Securities and Exchange Commission

                             Washington, D.C. 20549

                               -------------------
                                    FORM 10-K
                                  ANNUAL REPORT
                               -------------------
     Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Fiscal Year Ended December 31, 2002      Commission File No. 000-1170902


                          FLORIDA COMMUNITY BANKS, INC.
             (Exact Name of Registrant As Specified In Its Charter)

           Florida                                       35-2164765
-------------------------------              -----------------------------------
    (State of Incorporation)                (I.R.S. Employer Identification No.)

1400 North 15th Street, Immokalee, Florida                      34142-2202
------------------------------------------               -----------------------
 (Address of principal executive offices)                  (Including zip code)

                                 (239) 657-3171
                (Issuer's Telephone Number, Including Area Code)

              SECURITIES REGISTERED UNDER SECTION 12(b) OF THE ACT:

                              Name of each exchange
Title of each class                                         on which registered
-------------------                                        ---------------------
       None                                                         None

           SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

                          Common Stock, $0.01 Par Value
                         ------------------------------
                                (Title of Class)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days:        Yes  X       No
                                             -----       -----

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not 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-K or any amendment to this
Form 10-K. ____

Indicate  by check mark  whether  the  registrant  is an  accelerated  filer (as
defined in Exchange Act Rule 12b-2):      Yes        No  X
                                             -----     -----

The issuer's revenues for its most recent fiscal year were $33,586,000.

There is no established  trading market for the registrant's  capital stock. The
aggregate market value of the stock held by  non-affiliates of the registrant at
March 15, 2003 was $58,661,169,  based on a per share price of $25.50,  which is
the  price of the  last  trade of  which  management  is aware as of such  date.
Although  directors and executive  officers of the registrant were assumed to be
"affiliates"   of  the  registrant  for  purposes  of  this   calculation,   the
classification is not to be interpreted as an admission of such status.

At March 15, 2003, there were 3,123,316 shares of the registrant's  Common Stock
outstanding.


Documents Incorporated by Reference

Portions of the  registrant's  definitive  Proxy  Statement  for the 2003 Annual
Meeting of  Shareholders  are  incorporated  by reference  into Part III of this
report.

<PAGE>

                          FLORIDA COMMUNITY BANKS, INC.
                          2002 Form 10-K Annual Report

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>


    Item Number                                                                                          Page  or
   in  Form 10-K                                          Description                                    Location


   PART I

<S>     <C>                                                                                                  <C>
   Item 1.            Business...................................................................            3

   Item 2.            Properties.................................................................            7

   Item 3.            Legal Proceedings..........................................................            7

   Item 4.            Submission of Matters to a Vote of Security Holders........................            7

   PART II

   Item 5.            Market for the Registrant's Common Equity and Related
                      Shareholder Matters........................................................            8

   Item 6.            Selected Financial Data....................................................            9

   Item 7.            Management's Discussion and Analysis of Financial
                      Condition and Results of Operations........................................           10

   Item 7A.           Quantitative and Qualitative Disclosures About Market Risk.................           10

   Item 8.            Financial Statements and Supplementary Data................................           33

   Item 9.            Changes in and Disagreements with Accountants on Accounting
                      and Financial Disclosure...................................................           74
PART III

   Item 10.           Directors, Executive Officers, Promoters and Control Persons;
                      Compliance with Section 16(a) of the Exchange Act..........................           74

   Item 11.           Executive Compensation.....................................................           74

   Item 12.           Security Ownership of Certain Beneficial Owners and Management.............           74

   Item 13.           Certain Relationships and Related Transactions.............................           74

   Item 14.           Controls and Procedures....................................................           74

PART IV

   Item 15.           Exhibits and Reports on Form 8-K...........................................           75
</TABLE>

Signatures

Certification of Periodic Financial Reports

<PAGE>
                                     PART I

ITEM 1. BUSINESS

General

     Florida  Community Banks,  Inc. ("FCBI" or the "Company") is a bank holding
company, which owns all of the common stock of Florida Community Bank ("Bank" or
"FCB") and a special  purpose  business trust organized to issue Trust Preferred
Securities. FCBI is a Florida corporation registered with the Board of Governors
of the Federal  Reserve  System under the Bank Holding  Company Act of 1956,  as
amended.  Through its subsidiary Bank, FCBI is engaged in the commercial banking
business in  southwestern  Florida with  offices in Collier,  Lee,  Hendry,  and
Charlotte counties. At December 31, 2002, FCBI had total assets of approximately
$521 million,  total deposits of  approximately  $424 million and  stockholders'
equity of approximately $34 million.

     Florida  Community  Bank  is a  Florida-chartered  commercial  bank,  which
commenced operations in Everglades City, Florida on May 19, 1923, under the name
"Bank of the Everglades." The Bank changed its place of business from Everglades
City, Florida to Immokalee, Florida in September 1962. FCB changed its name from
Bank of the  Everglades  to "First Bank of  Immokalee"  in July 1967 and then to
"Florida Community Bank" in July 1996 as part of its merger with Tri-County Bank
of Lehigh Acres. The Bank is subject to regulation by the Florida  Department of
Banking and Finance ("Department") and the Federal Deposit Insurance Corporation
("FDIC").  The  Bank's  main  office  is  located  at 1400  North  15th  Street,
Immokalee,  Florida and its telephone  number is (239) 657-3171.  In addition to
the main banking office in Immokalee,  the Bank currently operates  full-service
branches  in the  southwest  Florida  cities of Lehigh  Acres,  LaBelle,  Naples
(Golden Gate area), Port Charlotte, Punta Gorda and Ft. Myers.

     The Company  employs  approximately  130  persons and it believes  that its
relationship with these employees is good.

     The Bank is engaged  primarily  in  soliciting  deposits  from the  general
public and investing  such  deposits,  together with other funds,  in commercial
loans,  consumer loans,  agricultural  loans, and real estate loans. To a lesser
extent,  the Bank  invests  its  funds in  securities  issued or  guaranteed  by
agencies of the United States Government and municipalities.

     The Bank  operates as a locally  operated  institution  aimed at  providing
prompt,   efficient  and   personalized   service  to  individuals,   small  and
medium-sized businesses, professionals and other local organizations. The Bank's
primary service area  encompasses  Charlotte,  Lee,  Collier,  Glades and Hendry
Counties (the "PSA"). The Bank's principal markets within the PSA are:

     (i)  commercial and small business lending and deposit services;

     (ii) residential  real  estate  mortgage  and retail  lending  and  deposit
          services; and

     (iii) commercial and residential real estate development lending.

     The principal  sources of funds for the Bank's loans and other  investments
are demand,  time,  savings and other deposits,  amortization  and prepayment of
loans,  sales to other lenders or  institutions  of loans or  participations  in
loans,   principal  payments  or  maturities  of  investment   securities,   and
borrowings.  The principal  sources of income for the Bank are interest and fees
collected on loans,  including  fees received for servicing  loans sold to other
lenders  or  institutions,  and  to a  lesser  extent,  interest  and  dividends
collected on other investments.  The principal expenses of the Bank are interest
paid on savings and other  deposits,  interest  paid on other  borrowings by the
Bank, employee compensation,  office expenses and other overhead and operational
expenses.

     The  Bank  offers  several  deposit  accounts,   including  demand  deposit
accounts,  negotiable  order  of  withdrawal  accounts  ("NOW"  and  "Super-NOW"
accounts), money market accounts, certificates of deposit and various retirement
accounts. In addition, the Bank belongs to an electronic banking network so that
its  customers  may use the  automated  teller  machines  (the  "ATMs") of other
financial  institutions  and  operates  drive-in  teller  services  and  24-hour
depository vaults.

                                       3
<PAGE>
     The following loan services are offered by the Bank:

     (a)  consumer loans,  automobile loans, real estate equity lines of credit,
          education  loans  and  real  estate  loans  secured  by  single-family
          residences;

     (b)  commercial  and business  loans for small to  medium-sized  companies,
          including     Small     Business      Administration     and     other
          government-guaranteed financing;

     (c)  individual and builder short-term residential construction financing;

     (d)  home improvement loans; and

     (e)  commercial and residential real estate development loans.

     The  Bank  provides  a full  range  of  competitive  banking  services  and
emphasizes  the manner in which the services are delivered.  Management  focuses
its  efforts  on  filling  the  void  created  by  the   decreasing   number  of
locally-owned  community  banks due to  acquisitions  by large regional  holding
companies,  which it believes has negatively impacted the personal nature of the
delivery,  quality and availability of banking services available in the PSA and
surrounding areas.

Primary Service Area

     The PSA enjoys an abundant work force,  attractive  business  climate and a
good relationship between the private and public sectors.

     In general,  commercial  real estate in the PSA consists of small  shopping
centers and office buildings. The type of residential real estate within the PSA
varies, with a number of condominiums,  townhouses, apartments and single-family
housing developments dispersed throughout the PSA.

Competition

     The business of banking is highly competitive. The Bank competes with other
banks,  savings and loan  associations  and credit  unions within the PSA. As of
June 30,  2002,  there were  approximately  46 banks and 5 savings  institutions
operating in the PSA,  operating a total of  approximately  326 banking offices.
The Bank believes that its operation as a locally owned and controlled bank with
a broad base of  ownership in the PSA enhances its ability to compete with those
non-local financial  institutions now operating in its market, but no assurances
can be given in this regard.

     The Bank's competitive strategy with respect to the financial  institutions
described above consists of:

     o    reviewing and acting upon loan requests  quickly with a  locally-based
          loan committee,

     o    maintaining flexible but prudent lending policies,

     o    personalizing service by establishing  long-term banking relationships
          with its customers; and

     o    maintaining an appropriate  ratio of employees to customers to enhance
          the level of service.

Facilities

     The Bank's main office in  Immokalee,  Florida was  purchased  in 1962.  At
December 31, 2002 the Bank operated  seven branch  offices with an eighth office
under construction.  The Lehigh Acres branch was acquired in 1996 as a result of
the  acquisition  of  Tri-County  Bank of Lehigh  Acres.  The Golden Gate branch
operates in a facility leased in 1997 for a five-year period. The LaBelle branch
was acquired as a result of the  acquisition  of Hendry County Bank by merger in
1998.  The land for the Port  Charlotte  branch  was  purchased  in 1998 and the
branch opened in 1999 after construction was completed. The facility for the Ft.
Myers branch is leased for 15 years (with renewal options after that period) and
opened in 2000. The Punta Gorda branch office  building is owned by the Bank and
the underlying land is subject to a 99-year lease,  which commenced in 2000. The
Cape Coral branch land was purchased in 2001 and the branch opened in 2002.  All
of the branch facilities are in good condition.

                                       4
<PAGE>
Regulation

     The  Bank  is  subject  to   comprehensive   regulation,   examination  and
supervision  by the  Department  and the FDIC,  and is subject to other laws and
regulations  applicable to banks. Such regulations  include limitations on loans
to a single  borrower  and to the  Bank's  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;  disclosure  of the  costs  and  terms  of  such  credit;  and
restrictions as to permissible investments. The Bank is examined periodically by
both the  Department  and the FDIC and submits  periodic  reports  regarding its
financial  condition and other matters to each of them.  Both the Department and
the FDIC  have a broad  range of  powers  to  enforce  regulations  under  their
respective jurisdictions, and to take discretionary actions determined to be for
the  protection  of  the  safety  and  soundness  of  the  Bank,  including  the
institution  of cease  and  desist  orders  and the  removal  of  directors  and
officers.

     FDIC  Regulations.  The Bank's  deposit  accounts  are  insured by the Bank
Insurance  Fund of 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  operations of its insured  banks.  The
approval  of the FDIC is  required  prior to a merger  or  consolidation  or the
establishment  or  relocation  of  an  office  facility.  This  supervision  and
regulation  is intended  primarily for the  protection of depositors  and not of
stockholders.

     The  Federal  Deposit  Insurance   Corporation   Improvement  Act  of  1991
("FDICIA")  substantially  revised the  depository  institution  regulatory  and
funding  provisions of the Federal  Deposit  Insurance  Act. Among other things,
FDICIA requires the federal banking  regulators to take prompt corrective action
in respect to  depository  institutions  that do not meet minimum  requirements.
FDICIA   established  five  capital  tiers:  "well   capitalized,"   "adequately
capitalized,"   "undercapitalized,"    "significantly   undercapitalized,"   and
"critically  undercapitalized." A depository  institution is well capitalized if
it  significantly  exceeds the minimum  level  required by  regulation  for each
relevant capital measure,  adequately capitalized if it meets each such measure,
undercapitalized   if  it  fails  to  meet  any  such   measure,   significantly
undercapitalized  it is  significantly  below any such  measure  and  critically
undercapitalized if it fails to meet any critical capital level set forth in the
regulations.  The critically undercapitalized level occurs where tangible equity
is less  than 2% of  total  tangible  assets  or less  than  65% of the  minimum
leverage ratio  prescribed by regulation  (except to the extent that 2% would be
higher than such 65% level).  A depository  institution may be deemed to be in a
capitalization  category  that is lower than is indicated by its actual  capital
position if it receives an unsatisfactory examination rating.

     FDICIA generally prohibits a depository institution from making any capital
distribution  (including  payment of a dividend) if the  depository  institution
would thereafter be undercapitalized.  In addition,  undercapitalized depository
institutions  are  subject  to growth  limitations  and are  required  to submit
capital  restoration  plans to the FDIC.  The federal  banking  agencies may not
accept a capital plan without determining,  among other things, that the plan is
based on  realistic  assumptions  and is  likely to  succeed  in  restoring  the
depository  institution's capital. If a depository fails to submit an acceptable
plan, it is treated as if it is significantly undercapitalized.

     Significantly  undercapitalized depository institutions may be subject to a
number of requirements  and  restrictions,  including  orders to sell sufficient
voting  stock to become  adequately  capitalized,  requirements  to reduce total
assets and  cessation  of the  receipt of  deposits  from  correspondent  banks.
Critically   undercapitalized   depository   institutions  are  subject  to  the
appointment of a receiver or conservator.

     FDICIA provides authority for special  assessments against insured deposits
and for the development of a general risk-based insurance assessment system. The
risk-based  insurance  assessment system would be used to calculate a depository
institution's  semi-annual deposit insurance assessment based on the probability
(as  defined in the FDICIA)  that the BIF will incur a loss with  respect to the
institution.  In accordance  with FDICIA,  the FDIC  implemented a  transitional
risk-based insurance premium system and increased deposit insurance premiums for
commercial banks to an average of 25.4 basis points.

     FDICIA  also  contains  various  provisions  related  to  an  institution's
interest rate risk. Under certain circumstances,  an institution may be required
to provide  additional  capital or  maintain  higher  capital  levels to address
interest rate risks.

                                       5
<PAGE>
     In  addition,  the FDIC has  adopted a minimum  leverage  ratio of 3%.  The
minimum  leverage  ratio is the ratio of common  equity,  retained  earnings and
certain  amounts of perpetual  preferred stock (after  subtracting  goodwill and
after making certain other  adjustments) to the total assets of the institution.
Generally,  banking organizations are expected to operate well above the minimum
required  capital  level of 3% unless  they  meet  certain  specified  criteria,
including  that  they  have  the  highest  regulatory   ratings.   Most  banking
organizations are required to maintain a leverage ratio of 3% plus an additional
cushion of 1% to 2%. The  guidelines  also provide  that  banking  organizations
experiencing  internal  growth or making  acquisitions  are expected to maintain
strong capital  positions  substantially  above the minimum  supervisory  levels
without significant reliance upon intangible assets.

     Dividend  Restrictions.  In addition to dividend restrictions placed on the
Bank by the FDIC based on the Bank's minimum capital  requirements,  the Florida
Financial  Institutions  Code prohibits the  declaration of dividends in certain
circumstances.  Section 658.37 (Florida Statutes),  prohibits the declaration of
any  dividend  until a bank has  charged off bad debts,  depreciation  and other
worthless  assets,  and has made  provision  for  reasonably-anticipated  future
losses on loans and other assets. Such dividends are limited to the aggregate of
the net profits of the  dividend  period,  combined  with a bank's  retained net
profits for the preceding two years. A bank may declare a dividend from retained
net profits that accrued  prior to the  preceding two years with the approval of
the Department.  However, a bank will be required, prior to the declaration of a
dividend on its common stock, to carry 20% of its net profits for such preceding
period to its surplus fund, until the surplus fund equals at least the amount of
the bank's common and preferred stock then issued and  outstanding.  In no event
may a bank  declare  a  dividend  at any time in which its net  income  from the
current year, combined with its retained 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 Department or other state or federal regulatory agency.

     Riegle-Neal   Interstate   Banking  and  Branching   Efficiency   Act.  The
Riegle-Neal  Interstate  Banking and Branching  Efficiency  Act of 1994 provides
that as of June 1, 1997,  adequately  capitalized and managed banks will be able
to  engage  in  interstate  branching  by  merging  banks in  different  states,
including  Florida,  which did not opt out of the application of this provision.
If a state did not opt out,  banks  will be  required  to  comply  with the host
state's regulations with respect to branching across state lines.

     Gramm-Leach-Bliley Act. On November 12, 1999, President Clinton signed into
law the  Gramm-Leach-Bliley  Act which reforms and  modernizes  certain areas of
financial  services  regulation.  The law permits the creation of new  financial
services  holding  companies  that can offer a full range of financial  products
under a regulatory  structure  based on the principle of functional  regulation.
The legislation  eliminates the legal barriers to  affiliations  among banks and
securities firms,  insurance companies,  and other financial services companies.
The law also provides financial  organizations with the opportunity to structure
these  new  financial  affiliations  through a holding  company  structure  or a
financial subsidiary. The new law reserves the role of the Federal Reserve Board
as the supervisor for bank holding companies. At the same time, the law provides
a system of  functional  regulation  which is  designed  to utilize  the various
existing federal and state regulatory bodies.

     The law also  includes a minimum  federal  standard of  financial  privacy.
Financial  institutions  are required to have written privacy policies that must
be disclosed to customers.  The disclosure of a financial  institution's privacy
policy must take place at the time a customer  relationship  is established  and
not less than annually during the continuation of the relationship. The act also
provides for the functional  regulation of bank securities  activities.  The law
repeals the exemption  that banks were afforded from the definition of "broker,"
and replaces it with a set of limited  exemptions that allow the continuation of
some  historical  broker  activities  performed by banks.  In addition,  the act
amends the  securities  laws to include  banks within the general  definition of
dealer.  Regarding new bank products,  the law provides a procedure for handling
products sold by banks that have securities elements.

     In the area of CRA  activities,  the law generally  requires that financial
institutions address the credit needs of low-to-moderate  income individuals and
neighborhoods  in the  communities  in which they operate.  Bank  regulators are
required  to take the CRA  ratings  of a bank or of the bank  subsidiaries  of a
holding company into account when acting upon certain branch and bank merger and
acquisition  applications  filed by the  institution.  Under the law,  financial
holding  companies and banks that desire to engage in new  financial  activities
are required to have  satisfactory  or better CRA ratings when they commence the
new activity.

     Most of the provisions of the law took effect on March 11, 2000, with other
provisions  being  phased  in over a one to two year  period  thereafter.  It is
anticipated that the effects of the law, while providing additional  flexibility
to bank holding  companies and banks,  may result in additional  affiliations of
different  financial  services

                                       6
<PAGE>
providers,  as well as increased  competition,  resulting in lower prices,  more
convenience, and greater financial products and services available to consumers.

     USA Patriot  Act. On October 26, 2001,  President  Bush signed into law the
Uniting and  Strengthening  America by Providing  Appropriate  Tools Required to
Intercept and Obstruct  Terrorism Act of 2001 (the "USA Patriot Act"),  which is
designed  to deny  terrorists  and  others the  ability to obtain  access to the
United  States  financial  system.  Title  III of  the  USA  Patriot  Act is the
International  Money Laundering  Abatement and  Anti-Terrorist  Financing Act of
2001.  Among its  provisions,  the USA  Patriot  Act  mandates  or will  require
financial  institutions  to implement  additional  policies and procedures  with
respect to, or  additional  measures,  including  additional  due  diligence and
recordkeeping,  designed to address, any or all of the following matters,  among
others:  money  laundering;   suspicious  activities  and  currency  transaction
reporting;  and  currency  crimes.  The  U.S.  Department  of  the  Treasury  in
consultation  with  the  Federal  Reserve  Board  and  other  federal  financial
institution  regulators has promulgated  rules and regulations  implementing the
USA Patriot Act which (i)  prohibits  U.S.  correspondent  accounts with foreign
banks that have no physical presence in any jurisdiction; (ii) require financial
institutions to maintain certain records for  correspondent  accounts of foreign
banks; (iii) require financial  institutions to produce certain records relating
to anti-money  laundering  compliance  upon request of the  appropriate  federal
banking  agency;  (iv) require due diligence with respect to private banking and
correspondent banking accounts;  (v) facilitate  information sharing between the
government and financial  institutions;  and (vi) require financial institutions
to have in  place a money  laundering  program.  In  addition,  an  implementing
regulation  under  the  USA  Patriot  Act  regarding  verification  of  customer
identification  by  financial  institutions  has been  proposed,  although  such
regulation  has not yet been  finalized.  The Company has  implemented  and will
continue to implement the provisions of the USA Patriot Act, as such  provisions
become effective.  The Company currently maintains and will continue to maintain
policies and procedures to comply with the USA Patriot Act requirements. At this
time,  the  Company  does not  expect  that  the USA  Patriot  Act  will  have a
significant impact on the financial position of the Company.

