should  maintain the
financial   flexibility  and  capital-raising   capacity  to  obtain  additional
resources for assisting its subsidiary  banks. A bank holding  company's failure
to meet its obligations to serve as a source of strength to its subsidiary banks
will  generally  be  considered  by the FRB to be an unsafe and unsound  banking
practice or a violation of the FRB's  regulations  or both. The BHC Act requires
every bank holding company to obtain the prior approval of the FRB before (i) it
may acquire direct or indirect  ownership or control of any voting shares of any
bank if,  after such  acquisition,  the bank holding  company  will  directly or
indirectly  own or control more than 5% of the total voting  shares of the bank,
(ii) it or any of its  subsidiaries,  other  than a  bank,  may  acquire  all or
substantially  all  of the  assets  of the  bank,  or  (iii)  it  may  merge  or
consolidate  with any other bank holding  company.  The BHC Act further provides
that the Federal Reserve may not approve any transaction  that would result in a
monopoly  or  would  be in  furtherance  of any  combination  or  conspiracy  to
monopolize  or attempt to  monopolize  the business of banking in any section of
the  United  States,  or the  effect  of which  may be  substantially  to lessen
competition  or to tend to create a monopoly in any section of the  country,  or
that in any  other  manner  would be in  restraint  of trade,  unless  the anti-
competitive  effects of the proposed  transaction are clearly  outweighed by the
public  interest in meeting the  convenience  and needs of the  community  to be
served.  The Federal  Reserve is also  required to consider  the  financial  and
managerial  resources  and future  prospects of the bank holding  companies  and
banks concerned and the convenience and needs of the community to be served.

     The BHC Act generally  prohibits the Holding  Corporation  from engaging in
activities  other  than  banking  or  managing  or  controlling  banks  or other
permissible  subsidiaries  and from  acquiring or  retaining  direct or indirect
control of any company  engaged in any  activities  other than those  activities
determined  by the FRB to be so  closely  related  to  banking  or  managing  or
controlling banks as to be a proper incident thereto.  In determining  whether a
particular   activity  is  permissible,   the  FRB  must  consider  whether  the
performance of such an activity  reasonably can be expected to produce  benefits
to the public, such as greater convenience,  increased competition,  or gains in
efficiency,  that outweigh possible adverse effects, such as undue concentration
of  resources,  decreased  or unfair  competition,  conflicts of  interests,  or
unsound banking practices. For example, factoring accounts receivable, acquiring
or servicing loans,  leasing personal property,  conducting  discount securities
brokerage  activities,  performing certain data processing  services,  acting as
agent or broker in selling  credit life  insurance  and  certain  other types of
insurance  in  connection  with  credit  transactions,  and  performing  certain
insurance  underwriting  activities  all have been  determined  by the FRB to be
permissible  activities of bank holding companies.  Despite prior approval,  the
FRB has the  power  to  order a bank  holding  company  or its  subsidiaries  to
terminate  any  activity  or to  terminate  its  ownership  or  control  of  any
subsidiary  when it has reasonable  cause to believe that  continuation  of such
activity  or  such  ownership  or  control  constitutes  a  serious  risk to the
financial  safety,  soundness,  or stability of any bank subsidiary of that bank
holding company.

     Bank  Regulation.  The Bank is  chartered  under  the laws of the  State of
Florida and its deposits are insured by the FDIC to the extent  provided by law.
The Bank is subject to comprehensive regulation,  examination and supervision by
the FDBF and the FRB and to other laws and regulations applicable to banks. Such
regulations  including  limitations  on loans to a  single  borrower  and to its
directors,  officers and employees;  restrictions  on the opening and closing of
branch offices;  the maintenance of required capital and liquidity  ratios;  the
granting of credit under equal and fair  conditions;  and the  disclosure of the
costs and terms of such credit.  The Bank is examined  periodically  by both the
FDBF and the FRB,  to each of whom it submits  periodic  reports  regarding  its
financial  condition and other  matters.  Both the FDBF and the FRB have a broad
range of powers to enforce regulations under their respective  protection of the
safety and soundness of the Bank,  including the institution of cease and desist
orders and the removal of directors and officers. These regulatory agencies also
have the authority to approve or disapprove mergers, consolidations, and similar
corporate  actions.  There are various statutory and contractual  limitations on
the ability of the Bank to pay  dividends,  extend credit,  or otherwise  supply
funds to the Holding Corporation.

     The  FDIC  and the  FDBF  also  have the  general  authority  to limit  the
dividends  paid by insured banks and bank holding  companies if such payment may
be deemed to constitute an unsafe and unsound practice. Dividends and management
fees from the Bank  constitute the sole source of funds for dividends to be paid
by the Holding Corporation. Under Florida law applicable to banks and subject to
certain  limitations,  after  charging  off bad  debts,  depreciation  and other
worthless  assets,  if any, and making  provisions  for  reasonably  anticipated
future  losses on loans and other  assets,  the board of directors of a bank may
declare a  dividend  of so much of the  bank's  aggregate  net  profits  for the
current year combined with its retained  earnings (if any) for the preceding two
years as the board shall deem to be  appropriate  and,  with the approval of the
FDBF,  may declare a dividend  from  retained  earnings for prior years.  Before
declaring a dividend, a bank must carry 20% of its net profits for any preceding
period as is covered by the dividend to its surplus fund, until the surplus fund
is at least equal to the amount of its common stock then issued and outstanding.
No dividends may be paid at any time when a bank's net income from the preceding
two years is a loss or which  would  cause the  capital  accounts of the bank to
fall below the minimum amount required by law, regulation,  order or any written
agreement with the FDBF or a federal regulatory  agency.  Florida law applicable
to companies (including the Holding Corporation)  provides that dividends may be
declared and paid only if,  after  giving it effect,  (i) the company is able to
pay its debts as they become due in the usual course of  business,  and (ii) the
company's  total assets  would be greater than the sum of its total  liabilities
plus the amount that would be needed if the company  were to be dissolved at the
time of the  dividend to satisfy the  preferential  rights upon  dissolution  of
shareholders  whose  preferential  rights are  superior to those  receiving  the
dividend.

     The  Bank  is  subject  to  agreements  with  the FRB and  with  the  State
Comptroller and Banking  Commissioner  of Florida  pursuant to which the Bank is
prohibited  from  declaring or paying any dividends  without their prior written
consent.  Under federal law,  federally insured banks are subject,  with certain
exceptions,  to certain  restrictions on any extension of credit to their parent
holding  companies  or other  affiliates,  on  investment  in the stock or other
securities  of  affiliates,  and on the  taking of such stock or  securities  as
collateral  from any  borrower.  In  addition,  such banks are  prohibited  from
engaging in certain  tie-in  arrangements  in  connection  with any extension of
credit or the providing of any property or service.

     The  FDIC  Improvement  Act of 1991  ("FDICIA")  made a number  of  reforms
addressing  the safety and soundness of deposit  insurance  funds,  supervision,
accounting,  and prompt  regulatory  action,  and implemented  other  regulatory
improvements.  FDICIA also recapitalized the Bank Insurance Fund ("BIF"),  under
which the Bank pays a quarterly statutory assessment. Under FDICIA, annual full-
scope, on-site examinations are required of all insured depository institutions.
The cost for conducting an examination of an institution may be assessed to that
institution,  with special  consideration  given to affiliates and any penalties
imposed for failure to provide information  requested.  Insured state banks also
are  precluded  from  engaging  as  principal  in any type of  activity  that is
impermissible for a national bank,  including  activities  relating to insurance
and  equity   investments.   FDICIA  also  recodifies  current  law  restricting
extensions of credit to insiders under the Federal  Reserve Act. The policies of
regulatory authorities have had a significant effect on the operating results of
commercial  banks in the past,  and may be expected  to do so in the future.  An
important  function of the FRB System is to regulate  aggregate  national credit
and money  supply  through  such means as open market  dealings  in  securities,
establishment  of the  discount  rate  on bank  borrowing,  changes  in  reserve
requirements  against bank deposits,  and limitations on the deposits on which a
bank may pay  interest.  Policies of these  agencies may be  influenced  by many
factors including inflation,  unemployment,  short-term and long-term changes in
the  international  trade  balance,  and fiscal  policies  of the United  States
Government.  Loans made by the Bank are also subject to numerous  other  federal
and  state  laws and  regulations,  including  the  Truth in  Lending  Act,  the
Community  Reinvestment  Act, the Equal Credit  Opportunity Act, the Real Estate
Settlement Procedures Act, and the Financial Institutions Reform,  Recovery, and
Enforcement Act of 1989. The federal bank  regulatory  agencies have an array of
powers to enforce laws, rules,  regulations and orders.  Among other things, the
agencies may require that institutions cease and desist from certain activities,
may preclude  persons from  participating  in the affairs of insured  depository
institutions,  may suspend or remove  deposit  insurance,  and may impose  civil
money penalties against  institution-affiliated  parties for certain violations.
The foregoing is a brief summary of certain  statutes,  rules,  and  regulations
affecting the Company and the Bank. Numerous other statutes and regulations have
an  impact  on  the  operations  of  the  Company  and  the  Bank.  Supervision,
regulation,  and  examination  of  banks  by the bank  regulatory  agencies  are
intended primarily for the protection of depositors, not shareholders.

     Commitments  to Florida  Department  of Banking  and  Finance.  The Company
entered  into  specific  agreements  with the FRB and the FDBF when it initially
offered  securities  prior  to  the  acquisition  of  the  Bank,  including  the
following: (1) The Bank may not pay dividends or management fees for the purpose
of paying the salaries or employment contracts of Wilson or Modder without prior
approval from the FDBF;  (2) the Bank may not pay dividends to its  shareholders
without the approval of the FDBF; (3) the Company  confirmed that the employment
contracts  between  Modder and Wilson are with the  Holding  Company and are not
obligations of the Bank; (4) Messrs.  Wilson and Modder will not become officers
of the Bank  without  prior  approval of the FDBF;  and (5) the FDBF did not and
will not approve or  disapprove  the  disclosure  materials  for any offering of
securities or any aspects of the employment  agreements between Modder,  Wilson,
and the Company.

     Insurance of Deposits.  The Bank's deposit accounts are insured by the FDIC
up to a maximum of $100,000 per insured depositor.  The FDIC issues regulations,
conducts  periodic  examinations,  requires the filing of reports and  generally
supervises  the  operation of its insured  banks.  Any insured bank which is not
operated in accordance  with or does not conform to FDIC  regulations,  policies
and  directives  may  be  sanctioned  for  non-compliance.  Proceedings  may  be
instituted  against any insured bank or any  director,  officer,  or employee of
such bank engaging in unsafe and unsound  practices,  including the violation of
applicable  laws  and  regulations.  The  FDIC has the  authority  to  terminate
insurance of accounts pursuant to procedures established for that purpose.

     Bank Branching. Florida banks are permitted by statute to branch statewide.
Such branch banking,  however,  is subject to prior approval by the FDBF and the
FDIC.  Any approval by the FDBF and the FDIC of branching by the Bank would take
into consideration  several factors,  including the Bank's level of capital, the
prospects and economics of the proposed branch office, and other  considerations
deemed  relevant by the FDBF and the FDIC for  purposes of  determining  whether
approval should be granted to open a branch office.

Competition

     The Company  operates in a competitive  environment,  where it must compete
with numerous other financial entities.  In one or more aspects of its business,
the Company competes with other commercial banks, savings and loan associations,
credit unions, finance companies,  mutual funds, insurance companies,  brokerage
and investment banking companies,  and other financial  intermediaries operating
in the  Company's  market  area.  Most of these  competitors,  some of which are
affiliated with bank holding companies, have substantially greater resources and
lending limits,  and may offer certain services that the Bank does not currently
provide. In addition, many of the Bank's non-bank competitors are not subject to
the same extensive  federal  regulations that govern bank holding  companies and
federally insured banks.

     The primary  factors in the  competition  for deposits are interest  rates,
personalized services, the quality and range of financial services,  convenience
of office  locations and office hours.  Competition for deposits comes primarily
from other commercial banks, savings  associations,  credit unions, money market
mutual funds and other investment  alternatives.  Competition for loans emanates
from other  commercial  banks,  savings  associations,  mortgage  banking firms,
credit  unions  and  other  financial  intermediaries.  Many  of  the  financial
institutions operating in the Company's market area offer certain services, such
as trust,  investment  and  international  banking,  which the Company  does not
offer.  To  compete,  the Bank  relies  upon  specialized  services,  responsive
handling of customer needs, and personal contacts by its officers, directors and
staff.  In those  instances  where the  Company is unable to provide  services a
customer  needs,  it seeks to arrange for those services to be provided by other
banks with which it has a correspondent relationship.

     Since  September  1995,  certain bank holding  companies are  authorized to
acquire banks  throughout  the United States.  In addition,  since June 1, 1997,
certain banks are permitted to merge with banks organized under the law of other
states. These changes, together with economic developments in the United States,
have lead to a period  of  consolidation  in the  banking  industry,  and may be
expected to lead to even greater competition for the Company and for the Company
to be placed in competition in the future with financial institutions with which
it does not  currently  compete.  As a result,  the  Company  may be expected to
encounter intense competition within its market area for the foreseeable future.

Item 2.  Description of Property

     The Company's  headquarters  and full service  community  banking office is
located at 3475 Sheridan Street, Hollywood, Florida 33021. At that location, the
Company   leases  5,212  square  feet  of  space  for  its  banking  and  office
requirements  under a lease  which  runs until  December  31,  2013.  Management
believes that its leased  facilities are adequate and well suited to its current
operations.

Item 3.  Legal Proceedings

     The  Company is not a party to, nor is its  property  the  subject  of, any
material pending legal proceeding.


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

     During the fourth quarter of 1998, no matter was submitted to a vote of the
Company's shareholders.



                                     PART II

Item 5.  Market for Common Equity and Related Stockholder Matters

          (a) There is no public trading market for the Company's common equity.

          (b) On  March 1,  1999,  there  were  433  holders  of  record  of the
Company's  Class A Voting Common Stock,  and no shares of the Company's  Class B
Non Voting Common Stock were issued or outstanding.

          c) Dividends.  The Company  has  not  paid any dividends on its Common
Stock since its  inception and has no present  intention of paying  dividends to
its shareholders in the foreseeable  future.  The Company  currently  intends to
reinvest earnings, if any, in the development and expansion of its business. The
determination  of the Board of  Directors  of the  Holding  Company  to  declare
dividends in the future will depend upon the earnings, capital requirements, and
financial  position  of the  Company,  and  upon  other  factors  they  may deem
relevant.  The ability of the Holding Corporation to pay dividends is subject to
statutory  restrictions  on cash dividends  applicable to Florida  corporations.
Further, the Holding Corporation's only current source of income on which to pay
dividends is through the payment of dividends  or  management  fees by the Bank.
The Bank may not declare or pay  dividends  on its common  stock if such payment
would cause it to be in violation of restrictions in the Florida Banking Code on
the payment of  dividends by Florida  state  banking  corporations,  such as the
Bank. The Company is also subject to certain regulatory  restrictions imposed by
the Federal  Reserve  Board on the payment of dividends by member banks to their
stockholders,  and by the  terms  of  agreements  with  the FRB  and  the  State
Comptroller and Banking Commissioner of Florida.

          (d) Sales of unregistered securities.  During  the fiscal  year  ended
December  31,  1998,   the  Company  sold  the  following   securities   without
registration under the Securities Act of 1933:

     (1) Commencing on November 12, 1997, the Company made a private offering of
1,000,000  Units at a price of $5.00 per Unit (the "1997  Offering").  Each Unit
included one share of the Company's  Class A Common Stock and one Warrant.  Each
Warrant  entitles  the holder to purchase one share of Class A Common Stock at a
price of $7.50 per share at any time from the date of issuance  through June 29,
1999.

     The 1997 Offering resulted in the  sale  through April 30, 1998  of 144,000
Units to 12  individuals,  all of whom were  "accredited  investors"  within the
meaning of Rule 501 of the SEC, at aggregate price of $720,000 . No underwriters
were used, and no underwriting  discounts or commissions  were paid. The Company
made the offering in reliance upon the exemptions from registration  provided by
Sections 4(2) and 4(6) of the Securities Act of 1933 and Rule 506 of the SEC for
sales by an issuer not  involving  any public  offering and for sales made by an
issuer  solely to  accredited  investors in an amount not  exceeding  the amount
allowed under Section 3(b) of the Securities Act.

     (2)  Commencing  on June 18, 1998,  the Company made a private  offering of
2,000,000  Units at a price of $5.00 per Unit (the "1998  Offering").  Each Unit
included one share of the Company's  Class A Common Stock and one Warrant.  Each
Warrant  entitles  the holder to purchase one share of Class A Common Stock at a
price of $7.50 per share at any time from the date of issuance  through June 29,
1999.

     The 1998 Offering resulted in the sale through December 18, 1998 of 107,303
Units to 25  individuals,  all of whom were  "accredited  investors"  within the
meaning of Rule 501 of the SEC, at aggregate price of $536,515.  No underwriters
were used, and no underwriting  discounts or commissions  were paid. The Company
made the offering in reliance upon the exemptions from registration  provided by
Sections 4(2) and 4(6) of the Securities Act of 1933 and Rule 506 of the SEC for
sales by an issuer not  involving  any public  offering and for sales made by an
issue  solely to  accredited  investors  in an amount not  exceeding  the amount
allowed under Section 3(b) of the Securities Act.


Item 6.  Management's Discussion and Analysis or Plan of Operation

                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

FORWARD LOOKING STATEMENTS

     Statements included in this document,  or incorporated herein by reference,
that do not relate to present or  historical  conditions  are  "forward  looking
statements" within the meaning of that term in Section 27A of the Securities Act
of 1933, as amended,  and Section 21F of the Securities Exchange Act of 1934, as
amended. Additional oral or written forward looking statments may be made by the
Company from time to time, and such statements may be included in documents that
are filed with the  Securities  and Exchange  Commission.  Such forward  looking
statements  involve risks and uncertainties that could cause results or outcomes
to differ  materially from those  expressed in the forward  looking  statements.
Forward looking statements may include, without limitation,  statements relating
to the Company's plans, strategies, objectives,  expectations and intentions and
are intended to be made  pursuant to the safe harbor  provisions  of the Private
Securities Litigation Reform Act of 1995. Words such as "believes," "forecasts,"
"intends,"  "possible,"  "estimates,"  "anticipates,"  and  "plans"  and similar
expressions  are  intended to identify  forward  looking  statements.  Among the
important factors on which such statements are based are assumptions  concerning
the business environment in Broward and Palm Beach Counties of Florida where the
Bank operates,  the availability of additional  capital to help the Bank achieve
the size  necessary  to achieve and sustain  profitability,  changes in interest
rates,  changes in the  banking  industry  in general  and  particularly  in the
competitive environment in which the Bank operates, and changes in inflation.

OVERVIEW

     The Company's principal asset is its ownership of a controlling interest in
the Bank,  which is a State of  Florida  chartered  commercial  banking  company
domiciled in Hollywood,  Florida. The Bank, Southern Security Bank, which may be
referred  to as SSB,  is a state  chartered  commercial  bank  regulated  by the
Florida  Division of Banking and Finance,  as its primary  regulator.  Since the
Bank is a member of the Federal Reserve system,  the Bank's secondary  regulator
is the Federal Reserve Bank of Atlanta.

