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

                                   FORM 10-KSB/A

                                  The following items were the subject
                                  of a Form 12b-25 and are included herein:
                                  (1) Item 1; (2) Item 6; (3) Item 7; and
                                  (4) Financial Data Schedule.  The following
                                  additional items are amended herewith:
                                  (1) Item 10; (2) Item 11; and (3) Item 12.

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

            For the fiscal year ended December 31, 1997

[ ]  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 $1,579,285

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 March
23, 1998 would have been $7,125,095. 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.

State the number of shares outstanding of each of the issuer's classes of common
equity,  as of the latest  practicable  date:  (i) Class A Voting Common Stock -
4,299,673; (ii) Class B Non-Voting Common Stock - None.

                                     DOCUMENTS INCORPORATED BY REFERENCE: None

Transitional Small Business Disclosure Format (check one):

                  Yes___; No X

<PAGE>


                                                      PART I

Item 1.  Description of Business

General

      Southern  Security Bank Corporation (the "Holding  Corporation") is a bank
holding  company  that  owns  96.81% 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,  1997,  the  Holding  Corporation  and its  subsidiary  Bank  (collectively,
referred  to  herein  as  the  "Company")  had  consolidated   total  assets  of
$16,931,962,  total  deposits  of  $15,675,312,  net loans of  $12,463,278,  and
stockholders equity of $472,830.

      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 12/31/97

Net Loan Portfolio Balance at end of Period           $ 6,951,096  $ 12,463,278
Charge-Off Devalued/Impaired Earning Assets           $ 1,202,000  $     37,337
Total Classified Assets and Owned Real Estate         $ 3,970,999  $    430,000
Total Assets of Bank affiliate 12/16/93 and 12/31/97  $13,089,724  $ 16,924,041


Total Capital of Bank affiliate 12/16/93 and 12/31/97 $   288,381  $    897,708

Total Classified Assets as a Percent of Total Loans        48.46%         3.45%

      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. As a result of the Merger, the former shareholders
of the Company  obtained  95% of the  outstanding  capital  stock of the Holding
Corporation, and the former shareholders of SSF obtained 4.9% of the outstanding
capital  stock of the  Holding  Corporation.  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,
1997,  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  is 12,800,  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 be 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  FDICA,  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.

Plan of Development

     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. In December,  1997, the
Company  commenced a private  offering for $5 million of common stock.  Although
the  Bank  had not  achieved  break-even  earnings  level  by the  end of  1997,
management  believes  that if at least $1 million in  additional  equity for the
Bank is received in this Offering,  then the Bank will have a sufficient capital
base to achieve and sustain profitable operations.


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


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

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.

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 four
years since the  Company's  ownership,  cumulative  losses in this category were
less than  $84,000.  Total  classified  assets as a percentage of total loans at
December 16, 1993  exceeded  48% and as of December  31, 1997 were at 3.4%.  The
Bank's loan  portfolio  since the  acquisition  date has grown more than 180% to
approximately  $12.4  million and total asset  growth from $13 million to nearly
$17 million.  It is the  Management's  belief that the Bank has been cleansed of
many of those  negative  characteristics  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 four years of
effort, the Bank is presently viewed by management as having high asset quality,
and capital exceeding statutory guidelines.  An existing negative characteristic
of the Bank is its low  level of  earning  assets  as it  relates  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 $12.4  million as of December  31, 1997 from
less than $7 million at December 31, 1993, this earning asset category  requires
an  additional  $3 million in growth to bring the Bank to break  even.  The loan
growth  experienced during this four-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 $5 million,  its deposit base
will require  growth of $7.5  million.  To support  this level of balance  sheet
growth, the Bank's capital will need to grow by approximately $400,000.  Thus, 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
classification  "poor"  to  "good."  However,  the  limited  amount  of  capital
available to the Bank has caused its operations  over the last 24 months reflect
a stable pattern of operation without meaningful period-to-period differences.

      Average Balance Sheet. An analysis of the Company's  average balance sheet
levels for the last two years is presented in the Table  Average  Balance  Sheet
Analysis.  The Company's net interest income and net yields on  interest-earning
assets  increased  8.7% percent over 1996.  This  increase was the result of the
improved  contribution  of the  securities  portfolio  and loan  portfolio,  and
deposit pricing management efforts.  The average yield/rate for interest-earning
assets increased 2.9% over 1996 while the average yield/rate of interest-bearing
liabilities decreased 5.7% from 1996 to 1997.

<TABLE>
<CAPTION>

                   Southern Security Bank Corporation
                     Average Balance Sheet Analysis


                                           December                         Year Ended December 31,
                                           31, 1997                   1997                              1996  
                                           Average        Average              Average      Average             Average
                                          Yield/Rate      Balance   Interest  Yield/Rate    Balance   Interest Yield/Rate
                                          -------------------------------------------------------------------------------
                                                         (Dollars in Thousands)              (Dollars in Thousands)
Assets:
<S>                                           <C>        <C>         <C>       <C>         <C>        <C>       <C>  
Interest-earning assets:
      Investments (1)                         6.72%      $  3,455       237     6.86%      $  4,100   $   280   6.83%
      Federal funds sold                      n/a           1,545        87     5.63%           855        47   5.50%
      Loans receivable                        9.18%        10,665     1,113    10.44%        10,811     1,078   9.97%
                                                           ------     -----    -----         ------     -----   ----
           Total interest earning assets                   15,665     1,437     9.17%        15,766     1,405   8.91%
                                                                      -----     ----                    -----   -----
Noninterest-earning assets                                  2,301                             1,834                 
                                                           ------                           -------
           Total                                         $ 17,966                          $ 17,600
                                                          =======                           =======  

Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
      NOW and money market accounts           2.59%      $  5,012       126     2.51%         4,706       117   2.49%
      Savings accounts                        2.10%           401         8     2.00%           273         6   2.20%
      Certificates of deposit                 5.72%         7,364       416     5.65%         7,788       458   5.88%
      Other                                   6.00%           130         8     6.15%           165        11   6.67%
                                                           ------     -----    -----         ------     -----   ----

           Total interest-bearing  
           liabilities                                     12,907       558     4.32%        12,932       592   4.58%
                                                                      -----     ----                    -----   -----
Noninterest-bearing liabilities                             4,445                             3,789                 
Stockholders' equity                                          614                               879                 
                                                           ------                           -------
           Total                                         $ 17,966                          $ 17,600                 
                                                          =======                            ======
Net interest income and net yield
      on interest-earning assets                                        879     5.61%                    813    5.16%
                                                                       ====     ====                     ===    =====

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


Net Income (loss) for the respective  periods of 1997 and 1996 was  ($1,167,000)
and ($555,000)  which represents an increase in the net loss by $612,000 defined
by a combination of factors as described below.


      Analysis  of Changes in Interest  Income and  Interest  Expense.  Interest
income  during 1997 was  $1,437,000  as compared to  $1,405,000  for 1996.  This
marginal  increase,   although  not  indicative  of  future  performance,   does
demonstrate  stabilization.  Interest  expense for this period was  $558,000 for
1997, and $592,000 for 1996, which represents a decrease of $33,000, largely due
to the increased amount of non-interest deposits held by the Bank. The resultant
Net Interest  Income was $879,000 in 1997 and $813,000 for 1996,  reflecting  an
increase of approximately $66,000.

      The  impact  of the  bank's  strategies  can be seen in the  table  titled
Analysis  of Changes in  Interest  Income and  Interest  Expense for the periods
indicated.  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) changes in  rate/volume  (change in rate  multiplied by change in volume);
and (iv) total changes in rate and volume.