     Federal  Reserve  System.  FCBI is a bank  holding  company  subject to the
supervision  and  regulations  of the Board of Governors of the Federal  Reserve
System  ("Federal  Reserve").  As such, the Company is required to file periodic
reports and such other  information as the Federal  Reserve may deem  necessary.
The Federal  Reserve also  conducts  examinations  of the  Company.  The Federal
Reserve  maintains  the  position  that the Company  should serve as a source of
financial  and  managerial  strength  for  the  Bank  and may  not  conduct  its
operations in an unsound manner.

     The foregoing is necessarily a general description of certain provisions of
federal and state law and does not purport to be  complete.  Proposals to change
the  laws  and  regulations   governing  the  banking  industry  are  frequently
introduced in Congress,  in the state  legislatures  and before the various bank
regulatory  agencies.  The  likelihood  and timing of any such  changes  and the
impact such changes might have on the Bank cannot be determined at this time.


ITEM 2. PROPERTIES

     For  the  description  of  the  property  of the  Company,  see  "ITEM  I -
DESCRIPTION OF BUSINESS - Facilities."


ITEM 3. LEGAL PROCEEDINGS

     There are no material proceedings to which the Company is a party.


ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     No matters were  submitted to a vote of security  holders during the fourth
quarter of 2002.

                                       7
<PAGE>
                                     PART II

ITEM 5.  MARKET  FOR THE  REGISTRANT'S  COMMON  EQUITY AND  RELATED  SHAREHOLDER
         MATTERS

     There is no established trading market for the Company's Common Stock, $.01
par value (the  "Common  Stock"),  which has been traded  inactively  in private
transactions.  Therefore,  no reliable  information is available as to trades of
the Common Stock or as to the prices at which Common Stock has traded.

     In December  2002, the Company issued 1.2 shares for 1.0 share stock split,
thereby increasing the number of shares outstanding from 2,602,764 to 3,123,316.

     Management has reviewed the limited information  available as to the ranges
at which the  Common  Stock has been sold and is aware of trades  that  occurred
during 2002. To the best of management's  knowledge,  the last trade in December
was executed at a price of $24.00 per share.  The per share price data regarding
the Common Stock is provided  for  information  purposes  only and should not be
viewed  as  indicative  of the  actual  or  market  value of the  Common  Stock.
<TABLE>
<CAPTION>

                                                 Estimated Price Range Per Share
                                                 -------------------------------
                                                      High             Low
                                                 -------------    --------------
2002 (Split Adjusted):
<S>                                              <C>              <C>
     First Quarter.............................. $       21.67    $        20.83
     Second Quarter.............................         22.29             21.67
     Third Quarter..............................         23.33             21.67
     Forth Quarter..............................         24.00             23.33

2001 (Split Adjusted):

     First Quarter.............................. $       18.75    $        18.40
     Second Quarter.............................         19.58             18.75
     Third Quarter..............................         20.00             19.58
     Fourth Quarter.............................         20.83             20.42
</TABLE>

     As of  March  15,  2003,  there  were  3,213,316  shares  of  Common  Stock
outstanding held by approximately 900 shareholders of record.

     The  payment  of future  dividends  will be at the sole  discretion  of the
Company's  Board of  Directors  and will depend on, among other  things,  future
earnings,  capital requirements,  the general financial condition of the Company
and general business  conditions.  The Company paid a dividend of $.35 per share
(split-adjusted)  in the  second  quarter  of 2002.  During  October  2002,  the
Company's Board of Directors  adopted a policy of capital  retention that ceases
cash dividends for the foreseeable future.

Equity compensation plan

At their Annual Meeting,  the Bank's shareholders  adopted the 2002 Key Employee
Stock Compensation Program ("Employee Program"),  which was assumed by FCBI upon
its  acquisition of the Bank. The following  table reflects the number of shares
to be issued upon the exercise of options  granted  under the Employee  Program,
the weighted-average exercise price of all such options, and the total number of
shares  of  common  stock  reserved  for  the  issuance  upon  the  exercise  of
authorized, but not-yet-granted options, as of December 31, 2002.

<TABLE>
<CAPTION>

                                   Number of Securities to                              Number of Equity Securities
          Plan Category               be Issued Upon the       Weighted-average        Remaining Available for Future
                                   Exercise of Outstanding     Exercise Price of     Issuance Under Equity Compensation
                                           Options            Outstanding Options                   Plan

Equity Compensation Plans
<S>                                         <C>                     <C>                           <C>
Approved by Shareholders                    55,200                  $15.00                        100,965

Equity Compensation Plans Not                --                       --                            --
Approved by Shareholders

Total                                       55,200                  $15.00                        100,965
</TABLE>

                                       8

<PAGE>
ITEM 6. SELECTED FINANCIAL DATA

     The following table presents on a historical basis selected  financial data
and ratios for the Company.
<TABLE>
<CAPTION>

                                                                          Years Ended December 31,
                                                       ------------------------------------------------------------
                                                           2002         2001        2000        1999        1998
                                                       ----------    ---------   ---------   ----------  ----------
                                                                (Dollars in thousands except per share data)

Earnings Summary:
<S>                                                    <C>           <C>         <C>         <C>         <C>
   Interest income...................................  $   31,570    $  27,903   $  24,991   $   18,160  $   16,463
   Less interest expense.............................      11,787       12,018      10,276        6,231       6,117
   Net interest income...............................      19,783       15,885      14,715       11,929      10,346
   Provision for loan losses.........................       2,510          720       1,000          810         920
   Net interest income after provision
        for loan losses..............................      17,273       15,165      13,715       11,119       9,426
   Non-interest income...............................       2,016        1,699       1,804        1,424       1,092
   Non-interest expense..............................       9,020        8,226       7,553        6,811       6,539
   Income before income taxes........................      10,269        8,638       7,966        5,732       3,979
   Applicable income taxes...........................       3,851        3,292       2,881        2,076       1,465
   Net income........................................       6,418        5,346       5,085        3,656       2,514

Per Common Share Data:
(Retroactively adjusted for effects of stock dividends
  and stock splits)
   Net income - basic ...............................  $     2.05    $    1.71   $    1.63   $    1.17   $    0.80
   Net income - diluted..............................        2.04         1.71        1.63        1.17        0.80
   Cash dividends declared per common share..........        0.35         0.70        0.64        0.55        0.50

Selected Average Balances:
   Total assets......................................  $  446,008    $ 324,188   $ 263,289   $  211,132  $  191,635
   Total loans.......................................     370,062      255,294     206,333      154,771     132,522
   Securities........................................      40,796       40,418      39,676       34,727      30,748
   Earning assets....................................     426,064      307,524     247,238      193,220     169,613
   Deposits..........................................     366,632      271,431     216,348      184,127     166,861
   Long-term borrowings..............................      41,391       17,478      15,607           59          40
   Shareholders' equity..............................      32,025       28,009      24,724       22,134      20,685
   Shares outstanding (split adjusted, in thousands).       3,123        3,123       3,123        3,123       3,123

Selected Period-End Balances:
   Total assets......................................  $  521,448    $ 388,061   $ 296,452   $  238,360  $  216,234
   Total loans.......................................     416,415      318,666     227,155      181,764     152,848
   Securities........................................      36,214       35,001      42,270       38,757      35,343
   Earning assets....................................     498,199      364,012     273,356      220,587     197,408
   Deposits..........................................     423,935      317,861     249,059      204,018     193,822
   Long-term borrowings..............................      60,039       37,580      15,093           39          80
   Shareholders' equity..............................      34,464       29,139      25,970       22,873      20,942
   Shares outstanding (split adjusted)...............       3,123        3,123       3,123        3,123       3,123

Selected Ratios:
   Return on average equity..........................       20.04%       19.09%      20.57%      16.52%      12.15%
   Return on average assets..........................        1.44         1.65        1.93        1.73        1.31
   Net interest margin...............................        4.64         5.17        5.96        6.19        6.12
   Allowance for loan losses to loans................        1.52         1.19        1.44        1.24        1.14
   Net charge-offs to average loans..................        0.00         0.07        0.00        0.19        0.92
   Average equity to average assets..................        7.18         8.64        9.39       10.48       10.79

Cash Dividends Declared..............................  $    1,093    $   2,178   $   1,988   $   1,725   $   1,568
</TABLE>
                                       9
<PAGE>
ITEM 7. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

     The purpose of this  discussion is to focus on  significant  changes in the
financial   condition   and  results  of  operations  of  the  Company  and  its
subsidiaries  during  the past three  years.  The  discussion  and  analysis  is
intended to supplement and highlight  information  contained in the accompanying
consolidated  financial  statements  and the selected  financial  data presented
elsewhere in this report.

ITEM 7A. QUANTITIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Forward-Looking Statements

     This report,  including  Management's  Discussion and Analysis of Financial
Condition  and  Results of  Operations,  and  documents  incorporated  herein by
reference,  may contain certain statements relating to the future results of the
Company  based upon  information  currently  available.  These  "forward-looking
statements"  (as defined in Section 21E of The  Securities  and  Exchange Act of
1934)  are  typically  identified  by  words  such  as  "believes",   "expects",
"anticipates",  "intends",  "estimates",  "projects",  and similar  expressions.
These forward-looking statements are based upon assumptions the Company believes
are  reasonable  and may relate to, among other  things,  the allowance for loan
loss adequacy,  simulation of changes in interest rates and litigation  results.
Such  forward-looking  statements are subject to risks and uncertainties,  which
could  cause the  Company's  actual  results  to differ  materially  from  those
included in these statements. These risks and uncertainties include, but are not
limited to, the following: (1) changes in political and economic conditions; (2)
interest rate fluctuations; (3) competitive product and pricing pressures within
the  Company's  markets;  (4) equity and fixed income market  fluctuations;  (5)
personal and corporate customers' bankruptcies;  (6) inflation; (7) acquisitions
and integration of acquired businesses;  (8) technological  changes; (9) changes
in law; (10) changes in fiscal,  monetary,  regulatory  and tax  policies;  (11)
monetary  fluctuations;  (12)  success  in  gaining  regulatory  approvals  when
required; and (13) other risks and uncertainties listed from time to time in the
Company's SEC reports and announcements.

General

     The Company,  through its subsidiary  Bank,  conducts a commercial  banking
business,  which  consists of attracting  deposits  from the general  public and
applying those funds to the origination of commercial,  consumer and real estate
loans (including  commercial loans collateralized by real estate). The Company's
profitability  depends primarily on net interest income, which is the difference
between interest income generated from interest-earning  assets (i.e., loans and
investments) less the interest expense incurred on interest-bearing  liabilities
(i.e., customer deposits and borrowed funds). Net interest income is affected by
the   relative   amounts  of   interest-earning   assets  and   interest-bearing
liabilities,  and the  interest  rate  paid and  earned on these  balances.  Net
interest income is dependent upon the Company's  interest rate spread,  which is
the difference between the average yield earned on its  interest-earning  assets
and  the  average   rate  paid  on  its   interest-bearing   liabilities.   When
interest-earning  assets approximates or exceeds  interest-bearing  liabilities,
any positive  interest rate spread will generate  interest income.  The interest
rate  spread is  impacted  by interest  rates,  deposit  flows and loan  demand.
Additionally, and to a lesser extent, the Company's profitability is affected by
such factors as the level of non-interest income and expenses, the provision for
loan losses and the effective tax rate.  Non-interest  income consists primarily
of deposit account service charges and other customer service fees. Non-interest
expenses consist of compensation and benefits,  occupancy-related  expenses, and
other expenses.

Summary

     Net income for 2002 was $6,418,306, a 20.05% increase over 2001 net income.
Net income for 2001 was  $5,346,217,  a 5.1% increase over 2000 net income.  Net
income per common share for 2002 was $2.04  (diluted)  compared to $1.71 in 2001
and $1.63 in 2000.  Net income for 2000 was  $5,085,061,  a 39.1%  increase from
1999 net income of $3,656,265.

     The  increases  in net income  from 1999 to 2000 and from 2000 to 2001 were
primarily attributable to increased volume of loans, with the resulting increase
in interest and fees. In 2001 and 2002,  the volume  increase in loans more than
offset the decrease in loan interest rates as discussed more fully below.

                                       10
<PAGE>

Earning Assets

     During 2002,  earning  assets  averaged $426  million,  an increase of $118
million (38.3%) over 2001. During 2001, earning assets averaged $308 million, an
increase of $61 million  (24.7%) over 2000.  Average  earning assets during 2000
totaled $247 million, an increase of $54 million (28.0%) over 1999.

     The management of the Company  considers many criteria in managing  earning
assets, including creditworthiness, diversification, maturity, and interest rate
sensitivity.  The  following  table  sets forth the  Company's  interest-earning
assets by category at December 31, in each of the last three years.
<TABLE>
<CAPTION>

                                                                                         December 31,
                                                                           ----------------------------------------
                                                                               2002          2001          2000
                                                                           -----------   -----------    -----------
                                                                                        (In thousands)

<S>                                                                        <C>           <C>            <C>
Interest-bearing deposits with banks....................................   $    12,668   $    10,345    $        --
Securities..............................................................        36,214        35,001         42,270
Federal funds sold......................................................        32,902            --          3,931
Loans:
   Real estate..........................................................       361,420       272,310        184,074
   Commercial and other.................................................        54,995        46,356         43,081
                                                                           -----------   -----------    -----------
     Total loans........................................................       416,415       318,666        227,155
                                                                           -----------   -----------    -----------

Interest-earning assets ................................................   $   498,199   $   364,012    $   273,356
                                                                           ===========   ===========    ===========
</TABLE>
Loan Portfolio

     Loan and deposit growth is emphasized in each market the Company  operates.
The Company has been  successful  in competing  for loans  against  other larger
institutions   due  primarily  to  a  lending   strategy  that  includes  direct
involvement by local management. Different customers require different solutions
to their financial needs and appreciate  local banking  officers that understand
the local environment and can provide for their business requirements.

     Average loans  increased $115 million (45.3%) in 2002 compared to 2001. The
increase in loans was a result of successful marketing efforts to originate real
estate  construction loans and other real estate loans. Loan growth for 2002 was
funded  primarily  by issuance of brokered  certificates  of deposit and Federal
Home Loan Bank of Atlanta advances.

                                       11
<PAGE>
     Average loans  increased $49 million  (23.7%) in 2001 compared to 2000. The
increase in loans was a result of population growth, branch openings, and strong
loan demand.  Loan growth for 2001 was funded  primarily with customer  deposits
and Federal Home Loan Bank of Atlanta advances.
<TABLE>
<CAPTION>

                                                              Loan  Portfolio
                                                                December 31,

                            2002                2001                2000              1999              1998
                     ------------------  -----------------   -----------------  ----------------  -----------------
                                Percent            Percent            Percent            Percent            Percent
                      Amount   of Total   Amount  of Total    Amount  of Total   Amount of Total   Amount  of Total
                     --------  --------  -------  --------   -------- --------  ------- --------  -------- --------

                                                           (Dollars in Thousands)

Commercial, financial
<S>                  <C>          <C>    <C>         <C>     <C>        <C>     <C>        <C>    <C>         <C>
  and agricultural.  $ 42,876     10.27% $ 38,007    11.92%  $ 37,628   16.56%  $32,718    17.98% $ 30,813    20.12%
Real estate -
  construction.....   140,723     33.70    93,049    29.17     73,665   32.42    48,442    26.63    25,972    16.96
Real estate -
  mortgage.........   220,697     52.85   179,261    56.20    110,409   48.60    95,257    52.36    90,792    59.27
Consumer...........    12,089      2.89     8,481     2.66      5,267    2.32     5,221     2.87     5,274     3.44
Other..............     1,226      0.30       157     0.05        221    0.10       303     0.17       330     0.22
                     --------  --------  --------  --------  --------  ------   -------  -------  --------  -------
                      417,611    100.00%  318,955   100.00%   227,190  100.00%  181,941   100.00%  153,181   100.00%
                                =======            =======            =======            =======            =======

Unearned income....    (1,197)               (289)                (35)             (177)              (332)
Allowance for loan
  losses...........    (6,319)             (3,803)             (3,267)           (2,261)            (1,750)
                     ---------           ---------           ---------         ---------          ---------

Net loans..........  $ 410,095           $ 314,863           $ 223,888         $ 179,503          $ 151,099
                     =========           =========           =========         =========          =========
</TABLE>


         The following table sets forth maturities of the loan portfolio and the
sensitivity to interest rate changes of the Company's loan portfolio (in
thousands):
<TABLE>
<CAPTION>

                                                  Selected Loan Maturity and Interest Rate Sensitivity

                                                                                       Rate Structure  for Loans
                                                   Maturity                              Maturing Over One Year
                                 ---------------------------------------------------  -----------------------------
                                                Over One
                                      One         Year         Over                    Predetermined   Floating or
                                    Year or      Through       Five                      Interest      Adjustable
                                     Less      Five Years      Years        Total          Rate           Rate
                                 -----------   -----------  -----------  -----------  -------------  --------------
                                                             (Amounts in thousands)

Commercial, financial
<S>                              <C>           <C>          <C>          <C>          <C>            <C>
   and agricultural............  $    22,452   $    18,290  $     2,134  $    42,876  $      15,065  $        5,359
Real estate - construction.....       47,466        74,220       19,037      140,723         51,331          41,926
                                 -----------   -----------  -----------  -----------  -------------  --------------

   Total.......................  $    69,918   $    92,510  $    21,171  $   183,598  $      66,396  $       47,285
                                 ===========   ===========  ===========  ===========  =============  ==============
</TABLE>

     For the  purposes  of this  schedule,  loans  that have  reached  the fixed
contractual floor rate are treated as having a pre-determined interest rate.

Securities Portfolio

     The  securities  portfolio  increased  by $1.2 million or 3.5% from 2001 to
2002. The balance in the securities portfolio decreased by $7.3 million or 17.2%
from 2000 to 2001.  The balance in the securities  portfolio  decreased as funds
were allocated to the loan portfolio  throughout 2001. The securities  portfolio
increased  by 9.06%  or $3.5  million  from  1999 to 2000.  The  balance  in the
securities portfolio increased as deposits increased faster than loans in 2000.

                                       12

<PAGE>
     The Company  maintains an investment  strategy of seeking  portfolio yields
within acceptable risk levels, as well as providing liquidity through borrowings
secured by that  portfolio.  On a daily basis,  funds  available for  short-term
investment  are  determined.   Funds  available  for  long-term  investment  are
projected  based upon  anticipated  loan and deposit  growth,  liquidity  needs,
pledging requirements,  maturities of securities, and other factors. The Company
holds   two    classifications    of    securities:    "Held-to-Maturity"    and
"Available-for-Sale." The Available-for-Sale securities are carried at estimated
fair market value and are equity  securities  at year-end  2002,  2001 and 2000.
Held-to-Maturity  securities  are carried at amortized  cost and  represent  the
largest portion of the total  securities  portfolio.  At December 31, 2002, 2001
and  2000  there   were  no   material   unrealized   gains   (losses)   in  the
Available-for-Sale   portfolio.  At  December  31,  2002,  2001  and  2000,  net
unrealized  gains  (losses)  in  the  Held-to-Maturity   portfolio  amounted  to
$780,513, $249,651 and ($66,363), respectively.