     The  Company's  results of  operations  are  primarily  dependent  upon the
results  of  operations  of the Bank.  The Bank  conducts a  commercial  banking
business which consists of, in very general terms,  attracting deposits from the
general public and applying a majority of these funds  (typically 60% to 75%) to
the origination of commercial  loans to small  businesses,  consumer loans,  and
secured real estate loans in its local trade area of South Florida.  The balance
(approximately  25% to 40%) is generally held in cash and invested in government
guaranteed - investment grade securities.

     The Bank's  profitability  depends  primarily on generating  sufficient net
interest income (the difference  between interest income received from loans and
investments and the interest  expense incurred on deposits) to offset the Bank's
operating expenses. Any excess thereof is pre-tax profit earned by the Bank. The
careful  balance  sought  between the interest rate earned and frequency of rate
changes,  as that  balance  relates  to that  interest  rate paid to the  Bank's
deposit  base,  determines  the  nature  and  extent  to  which  the Bank may be
profitable.  For  example,  if the income  generated  by the Bank's net interest
income plus  non-interest  income is in excess of the Bank's other  non-interest
expenses,  operating  expenses  and  loan  loss  reserves,  the Bank  should  be
operating  profitably.  Non-interest  expenses  consist  primarily  of personnel
compensation and benefits,  occupancy and related  expenses,  deposit  insurance
premiums paid the FDIC, as well as other operating expenses. Non-Interest income
consists  primarily of loan origination fees,  discounts on accounts  receivable
purchases, service charges and gains on securities transactions.


PROPOSED MERGER

     The long-term  business  plan of the Company is to  strengthen  the capital
base of the Bank and then to generate  additional  capital through leveraging of
the earning assets which could be used in conjunction with the Bank's charter as
a vehicle to branch into other affluent banking  markets.  On February 23, 1999,
the  Company  and  First  Colonial   Securities  Group,  Inc.  (FCSG)  signed  a
non-binding letter of intent to merge. A merger of this type is quite unique for
a  community  banking  company.  The  proposed  merger  would  permit  the newly
configured company to provide and cross-sell a full range of financial services,
coupled with a high level of personalized service.

     FCSG is a full service brokerage and investment banking firm which recently
moved its headquarters  from  Philadelphia to Boca Raton, and has twenty offices
throughout  the U.S.  FCSG's  principal  officer is Michael Golden who serves as
Chairman and Chief  Executive  Officer.  FCSG has an expertise in the  financial
services sector and has completed several public offerings (IPO's) for banks.

     If the merger is consummated,  Southern  Security Bank intends to open full
service  banking  operations in Boca Raton.  At the Company level Michael Golden
will assume the title of Chairman  and CEO,  Phil Modder will be Vice  Chairman,
and Jim Wilson will be President  and  Director.  At Southern  Security Bank the
principal  officers  and  directors  will be,  Philip C.  Modder,  Chairman  and
President,  and James L. Wilson as Chief  Executive  Officer and Vice  Chairman,
Michael Golden as Director. After consummation of the  transaction  the  Holding
Corporation will own  97.5% of Southern Security Bank and 100% of First Colonial
Securities Group, Inc.

     The  Company  will be one of the first  community  Banks in Florida to take
this step toward providing a full range of financial  services to its customers.
Upon joint  meeting of both  boards of  Directors  in late  January,  1999,  the
transaction was approved in principle by unanimous vote by the respective  Board
of Directors of each company.  The completion of the proposed  merger is subject
to,  among other  things,  the  negotiation  of a definitive  merger  agreement,
approval  of the merger  agreement  by the Board of  Directors  of each  entity,
approval  by the  shareholders  of each  entity,  and  obtaining  all  necessary
regulatory approvals.


OPERATING HISTORY

     Since the  acquisition of its affiliate Bank on December 16, 1993,  through
the acquisition of 96.6% of the Bank's outstanding common stock, the Company has
focused its attention on maximizing asset quality and minimizing  expenses.  For
the  three-year  period prior to the Company's  control of the Bank,  cumulative
loan losses and charge-offs were in excess of more than $1,200,000. For the five
years since the  Company's  ownership,  cumulative  losses in this category were
less than $113,000.  Total  classified  assets as a percentage of total loans at
December 16, 1993  exceeded  48% and as of December 31, 1998 were at 6.26%.  The
Bank's loan  portfolio  since the  acquisition  date has grown to  approximately
$14.6 million and total asset growth from $13 million to $22 million. Management
believes that the Bank has addressed many of those  historic  problem areas that
impeded the Bank from obtaining normalized operating profits. In the case of the
Bank,  the  predominant  impediments at  acquisition  were the Bank's  dangerous
under-capitalization  and the poor asset  quality of its loan  portfolio.  After
more than five years of effort,  management believes the Bank currently has high
asset  quality,  and that  the  Bank's  capital  exceeds  statutory  guidelines.
However,  management believes that the Bank currently has a low level of earning
assets as they relate to operating  expenses.  Management  is seeking to correct
this  problem  by  increasing  the level of  earning  assets  (predominantly  by
increasing the loan portfolio) and increasing the level of capital in support of
this growth.

     Although the Company has  implemented  a program of  increasing  net loans,
which have  increased  to more than $14.6  million as of December  31, 1998 from
less than $7 million at December 31, 1993, this earning asset category  requires
an additional $2 million in growth to bring the Bank to profitability.  The loan
growth  experienced during this five-year period was financed by a corresponding
growth in the deposit base of the Bank, and by an infusion of new capital at the
Bank level.  Generally,  banks maintain an average loan to deposit ratio of 75%,
and for the Bank to increase its loan portfolio by $2 million,  its deposit base
will require  growth of $3.5  million.  To support  this level of balance  sheet
growth,  the Bank's capital will need to grow by approximately  $800,000.  Thus,
management  believes that a relatively small amount of additional capital should
bring  the Bank to  marginal  profitability.  Additional  capitalization  should
provide a foundation for future growth and profitability,  including the opening
of a second bank branch to be located in Boca Raton, Palm Beach County, Florida.


RESULTS OF OPERATIONS:

     After the change of control of the Bank in December 1993, management sought
to  restore  and  renovate  the asset  quality  of the Bank,  the  policies  and
procedures by which the Bank was  operated,  and the safety and soundness of the
enterprise.  Since these plans and programs have taken effect,  the operation of
the  institution  was  stabilized,   and  its  asset  quality  was  raised  from
a classification of "poor" to "good."

     Average Balance Sheet.  An analysis of the Company's  average balance sheet
levels for the last two years is presented in the following table. The Company's
net interest income and net yields on  interest-earning  assets  increased 11.3%
percent over 1997.  This  increase was the result of the growth of total earning
assets made possible due to deposit  growth and capital  infusions.  The average
yield/rate for  interest-earning  assets  decreased 7.4% from 1997 to 1998 while
the average yield/rate of interest-bearing liabilities increased 10.4% from 1997
to 1998.

<TABLE>
<CAPTION>


                                                        Southern Security Bank Corporation
                                                           Average Balance Sheet Analysis


                                         December 
                                         31, 1998                    1998                                    1997
                                          Average     Average                   Average        Average                    Average
                                        Yield/Rate    Balance     Interest     Yield/Rate      Balance      Interest     Yield/Rate
                                        ----------    -------     --------     ----------      -------      --------     ----------

Assets:                                          (Dollars in Thousands)                       (Dollars in Thousands)

<S>                                      <C>          <C>           <C>          <C>           <C>            <C>         <C>

Interest-earning assets:                 6.35%        1,596         120          7.52%         3,455          237          6.86%
   Investments (1)
   Federal funds sold                    4.75%        5,038         274          5.44%         1,545           87          5.63%
   Loans receivable (2)                  9.01%       15,347       1,473          9.60%        10,665        1,113         10.44%
                                                    -------       -----       --------       -------       ------       --------
    Total interest earning assets                    21,981       1,867          8.49%        15,665        1,437          9.17%
        Noninterest-earning assets                    2,731                                    2,301
                                                      -----                                    -----
         Total                                       24,712                                   17,966
                                                     ======                                   ======

Liabilities and Stockholders' Equity:                 
Interest-bearing liabilties:
   NOW and money market accounts         2.16%        5,066        116           2.29%         5,012          126          2.51%
   Savings accounts                      2.05%          407          8           1.97%           401            8          2.00%
   Certificates of deposit               5.52%       13,036        755           5.79%         7,364          416          5.65%
   Other                                 6.00%          137         10           7.30%           130            8          6.15%
                                                    -------      -----        --------       -------       ------       --------
      Total interest-bearing liabilities             18,646        889           4.77%        12,907          558          4.32%
                                                     ------        ---          -----         ------          ---          -----
      Noninterest bearing liabilities                 5,177                                    4,445
      Stockholders' equity                              889                                      614
                                                      -----                                     ----
      Total                                          24,712                                   17,966
                                                     ======                                   ======
Net Interest income and net yield
   on interest-earning assets                                      978           4.45%                        879          5.61%
                                                                   ===           =====                        ===          =====
</TABLE>


(1) Includes investment  securities and Federal Reserve Bank stock.
(2) Includes loans for which the accrual of interest has been suspended.

Net Income (loss) for the respective periods of 1998 and 1997 was ($584,000) and
($1,167,000)  which represents a decrease in the net loss by $583,000 defined by
a combination of factors as described below.

     Analysis  of Changes in  Interest  Income and  Interest  Expense.  Interest
income during 1998 was $1,867,000 as compared to $1,437,000 for 1997. Management
believes that this increase, although not indicative of future performance, does
demonstrate  stabilization.  Interest  expense for this period was  $889,000 for
1998,  and $558,000 for 1997,  representing  an increase of $331,000,  which was
largely due to an increase in the amount of interest  bearing  deposits  held by
the Bank.  The resultant  net interest  income was $977,000 in 1998 and $879,000
for 1997, reflecting an increase of approximately $98,000.

     The  impact  of the  bank's  strategies  can be  seen in the  table  titled
Analysis of Changes in Interest Income and Interest Expense. The table indicates
changes in net interest income resulting either from changes in average balances
or  to  changes  in  average  rates  for  earning  assets  and  interest-bearing
liabilities.  For each category of interest-earning  assets and interest-bearing
liabilities,  information is provided on changes  attributable to: (i) change in
volume  (change in volume  multiplied  by prior year rate);  (ii) change in rate
(change in rate  multiplied by prior year volume);  (iii) change  in rate/volume
(change in rate multiplied by change in volume);  and (iv) total change  in rate
and volume.


<TABLE>
<CAPTION>

                                                                     Southern Security Bank Corporation
                                                       Analysis of Changes in Interest Income and Interest Expense
-----------------------------------------------------------------------------------------------------------------------------------
                                                   Year Ended December 31,
                                                   -----------------------
                                                  
                                                       1998 vs. 1997                             1997 vs. 1996
                                            Increase (Decrease) Attributable to      Increase (Decrease) Attributable to

                                     Volume     Rate   Rate/Volume    Net         Volume         Rate  Rate/Volume    Net
                                     ------     ----   -----------    ---         ------         ----  -----------    ---
                                                      
                                                                  (Dollars in Thousands)          
                                  
<S>                                  <C>       <C>        <C>        <C>             <C>        <C>        <C>       <C>

Interest Income on:
   Investments                       (128)     23         (12)       (117)            (44)       1          0        (43)
   Federal funds sold                 197      (3)         (7)        187              38        1          1         40
   Loans receivable                   489     (89)        (40)        360             (15)      50          0         35
                                    ------    ----    --------       -----       ---------      --    -------        ---
      Total interest income on
      interest-earning assets         558     (69)        (59)        430             (21)      52          1         32
Interest expense on:
   NOW and money market accounts         1    (11)          0         (10)              8        1          0          9
   Savings accounts                      0      0           0           0               3       (1)         0          2
   Certificates of deposit             320     10           9         339             (25)     (18)         1        (42)
   Other                                 0      1           1           2              (2)      (1)         0         (3)
      Total interest expense on
      interest-bearing liabilities     321      0          10         331             (16)     (19)         1        (34)
Increase (decrease) in net
   interest income                     237    (69)         99          (5)             71        0         66
                                  ========   =====   =========   =========   =============   ======   =======

</TABLE>

<PAGE>

     Other Income and  Expenses.  Total other  income was  $176,000  during 1998
compared with $142,000 for 1997,  which  represents an improvement of $34,000 in
this  category,  but is not viewed by management as indicative of any particular
trend or  significance.  Salaries and  employee  benefits  totaled  $743,000 and
$1,228,000  for 1998 and 1997  respectively,  which  represents  a  decrease  of
$485,000,  which is largely attributed to settlement in 1997 of amounts owed the
two  principal  officers  of the  Holding  Corporation  under the terms of their
employment agreements.  Total other expenses were $956,000 and $843,000 for 1998
and 1997,  respectively,  which  represents a difference  of $113,000,  of which
$53,000  was due to the  application  of funds  toward the  regulatory  approval
procedures,  travel and professional  fees associated with the private placement
memorandum issued in1998.

     Federal  Income Taxes.  At December 31, 1998, the Company had net operating
loss  carry-forwards  for federal income tax purposes available to offset future
federal  taxable  income,  in the amount of  $7,996,000  with  specific  amounts
expiring each year from 2002 through the year 2018.


FINANCIAL CONDITION

     Asset/Liability   Management.   A   principal   objective   of  the  Bank's
asset/liability  management  strategy  is to  minimize  the Bank's  exposure  to
changes in interest  rates by matching the maturity  and  repricing  horizons of
interest-earning  assets and  interest-bearing  liabilities.  This  strategy  is
overseen in part  through the  direction  of the Asset and  Liability  Committee
(ALCO) of the Bank which  establishes  policies and monitors  results to control
interest rate sensitivity.

     ALCO examines the extent to which its assets and  liabilities  are interest
rate sensitive and monitors the Bank's interest rate  sensitivity  GAP. An asset
or liability is considered to be interest  rate-sensitive if it will be repriced
or  mature  within  the time  period  analyzed,  usually  one year or less.  The
interest rate sensitivity GAP is the difference between  interest-earning assets
and interest-bearing liabilities scheduled to mature or reprice within such time
periods. A GAP is considered positive when the amount of interest rate-sensitive
assets is greater than the amount of interest  rate-sensitive  liabilities.  The
GAP is considered negative when the amount of interest  rate-sensitive assets is
less than the amount of interest rate-sensitive liabilities.  During a period of
rising interest rates, a positive GAP would tend to result in an increase in net
interest income;  and a negative GAP would tend to adversely affect net interest
income.  Conversely,  during a period of falling  interest rates, a negative GAP
would tend to result in an increase in net interest rates,  while a positive GAP
would tend to adversely affect net interest income.

     If the repricing of the Bank's assets and liabilities were equally flexible
and moved  concurrently,  the impact of any  increases  or decreases in interest
rates on net interest income would be minimal.  However,  as commercial  banking
companies  generally  have a  significant  quantity of their  earning  assets in
Rate-Over- Prime,  rate-adjusted-day-of-change earning assets, GAP management is
critical,  as very few, if any,  rate-sensitive  liabilities  (deposit accounts)
adjust at such a rapid frequency.

     The ALCO committee evaluates the Bank's GAP position,  and stratifies these
results   according  to  how  often  the  repayment  of  particular  assets  and
liabilities  are  impacted by changes in interest  rates.  Additionally,  income
associated   with   interest-earning    assets   and   costs   associated   with
interest-bearing  liabilities  may  not be  affected  uniformly  by  changes  in
interest  rates;  thus,  the magnitude and duration of changes in interest rates
may have a  significant  impact on net interest  income.  For example,  although
certain  assets  and  liabilities  may have  similar  maturities  or  periods of
repricing,  they may react in  different  degrees to changes in market  interest
rates.  Interest rates on certain types of assets and  liabilities  fluctuate in
advance of changes in general  market  interest  rates,  while interest rates on
other types of assets and  liabilities  may lag behind changes in general market
rates.  Additionally, certain  types of  earning assets  (variable rate mortgage
loans, for  example)  may have  interest caps which may limit the level of rate-
increases, even though general market interest rates  increase.  The  management
of GAP is further complicated by asset (loan) prepayment and/or early withdrawal
of liabilities  (deposits).  In  volatile  interest  rate markets  the  level of
assets and  liabilities  assumed by bank managers may not have accounted for the
deviation that has occurred in the unpredictable interest rate environment.

     Therefore,  Bank  management  and  the  ALCO  committee's  strategy  are to
maintain a balanced  interest  rate risk  position to protect  its net  interest
margin from market  fluctuations.  They review, on at least a monthly basis, the
maturity  and  repricing of assets and  liabilities  for the various time period
traunches  considered.  The  Bank's  ALCO  policy  limits for GAP and the Bank's
position with respect to various time traunches are:

     Total Rate-Sensitive Assets,  RSA/Total Rate Sensitive  Liabilities,  RSL =
0.80 to 1.20; the Bank is at 1.34.
         RSA/RSL (0 to 365 days) = 0.80 to 1.20; the Bank is at 1.04. RSA/RSL (0
         to 90 days) = 0.80 to 1.20; the Bank is at 1.77.  RSA/RSL (91-365 days)
         = 0.80 to 1.20;  the Bank is at 0.41. 0 to 365 day  GAP/Total  Assets =
         +/- 10%; the Bank is at +2.37%. 0 to 90 day GAP/Total Assets = +/- 10%;
         the Bank is at +19.36%.  91 to 365 day GAP/Total  Assets = +/- 10%; the
         Bank is at (-16.99%).

          The Bank's view of these GAP positions is as follows:

          1. Total RSA/Total RSL Ratio:  Out of "Target" of .80 to 1.20 at 1.34.
          Rate sensitive assets currently  outweigh rate sensitive  liabilities.
          Management is pursuing a program to obtain  additional  rate sensitive
          liabilities  at an  accelerated  pace  to  that  of  assets.  This  is
          accomplished  through repricing  opportunities as well as occasions to
          amend maturities.

          2. RSA/RSL - 0 to 365 Day: Within "Target"  tolerance of .80 - 1.20 at
          1.04%.

          3. RSA/RSL - 0 to 90 Day: Out of "Target" of .80 - 1.20 at 1.77%.  The
          most  applicable  and  currently  achievable  strategy  is to  further
          decrease the core deposit base within this time horizon.

          4. RSA/RSL - 91 - 365 Day: Out of "Target" of .80 - 1.20 at 0.41%. The
          most  applicable  and  currently  achievable  strategy  is to  further
          increase the core deposit base within this time horizon.

          5. 0 - 365 Day GAP/Total Assets Month End: Within  "Guideline" of -10%
          through +10% at +2.37%.

          6. 0 - 90 Day  GAP/Total  Assets  Month End:  Out of  "Target" of -10%
          through  +10% at +19.36%.  This  category is a component  of numeral 5
          above and is interrelated with numeral 7 below, however, are inverted.
          The most applicable and currently  achievable  strategy is to increase
          investments in higher  yielding loans which will reprice from within 4
          to 12 months.