Southern Security Bank Corporation
Analysis of Changes in Interest Income and Interest Expense


<TABLE>
<CAPTION>

                                                                       Year Ended December 31,
                                                    1997 vs. 1996                                 1996 vs. 1995
                                          Increase (Decrease) Attributable to           Increase (Decrease) Attributable to
                                         -------------------------------------------------------------------------------------
                                         Volume      Rate      Rate/Volume    Net      Volume    Rate       Rate/Volume    Net
                                         -------------------------------------------------------------------------------------

                                                   (Dollars in Thousands)
Interest income on:
<S>                                      <C>         <C>          <C>        <C>       <C>       <C>           <C>         <C>    
      Investments                        $  (44)     $     1      $  0       $  (43)   $  128    $    (4)     $   (3)     $  121
      Federal funds sold                      38           1         1           40       (53)        (32)        14         (71)
      Loans receivable                      (15)          50         0           35       223         (22)        (6)        195
                                          -----       ------       ---        ------    ------    --------     ------      -----
           Total interest income on
           interest-earning assets          (21)          52         1           32       298         (58)         5         245
                                          -----       ------       ---        ------    ------    --------     ------      -----

Interest expense on:
      NOW and money market accounts            8           1         0            9        (8)        (35)         2         (41)
      Savings accounts                         3         (1)         0            2        (4)          1          0          (3)
      Certificates of deposit               (25)        (18)         1          (42)      131         (16)        (6)        109
      Other                                  (2)         (1)         0           (3)        6          (2)        (2)          2
                                          -----       ------       ---        ------    ------    --------     ------      -----
           Total interest expense on
           interest-bearing liabilities     (16)        (19)         1          (34)      125         (52)        (6)         67
                                          -----       ------       ---        ------    ------    --------     ------      -----
Increase (decrease) in net
      interest income                    $   (5)     $    71      $  0      $    66    $  173    $     (6)     $  11     $   178
                                          =====       ======       ===       ======     =====     ========      ====      =======
</TABLE>


     Other Income and  Expenses.  Total other  income was  $142,000  during 1997
compared with $108,000 for 1996,  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  $1,228,000 and
$686,000  for 1997 and 1996  respectively,  which  represents  a  difference  of
$542,000,  which is largely  attributed  to  settlement  of amounts owed the two
principal  officers of the Holding  Company under the terms of their  employment
agreements.  Total other  expenses were $843,000 and $788,000 for 1997 and 1996,
respectively, which represents a difference of $55,000, of which $57,000 was due
to the application of funds toward the regulatory  approval  procedures,  travel
and  professional  fees  associated with the merger with a shell public company,
Southern Security Financial Corporation.

      Federal Income Taxes.  At December 31, 1997, the Company had net operating
loss  carry-forwards  for Federal income tax purposes available to offset future
federal  taxable  income,  in the amount of  $7,674,000  with  specific  amounts
expiring each year from 2002 through the year 2012.


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  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.

      Therefor,  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 1.26.

      RSA/RSL (0 to 365 days) = 0.80 to 1.20, the Bank is at 0.67. RSA/RSL (0 to
      90 days) = 0.80 to 1.20, the Bank is at 1.22. RSA/RSL (91-365 days) = 0.80
      to 1.20, the Bank is at 0.25.

      0 to 365 day GAP/Total Assets = +or-10%, the Bank is at (-19.71%). 0 to 90
      day GAP/Total Assets = +or-10%, the Bank is at +5.62%.

      91 to 365 day GAP/Total Assets = +or-10%, the Bank is at (-25.33%).

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

            i.    Total  RSA/Total RSL Ratio:  Out of "Target" of .80 to 1.20 at
                  1.26. Rate sensitive assets currently  outweigh rate sensitive
                  liabilities.  Management  is  pursuing a program to  obtaining
                  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.

            ii.   RSA/RSL - 0 to 365 Day:  Out of Target of .80 - 1.20 at 0.67%.
                  The most  applicable and currently  achievable  strategy is to
                  further  increase  the core  deposit  base  within  this  time
                  horizon.

            iii.  RSA/RSL  - 0 to 90 Day:  Out of Target of .80 - 1.20 at 1.22%.
                  The most  applicable and currently  achievable  strategy is to
                  further  increase  the core  deposit  base  within  this  time
                  horizon.

            iv.   RSA/RSL - 91 - 365 Day:  Out of Target of .80 - 1.20 at 0.25%.
                  The most  applicable and currently  achievable  strategy is to
                  further  increase  the core  deposit  base  within  this  time
                  horizon.

            v.    0 - 365 Day  GAP/Total  Assets  Month End: Out of Guideline of
                  -10%  through  +10%  at  -19.71%.   The  most  applicable  and
                  currently  achievable  strategy  is to increase investments in
                  higher  yielding loans which will reprice  outside the 12
                  month horizon.

            vi.   0 - 90 Day  GAP/Total  Assets Month End: Out of Target of -10%
                  through  +10% at  13.21%.  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.

            vii.  91-365 Day  GAP/Total  Assets Month End: Out of Target of -10%
                  through  +10% at - 25.33%.  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, 1997.  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


Residential Real Estate
<S>                           <C>                  <C>               <C>               <C>               <C>              <C> 
      Fixed rate              $     1,691,741      $          0      $    315,378      $  1,361,363      $    15,000      $       0
      Adjustable rate               1,485,981                 0           370,896         1,115,085                0              0

Consumer
      Fixed rate                    3,092,577             9,395         3,083,182                 0                0              0
      Adjustable rate                 170,482            64,967           105,515                 0                0              0

Commercial
      Fixed rate                      663,679           183,313           190,294           290,072                0              0
      Adjustable rate               2,636,594         1,828,950           807,644                 0                0              0

Commercial Real Estate
      Fixed rate                      586,738            74,518           121,242           390,978                0              0
      Adjustable rate               2,313,072           228,805         1,079,882           561,891                0        442,494

Other                                  43,193            43,193                 0                 0                0              0

                              $    12,684,057      $  2,433,141      $  6,074,033      $  3,719,389      $    15,000      $ 442,494

Add deferred loan costs                68,023

                              $    12,752,080

</TABLE>

Fixed  rate  loans due after  one year  total  approximately  $5.8  million  and
adjustable  rate  loans due after one year  total  approximately  $4.0  million.
Adjustable rate loans which reprice after December 31, 1998 total  approximately
$117,000 at December 31, 1997.

      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 6.83% in 1996
to 6.73% at December 31, 1997.



                       Southern Security Bank Corporation
                      Maturities of Investment Securities
                               December 31, 1997

<TABLE>
<CAPTION>

                                 One Year of Less   Through Five Years     Through Ten Years After 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)
U.S. Treasury Securities
<S>                            <C>            <C>  <C>            <C>       <C>       <C>  <C>            <C>    <C>         <C>  
  Held to maturity             $    --        --%  $ 246,867      6.51%     $    --   --%  $       --     --%    $ 246,867   6.51%
  Available for Sale                --        --          --        --           --   --           --     --            --     --

Mortgage-backed securities
  Held to maturity             $    --        --%         --        --        150,856 7.50     530,354   6.35     681,210    6.60
  Available for Sale                --        --          --        --           --   --       380,094   6.68     380,094    6.68

U.S. government corporations
  and agencies:
  Held to maturity                  --        --          --        --        399,417 6.40     500,000   7.33     899,417    6.92
  Available for Sale                --        --          --        --             --   --          --     --          --      --
                                ------      ----    --------     -----        ------- ----   ---------   ----     -------    ----
     Total                     $    --        --$   $ 246,867     6.51%     $ 550,273 6.70% $1,410,448   6.78% $2,207,588    6.73%
                                ======      ====     ========     ====       ======== ====   =========   ====   =========    ====
</TABLE>
<PAGE>
      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 loan
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/Bank  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  portfolio for the past
two years for the period ending December 31, 1997 and December 31, 1996:

                                                         1997       1996

    Commercial Loans to businesses:                      22%        27%
    Consumer & Installment Loans:                        26%         8%
    Residential Mortgage Loans:                          25%        31%
    Commercial Mortgage Loans:                           23%        29%
    Accounts Receivable financing:                        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 ensure 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, 1997 delinquent loans greater
than  30 and  less  than  90  days  (excluding  Government  Guaranteed)  totaled
$241,000;  Classified  loans  totaled  $24,000;  and  Other  Real  Estate  Owned
(consisting of 5 condominium units) totaled $406,000.
<PAGE>
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, 1997 and 1996.
<TABLE>
<CAPTION>


                                                       1997               1996
                                                      (Dollars in Thousands)
                                               --------------------------------
Nonaccrual loans
<S>                                            <C>                   <C>     
      Real estate                              $         15          $       48
      Installment                                         0                   8

Accrual loans - Past Due 90 days or more
      Real estate                                       513*                 98
      Installment                                        22                   0

Restructured loans                                        0                   0

Real estate owned                                       406                 490

           Total nonperforming assets          $        956          $      644

</TABLE>

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

     Total non  performing  assets have  increased in 1997 from 1996 by $312,000
(48%);  however, the Bank's exposure to loss has been reduced.  Nonaccrual loans
decreased by $41,000  (73%),  and real estate owned  decreased by $84,000 (17%).
Accrual loans over 90 days  increased by $437,000 (346%).  Management  believes
that the exposure to loss is substantially mitigated as the $513,000 real estate
loans for 1997 are guaranteed by United States government agencies.