     The  following  table  presents  the  carrying  amounts  of the  securities
portfolio at December 31, in each of the last three years.
<TABLE>
<CAPTION>

                                                  Securities Portfolio

                                                                                      December 31,
                                                                     ----------------------------------------------
                                                                         2002             2001            2000
                                                                     -------------   -------------   --------------
                                                                                     (In thousands)

 Held-to-Maturity:
<S>                                                                  <C>             <C>             <C>
   U.S. government and agencies.................................     $       3,000   $      16,098   $       32,797
   State and municipal..........................................                --             110            7,603
   Mortgage-backed securities...................................            30,339          16,833              559
                                                                     -------------   -------------   --------------
     Total Held-to-Maturity.....................................            33,339          33,041           40,959
                                                                     -------------   -------------   --------------

 Available-for-Sale:
   Equity securities............................................             2,875           1,960            1,311
                                                                     -------------   -------------   --------------
     Total Available-for-Sale...................................             2,875           1,960            1,311
                                                                     -------------   -------------   --------------

Total Securities................................................     $      36,214   $      35,001   $       42,270
                                                                     =============   =============   ==============
</TABLE>
<TABLE>
<CAPTION>

                                          Security Portfolio Maturity Schedule

                                                                       Maturing
                                    --------------------------------------------------------------------------------------
                                           Within              After One But          After Five But            After
                                          One Year           Within Five Years       Within Ten Years         Ten Years
                                    --------------------    -------------------     ------------------    -----------------
                                     Amount      Yield       Amount      Yield       Amount     Yield      Amount    Yield
                                    --------   ---------    --------   --------     --------   -------    --------  -------
                                                                (Amounts in thousands)
Securities Held-to-Maturity:
   (amortized cost)
<S>                                 <C>          <C>        <C>            <C>      <C>          <C>      <C>         <C>
   U.S. Government and agencies..   $     --     0.00%      $   3,000      5.90%    $     --     0.00%    $     --    0.00%
   Mortgage-backed securities....      5,418     5.21          24,337      4.82          584     6.17           --    0.00
                                    --------                ---------               --------              --------
     Total.......................      5,418     5.21          27,337      4.94          584     6.17           --    0.00
                                    --------                                        --------              --------

Securities Available-for-Sale:
   Equity securities.............         --     0.00              --      0.00           --     0.00        2,875    0.00
                                    --------                ---------               --------              --------

Total Securities.................   $  5,418     5.21       $  27,337      4.94     $    584     6.17     $  2,875    0.00
                                    ========                =========               ========              ========
</TABLE>

     There were no securities  held by the Company of which the aggregate  value
at December 31, 2002, 2001 and 2000 exceeded ten percent of shareholders' equity
at that date.  (Securities which are payable from and secured by the same source
of revenue or taxing  authority  are  considered  to be  securities  of a single
issuer.  Securities  of the U.S.  Government  and U.S.  Government  agencies and
corporations are not included.)

                                       13
<PAGE>
Deposits and Borrowed Funds

     Average deposits  increased $95.2 million (35.1%) in 2002 compared to 2001.
Total deposits  increased  $106 million  (33.4%) from year-end 2001 to 2002. The
largest area of growth in 2002 was in certificates  of deposit,  which increased
$89.8 million. From 2001 to 2002,  noninterest-bearing demand deposits decreased
$5.7 million or 9.4% and savings deposits increased $22.1 million (31.7%)

     Average  deposits rose $55 million or 25.5% in 2001 compared to 2000. Total
deposits  increased $69 million or 27.5% from year-end 2000 to 2001. The largest
area of growth in 2001 was in  certificates  of  deposit,  which  increased  $32
million. From 2000 to 2001, interest-bearing transaction deposits increased $5.1
million or 25.5%,  savings deposits  increased $18 million or 34.5%,  other time
deposits of less than $100,000 increased $13 million or 17.2%, and time deposits
of  $100,000  or more  increased  $19 million or 34.2%.  From  year-end  2000 to
year-end 2001,  total  non-interest  bearing  deposits  increased $14 million or
29.4%.

     The following table sets forth the Company's  deposit structure at December
31 in each of the last three years.
<TABLE>
<CAPTION>

                                                                                      December 31,
                                                                     ----------------------------------------------
                                                                         2002             2001            2000
                                                                     -------------   -------------   --------------
                                                                                     (In thousands)

Noninterest-bearing deposits:
<S>                                                                  <C>             <C>             <C>
   Individuals partnerships and corporations....................     $      49,970   $      43,736   $       40,301
   U.S. Government and states and political subdivisions........             2,311           2,408            1,936
   Certified and official checks................................             2,197          14,017            4,268
                                                                     -------------   -------------   --------------
     Total non-interest-bearing deposits........................            54,478          60,161           46,505
                                                                     -------------   -------------   --------------

Interest-bearing deposits:
   Interest - bearing demand accounts...........................            24,774          24,959           19,883
   Savings accounts.............................................            92,109          69,963           52,007
   Certificates of deposit, less than $100,000..................           111,774          86,992           74,200
   Certificates of deposit, more than $100,000..................           140,800          75,786           56,464
                                                                     -------------   -------------   --------------
     Total interest-bearing deposits............................           369,457         257,700          202,554
                                                                     -------------   -------------   --------------

     Total deposits.............................................     $     423,935   $     317,861   $      249,330
                                                                     =============   =============   ==============
</TABLE>

     The following  table presents a breakdown by category of the average amount
of deposits  and the  weighted  average  rate paid on  deposits  for the periods
indicated:
<TABLE>
<CAPTION>

                                                                  Years Ended December 31,
                                           -----------------------------------------------------------------------
                                                    2002                    2001                     2000
                                           ----------------------  ----------------------   -----------------------
                                              Amount       Rate       Amount       Rate       Amount        Rate
                                           ----------  ----------  ----------   ---------   ---------    ----------
                                                                   (Dollars in thousands)

<S>                                        <C>             <C>     <C>              <C>     <C>              <C>
Non interest-bearing deposits............  $   53,376      0.00%   $   43,735       0.00%   $  39,268        0.00%
Savings deposits.........................      86,383      1.99        66,586       3.14       56,939        4.20
Time deposits............................     203,413      3.99       138,773       6.05      100,566        6.10
Interest-bearing demand deposits.........      23,460      0.90        22,337       1.92       19,575        2.11
                                           ----------  --------    ----------               ---------

  Total deposits.........................  $  366,632      2.74%   $  271,431       4.02%   $ 216,348        4.13%
                                           ==========              ==========               =========
</TABLE>

                                       14
<PAGE>
     At December  31,  2002,  time  deposits  of $100,000 or greater  aggregated
approximately $140.8 million. The following table indicates,  as of December 31,
2002,  2001 and 2000 the dollar  amount of $100,000 or more time deposits by the
time remaining until maturity (in thousands):

                        Maturities of Large Time Deposits
                                 (In thousands)
<TABLE>
<CAPTION>

                                                                         2002             2001            2000
                                                                     -------------   -------------   --------------

<S>                                                                  <C>             <C>             <C>
Three months or less............................................     $      49,384   $      27,855   $       29,552
Over three through six months...................................             7,461           3,301            2,813
Over six through twelve months..................................            40,581          27,476           14,434
Over twelve months..............................................            43,374          17,154            9,665
                                                                     -------------   -------------   --------------

     Total......................................................     $     140,800   $      75,786   $       56,464
                                                                     =============   =============   ==============
</TABLE>

     At  December  31, 2002 and 2001,  respectively,  borrowed  funds  consisted
primarily of long-term  debt.  The Bank had  $22,250,000  in available  lines to
purchase  federal  funds,  on an unsecured  basis,  from  commercial  banks.  At
December 31, 2001, the bank had $1,086,000  advanced against these lines.  There
were no advances  against  these lines at the end of 2002 and 2000.  At December
31, 2002 and 2001 the Company  also had credit  available of  approximately  $78
million  and $58  million,  respectively,  with the  Federal  Home  Loan Bank of
Atlanta. Of the credit available,  $50,000,000 and $32,500,000 had been utilized
at December 31, 2002 and 2001, respectively.  The line is secured by residential
and commercial real estate loans, investment securities and cash.

     The following  table sets forth the expected debt service for the next five
years based on interest rates and repayment provisions as of December 31, 2002.

                          Maturities of Long-term Debt
                                 (In thousands)
<TABLE>
<CAPTION>

                                                          2003        2004        2005        2006         2007
                                                       ---------   ---------    --------    --------    -----------

<S>                                                    <C>         <C>          <C>         <C>         <C>
   Interest on indebtedness.........................   $   2,463   $   2,247    $  1,723    $    1,323  $     1,231
   Repayment of principal...........................          18      10,518      15,003         4,500           --
                                                       ---------   ---------    --------    ----------  -----------

                                                       $   2,481   $  12,765    $ 16,726    $    5,823  $     1,231
                                                       =========   =========    ========    ==========  ===========

</TABLE>

Capital Resources

     Shareholders' equity increased $5.3 million to $34.5 million as of December
31, 2002,  and increased  $3.2 million $29.1 to million as of December 31, 2001.
Shareholders'  equity increased $3.1 million to $26.0 million as of December 31,
2000.  The  increase  in  shareholders'  equity  for  2002,  2001  and  2000 was
attributable to net income less dividends declared.

     On June 21, 2002, FCBI Capital Trust I ("FCBI Trust"), a Delaware statutory
trust established by the Company,  received  $10,000,000 in proceeds in exchange
for $10,000,000  principal amount of FCBI Trust's floating rate cumulative trust
preferred  securities (the "preferred  securities") in a trust preferred private
placement.  The  proceeds  of that  transaction  were then used by FCBI Trust to
purchase  an  equal  amount  of  floating  rate  subordinated   debentures  (the
"subordinated   debentures")   of  the  Company.   The  Company  has  fully  and
unconditionally guaranteed all obligations of FCBI Trust on a subordinated basis
with  respect to the  preferred  securities.  The Company  accounts for the FCBI
Trust  preferred   securities  as  a  minority  interest.   Subject  to  certain
limitations,  the  preferred  securities  qualify  as  Tier 1  capital  and  are
presented in the Consolidated  Statements of Financial  Condition as "Guaranteed
preferred  beneficial interests in the Company's  subordinated  debentures." The

                                       15
<PAGE>

sole asset of FCBI Trust is the subordinated  debentures  issued by the Company.
Both the preferred  securities of FCBI Trust and the subordinated  debentures of
the Company each have approximately 30-year lives. However, both the Company and
FCBI Trust have a call option after five years,  subject to  regulatory  capital
requirements.

     A strong capital position, which is vital to the continued profitability of
the Company,  also  promotes  depositor and investor  confidence  and provides a
solid  foundation  for the future growth of the  organization.  The objective of
management is to maintain a level of  capitalization  that is sufficient to take
advantage  of  profitable   growth   opportunities   while  meeting   regulatory
requirements.  This is achieved by improving  profitability  through effectively
allocating  resources to more  profitable  businesses,  improving asset quality,
strengthening service quality, and streamlining costs. The primary measures used
by  management  to monitor the results of these efforts are the ratios of return
on average assets, return on average common equity and average equity to average
assets.

     The table below  summarizes  these and other key ratios for the Company for
each of the last three years.

                           Return on Equity and Assets
<TABLE>
<CAPTION>

                                                                           2002           2001          2000
                                                                        -----------   -----------   -----------

<S>                                                                            <C>           <C>           <C>
Return on average assets...........................................            1.44%         1.65%         1.93%
Return on average common equity....................................           20.04         19.09         20.57
Dividend payout ratio..............................................           17.03         40.74         39.10
Average common shareholders' equity to average
   assets ratio....................................................            7.18          8.64          9.39
</TABLE>

     In addition,  bank holding  companies  are required to maintain  capital to
support, on a risk-adjusted  basis, certain off-balance sheet activities such as
loan commitments.  The Federal Reserve has adopted capital guidelines  governing
the  activities  of  bank  holding  companies.   These  guidelines  require  the
maintenance  of an  amount  of  capital  based on  risk-adjusted  assets so that
categories  of assets with  potentially  higher  credit risk will  require  more
capital backing than assets with lower risk.

     The capital guidelines classify capital into two tiers, referred to as Tier
I and Tier II. Under risk-based capital requirements,  Total Capital consists of
Tier I Capital,  which is generally common  shareholders'  equity less goodwill,
and Tier II  Capital,  which is  primarily a portion of the  allowance  for loan
losses and  certain  qualifying  debt  instruments.  In  determining  risk-based
capital requirements,  assets are assigned risk-weights of 0% to 100%, depending
primarily on the regulatory  assigned levels of credit risk associated with such
assets.   Off-balance   sheet  items  are  considered  in  the   calculation  of
risk-adjusted  assets through conversion factors  established by the regulators.
The framework for calculating risk-based capital requires banks and bank holding
companies to meet the regulatory  minimums of 4% Tier I and 8% total  risk-based
capital.  In  1990  regulators  added  a  leverage  computation  to the  capital
requirements,  comparing  Tier I Capital to total average  assets less goodwill.
Banks have similar capital requirements.

     During 2001, the Bank issued  $5,000,000 in subordinated debt to qualify as
Tier II  Capital.  Portions  of this  debt  qualify  according  to  maturity  as
allowable Tier II Capital.  In 2001, the Bank had $4,400,000 as qualifying  Tier
II Capital.  There were no similar  transactions  during 2000. The  subordinated
debt was  repaid by the Bank from  proceeds  of the Trust  Preferred  securities
issued by the Company and injected into the Bank as Tier I capital.



              [The remainder of this page intentionally left blank]

                                       16
<PAGE>
     The table below illustrates the Company's  regulatory  capital ratios under
federal guidelines at December 31, 2002, 2001 and 2000:

                             Capital Adequacy Ratios
<TABLE>
<CAPTION>

                                                             Statutory             Years ended December 31,
                                                                           ----------------------------------------
                                                              Minimum          2002          2001          2000
                                                            ------------   -----------   -----------    -----------
                                                                                    (Amounts in thousands)

<S>                                                                        <C>           <C>            <C>
  Tier I Capital                                                           $    44,464   $    29,139    $    25,970
  Tier II Capital                                                                5,856         8,203          3,267
                                                                           -----------   -----------    -----------

  Total Qualifying Capital                                                 $    50,320   $    37,342    $    29,237
                                                                           ===========   ===========    ===========

  Risk Adjusted Total Assets (including
  off-balance-sheet exposures)                                             $   468,050   $   350,629    $   268,019
                                                                           ===========   ===========    ===========

  Adjusted quarterly average assets                                        $   485,977   $   351,496    $   281,659
                                                                           ===========   ===========    ===========

  Tier I Capital Ratio                                              4.00%         9.50%         8.31%         9.69%

  Total Capital Ratio                                               8.00         10.75         10.65         10.91

  Leverage Ratio                                                    4.00          9.15          8.29          9.22
</TABLE>

     Information  on the Bank  capital  ratios  appears  in  Footnote  11 to the
consolidated financial statements contained elsewhere herein.

     On  December  31, 2002 the Company  and the Bank  exceeded  the  regulatory
minimums and qualified as well capitalized institutions under the regulations.

Liquidity Management

     Liquidity  is the ability of a company to convert  assets into cash without
significant  loss  and to  raise  funds  by  increasing  liabilities.  Liquidity
management  involves  having  the  ability  to meet  the  day-to-day  cash  flow
requirements of its customers,  whether they are depositors  wishing to withdraw
funds or borrowers requiring funds to meet their credit needs.

     The primary  function of  asset/liability  management is not only to assure
adequate liquidity in order for the Bank to meet the needs of its customer base,
but to maintain an appropriate  balance  between  interest-sensitive  assets and
interest-sensitive liabilities so that the Bank can remain profitable in varying
interest rate  environments.  Both assets and liabilities are considered sources
of liquidity funding and both are, therefore, monitored on a daily basis.

     The asset portion of the balance sheet provides liquidity primarily through
loan repayments and maturities of or pledge of securities. Additional sources of
liquidity  are  investments  in  federal  funds  sold and  prepayments  from the
mortgage-backed securities in the securities portfolio.

     The  liability  portion of the balance  sheet  provides  liquidity  through
various interest bearing and noninterest-bearing  deposit accounts. The Bank had
$22,250,000  and $21,164,000 of federal funds available at December 31, 2002 and
2001, respectively. The Bank also had available as a source of financing, a line
of credit with the Federal  Home Loan Bank of Atlanta of which  $28,000,000  and
$25,500,000   was   available   and  unused  at  December  31,  2002  and  2001,
respectively,  subject to the  availability  of assets to pledge to secure  such
borrowings.

                                       17
<PAGE>
Interest Rate Sensitivity Management

     Interest rate  sensitivity is a function of the re-pricing  characteristics
of  the  Company's  portfolio  of  assets  and  liabilities.   These  re-pricing
characteristics are the time frames within which the interest-bearing assets and
liabilities  are subject to change in interest  rates either at  replacement  or
maturity  during the life of the  instruments.  Sensitivity  is  measured as the
difference  between the volume of assets and  liabilities  in the Bank's current
portfolio that are subject to re-pricing in future time periods. The differences
are known as interest sensitivity gaps and are usually calculated separately for
segments of time ranging from zero to thirty  days,  thirty-one  to ninety days,
ninety-one  days to one  year,  one to five  years,  over  five  years  and on a
cumulative basis.

     The following table shows interest sensitivity gaps for different intervals
as of December 31, 2002.

                       Interest Rate Sensitivity Analysis
                                 (In thousands)
<TABLE>
<CAPTION>

                                         0-30         31-90        90-365         1-5        Over 5
                                         Days         Days          Days         Years        Years        Total
                                      -----------  -----------  -----------  -----------  -----------   -----------

Interest-earning assets (1)
<S>                                   <C>          <C>          <C>          <C>          <C>           <C>
   Loans............................  $   109,000  $    10,720  $    95,072  $   169,777  $    31,846   $   416,415
   Securities and federal funds sold       32,902        2,506        2,895       16,179       14,635        69,117
   Interest-bearing deposits in banks      12,668           --           --           --           --        12,668
                                      -----------  -----------  -----------  -----------  -----------   -----------
                                          154,570       13,226       97,967      185,956       46,481       498,200
                                      -----------  -----------  -----------  -----------  -----------   -----------
Interest-bearing liabilities (2)....
   Demand deposits (3)..............        8,258        8,258        8,258           --           --        24,774
   Savings deposits (3).............       30,703       30,703       30,703           --           --        92,109
   Time deposits....................       34,985       40,165      108,409       69,014           --       252,573
   Long-term borrowings.............           --           --           18       30,021       30,000        60,039
                                      -----------  -----------  -----------  -----------  -----------   -----------
                                           73,946       79,126      147,388       99,035       30,000       429,495
                                      -----------  -----------  -----------  -----------  -----------   -----------

Interest sensitivity gap............  $    80,624  $   (65,900) $   (49,421) $    86,921  $    16,481   $    68,705
                                      ===========  ============ ===========  ===========  ===========   ===========

Cumulative interest sensitivity gap.  $    80,624  $    14,724  $   (34,697) $    52,224  $    68,705
                                      ===========  ===========  ===========  ===========  ===========

Ratio of interest-earning assets to
     Interest-bearing liabilities...       1.92         0.17         0.66         1.88          2.82

Cumulative ratio....................       1.92         1.10         0.88         1.13          1.16

Ratio of cumulative gap to total
   interest-earning assets..........       0.16         0.03        (0.07)        0.10          0.14
<FN>

     (1)  Excludes  nonaccrual  loans.   Securities   maturities  are  based  on
          projected re-payments at current interest rate levels.

     (2)  Excludes  matured  certificates  which have not been  redeemed  by the
          customer and on which no interest is accruing.

     (3)  Interests  bearing  demand  and  savings  deposits  are  assumed to be
          subject to movement  into other deposit  instruments  in equal amounts
          during the 0-30 day period,  the 31-90 day period,  and the 91-365 day
          period.
</FN>
</TABLE>

     The above table indicates that in a rising interest rate  environment,  the
Company's earnings may be positively affected in the short-term, (0-30 days) due
to earning assets repricing faster than interest-bearing liabilities. As seen in
the preceding table, for the first 30 days of repricing  opportunity there is an
excess of earning assets over interest-bearing  liabilities of approximately $80
million.  For the first 365 days,  interest-bearing  liabilities  exceed earning
assets by  approximately  $35 million.  Changes in the mix of earning  assets or
supporting  liabilities  can either increase or decrease the net interest margin
without  affecting  interest rate  sensitivity.  In addition,  the interest rate
spread and the level of interest-bearing assets and liabilities may change, thus
impacting  net  interest  income.  Due to  management's  continued  emphasis  on
profitability,  $3.0 million of the higher-yielding  securities presented in the
table above have call  features,  which may result in such  securities  having a
shorter  effective life.  This in turn may reduce the interest rate  sensitivity
gap  presented   above.   It  should  be  noted,   therefore,   that  a  matched
interest-sensitive  position by itself  would not ensure  maximum  net  interest
income.

                                       18
<PAGE>

     Management  continually evaluates the condition of the economy, the pattern
of market  interest  rates,  and other  economic  data to determine the types of
investments  that should be made and at what  maturities.  Using this  analysis,
management  from  time to  time  assumes  calculated  interest  sensitivity  gap
positions to maximize net interest  income based upon  anticipated  movements in
the general level of interest rates.


Results of Operations

Net Interest Income

     Net interest income is the principal component of a financial institution's
income  stream  and  represents  the  spread  between  interest  and fee  income
generated  from  earning  assets and the  interest  expense paid on deposits and
borrowings. The following discussion is on a fully taxable equivalent basis.

     Net interest income increased  approximately  $3.9 million (24.5%) to $19.8
million in 2002 compared to 2001.  Net interest  income  increased  $1.2 million
(7.8%) to $15.9  million from 2000 to 2001.  The  increase  each year in the net
interest income is primarily due to increased volume in total loans.