         7.  91-365 Day  GAP/Total  Assets  Month End:  Out of  "Target" of -10%
         through  +10% at - 16.9%.  This  category is a  component  of numeral 5
         above and is interrelated with numeral 6 above,  however, are inverted.
         The most  applicable and currently  achievable  strategy is to increase
         investments  in higher  yielding loans which will reprice from within 4
         to 12 months.

Loan  Maturity  Schedule:   The  following  schedule  sets  forth  the  time  to
contractual  maturity of the Bank's loan  portfolio at December 31, 1998.  Loans
which  have  adjustable  rates  and fixed  rates are all shown in the  period of
contractual  maturity.  Demand loans,  loans having no contractual  maturity and
overdrafts are reported as due in one year or less.

<TABLE>
<CAPTION>


                                                 One Year       One to          Over                       Home
                                  Total          or Less      Five Years     Five Years    Nonaccrual     Equity
                                  -----          -------      ----------     ----------    ----------     ------
<S>                              <C>         <C>            <C>             <C>          <C>           <C>

Residential Real Estate                                       
   Fixed Rate                    1,768,041   $         -   $    347,075   $  1,420,965   $       -     $        -
   Adjustable Rate               1,088,985             -        266,712        822,273           -              -
Consumer
   Fixed rate                    5,824,585        67,526      5,755,705              -           -          1,355
   Adjustable rate                 185,410       105,843         79,587              -           -              -
Commercial
   Fixed rate                    1,034,483       776,086        258,297              -           -              -
   Adjustable rate               1,820,703       966,525        452,915        351,617      49,646              -
Commercial Real Estate
   Fixed rate                      747,891        73,300        492,718        181,873           -              -
   Adjustable rate               2,319,403       580,513        379,753        630,825           -        758,312
Other                               69,263        69,263             -               -           -              -
                             -------------   -----------   ------------   ------------   ---------      ---------
                             $  14,858,765   $ 2,609,056   $  8,032,842   $  3,407,554   $  49,646     $  759,667
                                              ==========    ===========    ===========    ========      =========
Add deferred loan costs             25,732
                              ------------
                                14,884,497
                              ============
</TABLE>

Fixed  rate  loans due after  one year  total  approximately  $8.5  million  and
adjustable  rate  loans due after one year  total  approximately  $3.0  million.
Adjustment rate loans which reprice after December 31, 1998 total  approximately
$117,000 at December 31, 1998.

     The Bank extends credit with terms,  rates and fees commensurate with those
in its market place for like types of credit.  Loan maturities may positively or
negatively impact the Bank's GAP position and, ultimately, its profitability.

     Securities   Portfolio.   The  Company's  investment  securities  portfolio
consists of high quality securities.  The Company utilized buying  opportunities
during  the  last  two  years  to  extend  the  average  life of its  investment
portfolio. The maturity distribution of the securities portfolio is reflected in
the  following  Table  of  Maturities  of  Investment  Securities.  The  average
yield/rate for the Company's  investment  portfolio decreased from 6.73% in 1997
to 6.37% at December 31, 1998.


<TABLE>
<CAPTION>

                                                        Southern Security Bank Corporation
                                                      Maturities of Investment Securities
                                                              December 31, 1998


                           One Year or Less   Through Five Years  Through Ten Years    Ater Ten Years             Total
                         -------------------  ------------------  ------------------   ----------------  -----------------------
                                   Weighted           Weighted            Weighted             Weighted                 Weighted
                          Carrying  Average  Carrying  Average  Carrying  Average    Carrying  Average   Carrying       Average 
                          Value     Yield    Value     Yield      Value    Yield      Value     Yield     Value          Yield

                                                                (Dollars in Thousands)
<S>                       <C>         <C>   <C>        <C>       <C>        <C>   <C>             <C>     <C>          <C>
U.S. Treasury Securities
   Held to maturity       $     --    -- %  $248,280    6.51 %    $  --      --%   $      --         --%   $  248,280     6.51%
   Available for Sale     $     --    --          --      --         --      --           --         --            --       --

Mortgage-backed securities:
   Held to maturity             --    --     102,603    7.36         --      --           --         --       102,603     7.36
   Available for Sale           --    --          --      --         --      --      277,970       5.67       277,970     5.87

U.S. government corporations
and agencies:
   Held to Maturity             --    --          --      --         --      --           --         --            --      --
   Available for sale           --    --          --      --         --      --           --         --            --      --

      Total                    $--    --%   $350,883    6.76%       $--      -- %   $277,970       5.87%     $628,853    6.37%
                              ===== =====   ========    =====      =====   =====    ========      =====      ========    =====
</TABLE>

     Asset Quality.  The Bank's  management  seeks to maintain a high quality of
assets  through  conservative  underwriting  and sound  lending  practices.  The
earning asset portfolio (exclusive of investment  securities) is generally split
into  five  categories,  four of which  are  types of  loans,  and the  fifth is
accounts receivable purchase financing. Loan concentrations are defined as loans
outstanding  that are segregated into similar  collateral types and/or nature of
cash-flow income  generation,  which may cause a correspondingly  similar impact
with a particular  economic or other condition.  The Company routinely  monitors
these  concentrations  in order to make  necessary  adjustments  in its  lending
practices that most clearly  reflect the economic  conditions  and trends,  loan
ratios, loan covenants, asset valuations, and industry trends.

     Displayed  below are the  percentages  of the total  loan  portfolio  as of
December 31, 1998 and December 31, 1997:

                                                     1998     1997
                                                     ----     ----
  Commercial Loans to businesses:                    15%       22%
  Consumer & Installment Loans:                      41%       26%
  Residential Mortgage Loans:                        19%       25%
  Commercial Mortgage Loans:                         21%       23%
  Accounts Receivable:                                4%        4%

     In an effort to  maintain  the  quality of the loan  portfolio,  management
seeks to minimize  higher risk loans.  In view of the relative  significance  of
real estate  related  loans, a downturn in the value of the value of real estate
property could have an adverse impact on the Company's profitability. As part of
the Bank's loan policy and loan management  strategy,  the Bank typically limits
its  loan-to-value  ratio to a maximum of 50%-80%  depending on the type of real
property secured thereby.  The use of qualified third party certified appraisers
for  property  valuations,   and  property  inspections  by  knowledgeable  bank
officials helps mitigate real property loan risks.

     The Directors  Loan and Discount  Committee for the Bank  concentrates  its
efforts and resources and that of its senior  management and lending officers on
loan review and underwriting procedures and standards. Internal controls include
ongoing reviews of loans made to monitor documentation and e nsure the existence
and valuations of collateral,  early detection of loan degradation, and regional
economic conditions.

     Classification  of Assets.  Generally,  interest  on loans is  accrued  and
credited to income based on the outstanding balance of the contract  obligations
of each  loan/receivable  contract.  It is the Bank's policy to discontinue  the
accrual of interest  income and classify  loan(s)/asset(s)  as non-accrual  when
principal  or  interest  is  past-due  90 days or more  and/or  the  loan is not
properly/adequately  collateralized,  or if in the  belief  of  Bank  management
principal  and/or interest is not likely to be paid accordance with the terms of
the  obligation/documentation.  As of December 31, 1998 delinquent loans greater
than  30 and  less  than  90  days  (excluding  Government  Guaranteed)  totaled
$410,435;  Classified  loans  totaled  $517,445;  and Other  Real  Estate  Owned
(consisting of 5 condominium units and one unimproved lot) totaled $414,297. The
following  table sets forth  information  with respect to  nonperforming  assets
identified by the Bank,  including  nonaccrual loans,  loans past due 90 days or
more and still accruing and real estate owned at December 31, 1998 and 1997.

The following table sets forth information with respect to nonperforming  assets
identified by the Bank,  including  nonaccrual loans,  loans past due 90 days or
more and still accruing and real estate owned at December 31, 1998 and 1997.


                                             1998            1997
                                             ----            ----
                                             (Dollars in Thousands)
Nonaccrual loans
   Real estate                                --              15
   Commercial                                 50              --
Accrual loans - Past Due 90 days or more
   Real estate                               109             513
   Installment                                54              22
Restructured loans                            --              --
Real estate owned                            414             406
                                             ---             ---
   Total nonperforming assets                627              956
                                            ====             ====


*        -Consists  of  two  purchased  loan  participations   which  were  100%
         guaranteed by United States government agencies.

     Total  nonperforming  assets  have  increased  in 1998 from 1997 by $43,000
(10%).  Nonaccrual  loans  increased  by $35,000  (333%),  and real estate owned
increased  by $8,000  (2%).  Accrual  loans over 90 days  decreased  by $372,000
(70%).

     Allowances for Loan Losses,  the reserve, is established though a provision
for loan losses charged to operations. Loans are charged against the allowance 
for loan losses when management believes that the collection of the principal is
unlikely.  Subsequent recoveries are added to the allowance. The allowance is an
amount that  management  believes  will be adequate  to absorb  possible  losses
inherent  in  existing  loans  and loan  commitments,  based on  evaluations  of
collection and prior loss experience.  Management  evaluates the adequacy of the
allowance  monthly,  or more frequently as necessary.  The evaluation takes into
consideration  such  factors  as  changes  in the  nature and volume of the loan
portfolio,  overall portfolio quality, loan concentrations,  specific identified
problem  assets/loans,  and current  anticipated  economic  conditions  that may
effect the borrower's  ability to fulfill its contractual  commitment(s).  As of
December 31, 1998,  the Bank has set a conservative  loan loss  percentage at no
less than 1.44% of total loan portfolio balance.

     For comparative  purposes,  in  demonstration of Bank's clean-up efforts
since the change of control date, in the following  table the right most column
shows year end, December 31, 1992 prior to ownership and control by the Company,
and the left column shows the Bank as of December 31, 1998:

                                                     12/31/98        12/31/92

         Ending Balance Loan Loss Reserve           $272,000        $619,000
         Loan Portfolio Charge-Offs                   65,000         593,000
         Classified Loans                            517,000       3,004,000
         Other Real Estate Owned                     414,000         967,000
                                                     -----------------------
         Total Classified Assets                     931,000       3,971,000
         Percent Classified to Total Loans               6.3%           48.5%


The following  table sets forth the composition of the allowance for loan losses
by type of loan at the dates  indicated.  The allowance is allocated to specific
categories of loans for  statistical  purposes  only, and may be applied to loan
losses incurred in any loan category.


<TABLE>
<CAPTION>

                                                     1998                        1997
                                                     ----                        ----

                                                          Amount of                  Amount of
                                          Amount of       Loans to      Amount of    Loans to 
                                          Allowance      Gross Loans    Allowance   Gross Loans
                                          ---------      -----------    ---------   -----------

<S>                                  <C>                   <C>      <C>               <C>

Commercial                           $         37,450       19.22%  $     72,852       22.21%
Commercial Real Estate                         65,905       20.64%        64,012       19.52%
Residential Real Estate                        48,889       19.23%        77,647       21.39%
Consumer                                      118,527       40.45%        73,338       21.96%
Other                                             728        0.47%           953        0.29%
                                     ----------------   ----------  ------------   ----------
Total allowance for loan losses      $        271,499      100.00%  $    288,802       85.36%
                                     ================   ==========  ============   ==========

</TABLE>

     Liabilities  and  Stockholders'  Equity:  The Liability side of the balance
sheet has great  significance to the profitable  operation of a banking company.
Deposits  are the  major  source  of the  Bank's  funds  for  lending  and other
investment activities. Deposits are attracted principally from within the Bank's
primary  market  area  through  the  offering  of a  broad  variety  of  deposit
instruments including checking accounts, money market accounts,  regular savings
accounts and certificates of deposits (known as CD's).  Maturity terms,  service
fees and withdrawal  penalties are  established by the Bank on a periodic basis.
The  determination  of rates and terms is  predicated on funds  acquisition  and
liquidity  requirements,  rates paid by  competitors,  growth  goals and Federal
regulations.

     Federal Regulations promulgated by the FDIC pursuant to the Federal Deposit
Insurance  Company  Improvement Act of 1991, place limitations on the ability of
certain insured depository  institutions to accept,  renew, or rollover deposits
by offering rates of interest which are significantly higher than the prevailing
rates of interest on deposits offered by other insured  depository  institutions
having the same type of Charter in the institution's market area.

Impact of Inflation and Changing Prices

     The financial  statements and accompanying  footnotes have been prepared in
accordance with generally accepted accounting principles ("GAAP"), which require
the  measurement  of  financial  position  and  operating  results  in  terms of
historical dollars without  consideration for changes in the relative purchasing
power of money over time due to  inflation.  The assets and  liabilities  of the
Company are primarily  monetary in nature and changes in market  interest  rates
have a greater impact on its performance than do the effects of inflation.

     The following table sets forth the Deposit base of the Bank at the close of
business on December  31, 1998 and  December  31,  1997.  The Company  views the
deposit  base  as a good  core  deposit  base  that  is  stable  and  improving.
Non-interest  bearing  transaction  accounts are on a demand basis, and as such,
balances continually fluctuate.

<TABLE>
<CAPTION>

                                              Southern Security Bank
                                                 Deposit Accounts
                                                 December 31, 1998


                                                    1998                                    1997
                                                    ----                                    ----

                                                 Weighted                                 Weighted
                                                  Average      % of                        Average      % of
                                       Amount      Rate       Deposits       Amount         Rate      Deposits
                                       ------      ----       --------       ------         ----      --------
<S>                                  <C>           <C>        <C>          <C>             <C>        <C>

Noninterest bearing accounts:        5,138,392     0.00%      25.38%       3,974,999       0.00%      25.36%
Interest bearing accounts:
   NOW accounts                      1,601,587     1.91%       7.91%       1,602,893       1.91%      10.23%
   Money market deposit accounts     2,745,687     2.25%      13.56%       3,690,050       2.63%      23.54%
   Savings accounts                    725,038     2.05%       3.58%         431,153       2.10%       2.75%
Time deposits                       10,033,342     5.52%      49.56%       5,976,217       5.72%      38.13%
                                    ----------                             ---------
   Total deposits                   20,244,046                            15,675,312
                                    ==========                            ==========

</TABLE>

The following table sets forth  information with respect to the return on assets
and the return on equity for the years ending  December  31, 1998 and 1997,  and
the ratio of average equity to average assets for those years.

                                              1998         1997
                                           (Dollars in Thousands)
                                           ----------------------

Net loss                                   $ (584,021)  $  (1,167)
Average total assets                           24,712      17,966
Average total equity                              889         614
Return on average assets                        (2.47%)      (6.5)%
Return on average equity                       (65.7%)     (190.1)%
Equity to assets ratio                           3.6%         3.4%

There were no dividends declared in the years ended December 31, 1998 and 1997.

     The  Company's  net loss  decreased  by  $582,633  (50%) in 1998 due to the
settlement of compensation due in 1997 to executive  officers under the terms of
their employment agreements and a substantial provision for loan losses in 1997.

     Equity and  Capital  Resources.  The Bank is subject to various  regulatory
capital  requirements  administered  by Federal and State  banking  authorities.
Failure to meet minimum capital  requirements can initiate certain mandatory and
possible additional discretionary actions by regulators that, if not undertaken,
could have a direct  material  effect on the  Bank's  financial  statements  and
operation.  Under capital adequacy  guidelines and the regulatory  framework for
prompt corrective  action,  the Bank must meet specific capital  guidelines that
involve  quantitative  measures of the Bank's assets,  liabilities,  and certain
off-balance sheet items as calculated under regulatory accounting policies.

     The  Bank's  capital  accounts  and  classifications  are also  subject  to
qualitative judgements by the regulators about components,  risk weighting,  and
other factors.  Quantitative and qualitative  measures established by regulation
to ensure  capital  adequacy  require the Bank to maintain  minimum  amounts and
ratios, set forth in the table below, of total and Tier-1 capital, as defined by
regulation,  to risk weighted  assets,  and of Tier-1 capital to average assets.
Management believes that as of December 31, 1998 it has met the capital adequacy
requirements as defined by these definitions.

     However,  the Bank in its written  agreement with the regulators had agreed
to  maintain a 6.25%  ratio of capital  to total  assets,  which was at 6.25% at
December 31, 1998. The Bank has agreed to increase this level to 7.00% beginning
January 1, 1999.  The second column below with the  indication  "Adequately"  is
that regulatory  definition for an Adequately  Capitalized banking  institution.
The right column below with the indication "Well" is that regulatory  definition
for a Well Capitalized banking institution.


Regulator Definition for each Capital Tier Category     SSB  Adequately   Well

Tier-2  Capital = Tier-2  Cap/Risk Weighted Assets     10.0%    8.00%     10.0%
Tier-1  Risk = Tier-1     Cap/Risk Weighted Assets     10.53%   4.00%      6.0%
Tier-1  Leverage = Tier-1 Cap/Avg Quarterly Assets      6.25%   4.00%      5.0%

Effect of Government Policy, Future Legislation and Changing Financial Markets

     One  of the  primary  determinants  of the  Company's  future  success  and
profitability  is the  interest  rate  differentials  obtained by its  affiliate
banking institutions.  The Bank's earning capacity will be largely controlled by
the  difference  between  the  interest  rate  paid on its  deposits  and  other
borrowing and the interest  rates  received on loans to customers and securities
held in its  investment  portfolio.  The value and  yields of its assets and the
rate paid on its  liabilities  are sensitive to changes in  prevailing  rates of
interest.  Consequently,  the  earnings  and  growth  of  the  Company  will  be
influenced by general economic  conditions,  the monetary and fiscal policies of
the federal  government  and policies of  regulatory  agencies  which  implement
national  monetary  policy.  The  nature  and  impact of any  future  changes in
monetary policies cannot be predicted.  The entire regulatory  environment which
controls the banking  industry in the United  States is  undergoing  significant
change,  both as to the banking industry itself and the permissible  competition
between  banks  and  non-banking   financial   institutions.   There  have  been
significant  regulatory  changes in the areas of bank mergers and  acquisitions,
the products and services  offered by banks and the  non-banking  activities  in
which bank holding  companies  may engage.  Partly as a result of such  changes,
banks are now actively competing with other types of depository institutions and
with  non-bank  financial  institutions  such as money market  funds,  brokerage
firms, insurance companies and other financial services organizations. It is not
possible at this time to assess what impact these changes will  ultimately  have
on the Company and its operations.  Certain legislative and regulatory proposals
that could affect the Company are pending,  or may be introduced,  in the United
States  Congress,   the  Florida  legislature  and  various  other  governmental
agencies.  These  proposals  could further alter the  structure,  regulation and
competitive  relationship of financial  institutions and may subject the Company
to increased regulation, disclosure and reporting requirements. In addition, the
various banking regulatory  agencies frequently propose rules and regulations to
implement  and enforce  already  existing  legislation.  It cannot be  predicted
whether or in what form any future legislation or regulations will be enacted or
to the extent to which the  business  of the  Company  will be  affected by such
matters.

Year 2000 Issue

     The  Company is aware that many  existing  computer  programs  use only two
digits to identify a year in the date field.  These  programs  were designed and
developed without  considering the impact of the upcoming change of the century.
If not  corrected,  many computer  applications  could fail or create  erroneous
results by or at Year 2000. This is commonly  referred to as a "Year 2000 Issue"
and it affects virtually all companies and organizations.