      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, 1997,  the Bank has set a conservative  loan loss  percentage at no
less than 1.53% 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, 1997:

                                               12/31/97         12/31/92

            Ending Balance Loan Loss Reserve   $289,000         $  619,000
            Loan Portfolio Charge-Offs           41,000            593,000

            Classified Loans                     24,000          3,004,000
            Other Real Estate Owned             406,000            967,000
                                                -------            -------
            Total Classified Assets             430,000          3,971,000

            Percent Classified to Total Loans        3.4%            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>

                                                            1997                                    1996

                                                         Amount of                                Amount of
                                               Amount of          Loans to              Amount of            Loans to
                                               Allowance         Gross Loans            Allowance         Gross Loans
                                                      (Dollars in Thousands)
<S>                                        <C>                      <C>          <C>                         <C>   
Commercial                                 $       72,852            26.02%       $         53,688            31.43%

Commercial Real Estate                             64,012            22.86%                 49,274            28.85%

Residential Real Estate                            77,647            25.05%                 77,561            31.32%

Consumer                                           73,338            25.73%                 14,763             7.90%

Other                                                 953             0.34%                    854             0.50%


      Total allowance for loan losses      $      288,802           100.00%       $        196,140           100.00%
</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 in 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.

     The following table sets forth the Deposit base of the Bank at the close of
business on December 31, 1997 and December 31, 1996  displayed in thousands (000
omitted).  The Company  views the deposit base as 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.  Such  was the  case as
reflected on the last business day  illustrated in the table below.  In 1997 the
non-interest bearing transaction balances were at a low on the last business day
while in 1996 they were at a peak on the last  business  day. For the year 1996,
total deposits  averaged  $16.2  million  compared to the 1997 average of $17.9
million.

                                                           12/31/97   12/31/96

      Total non-interest bearing transaction accounts      $ 3,975    $ 5,847
      Total interest bearing transaction accounts            5,293      4,752
      Total Savings and Time Deposits                        6,407      7,657
      -------------------------------                      -------    -------
      Total for all Deposits accounts                      $15,675    $18,256


The following table sets forth  information with respect to the return on assets
and the return on equity for the years ending  December  31, 1997 and 1996,  and
the ratio of average equity to average assets for those years.

                                     1997              1996
                                     (Dollars in Thousands)
                                -----------------------------
Net loss                        $   (1,167)        $    (555)

Average total assets                17,966            17,600

Average total equity                   614               879

Return on average assets             (6.5)%             (3.2)%

Return on average equity            (190.1)%           (63.1)%

Equity to assets ratio                 3.4%              5.0 %


There were no dividends declared in the years ended December 31, 1997 and 1996.

     The  Company's  net loss  increased  by $612,000  (103%) in 1997 due to the
settlement  of  compensation  due to executive officers under the terms of their
employment agreements and a substantial provision for loan losses. The increased
provision for loan losses of $122,000 reflected the expectation loan growth, not
the degradation of the loan portfolio.
<PAGE>
      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, 1997 it has met the capital adequacy
requirements as defined by these definitions.

     However,  the Bank in its written  agreement with the regulators has agreed
to attempt to  maintain a 6.25% ratio of capital to total  assets,  which was at
5.08% at  December  31,  1997.  The  third  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.


Regulatory Definition for each Capital Tier category  SSB   Adequately    Well

Tier-2 Capital = Tier-2 Cap/Risk Weighted Assets       8.9%   8.00%       10.0%
Tier-1 Risk = Tier-1 Cap/Risk Weighted Assets          7.6%   4.00%        6.0%
Tier-1 Leverage = Tier-1 Cap/Avg Quarterly Assets      5.0%   4.00%        5.0%

      In December 1997 the Company commenced a private offering of $5,000,000 of
common  stock.  The primary  purpose of the  offering  is to provide  additional
capital to the Bank so that it may grow its base of earning assets,  and achieve
stabilized  profitability,  a condition which does not presently exist.  Without
the injection of additional  capital into the Bank, it is unlikely that adequate
profitability  can be  achieved,  although  the Bank expects to be very close to
break-even operation within the first quarter of 1998.


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

      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.

     The Company has commenced a thorough review of the potential impacts of the
Year 2000 problem on its operations and financial condition. The Company expects
to incur minimal internal staff costs and other expenses in the execution of its
implementation  plan for Year 2000 compliance.  It is the Company's intention to
have all mission  critical  programs updated and tested for Year 2000 compliance
by December 31, 1998.  Management  reports progress on its compliance program to
the Board of Directors at least quarterly.


Item 7.  Financial Statements

                       SOUTHERN SECURITY BANK CORPORATION
                                 AND SUBSIDIARY


                          CONSOLIDATED FINANCIAL REPORT


                                DECEMBER 31, 1997










<PAGE>
                                           INDEPENDENT AUDITOR'S REPORT


To the Board of Directors and Stockholders
Southern Security Bank Corporation and Subsidiary
Boca Raton, Florida

We have  audited  the  accompanying  consolidated  balance  sheets  of  Southern
Security Bank  Corporation  and subsidiary as of December 31, 1997 and 1996, 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,  1997 and 1996,  and the
results  of their  operations  and their  cash flows for the years then ended in
conformity with generally accepted accounting principles.


                                        s/McGladrey & Pullen, LLP

Fort Lauderdale, Florida
March 24, 1998, except for the last
     paragraph of Note 16 as to which
     the date is April 30, 1998.


<PAGE>
SOUTHERN SECURITY BANK CORPORATION AND SUBSIDIARY


CONSOLIDATED BALANCE SHEETS
December 31, 1997 and 1996
ASSETS                                           1997             1996
-------------------------------------------------------------------------

Cash and due from banks (Note 3)            $  1,107,669     $  3,005,602

Federal funds sold                                    --        1,231,000
                                       ----------------------------------

   Total cash and cash equivalents             1,107,669        4,236,602

Securities held to maturity (Note 4)           1,827,494        2,108,882

Securities available for sale (Note 4)           380,094        1,377,545

Federal Reserve Bank stock, at cost               63,100           59,500

Loans, net (Notes 5, 13 and 17)               12,463,278       11,414,773

Premises and equipment (Note 6)                  399,799          430,275

Other real estate owned                          406,298          489,804

Accrued interest receivable                      125,870          106,715

Other assets                                     158,360           96,896
                                       ----------------------------------
                                            $ 16,931,962     $ 20,320,992
                                        ----------------------------------

See Notes to Consolidated Financial Statements.