     Interest income was $31.6 million in 2002, which represented an increase of
13.1% over 2001.  Interest income produced by the loan portfolio  increased $4.2
million  (16.9%)  in 2002  compared  to  2001.  The  increase  in loan  interest
reflected  the  offsetting  effects of a lower  average rate earned on a greater
average  investment  in loans.  Interest  income on  securities  decreased  $298
thousand  (12.0%) in 2002 compared to 2001. The decrease in securities  interest
from 2001 to 2002  reflected an increase in the average  volume more than offset
by the  decline  in  yield.  The call of  higher  rate  U.S.  Government  Agency
securities contributed to the lower yields.

     Interest  income was $27.9 million in 2001,  which  represented an increase
$2.9 million  (11.6%) over 2000.  Interest income produced by the loan portfolio
increased  $2.4 (10.8%) in 2001 compared to 2000.  The increase in loan interest
reflected  the  offsetting  effects of a lower  average rate earned on a greater
average  investment  in loans.  Interest  income  on  securities  increased  $37
thousand  (1.5%) in 2001  compared to 2000.  The minor  increase  in  securities
income from 2000 to 2001  reflected a stable  average  investment  in securities
during 2001 and 2000.

     Interest income was $25.0 million in 2000, which represented an increase of
$6.8 million  (37.5%) over 1999.  Interest income produced by the loan portfolio
increased $6.5 million (40.6%) in 2000 from 1999. The Bank benefited from a rise
in the national  interest  rate levels and the asset  sensitive  position of the
loan portfolio.  Interest income on securities  increased $441 thousand  (21.9%)
from 1999 to 2000. The increase in securities income from 1999 to 2000 is due to
an increase in the average volume of taxable securities.

     Interest income other than loans and securities  decreased by $259 thousand
from 2001 to 2002. During 2001, the Bank maintained a slightly larger investment
in federal funds sold  (averaging  $11.7  million)  compared to 2000 while rates
declined significantly (about 2.8%), resulting in the decreased income.

     Interest income other than loans and securities  increased by $436 thousand
from 2000 to 2001.  During 2001, the Company  maintained a larger  investment in
federal funds sold  (averaging $11 million)  compared to 2000,  resulting in the
increased income.  Interest income other than loans and securities  decreased by
$106 thousand from 1999 to 2000. The decrease is due primarily to the decline in
the average federal funds sold balance.

     Total interest  expense  decreased by $231 thousand (1.9%) in 2002 compared
to 2001. The interest expense decrease from 2001 to 2002 is primarily due to the
volume increase in time deposit accounts and FHLB advances more than offset by a
decline  in the  average  rate  paid on both.  (See the  "Rate/Volume  Analysis"
following this section.)  Interest  expense on time deposit  accounts  decreased
$285  thousand  although  the average  volume  increased by $64.6  million.  The
significant  rate  decline  was cause by a shift  from  locally  generated  time
deposits to brokered time deposits and the general decline in rates during 2002.

                                       19
<PAGE>
     Total interest  expense  increased by $1.7 million (17.0%) in 2001 compared
to 2000. The interest expense increase from 2000 to 2001 is primarily due to the
volume increase in time deposit  accounts,  partially offset by a 38 basis point
decline in the average rate paid on total interest-bearing liabilities. Interest
expense on time deposit  accounts  increased  $2.2 million  (36.7%) from 2000 to
2001 as the Bank relied on that source of funds to make loans.

     Total  interest  expense  increased  by $4.0  million or 64.9% in 2000 from
1999.  The interest  expense  increase from 1999 to 2000 is primarily due to the
increase in time deposit  accounts and long-term  borrowings  and an increase of
107 basis points in the average rate paid on total interest-bearing liabilities.
Interest expense on time deposit  accounts  increased $2.5 million or 70.2% from
1999 to 2000 and interest expense on long-term borrowings increased $1.0 million
over the same period of time.

     The trend in net interest  income is commonly  evaluated  by measuring  the
average yield on earning assets, the average cost of funds, and the net interest
margin.  The Company's  average yield on earning assets (total  interest  income
divided by average interest earning assets)  decreased in 2002 to 7.40% compared
to 9.08% in 2001.  Most of the  decline  was  caused  by the drop in Prime  rate
during  2001 at the same time the Bank had over $100  million  in loans  tied to
that index. In line with the national interest rate markets,  the Bank's average
cost of funds  (total  interest  expense  divided  by average  interest  bearing
liabilities)  declined  from  4.83% in 2001 to 3.30% in  2002.  The  Bank's  net
interest margin (net interest income divided by average interest earning assets)
declined in 2002 to 4.64%  compared to 5.17% in 2001.  The decline was caused by
the Bank's asset sensitive  position during a period of dropping  interest rates
as  discussed  more  fully in the  section  titled  "Interest  Rate  Sensitivity
Management" elsewhere in this report.

     The Bank's average yield on earning assets (total  interest  income divided
by average  interest  earning  assets)  decreased  in 2001 to 9.08%  compared to
10.12% in 2000.  Most of the decline was caused by the drop in Prime rate during
2001 at the same  time the Bank had  over  $100  million  in loans  tied to that
index. In line with the national interest rate markets,  the Bank's average cost
of  funds  (total  interest   expense  divided  by  average   interest   bearing
liabilities)  declined  from  5.21% in 2000 to 4.83% in  2001.  The  Bank's  net
interest margin (net interest income divided by average interest earning assets)
declined  in 2001 to 5.17% in 2001  compared  to 5.96% in 2000.  The decline was
caused by the  Bank's  asset  sensitive  position  during a period  of  dropping
interest rates.

     The net  interest  margin  decreased  23 basis points in 2000 from 6.19% at
year-end 1999 to 5.96% at year-end 2000,  reflecting a major shift (as a percent
of deposits)  from lower cost savings  accounts to higher cost  certificates  of
deposit.  The shift in funding  was driven by a rapid loan  growth  requiring  a
significant  increase in rates to attract  certificates  of  deposit.  Partially
offsetting the higher rates paid on  certificates of deposit in 2000 compared to
1999, the yield on earning assets increased 71 basis points to 10.12% from 9.41%
during the same period.



              [The remainder of this page intentionally left blank]

                                       20
<PAGE>
     The tables that follow show, for the periods  indicated,  the daily average
balances  outstanding for the major  categories of  interest-bearing  assets and
interest-bearing  liabilities,  and the  average  interest  rate  earned or paid
thereon. Such yields are calculated by dividing income or expense by the average
balance of the corresponding  assets or liabilities.  Also shown are the changes
in income attributable to changes in volume and changes in rate.
<TABLE>
<CAPTION>

                                      Average Balances, Interest Income/Expense and Yields/Rates
                                                        Taxable Equivalent Basis

                                                                    Years Ended December 31,
                            ------------------------------------------------------------------------------------------
                                         2002                           2001                          2000
                            ------------------------------  ----------------------------  ----------------------------
                                       Interest    Average            Interest   Average            Interest   Average
                             Average    Income/    Yields/   Average   Income/   Yields/   Average   Income/   Yields/
                             Balance    Expense     Rates    Balance   Expense    Rates    Balance   Expense    Rates
                            ---------  ---------  --------  --------  --------  --------  --------  --------  --------
                                                            (Dollars in thousands)
 Assets:
   Earning assets:
     Loans, net of
<S>                    <C>  <C>         <C>           <C>   <C>       <C>           <C>   <C>       <C>          <C>
       unearned income (1)  $ 370,062   $ 29,128      7.85% $255,294  $ 24,908      9.76% $206,333  $ 22,482     10.90%
   Securities:
     Taxable............       40,714      2,185      5.37    40,093     2,459      6.13    38,984     2,386      6.12
     Tax-exempt.........           82          5      6.10       325        29      8.31       692        65      9.39
                             --------   --------            --------  --------            --------  --------
       Total securities.       40,796      2,190      5.37    40,418     2,488      6.15    39,676     2,451      6.18
   Interest-bearing deposits
     in other banks.....        3,483         77      2.21     1,137        55      4.84        19        --      0.00
   Federal funds sold...       11,723        182      1.55    10,675       463      4.34     1,210        82      6.78
                             --------   --------            --------  --------            --------  --------
       Total interest-
         earning assets (2)   426,064     31,577      7.41   307,524    27,914      9.08   247,238    25,015     10.12

   Non-interest earning assets:
     Cash and due from banks   10,689                          8,756                         9,000
     Accrued interest and
       other assets.....       13,995                         11,449                         9,873
     Allowance for loan
       losses...........       (4,740)                        (3,541)                       (2,822)
                             --------                       --------                      --------

       Total assets.....    $ 446,008                       $324,188                      $263,289
                            =========                       ========                      ========

Liabilities and Shareholders' Equity:
   Interest-bearing liabilities:
     Demand deposits....     $ 23,460        210      0.90% $ 22,337       429      1.92  $ 19,575       413      2.11
     Savings deposits...       86,383      1,715      1.99    66,586     2,088      3.14    56,939     2,389      4.20
     Time deposits......      203,413      8,107      3.99   138,773     8,392      6.05   100,566     6,137      6.10
                             --------   --------            --------  --------            --------  --------
       Total deposits...      313,256     10,032      3.20   227,696    10,909      4.79   177,080     8,939      5.05

     Long-term borrowings      41,391      1,699      4.10    17,478     1,004      5.74    15,607     1,015      6.50
     Short-term borrowings      2,759         56      2.03     3,773       105      2.78     4,614       322
                             --------   --------            --------  --------            --------  --------      6.98
       Total interest-
        bearing liabilities   357,406     11,787      3.30   248,947    12,018      4.83   197,301    10,276
                             --------   --------                      --------  --------  --------  --------      5.21

   Non interest-bearing liabilities:
     Demand deposits....       53,376                         43,735                        39,268
     Accrued interest and
       other liabilities        3,201                          3,497                         1,996
     Shareholders' equity      32,025                         28,009                        24,724
                             --------                       --------                      --------
       Total liabilities and
       shareholders' equity  $446,008                       $324,188                     $ 263,289
                             ========                       ========                     =========

   Net interest income/net
    interest spread.....                  19,790      4.11%             15,896      4.25%             14,739      4.91%
                                                  ========                      ========                      ========

   Net yield on earning assets                        4.64%                         5.17%                         5.96%
                                                  ========                      ========                      ========

   Taxable equivalent adjustment:
     Securities.........                       1                             9                            22
     Loans..............                       6                             2                             2
                                        --------                      --------                      --------
       Total taxable
        equivalent adjustment                  7                            11                            24
                                        --------                      --------                      --------

   Net interest income..                $ 19,783                      $ 15,885                      $ 14,715
                                        ========                      ========                      ========
<FN>


     (1)  Average loans  include  nonaccrual  loans.  All loans and deposits are
          domestic.

     (2)  Tax equivalent  adjustments  have been based on an assumed tax rate of
          34  percent,  and do not give effect to the  disallowance  for federal
          income tax purpose of interest  expense related to certain  tax-exempt
          earning assets.
</FN>
</TABLE>

                                       21
<PAGE>
<TABLE>
<CAPTION>

                                                          Rate/Volume Variance Analysis
                                                             Taxable Equivalent Basis

                                     Average Volume               Change in Volume                Average Rate
                             -------------------------------  -------------------------   ------------------------------
                               2002       2001       2000      2002-2001     2001-2000      2002       2001       2000
                             ---------  ---------  ---------  -----------   -----------   --------   --------   --------
                                                              (Dollars in thousands)
Earning assets:

Loans, net of unearned
<S>      <C>                 <C>        <C>        <C>        <C>           <C>               <C>        <C>       <C>
   income(1)...............  $ 370,062  $ 255,294  $ 206,333  $   117,768   $    48,961       7.85%      9.76%     10.90%

Securities:
   Taxable.................     40,714     40,093     38,984          621         1,109       5.37       6.13       6.12
   Tax exempt..............         82        325        692         (243)         (367)      6.10       8.31       9.39
                             ---------  ---------  ---------  -----------   -----------
     Total securities......     40,796     40,418     39,676        1,868           742       5.37       6.15       6.18
                             ---------  ---------  ---------  -----------   -----------

Interest-bearing deposits
   with other banks........      3,483      1,137         19        2,348         1,118       2.21       4.84       0.00
Federal funds sold.........     11,723     10,675      1,210        1,048         9,465       1.55       4.34       6.78
                             ---------  ---------  ---------  -----------   -----------

     Total earning assets..  $ 426,964  $ 307,524  $ 247,238  $   119,441   $    60,286       7.41       9.08      10.12
                             =========  =========  =========  ===========   ===========

Interest-bearing liabilities:
Deposits:..................
   Demand deposits.........  $  23,460  $  22,337  $  19,575  $     1,123   $     2,762       0.90       1.92       2.11
   Savings.................     86,383     66,586     56,939       19,797         9,647       1.99       3.14       4.20
   Time certificates.......    203,413    138,773    100,566       64,640        38,207       3.99       6.05       6.10
                             ---------  ---------  ---------  -----------   -----------
     Total deposits........    313,256    227,696    177,080       85,560        50,616       3.20       4.79       5.05

Long-term borrowings.......     41,391     17,478     15,607       23,913         1,871       4.10       5.74       6.50
Other borrowings...........      2,759      3,773      4,614       (1,014)         (841)      2.03       2.78       6.98
                             ---------  ---------  ---------  -----------   -----------

     Total interest-bearing
        liabilities          $ 357,406  $ 248,947  $ 197,301  $   108,469   $    51,646       3.30       4.83       5.21
                             =========  =========  =========  ===========   ===========

Net interest income/net interest spread                                                       4.11       4.25       4.91

Net yield on earning assets                                                                   4.64       5.17       5.96

Net cost of funds..........                                                                   2.77       3.91       4.16
</TABLE>

<TABLE>
<CAPTION>

                                                                                              Variance Attributed to
                                                                             -------------------------------------------------------
                                 Interest
                              Income/Expense               Variance                      2002                         2001
                          ----------------------   ------------------------  ---------------------------   -------------------------
                           2002    2001    2000     2002-2001    2001-2000    Volume     Rate      Mix     Volume     Rate      Mix
                          ------  ------  ------   -----------  -----------  --------  --------  -------   -------  --------  ------
                                                                 (Dollars in thousands)
Earning assets:
Loans, net of
<S>                      <C>     <C>     <C>       <C>           <C>         <C>       <C>       <C>       <C>      <C>      <C>
  unearned income....... $29,128 $24,908 $22,482   $     4,220   $   2,426   $ 11,198  $ (4,814) $(2,164)  $ 5,335  $ (2,351)$ (558)
Securities:
   Taxable..............   2,185   2,459   2,386          (274)         73         38      (307)      (5)       68         5      0
   Tax exempt...........       5      29      65           (24)        (36)       (22)       (9)       7       (34)       (3)     1
                          ------  ------  ------   -----------  ----------   --------  --------  -------   -------  --------  ------
     Total securities...   2,190   2,488   2,451          (298)         37         16      (316)       2        34        (2)     1
                          ------  ------  ------   -----------  ----------   --------  --------  -------   -------  --------  ------
Interest-bearing deposits
   with other banks.....      77      55      --            22          55        114       (30)     (62)        0         1     54
Federal funds sold......     182     463      82          (281)        381         45      (297)     (29)      641       (30)  (230)
                          ------  ------  ------   -----------  ----------   --------  --------  -------   -------  --------  ------
     Total earning
       assets...........  31,577  27,914  25,015         3,663       2,899     11,373    (5,457)  (2,253)    6,010    (2,378)  (733)
                          ------  ------  ------   -----------  ----------   --------  --------  -------   -------  --------  ------

Interest-bearing liabilities:
Deposits:
   Demand...............     210      429      413        (219)        16          22      (229)    (12)        58       (37)    (5)
   Savings..............   1,715    2,088    2,389        (373)      (301)        621      (766)   (228)       405      (604)  (102)
   Time certificates....   8,107    8,392    6,137        (285)     2,255       3,908    (2,861)  (1,332)    2,332       (55)   (22)
                          ------   ------  -------   ---------  ---------    --------  --------  -------   -------  --------  ------
     Total deposits.....  10,032   10,909    8,939        (877)     1,970       4,551    (3,856)  (1,572)    2,795    (696)    (129)
                          ------   ------  -------   ---------  ---------    --------  --------  -------   -------  --------  ------

Long-term borrowings....   1,699    1,004    1,015         695        (11)      1,375      (287)   (393)       122     (118)    (15)
Short-term borrowings...      56      105      322         (49)      (217)        (29)      (28)      8        (59)    (194)     36
                          ------   ------  -------   ---------  ---------    --------  --------  -------   -------  -------   ------
     Total interest-
       bearing
        liabilities.....  11,787   12,018   10,276       (231)      1,742       5,897    (4,171) (1,957)     2,858   (1,008)   (108)
                          ------   ------  -------   ---------  ---------    --------  --------  -------   -------  -------   ------
Net interest income/net
   interest spread...... $19,790  $15,896  $14,739   $   3,894  $   1,157    $  5,476  $ (1,286) $ (296)  $ 3,152  $(1,370) $  (625)
                          ======   ======  =======   =========  =========    ========  ========  =======   =======  =======   ======
</TABLE>

                                       22

<PAGE>
Allowance for Loan Losses

     Each of the Bank's loans is assigned to a lending  officer  responsible for
the ongoing review and  administration  of that loan.  Lending officers make the
initial  identification  of loans which present some difficulty in collection or
where  there is an  indication  that the  probability  of loss  exists.  Lending
officers are responsible for the collection  effort on a delinquent loan. Senior
management  is  informed  of the status of  delinquent  and  problem  loans on a
monthly basis.

     Senior management makes  recommendations  monthly to the Board of Directors
as to  charge-offs.  Senior  management  reviews the allowance for possible loan
losses on a monthly basis. The Bank's policy is to discontinue  interest accrual
when payment of principal and interest is 90 days or more in arrears  unless the
value of the collateral exceeds the principal plus accrued interest.

     The allowance for possible loan losses represents  management's  assessment
of the risks  associated with extending credit and its evaluation of the quality
of the loan portfolio.  Management  analyzes the loan portfolio to determine the
adequacy  of  the  allowance  for  possible  loan  losses  and  the  appropriate
provisions   required  to  maintain  a  level  considered   adequate  to  absorb
anticipated loan losses. In assessing the adequacy of the allowance,  management
reviews the size,  quality and risk of loans in the portfolio.  Management  also
considers  such  factors  as loan loss  experience,  the  amount of past due and
nonperforming loans, specific known risk, the status and amount of nonperforming
assets,  underlying  collateral  values securing loans,  current and anticipated
economic  conditions  and other factors which affect the allowance for potential
credit losses.

     While it is the Bank's policy to charge off in the current period the loans
in which a loss is considered  probable,  there are  additional  risks of future
losses,  which cannot be quantified  precisely or attributed to particular loans
or  classes of loans.  Because  these  risks  include  the  future  state of the
economy,   management's  judgment  as  to  the  adequacy  of  the  allowance  is
necessarily approximate and imprecise.

     Management  believes that  $6,319,000  on December 31, 2002,  $3,803,000 on
December 31, 2001,  $3,267,000 on December 31, 2000,  $2,261,000 on December 31,
1999, and $1,750,000 on December 31, 1998, in the allowance for loan losses were
adequate to absorb  known risks in the  portfolio.  No  assurance  can be given,
however, that adverse economic circumstances will not result in increased losses
in the loan portfolio,  and require greater  provisions for possible loan losses
in the future.



              [The remainder of this page intentionally left blank]

                                       23
<PAGE>
     The  following  table sets forth  certain  information  with respect to the
Bank's loans, net of unearned income,  and the allowance for loan losses for the
five years ended December 31, 2002.

<TABLE>
<CAPTION>

                                              Summary of Loan Loss Experience

                                                        2002         2001         2000         1999         1998
                                                     ---------    ---------     --------     --------     ---------
                                                                         (Dollars in thousands)

<S>                                                  <C>          <C>           <C>          <C>          <C>
Allowance for loan losses at beginning of year.....  $   3,803    $   3,267     $  2,261     $  1,750     $   2,045
Loans charged off:
  Commercial, financial and agricultural...........        161          162           50          166           532
  Real estate - mortgage...........................          0          185            8          479         1,021
  Consumer.........................................         46           43           52           38            55
                                                     ---------    ---------     --------     --------     ---------
    Total loans charged off........................        207          390          110          683         1,608
                                                     ---------    ---------     --------     --------     ---------

Recoveries on loans previously charged off:
  Commercial, financial and agricultural...........        193           47           33            7           126
  Real estate - mortgage...........................          3          131           72          340           251
  Consumer.........................................         17           28           11           37            16
                                                     ---------    ---------     --------     --------     ---------
    Total recoveries...............................        213          206          116          384           393
                                                     ---------    ---------     --------     --------     ---------

Net loans charged off (recovered)..................         (6)         184           (6)         299         1,215

Provision for loan losses..........................      2,510          720        1,000          810           920
                                                     ---------    ---------     --------     --------     ---------

Allowance for loan losses at end of period.........  $   6,319    $   3,803     $  3,267     $  2,261     $   1,750
                                                     =========    =========     ========     ========     =========

Loans, net of unearned income, at end of period....  $ 416,415    $ 318,666     $227,155     $181,764     $ 152,848

Average loans, net of unearned income,
  outstanding for the period.......................    370,062      255,294      206,333      154,771       132,522

Ratio of net charge-offs to net average loans......      (0.00)%        0.07%       (0.00)%       0.19%        0.92%

</TABLE>

     In evaluating the allowance,  management also considers the historical loan
loss  experience of the Bank,  the amount of past due and  nonperforming  loans,
current and  anticipated  economic  conditions,  lender  requirements  and other
appropriate  information.  The Bank  allocates  the allowance for loan losses to
specific loan categories based on an average of historical losses and the volume
of each loan category.