     The Company is subject to various  regulations  and oversight by regulatory
authorities,  including the Federal Reserve Bank. These regulatory agencies have
coordinated  various regulatory  examinations  focusing on the Year 2000 issues,
and  report  their  findings  to the  Company's  management  and  the  Board  of
Directors.

     Management of the Company is committed to ensuring that the Company's daily
operations suffer little impact as a result of the date change at the end of the
century. The Company has commenced a thorough review of the potential impacts of
the Year 2000  issue on its  operations  and  financial  condition  based on the
Federal  Financial  Institutions  Examination  Council's  (FFIEC),   Interagency
Guidelines.  The  guidelines  identify a process  in which Year 2000  issues are
addressed,   such   as   awareness,   assessment,   remediation,   testing   and
implementation.

     The Company has identified  key areas for which  management is focusing its
efforts.  These areas  include data center,  desktop  environment  and networks,
financial applications,  facilities, legal, insurance, and outside services. For
each of these areas  identified,  the Company is employing a process  which will
compile  inventories of all identified areas which could be affected by the year
2000,  including  information  technology  ("IT")  systems  and  non-information
technology  systems such as phone  systems,  fax machines and alarm  systems.  A
testing schedule is defined and the identified  systems are tested,  and results
evaluated.  A remedy  process is then defined,  and  implemented  and testing is
performed again. The process is repeated until repairs are complete.  Management
reports  progress on its  compliance  program to the Board of Directors at least
quarterly.

     All identified critical applications have been tested. Non-critical testing
validation  and repair is  scheduled to be performed  and  completed  during the
second quarter of 1999.

     The Company has  relationships  with third parties including its borrowers,
which are also subject to the Year 2000 uncertainties. Management has identified
relationships which are considered material, and would have an adverse effect on
the Bank and the  Company if such third  parties  were not Year 2000  compliant.
Management has solicited Year 2000 certifications from significant  vendors, and
also  completed  its own Year 2000 due  diligence.  No  borrower  or third party
vendor has given the  Company a response  that  indicates  that they will not be
Year 2000 compliant.  It is anticipated  that all identified third party vendors
will be  compliant,  however,  no  assurance  can be given with  regard to their
compliance  with Year 2000.  Also, no assurances can be given that a third party
vendor or borrower will not have a material  effect on the Company or Bank,  due
to their non-compliance with the Year 2000 issue.

     While no assurance can be given to actual system  operations  upon the turn
of  the  century,  based  upon  information  currently  known  to it,  and  upon
consideration  of its testing efforts to date,  management  believes that in the
worst case  scenario,  the Company  will suffer  only a slight  interruption  of
business, as a result of minor application failures of its IT and non-IT systems
and  software  as a  result  of the  Year  2000.  However,  if  the  appropriate
modifications  are not made, or are not  completed on a timely  basis,  the Year
2000 issue could have a material  impact on the  operations  of the Bank and the
Company.

Costs of Year 2000

     The Company expects to incur minimal internal staff costs and other minimal
costs in the  execution  of its  implementation  plan for Year 2000  compliance.
These costs may include new  equipment  and software  purchases,  in addition to
testing applications prior to the Year 2000.

Contingency Plans

     The Company has  prepared  or is in the  process of  preparing  contingency
plans for each major area of business  identified  above. The plans will utilize
in  part   alternative   procedures,   other  third  party  vendors  and  manual
intervention,  to compensate for the loss of certain computer  system.  All such
plans will be completed by the second quarter 1999.

Item 7.  Financial Statements

SOUTHERN SECURITY BANK CORPORATION
AND SUBSIDIARY
Consolidated Financial Report
December 31, 1998

Independent Auditor's Report


To the Board of Directors and Stockholders
Southern Security Bank Corporation and Subsidiary

Hollywood, Florida

We have  audited  the  accompanying  consolidated  balance  sheets  of  Southern
Security Bank  Corporation  and subsidiary as of December 31, 1998 and 1997, and
the related  consolidated  statements of operations,  stockholders'  equity, and
cash  flows  for the  years  then  ended.  These  financial  statements  are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material  respects,  the financial  position of Southern Security
Bank  Corporation  and  subsidiary  as of December  31,  1998 and 1997,  and the
results  of their  operations  and their  cash flows for the years then ended in
conformity with generally accepted accounting principles.



Fort Lauderdale, Florida
January 22, 1999, except for the second
         paragraph to Note 10 as to which
         the date is February 18, 1999.

<PAGE>

SOUTHERN SECURITY BANK CORPORATION AND SUBSIDIARY

Consolidated Balance Sheets
December 31, 1998 and 1997


ASSETS                                          1998             1997
-------------------------------------------------------------------------
Cash and due from banks (Note 3)       $      1,012,269  $      1,107,669
Federal funds sold                            4,845,000
                                      -----------------------------------
Total cash and cash equivalents               5,857,269         1,107,669
Securities held to maturity (Note 4)            350,883         1,827,494
Securities available for sale (Note 4)          277,970           380,094
Federal Reserve Bank stock, at cost              84,300            63,100
Loans, net (Notes 5, 13 and 17)              14,612,998        12,463,278
Premises and equipment (Note 6)                 344,592           399,799
Other real estate owned                         414,298           406,298
Accrued interest receivable                     136,854           125,870
Other assets                                    181,677           158,360
                                      -----------------------------------
                                       $     22,260,841  $     16,931,962
                                      ===================================


See Notes to Consolidated Financial Statements.


<PAGE>
<TABLE>
<CAPTION>

LIABILITIES AND STOCKHOLDERS' EQUITY                                        1998                     1997
------------------------------------------------------------------------------------------------------------
<S>                                                            <C>                        <C>

Liabilities:

Noninterest-bearing deposits                                   $          5,138,392   $            3,974,999
Interest-bearing deposits (Note 7)                                       15,105,654               11,700,313
                                                               ---------------------------------------------
Total deposits                                                           20,244,046               15,675,312
Federal funds purchased                                                                              206,000
Notes payable (Note 9)                                                      100,000                  100,000
Other liabilities                                                           661,184                  452,550
                                                               ---------------------------------------------
Total liabilities                                                        21,005,230               16,433,862
                                                               ---------------------------------------------
Commitments and contingencies (Notes 14 and 17)
Minority interest in subsidiary                                              39,491                   25,270
                                                               ---------------------------------------------
Stockholders' equity (Notes 2, 10, 11, and 15):
Series A voting convertible preferred stock, $.01 par
value; $1.50 liquidation value; 1,200,000 shares
authorized; none issued and outstanding

Class A voting common stock, $.01 par value; 30,000,000
1,644,988 shares authorized; issued and outstanding 1998
4,567,641 shares; 1997 4,299,673 shares                                      45,676                   42,997

Class B nonvoting convertible common stock,
$.01 par value; 5,000,000 shares authorized;
none issued and outstanding

Capital surplus                                                           5,537,269                4,215,371

Accumulated deficit                                                      (4,370,251)              (3,786,230)
                                                               ---------------------------------------------
                                                                          1,212,694                  472,138
Accumulated other comprehensive income                                        3,426                      692
                                                               ---------------------------------------------
       Total stockholders' equity                                         1,216,120                  472,830
                                                               ---------------------------------------------
                                                               $         22,260,841        $      16,931,962
                                                               =============================================
</TABLE>

<PAGE>

SOUTHERN SECURITY BANK CORPORATION AND SUBSIDIARY

<TABLE>
<CAPTION>

Consolidated Statements of Operations     Years Ended December 31, 1998 and 1997

                                                                    1998               1997
----------------------------------------------------------------------------------------------
<S>                                                         <C>                 <C>
Interest income:                                         

Interest and fees on loans                                  $    1,472,713   $       1,113,375
Interest and dividends on securities                               120,146             237,029
Interest on federal funds sold                                     273,926              86,653
                                                          ------------------------------------
                                                                 1,866,785           1,437,057
Interest expense                                                   889,292             558,451
                                                          ------------------------------------
Net interest income                                                977,493             878,606
Provision for loan losses (Note 5)                                  40,000             130,000
                                                          ------------------------------------
Net interest income after provision for loan losses                937,493             748,606
                                                          ------------------------------------
Other income:

Service charges on deposit accounts                                136,298              98,959
Securities gains (losses), net (Note 4)                                543                 753
    Other                                                           39,635              42,516
                                                          ------------------------------------
Total other income                                                 176,476             142,228
                                                          ------------------------------------
Other expenses:
Salaries and employee benefits                                     743,373           1,227,901
Occupancy and equipment                                            321,349             338,750
Data and item processing                                            72,505              78,926
Professional fees                                                  140,383              86,850
Insurance                                                           91,886              87,861
Other                                                              330,181             250,641
                                                          ------------------------------------
Total other expenses                                             1,699,677           2,070,929
                                                          ------------------------------------
Net loss before minority interest in
net loss of subsidiary                                            (585,708)         (1,180,095)
Minority interest in net loss of subsidiary                          1,687              13,441
                                                          ------------------
Net loss                                                  $       (584,021)   $     (1,166,654)
                                                          ====================================
Basic and diluted earnings (loss) per share (Note 12)     $          (0.13)              (0.31)           

</TABLE>

See Notes to Consolidated Financial Statements.

<PAGE>
SOUTHERN SECURITY BANK CORPORATION AND SUBSIDIARY

Consolidated Statements of Stockholders' Equity
Years Ended December 31, 1998 and 1997

<TABLE>
<CAPTION>
                                                                                                                   Accumulated
                                                                                                                      Other 
                                  Comprehensive    Preferred Stock      Common Stock       Paid-In    Accumulated Comprehensive
                                     Income       Shares     Amount   Shares    Amount     Capital     (Deficit)     Income    Total
-----------------------------------------------------------------------------------------------------------------------------------
<S>     <C>    <C>    <C>    <C>    <C>    <C>

Balance, December 31, 1996                      596,622  $  5,966  9,856,664  $ 98,567  $3,259,822   $(2,619,576)$ (23,611)$721,168 
 Comprehensive income (loss):                                             -         -           -
   Net loss                       $ (1,166,654)       -         -         -         -           -    (1,166,654)        -(1,166,654)
   Other Comprehensive income,               
     net of tax:
   Change in unrealized gain
    (loss) on securities available
    for sale (Note 4)                   24,303         -        -         -         -           -             -    24,303     24,303
                                        ------
  Comprehensive income (loss)     $ (1,142,351)
                                     =========
  Issuance of stock in
    private placements                                 -        -    884,859    8,849      522,067            -         -    530,916
  Issuance of stock in 
    settlement of certain
    liabilities (Notes 9 and 11)                       -        -    595,120    5,951      351,121            -         -    357,072
  Conversion of preferred stock
    (Note 10)                                   (596,622)  (5,966)   596,622     5,966           -            -         -          -
  Preferred stock dividends                            -        -    197,178     1,972      (1,972)           -         -          -
  Reverse acquisition (Note 2)                         -        - (7,830,770)  (78,308)     84,333            -         -      6,025
                                                 -------    -----  ---------    ------      ------           --        --      -----
Balance, December 31, 1997                             -        -  4,299,673    42,997   4,215,371   (3,786,230)      692    472,830
  Comprehensive income (loss):
   Net loss                       $  (584,021)         -        -          -         -           -     (584,021)        -  (584,021)
   Other comprehensive income,
    net of tax:
   Change in unrealized gain
    (loss) on securities available
    for sale (Note 4)                   2,734          -        -          -         -           -            -      2,734     2,734
  Comprehensive income (loss)     $  (581,287)
                                      =======
  Issuance of stock                                    -        -    267,968     2,679    1,321,898           -          - 1,324,577

Balance December 31, 1998                              -        -  4,567,641   $45,676   5,537,269  $(4,370,251)   $ 3,426 1,216,120
                                                         ===========================================================================
</TABLE>


See Notes to Consolidated Financial Statements
<PAGE>

SOUTHERN SECURITY BANK CORPORATION AND SUBSIDIARY
<TABLE>
<CAPTION>

CONSOLIDATED Statements of Cash Flows
Years Ended December 31, 1998 and 1997

                                                                                    1998               1997
--------------------------------------------------------------------------------------------------------------------
<S>                                                                     <C>                    <C>

Cash Flows From Operating Activities
Net loss                                                                 $       (584,021)   $     (1,166,654)
Adjustments to reconcile net loss to net cash used in
operating activities:
Net accretion on securities                                                       (22,133)             (7,452)
Provision for loan losses                                                          40,000             130,000
Provision for losses on other real estate owned                                     7,000
Depreciation and amortization                                                      79,485              76,406
Securities (gains) losses, net                                                       (543)               (753)
Minority interest in net loss of subsidiary                                        (1,687)            (13,441)
Issuance of common stock as compensation
for services                                                                       89,325             207,072
(Increase) decrease in:
Accrued interest receivable                                                       (10,984)            (19,155)
Other assets                                                                       (7,471)            (55,439)
Increase in other liabilities                                                     208,634             146,745
                                                                       ---------------------------------------
Net cash used in operating activities                                            (202,395)           (702,671)
                                                                       ---------------------------------------
Cash Flows From Investing Activities
Net cash flows from securities (Note 18)                                        1,583,006           1,308,642
Loan originations and principal collections on loans                            3,519,073           1,335,699
Purchases of loans                                                              5,723,793          (2,514,204)
Purchase of premises and equipment                                                (24,278)            (45,930)
Proceeds from sale of other real estate owned                                                          83,506
                                                                       ---------------------------------------
Net cash provided by (used in) investing activities                              (645,992)            167,713
                                                                       ---------------------------------------
Cash Flows From Financing Activities
Net (decrease) in federal funds purchased
and securities sold under repurchase agreements                                 (206,000.           (544,000.
Net increase (decrease) in deposits                                             4,568,735         (2,580,891.
Proceeds from issuance of stock                                                 1,235,252             530,916
                                                                       ---------------------------------------
Net cash provided by (used in) financing activities                             5,597,987          (2,593,975)
                                                                       ---------------------------------------
Net increase (decrease) in cash
and cash equivalents                                                            4,749,600          (3,128,933)
Cash and cash equivalents:
Beginning                                                                       1,107,669           4,236,602
                                                                       ---------------------------------------
Ending                                                                   $      5,857,269   $       1,107,669
                                                                       =======================================

</TABLE>

See Notes to Consolidated Financial Statements.

<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1.   Summary of Significant Accounting Policies

Description of business:  Southern  Security Bank  Corporation  (the  "Company")
provides a full range of banking services to individual and corporate  customers
in Southeast Florida through its subsidiary bank.

Principles of consolidation:  The accompanying consolidated financial statements
include  the   accounts  of  Southern   Security   Bank   Corporation   and  its
majority-owned subsidiary,  Southern Security Bank (the "Bank"). All significant
intercompany balances and transactions have been eliminated in consolidation.

Basis of  presentation:  The  financial  statements  of Southern  Security  Bank
Corporation  and its subsidiary  have been prepared in conformity with generally
accepted  accounting  principles and conform to predominate  practice within the
banking  industry.  In  preparing  the  financial   statements,   the  Company's
management is required to make  estimates and  assumptions  which  significantly
affect  the  reported  amounts  of assets  and  liabilities  and  disclosure  of
contingent  assets and  liabilities at the date of the financial  statements and
the  reported  amounts of revenues  and expenses  during the  reporting  period.
Significant  estimates which are  particularly  susceptible to change in a short
period of time include the  determination  of the  allowance for loan losses and
the fair value of securities. Actual results could differ from those estimates.

Effective January 1, 1998, the Company adopted FASB Statement No. 130, which was
issued in June 1997.  Statement No. 130  establishes new rules for the reporting
and display of comprehensive income and its components, but has no effect on the
Company's net income or total stockholders'  equity.  Statement No. 130 requires
unrealized gains and losses on the Bank's available-for-sale  securities,  which
prior to adoption  were  reported  separately  in  stockholders'  equity,  to be
included in  comprehensive  income.  Prior year financial  statements  have been
reclassified to conform to the requirements of Statement No. 130.

Cash and cash flows: Cash and cash equivalents includes cash and due from banks,
and federal funds sold. For purposes of reporting cash flows,  loans,  deposits,
federal funds  purchased and  securities  sold under  repurchase  agreements are
reported net. The Bank maintains deposits with financial  institutions which are
in excess of federally-insured amounts.

Securities  held to maturity:  Debt  securities  for which the Bank has both the
positive  intent  and  ability to hold to  maturity  are  classified  as held to
maturity and reported at amortized cost.  Amortization of premiums and accretion
of discounts,  computed by the interest method over their contractual  lives, is
included in interest income.

Securities available for sale: Securities  classified as available-for-sale  are
those debt securities that the Bank intends to hold for an indefinite  period of
time,  but  not  necessarily  to  maturity.  Any  decision  to  sell a  security
classified as  available-for-sale  would be based on various factors,  including
significant  movements  in interest  rates,  changes in the  maturity mix of the
Bank's   assets   and   liabilities,   liquidity   needs,   regulatory   capital
considerations, and other similar factors.

Securities  available for sale are reported at fair value with unrealized  gains
or losses reported as a separate component of other comprehensive income, net of
the related  deferred tax effect.  The amortization of premiums and accretion of
discounts,  computed by the interest  method over the  contractual  lives of the
applicable securities are included in interest income. Realized gains or losses,
determined on the basis of the cost of specific securities sold, are included in
earnings.

Declines in the fair value of individual securities classified as either held to
maturity or available for sale below their amortized cost that are determined to
be other than temporary  result in  write-downs of the individual  securities to
their fair value with the resulting  write-downs included in current earnings as
realized losses.

Loans:  Loans  receivable that management has the intent and ability to hold for
the  foreseeable  future or until maturity or payoff are stated at the amount of
unpaid  principal,  plus  unamortized  premiums,  net loan  origination fees and
costs, and an allowance for loan losses.

Loan origination and commitment fees and certain direct loan  origination  costs
are being deferred and recognized  over the expected life of the related loan as
an adjustment of yield. The Bank is generally  amortizing these amounts over the
contractual  life  using the  interest  method.  Commitment  fees  based  upon a
percentage  of a  customer's  unused line of credit and fees  related to standby
letters of credit are recognized over the commitment period.

Interest on loans is  calculated  by using the simple  interest  method on daily
balances of the principal  amount  outstanding.  For impaired loans,  accrual of
interest is discontinued on a loan when management  believes,  after considering
collection efforts and other factors, that the borrower's financial condition is
such that  collection of interest is doubtful.  Interest income is recognized on
those loans only upon receipt. Accrual of interest is generally resumed when the
customer is current on all principal and interest payments.

A loan is impaired  when it is  probable  the Bank will be unable to collect all
contractual  principal and interest payments due in accordance with the terms of
the loan  agreement.  Impaired  loans are measured based on the present value of
expected future cash flows discounted at the loan's effective  interest rate or,
as a practical  expedient,  at the loan's  observable  market  price or the fair
value of the  collateral  if the loan is  collateral  dependent.  The  amount of
impairment, if any, and any subsequent changes are included in the allowance for
loan losses.