<PAGE>
<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY                          
                                                             1997               1996
---------------------------------------------------------------------------------------

Liabilities:
<S>                                                     <C>              <C> 
   Noninterest-bearing deposits                         $   3,974,999    $   5,847,168
   Interest-bearing deposits (Note 7)                      11,700,313       12,409,035
                                                     ----------------------------------
              Total deposits                               15,675,312       18,256,203
   Federal funds purchased                                    206,000               --
   Securities sold under repurchase agreements                     --          750,000
   Notes Payable (Note 9)                                     100,000          250,000
   Other liabilities                                          452,550          305,805
                                                     ----------------------------------
              Total liabilities                            16,433,862       19,562,008
                                                     ----------------------------------

Commitments and contingencies (Notes 14 and 17)                    --               --
Minority interest in subsidiary                                25,270           37,816
                                                     ----------------------------------
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; issued
      and outstanding 1997 none
      1996 596,622 shares                                          --            5,966
   Class A voting common stock, $.01 par value;
      30,000,000 1,644,988
      shares authorized; issued and outstanding 1997
      4,299,673 shares; 1996 9,856,664 shares                  42,997           98,567
   Class B Non-Voting Convertible common stock,
      $.01 par value; 5,000,000 shares authorized;
      none issued and outstanding                                  --               --
   Capital surplus                                          4,215,371        3,259,822
   Accumulated (deficit)                                  (3,786,230)      (2,619,576)
                                                     ----------------------------------
                                                              472,138          744,779
   Unrealized gain (loss) on securities available 
      for sale, net (Note 4)                                      692          (23,611)
                                                     ----------------------------------
                     Total stockholders' equity               472,830          721,168
                                                     ----------------------------------
                                                        $  16,931,962    $  20,320,992
                                                     ----------------------------------

</TABLE>
<PAGE>


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

CONSOLIDATED STATEMENTS OF OPERATIONS
Years Ended December 31, 1997 and 1996
                                                                 1997           1996
-----------------------------------------------------------------------------------------
Interest income:
<S>                                                       <C>              <C>             
   Interest and fees on loans                             $   1,113,375    $   1,077,786
   Interest and dividends on securities                         237,029          280,152
   Interest on federal funds sold                                86,653           46,831
                                                       ----------------------------------
                                                              1,437,057        1,404,769
Interest expense                                                558,451          591,883
                                                       ----------------------------------

              Net interest income                               878,606          812,886

Provision for loan losses (Note 5)                              130,000            8,000
                                                       ----------------------------------

              Net interest income after
              provision for loan losses                         748,606          804,886
                                                       ----------------------------------

Other income:
   Service charges on deposit accounts                           98,959           70,062
   Securities gains (losses), net (Note 4)                          753          (6,697)
    Other                                                        42,516           44,162
                                                       ----------------------------------
              Total other income                                142,228          107,527
                                                       ----------------------------------

Other expenses:
   Salaries and employee benefits                             1,227,901          685,646
   Occupancy and equipment                                      338,750          333,710
   Data and item processing                                      78,926           75,274
   Professional fees                                             86,850           48,483
   Insurance                                                     87,861           77,709
   Other                                                        250,641          253,411
                                                       ----------------------------------
              Total other expenses                            2,070,929        1,474,233
                                                       ----------------------------------

              Net (loss) before minority interest in
                 net loss of subsidiary                      (1,180,095)        (561,820)
Minority interest in net loss of subsidiary                      13,441            6,481
                                                       ----------------------------------

              Net (loss)                                  $  (1,166,654)    $   (555,339)
                                                       ----------------------------------

              Basic and diluted earnings 
              per share (Note 12)                         $      (0.31)     $     (0.20)
                                                       ----------------------------------
</TABLE>
<PAGE>
See Notes to Consolidated Financial Statements.
<TABLE>
<CAPTION>

SOUTHERN SECURITY BANK CORPORATION AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Years Ended December 31, 1997 and 1996


                                                           Preferred Stock               Common Stock
                                                            -------------               -------------
                                                        Shares         Amount      Shares          Amount
----------------------------------------------------------------------------------------------------------

<S>                                                  <C>          <C>            <C>          <C>        
Balance, December 31, 1995                           1,002,624    $    10,026    8,893,442    $    88,934
   Net (loss)                                                -              -            -              -
   Issuance of stock in private
      placements                                        29,558            296      527,662          5,277
   Conversion of preferred
      stock (Note 10)                                (435,560)        (4,356)      435,560          4,356
   Net change in unrealized gain (loss) on
      securities available for sale (Note 4)                 -              -            -              -
                                                  --------------------------------------------------------
Balance, December 31, 1996                             596,622          5,966    9,856,664         98,567
   Net (loss)                                                -              -            -              -
   Issuance of stock in private
      placements                                             -              -      884,859          8,849
   Issuance of stock in settlement of
      certain liabilities (Notes 9 and 11)                   -              -      595,120          5,951
   Conversion of preferred
      stock (Note 10)                                (596,622)        (5,966)      596,622          5,966
   Preferred stock dividends                                 -              -      197,178          1,972
   Reverse acquisition (Note 2)                              -              -   (7,830,770)       (78,308)
   Net change in unrealized  gain (loss) on
      Securities  available for sale (Note 4)                -              -            -              -
                                                  --------------------------------------------------------
Balance, December 31, 1997                                   -    $         -    4,299,673    $    42,997
                                                  --------------------------------------------------------
</TABLE>

See Notes to Consolidated Financial Statements.

                                 Unrealized
                                 Gain
                                 (Loss)
                                 on
                                 Securities
Paid-In         Accumulated      Available for
Capital         (Deficit)        Sale, Net     Total
-------------------------------------------------------------

 $  2,933,995   $  (2,064,237)   $    17,059   $     985,777
            -        (555,339)             -        (555,339)

      325,827               -              -         331,400

            -               -              -               -

            -               -        (40,670)        (40,670)
-------------------------------------------------------------
    3,259,822      (2,619,576)       (23,611)        721,168
            -      (1,166,654)            -       (1,166,654)

      522,067               -              -         530,916

      351,121               -              -         357,072
            -               -              -               -
       (1,972)              -              -               -
       84,333               -              -           6,025

            -               -          24,303         24,303
-------------------------------------------------------------
 $  4,215,371   $ (3,786,230)    $        692   $    472,830
-------------------------------------------------------------

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

CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended December 31, 1997 and 1996


                                                                                   1997             1996
-------------------------------------------------------------------------------------------------------------
Cash Flows From Operating Activities
<S>                                                                           <C>              <C>             
   Net (loss)                                                                 $  (1,166,654)   $   (555,339)
   Adjustments to reconcile net (loss) to net cash used in
      operating activities:
      Net (accretion) on securities                                                  (7,452)          (1,931)
      Provision for loan losses                                                     130,000            8,000
      Depreciation and amortization                                                  76,406           65,254
      Securities (gains) losses, net                                                  (753)            6,697
      Minority interest in net loss of  subsidiary                                 (13,441)           (6,481)
      Issuance of common stock
        as compensation for officers                                                207,072               --
      Decrease (increase) in:
        Accrued interest receivable                                                (19,155)           23,939
        Other assets                                                               (55,439)           21,105
      Increase in other liabilities                                                146,745            36,235
                                                                           ----------------------------------
              Net cash (used in) operating activities                             (702,671)         (402,521)
                                                                           ----------------------------------

Cash Flows From Investing Activities
   Net cash flows from securities (Note 18)                                       1,308,642        1,468,876
   Loan originations and principal collections on loans                           1,335,699        (289,132)
   Purchases of loans                                                           (2,514,204)      (1,790,534)
   Purchase of premises and equipment                                              (45,930)         (56,373)
   Proceeds from sale of other real estate owned                                     83,506               --
                                                                           ----------------------------------
              Net cash provided by (used in) investing activities                   167,713        (667,163)
                                                                           ----------------------------------

Cash Flows From Financing Activities
   Net increase (decrease) in federal funds purchased
      and securities sold under repurchase agreements                             (544,000)          750,000
   Net increase (decrease) in deposits                                          (2,580,891)        1,820,024
   Proceeds from issuance of stock                                                  530,916          331,400
                                                                           ----------------------------------
              Net cash provided by (used in) financing activities                (2,593,975)        2,901,424
                                                                           ----------------------------------

              Increase (decrease) in cash and cash equivalents                   (3,128,933)        1,831,740
Cash and cash equivalents
   Beginning                                                                      4,236,602        2,404,862
                                                                           ----------------------------------
   Ending                                                                     $   1,107,669    $   4,236,602
                                                                           ----------------------------------
</TABLE>

See Notes to Consolidated Financial Statements.

<PAGE>


SOUTHERN SECURITY BANK CORPORATION AND SUBSIDIARY

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.

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.

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.

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 stockholders'  equity, 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 methods 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.