              [The remainder of this page intentionally left blank]

                                       24
<PAGE>
<TABLE>
<CAPTION>


              Management allocated the allowance for loan losses to specific loan categories as follows:

                                                        Allocation of Loan Loss Reserve

                                                             December 31,
                      ------------------------------------------------------------------------------------------------------------
                              2002                  2001                  2000                  1999                  1998
                      --------------------  ---------------------  -------------------  --------------------  --------------------
                                 Percent               Percent               Percent               Percent               Percent
                                 of Loans              of Loans              of Loans              of Loans              of Loans
                                 in Each               in Each               in Each               in Each               in Each
                                 Category              Category              Category              Category              Category
                                 to Total              to Total              to Total              to Total              to Total
                        Amount     Loans      Amount     Loans      Amount     Loans      Amount     Loans      Amount     Loans
                      ---------- ---------  ---------- ---------  ---------- ---------  ---------- ---------  ---------- ---------
                             (Dollars in Thousands)
Domestic loans:
  Commercial, financial
<S>                   <C>            <C>    <C>            <C>    <C>            <C>    <C>            <C>    <C>            <C>
    and agricultural  $    2,494     10.27% $    1,566     11.92% $      544     16.56% $      410     17.98% $      336     20.12%
  Real estate -
    mortgage........       3,357     86.54       2,021     85.37       2,647     81.02       1,786     78.98       1,372     76.23
  Consumer..........         468      3.19         216      2.71          76      2.42          65      3.04          42      3.66
                      ---------- ---------  ---------- ---------  ---------- ---------  ---------- ---------  ---------- ---------

                      $    6,319    100.00% $    3,803    100.00% $    3,267    100.00% $    2,261    100.00% $    1,750    100.00%
                      ========== =========  ========== =========  ========== =========  ========== =========  ========== =========
</TABLE>

Nonperforming Assets

     Nonperforming assets include nonperforming loans and foreclosed real estate
held for sale.  Nonperforming  loans include  loans  classified as nonaccrual or
renegotiated.  The Bank's policy is to place a loan on nonaccrual status when it
is contractually past due 90 days or more as to payment of principal or interest
unless the  collateral  value is  greater  than both the  principal  due and the
accrued interest.  At the time a loan is placed on nonaccrual  status,  interest
previously  accrued but not  collected is reversed and charged  against  current
earnings. Recognition of any interest after a loan has been placed on nonaccrual
is accounted for on a cash basis.

     The Bank had  nonperforming  assets at December 31, 2002, 2001, 2000, 1999,
and 1998 of approximately $7,698,000,  $2,367,000,  $1,548,000,  $3,076,000, and
$4,219,000, respectively.

     The following table presents information concerning outstanding balances of
nonperforming assets at December 31, 2002, 2001, 2000, 1999, and 1998.
<TABLE>
<CAPTION>

                                                  Nonperforming Assets

                                                                           December 31,
                                               --------------------------------------------------------------------
                                                  2002          2001           2000          1999          1998
                                               -----------   -----------   -----------   -----------    -----------
                                                               (Amounts in thousands, except ratios)

<S>                                            <C>           <C>           <C>           <C>            <C>
Nonaccruing loans...........................   $     5,035   $     1,333   $     1,352   $       945    $     2,552
Accruing loans 90 days or more past due.....         2,662           984             2         1,313          1,199
Restructured loans..........................            --            --            --            --             --
                                               -----------   -----------   -----------   -----------    -----------
     Total nonperforming loans..............         7,698         2,317         1,354         2,258          3,751
Nonaccruing securities......................            --            --            --            --             --
Other real estate...........................            --            50           194           818            468
                                               -----------   -----------   -----------   -----------    -----------

     Total..................................   $     7,698   $     2,367   $     1,548   $     3,076    $     4,219
                                               ===========   ===========   ===========   ===========    ===========

Ratios:
   Loan loss allowance to total
     nonperforming assets...................         0.821         1.607         2.110          0.735         0.415
                                               ===========   ===========   ===========   ============   ===========
   Total nonperforming loans to total loans
     (net of unearned interest).............         0.018         0.007         0.007          0.017         0.027
                                               ===========   ===========   ===========   ============   ===========

   Total nonperforming assets to
     total assets...........................         0.015         0.006         0.005          0.013         0.020
                                               ===========   ===========   ===========    ===========   ===========
</TABLE>

                                       25

<PAGE>
     It is the general policy of the Bank to stop accruing  interest  income and
place  the  recognition  of  interest  on a  cash  basis  when  any  commercial,
industrial  or real estate loan is past due as to  principal or interest and the
ultimate  collection  of either  is in  doubt.  Accrual  of  interest  income on
consumer  installment  loans is  suspended  when any  payment  of  principal  or
interest,  or both, is more than 90 days delinquent.  When a loan is placed on a
nonaccrual basis, any interest  previously accrued but not collected is reversed
against current income unless the collateral for the loan is sufficient to cover
the accrued interest or a guarantor assures payment of interest.

     There  has  been  no  significant  impact  on  the  Company's  consolidated
financial  statements  as a result of the  provisions  of Statement of Financial
Accounting  Standards No. 114, Accounting by Creditors for Impairment of a Loan,
or Statement of Financial  Accounting Standards No. 118, Accounting by Creditors
for Impairment of a Loan-Income Recognition and Disclosures.

Noninterest Income

     Noninterest  income  consists of revenues  generated  from a broad range of
financial services and activities  including  fee-based services and profits and
commissions earned through credit life insurance sales and other activities.  In
addition,  gains  or  losses  realized  from the  sale of  investment  portfolio
securities  are  included  in  noninterest  income.   Total  noninterest  income
increased by $317 thousand (18.7%) for the year ended December 31, 2002 compared
to 2001.  The increase  was due to higher  service  charges on deposit  accounts
(increased  $156  thousand) and gains on sale of  available-for-sale  securities
(increased $36 thousand). Total noninterest income decreased by $105 thousand or
5.8% for the year ended  December 31, 2001 compared to 2000. The decline was due
primarily to a decrease of $256 thousand in insurance  proceeds (a non-recurring
event) offset by increased fess on customer  accounts.  Total noninterest income
increased  by $380  thousand  or 26.7% for the year ended  December  31, 2000 as
compared to 1999 caused in large part by the insurance proceeds noted above.

     The table  below sets forth the Bank's  noninterest  income for the periods
indicated.
<TABLE>
<CAPTION>

                                                                                       2001/2002        2000/2001
                                                Years Ended December 31,                Percent          Percent
                                      --------------------------------------------
                                          2002           2001            2000            Change          Change
                                      ------------   ------------    -------------   -------------   --------------
                                                 (Dollars in thousands)

<S>                                   <C>            <C>             <C>                      <C>               <C>
Service charges on deposits........   $      1,268   $      1,112    $       1,096            14.0%             1.5%
Insurance commissions..............             31             41               13           (24.4)           215.4
Securities gains...................             36             --               --              --               --
Gains on other real estate.........             13             19              167           (31.6)           (88.6)
Insurance policy proceeds..........             --             --              256              --               --
Safe deposit box rental............             67             67               66              --              1.5
Exchange fees......................            390            304               47            28.3            546.8
Other..............................            211            156              159            35.3             (1.9)
                                      ------------   ------------    -------------
                                      $      2,016   $      1,699    $       1,804            18.7             (5.8)
                                      ============   ============    =============
</TABLE>
Noninterest Expenses

     From 2001 to 2002,  noninterest  expense  increased  $795 thousand  (9.7%).
Salaries and employee  benefits in 2002 increased $320 thousand (6.1%) from 2001
to a total of $5.6 million.  The increase in 2002 reflected the effect of adding
staff for new branches and higher employee benefits costs.

     From 2000 to 2001,  noninterest  expense  increased  $672 thousand  (8.9%).
Salaries and employee  benefits in 2001 increased $468 thousand (9.8%) from 2000
to a total of $5.2 million for 2001. The increase in 2001 reflected the staffing
required to open two branches and  additional  support  personnel  for loans and
deposits.  From  1999 to  2000,  noninterest  expense  increased  $742  thousand
(10.9%). Salaries and employee benefits in 2000 increased $671
<PAGE>

                                       26

(16.4%) from 1999 to a total of $4.8 million at year-end 2000.  These  increases
also can be attributed  to the overall  growth and expansion of the Bank in 2000
and 1999.

     Occupancy and equipment  expense  increased $328 thousand (24.1%) from 2001
to 2002 and  increased  $252 thousand  (22.7%) from 2000 to 2001.  Occupancy and
equipment expense rose $79 thousand or 7.7% from 1999 to 2000. The occupancy and
equipment  expense  increases  were a  result  of the  additional  property  and
equipment  added  as a  result  of  new  branch  locations  and  the  associated
depreciation expense.

     The table below sets forth the Bank's noninterest  expenses for the periods
indicated.
<TABLE>
<CAPTION>

                                                                                       2001/2002        2000/2001
                                                Years Ended December 31,                Percent          Percent
                                      --------------------------------------------
                                          2002           2001            2000            Change          Change
                                      ------------   ------------    -------------   -------------   --------------
                                                 (Dollars in thousands)

<S>                                   <C>            <C>             <C>                        <C>             <C>
Salaries and employee benefits.....   $      5,552   $      5,232    $       4,764              6.1%            9.8%
Occupancy and equipment expense....          1,689          1,361            1,109             24.1            22.7
Professional fees..................            210            191              170              9.9            12.4
Supplies...........................            182            135              128             34.8             5.5
Regulatory fees and assessments....            139            106               87             31.1            21.8
Postage............................            137             99               87             38.4            13.8
Telephone..........................            136            122              103             11.5            18.4
Advertising........................            135            130             161             3.8             (19.3)
ATM expense........................            124            124              101              0.0            22.8
Taxes and licenses.................            103            107              118             (3.7)           (9.3)
Software maintenance...............             70            120               98            (41.7)          (22.4)
Director and committee fees........             67             67               72              --             (6.9)
Litigation settlement..............             --             --              200              --               --
Other..............................            476            431              355             10.2            21.4
                                      ------------   ------------    -------------

   Total...........................   $      9,020   $      8,225    $       7,553              9.7%            8.9%
                                      ============   ============    =============
</TABLE>
Income Taxes

     Income tax expense  increased $559 thousand (17.0%) to $3.9 million for the
year ended December 31, 2002,  increased  $411 thousand  (14.3%) to $3.3 million
for the year ended December 31, 2001, $805 thousand (38.8%) to $2.9 for the year
ended December 31, 2000, and increased $611 thousand (41.7%) to $2.1 million for
the year ended  December 31, 1999.  The  effective  tax rate as a percentage  of
pretax income was 37.5% in 2002, 38.1% in 2001, and 36.2% in 2000. The statutory
federal rate was 34 percent during 2002,  2001, and 2000. There is no current or
pending tax  legislation of which  management is aware that if passed would have
any  material  effect  on the  financial  statements.  For  further  information
concerning  the provision for income taxes,  refer to Note 14, Income Taxes,  of
the "Notes to Financial Statements."

Impact of Inflation and Changing Prices

     A bank's asset and liability structure is substantially different from that
of an industrial  company in that virtually all assets and liabilities of a bank
are  monetary in nature.  Management  believes  the impact of  inflation  on its
financial  results  depends  upon the  Company's  ability to react to changes in
interest  rates  and by such  reaction  to  reduce  the  inflationary  impact on
performance. Interest rates do not necessarily move in the same direction, or at
the same  magnitude,  as the prices of other goods and  services.  As  discussed
previously,    management   seeks   to   manage   the    relationship    between
interest-sensitive  assets  and  liabilities  in order to protect  against  wide
interest rate fluctuations, including those resulting from inflation.

Market Risk

     Market risk is the risk arising  from adverse  changes in the fair value of
financial  instruments  due to a change in interest  rates,  exchange  rates and
equity prices. The Company's primary risk is interest rate risk.

                                       27
<PAGE>
     The primary  objective of  Asset/Liability  Management of the Company is to
manage  interest  rate risk and achieve  reasonable  stability  in net  interest
income  throughout  interest rate cycles.  This is achieved by  maintaining  the
proper balance of rate sensitive earning assets and rate sensitive  liabilities.
The relationship of rate sensitive earning assets to rate sensitive  liabilities
is the principal factor in projecting the effect that fluctuating interest rates
will have on future net  interest  income.  Rate  sensitive  earning  assets and
interest-bearing  liabilities  are those that can be repriced to current  market
rates  within a  relatively  short time  period.  Management  monitors  the rate
sensitivity of earning assets and  interest-bearing  liabilities over the entire
life of these instruments,  but places particular emphasis on the first year and
through three years.

     The Company has not  experienced a high level of volatility in net interest
income  primarily  because of the relatively large base of core deposits that do
not reprice on a contractual  basis.  These  deposit  products  include  regular
savings,   interest-bearing   transaction  accounts  and  money  market  savings
accounts. Balances for these accounts are reported based on historical repricing
experienced  at each bank.  However,  the rates paid are  typically not directly
related to market  interest  rates,  since  management  has some  discretion  in
adjusting these rates as market rates change.

     The  Company  uses  additional  tools to monitor and manage  interest  rate
sensitivity.  One  of the  primary  tools  is  simulation  analysis.  Simulation
analysis is the  primary  method of  estimating  earnings at risk and capital at
risk under varying interest rate conditions. Simulation analysis is used to test
the sensitivity of the Company's net interest income and shareholders' equity to
both the level of interest  rates and the slope of the yield  curve.  Simulation
analysis  accounts for the expected timing and magnitude of assets and liability
cash flows, as well as the expected timing and magnitude of deposits that do not
reprice on a  contractual  basis.  In  addition,  simulation  analysis  includes
adjustments for the lag between  movements in market interest rates on loans and
interest-bearing deposits. These adjustments are made to reflect more accurately
possible  future cash flows,  repricing  behavior  and  ultimately  net interest
income.  The  estimated  impact on the  Company's  net  interest  income  before
provision for loan loss sensitivity over a one-year time horizon is shown below.
Such  analysis  assumes a sustained  parallel  shift in  interest  rates and the
Company's estimate of how interest-bearing  transaction accounts will reprice in
each scenario.  Actual results will differ from simulated results due to timing,
magnitude  and  frequency  of  interest  rate  changes  and  changes  in  market
conditions and management's strategies, among other factors.
<TABLE>
<CAPTION>

                                                                    Percentage Increase
                                                                  (Decrease) in Interest
                                                                    Income/Expense Given
                                                                    Interest Rate Shifts
                                                             -------------------------------
                                                                 Down 200          Up 200
                                                               Basis Points     Basis Points
         For the Twelve Months After December 31, 2002       ---------------   -------------
         Projected change in:
<S>                                                                   <C>               <C>
                  Interest income                                     (6.36)%           5.79%
                  Interest expense                                   (10.30)           11.25
                                                             ---------------   -------------

                  Net interest income                                 (4.00)%           9.27%
                                                             ===============   =============
</TABLE>

Other Accounting Issues

     In June 1998, the Financial  Accounting  Standards  Board  ("FASB")  issued
Statement of Financial  Accounting  Standards  ("SFAS") No. 133,  Accounting for
Derivative  Instruments  and  Hedging  Activities.  This  statement  establishes
accounting and reporting  standards for derivative  instruments  and for hedging
activities.  It requires  that an entity  recognize  all  derivatives  as either
assets or liabilities in the statement of financial  condition and measure those
instruments  at fair value.  The  accounting  for changes in the fair value of a
derivative  is to be determined  based upon the intended use of the  derivative.
For certain hedge  designations  (cash flow and foreign  currency  exposure) the
derivative's  gain or loss is  reported as a  component  of other  comprehensive
income. Other designations require the gain or loss to be recognized in earnings
in the period of change.  This  statement,  amended as to effective date by SFAS
No. 137, is effective for financial  statements for periods beginning after June
15, 2000. In June 2000,  the Financial  Accounting  Standards  Board also issued
SFAS No. 138, Accounting for Certain Derivative  Instruments and Certain Hedging
Activities  - an  Amendment  of SFAS No. 133.  The  adoption of SFAS No. 133, as
amended  by SFAS  No.  138 did  not  have a  material  impact  on the  Company's
consolidated  financial statements.  In September 2000, the FASB issued SFAS No.
140,   Accounting   for  Transfers   and  Servicing  of  Financial   Assets  and
Extinguishments  of Liabilities - a replacement of FASB Statement No. 125. While
SFAS No. 140 carries over most of the provisions of SFAS No. 125, Accounting for
Transfers and Servicing of Financial Assets and  Extinguishments of Liabilities,
it  provides  new  standards  for  reporting  financial  assets  transferred  as
collateral  and new  standards for the  derecognition  of financial  assets,  in
particular  transactions involving the use of special purpose entities. SFAS No.
140 also prescribes additional  disclosures for collateral  transactions and for
securitization transactions accounted for as sales. The new collateral standards
and disclosure requirements are effective for fiscal years ending after December
15, 2000, while the new standards for the  derecognition of financial assets are
effective  for  transfers  made  after  March 31,  2001.  The  adoption  of this
statement did not have a material effect on the Company's consolidated financial
statements.

                                       28

<PAGE>

     In May 2001,  the Auditing  Standards  Board  issued  Statement on Auditing
Standards ("SAS") No. 94, The Effect of Information  Technology on the Auditor's
Consideration of Internal Control in a Financial Statement Audit. This statement
amends SAS No. 55,  Consideration of Internal  Control in a Financial  Statement
Audit, by providing  additional  guidance  related to the  understanding  by the
auditor of an entity's use of information technology relevant to the audit. This
auditing  standard is effective for audits of financial  statements  for periods
beginning  on or after  June 1, 2001.  The impact on the audit of the  Company's
consolidated  financial  statements resulting from the issuance of this auditing
standard was not material.

     In June 2001,  the FASB issued SFAS No. 141,  Business  Combinations.  This
statement addresses financial accounting and reporting for business combinations
and supersedes  Accounting  Principles  Board ("APB")  Opinion No. 16,  Business
Combinations,  and SFAS No. 38, Accounting for  Preacquisition  Contingencies of
Purchased  Enterprises.  All business  combinations in the scope of SFAS No. 141
are to be  accounted  for using one method,  the purchase  method.  Prior to the
issuance of this statement,  subject to certain criteria,  business combinations
were accounted for using one of two methods, the pooling-of-interests  method or
the purchase  method.  The two methods  produce  different  financial  statement
results. The single-method approach used in SFAS No. 141 reflects the conclusion
that virtually all business  combinations  are acquisitions and therefore should
be  accounted  for in the same manner as other asset  acquisitions  based on the
values exchanged.  This statement provides expanded and revised guidance related
to the  allocation  of the  purchase  price to  goodwill  and other  intangibles
arising from the business  combination.  The provisions of SFAS No. 141 apply to
all business combinations initiated after June 30, 2001.

     In June 2001, the FASB issued SFAS No. 142,  Goodwill and Other  Intangible
Assets, which addresses financial accounting and reporting for acquired goodwill
and other  intangible  assets and  supersedes  APB  Opinion  No. 17,  Intangible
Assets.  SFAS  No.  142  provides  new  standards  for  accounting  relating  to
intangible assets after initial  recognition in the financial  statements.  This
statement   proscribes  the  accounting  practice  of  amortizing  or  expensing
intangibles  ratably over a  prescribed  period of time and imposes new guidance
requiring  that goodwill and certain other  intangibles be tested for impairment
at least  annually by comparing  fair values of those assets with their recorded
amounts. Additional disclosure requirements also are provided. The provisions of
SFAS No. 142 are required to be applied in fiscal years beginning after December
15, 2001.

     The  adoption  of SFAS No.  141 and SFAS  No.  142 did not have a  material
effect on the Company's consolidated financial statements.

     In June 2001, the FASB issued SFAS No. 143, Accounting for Asset Retirement
Obligations.  This statement  requires that the fair value of a liability for an
asset retirement  obligation be recognized in the period in which it is incurred
if a  reasonable  estimate  of fair  value  can be made.  The  associated  asset
retirement  costs  are  capitalized  as  part  of  the  carrying  amount  of the
long-lived  asset.  This statement is effective for financial  statements issued
for fiscal years  beginning  after June 15, 2002. The adoption of this statement
is not  expected  to  have a  material  effect  on  the  Company's  consolidated
financial statements.