The allowance for loan losses is established through a provision for loan losses
charged to expense. Loans are charged against the allowance for loan losses when
management  believes  that  collectibility  of the  principal is  unlikely.  The
allowance  is an amount  that  management  believes  will be  adequate to absorb
estimated losses on existing loans, based on an evaluation of the collectibility
of  loans  and  prior  loss   experience.   This   evaluation  also  takes  into
consideration  such  factors  as  changes  in the  nature and volume of the loan
portfolio,  overall  portfolio  quality,  review of specific  problem loans, and
current economic conditions that may affect the borrower's ability to pay. While
management uses the best  information  available to make its evaluation,  future
adjustments to the allowance may be necessary if there are  significant  changes
in economic conditions.

Premises  and  equipment:  Premises  and  equipment  are  stated  at  cost  less
accumulated   depreciation.   Depreciation   is  computed   principally  by  the
straight-line method over the following estimated useful lives:


                                 Years
Leasehold Improvements           5 - 10
Furniture and Equipment          3 - 12


Other real estate owned:  Real estate  acquired  through  foreclosure or deed in
lieu of foreclosure represents specific assets to which the Company has acquired
legal title in satisfaction of indebtedness. Such real estate is recorded at the
property's  fair  value at the date of  foreclosure  (cost).  Initial  valuation
adjustments, if any, are charged against the allowance for loan losses. Property
is evaluated regularly to ensure the recorded amount is supported by its current
fair value and valuation  allowances to reduce the carrying amount to fair value
less estimated cost to dispose are recorded as necessary.  Revenues and expenses
related to holding and operating these properties are included in operations.

Income taxes: Deferred taxes are provided on a liability method whereby deferred
tax assets are recognized for deductible  temporary  differences,  and operating
loss or tax credit carryforwards and deferred tax liabilities are recognized for
taxable temporary differences. Temporary differences are the differences between
the reported amounts of assets and liabilities and their tax bases. Deferred tax
assets are reduced by a valuation  allowance when, in the opinion of management,
it is more likely than not that some  portion or all of the  deferred tax assets
will not be realized.  Deferred tax assets and  liabilities are adjusted for the
effects of changes in tax laws and rates on the date of enactment.

Off-balance-sheet  instruments: In the ordinary course of business, the Bank has
entered into  off-balance-sheet  financial instruments consisting of commitments
to extend credit and standby  letters of credit.  Management  assesses the risks
related to those instruments for potential losses on an ongoing basis.

Earnings per share:  Basic earnings  per-share  amounts are computed by dividing
net income  (the  numerator)  by the  weighted-average  number of common  shares
outstanding (the  denominator).  Diluted earnings  per-share  amounts assume the
conversion,  exercise or  issuance of all  potential  common  stock  instruments
unless the effect is to reduce the loss or increase  the income per common share
from continuing operations.

Fair value of financial instruments:  SFAS No. 107, Disclosures about Fair Value
of Financial  Instruments  requires  disclosure of fair value  information about
financial instruments, whether or not recognized in the balance sheet, for which
it is  practicable  to estimate that value.  In cases where quoted market prices
are not  available,  fair values are based on estimates  using  present value or
other valuation techniques.  Those techniques are significantly  affected by the
assumptions  used,  including  the  discount  rate and  estimates of future cash
flows. In that regard,  the derived fair value estimates cannot be substantiated
by comparison to independent  markets and, in many cases,  could not be realized
in  immediate  settlement  of the  instrument.  SFAS No.  107  excludes  certain
financial  instruments  and all  nonfinancial  assets and  liabilities  from its
disclosure requirements. Accordingly, the aggregate fair value amounts presented
do not represent the underlying value of the Bank.

The fair value estimates presented are based on pertinent  information available
to management as of December 31, 1998 and 1997. Although management is not aware
of any factors that would significantly  affect the estimated fair value amount,
such  amounts  have not been  comprehensively  revalued  for  purposes  of these
financial statements since these dates and therefore,  current estimates of fair
value may differ  significantly  from the amounts  presented in these  financial
statements.

Emerging accounting standards:  In June 1998, the Financial Accounting Standards
Board issued  Statement  No. 133,  Accounting  for  Derivative  Instruments  and
Hedging  Activities,  which is required to be adopted in years  beginning  after
June 15, 1999.  The Statement  permits early adoption as of the beginning of any
fiscal  quarter after its issuance.  The Bank expects to adopt the new Statement
effective  January 1, 2000. The Statement will require the Bank to recognize all
derivatives on the balance sheet at fair value.  Derivatives that are not hedges
must be adjusted to fair value  through  income.  If the  derivative is a hedge,
depending on the nature of the hedge,  changes in the fair value of  derivatives
will  either be offset  against  the change in fair value of the hedged  assets,
liabilities,  or firm  commitments  through  earnings  or  recognized  in  other
comprehensive  income  until the hedged  item is  recognized  in  earnings.  The
ineffective  portion of a derivative's  change in fair value will be immediately
recognized in earnings.  Management does not anticipate that the adoption of the
new Statement will have a significant effect on the Bank's earnings or financial
position.


Note 2.   Reverse Acquisition

On November 10, 1997, Southern Security Financial  Corporation ("SSFC") acquired
all of the  outstanding  stock of the  Company.  For  accounting  purposes,  the
acquisition  has been  treated  as a  reorganization  of the  Company,  with the
Company  as the  acquirer  (reverse  acquisition).  The  classes  and  terms  of
authorized  stock  have  remained  substantially  the  same as a  result  of the
acquisition.

SSFC was a shell  corporation  registered  under Section 12(g) of the Securities
Exchange  Act of 1934  and  incorporated  in the  state  of  Delaware.  Prior to
November 10, 1997,  SSFC had no business  operations  or  significant  assets or
liabilities.  As a result of the  reverse  acquisition,  the  602,500  shares of
common  stock of SSFC  outstanding  immediately  prior to the  transaction  were
converted  into 256,088  shares of common stock of SSFC and 4,043,585  shares of
common stock of SSFC were issued to the  stockholders of the Company in exchange
for all of their  outstanding  stock to effect a 1:3 stock split.  Subsequent to
the  reverse  acquisition,  SSFC  changed  its name to  Southern  Security  Bank
Corporation.

Note 3.   Restrictions on Cash and Due From Banks

The Bank is required by the Federal Reserve Bank to maintain reserve balances in
cash or on deposit, based on a percentage of deposits. Required reserve balances
were completely satisfied by cash on hand at December 31, 1998 and 1997.

Note 4.   Investment Securities

Securities  held to maturity:  The amortized  cost and fair values of securities
held to maturity as of December 31, 1998 and 1997 are summarized as follows:

<TABLE>
<CAPTION>
                                                                      1998
                                           ------------------------------------------------------
                                                               Gross       Gross
                                                Amortized   Unrealized   Unrealized      Fair
                                                   Cost        Gains       Losses       Values
                                           ------------------------------------------------------
<S>                                         <C>               <C>                   <C>

U. S. Treasury securities                    $   248,280   $   4,962   $             $    253,242
Mortgage-backed securities                       102,603       3,188                      105,791
                                           ------------------------------------------------------
                                             $   350,883   $   8,150   $             $    359,033
                                           ======================================================

</TABLE>
<TABLE>
<CAPTION>



                                                                  1997
                                   ---------------------------------------------------------
                                                           Gross         Gross
                                         Amortized       Unrealized    Unrealized     Fair
                                           Cost            Gains        Losses       Values
                                   ---------------------------------------------------------
<S>                                  <C>                 <C>                  <C>       <C> 
U. S. Treasury securities            $      246,867   $      4,148      $         $  251,015
U. S. Government corporations
     and agencies                           899,417            331                   899,748
Mortgage-backed securities                  681,210         11,224                   692,434
                                     -------------------------------------------------------
                                     $    1,827,494   $     15,703      $        $ 1,843,197
                                     =======================================================
</TABLE>

The amortized  cost and fair values of  securities  held to maturity at December
31, 1998, by contractual maturity, are shown below.


                                         
                                                 Amortized           Fair
                                                   Cost             Values
                                        ----------------------------------
Due after one year through five years      $      248,280   $      253,242
Mortgage-backed securities                        102,603          105,791
                                        ----------------------------------
                                           $      350,883   $      359,033
                                        ==================================

Gross gains of $543 were  recognized on securities held to maturity in 1998 as a
result  of the  disposition  of a  security  that was  called by the  maker.  No
securities held to maturity were called in 1997.

Securities held to maturity with a carrying amount of approximately $250,000 and
$1,300,000  at  December  31,  1998 and  1997,  respectively,  were  pledged  as
collateral on trustee deposits and repurchase agreements.

Securities  available for sale: The amortized cost and fair values of securities
available for sale as of December 31, 1998 and 1997 are summarized as follows.


                                                     1998
                                                     ----
                                              Gross        Gross
                                Amortized   Unrealized   Unrealized     Fair
                                  Cost        Gains        Losses      Values
                             ---------------------------------------------------
Mortgage-backed securities     $ 274,458   $   3,512   $               $ 277,970
                             ===================================================


                                                     1997
                                                     ----

                                              Gross       Gross
                              Amortized    Unrealized   Unrealized      Fair
                                Cost          Gains      Losses        Values
                             -------------------------------------------------
Mortgage-backed securities    $379,378    $  1,325     $   (609)     $ 380,094
                             =================================================

Contractual maturities of mortgage-backed  securities available for sale are not
disclosed  because  they are not due at a single  maturity  date.  In  addition,
mortgage-backed  securities may mature earlier than their contractual maturities
because of principal prepayments.

There  were no  sales of  securities  available  for  sale in 1998.  The sale of
securities  available for sale in 1997 resulted in gross  realized gains of $753
and no gross realized losses.

No securities available for sale were pledged at December 31, 1998 and 1997.

Changes in the  unrealized  gain (loss) on securities  available for sale are as
follows:

<TABLE>
<CAPTION>

                                                                             Year Ended December 31,
                                                                         -----------------------------
                                                                                 1998          1997
                                                                         -----------------------------
<S>                                                                         <C>             <C> 
Unrealized holding gains (losses) arising during the period                 $     2,795    $   14,125
Amortization of unrealized loss on security transferred
to held to maturity                                                                            11,826
Less reclassification adjustment for gains (losses) realized
in net income                                                                                    (753)
                                                                         -----------------------------
Net unrealized gains (losses), before tax (expense) benefit                       2,795        25,198
Tax (expense) benefit
                                                                         -----------------------------
Other comprehensive income before minority interest                               2,795        25,198
Minority interest in other comprehensive income of subsidiary                       (61)         (895)
                                                                         -----------------------------
Other comprehensive income                                                  $     2,734    $   24,303
                                                                         =============================
</TABLE>

<PAGE>

Note 5.   Loans

The composition of net loans as of December 31, 1998 and 1997 is as follows:


                                                      1998         1997
                                                --------------------------
Commercial                                      $  2,855,186  $  3,300,273
Commercial real estate                             3,067,294     2,899,810
Residential real estate                            2,857,026     3,177,722
Consumer                                           6,009,996     3,263,059
Other                                                 69,263        43,193
                                                --------------------------
                                                  14,858,765    12,684,057
Allowance for loan losses                          (271,499.     (288,802.
Deferred loan fees and unamortized premiums, net      25,732        68,023
                                                --------------------------
Loans, net                                      $ 14,612,998  $ 12,463,278
                                                ==========================

Activity in the allowance for loan losses for the years ended  December 31, 1998
and 1997 was as follows:

                                                  1998           1997
                                         ------------------------------

Balance, beginning                       $     288,802  $      196,140
Amounts charged off:
Consumer loans                                 (65,097)        (13,620)
Commercial loans                                               (27,359)
Provision for loan losses                       40,000         130,000
Recoveries of amounts charged off
Consumer loans                                   7,794
Commercial loans                                                 3,641
                                         ------------------------------
Balance, ending                          $     271,499  $      288,802
                                         ==============================

The Bank's recorded  investment in impaired loans was approximately  $50,000 and
$15,000 at December  31, 1998 and 1997,  respectively.  The  specific  allowance
associated with impaired  loans,  and included in the allowance for loan losses,
at  December  31,  1998  and  1997,   was   approximately   $7,400  and  $7,500,
respectively.  The average recorded investment in impaired loans during 1998 and
1997 was $17,000 and $55,000,  respectively.  Interest income on impaired loans,
recognized for cash payments received in 1998 and 1997, was not significant.

<PAGE>

Note 6.   Premises and Equipment

The  major  classes  of  premises  and  equipment  and  the  total   accumulated
depreciation as of December 31, 1998 and 1997 are as follows:


                                                     1998         1997
                                              --------------------------
Leasehold improvements                         $   712,022  $   705,408
Furniture, fixtures, and equipment                 552,803      534,974
                                              --------------------------
                                                 1,264,825    1,240,382
Less accumulated depreciation and amortization     920,233      840,583
                                              --------------------------
                                               $   344,592  $   399,799
                                              ==========================

Note 7.   Deposits

The composition of interest-bearing deposits at December 31, 1998 and 1997 is as
follows:


                                                    1998         1997
                                            ----------------------------
Now accounts                                $    1,601,587  $  1,602,893
 money market accounts                           2,745,687     3,690,050
Savings accounts                                   725,038       431,153
Certificates of deposit less than $100,000       6,749,358     4,276,204
Certificates of deposit of $100,000 or more      3,283,984     1,700,013
                                            -----------------------------
Total                                       $   15,105,654  $ 11,700,313
                                            =============================

At December 31, 1998, the scheduled maturities of certificates of deposit are as
follows:


                                      Less than         $100,000
                                     $100,000          and over         Total
                                 -----------------------------------------------
Three months or less              $  1,914,932    $  1,136,068     $   3,051,000
Over three through six months        2,180,259         826,720         3,006,979
Over six through twelve months       1,128,500       1,021,168         2,149,668
Over one through two years           1,213,999         300,028         1,514,027
Over two through three years           145,000                           145,000
Over three through four years          107,000                           107,000
Over four through five years            59,668                            59,668
                                 -----------------------------------------------
                                  $  6,749,358    $  3,283,984     $  10,033,342
                                 ===============================================

<PAGE>

Note 8.           Income Taxes

The net  cumulative  tax  effects of the  primary  temporary  differences  as of
December 31, 1998 and 1997 are shown in the following table:

<TABLE>
<CAPTION>
                                                            1998              1997
                                                 ----------------------------------
<S>                                              <C>                   <C>
Deferred tax assets:
Allowance for loan losses                        $         57,200   $        42,000
Other real estate owned                                    28,300            25,200
Premises and equipment                                     69,500            41,500
Net operating loss carryforward                         3,010,400         2,878,400
Accrual to cash conversion for income taxes               126,900            56,800
Other                                                                         2,300
                                                 -----------------------------------
Total deferred tax assets                               3,292,300         3,046,200
                                                 -----------------------------------
Deferred tax liabilities:
Deferred loan costs                                        (2,700)          (13,800)
                                                 -----------------------------------
Total deferred tax liabilities                             (2,700)          (13,800)
                                                 -----------------------------------
                                                        3,289,600         3,032,400
Valuation allowance for deferred tax assets            (3,289,600)       (3,032,400)
                                                 -----------------------------------
Net deferred tax assets                          $                  $
                                                 ===================================

</TABLE>

The Company has  recorded a valuation  allowance  on the  deferred tax assets to
reduce the total to an amount that  management  believes is more likely than not
to be  realized.  The  valuation  allowance  increased  by $257,200 and $359,900
during the years ended December 31, 1998 and 1997, respectively.  Realization of
deferred tax assets is dependent  upon  sufficient  future taxable income during
the period that deductible temporary  differences and carryforwards are expected
to be  available to reduce  taxable  income.  No income tax  benefits  have been
provided for the years ended December 31, 1998 and 1997,  because the results of
operations do not provide  evidence that the net operating  losses available for
carryforward will be utilized in the future.

The Company has available federal net operating loss carryforwards approximating
the following at December 31, 1998:



Expiring December 31,                 Amount
--------------------------------------------

2002                       $         143,000
2003                                 998,000
2004                                 500,000
2005                                 759,000
2006                                 526,000
2007                                 935,000
2008                                 905,000
2009                                 872,000
2010                                 898,000
2011                                 288,000
2012                                 844,000
2018                                 328,000
                               -------------
                               $   7,996,000
                               =============

Note 9. Notes Payable

The  Company  has  an  unsecured  note  payable  to a  trust  affiliated  with a
stockholder in the amount of $100,000 at December 31, 1998 and 1997. The note is
due June 30, 1999 and interest is payable quarterly at 8.0%. The due date of the
note is automatically  extended for additional periods of six months at each due
date  unless  the  lender  provides  30 days  notice of its intent not to permit
additional extensions.

Note 10. Capital Stock

During 1998, the Company sold 251,303 units under a private  offering at a price
of $5 per share.  Each unit sold  consisted of one share of Class A Common Stock
and a warrant to  purchase  one  additional  share of Class A Common  Stock at a
price of $7.50,  which expires  September 30, 2001. At December 31, 1998,  there
are 251,303 of such warrants outstanding.

Effective  February 8, 1999 through  March 25, 1999,  the Company has offered to
permit the  holders of the  warrants  discussed  above to  purchase 10 shares of
Class A Common Stock for $5.00 through the early exercise of such warrants.  The
Board of Directors has the authority to issue up to 5,000,000  preferred  shares
in one or more classes,  to fix the number of shares  constituting any class and
the stated  value  thereof,  and to fix the terms of any such  class,  including
dividend rights,  dividend rates,  conversion or exchange rights, voting rights,
rights and terms of redemption and the liquidation preference of such class. The
Certificate of Incorporation created Series A Preferred Stock and authorized the
issuance of 1,200,000 shares from the total authorized shares.

The  Series  A  Preferred   Stock  is   convertible   into  common  stock  on  a
share-for-share  basis upon the  occurrence  of certain  events.  Dividends  are
payable  quarterly,  when  declared by the Board of  Directors,  on the Series A
Preferred  Stock at an annual  rate of $.06 per  share.  Accumulated  but unpaid
dividends for any past quarterly  dividend periods will be cumulative and accrue
without  interest.  No dividends  may be declared or paid on common stock of the
Company and no common stock shall be redeemed  until all dividends in arrears on
the Series A Preferred  Stock have been paid.  In addition,  holders of Series A
Preferred Stock shall also receive a dividend any time a dividend is declared on
the Class A Common Stock generally on a share-for-share basis. No dividends have
been  declared  on the  Series A  Preferred  Stock  since the  inception  of the
Company.  All  shares  of  Series  A  Preferred  Stock  which  were  issued  and
outstanding on December 31, 1996 were converted into Class A Common Stock during
the year ended December 31, 1997 and  accumulated  dividends were settled by the
issuance  of Class A Common  Stock at a price of $1.80 per share  (after  giving
effect  to the 1 for 3 reverse  stock  split  executed  in  connection  with the
reverse merger discussed in Note 2).

Note 11. Officer and Stock-Based Compensation

At June 30, 1997, the Company settled  contractual  liabilities under employment
agreements with two officers totaling $207,072,  through the issuance of 345,120
shares  of Class A  Common  Stock.  In  addition,  the  Company  has  recognized
liabilities  totaling  approximately  $278,000 and $290,000 at December 31, 1998
and 1997,  respectively  for  additional  amounts  due to the two  officers  for
services  performed in connection with their employment  agreements.  During the
year ended  December 31, 1998,  one officer  voluntarily  agreed to  permanently
forgive  $125,000 of  compensation  due and the related  liability was decreased
accordingly.