Transfers of receivables:  The Financial  Accounting  Standards Board has issued
Statement No. 125,  Accounting  for Transfers and Servicing of Financial  Assets
and  Extinguishment  of  Liabilities,   which  is  effective  for  transfers  of
receivables  occurring  after  December 31, 1996.  The Statement does not permit
earlier or retroactive  application.  The Statement  distinguishes  transfers of
financial  assets that are sales from transfers that are secured  borrowings.  A
transfer of financial  assets in which the  transferor  surrenders  control over
those assets is accounted for as a sale to the extent that  consideration  other
than beneficial interests in the transferred assets is received in exchange. For
transfers  that are not  accounted  for as sales,  the  Statement  requires that
debtors  reclassify  financial  assets  pledged as  collateral  and that secured
parties  recognize  those assets and their  obligation to return them in certain
circumstances in which the secured party has taken control of those assets.

Earnings per share: The FASB has issued  Statement No. 128,  Earnings per Share,
which  supersedes  APB Opinion No. 15.  Statement  No. 128  established  revised
standards for the computation and presentation of earnings per share and applies
to all  entities  that have common  stock or  potential  common  stock,  such as
options, warrants and convertible securities, outstanding that trade in a public
market.  Other  entities  which  choose to present  earnings  per share in their
financial  statements  must also apply the provisions of this  Statement.  Those
entities that have only common stock  outstanding  are required to present basic
earnings  per-share  amounts.  (Basic per-share amounts are computed by dividing
net income  (the  numerator)  by the  weighted-average  number of common  shares
outstanding (the denominator).  All other entities are required to present basic
and diluted per-share amounts.  Diluted 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.

The Company  initially applied Statement No. 128 for the year ended December 31,
1997 and, as required by the Statement,  has restated all per share  information
for the prior years to conform to the Statement.


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, 1997 and 1996. 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:  The Financial Accounting Standards Board issued
Statement No. 130, Reporting  Comprehensive  Income in June, 1997. Statement No.
130 requires an entity to include a statement of  comprehensive  income in their
full set of general-purpose financial statements.  Comprehensive income consists
of the net  income or loss of the  entity  plus or minus the change in equity of
the entity during the period from transactions,  other events, and circumstances
resulting  from  nonowner  sources.  Statement  No. 130 is  effective  for years
beginning  after  December 15, 1997 and will  require  financial  statements  of
earlier periods that are presented for comparative purposes to be reclassified.

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 to maintain reserve balances in cash or on deposit with the
Federal  Reserve  Bank,  based on a  percentage  of deposits.  Required  reserve
balances  were  completely  satisfied  by cash on hand at December  31, 1997 and
1996.


Note 4.  Investment Securities

Securities  held to maturity:  The amortized  cost and fair values of securities
held to maturity as of December 31, 1997 and 1996 are summarized as follows:
<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>
<TABLE>
<CAPTION>

                                                              1996
                                   ---------------------------------------------------------
                                                        Gross        Gross
                                       Amortized    Unrealized    Unrealized        Fair
                                            Cost        Gains        Losses         Values  
                                   ---------------------------------------------------------
<S>                                <C>              <C>          <C>            <C>
U. S. Government corporations
     and agencies                  $    1,399,327   $       -    $  (22,708)    $ 1,376,619
Mortgage-backed securities                709,555       7,518             -         717,073
                                   ---------------------------------------------------------
                                   $    2,108,882   $   7,518    $  (22,708)    $ 2,093,692
                                   ---------------------------------------------------------
</TABLE>

The amortized  cost and fair values of  securities  held to maturity at December
31, 1997, by contractual maturity, are shown below.

                                               Amortized             Fair
                                                 Cost                Values
                                           ---------------------------------
Due after one year through five years         $    246,867     $    251,015
Due after five through ten years                   399,417          399,748
Due after ten years                                500,000          500,000
Mortgage-backed securities                         681,210          692,434
                                           ---------------------------------
                                              $  1,827,494     $  1,843,197
                                           ---------------------------------

Gross losses of $1,453 were  recognized  on  securities  held to maturity in the
year ended  December 31, 1996 as a result of the  disposition of a security that
was called by the maker.

Securities held to maturity with a carrying amount of  approximately  $1,300,000
and  $475,000  at  December  31, 1997 and 1996,  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, 1997 and 1996 are summarized as follows.

<TABLE>
<CAPTION>

                                                         1997
                              ----------------------------------------------------------
                                                  Gross        Gross
                                 Amortized    Unrealized    Unrealized        Fair
                                      Cost        Gains        Losses         Values 
                              ----------------------------------------------------------
<S>                           <C>             <C>            <C>          <C>
Mortgage-backed securities    $   379,378     $  1,325       $   (609)    $   380,094
                              ----------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>

                                                         1996
                              ----------------------------------------------------------
                                                  Gross        Gross
                                 Amortized    Unrealized    Unrealized        Fair
                                      Cost        Gains        Losses         Values 
                              ----------------------------------------------------------
<S>                           <C>             <C>           <C>           <C>    
Mortgage-backed securities    $  1,390,201    $    2,852    $  (15,508)   $  1,377,545
                              ----------------------------------------------------------
</TABLE>

Contractual maturities of mortgage-backed  securities available for sale are not
disclosed  because borrowers have the right to call or repay obligations with or
without call or repayment penalties.

Gross realized gains (losses) from the sale of securities available for sale for
the years ended December 31, 1997 and 1996 were as follows:

                                  1997                       1996
--------------------------------------------------------------------------
Gross gains                   $    753                  $       -
Gross losses                         -                    (5,244)

There were no  securities  available  for sale  pledged at  December  31,  1997.
Securities  available for sale with a carrying amount of approximately  $715,000
at December 31, 1996,  were pledged as  collateral  on trustee  deposits and for
repurchase agreements.

Changes in the unrealized loss on securities available for sale are as follows:
<TABLE>
<CAPTION>

                                                                    Years Ended December 31,
                                                                    ------------------------
                                                                      1997              1996
                                                            ----------------------------------
<S>                                                          <C>                <C> 
Balance, beginning                                           $      (23,611)    $       17,059
   Net change in unrealized gains (losses) during the year            13,372           (42,373)
   Amortization of unrealized loss on security transferred
        to held to maturity                                           11,826              145
   Allocation of changes to minority interest in subsidiary            (895)            1,558
                                                             ---------------------------------
Balance, ending                                              $           692    $    (23,611)
                                                             ---------------------------------
</TABLE>
<PAGE>

Note 5.  Loans

The composition of net loans as of December 31, 1997 and 1996 is as follows:

                                          1997             1996
                               -----------------------------------
Commercial                     $      3,300,273  $      3,641,451
Commercial real estate                2,899,810         3,342,084
Residential real estate               3,177,722         3,579,962
Consumer                              3,263,059           915,062
Other                                    43,193            57,953
                               -----------------------------------
                                     12,684,057        11,536,512
                               -----------------------------------

Allowance for loan losses              (288,802)         (196,140)
Deferred loan fees and
purchased premiums, net                  68,023            74,401
                               -----------------------------------
Loans, net                     $     12,463,278  $     11,414,773
                               -----------------------------------

Activity in the allowance for loan losses for the years ended  December 31, 1997
and 1996 was as follows:

                                              1997             1996
                                    ---------------------------------
Balance, beginning                   $      196,140    $      182,832
Amounts charged off:
   Consumer loans                          (13,620)            (5,326)
   Commercial loans                        (27,359)                 -
Provision for loan losses                   130,000             8,000
Recoveries of amounts charged off
   Commercial loans                           3,641            10,634
                                     ---------------------------------
Balance, ending                      $      288,802    $      196,140
                                     ---------------------------------

The Bank's  recorded  investment  in  impaired  loans was $15,000 and $56,124 at
December 31, 1997 and 1996, respectively. The specific allowance associated with
impaired loans,  and included in the allowance for loan losses,  at December 31,
1997 and 1996,  was $7,500  and  $24,073,  respectively.  The  average  recorded
investment  in impaired  loans  during  1997 and 1996 was  $55,000 and  $45,000,
respectively.  Interest income on impaired  loans,  recognized for cash payments
received in 1997 and 1996, was not significant.