     In August 2001, the FASB issued SFAS No. 144, Accounting for the Impairment
or Disposal of Long-lived Assets. This statement addresses financial  accounting
and  reporting  for the  impairment  or  disposal  of  long-lived  assets.  This
statement  supersedes  FASB Statement No. 121,  Accounting for the Impairment of
Long-Lived  Assets  and  for  Long-Lived  Assets  to Be  Disposed  Of,  and  the
accounting and reporting provisions of APB Opinion No. 30, Reporting the Results
of Operations--Reporting the Effects of Disposal of a Segment of a Business, and
Extraordinary,  Unusual and Infrequently Occurring Events and Transactions,  for
the disposal of a segment of a business (as previously defined

                                       29

<PAGE>

in that opinion).  This statement also amends  Accounting  Research Bulletin No.
51,   Consolidated   Financial   Statements,   to  eliminate  the  exception  to
consolidation for a subsidiary for which control is likely to be temporary.  The
major changes  resulting from this statement  relate to the  establishment  of a
single method for the recognition of impairment  losses on long-lived  assets to
be held and used whether from discontinuance of a business segment or otherwise.
This  statement is effective  for financial  statements  issued for fiscal years
beginning after December 15, 2001. The adoption of this statement did not have a
material effect on the Company's consolidated financial statements.

     In December 2001,  the  Accounting  Standards  Executive  Committee  issued
Statement of Position ("SOP") 01-6,  Accounting by Certain  Entities  (Including
Entities  With Trade  Receivables)  That Lend to or Finance  the  Activities  of
Others.  This  statement  reconciles  and conforms the  accounting and financial
reporting  provisions for similar  transactions as applied to different entities
within the financial services industry. It eliminates  differences in disclosure
practices  where  not  warranted  and  should  provide  greater  consistency  in
reporting by entities in the  financial  services  industry.  This  statement is
effective for annual and interim  financial  statements  issued for fiscal years
beginning  after  December  15,  2001.  The  adoption of SOP 01-6 did not have a
material effect on the Company's consolidated financial statements.

     In December 2001, the Auditing Standards Board issued SAS No. 95, Generally
Accepted  Auditing  Standards.  This  statement  supersedes  Generally  Accepted
Auditing  Standards of SAS No. 1 and generally provides  additional  guidance to
the  independent  auditor in the conduct of an audit  engagement,  primarily  by
addressing   authoritative   and   nonauthoritative   publications   for   audit
consideration  and  guidance.  This SAS is  effective  for  audits of  financial
statements  for periods  beginning on or after  December 15, 2001. The impact on
the audit of the Company's  consolidated financial statements resulting from the
issuance of this auditing standard was not material.

     In January  2002,  the  Auditing  Standards  Board issued SAS No. 96, Audit
Documentation.  This statement  supersedes SAS No. 41, Working Papers and amends
SAS No. 47,  Audit Risk and  Materiality  in  Conducting  an Audit,  SAS No. 56,
Analytical Procedures and SAS No. 59, The Auditor's Consideration of an Entity's
Ability to Continue as a Going Concern. This statement provides revised guidance
to the  independent  auditor as to the type,  purpose and  requirements of audit
documentation.  This SAS is  effective  for audits of financial  statements  for
periods  beginning  on or after  May 15,  2002.  The  impact on the audit of the
Company's  consolidated financial statements resulting from the issuance of this
auditing standard was not material.

     In April 2002, the FASB issued SFAS No. 145,  Rescission of FASB Statements
No.  4,  44,  and  64,  Amendment  of  FASB  Statement  No.  13,  and  Technical
Corrections.  SFAS No. 145  addresses  accounting  and  financial  reporting for
extinguishments  of debt,  intangible assets of motor carriers and leases.  SFAS
No. 145 is effective for fiscal years beginning after and transactions occurring
after May 15,  2002.  The  adoption of this  statement is not expected to have a
material effect on the Company's consolidated financial statements.

     In June 2002, the FASB issued SFAS No. 146, Accounting for Costs Associated
with Exit or Disposal  Activities.  The statement  addresses financial reporting
and  accounting  for costs  associated  with  exit or  disposal  activities  and
nullifies Emerging Issues Task Force Issue No. 94-3,  Liability  Recognition for
Certain  Employee  Termination  Benefits  and  Other  Costs to Exit an  Activity
(including  Certain Costs Incurred in a Restructuring).  The primary  difference
between SFAS No. 146 and Issue 94-3 relates to the  requirement  for recognition
of a  liability  related to the cost of an exit or  disposal  activity  when the
liability is incurred.  Under 94-3,  such  liability  would be recognized at the
date of an entity's  commitment  to an exit plan.  SFAS No. 146 is effective for
exit or disposal  activities  initiated  after  December  31,  2002,  with early
application encouraged. The adoption of this statement is not expected to have a
material impact on the Company's consolidated financial statements.

     In June 2002, the Auditing  Standards Board issued SAS No. 97, Amendment to
Statement on Auditing Standards No. 50, Reports on the Application of Accounting
Principles.  This  statement  prohibits an accountant  from  providing a written
report on the  application  of accounting  principles  not  involving  facts and
circumstances  of a specific  entity.  This SAS is effective for written reports
issued or oral  advice  provided  on or after June 30,  2002.  The impact on the
audit of the Company's  consolidated  financial  statements  resulting  from the
issuance of this auditing standard is not expected to be material.

     In September 2002, the Auditing  Standards Board issued SAS No. 98, Omnibus
Statement  on  Auditing  Standards  - 2002.  This  statement  revises and amends
several previously issued Statements on Auditing Standards. The

                                       30

<PAGE>

changes required impose enhanced quality controls and audit  considerations on a
firm of  independent  auditors  in the  conduct  of their  audit of a  company's
financial  statements.  The  additional  requirements  primarily  relate to more
descriptive  guidance on the  application of auditing  procedures,  the auditors
report and related  disclosures and supplementary  information.  This SAS No. 98
was  effective  upon  issuance  except for the amendment to SAS No. 70, which is
effective  for  reports  issued on or after  January 1, 2003.  The impact on the
audit of the Company's  consolidated  financial  statements  resulting  from the
issuance of this auditing standard was not material.

     In October  2002,  the FASB issued SFAS No.  147,  Acquisitions  of Certain
Financial  Institutions,   an  amendment  of  SFAS  No.  72  and  144  and  FASB
Interpretation  No.  9.  Except  for  transactions  between  two or more  mutual
enterprises,  SFAS No. 147 removes  acquisitions of financial  institutions from
the scope of SFAS No. 72 and Interpretation 9 and requires those transactions be
accounted for in accordance  with SFAS No. 141 and 142. SFAS No. 147 also amends
SFAS No. 144 to include in its scope long-term customer-relationship  intangible
assets of financial  institutions  such as depositor  and borrower  relationship
intangible assets and credit cardholder intangible assets.  Consequently,  those
intangible assets are subject to the same undiscounted cash flow  recoverability
test and impairment loss  recognition  and measurement  provisions that SFAS No.
144 requires for other long-lived  assets that are held and used. The provisions
of SFAS No. 72 requiring the intangible recognition and subsequent  amortization
of any excess fair value of net  liabilities  assumed in an acquisition  will no
longer apply. SFAS No. 147 is essentially  effective as of October 1, 2002. As a
result,  the Company  adopted SFAS No. 147 on October 1, 2002,  with no material
impact on the Company's consolidated financial statements.

     In  October  2002,  the  Auditing   Standards  Board  issued  SAS  No.  99,
Consideration of Fraud in a Financial Statement Audit. This statement supersedes
SAS No. 82 and amends SAS No. 1 and SAS No. 85. SAS No. 99  describes  fraud and
its  characteristics;  discusses the need for auditors to exercise  professional
skepticism;  requires (as part of planning the audit) that there be a discussion
among the audit team members regarding the risks of material misstatement due to
fraud; and requires auditors to gather  information  necessary to identify risks
of  material  misstatement  due to fraud.  This SAS is  effective  for audits of
financial  statements  for periods  beginning on or after December 15, 2002. The
impact on the audit of the Company's consolidated financial statements resulting
from the issuance of this auditing standard is not expected to be material.

     In November 2002, the Auditing  Standards Board issued SAS No. 100, Interim
Financial  Information.  This statement  supersedes  SAS No. 71 and  establishes
standards on the nature,  timing and extent of the procedures to be performed by
an  independent  accountant  when  conducting  a  review  of  interim  financial
information.  This SAS is  effective  for interim  periods  within  fiscal years
beginning  after  December  15. 2002.  The impact on the audit of the  Company's
consolidated  financial  statements resulting from the issuance of this auditing
standard is not expected to be material.

     In  November  2002,  the FASB  issued  Interpretation  No. 45,  Guarantor's
Accounting  and  Disclosure  Requirements  for  Guarantees,  Including  Indirect
Guarantees of Indebtedness of Others.  This  interpretation  changes the current
practice  of  accounting  for,  and  the  disclosures   related  to  guarantees.
Interpretation  No. 45 requires certain guarantees to be recorded at fair value,
which is a change  from the  current  practice  of  generally  only  recording a
liability when a loss is probable and reasonably  estimable.  The interpretation
also requires a guarantor to make new  disclosures,  even when the likelihood of
making any payments under the guarantee is remote,  which is another change from
current  practice.  The  disclosure  requirements  of  this  interpretation  are
effective for financial  statements  of interim or annual  periods  ending after
December  15,  2002.  The  interpretation's   initial  recognition  and  initial
measurement  provisions  are  applicable  on a  prospective  basis to guarantees
issued or modified after December 31, 2002. The guarantor's  previous accounting
for guarantees issued prior to the date of  Interpretation  No. 45 are not to be
revised or restated to reflect the interpretation's  provisions. The adoption of
the disclosure  requirements  of  Interpretation  No. 45 did not have a material
impact on the Company's consolidated  financial statements.  The adoption of the
initial recognition and initial measurement  provisions of Interpretation No. 45
is not  expected  to  have a  material  impact  on  the  Company's  consolidated
financial statements.

     In December 2002, the FASB issued SFAS No. 148,  Accounting for Stock-Based
Compensation - Transition and Disclosure.  This statement amends SFAS No. 123 to
provide alternative methods of transition for an entity that voluntarily changes
to  the  fair  value  based  method  of  accounting  for  stock-based   employee
compensation.  It amends the disclosure  provisions of that Statement to require
prominent  disclosure  about the effects on  reported  net income of an entity's
accounting policy decisions with respect to stock-based  employee  compensation.
This Statement also

                                       31

<PAGE>

amends APB Opinion No. 28 to require  disclosure  about those effects in interim
financial information.  This Statement is effective for financial statements for
fiscal years ending after December 15, 2002 and for financial reports containing
condensed financial  statements for interim periods beginning after December 15,
2002.  The  adoption  of SFAS No.  148 did not  have a  material  impact  on the
Company's consolidated financial statements.

         In January 2003, the Auditing Standards Board Issued SAS No. 101,
Auditing Fair Value Measurements and Disclosures. This statement establishes
standards on auditing the measurement and disclosure of assets, liabilities, and
specific components of equity presented or disclosed at fair value in financial
statements. This SAS is effective for audits of financial statements for periods
beginning on or after June 15, 2003. The impact on the audit of the Company's
consolidated financial statements resulting from the issuance of this auditing
standard is not expected to be material.

          In January 2003, the FASB issued FIN 46, which clarifies the
application of Accounting Research Bulletin ("ARB") 51, Consolidated Financial
Statements, to certain entities (called variable interest entities) in which
equity investors do not have the characteristics of a controlling financial
interest or do not have sufficient equity at risk for the entity to finance its
activities without additional subordinated financial support from other parties.
The disclosure requirements of this Interpretation are effective for all
financial statements issued after January 31, 2003. The consolidation
requirements apply to all variable interest entities created after January 31,
2003. In addition, public companies must apply the consolidation requirements to
variable interest entities that existed prior to February 1, 2003 and remain in
existence as of the beginning of annual or interim periods beginning after June
15, 2003. Management is currently assessing the impact of FIN 46, and does not
expect this Interpretation to have a material impact to the Consolidated
Financial Statements.




              [The remainder of this page intentionally left blank]



                                       32

<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     The financial  statements and supplementary data required by Regulation S-X
and by Item 302 of Regulation S-K are set forth in the pages listed below.

<TABLE>
<CAPTION>

FLORIDA COMMUNITY BANKS, INC.
Consolidated Financial Statements

                                                                                                              Page(s)

<S>                                                                                                              <C>
Independent Auditors' Report ..............................................................................      34
Consolidated Statements of Financial Condition as of December 31, 2002 and 2001............................      35
Consolidated Statements of Income for the Years Ended December 31, 2002, 2001 and 2000.....................      36
Consolidated Statements of Shareholders' Equity for the Years Ended December 31, 2002, 2001 and 2000.......      37
Consolidated Statements of Cash Flows for the Years Ended December 31, 2002, 2001 and 2000.................      38
Notes to Consolidated Financial Statements.................................................................      40
Quarterly Results (Unaudited)..............................................................................      73
</TABLE>

                                       33
<PAGE>

                          INDEPENDENT AUDITORS' REPORT


To the Board of Directors and Shareholders
Florida Community Banks, Inc. and Subsidiaries
Immokalee, Florida


We have audited the accompanying  consolidated statements of financial condition
of Florida Community Banks, Inc. (a Florida  corporation) and subsidiaries as of
December 31, 2002 and 2001, and the related  consolidated  statements of income,
shareholders'  equity and cash  flows for each of the three  years in the period
ended  December  31,  2002.  These  consolidated  financial  statements  are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit to obtain reasonable  assurance about whether the consolidated
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 Florida Community
Banks,  Inc. and  subsidiaries as of December 31, 2002 and 2001, and the results
of their  operations  and their  cash  flows for each of the three  years in the
period  ended  December 31,  2002,  in  conformity  with  accounting  principles
generally accepted in the United States of America.


Birmingham, Alabama
January 31, 2003               /s/ Schauer Taylor Cox Vise Morgan & Fowler, P.C.
                              --------------------------------------------------
                              Schauer Taylor Cox Vise Morgan & Fowler, P.C.


                 See notes to consolidated financial statements

                                       34
<PAGE>

                          FLORIDA COMMUNITY BANKS, INC.
                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                           December 31, 2002 and 2001

<TABLE>
<CAPTION>

                                                                                   2002                  2001
                                                                           ------------------    ------------------
Assets
<S>                                                                        <C>                   <C>
   Cash and due from banks.............................................    $       13,264,464    $       15,193,797
   Federal funds sold..................................................            32,902,000                    --
   Interest-bearing demand deposits with banks.........................            12,668,201             7,845,331
                                                                           ------------------    ------------------
       Cash and Cash Equivalents.......................................            58,834,665            23,039,128

   Interest-bearing time deposits with banks...........................                    --             2,500,000
   Securities available-for-sale.......................................             2,874,977             1,960,475
   Securities held-to-maturity, fair value of $34,120,018 in
     2002 and $33,290,686 in 2001......................................            33,339,505            33,041,035

   Loans, net of unearned income.......................................           416,414,676           318,665,591
   Allowance for loan losses...........................................            (6,319,298)           (3,802,836)
                                                                           ------------------    ------------------
       Net Loans.......................................................           410,095,378           314,862,755

   Premises and equipment, net.........................................            10,109,252             7,938,850
   Accrued interest....................................................             2,904,150             2,688,165
   Foreclosed real estate..............................................                    --                49,788
   Deferred taxes, net.................................................             1,960,513             1,111,359
   Other assets........................................................             1,329,363               869,117
                                                                           ------------------    ------------------

       Total Assets....................................................    $      521,447,803    $      388,060,672
                                                                           ==================    ==================

Liabilities and Shareholders' Equity

Liabilities
   Deposits:
     Noninterest-bearing...............................................    $       54,478,258    $       60,160,766
     Interest-bearing..................................................           369,456,264           257,700,574
                                                                           ------------------    ------------------
       Total Deposits..................................................           423,934,522           317,861,340

   Short-term borrowings...............................................                    --             1,086,000
   Long-term FHLB advances.............................................            50,000,000            32,500,000
   Subordinated capital note...........................................                    --             5,000,000
   Other long-term debt................................................                39,415                79,761
   Guaranteed preferred beneficial interests in the Company's
     subordinated debentures...........................................            10,000,000                    --
   Deferred compensation...............................................               424,745               473,267
   Accrued interest....................................................             1,866,824             1,688,813
   Other liabilities...................................................               718,497               232,836
                                                                           ------------------    ------------------
       Total Liabilities...............................................           486,984,003           358,922,017

Shareholders' Equity
   Common stock - par value $.01 per share, 10,000,000 shares authorized,
     3,123,316 shares issued and
     outstanding.......................................................                31,233                31,233
   Paid-in capital.....................................................            16,680,055            16,680,055
   Retained earnings...................................................            17,752,512            12,427,367
                                                                           ------------------    ------------------
       Total Shareholders' Equity......................................            34,463,800            29,138,655
                                                                           ------------------    ------------------

       Total Liabilities and Shareholders' Equity......................    $      521,447,803    $      388,060,672
                                                                           ==================    ==================
</TABLE>

                 See notes to consolidated financial statements

                                       35
<PAGE>


                          FLORIDA COMMUNITY BANKS, INC.
                        CONSOLIDATED STATEMENTS OF INCOME
                  Years Ended December 31, 2002, 2001 and 2000
<TABLE>
<CAPTION>


                                                            2002                  2001                  2000
                                                     ------------------    ------------------    ------------------
Interest Income
<S>                                                  <C>                   <C>                   <C>
   Interest and fees on loans.....................   $       29,121,572    $       24,907,498    $       22,479,761
   Interest and dividends on securities:
     Taxable securities...........................            2,184,654             2,458,634             2,386,201
     Tax-exempt securities........................                3,855                18,895                42,512
   Interest on federal funds sold.................              181,906               462,658                81,924
   Interest on deposits in banks..................               78,130                55,200                    --
                                                     ------------------    ------------------    ------------------
       Total Interest Income......................           31,570,117            27,902,885            24,990,398
                                                     ------------------    ------------------    ------------------

Interest Expense
   Interest on FHLB advances......................            1,300,372               999,021             1,015,003
   Interest on deposits...........................           10,032,397            10,909,392             8,939,361
   Interest on short-term borrowings..............               55,987               105,235               319,007
   Interest on other long-term debt...............               91,759                 4,642                 2,506
   Interest on guaranteed preferred
     beneficial interest in the Company's
     subordinated debentures......................              306,715                    --                    --
                                                     ------------------    ------------------    ------------------
       Total Interest Expense.....................           11,787,230            12,018,290            10,275,877
                                                     ------------------    ------------------    ------------------

Net interest income...............................           19,782,887            15,884,595            14,714,521
Provision for loan losses.........................            2,510,000               720,000             1,000,000
                                                     ------------------    ------------------    ------------------

Net Interest Income After Provision
   For Loan Losses................................           17,272,887            15,164,595            13,714,521

Noninterest Income
   Customer service fees..........................            1,268,130             1,065,183             1,100,673
   Gains on other real estate owned, net..........               13,489                    --               166,516
   Investment security gains......................               36,083                    --                    --
   Insurance policy proceeds, net.................                   --                    --               256,010
   Other operating income.........................              698,607               633,455               280,855
                                                     ------------------    ------------------    ------------------
       Total Noninterest Income...................            2,016,309             1,698,638             1,804,054
                                                     ------------------    ------------------    ------------------

Noninterest Expenses
   Salaries and employee benefits.................            5,551,509             5,232,453             4,764,181
   Occupancy and equipment expense................            1,689,334             1,360,901             1,109,263
   Losses on other real estate owned, net.........                   --                10,312                    --
   Other operating expenses.......................            1,779,225             1,621,816             1,679,271
                                                     ------------------    ------------------    ------------------
       Total Noninterest Expenses.................            9,020,068             8,225,482             7,552,715
                                                     ------------------    ------------------    ------------------

Income before income taxes........................           10,269,128             8,637,751             7,965,860
Income tax expense................................            3,850,822             3,291,534             2,880,799
                                                     ------------------    ------------------    ------------------

Net Income........................................   $        6,418,306    $        5,346,217    $        5,085,061
                                                     ==================    ==================    ==================

Earnings Per Common Share
   Basic..........................................   $             2.05     $            1.71     $            1.63
   Diluted........................................                 2.04                  1.71                  1.63

Cash Dividends Declared Per
   Common Share...................................                 0.35                  0.70                  0.64

Weighted Average Shares Outstanding
   Basic..........................................            3,123,316             3,123,316             3,123,316
   Diluted........................................            3,140,439             3,126,245             3,123,316
</TABLE>

                 See notes to consolidated financial statements

                                       36
<PAGE>

                          FLORIDA COMMUNITY BANKS, INC.
                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                  Years Ended December 31, 2002, 2001 and 2000
<TABLE>
<CAPTION>


                                             Common             Paid-in            Retained
                                              Stock             Capital            Earnings              Total
                                       ----------------    ----------------   -----------------   -----------------