Options for the purchase of stock in Southern Security Bank

Under the Incentive  Stock Option Plan (the "Plan") adopted by the Bank in 1988,
the Bank is  authorized  to grant  options for the  purchase of up to 20% of the
outstanding common shares of the Bank (575,570 shares at December 31, 1998). All
directors, officers and employees of the Bank are eligible to receive options to
purchase  shares of common  stock at the fair  value of the stock at the date of
grant,  but in no event may the price be less than the par value of such  stock.
Options  granted  under the plan  expire  no more than 8 years  from the date of
issue, or upon 90 days after termination of employment. The Plan expires July 1,
2000,  and no additional  options may be granted after that date under the Plan.
The weighted-average  remaining life of options outstanding at December 31, 1998
and 1997 is 5.0 years and 4.5 years, respectively.

A  summary  of the  options  for  the  purchase  of  common  stock  of the  Bank
outstanding  as of December 31, 1998 and 1997, and changes during the years then
ended is presented in the following  table.  The fair value of each option grant
is  estimated  on the date of grant using the present  value with the  following
weighted-average  assumptions  used  for  grants  in 1998  and  1997:  risk-free
interest rates of 5.5% and 6.0% for 1998 and 1997, expected lives of 6 years for
both years and no dividends.


<TABLE>
<CAPTION>

                                                        1998                                  1997
                                       -------------------------------------------------------------------------------
                                                              Weighted-Average                        Weighted-Average
                                          Shares              Exercise Price         Shares            Exercise Price
                                       -------------------------------------------------------------------------------

<S>                                 <C>                       <C>               <C>                <C> 

Outstanding at beginning of year            414,870             $      1.00          319,690        $     1.00
Granted                                    114,830                     1.00           95,180              1.00
Exercised
Forfeited                                   (2,640)                    1.00
                                    --------------                                ----------
Outstanding at end of year                 527,060                     1.00          414,870              1.00
                                    ==============                                ==========
Options exercisable at year-end            527,060                     1.00          414,870              1.00
                                    ==============                ==========

Weighted-average fair value of
options granted during the year                                     $  0.08                         $     0.10

</TABLE>


Options for the purchase of stock in Southern Security Bank Corporation

The Company has granted stock options for the purchase of shares of common stock
of the Company to directors of the Company under various compensation agreements
and  actions  of  the  Board  of  Directors,  representing  a  majority  of  the
stockholders. All options for the purchase of common stock of the Company expire
10 years from the date of issue. The weighted-average  remaining life of options
outstanding at December 31, 1998 and 1997 was 6.4 and 6.0 years, respectively.

<PAGE>

A  summary  of the  options  for the  purchase  of common  stock of the  Company
outstanding  as of December 31, 1998 and 1997, and changes during the years then
ended is  presented  below.  The fair value of each option grant is estimated on
the date of grant using the present  value with the  following  weighted-average
assumptions  used for grants in 1998 and 1997:  risk-free  interest rate of 5.5%
and 6.0% percent for 1998 and 1997, respectively,  expected lives of 9 years for
both years, and no dividends. Volatility was assumed to be zero because there is
currently no market for the Company's stock.

<TABLE>
<CAPTION>

                                                       1998                         1997
                                        ------------------------------------------------------------------
                                                        Weighted-Average                  Weighted-Average
                                             Shares       Exercise Price      Shares       Exercise Price
                                        ------------------------------------------------------------------
<S>                                        <C>            <C>                <C>          <C>
Outstanding at beginning of year           758,612        $     0.75         667,134      $      0.34
Granted                                    105,076              5.00          91,478             1.80
Exercised
Forfeited
                                        ----------                          --------
Outstanding at end of year                 863,688              1.06         758,612             0.51
                                        ==========                          ========
Options exercisable at year-end            863,688              1.06         758,612             0.51
                                        ==========                          ========
Weighted-average fair value of
options granted during the year                          $      1.95                         $   0.75

</TABLE>

The Company and its subsidiary apply APB Opinion 25 and related  Interpretations
in  accounting  for their  plans.  Accordingly,  no  compensation  cost has been
recognized for the stock options  discussed above. Had compensation cost for the
Company's  stock  options been  determined  based on the fair value at the grant
dates for awards under those plans,  the  Company's net loss and loss per common
share and common  equivalent  share would have been  increased  to the pro forma
amounts indicated below:


                                              1998               1997
----------------------------------------------------------------------------

Net loss                  As reported     $ (584,021)     $(1,166,654)
                          Pro forma         (818,000)      (1,235,000)
Basic earnings per share  As reported          (0.13)           (0.31)
                          Pro forma            (0.18)           (0.33)

Note 12.  Earnings Per Share

Following is  information  about the  computation of the earnings per share data
for the years ended December 31, 1998 and 1997:

                                                Numerator  Denominator Per-Share
                                                                         Amounts
                                                --------------------------------
                                                 Year Ended December 31, 1998
                                                --------------------------------
Net loss                                    $ (584,0210)
Less preferred stock dividends accrued
                                            ------------
Basic and diluted earnings (loss) per share,
income available to common stockholders      (584,021)     4,425,148   $(0.13)
                                            ==================================


                                                Year Ended December 31, 1997
                                               -----------------------------

Net loss                                 $(1,166,654)
Less preferred stock dividends accrued       (14,834)
                                         ------------
Basic and diluted earnings (loss) per share, 
income available to common stockholders   (1,181,488)      3,771,047  $(0.31)
                                          ===================================

Options for the  purchase of 863,688  shares and 758,612  shares at December 31,
1998 and  1997,  respectively,  have not been  included  in the  computation  of
diluted  earnings per share for 1998 and 1997 because their inclusion would have
been antidilutive as a result of losses being reported for these years.

Note 13.  Related-Party Transactions

The  Bank  has  had,  and  may  be  expected  to  have  in the  future,  banking
transactions  in the ordinary  course of business  with  directors,  significant
stockholders,  principal  officers,  their  immediate  families  and  affiliated
companies  in which they are  principal  stockholders  (commonly  referred to as
related parties). Aggregate loans to, or guaranteed by, these related parties at
December 31, 1998 and 1997 and the activity therein for the years then ended was
as follows:

                                  1998           1997
                         -----------------------------
Balance, beginning       $     255,057  $      705,057
New loans                      248,401
Repayments                     (76,362)       (450,000)
                         ------------------------------
Balance, ending          $     427,096  $      255,057
                         ==============================


Note 14.  Leases

The Bank leases its facilities  under a  noncancelable  agreement  which expires
December 31, 2013.  The  approximate  future  minimum lease  payments under this
lease as of December 31, 1998, are as follows:

Year Ending
December 31                                       Amount
---------------------------------------------------------

1999                                      $       178,920
2000                                              184,288
2001                                              189,816
2002                                              195,510
2003                                              201,376
Thereafter                                      2,467,478
                                         ----------------
Total minimum lease payments             $      3,417,388
                                         ================

Total lease expense for the years ended December 31, 1998 and 1997  approximated
$183,000 and $214,100, respectively, net of sublease income of none and $22,900,
respectively,  and  is  included  in  occupancy  and  equipment  expense  in the
accompanying consolidated statements of operations.

Note 15.  Restrictions on Retained Earnings and Regulatory Capital Requirements

The Bank is subject to certain  restrictions on the amount of dividends that may
be declared without prior regulatory approval. At December 31, 1998, no retained
earnings were available for dividend declaration without regulatory approval.

The Bank is subject to various capital requirements  administered by the federal
banking  agencies.  Failure to meet minimum  capital  requirements  can initiate
certain mandatory - and possibly additional  discretionary actions by regulators
that, if undertaken, could have a direct material effect on the Bank's financial
statements.  Under capital adequacy guidelines and the regulatory  framework for
prompt corrective  action,  the Bank must meet specific capital  guidelines that
involve  quantitative  measures of the Bank's assets,  liabilities,  and certain
off-balance-sheet items as calculated under regulatory accounting practices. The
Bank's  capital  amounts  and  classification  are also  subject to  qualitative
judgments  by the  regulators  about  components,  risk  weightings,  and  other
factors.

Quantitative  measures  established  by  regulation to ensure  capital  adequacy
require the Bank to maintain  minimum amounts and ratios (set forth in the table
below)  of total  and Tier I  capital  to  risk-weighted  assets,  and of Tier I
capital to average assets (all defined in the regulations).  Management believes
the Bank meets all capital adequacy  requirements required by law as of December
31, 1998.

<PAGE>

As of December 31, 1998, the most recent  notification  from the Federal Reserve
categorized the Bank as adequately  capitalized  under the regulatory  framework
for prompt corrective  action.  To be categorized as adequately  capitalized the
Bank must maintain  minimum  total  risk-based,  Tier I  risk-based,  and Tier I
leverage  ratios as set forth in the table  below.  There are no  conditions  or
events since that notification that management  believes have changed the Bank's
category.

The Bank's  actual  capital  amounts and ratios are also  presented in the table
below:

<TABLE>
<CAPTION>
                                                               To Be Adequately Capitalized


                                                                      For Capital               Under Prompt Corrective
                                Actual                            Adequacy Purposes                 Action Provisions
                        -----------------------------------------------------------------------------------------------
<S>                       <C>                     <C>        <C>                        <C>      <C>
As of December 31, 1998:
Total Capital (to
Risk-Weighted Assets)     $    1,800,324       11.8%      $      1,222,234        8.0%     $     1,222,234     8.0%
Tier I Capital (to
Risk-Weighted Assets)     $    1,608,356       10.5%      $        611,117        4.0%     $       611,117     4.0%
Tier I Capital (to
Average Assets)           $    1,608,356        6.3%      $        919,600        4.0%     $       919,600     4.0%

As of December 31, 1997:
Total Capital (to
Risk-Weighted Assets)     $    1,046,502        8.9%      $        956,859         8.0%    $       956,859      8.0%
Tier I Capital (to
Risk-Weighted Assets)     $      896,993        7.6%      $        478,430         4.0%    $       478,430      4.0%
Tier I Capital (to
Average Assets)           $      896,993        5.0%      $        711,600         4.0%    $       711,600      4.0%
</TABLE>


Under the  framework,  the Bank's capital levels do not allow the Bank to accept
brokered deposits without prior approval from regulators.

<PAGE>

Note 16.  Regulatory Matters and Going Concern Considerations

On  April  13,  1995,  the  Company  entered  into  a  written   agreement  (the
"Agreement")  with the Federal Reserve Bank of Atlanta (the "FRB").  Among other
items, the written agreement:

a.   Prohibits the  declaration  or payment of dividends by the Company  without
     the prior written approval of the FRB;
b.   Requires  the  Company to submit a written  plan to  maintain  an  adequate
     capital  position which, at a minimum,  addresses and considers (i) current
     and future capital  requirements of the Bank,  including the maintenance of
     adequate capital ratios, (ii) the volume of the Bank's adversely classified
     assets, (iii) the Bank's anticipated level of earnings, and (iv) the source
     and timing of  additional  funds that may be  necessary  to fulfill  future
     capital requirements;
c.   Prohibits  any  additional  borrowings  by the Company,  or any payments on
     existing  debt of the Company,  without the prior  written  approval of the
     FRB;
d.   Prohibits the Company from entering  into new  financial  transactions,  or
     amending the terms of existing  agreements,  with related parties,  without
     the prior written approval of the FRB; and,
e.   Prohibits  the Company from  entering  into any  transaction  with the Bank
     without the prior written approval of the FRB.

On  November  13,  1998,  the  Bank  entered  into  a  written   agreement  (the
"Agreement")  with the Federal Reserve Bank of Atlanta (the "FRB") and the State
of Florida  Department of Banking and Finance (the  "Department").  This written
agreement  superseded the prior  agreement  dated March 17, 1992. In addition to
requiring  the Bank to implement  certain  operating  administrative  policy and
procedure changes, the written agreement:

a.   Prohibits the  declaration  or payment of dividends by the Bank without the
     prior written approval of the FRB and the Department;
b.   Requires the Bank to submit a written plan to maintain an adequate  capital
     position  which,  at a minimum,  addresses  and  considers  (a) current and
     future capital  requirements  including the  maintenance of minimum capital
     ratios,  (b) any planned growth in the Bank's assets, (c) the volume of the
     Bank's adversely  classified  assets,  (d) the Bank's  anticipated level of
     retained  earnings,  and (e) the source and timing of  additional  funds to
     fulfill future capital requirements; and,
c.   Requires the Bank to maintain its tier one leverage  ratio at a level of no
     less than 6.25% through December 31, 1998 and 7.0%  thereafter.As  shown in
     the financial  statements,  the Company incurred net losses of $584,021 and
     $1,166,654 during the years ended December 31, 1998 and 1997, respectively.
     Despite these  losses,  the Bank  continued to meet the minimum  regulatory
     capital  requirements  prescribed under prompt corrective action provisions
     at December 31, 1998. Failure to meet these capital requirements may result
     in one or  more  regulatory  sanctions,  including  restrictions  as to the
     source of deposits and the appointment of a conservator.  It is the opinion
     of management that the ability to meet the prescribed capital  requirements
     in the future is dependent on the ability to raise additional  capital,  as
     well as the ability to improve  operating  results.  Management  expects to
     raise  additional  capital through the offer for early exercise of warrants
     as  discussed  in  Note  10 and  to  significantly  reduce  the  loss  from
     operations  in 1999.  In addition,  the Company  plans to raise  additional
     capital in connection with the planned merger discussed in Note 20.

Note 17.  Commitments and Contingencies

Financial  instruments  with  off-balance-sheet  risk:  The  Bank is a party  to
financial  instruments  with  off-balance-sheet  risk in the  normal  course  of
business,  to  meet  the  financing  needs  of its  customers.  These  financial
instruments  include commitments to extend credit and standby letters of credit.
These instruments  involve, to varying degrees,  elements of credit and interest
rate risk in excess of the amounts recognized on the consolidated balance sheet.
The  Bank's  exposure  to  credit  loss in the  event of  nonperformance  by the
counterparty  to the financial  instruments for commitments to extend credit and
letters  of  credit  is  represented  by  the   contractual   amounts  of  those
instruments.  The Bank uses the same credit  policies in making  commitments and
conditional obligations as it does for on-balance-sheet instruments.

These commitments were as follows at December 31, 1998 and 1997:
                                          
                                                   1998           1997
                                          ------------------------------
Commitments to extend credit (unfunded)    $    1,923,741  $   1,995,917
Standby letters of credit                         107,932         58,632
                                          ------------------------------
                                           $    2,031,673  $  2,054,549.
                                          ==============================

Commitments  to extend credit are  commitments  to lend to a customer as long as
there is no violation of any condition established in the contract.  Commitments
generally  have fixed  expiration  dates or other  termination  clauses  and may
require  payment of a fee. Since many of the  commitments are expected to expire
without  being  drawn  upon,  the total  commitment  amounts do not  necessarily
represent  future  cash   requirements.   The  Bank  evaluates  each  customer's
creditworthiness on a case-by-case basis. The amount of collateral obtained,  if
any, is based on management's credit evaluation of the counterparty.  Collateral
held varies, but may include cash,  accounts  receivable,  inventory,  property,
plant and equipment, and residential and commercial real estate.

Standby  letters of credit  are  conditional  commitments  issued by the Bank to
guarantee the performance of a customer to a third party.  These  guarantees are
primarily issued to support public and private borrowing arrangements, including
commercial paper,  construction  bonding, and similar  transactions.  The credit
risk  involved  in  issuing  letters of credit is  essentially  the same as that
involved in extending loans to customers.  The collateral varies but may include
accounts receivable,  inventory,  property, plant and equipment, and residential
and commercial real estate.

Contingencies: In the normal course of business, the bank is involved in various
legal proceedings.  In the opinion of management,  any liability  resulting from
such  proceedings  would  not  have a  material  adverse  effect  on the  Bank's
financial statements.

In addition, the Company has executed employment agreements with two individuals
who are both  officers  and  directors  of the  Company.  Under the terms of the
agreements,  the Company has agreed to pay base  salaries of $175,000  per year,
adjusted for inflation,  to grant semiannual options for the purchase of 0.6% of
the  outstanding  Class A Common Stock at an exercise price equal to 110% of the
per share book value of such shares at the date of grant, and to provide certain
other benefits and  compensation to the two officers.  The officers  voluntarily
agreed to an exercise  price of $5.00 for options  granted in 1998 and 1999. The
employment  agreements expire June 10, 2002, except that if the Company does not
deliver  written  notice of its intent to terminate to the officers at least six
months  prior to that date,  the  agreements  shall  automatically  renew for an
additional five-year period.

The employment agreements also include provisions requiring the payment of up to
200% of an officer's  total annual  compensation  upon the occurrence of certain
events leading to the  termination of employment  such as a change in control of
the Company, death or disability.

Financial  instruments  with  concentration  of  credit  risk:  The  Bank  makes
commercial,  residential and consumer loans to customers  primarily in Southeast
Florida.  A  substantial  portion  of its  debtors'  abilities  to  honor  their
contracts is dependent upon the local economy. The economy of the Bank's primary
market area is not heavily dependent on any individual economic sector.

Interest  rate  risk:  The Bank  assumes  interest  rate risk as a result of its
normal  operations.  As a  result,  the  fair  values  of the  Bank's  financial
instruments will change when interest rate levels change, and that change may be
either  favorable  or  unfavorable  to the Bank.  Management  attempts  to match
maturities of assets and liabilities to the extent believed  necessary to manage
interest rate risk.  However,  borrowers with  fixed-rate  obligations  are more
likely to prepay in a falling  rate  environment  and less likely to prepay in a
rising rate  environment.  Conversely,  depositors who are receiving fixed rates
are more likely to withdraw funds before  maturity in a rising rate  environment
and less  likely to do so in a falling  rate  environment.  Management  monitors
rates and maturities of assets and  liabilities  and attempts to manage interest
rate risk by  adjusting  terms of new loans and  deposits  and by  investing  in
securities with terms that mitigate the Bank's overall interest rate risk.

Note 18.  Additional Cash Flow Information

<TABLE>
<CAPTION>

                                                             Years Ended December 31,
                                                          ---------------------------
                                                             1998            1997
                                                           ---------------------------
<S>                                                     <C>               <C> 
Cash flows from securities:
Securities available for sale:
Sales                                                   $                 $  782,010
Maturities, calls, and paydowns                              106,139         584,473
Purchases                                                                   (349,945)
Securities held to maturity:
Maturities and paydowns                                    1,498,067         541,563
Purchases                                                                   (245,859)
Purchases of Federal Reserve Bank stock                      (21,200)         (3,600)
                                                        -----------------------------
                                                        $  1,583,006   $   1,308,642
                                                        =============================
Supplemental disclosures of cash flow information:        

    Cash payments for interest                            $ 683,957   $      633,500
Supplemental schedule of Noncash Investing and
Financing Activities
Issuance of 250,000 shares of Class A Common Stock
in exchange for notes payable to stockholders (Note 9)                       150,000
Issuance of 345,120 shares of Class A Common Stock
as compensation for officers (Note 11)                                       207,072
Addition of 256,088 shares of Class A Common Stock
in connection with reverse merger (Note 2)                                     6,025
Issuance of 16,665 shares of Class A Common Stock
in exchange for services                                     89,325
Acquisition of other real estate upon foreclosure of loans   15,000

</TABLE>


Note 19.  Fair Value of Financial Instruments

The following methods and assumptions were used by the Company in estimating the
fair value of its financial instruments:

Cash and cash  equivalents:  The carrying  amounts reported in the balance sheet
for cash and short-term instruments approximated their fair values.