Note 6.  Premises and Equipment

The  major  classes  of  premises  and  equipment  and  the  total   accumulated
depreciation as of December 31, 1997 and 1996 are as follows:

                                                       1997             1996
                                              -------------------------------
Leasehold improvements                         $      705,408    $    675,332
Furniture, fixtures, and equipment                    534,974         536,105
                                              -------------------------------
                                                    1,240,382       1,211,437
Less accumulated depreciation and amortization        840,583         781,162
                                              -------------------------------
                                               $      399,799    $    430,275
                                              -------------------------------


Note 7.  Deposits

The composition of interest-bearing deposits at December 31, 1997 and 1996 is as
follows:

                                                    1997              1996
                                             -------------------------------
Now accounts                                 $   1,602,893    $   1,167,277
Money market accounts                            3,690,050        3,584,884
Savings accounts                                   431,153          363,789
Certificates of deposit less than $100,000       4,276,204        5,203,073
Certificates of deposit of $100,000 or more      1,700,013        2,090,012
                                             -------------------------------
   Total                                     $  11,700,313    $  12,409,035
                                             -------------------------------

At December 31, 1997, the scheduled maturities of certificates of deposit are as
follows:

                                   Less               $100,000    
                                   than                  and
                                   $100,000              over           Total
                              -------------------------------------------------
Three months or less           $    1,023,219    $     300,000    $   1,323,219

Over three through six months         650,144          800,000        1,450,144
Over six through twelve months      2,420,661          500,013        2,920,674
Over one through two years            120,757          100,000          220,757

Over two through three years           55,423                -           55,423
Over three through four years           6,000                -            6,000
                               ------------------------------------------------
                               $    4,276,204    $   1,700,013   $    5,976,217
                               ------------------------------------------------




Note 8.  Income Taxes

The net  cumulative  tax  effects of the  primary  temporary  differences  as of
December 31, 1997 and 1996 are shown in the following table:
<TABLE>
<CAPTION>

                                                            1997        1996
------------------------------------------------------------------------------
Deferred tax assets:
<S>                                              <C>              <C>
   Allowance for loan losses                     $       42,000   $        -
   Other real estate owned                               25,200       25,200
   Premises and equipment                                41,500       47,900
   Net operating loss carryforward                    2,878,400    2,568,900
   Accrual to cash conversion for income taxes           56,800       40,100
   Other                                                  2,300        7,100
                                                 ----------------------------
              Total deferred tax assets               3,046,200    2,689,200
                                                 ----------------------------
Deferred tax liabilities:
   Allowance for loan losses                                 -        (6,800)
   Deferred loan costs                                 (13,800)      (9,900)
                                                 ----------------------------
              Total deferred tax liabilities           (13,800)     (16,700)
                                                 ----------------------------
                                                      3,032,400    2,672,500
Valuation allowance for deferred tax assets          (3,032,400)  (2,672,500)
                                                 ----------------------------
              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 $359,900 and $219,600
during the years ended December 31, 1997 and 1996, 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, 1997 and 1996,  because the results of
operations do not provide  evidence that the net operating  losses available for
carryforward will be utilized in the future.

The Bank has available  federal net operating loss  carryforwards  approximating
the following at December 31, 1997:

Expiring December 31,
-----------------------------------
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                        850,000
                   -----------------
                   $      7,674,000
                   -----------------


Note 9.  Notes Payable

The  Company  has  an  unsecured  note  payable  to a  trust  affiliated  with a
shareholder in the amount of $100,000 at December 31, 1997 and 1996. The note is
due June 30, 1998 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.

The Company also had  unsecured  notes  payable to two directors and officers in
the total amount of $150,000 at December 31, 1996.  The notes were exchanged for
250,000 shares of Class A Common Stock of the Company on June 30, 1997.


Note 10.  Capital Stock

The Company has authorized the issuance of 5,000,000  shares of Preferred  Stock
with a par value of $.01 per share.  The  Certificate of  Incorporation  created
Series A Preferred  Stock and authorized  the issuance of 1,200,000  shares from
the total authorized  shares.  The Board of Directors has the authority to issue
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  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.  Accumulated  dividends  at  December  31, 1996  totaled  approximately
$120,000.  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  but unpaid  dividends  were
settled by the issuance of Class A Common Stock at a price of $.60 per share.

Shares of Series A  Preferred  Stock may be either  converted  to Class A common
stock, generally on a share for share basis, or redeemed at a price of $1.50 per
share plus the amount of any  dividends  in  arrears,  in the event the  Company
files a registration  statement  relating to an initial  public  offering of the
Class A Common  Stock.  Shares of Series A Preferred  Stock may be redeemed at a
price of $1.50 per share plus the amount of any  dividends  in  arrears,  in the
event the  Company (1) merges  with  another  company and does not remain as the
continuing  corporation,  (2) sells or transfers all or substantially all of its
assets to another  corporation,  or (3) the Company is liquidated,  dissolved or
otherwise  winds up its business.  In the event of a stock split,  reverse stock
split or stock  dividend  resulting  in an increase or decrease in the number of
shares  of  common  stock  outstanding,  the  conversion  price of the  Series A
Preferred Stock shall be correspondingly increased or decreased proportionately.


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 $290,000 at December 31, 1997 for additional
amounts due to the two officers for services  performed in connection with their
employment agreements.

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 (420,390 shares at December 31, 1997). 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 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, 1997 and
1996 is 5.5 years and 6.2 years, respectively.

A  summary  of the  options  for  the  purchase  of  common  stock  of the  Bank
outstanding  as of December 31, 1997 and 1996, 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 1997 and 1996:  risk-free  interest  rates of 6
percent for 1997 and 7 percent for 1996 and  expected  lives of 6 years for both
years.
<TABLE>
<CAPTION>

                                                 1997                             1996
                                     -------------------------------------------------------------
                                                  Weighted-Average                Weighted-Average
                                     Shares       Exercise         Shares         Exercise
                                                  Price                           Price
--------------------------------------------------------------------------------------------------
<S>                                       <C>     <C>                 <C>         <C>      
Outstanding at beginning of year          319,690 $        1.00        193,930    $       1.00
Granted                                    95,180          1.00        137,760            1.00
Exercised                                      --                           --
Forfeited                                      --                     (12,000)            1.00
                                     -------------                -------------
Outstanding at end of year                414,870          1.00        319,690            1.00
                                     -------------                -------------
Options exercisable at year-end           414,870          1.00       319,690             1.00
                                     -------------                -------------
Weighted-average fair value of
   options granted during the year                $ 0.08                          $ 0.14

</TABLE>
In addition to the plan discussed  above,  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  shareholders.  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, 1997
and 1996 was 7.0 and 6.7 years, respectively.

A  summary  of the  options  for the  purchase  of common  stock of the  Company
outstanding  as of December 31, 1997 and 1996, and changes during the years then
ended is presented  below.  (After  giving  effect to the 1 for 3 reverse  stock
split executed in connection  with the reverse merger  discussed in Note 2.) 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
1997 and 1996:  risk-free interest rates of 6 percent for 1997 and 7 percent for
1996 and 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>


                                                 1997                             1996
                                     -------------------------------------------------------------
                                                  Weighted-Average                Weighted-Average
                                     Shares       Exercise         Shares         Exercise
                                                  Price                           Price
--------------------------------------------------------------------------------------------------
<S>                                        <C>     <C>                  <C>        <C>    
Outstanding at beginning of year           667,134 $        0.34        632,801    $      0.26 
Granted                                     91,478          1.80         34,333           1.80
Exercised                                        -                            -
Forfeited                                        -                            -
                                     --------------              ---------------
Outstanding at end of year                 758,612          0.51        667,134           0.34
                                     --------------              ---------------
Options exercisable at year-end            758,612          0.51        667,134           0.34
                                     --------------              ---------------
Weighted-average fair value of
   options granted during the year                 $ 0.75                           $  0.84


</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:

                                                     1997          1996
                             ----------------------------------------------
Net loss                     As reported        $ (1,166,654)    (555,339) 
                             Pro forma            (1,235,000)    (584,000)

Basic earnings per share     As reported               (0.31)       (0.20)
                             Pro forma                 (0.33)       (0.20)