Balance at
<S>         <C> <C>                    <C>                 <C>                <C>                 <C>
   December 31, 1999................   $         31,233    $     16,680,055   $       6,161,957   $      22,873,245

Net income - 2000...................                 --                  --           5,085,061           5,085,061
                                                                                                  -----------------
Comprehensive income................                 --                  --                  --           5,085,061
                                                                                                  -----------------
Cash dividends - Common
   $0.64 per share..................                 --                  --          (1,988,222)         (1,988,222)
                                       ----------------    ----------------   -----------------   -----------------

Balance at
   December 31, 2000................             31,233          16,680,055           9,258,796          25,970,084

Net income - 2001...................                 --                  --           5,346,217           5,346,217
                                                                                                  -----------------
Comprehensive income................                 --                  --                  --           5,346,217
                                                                                                  -----------------
Cash dividends - Common
   $0.70 per share..................                 --                  --          (2,177,646)         (2,177,646)
                                       ----------------    ----------------   -----------------   -----------------

Balance at
   December 31, 2001................             31,233          16,680,055          12,427,367          29,138,655

Net income - 2002...................                 --                  --           6,418,306           6,418,306
                                                                                                  -----------------
Comprehensive income................                 --                  --                  --           6,418,306
                                                                                                  -----------------
Cash dividends - Common
   $0.35 per share..................                 --                  --          (1,093,161)         (1,093,161)
                                       ----------------    ----------------   -----------------   -----------------

Balance at
   December 31, 2002................   $         31,233    $     16,680,055   $      17,752,512   $      34,463,800
                                       ================    ================   =================   =================

</TABLE>

                 See notes to consolidated financial statements

                                       37
<PAGE>

                          FLORIDA COMMUNITY BANKS, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                  Years Ended December 31, 2002, 2001 and 2000
<TABLE>
<CAPTION>


                                                            2002                  2001                  2000
                                                     ------------------    ------------------    ------------------

Operating Activities
<S>                                                  <C>                   <C>                   <C>
   Net income.....................................   $        6,418,306    $        5,346,217    $        5,085,061
   Adjustments to reconcile net income to
     net cash provided by operating activities:
       Provision for loan losses..................            2,510,000               720,000             1,000,000
       Depreciation, amortization,
         and accretion, net.......................              752,624               544,881               518,527
       Deferred tax benefit.......................             (849,154)             (250,859)             (359,242)
       Realized investment securities gains.......              (36,083)                   --                    --
       (Gain) loss on disposition of
         other real estate........................              (13,489)               10,312              (166,515)
       (Increase) decrease in accrued
         interest receivable......................             (215,985)              728,824              (834,393)
       Increase in accrued interest payable.......              178,011               349,659               713,138
       Other, net.................................              (45,523)             (844,277)              437,880
                                                     ------------------    ------------------    ------------------
       Net Cash Provided By
         Operating Activities.....................            8,698,707             6,604,757             6,394,456
                                                     ------------------    ------------------    ------------------

Investing Activities
   Purchases of securities available-for-sale.....             (941,919)             (650,000)             (975,000)
   Purchases of investment securities
     held-to-maturity.............................          (21,968,075)          (28,310,329)          (10,036,604)
   Proceeds from maturities, calls
     and paydowns of investment
     securities held-to-maturity..................           21,624,634            36,239,078             7,508,194
   Proceeds from sale of securities
     available for sale...........................               63,500                    --                    --
   Purchases of interest-bearing time
     deposits with other banks....................                   --            (2,500,000)                   --
   Proceeds from maturity of interest-
     bearing deposits with other banks............            2,500,000                    --                    --
   Net increase in loans to customers.............          (97,754,367)          (92,039,273)          (45,536,179)
   Purchase of premises and equipment.............           (2,919,987)           (2,386,873)           (1,637,570)
   Proceeds from disposition of
     premises and equipment.......................               62,119             1,829,724                73,948
   Net proceeds from disposition of
     foreclosed real estate.......................               75,000               478,666               941,394
                                                     ------------------    ------------------    ------------------
       Net Cash Used In
         Investing Activities.....................          (99,259,095)          (87,339,007)          (49,661,817)
                                                     ------------------    ------------------    ------------------
</TABLE>

                         (Continued on following page)
                 See notes to consolidated financial statements

                                       38
<PAGE>

                          FLORIDA COMMUNITY BANKS, INC.
                CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
                  Years Ended December 31, 2002, 2001 and 2000
<TABLE>
<CAPTION>


                                                            2002                  2001                  2000
                                                     ------------------    ------------------    ------------------

Financing Activities
   Net increase (decrease) in demand
     deposits, NOW accounts, and
<S>                                                  <C>                   <C>                   <C>
     savings accounts.............................   $       16,278,817    $       36,416,227    $       (3,483,547)
   Net increase in certificates of deposit........           89,794,365            32,114,632            48,795,648
   Net decrease in short-term borrowings..........           (1,086,000)           (1,914,000)           (6,772,000)
   Issuance of long-term debt.....................           25,055,696            17,500,000            15,080,243
   Repayments of long-term debt...................           (7,593,792)              (12,818)              (26,867)
   Issuance of Subordinated Capital Note..........                   --             5,000,000                    --
   Repayment of Subordinated Capital Note.........           (5,000,000)                   --                    --
   Issuance of guaranteed preferred
     beneficial interest in the Company's
     subordinated debentures......................           10,000,000                    --                    --
   Cash dividends.................................           (1,093,161)           (2,177,646)           (1,988,222)
                                                     ------------------    ------------------    ------------------
       Net Cash Provided By
          Financing Activities....................          126,355,925            86,926,395            51,605,255
                                                     ------------------    ------------------    ------------------

Net Increase in Cash and Cash
   Equivalents....................................           35,795,537             6,192,145             8,337,894

Cash and Cash Equivalents
   at Beginning of Year...........................           23,039,128            16,846,983             8,509,089
                                                     ------------------    ------------------    ------------------

Cash and Cash Equivalents
   at End of Year.................................   $       58,834,665    $       23,039,128    $       16,846,983
                                                     ==================    ==================    ==================
</TABLE>


                 See notes to consolidated financial statements

                                       39

<PAGE>

                          FLORIDA COMMUNITY BANKS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2002, 2001 and 2000


Note 1 - Summary of Significant Accounting Policies

Florida  Community  Banks,  Inc.  ("FCBI")  (a  Florida   corporation)  and  its
wholly-owned  subsidiaries,  Florida  Community  Bank (the  "Bank")  (a  Florida
corporation)  and  FCBI  Capital  Trust I (the "  Trust")(a  Delaware  statutory
trust),  collectively  referred to herein as the "Company," is  headquartered in
Immokalee,  Florida.  The Bank's main office also is in Immokalee,  Florida with
seven additional branch locations in Southwest Florida. The Bank provides a full
range of banking  services to individual  and corporate  customers in Charlotte,
Collier, Glades, Hendry and Lee counties and the surrounding areas.

The  accounting  and  reporting  policies of the Company  conform to  accounting
principles  generally  accepted  in the United  States of America and to general
practice  within  the  banking  industry.  The  following  summarizes  the  most
significant of these policies.

Business Combination

Florida  Community  Banks was  incorporated  on February 20,  2002.  FCBI had no
assets,  liabilities,  revenues or  operations  until April 15, 2002,  when FCBI
acquired 100% of the outstanding  shares of Florida  Community Bank common stock
pursuant to a Plan of Reorganization and Share Exchange by exchanging one common
share of FCBI  for one  common  share  of the  Bank.  The  combination  has been
accounted  for as a  statutory  pooling of  interest  between  affiliates,  and,
accordingly,  all  periods  presented  reflect  FCBI and the Bank on a  combined
basis.  Since April 15, 2002, FCBI's  predominate  activity has been acting as a
one-bank  holding  company for the Bank.  The Bank has  continued to conduct its
activities in substantially the same manner as it had before the acquisition.

Basis of Consolidation

The consolidated  financial statements include the accounts of Florida Community
Banks, Inc., the Bank and the Trust. All significant  inter-company balances and
transactions have been eliminated.

Use of Estimates

The preparation of financial statements in conformity with accounting principles
generally  accepted in the United States of America requires  management to make
estimates  and  assumptions  that  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. Actual results could differ from those estimates.

The  determination  of the adequacy of the allowance for loan losses is based on
estimates  that are  particularly  susceptible  to  significant  changes  in the
economic environment and market conditions. In connection with the determination
of the estimated losses on loans,  management obtains independent appraisals for
significant collateral. While management uses available information to recognize
losses on loans,  further  reductions  in the  carrying  amounts of loans may be
necessary based on changes in local economic conditions. In addition, regulatory
agencies, as an integral part of their examination process,  periodically review
the estimated losses on loans. Such agencies may require the Bank to recognize

                                       40

<PAGE>

Note 1 - Summary of Significant Accounting Policies - Continued

additional losses based on their judgments about  information  available to them
at the time of their  examination.  Because of these  factors,  it is reasonably
possible  that the estimated  losses on loans may change  materially in the near
term.  However,  the amount of the change that is reasonably  possible cannot be
estimated.

Securities

Securities are  classified as either  held-to-maturity,  available-for-sale,  or
trading.

Securities  held-to-maturity  are those  securities for which management has the
ability  and  intent  to hold on a  long-term  basis  or until  maturity.  These
securities are carried at amortized cost, adjusted for amortization of premiums,
and accretion of discount to the earlier of the maturity or call date.

Securities available-for-sale represent those securities intended to be held for
an indefinite period of time,  including  securities that management  intends to
use as part of its asset/liability  strategy, or that may be sold in response to
changes in interest  rates,  changes in  prepayment  risk,  the need to increase
regulatory capital, or other similar factors. Securities  available-for-sale are
recorded at market value with unrealized gains and losses net of any tax effect,
added or deducted directly from shareholders' equity.

Securities  carried  in  trading  accounts  are  carried  at market  value  with
unrealized gains and losses reflected in income.

Realized   and   unrealized   gains  and  losses  are  based  on  the   specific
identification method.

Declines in the fair value of individual held-to-maturity and available-for-sale
securities  below their cost that are other than temporary result in write-downs
of the individual  securities to their fair value.  The related  write-downs are
included in earnings as realized losses.

The Company has no trading securities.

Loans

Loans are  stated at unpaid  principal  balances,  less the  allowance  for loan
losses, unearned discounts and net deferred loan fees.

Unearned  discounts on installment  loans are recognized as income over the term
of the loans using a method that approximates the interest method.

Loan  origination  and commitment  fees, as well as certain  direct  origination
costs,  are deferred and amortized as a yield  adjustment  over the lives of the
related loans using the interest method or the straight-line method.

                                       41
<PAGE>

Note 1 - Summary of Significant Accounting Policies - Continued

Allowance for Possible Loan Losses

A loan is considered impaired, based on current information and events, if it is
probable  that the Bank will be unable to  collect  the  scheduled  payments  of
principal or interest  when due according to the  contractual  terms of the loan
agreement.  Uncollateralized  loans are  measured  for  impairment  based on the
present  value of  expected  future  cash  flows  discounted  at the  historical
effective interest rate, while all  collateral-dependent  loans are measured for
impairment  based  on  the  fair  value  of  the  collateral.   Smaller  balance
homogeneous  loans,  which consist of residential  mortgages and consumer loans,
are evaluated collectively and reserves are established based on historical loss
experience.

The allowance for loan losses is established  through charges to earnings in the
form of a provision  for loan losses.  Increases  and decreases in the allowance
due to changes in the  measurement  of the impaired  loans are considered in the
provision for loan losses.  Loans  continue to be classified as impaired  unless
they are brought  fully  current and the  collection  of scheduled  interest and
principal is considered probable. When a loan or portion of a loan is determined
to be  uncollectible,  the portion deemed  uncollectible  is charged against the
allowance and subsequent recoveries, if any, are credited to the allowance.

Management's  periodic  evaluation  of the adequacy of the allowance is based on
the Bank's past loan loss experience, known and inherent risks in the portfolio,
adverse  situations that may affect the borrowers'  ability to repay,  estimated
value  of  any  underlying  collateral,  and an  analysis  of  current  economic
conditions.  While management  believes that it has established the allowance in
accordance  with  generally  accepted  accounting  principles and has taken into
account the views of banking  regulators and the current  economic  environment,
there can be no  assurance  that in the  future  the  Bank's  regulators  or its
economic environment will not require further increases in the allowance.

Income Recognition on Impaired and Non-accrual Loans

Loans, including impaired loans, are generally classified as non-accrual if they
are past due as to maturity or payment of  principal or interest for a period of
more than 90 days, unless such loans are well  collateralized and in the process
of collection.  If a loan or a portion of a loan is classified as doubtful or is
partially  charged off, the loan is generally  classified as non-accrual.  Loans
that are on a current  payment  status or past due less than 90 days may also be
classified as non-accrual if repayment in full of principal  and/or  interest is
in doubt.

Loans may be returned to accrual status when all principal and interest  amounts
contractually  due are  reasonably  assured of  repayment  within an  acceptable
period of time, and there is a sustained period of repayment  performance by the
borrower, in accordance with the contractual terms of interest and principal.

                                       42
<PAGE>

Note 1 - Summary of Significant Accounting Policies - Continued

While a loan is classified as non-accrual and the future  collectability  of the
recorded  loan balance is doubtful,  collections  of interest and  principal are
generally applied as a reduction to principal outstanding, except in the case of
loans with scheduled amortizations where the payment is generally applied to the
oldest payment due. When the future  collectability of the recorded loan balance
is expected,  interest  income may be  recognized  on a cash basis.  In the case
where a non-accrual loan has been partially charged off, recognition of interest
on a cash  basis is limited to that  which  would  have been  recognized  on the
recorded loan balance at the  contractual  interest rate.  Receipts in excess of
that amount are recorded as  recoveries  to the  allowance for loan losses until
prior charge offs have been fully  recovered.  Interest  income  recognized on a
cash basis was immaterial for the years ended December 31, 2002, 2001 and 2000.

Premises and Equipment

Premises  and  equipment  are  stated  at cost  less  accumulated  depreciation.
Expenditures for additions and major improvements that significantly  extend the
useful  lives of the  assets  are  capitalized.  Expenditures  for  repairs  and
maintenance  are charged to expense as incurred.  The carrying  values of assets
traded in are used to adjust the carrying  values of the new assets  acquired by
trade.  Assets  that are  disposed  of are  removed  from the  accounts  and the
resulting gains or losses are recorded in operations.

Depreciation  is provided  generally by accelerated  and  straight-line  methods
based on the estimated useful lives of the respective assets.

Foreclosed Real Estate

Foreclosed   real  estate  includes  both  formally   foreclosed   property  and
in-substance  foreclosed property.  In-substance foreclosed properties are those
properties for which the institution has taken physical  possession,  regardless
of whether formal foreclosure proceedings have taken place.

At the time of  foreclosure,  foreclosed real estate is recorded at the lower of
the  carrying  amount  or fair  value  less  cost to  sell,  which  becomes  the
property's new basis. Any write-downs based on the asset's fair value at date of
acquisition  are charged to the  allowance for loan losses.  After  foreclosure,
these assets are carried at the lower of their new cost basis or fair value less
cost  to  sell.  Costs  incurred  in  maintaining  foreclosed  real  estate  and
subsequent  adjustments  to the carrying  amount of the property are included in
income (loss) on foreclosed real estate.

Advertising Costs

The Company's policy is to expense  advertising  costs as incurred.  Advertising
expense  for the years  ended  December  31,  2002,  2001 and 2000  amounted  to
approximately $135,000, $130,000 and $161,000, respectively.

                                       43

<PAGE>

Note 1 - Summary of Significant Accounting Policies - Continued

Income Taxes

Income taxes are provided  for the tax effects of the  transactions  reported in
the financial  statements and consist of taxes currently due plus deferred taxes
related  primarily to  differences  between the basis of the  allowance for loan
losses,  accumulated  depreciation,  and accrued employee benefits for financial
and income tax reporting.  The deferred tax assets and liabilities represent the
future tax  return  consequences  of those  differences,  which  will  either be
taxable or deductible  when the assets and liabilities are recovered or settled.
Deferred tax assets and liabilities are reflected at income tax rates applicable
to the period in which the deferred tax assets or liabilities are expected to be
realized or settled.  As changes in tax laws or rates are enacted,  deferred tax
assets and liabilities are adjusted through the provision for income taxes.

Stock-Based Compensation

In October  1995,  the FASB  issued  SFAS No. 123,  Accounting  for  Stock-Based
Compensation;  which  defines a fair value  based  method of  accounting  for an
employee stock option plan. This statement  establishes financial accounting and
reporting standards for stock-based employee  compensation plans and stock-based
non-employee  compensation.  Under the fair value based method,  compensation is
measured  at the grant  date  based on the value of the award and is  recognized
over the service period, which is usually the vesting period.  However, SFAS No.
123 allows an entity to continue to measure  compensation  costs for those plans
using the intrinsic  value based method of accounting  prescribed by APB Opinion
No, 25,  Accounting  for Stock Issued to  Employees.  The Company has elected to
follow APB No. 25 in accounting for its stock option plans.

Retirement Plan

The Company has a defined  contribution  Pension Plan and a Profit-Sharing  Plan
covering  all  eligible  employees.  Employer  contributions  to the  plans  are
included in salaries and employee benefits expense.  Pension Plan  contributions
are   required  at  10  percent  of  total   eligible   employee   compensation.
Profit-Sharing  contributions  are  determined  by the board of  directors.  The
Company also has deferred compensation plans with certain executive officers and
directors.  The Company  contributes  amounts to the pension fund  sufficient to
satisfy funding requirements of the Employee Retirement Income Security Act.

Off-Balance Sheet Financial Instruments

In the  ordinary  course of business  the Company has entered  into  off-balance
sheet  financial  instruments   consisting  of  commitments  to  extend  credit,
commercial  letters of credit and  standby  letters  of credit.  Such  financial
instruments are recorded in the financial statements when paid.

The Bank has  available  as a source  of  financing  a line of  credit  with the
Federal Home Loan Bank of Atlanta that is limited to 15% of assets (an amount of
approximately  $78,000,000  at December  31,  2002),  of which  $28,000,000  was
available and unused.  The ability to utilize the remaining line is dependent on
the amount of eligible  collateral  that is  available  to pledge to the Federal
Home Loan Bank.

                                       44
<PAGE>

Note 1 - Summary of Significant Accounting Policies - Continued

The Bank also has available as a source of short-term  financing the purchase of
federal  funds  from  other  commercial  banks  from  available  lines  totaling
$25,000,000.

Segment Information

All of the Company's offices offer similar products and services, are located in
the same geographic  region, and serve the same customer segments of the market.
As a  result,  management  considers  all  units as one  operating  segment  and
therefore  feels that the basic  consolidated  financial  statements and related
footnotes provide details related to segment reporting.

Reclassifications

Certain amounts in 2001 and 2000 have been reclassified to conform with the 2002
presentation.

Recently Issued Accounting Standards

In June 1998, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial  Accounting  Standards ("SFAS") No. 133,  Accounting for Derivative
Instruments and Hedging Activities.  This statement  establishes  accounting and
reporting standards for derivative  instruments and for hedging  activities.  It
requires  that  an  entity   recognize  all  derivatives  as  either  assets  or
liabilities   in  the  statement  of  financial   condition  and  measure  those
instruments  at fair value.  The  accounting  for changes in the fair value of a
derivative  is to be determined  based upon the intended use of the  derivative.
For certain hedge  designations  (cash flow and foreign  currency  exposure) the
derivative's  gain or loss is  reported as a  component  of other  comprehensive
income. Other designations require the gain or loss to be recognized in earnings
in the period of change.  This  statement,  amended as to effective date by SFAS
No. 137, is effective for financial  statements for periods beginning after June
15,  2000.  In June 2000,  the FASB also  issued SFAS No.  138,  Accounting  for
Certain Derivative  Instruments and Certain Hedging Activities - an Amendment of
SFAS No. 133.  The  adoption of SFAS No. 133, as amended by SFAS No. 138 did not
have a material impact on the Company's consolidated financial statements.

In September  2000,  the FASB issued SFAS No. 140,  Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities - a replacement
of FASB  Statement  No.  125.  While  SFAS  No.  140  carries  over  most of the
provisions of SFAS No. 125,  Accounting for Transfers and Servicing of Financial
Assets and  Extinguishments  of  Liabilities,  it  provides  new  standards  for
reporting  financial assets  transferred as collateral and new standards for the
derecognition of financial assets, in particular  transactions involving the use
of special purpose entities. SFAS No. 140 also prescribes additional disclosures
for collateral transactions and for securitization transactions accounted for as
sales.  The new collateral  standards and disclosure  requirements are effective
for fiscal years ending after December 15, 2000, while the new standards for the
derecognition  of financial  assets are effective for transfers made after March
31, 2001. The adoption of this  statement did not have a material  effect on the
Company's consolidated financial statements.