Investment securities (including  mortgage-backed  securities):  Fair values for
investment  securities are based on quoted market prices,  where  available.  If
quoted market prices are not  available,  fair values are based on quoted market
prices of comparable instruments.

Loans receivable:  For variable-rate  loans that reprice  frequently and with no
significant  change in credit risk,  values are based on carrying  values.  Fair
values for other loans are estimated on discounted  cash flows,  using  interest
rates  currently  being offered for loans with similar  terms to borrowers  with
similar credit quality.  Management  believes that the allowance for loan losses
is an  appropriate  indication of the  applicable  credit risk  associated  with
determining  the fair value of its loan  portfolio  and the  allowance  has been
deducted from the estimated fair value of loans.

Accrued interest receivable:  The carrying amount of accrued interest receivable
approximates its fair value.

Off-balance-sheet  instruments:  Fair  values for the  Bank's  off-balance-sheet
instruments,  primarily lending commitments, are based on fees currently charged
to enter into similar agreements, taking into account the remaining terms of the
agreements. The fair value for such commitments are nominal.

Deposit  liabilities:  The fair values of demand deposits and statement  savings
equal their carrying amounts which represents the amount payable on demand.  The
carrying  amounts  for  variable-rate,  fixed-term  money  market  accounts  and
certificates of deposit approximate their fair value at the reporting date. Fair
values for fixed-rate  certificates  of deposit are estimated using a discounted
cash flow  calculation  that applies  interest rates  currently being offered on
certificates  to a schedule of aggregated  expected  monthly  maturities on time
deposits.

Other liabilities:  The carrying amount of other liabilities  approximates their
fair value.

Following is a summary of the carrying  amounts and  approximate  fair values of
the Company's financial instruments at December 31, 1998 and 1997:

<TABLE>
<CAPTION>
                                                                                            1998
                                                                       -------------------------------------
                                                                                Carrying            Fair
                                                                                 Amount             Value
                                                                       -------------------------------------
<S>                                                                      <C>                     <C>
Cash and cash equivalents                                                 $      1,012,269    $    1,012,269
Investment securities (including Federal Reserve Bank stock)                       713,153           721,303
Loans receivable                                                                14,612,998        14,716,432
Accrued interest receivable                                                        136,854           136,854
Deposits                                                                        20,244,046        20,256,510
Other liabilities                                                                  761,184           761,184
Commitments to extend credit



                                                                                           1997
                                                                          ---------------------------------
                                                                                Carrying           Fair
                                                                                 Amount            Value
                                                                          ---------------------------------
<S>                                                                       <C>                   <C> 
Cash and cash equivalents                                                 $     1,107,669    $    1,107,669
Investment securities (including Federal Reserve Bank stock)                    2,270,688         2,286,391
Loans receivable                                                               12,463,278        12,588,248
Accrued interest receivable                                                       125,870           125,870
Deposits                                                                       15,675,312        15,680,210
Other liabilities                                                                 758,550           758,550
Commitments to extend credit

</TABLE>

Note 20.  Planned Merger

The  Company  has  signed a  letter  of  intent  to merge  with  First  Colonial
Securities Group, Inc. (FCSG), to be effected through a stock for stock exchange
with the Company to be the surviving  parent.  FCSG is a full service  brokerage
and investment banking firm headquartered in Boca Raton,  Florida and has twenty
offices throughout the United States.  After consummation of the planned merger,
the Company would own 100% of FCSG.


Note 21.  Parent Company Only Financial Statements

Condensed  financial  statements for Southern Security Bank Corporation only are
presented below:


SOUTHERN SECURITY BANK CORPORATION        

PARENT COMPANY ONLY BALANCE SHEETS

December 31, 1998 and 1997

ASSETS                                            1998            1997
                                          ------------------------------
Cash                                       $      68,108      $      721
Investment in Southern Security Bank           1,580,675         843,231
Other assets                                       4,519          36,408
                                           -----------------------------
                                           $   1,653,302      $  880,360
                                           =============================

LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities
Notes payable                              $    100,000      $   100,000
Other liabilities                               337,182          307,530
                                           -----------------------------
Total liabilities                               437,182          407,530
Stockholders' equity                          1,216,120          472,830
                                           -----------------------------
                                          $   1,653,302   $      880,360
                                          ==============================


SOUTHERN SECURITY BANK CORPORATION
PARENT COMPANY ONLY STATEMENTS OF OPERATIONS

Years Ended December 31, 1998 and 1997
 
                                                     1998         1997
                                               ---------------------------
Equity in net loss of Southern Security Bank    $  (37,349)  $   (283,951)
                                               ---------------------------
Expenses:
Interest expense                                    10,366          6,117
Other expenses                                     536,306        876,586
                                               --------------------------
Total expenses                                     546,672        882,703
                                               ---------------------------
Net loss                                       $  (584,021)  $ (1,166,654
                                               ==========================

SOUTHERN SECURITY BANK CORPORATION
PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

Years Ended December 31, 1998 and 1997


<PAGE>

<TABLE>
<CAPTION>
                                                                         1998                  1997
                                                                -------------------------------------
<S>                                                             <C>                   <C>
Net loss                                                         $     (584,021)     $    (1,166,654)
Adjustments to reconcile net loss to net cash
used in operating activities:
Equity in net loss of Southern Security Bank                             37,349              283,951
Issuance of common stock as compensation for services                    89,325              207,072
Other                                                                    65,382              260,234
                                                                -------------------------------------
Net cash used in operating activities                                  (391,965)            (415,397)
Net cash used in investing activities (Investment in Southern
Security Bank )                                                        (775,900)            (120,000)
Net cash provided by financing activities                             1,235,252              530,916
                                                                -------------------------------------
Decrease in cash and cash equivalents                                    67,387              (4,481.
Cash and cash equivalents:
Beginning                                                                   721                5,202
                                                                -------------------------------------
Ending                                                          $        68,108     $            721
                                                                =====================================

</TABLE>

Note 22.  Year 2000 Issue

The Company has  conducted a  comprehensive  review of its  computer  systems to
identify  the  systems  that  could be  affected  by the Year 2000  Issue and is
developing  a  remediation  plan to  resolve  the  Issue.  The Issue is  whether
computer  systems will properly  recognize date sensitive  information  when the
year changes to 2000.  Systems that do not properly  recognize such  information
could  generate  erroneous  data or  cause a  system  to fail.  The  Company  is
dependent on computer processing in the conduct of its business activities.

Based on the review of the  computer  systems,  management  does not believe the
cost of remediation will be material to the Company's financial statements.

Item 8    Changes in and Disagreements with Accountants on Accounting and
          Financial Disclosure

          None.


                                    PART III

Item 9.   Directors, Executive Officers, Promoters and Control Persons;
          Compliance With Section 16(a) of the Exchange Act

MANAGEMENT

Company Officers and Directors

<TABLE>
<CAPTION>

 Name                       Term         Age          Position                   Position Since
<S>                         <C>          <C>          <C>                        <C>

 Philip C. Modder            3yr         58           Chairman of the Board      June, 1992
                                                      President

 James L. Wilson             3 yr        54           Vice Chairman              June, 1992
                                                      Chief Executive Officer

 Timothy S. Butler           2 yr        49           Director                   December, 1992

 Eugene J. Strasser          2 yr        52           Director                   December, 1992

 Harold C. Friend            1 yr        52           Director                   December, 1994

 Robert D. Butler, Jr. **    1 yr        50           Director                   December, 1994
</TABLE>

**  Timothy S. Butler and Robert D. Butler, Jr. are cousins.

Each director is elected for a period of three years.  The term of directorships
are  staggered  as to  expiration  date,  such  that  for the  present  board of
directors,  each year one-third of the  directorship  is subject to re-election,
providing for additional  stability and continuity.  Vacancies and newly created
directorships  resulting from any increase in the number of authorized directors
may be filled by a  majority  vote of the directors  then  remaining  in office;
However,  any additional  Directors or vacancies  filled may not take office nor
serve,  until proper  applications  and  disclosures are filed with the FRB, for
prior approval  therefrom.  Once approval is obtained from the FRB,  director(s)
may thereafter take office and serve in that capacity.  Certain information with
respect to the background of each director and the three  executive  officers of
the Company is set forth below.

Philip C. Modder: Mr. Modder, President of the Company, has been involved in the
banking industry in Palm Beach County for over 25 years.  Modder was educated at
the University of Wisconsin,  Racine, Wisconsin,  Evangel College,  Springfield,
Mo.,  Palm  Beach  Junior  College,   Lake  Worth,  Fl.,  and  Florida  Atlantic
University,  which granted him a B.S.  Degree in 1969, in the academic  areas of
Finance and Accounting.  Prior to organizing the subject Company, Mr. Modder was
President and Chief  Executive  Officer and  organizing  director of Mizner Bank
located in Boca Raton,  Florida, from March 1987 to May 1992. Prior thereto, Mr.
Modder  served as Senior Vice  President  of Caribank of Palm Beach  County.  In
1988,  Caribank of Palm Beach  County was merged  into its  parent,  Caribank of
Dania.

Prior to that time,  Modder  previously served as Senior Vice President and Area
Manager of Atlantic  National Bank for five years and Vice  President and Branch
Manager for eight years at Sun Bank.  Mr.  Modder serves as a Director and was a
past Chairman of the Boca Raton Chamber of Commerce, and also serves as Chairman
of the Boca Raton Airport Authority. Mr. Modder has also served as an instructor
for the American Institute of Banking.

James L. Wilson:  Mr. Wilson,  Chief Executive Officer of the Company,  has been
involved in banking and the finance industry in Florida since 1970, was educated
at  Union  College  with  degree  granted  in  1968  in the  academic  areas  of
Mathematics and Organic Chemistry.  Prior to organizing the Company,  Mr. Wilson
was Executive  Vice  President and Senior  Lending  Officer of Boca Bank in Boca
Raton, Florida from June 1990 to June 1992. Prior thereto, from June 1985 to May
1990, Wilson was a Principal of Bayshore  Investments,  Tampa,  Florida,  a real
estate finance and property management  company.  Wilson in the early 1980's was
Vice  President,  and Senior Real Estate  Lending  Officer for  Southeast  Bank,
Tampa,  Florida.  Wilson  also held  various  positions  with  Royal  Trust Bank
(Canada),  N.A.  with USA offices in Miami;  while at Royal Trust,  Wilson was a
member of the Bank  Acquisition  Team,  which  purchased  and/or examined over a
billion dollars in banking  companies.  Wilson's biography has been published in
multiple  editions  of Who's Who of America,  the South and South West,  and the
World since 1984.  Mr. Wilson has also served as an instructor  for the American
Institute of Banking.

Timothy S. Butler:  Mr. Butler was born in Fort  Lauderdale  and graduated  from
Pompano Beach High School in 1967.  He attended  Broward  Community  College and
Florida State  University.  He has served as President of Butler Properties Ltd.
since 1971. That Company  manages the family assets  consisting of farm land and
various other real estate holdings. From January 1989 to June 1992, he served as
an Associate Director of Mizner Bank in Boca Raton.

Eugene J. Strasser, M.D.: Dr. Strasser did his undergraduate and Pre-Med work at
Loyola  College and the  University  of Maryland  where he graduated in 1968. He
attended the University of Maryland Medical School in Baltimore,  Maryland where
he graduated in 1972.  He is licensed by the American  Medical  Board as a Board
Certified  General  Surgeon and a Board  Certified  Plastic  and  Reconstructive
Surgeon. He has established his own small, private hospital,  CosmoPlast Center,
in Coral Springs, Florida, where he has practiced medicine since 1981.

Harold C. Friend,  M.D.:  Dr. Friend has been a resident of South Florida for 21
years.  He received his B.A. from the  University  of Texas,  and his M.D degree
from the University of Texas  Southwestern  Medical School in 1972.  Friend is a
board-certified  Neurologist,  practicing  in Boca Raton.  He has been active in
numerous  business  activities,  including past  membership of the Mizner Bank's
Advisory  Board,  President of Puget Sound Yellow  Taxi,  Inc. a  transportation
company located in Seattle,  Washington from June of 1993 to October,  1996, and
President of the  Neuroscience  Center in Boca Raton,  Florida from June 1985 to
the  present.  As to civic  involvement,  Dr.  Friend has held past and  present
positions with the Southern Region of the Boy Scouts,  Executive Board of United
Way, and the Local and International Rotary. Dr. Friend's biography is published
in multiple editions of Who's Who of the South and South West, and the World.

Robert David  Butler,  Jr.: Mr.  Butler was born in Boca Raton,  Florida and was
reared in Deerfield Beach,  Florida. He attended  Carson-Newman  College and the
University   of   Tennessee   and  was   graduated   with  degrees  in  Business
Administration,  English,  and Music. After retiring from Eastern Airlines after
fifteen years of service as a flight services representative, in June of 1991 he
established Pegasus Travel Management, a division of Regit Enterprises, Inc., of
which he is President and Chief Executive Officer. Mr. Butler resides in Coconut
Grove,   Florida,   this  city  also  being  the  location  of  the  corporation
headquarters of Regit Enterprises.

Floyd  Harper:  Vice  President  of the Company (and Senior Vice  President  and
Cashier of the Bank), 49, graduated with honors from Northwood University,  West
Palm Beach,  Florida with a Business  Administration  Degree,  received a Degree
from University of Virginia  Graduate School of Retail Bank Management,  and has
been designated a Certified Consumer Credit Executive thereby. From January 1993
to October 1994,  Harper was engaged by the Resolution Trust  Corporation in the
disposition of failed banking institutions of over $12 Billion, as Regional Vice
President,  Branch  Administration,  and  dealt  with  deposit  acquisition  and
operational  efficiency.  Prior to 1993,  Harper was Executive  Vice  President,
Chief  Operating  Officer  for  Southern  National  Bank,  was Vice  President &
District  Manager for Chase Manhattan Bank (Florida)  handling  upscale lending,
and served with Atlantic National Bank and Barnett Bank in South Florida.

Peter Stec,  Senior Vice President and Senior  Lending  Officer of the Bank, 46,
has  been  involved  in  community  banking  since  1980 and is  experienced  in
rehabilitating  loan portfolios and in originating new borrowing  relationships.
Stec was educated at the University of Dayton,  Ohio, where he received a degree
in Business Administration granted in 1975. He has attended the Stonier Graduate
School of Banking and is a Certified Lender-Business Banking,  recognized by the
American Bankers Association.  From June 1987 to October 1989, Stec managed a 75
employee lending unit consisting of Commercial Lending, Loan Operations,  Credit
Administration,  as Senior Vice President of First American Bank, a $1.5 Billion
Florida banking  company.  From November 1989 to March 1993, Stec served as Vice
President and Commercial Lending Manager for Boca Bank, Boca Raton, Florida, and
from  June 1985 to May 1987  served as a Loan  Officer  for  Southeast  Bank and
Florida Coast Bank in South Florida.

Section 16(a) Beneficial Ownership Reporting Compliance

     Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors  and  executive  officers,  and  persons  who own  more  than 10% of a
registered class of the Company's equity securities, to file with the Securities
and Exchange  Commission reports of ownership and changes in ownership of common
stock of the Company. Officers,  directors and greater than 10% shareholders are
required by SEC  regulation  to furnish  the Company  with copies of all Section
16(a) forms they file.

     Based solely on review of the copies of Section 16(a) reports  furnished to
the  Company,  the  Company  believes  that,  during the 1998 fiscal  year,  the
following  directors,  officers,  and holders of more than 10% of the  Company's
common  stock  failed  to file one  Form 4 report  with  respect  to  beneficial
ownership of the Company's  securities:  Timothy S. Butler and Harold C. Friend.
Mr. Philip C. Modder and Mr. James Wilson each failed to file one Form 5 report.
During 1998 there was no public  trading  market with  respect to the  Company's
common  stock,  and based upon the  Company's  registry of record  owners of its
common  stock  and  transfer  restrictions  on the  common  stock  owned by such
persons,  the Company believes that none of the foregoing  persons  purchased or
sold any shares of the Company's common stock during that period.

Item 10.  Executive Compensation

Compensation of Management

The  following  Table  shows   information   concerning   annual  and  long-term
compensation to certain  Executive  Officers for services to the Company for the
years ended December 31, 1998, 1997 and 1996. The table includes  information on
the Company's Chairman and President,  Philip C. Modder, and its Chief Executive
Officer,  James L. Wilson,  (collectively,  the "Named Executive Officers").  No
other current executive officer earned more than $100,000 in salary and bonus in
1998.
<TABLE>
<CAPTION>


  
                                          Annual Compensation         Long-Term Compensation

                                                                      Securities   
      Name and                                        Other Annual    Underlying  LTIP      Other
Principal Position          Year         Salary       Compensation    Options/    Layouts  Compensation
                                                                      SARs (#)
-------------------------------------------------------------------------------------------------------
<S>                          <C>         <C>          <C>             <C>          <C>      <C>

Philip C. Modder, Chairman   1998        $175,000     $17,000(1)      52,538       -0-      $ -0-
and President                1997        $175,000     $17,000(1)      48,807       -0-      $ -0-
                             1996        $127,000     $17,000(1)      19,619       -0-      $ -0-
-------------------------------------------------------------------------------------------------------
James L. Wilson, Chief       1998        $175,000      17,000(1)      52,538       -0-      $ -0-
Executive Officer            1997        $175,000      17,000(1)      42,671       -0-      $ -0-
                             1996        $103,000      17,000(1)      14,714       -0-      $ -0-

</TABLE>

(1) Includes Term Life Insurance  premiums and automobile  allowances of $10,800
to Messrs. Modder and Wilson.

         The following  table shows  information  concerning  options granted to
Named Executive Officers during the fiscal year ended December 31, 1998.

<TABLE>
<CAPTION>

                           Option / SAR Grants in Last Fiscal Year

                 Number of Securities    % of Total Options/SAR's    Exercise or     Expiration
                  Underlying Options/    Granted to Employees in      Base Price        Date
Name                SAR's Granted              Fiscal Year            ($/Share)
-----------------------------------------------------------------------------------------------
<S>                     <C>                        <C>                 <C>            <C>
Philip Modder           52,538                     50%                 $5.00          6/30/2008
James Wilson            52,538                     50%                 $5.00          6/30/2008

</TABLE>

     In addition,  as  Directors of the  Company's Bank subsidiary, each Messrs.
Modder and  Wilson received 13,500 options to purchase shares of common stock of
the Bank.  Such  options  are  exercisable  at  the  greater of 110% of the fair
market  value  or par  value of the  Bank's  shares on the date of grant and are
exercisable for a period of five years from the date of grant.

     The following table shows information concerning option exercises and year-
end option values for options held by the Named Executive Officers.