<PAGE>



Note 12.  Earnings per Share

Following is  information  about the  computation of the earnings per share data
for the years ended  December 31, 1997 and 1996:  (After  giving effect to the 1
for 3 reverse  stock  split  executed  in  connection  with the  reverse  merger
discussed in Note 2.)
<TABLE>
<CAPTION>

                                                                             Per Share
                                              Numerator      Denominator     Amounts
                                             ------------------------------------------
                                                    Year Ended December 31, 1997
                                             ------------------------------------------

<S>                                          <C>              <C>           <C>
Net loss                                     $(1,166,654) 
Less preferred stock dividends accrued           (14,834)
                                             ------------
Basic and diluted earnings per share,
   income available to common shareholders   $(1,181,488)      3,771,047    $ (0.31)
                                             =======================================
</TABLE>
<TABLE>
<CAPTION>

                                                    Year Ended December 31, 1996
                                             -----------------------------------------

<S>                                          <C>              <C>           <C> 
Net loss                                     $ (555,339)         
Less preferred stock dividends accrued          (47,752)
                                             ------------
Basic and diluted earnings per share,
   income available to common shareholders     (603,091)      3,088,970     $ (0.20)
                                               =====================================

</TABLE>
Convertible preferred stock in the amount of 596,622 shares at December 31, 1996
and options for the  purchase of 758,612  shares and 667,134  shares at December
31, 1997 and 1996,  respectively,  have not been included in the  computation of
diluted  earnings per share for 1997 and 1996 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, 1997 and 1996 and the activity therein for the years then ended was
as follows:

                                                     1997           1996
                                                     ----           ----
Balance, beginning                                $  705,057     $  836,331

     New loans                                            -         160,000

     Repayments                                     (450,000)      (291,274)
                                                  --------------------------
Balance, ending                                   $  255,057     $  705,057
                                                  =========================

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, 1997, are as follows:

Years ending December 31                              Amount
--------------------------------------------------------------
1998                                        $         161,646
1999                                                  166,496
2000                                                  171,490
2001                                                  176,635
2002                                                  181,934
Thereafter                                          2,400,081
                                            ------------------
     Total minimum lease payments           $       3,258,282
                                            ------------------

Total lease expense for the years ended December 31, 1997 and 1996  approximated
$214,100 and $226,900,  respectively,  net of sublease  income of  approximately
$22,900 and $40,600,  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, 1997, 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, 1997.

As of December 31, 1997, 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>         <C> 
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%

As of December 31, 1996:
   Total Capital (to
      Risk-Weighted Assets)      $  1,238,319  11.2%   $    881,360  8.0%    $ 881,360   8.0%
   Tier I Capital (to
      Risk-Weighted Assets)      $  1,099,885  10.0%   $    440,680  4.0%    $ 440,680   4.0%
   Tier I Capital (to
      Average Assets)            $  1,099,885   6.6%   $    670,440  4.0%    $ 670,440   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.

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 March 17, 1992, 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").  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) the volume of adversely  classified assets, (c) the Bank's anticipated level
of retained  earnings,  and (d) the source and timing of  additional  funds that
fulfill future capital requirements;

     c. Requires that, in the event the Bank's leverage ratio falls below 6.25%,
the Bank  notify the FRB and the  Department  about the capital  deficiency  and
submit a  written  statement  detailing  the steps to be taken to  increase  the
leverage ratio; and,

     d.   Requires  the Bank to  maintain  at all  times an  allowance  for loan
losses not less than 1.53% of total loans.


As shown in the  financial  statements,  the  Company  incurred  net  losses  of
$1,166,654  and  $555,339  during the years  ended  December  31, 1997 and 1996,
respectively.  Despite  these  losses,  the Bank  continued  to meet the minimum
regulatory  capital  requirements  prescribed  under  prompt  corrective  action
provisions at December 31, 1997. 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. In the Company's written plan submitted to
the FRB, as well as the Bank's  written plan  submitted to the FRB and the State
of Florida  Department of Banking and Finance,  management has indicated that it
intends to raise additional capital through the sale of common stock and that it
expects to  significantly  reduce the loss from  operations in 1998. In December
1997 the Company  commenced  a private  offering  of up to  1,000,000  shares of
common  stock at an officer  price of $5 per share.  The  securities  may not be
offered or sold in the U.S. absent registration under the Securities Act of 1933
or an  applicable  exemption  from  registration.  The offering is being made in
reliance upon  applicable  exemptions  from  registration.  The Company has sold
144,000 shares under the private  offering  through April 30, 1998. There can be
no  assurance  that  the  sale of  additional  shares  can be  accomplished.  In
addition,  management believes that improvements in the Bank's  profitability in
1998 have been sufficient to eliminate operating losses at the Bank, and expects
that such improvement in the Bank's  profitability will significantly reduce the
Company's loss from operations in 1998.

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, 1997 and 1996:

                                       1997               1996
                               ----------------------------------
Commitments to extend credit   $    1,995,917    $     1,536,353
Standby letters of credit              58,632             58,632
                               ----------------------------------
                               $    2,054,549    $     1,594,985
                               ----------------------------------

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 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,
                                                                   -----------------------------------

                                                                              1997             1996
                                                                 -------------------------------------
<S>                                                                <C>               <C>
Cash flows from securities:
   Securities available for sale:
      Sales                                                        $         782,010 $      1,173,016
      Maturities and paydowns                                                584,473          252,964
      Purchases                                                             (349,945)
   Securities held to maturity:
      Maturities and paydowns                                                541,563          447,846
      Purchases                                                             (245,859)        (399,250)
   Purchases of Federal Reserve Bank stock                                    (3,600)          (5,700)
                                                                     ----------------------------------
                                                                    $      1,308,642 $      1,468,876
                                                                     ----------------------------------

Supplemental disclosures of cash flow information:
    Cash payments for interest                                      $        633,500 $        632,532
Supplemental schedule of Noncash Investing and
   Financing Activities
   Net change in unrealized gain (loss) on securities available
      for sale (Note 4)                                                       24,303         (40,670)
   Issuance of 250,000 shares of Class A Common Stock
      in exchange for notes payable to shareholders (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                -

</TABLE>


Note 19.  Securities Sold Under Repurchase Agreements

Securities sold under agreements to repurchase generally mature within one month
from the transaction  date. The securities sold under the repurchase  agreements
are held in  safekeeping  for the  Bank and are  identified  as  pledged  by the
safekeeping  agent.  Securities  sold under  agreements to  repurchase  averaged
approximately  $8,000 and $65,000  during 1997 and 1996,  respectively,  and the
average  interest  rate  was  approximately  5.5  percent.  The  maximum  amount
outstanding at any time during 1997 and 1996 was $750,000.


Note 20.  Fair Value of Financial Instruments

The following  methods and  assumptions  were used by the Bank 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 estimate 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 passbook  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 Bank's financial instruments at December 31, 1997 and 1996:

<TABLE>
<CAPTION>
                                                                           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)        2,270,588         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>
<TABLE>
<CAPTION>

                                                                           1996
                                                                 ------------------------------
                                                                    Carrying             Fair
                                                                     Amount              Value
                                                                 -------------------------------
<S>                                                              <C>           <C>             
Cash and cash equivalents                                        $  4,236,602  $      4,236,602
Investment securities (including Federal Reserve Bank stock)        3,545,927         3,530,737
Loans receivable                                                   11,414,773        11,515,557
Accrued interest receivable                                           106,715           106,715
Deposits                                                           18,256,203        18,284,700
Other liabilities                                                   1,305,805         1,305,805
Commitments to extend credit                                                -                 -

</TABLE>

Note 21.  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  an  implementation  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 heavily
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.

Note 22.  Parent Company Only Financial Statements

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

                       Southern Security Bank Corporation
                       Parent Company Only Balance Sheets
                           December 31, 1997 and 1996

<TABLE>
<CAPTION>
                                                  1997           1996
ASSETS
                                             --------------------------------
<S>                                          <C>                 <C>         
Cash                                         $       721         $      5,202
Investment in Southern Security Bank             843,231              982,879
Other assets                                      36,408               79,780
                                             --------------------------------
                                             $   880,360         $  1,067,861
</TABLE>
<TABLE>
<CAPTION>

LIABILITIES AND STOCKHOLDERS' EQUITY

<S>                                          <C>                 <C>         
Liabilities                                  
  Notes payable                              $   100,000         $    250,000
  Other liabilities                              307,530               96,693
                                             --------------------------------
    Total liabilities                            407,530              346,693

Stockholders' equity                             472,830              721,168
                                             --------------------------------
                                             $   880,360         $  1,067,861
</TABLE>


                       Southern Security Bank Corporation
                  Parent Company Only Statements of Operations
                     Years Ended December 31, 1997 and 1996

<TABLE>
<CAPTION>
                                                  1997           1996
                                             --------------------------------
<S>                                          <C>                 <C>         
Equity in net loss of Southern
 Security Bank                               $   (283,951)       $    (198,911)
Interest expense                                    6,117               8,000
Other expenses                                    876,586              348,428
                                             --------------------------------
Net (loss)                                   $ (1,166,654)       $    (555,339)
</TABLE>

                       Southern Security Bank Corporation
                  Parent Company Only Statements of Cash Flows
                     Years Ended December 31, 1997 and 1996

<TABLE>
<CAPTION>
                                                  1997           1996
                                             --------------------------------
<S>                                          <C>                 <C>         
Net (loss)                                   $ (1,166,654)        $    (555,339)
Adjustments to reconcile net (loss) to net
 cash provided by operating activities:
 Equity in net loss of Southern Security
   Bank                                           283,951              198,911
 Issuance of common
   stock as compensation for officers             207,072                    -
 Other                                            260,234              144,973
                                             --------------------------------
Net cash (used in) operating activities          (415,397)            (211,455)

Net cash (used in) investing activities          (120,000)            (165,000)

Net cash provided by financing activities         530,916              331,400
                                             --------------------------------
Increase (decrease) in cash and cash
 equivalents                                       (4,481)             (45,055)
Cash and cash equivalents        
 Beginning                                          5,202               50,257
                                              --------------------------------
 Ending                                      $        721        $       5,202
                                              ================================
</TABLE>


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, 1997, 1996 and 1995. 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
1997.


<TABLE>
<CAPTION>
                        Annual Compensation                                 Long-Term Compensation
        Name and                                                                                
   Principal Position                                                                           All Other
                                                                                                Compen-
                                                                                                sation
                                                                      Securities
                             Year           Salary    Other Annual    Underlying    LTIP
                                                      Compensation    Options/      Payouts ($)
                                                                      SARs (#)
----------------------------------------------------------------------------------------------------------------

<S>                          <C>         <C>          <C>             <C>            <C>         <C>    
Philip C. Modder, Chairman   1997        $175,000     $17,000(1)      48,807        -0-          $ -0-
and President                1996        $127,000     $17,000(1)      19,619        -0-          $ -0-
                             1995        $149,000     $17,000(1)      18,692        -0-          $ -0-
----------------------------------------------------------------------------------------------------------------

James L. Wilson, Chief       1997        $175,000      17,000(1)      42,671        -0-          $ -0-
Executive Officer            1996        $103,000      17,000(1)      14,714        -0-          $ -0-
                             1995        $125,000      17,000(1)      15,966        -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, 1997.

                                      Option / SAR Grants in Last Fiscal Year

<TABLE>
<CAPTION>

                        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           48,807                53%                          $0.24         6/30/2007

James Wilson            42,671                47%                          $0.24         6/30/2007
</TABLE>

     In addition,  as Directors of the Company's Bank  subsidiary,  each Messrs.
Modder and Wilson  received 11,600 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.


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

<TABLE>
<CAPTION>

                                                              Number of                  Value of
                                                              Securities                 Unexercised
                                                              Underlying                 In-the-Money
                                                              Unexercised                Options/SAR's
                       Shares Acquired                        Options/SAR's at FY-End    at FY-End
Name                   on Exercise      Value Realized        Exercisable/               Exercisable/
                                                              Unexercisable              Unexercisable
------------------------------------------------------------------------------------------------------------------

<S>                     <C>             <C>                   <C>                       <C> 
Philip Modder          -0-              -0-                   282,785 / 0                $-0-(1)

James Wilson           -0-              -0-                   209,018 / 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:  (I) 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%; (ii) the  executive  will be paid a bonus equal to 2.5% of
the pre-tax net income of the Company;  (iii) 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; (iv) 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 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  options);  (v) 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;  (vi) 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;  (vii)  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;  (viii) 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;  (viii)  family  membership  in two  country  clubs;  (ix) 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 (ix)
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: (I) 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;  (ii) 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;  (iii) 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; (iv) 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 (v) 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 17,200  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 June 1, 1998, 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                 1,008,613 (2)    19.6%

James L. Wilson
3475 Sheridan Street
Hollywood, FL  33021                   921,513 (3)    17.5%

Jack E. & Molly W. Butler, TTE's
U/A dtd 11/13/90
2363 Loblolly Lane
Deerfield Beach, FL  33442             309,343 (4)     5.9%

Robert D. & Martha L. Butler,
TTE's
U/A dtd 3/29/90
84 Southeast 4th Avenue
Deerfield Beach, FL  33441             312,948 (5)     5.9%

Linda K. Strasser
6770 N.W. 87th Avenue
Parkland, FL  33067                    398,128 (6)     7.6%

Timothy S. Butler
H.C. 10, Box 580
Lakemont, GA  30552                    449,738 (7)     8.5%

Harold C. Friend
3475 Sheridan Street
Hollywood, FL  33021                   281,688 (8)     5.4%
      ------------------------------------------
(1)  Based on information supplied by the persons indicated.
(2)  Includes options to purchase 308,583 shares that are exercisable  within 60
     days, and 67,511 shares owned by Mr. Modder's wife.
(3)  Includes options to purchase 234,816 shares that are exercisable  within 60
     days, and 40,844 shares owned by Mr. Wilson's wife.
(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  250,000  shares owned by a trust as to which Mr.  Butler has sole
     voting and investment  power and options to purchase 134174 shares that are
     exercisable within 60 days.
(8   Includes  options to purchase 19,953 shares that are exercisable  within 60
     days, 40,933 shares owned by Mr. Friend's wife, and 152,467 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 June 1, 1998.


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

Philip C. Modder                  1,008,613 (2)           19.2%

James L. Wilson                     921,513 (2)           17.5%

Eugene J. Strasser                  398,128 (3)            7.6%

Harold C. Friend                    281,688 (2)            5.4%

Robert D. Butler                     42,890 (4)            0.8%

Timothy S. Butler                   449,738 (2)            8.5%

All directors and executive
officers as a group (7 persons)
                                  3,101,570 (5)           58.9%

      (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  $100,00 to a trust  affiliated  with Jack E.
Butler,  who is the  father  of  Timothy  S.  Butler  and the uncle of Robert D.
Butler,  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, 1998.


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 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***(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 -- corrected  version
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.

   (1) Management compensation plan or arrangement.

   (b) Reports filed on Form  8-K.  The following reports on Form 8-K were filed
subsequent to November 30, 1997.

        (i)  Form 8-K filed November 25, 1997

        (ii) Form 8-K/A filed February 6, 1998 


<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


May 29,  1998                       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        May 29, 1998

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


(ii) Principal Accounting and       Vice President                 May 31, 1998
     Financial Officer:

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


(iii) Directors:


     s/Philip C. Modder             Chairman of the Board          June 2, 1998
     ----------------------------
     Philip C. Modder

     s/James L. Wilson              Vice Chairman                  May 29, 1998
     ----------------------------
     James L. Wilson

     s/Timothy S. Butler            Director                       June 2, 1998
     ----------------------------
     Timothy S. Butler

     s/Harold C. Friend             Director                       June 1, 1998
     ----------------------------
     Harold C. Friend

     s/Robert D. Butler             Director                       June 2, 1998
     ----------------------------
     Robert D. Butler

     s/Eugene J. Strasser           Director                       June 2, 1998
     ----------------------------
     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 -- corrected  version
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.