<TABLE>
<CAPTION>

                           Aggregated Option/SAR Exercises in Last Fiscal Year
                                                     and
                                    Fiscal Year-End Option SAR Values

                                                       Number of
                                                       Securities        Value of
                                                       Underlying        Unexercised
                                                       Unexercised       In-the-Money
                                                       Options/SAR's     Options/SAR's
                                                       at FY-End         at FY-End
                   Shares Acquired                     Exercisable/      Exercisable/
Name                on Exercise    Value Realized      Unexercisable     Unexercisable
--------------------------------------------------------------------------------------
<S>                    <C>              <C>             <C>                 <C>
Philip Modder          -0-              -0-             335,323 / 0         $-0-(1)
James Wilson           -0-              -0-             261,555 / 0         $-0-(1)

</TABLE>

(1) Average option exercise price was $.26 per share, the approximate book value
of the shares. There is no market for the Company's Common Stock, and any shares
issued  upon  exercise  of the  options  would  have been  restricted  under the
Securities Act.

Employment Agreements

     Philip C. Modder and James L. Wilson have  Employment  Agreements  with the
Company  dated  June 11,  1992 as  amended  June 30,  1997 (as so  amended,  the
"Employment  Agreements").  The Employment  Agreements provide that Modder shall
serve as the  Company's  President  and  Chairman of the Board,  and that Wilson
shall serve as the Company's  Chief  Executive  Officer and Vice Chairman of the
Board.  By order of the Board of Directors of the Company on September  23, 1997
and subject to approval by bank  regulators,  which approval was granted thereby
with an effective date of December 1, 1997, the positions of Messrs.  Modder and
Wilson were changed to Chairman of the Board and President, and Vice Chairman of
the Board and Chief Executive Officer, respectively.

     The Employment  Agreements  provide that Modder and Wilson shall each serve
for a five year term from June 11,  1997,  except that if the  Company  does not
deliver written notice to the respective  executive at least six months prior to
the end of the term it shall  automatically  renew for an  additional  five year
term. Each Employment  Agreement provides for the following  compensation to the
executive:  (1) the  executive  will be paid a base salary of $175,000 per year,
subject to annual  increase by the greater of the change in the  Consumer  Price
Index ("CPI") or 5%; (2) the executive will be paid a bonus equal to 2.5% of the
pre-tax net income of the Company; (3) if the Company acquires the assets of any
existing  financial  institution,  the executive  shall receive a bonus equal to
0.20% of the gross assets for each such  transaction;  (4) the  executive  shall
during term of the Agreement receive  semi-annual grants on July 1st and January
1st of stock  options equal to 0.6% of the  outstanding  Class A Common Stock of
the Company exercisable at 110% of per share book value of such stock on the day
preceding the grant (the  executives have agreed that options granted on July 1,
1997 and January 1, 1998 and July 1, 1998 are  exercisable at the price at which
shares were offered in private placements on or about the date of grant -- $1.80
per  share in the case of the July 1,  1997  options  and $5.00 per share in the
case of the January 1, 1998 and July 1, 1998  options);  (5) if permitted by law
and in accordance with applicable federal and state regulations,  loans equal to
the  exercise  price of the options  granted at interest  rates not greater than
prime plus 1% with a term of not less than 30 months;  (6) if any of the options
is  not  an  "incentive   stock   option"  under  the  Internal   Revenue  Code,
reimbursement  of any taxes the executive is required to pay by reason  thereof;
(7) disability insurance coverage providing for benefits in the amount of 60% of
the executives total annual  compensation  subject to cost of living adjustments
equal to the lesser of the change in the CPI or 12% per annum;  (8) a whole life
insurance annuity policy in the face amount of $1,750,000 plus  reimbursement of
any income taxes the  executive is required to pay as a result of payment of the
premiums on such insurance  policy;  (9) family membership in two country clubs;
(10) an  automobile  allowance of $900 per month  adjusted  annual in accordance
with the CPI plus sales taxes,  insurance and operating  costs of the auto;  and
(11) comprehensive medical and dental insurance.

Termination payments.

     The Employment Agreements contain provisions for additional compensation to
the  executive  or his  legal  representatives  in  the  event  of  termination,
including: (1) if an Employment Agreement terminates for any reason, all options
provided for thereunder  become fully vested and exercisable for a period of ten
years  from the date of such  termination;  (2) if an  Employment  Agreement  is
terminated for any reason other than death or permanent disability,  the Company
will pay for the executive's  comprehensive medical and dental insurance for two
years  following  the date of  termination;  (3) in the  event  of the  death or
permanent disability of the executive, the executive's annual compensation shall
be paid to him or his legal  representatives for a period of 12 months following
termination;  (4) in the event of a Change of Control of the Company (defined to
include  the  acquisition  of 20% or more of the  combined  voting  power or the
Company's  outstanding  stock after the date of the  agreement,  a change in the
majority of the Board of Directors of the Company in connection  with a business
combination, sale of assets or related transaction), if the executive terminates
the  agreement on 60 days written  notice he shall receive a lump sum payment of
200% of his total annual  compensation for the preceding 12 months; and (5) upon
60 days written notice before termination by the executive,  the executive shall
receive a lump sum payment of 200% of his annual  compensation for the preceding
12 months  together  with  continuation  of  employee  benefits  for the periods
described above.

Compensation of Directors: At present the Company does not compensate any of its
directors for their  services to the Company as directors,  although they may do
so in the future,  subject to applicable  regulatory  approval.  The Company may
reimburse its directors for their costs  incurred for attending  meetings of the
Board of Directors.  The Company's Bank  subsidiary  compensates  its directors,
some of whom are  directors  of the  Company,  by annual  grants of  options  to
purchase  up to 13,500  shares of the Bank's  common  stock.  Such  options  are
exercisable  at the  greater  of fair  market  value or par value of the  Bank's
shares on the date of grant,  and are  exercisable  for a period of eight years,
except that in the case of Messrs.  Modder and Wilson,  they are  exercisable at
the greater of 110% of fair market value or par value on the date of grant for a
period of five years.


Item 11.  Security Ownership of Certain Beneficial Owners and Management


                              SECURITY OWNERSHIP OF
                    CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The following table sets forth certain information regarding the beneficial
ownership of the Company's  Common Stock as of February 28, 1999, by each person
known by the Company to be the beneficial owner of more than five percent of all
Classes of the Company's voting securities.

Name and Address of                 Number of               % of Outstanding
Beneficial Owner                     Shares                       Shares
-------------------                  ------                       ------

Philip C. Modder
3475 Sheridan Street
Hollywood, FL  33021              1,048,213 (2)                  19.3%

James L. Wilson
3475 Sheridan Street
Hollywood, FL  33021                933,400 (3)                  17.2%

Jack E. & Molly W. Butler, TTE's
U/A dtd 11/13/90
2363 Loblolly Lane 
Deerfield Beach, FL  33442          321,467 (4)                  5.9%

Robert D. & Martha L. Butler,
TTE's
U/A dtd 3/29/90
84 Southeast 4th Avenue
Deerfield Beach, FL  33441          325,150 (5)                  6.0%

Linda K. Strasser
6770 N.W. 87th Avenue
Parkland, FL  33067                 383,060 (6)                  7.1%

Timothy S. Butler
151 Deer Track Run
Lakemont, GA  30552                 449,675 (7)                  8.3%

Harold C. Friend
3475 Sheridan Street
Hollywood, FL  33021                287,708 (8)                  5.3%


(1)      Based on information supplied by the persons indicated.
(2)      Includes options to purchase 335,323 shares that are exercisable within
         60 days, and 67,511 shares owned by Mr. Modder's wife.
(3)      Includes options to purchase 261,555 shares that are exercisable within
         60 days,  40,844 shares owned by Mr. Wilson's wife, 13,334 shares owned
         by Mrs. Wilson as custodian for her children.
(4)      Jack E. and Molly W. Butler  share  voting and  investment  power  with
         respect to such shares.
(5)      Robert D. and Martha L. Butler share voting and  investment  power with
         respect to such shares.
(6)      Includes  16,667  shares owned by Linda Strasser's  husband and options
         owned by him to purchase 100,841 shares  that are exercisable within 60
         days.
(7)      Includes 83,334 shares owned by a trust as to which Mr. Butler has sole
         voting and investment power and options to purchase 134,174 shares that
         are exercisable within 60 days.
(8)      Includes options to purchase 19,953 shares that are exercisable  within
         60 days,  40,998 shares owned by Mr.  Friend's  wife, and 94,258 shares
         owned by Mr. Friend as custodian for his children.

     The  following  table  sets forth  information  concerning  the  beneficial
ownership of the Company's Common Stock  beneficially  owned by each director of
the Company,  by each executive officer of the Company named in the compensation
table, and by all directors and executive officers of the Company as a group, as
of February 28, 1999.


                         Shares of Class A   Percent (%) of
Name (1)                   Common Stock         Class
--------                   ------------         -----

Philip C. Modder           1,048,213 (2)        19.3%
James L. Wilson            933,400 (2)          17.2%
Eugene J. Strasser         383,060 (3)           7.1%
Harold C. Friend           287,708 (2)           5.3%
Robert D. Butler, Jr.      41,891 (4)            0.8%
Timothy S. Butler          449,675 (2)           8.3%
All directors and executive
officers as a group
(7 persons)              3,143,947 (5)          57.9%

(1)      The  business  address of each of the  persons  identified  above is at
         Southern  Security Bank Corporation,  3475 Sheridan Street,  Hollywood,
         Florida 33021.
(2)      See footnotes to preceding table.
(3)      Includes 272,620 shares owned by Eugene  Strasser's wife and options to
         purchase 100,841 shares that are exercisable  within 60 days.
(4)      Includes options to purchase 11,841 shares that are exercisable  within
         60 days.
(5)      Except as otherwise  indicated in the footnotes  above,  members of the
         group have sole voting and investment power as to such shares.

Item 12.  Certain Relationships and Related Transactions

                              CERTAIN TRANSACTIONS

     On  September  30,  1993,  the Company  received  from Philip  Modder,  the
Chairman  of the  Company,  and James  Wilson,  the  President  of the  Company,
$100,000 and $50,000,  respectively,  in services and  assistance  in payment of
organizational  expenses of the Company,  and they received non interest bearing
notes therefor (the "Notes").  On June 30, 1997, in exchange for  elimination of
the Notes, the Company sold 945,269 shares of its Common Stock to Philip Modder,
and  472,634  shares of its  Common  Stock to James  Wilson,  in each case at an
agreed  upon fair value of  $0.10579  per share (110% of the then per share book
value).  On the same date,  Messrs.  Modder and Wilson entered into an agreement
with the Board of  Directors  of the Company  pursuant to which they  eliminated
certain  obligations  of the Company to them for unpaid wages and benefits under
the terms of their employment agreements ($78,563 in the case of Mr. Modder, and
$128,563 in the case of Mr.  Wilson) in exchange for the Company  issuing Common
Stock to them (742,632 shares and 1,215,266 shares,  respectively) at the agreed
upon value of $.10579 per share.  Messrs.  Modder and Wilson subsequently agreed
with the Company to revalue the shares of Common  Stock  issued on June 30, 1997
at $.60 per share and, as a result, the Company rescinded the issue of 2,780,590
of the shares (1,390,085 each) made to them on June 30, 1997. As of December 31,
1997,  the Company  owed  $222,000 to Mr.  Modder and $68,000 to Mr.  Wilson for
unpaid back wages and benefits.

     The  Company  currently  owes  $100,000 to a trust affiliated  with Jack E.
Butler,  who is the  father  of  Timothy  S.  Butler  and the uncle of Robert D.
Butler,  Jr. who are  directors of the Company,  pursuant to the terms of a note
that bears  interest at the rate of 8% per annum payable  quarterly (the "Butler
Note").  The Butler Note was issued on December  29, 1993 and matures  every six
months,  when it is automatically  renewed unless the trust notifies the Company
of its intention to call the note 60 days prior to such maturity  date. The next
maturity date of the Butler Note is on June 30, 1999.


13.  Exhibits and Reports on Form 8-K

Exhibits.  The following exhibits are filed as part of this report.

     2.1  Agreement  and  Plan  of  Merger  by  and  between  Southern  Security
          Financial  Corporation and Southern Security Bank  Corporation,  dated
          October 31, 1997*

     2.2  Certificate  of Merger of  Southern  Security  Bank  Corporation  into
          Southern Security Financial Corporation, dated November 10, 1997*

     2.3  Articles of Merger of Southern Security Bank Corporation into Southern
          Security  FinancialCorporation,  under Florida law, dated November 12,
          1997*

         3.(i)

                    (a)  Certificate of Incorporation of Southern  Security Bank
                         Corporation, dated October 3, 1996**

                    (b)  Certificate    of   Amendment   of    Certificate    of
                         Incorporation  of  Southern  Security  BankCorporation,
                         dated January 17, 1997**

                    (c)  Certificate    of   Amendment   of    Certificate    of
                         Incorporation    of   Southern    Security    Financial
                         Corporation,  dated November 12, 1997 (changing name to
                         Southern Security Bank Corporation)*

         (ii)     By-laws of the registrant***

     4.1  Stock Certificate for Class A Common Stock***

     9.0  Voting Trust Agreement--N/A

     10.1 Executive  Employment  Agreement of Philip C.  Modder,  dated June 11,
          1992, together with Amendment No. 1 thereto, dated June 30, 1997***(1)

     10.2 Executive  Employment  Agreement  of James L.  Wilson,  dated June 11,
          1992, together with Amendment No. 1 thereto***(1)

     10.3 Minutes of Meeting of June 6, 1997,  of the Board of  Directors of the
          registrant  relating to modification of the compensation  arrangements
          for Philip C. Modder and James L. Wilson(1)***

     10.4 Agreements  between Southern Security Bank  Corporation,  Inc. and the
          Federal Reserve Bank of Atlanta, dated February 13, 1995 ****

     10.5 Agreement  between Southern Security Bank and the Federal Reserve Bank
          of Atlanta and the State of Florida  Department of Banking and Finance
          dated November 13, 1998 -- filed herewith.

     11.0 Statement re Computation of Per Share Earnings -- N/A.

     13.0 Annual Report to security holders for the last fiscal year -- N/A

     16.0 Letter re change of Certifying Accountant -- N/A

     17.0 Letter re change in accounting principles -- N/A

     21.0 Subsidiaries of the Registrant -- ***

     22.0 Published Report re matters submitted to vote -- N/A

     23.0 Consent of experts and counsel -- N/A

     27.0 Financial Data Schedule -- filed herewith.

__________

   *     Filed as an exhibit to Form 8-K of the  registrant  filed on November
         25, 1997.

   **    Filed as an exhibit to Form 10-SB of the registrant filed 7/31/97

   ***   Filed as an exhibit to Form 10-KSB filed on April 2, 1998.

  ****   Filed as an exhibit to Form 10-KSB/A filed on June 10, 1998.

   (1) Management compensation plan or arrangement.

   (b) Reports filed on Form  8-K.

     No  reports on Form 8-K were  filed  during the last  quarter of the period
covered by this report.

<PAGE>

                                   SIGNATURES

     In accordance with Section 13 or 15(d) of the Securities  Exchange Act, the
registrant  caused  this  report to be signed on its behalf by the  undersigned,
thereunto duly authorized.

                       SOUTHERN SECURITY BANK CORPORATION

March 30,  1999          By: s/ James L. Wilson

         Name:  James L. Wilson
         Title: Chief Executive Officer

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
this  report has been  signed  below by the  following  persons on behalf of the
Registrant and in the capacities and on the dates indicated;


Signature                                   Title                     Date
---------                                   -----                     ----

(i)  Principal Executive Officer:   Chief Executive Officer       March 30, 1999

     s/ James L. Wilson
     ------------------
     James L. Wilson



(ii) Principal Accounting and       Vice President                March 30, 1999
       Financial Officer:

     s/ Floyd D. Harper
     ------------------
     Floyd D. Harper


(iii) Directors:


     s/Philip C. Modder             Chairman of the Board         March 23, 1999
     ------------------
     Philip C. Modder

     s/James L. Wilson               Vice Chairman                March 30, 1999
     -----------------
     James L. Wilson

     s/Timothy S. Butler             Director                     March 23, 1999
     -------------------
     Timothy S. Butler

     s/Harold C. Friend              Director                     March 23, 1999
     ------------------
     Harold C. Friend

     s/Robert D. Butler              Director                     March 23, 1999
     ------------------
     Robert D. Butler

     s/Eugene J. Strasser            Director                     March 23, 1999
     --------------------
     Eugene J. Strasser

<PAGE>

                                   EXHIBIT INDEX

     Exhibit

     2.1  Agreement  and  Plan  of  Merger  by  and  between  Southern  Security
          Financial  Corporation and Southern Security Bank  Corporation,  dated
          October 31, 1997*

     2.2  Certificate  of Merger of  Southern  Security  Bank  Corporation  into
          Southern Security Financial Corporation, dated November 10, 1997*

     2.3  Articles of Merger of Southern Security Bank Corporation into Southern
          Security Financial Corporation,  under Florida law, dated November 12,
          1997*

     3.(i)

               (a)  Certificate  of  Incorporation  of  Southern  Security  Bank
                    Corporation, dated October 3, 1996**

               (b)  Certificate of Amendment of Certificate of  Incorporation of
                    Southern Security Bank Corporation, dated January 17, 1997**

               (c)  Certificate of Amendment of Certificate of  Incorporation of
                    Southern Security Financial Corporation,  dated November 12,
                    1997 (changing name to Southern Security Bank Corporation*

         (ii)     By-laws of the registrant***

     4.1  Stock Certificate for Class A Common Stock***

     9.0  Voting Trust Agreement--N/A

     10.1 Executive  Employment  Agreement of Philip C.  Modder,  dated June 11,
          1992, together with Amendment No. 1 thereto, dated June 30, 1997***

     10.2 Executive  Employment  Agreement  of James L.  Wilson,  dated June 11,
          1992, together with Amendment No. 1 thereto, dated June 30, 1998***

     10.3 Minutes of Meeting of June 6, 1997,  of the Board of  Directors of the
          registrant  relating to modification of the compensation  arrangements
          for Philip C. Modder and James L. Wilson***

     10.4 Agreements  between Southern Security Bank  Corporation,  Inc. and the
          Federal Reserve Bank of Atlanta, dated February 13, 1995 ****

     10.5 Agreement  between Southern  Security Bank and Federal Reserve Bank of
          Atlanta  and the State of Florida  Department  of Banking  and Finance
          dated November 13, 1998 - Filed herewith.

     11.0 Statement re Computation of Per Share Earnings -- N/A.

     13.0 Annual Report to security holders for the last fiscal year -- N/A

     16.0 Letter re change of Certifying Accountant -- N/A

     17.0 Letter re change in accounting principles -- N/A

     21.0 Subsidiaries of the Registrant -- ***.

     22.0 Published Report re matters submitted to vote -- N/A

     23.0 Consent of experts and counsel -- N/A

     27.0 Financial Data Schedule -- filed herewith.

---------

 *       Filed as an exhibit to Form 8-K of the  registrant  filed on 11/25/97.

 **      Filed as an exhibit to Form 10-SB of the registrant filed on 7/31/97.

 ***    Filed as an exhibit to Form 10-KSB of the registrant filed on 4/2/98.

 ****  Filed as an exhibit to Form 10-KSB/A filed on June 10, 1998.