                                       45
<PAGE>

Note 1 - Summary of Significant Accounting Policies - Continued

In May 2001, the Auditing Standards Board issued Statement on Auditing Standards
("SAS")  No.  94,  The  Effect  of  Information   Technology  on  the  Auditor's
Consideration of Internal Control in a Financial Statement Audit. This statement
amends SAS No. 55,  Consideration of Internal  Control in a Financial  Statement
Audit, by providing  additional  guidance  related to the  understanding  by the
auditor of an entity's use of information technology relevant to the audit. This
auditing  standard is effective for audits of financial  statements  for periods
beginning  on or after  June 1, 2001.  The impact on the audit of the  Company's
consolidated  financial  statements resulting from the issuance of this auditing
standard was not material.

In June  2001,  the  FASB  issued  SFAS No.  141,  Business  Combinations.  This
statement addresses financial accounting and reporting for business combinations
and supersedes  Accounting  Principles  Board ("APB")  Opinion No. 16,  Business
Combinations,  and SFAS No. 38, Accounting for  Preacquisition  Contingencies of
Purchased  Enterprises.  All business  combinations in the scope of SFAS No. 141
are to be  accounted  for using one method,  the purchase  method.  Prior to the
issuance of this statement,  subject to certain criteria,  business combinations
were accounted for using one of two methods, the pooling-of-interests  method or
the purchase  method.  The two methods  produce  different  financial  statement
results. The single-method approach used in SFAS No. 141 reflects the conclusion
that virtually all business  combinations  are acquisitions and therefore should
be  accounted  for in the same manner as other asset  acquisitions  based on the
values exchanged.  This statement provides expanded and revised guidance related
to the  allocation  of the  purchase  price to  goodwill  and other  intangibles
arising from the business  combination.  The provisions of SFAS No. 141 apply to
all business combinations initiated after June 30, 2001.

In June 2001,  the FASB  issued  SFAS No.  142,  Goodwill  and Other  Intangible
Assets, which addresses financial accounting and reporting for acquired goodwill
and other  intangible  assets and  supersedes  APB  Opinion  No. 17,  Intangible
Assets.  SFAS  No.  142  provides  new  standards  for  accounting  relating  to
intangible assets after initial  recognition in the financial  statements.  This
statement   proscribes  the  accounting  practice  of  amortizing  or  expensing
intangibles  ratably over a  prescribed  period of time and imposes new guidance
requiring  that goodwill and certain other  intangibles be tested for impairment
at least  annually by comparing  fair values of those assets with their recorded
amounts. Additional disclosure requirements also are provided. The provisions of
SFAS No. 142 are required to be applied in fiscal years beginning after December
15, 2001.

The adoption of SFAS No. 141 and SFAS No. 142 did not have a material  effect on
the Company's consolidated financial statements.

In June 2001,  the FASB  issued SFAS No. 143,  Accounting  for Asset  Retirement
Obligations.  This statement  requires that the fair value of a liability for an
asset retirement  obligation be recognized in the period in which it is incurred
if a  reasonable  estimate  of fair  value  can be made.  The  associated  asset
retirement  costs  are  capitalized  as  part  of  the  carrying  amount  of the
long-lived  asset.  This statement is effective for financial  statements issued
for fiscal years  beginning  after June 15, 2002. The adoption of this statement
is not  expected  to  have a  material  effect  on  the  Company's  consolidated
financial statements.

                                       46
<PAGE>

Note 1 - Summary of Significant Accounting Policies - Continued

In August 2001,  the FASB issued SFAS No. 144,  Accounting for the Impairment or
Disposal of Long-lived Assets. This statement addresses financial accounting and
reporting for the  impairment or disposal of long-lived  assets.  This statement
supersedes  FASB Statement No. 121,  Accounting for the Impairment of Long-Lived
Assets and for  Long-Lived  Assets to Be  Disposed  Of, and the  accounting  and
reporting   provisions  of  APB  Opinion  No.  30,   Reporting  the  Results  of
Operations--Reporting  the Effects of  Disposal of a Segment of a Business,  and
Extraordinary,  Unusual and Infrequently Occurring Events and Transactions,  for
the disposal of a segment of a business (as previously defined in that opinion).
This statement also amends  Accounting  Research  Bulletin No. 51,  Consolidated
Financial  Statements,  to  eliminate  the  exception  to  consolidation  for  a
subsidiary  for  which  control  is likely to be  temporary.  The major  changes
resulting from this statement relate to the establishment of a single method for
the  recognition of impairment  losses on long-lived  assets to be held and used
whether from  discontinuance of a business segment or otherwise.  This statement
is effective for financial  statements  issued for fiscal years  beginning after
December 15, 2001. The adoption of this statement did not have a material effect
on the Company's consolidated financial statements.

In December 2001, the Accounting  Standards Executive Committee issued Statement
of Position  ("SOP") 01-6,  Accounting by Certain Entities  (Including  Entities
With Trade  Receivables) That Lend to or Finance the Activities of Others.  This
statement  reconciles  and  conforms  the  accounting  and  financial  reporting
provisions for similar  transactions as applied to different entities within the
financial services industry.  It eliminates  differences in disclosure practices
where not  warranted  and should  provide  greater  consistency  in reporting by
entities in the financial  services  industry.  This  statement is effective for
annual and interim financial  statements issued for fiscal years beginning after
December  15, 2001.  The adoption of SOP 01-6 did not have a material  effect on
the Company's consolidated financial statements.

In December  2001,  the Auditing  Standards  Board issued SAS No. 95,  Generally
Accepted  Auditing  Standards.  This  statement  supersedes  Generally  Accepted
Auditing  Standards of SAS No. 1 and generally provides  additional  guidance to
the  independent  auditor in the conduct of an audit  engagement,  primarily  by
addressing   authoritative   and   nonauthoritative   publications   for   audit
consideration  and  guidance.  This SAS is  effective  for  audits of  financial
statements  for periods  beginning on or after  December 15, 2001. The impact on
the audit of the Company's  consolidated financial statements resulting from the
issuance of this auditing standard was not material.

In  January  2002,  the  Auditing  Standards  Board  issued  SAS No.  96,  Audit
Documentation.  This statement  supersedes SAS No. 41, Working Papers and amends
SAS No. 47,  Audit Risk and  Materiality  in  Conducting  an Audit,  SAS No. 56,
Analytical Procedures and SAS No. 59, The Auditor's Consideration of an Entity's
Ability to Continue as a Going Concern. This statement provides revised guidance
to the  independent  auditor as to the type,  purpose and  requirements of audit
documentation.  This SAS is  effective  for audits of financial  statements  for
periods  beginning  on or after  May 15,  2002.  The  impact on the audit of the
Company's  consolidated financial statements resulting from the issuance of this
auditing standard was not material.

                                       47
<PAGE>

Note 1 - Summary of Significant Accounting Policies - Continued

In April 2002,  the Financial  Accounting  Standards  Board issued SFAS No. 145,
Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No.
13, and Technical  Corrections.  SFAS No. 145 addresses accounting and financial
reporting for  extinguishments of debt,  intangible assets of motor carriers and
leases.  SFAS  No.  145 is  effective  for  fiscal  years  beginning  after  and
transactions occurring after May 15, 2002. The adoption of this statement is not
expected  to have a  material  effect on the  Company's  consolidated  financial
statements.

In June 2002,  the  Financial  Accounting  Standards  Board issued SFAS No. 146,
Accounting for Costs Associated with Exit or Disposal Activities.  The statement
addresses  financial  reporting and accounting for costs associated with exit or
disposal  activities  and nullifies  Emerging  Issues Task Force Issue No. 94-3,
Liability  Recognition for Certain Employee Termination Benefits and Other Costs
to Exit an Activity  (including Certain Costs Incurred in a Restructuring).  The
primary  difference  between  SFAS  No.  146  and  Issue  94-3  relates  to  the
requirement  for  recognition  of a liability  related to the cost of an exit or
disposal  activity when the liability is incurred.  Under 94-3,  such  liability
would be recognized at the date of an entity's  commitment to an exit plan. SFAS
No. 146 is effective for exit or disposal  activities  initiated  after December
31, 2002, with early application  encouraged.  The adoption of this statement is
not expected to have a material impact on the Company's  consolidated  financial
statements.

In June 2002,  the  Auditing  Standards  Board  issued SAS No. 97,  Amendment to
Statement on Auditing Standards No. 50, Reports on the Application of Accounting
Principles.  This  statement  prohibits an accountant  from  providing a written
report on the  application  of accounting  principles  not  involving  facts and
circumstances  of a specific  entity.  This SAS is effective for written reports
issued or oral  advice  provided  on or after June 30,  2002.  The impact on the
audit of the Company's  consolidated  financial  statements  resulting  from the
issuance of this auditing standard is not expected to be material.

In September  2002,  the  Auditing  Standards  Board issued SAS No. 98,  Omnibus
Statement  on  Auditing  Standards  - 2002.  This  statement  revises and amends
several previously issued Statements on Auditing Standards. The changes required
impose  enhanced  quality  controls  and  audit  considerations  on  a  firm  of
independent  auditors in the  conduct of their  audit of a  company's  financial
statements.  The additional  requirements  primarily  relate to more descriptive
guidance on the  application  of auditing  procedures,  the auditors  report and
related disclosures and supplementary information. This SAS No. 98 was effective
upon  issuance  except for the  amendment to SAS No. 70, which is effective  for
reports  issued on or after  January  1,  2003.  The  impact on the audit of the
Company's  consolidated financial statements resulting from the issuance of this
auditing standard was not material.

In October 2002, the FASB issued SFAS No. 147, Acquisitions of Certain Financial
Institutions, an amendment of SFAS No. 72 and 144 and FASB Interpretation No. 9.
Except for  transactions  between two or more mutual  enterprises,  SFAS No. 147
removes acquisitions of financial institutions from the scope of SFAS No. 72 and
Interpretation 9 and requires those  transactions be accounted for in accordance
with SFAS No. 141 and 142.  SFAS No. 147 also  amends SFAS No. 144 to include in
its  scope  long-term  customer-relationship   intangible  assets  of  financial
institutions such as depositor and borrower  relationship  intangible assets and
credit cardholder intangible assets.  Consequently,  those intangible assets are
subject to the same  undiscounted cash flow  recoverability  test and impairment
loss recognition

                                       48

<PAGE>

Note 1 - Summary of Significant Accounting Policies - Continued

and  measurement  provisions  that SFAS No. 144  requires  for other  long-lived
assets  that are held and used.  The  provisions  of SFAS No. 72  requiring  the
intangible  recognition and subsequent  amortization of any excess fair value of
net liabilities  assumed in an acquisition will no longer apply. SFAS No. 147 is
essentially  effective as of October 1, 2002. As a result,  the Company  adopted
SFAS No.  147 on  October  1, 2002,  with no  material  impact on the  Company's
consolidated financial statements.

In October 2002, the Auditing  Standards Board issued SAS No. 99,  Consideration
of Fraud in a Financial  Statement Audit.  This statement  supersedes SAS No. 82
and  amends  SAS No.  1 and SAS No.  85.  SAS No.  99  describes  fraud  and its
characteristics;  discusses  the  need for  auditors  to  exercise  professional
skepticism;  requires (as part of planning the audit) that there be a discussion
among the audit team members regarding the risks of material misstatement due to
fraud; and requires auditors to gather  information  necessary to identify risks
of  material  misstatement  due to fraud.  This SAS is  effective  for audits of
financial  statements  for periods  beginning on or after December 15, 2002. The
impact on the audit of the Company's consolidated financial statements resulting
from the issuance of this auditing standard is not expected to be material.

In November  2002,  the Auditing  Standards  Board  issued SAS No. 100,  Interim
Financial  Information.  This statement  supersedes  SAS No. 71 and  establishes
standards on the nature,  timing and extent of the procedures to be performed by
an  independent  accountant  when  conducting  a  review  of  interim  financial
information.  This SAS is  effective  for interim  periods  within  fiscal years
beginning  after  December  15. 2002.  The impact on the audit of the  Company's
consolidated  financial  statements resulting from the issuance of this auditing
standard is not expected to be material.

In November 2002, the FASB issued Interpretation No. 45, Guarantor's  Accounting
and Disclosure  Requirements for Guarantees,  Including  Indirect  Guarantees of
Indebtedness  of Others.  This  interpretation  changes the current  practice of
accounting for, and the disclosures related to guarantees. Interpretation No. 45
requires certain guarantees to be recorded at fair value, which is a change from
the current  practice of  generally  only  recording a liability  when a loss is
probable and reasonably estimable.  The interpretation also requires a guarantor
to make new  disclosures,  even when the likelihood of making any payments under
the  guarantee is remote,  which is another  change from current  practice.  The
disclosure  requirements  of this  interpretation  are  effective  for financial
statements  of interim or annual  periods  ending after  December 15, 2002.  The
interpretation's  initial  recognition  and initial  measurement  provisions are
applicable  on a  prospective  basis to  guarantees  issued  or  modified  after
December 31, 2002. The  guarantor's  previous  accounting for guarantees  issued
prior to the date of Interpretation  No. 45 are not to be revised or restated to
reflect  the  interpretation's   provisions.  The  adoption  of  the  disclosure
requirements  of  Interpretation  No. 45 did not have a  material  impact on the
Company's  consolidated  financial  statements.  The  adoption  of  the  initial
recognition and initial  measurement  provisions of Interpretation No. 45 is not
expected  to have a  material  impact on the  Company's  consolidated  financial
statements.

                                       49
<PAGE>

Note 1 - Summary of Significant Accounting Policies - Continued

In December  2002,  the FASB issued SFAS No.  148,  Accounting  for  Stock-Based
Compensation - Transition and Disclosure.  This statement amends SFAS No. 123 to
provide alternative methods of transition for an entity that voluntarily changes
to  the  fair  value  based  method  of  accounting  for  stock-based   employee
compensation.  It amends the disclosure  provisions of that Statement to require
prominent  disclosure  about the effects on  reported  net income of an entity's
accounting policy decisions with respect to stock-based  employee  compensation.
This Statement also amends APB Opinion No. 28 to require  disclosure about those
effects in interim  financial  information.  This  Statement  is  effective  for
financial  statements  for fiscal years  ending after  December 15, 2002 and for
financial reports containing  condensed financial statements for interim periods
beginning  after  December 15, 2002. The adoption of SFAS No. 148 did not have a
material impact on the Company's consolidated financial statements.

In January 2003, the Auditing  Standards Board Issued SAS No. 101, Auditing Fair
Value  Measurements and  Disclosures.  This statement  establishes  standards on
auditing the  measurement  and disclosure of assets,  liabilities,  and specific
components  of  equity  presented  or  disclosed  at  fair  value  in  financial
statements. This SAS is effective for audits of financial statements for periods
beginning  on or after June 15, 2003.  The impact on the audit of the  Company's
consolidated  financial  statements resulting from the issuance of this auditing
standard is not expected to be material.

In January  2003,  the FASB issued FIN 46, which  clarifies the  application  of
Accounting Research Bulletin ("ARB") 51, Consolidated  Financial Statements,  to
certain entities (called variable  interest  entities) in which equity investors
do not have the  characteristics  of a controlling  financial interest or do not
have sufficient equity at risk for the entity to finance its activities  without
additional  subordinated  financial  support from other parties.  The disclosure
requirements of this  Interpretation are effective for all financial  statements
issued  after  January 31, 2003.  The  consolidation  requirements  apply to all
variable interest  entities created after January 31, 2003. In addition,  public
companies  must  apply  the  consolidation  requirements  to  variable  interest
entities  that  existed  prior to February 1, 2003 and remain in existence as of
the  beginning  of annual or interim  periods  beginning  after  June 15,  2003.
Management is currently assessing the impact of FIN 46, and does not expect this
Interpretation  to  have  a  material  impact  to  the  Consolidated   Financial
Statements.

                                       50

<PAGE>

Note 1 - Summary of Significant Accounting Policies - Continued

Earnings Per Common Share

Basic earnings per common share are computed by dividing  earnings  available to
stockholders by the weighted average number of common shares  outstanding during
the period. Diluted earnings per share reflect per share amounts that would have
resulted if dilutive  potential common stock had been converted to common stock,
as  prescribed  by SFAS No.  128,  Earnings  per  Share.  All per share  amounts
included in these  consolidated  financial  statements  have been  retroactively
adjusted to reflect the effects of the 1.2 for 1.0 stock splits  which  occurred
during 2002, 2001 and 2000. The following reconciles the weighted average number
of shares outstanding:
<TABLE>
<CAPTION>

                                                                 2002                2001                2000
                                                            ---------------     ---------------    ----------------

<S>                                                               <C>                 <C>                 <C>
Weighted average of common shares outstanding.............        3,123,316           3,123,316           3,123,316
Effect of dilutive options................................           17,123               2,929                  --
                                                            ---------------     ---------------    ----------------

Weighted average of common shares outstanding
   effected for dilution..................................        3,140,439           3,126,245           3,123,316
                                                            ===============     ===============    ================
</TABLE>

In May 2000,  June 2001 and April 2002,  the Company  issued  1.2-for-1.0  stock
splits.  All  per  share  amounts  included  in  these  consolidated   financial
statements have been retroactively adjusted to give effect to these splits.

Comprehensive Income

The Company adopted Statement of Financial  Accounting Standards (SFAS) No. 130,
Reporting Comprehensive Income, on December 31, 1998. This statement establishes
standards  for  the  reporting  and  display  of  comprehensive  income  and its
components in a full set of general-purpose financial statements.  The statement
requires  that an enterprise  classify  items of other  comprehensive  income by
their nature in the financial  statement and display the accumulated  balance of
other comprehensive income separately from retained earnings and additional paid
in  capital  in the  equity  section  of a  statement  of  financial  condition.
Comprehensive  income is generally defined as the change in equity of a business
enterprise  during a period from transactions and other events and circumstances
from non-owner sources. It includes all changes in equity during a period except
those resulting from investments by owners and distributions to owners.

Comprehensive  income is the total of net income and all other non-owner changes
in  equity.  Items  that are to be  recognized  under  accounting  standards  as
components of comprehensive  income are displayed in statements of shareholders'
equity.

In the calculation of comprehensive income, certain reclassification adjustments
are made to avoid double counting items that are displayed as part of net income
for a period that also had been displayed as part of other comprehensive  income
in  that  period  or  earlier  periods.  The  Company  had no such  items  to be
reclassified at December 31, 2002, 2001 and 2000.

                                       51
<PAGE>

Note 1 - Summary of Significant Accounting Policies - Continued

Statements of Cash Flows

The Company  includes  cash,  due from banks,  and certain cash  equivalents  in
preparing the statements of cash flows. The following is supplemental disclosure
to the statements of cash flows for the three years ended December 31, 2002.
<TABLE>
<CAPTION>

                                                                        Years Ended December 31,
                                                     --------------------------------------------------------------
                                                            2002                  2001                  2000
                                                     ------------------    ------------------    ------------------

<S>                                                  <C>                   <C>                   <C>
   Cash paid during the year for interest.........   $       11,609,219    $       11,668,631    $        9,562,739

   Cash paid during the year for income
     taxes, net...................................            4,772,000             4,596,457             2,505,448

   Non-cash Disclosures:
   --------------------

   Loans transferred to foreclosed
     real estate during the year..................              133,743               439,235               427,319

   Proceeds from sale of foreclosed real
     estate financed through loans................              121,998                62,960               276,919
</TABLE>


Note 2- Restrictions on Cash and Due from Bank Accounts

The Bank is required by  regulatory  authorities  to  maintain  average  reserve
balances  either in vault  cash or on  deposit  with the  Federal  Reserve.  The
average  amount of those reserves  required at December 31, 2002 and 2001,  were
approximately $3,877,000 and $3,168,000, respectively.


Note 3 - Securities

The carrying  amounts of securities as shown in the  consolidated  statements of
financial  condition and their  approximate fair values at December 31, 2002 and
2001 were as follows:
<TABLE>
<CAPTION>

                                                                      Gross            Gross           Estimated
                                                  Amortized        Unrealized       Unrealized           Fair
                                                    Cost              Gains           Losses             Value
                                               ---------------  ---------------   ---------------  ----------------
Securities Available-for-Sale

December 31, 2002:
<S>                                            <C>              <C>               <C>              <C>
   Equity Securities........................   $     2,874,977  $            --   $            --  $      2,874,977
                                               ===============  ===============   ===============  ================

December 31, 2001:
   Equity Securities........................   $     1,960,475  $            --   $            --  $      1,960,475
                                               ===============  ===============   ===============  ================
</TABLE>

                                       52
<PAGE>

Note 3 - Securities - Continued
<TABLE>
<CAPTION>

                                                                      Gross            Gross           Estimated
                                                  Amortized        Unrealized       Unrealized           Fair
                                                    Cost              Gains           Losses             Value
                                               ---------------  ---------------   ---------------  ----------------

Securities Held-to-Maturity

December 31, 2002:
   U. S. Government and
<S>                                            <C>              <C>               <C>              <C>
     agency securities......................   $     3,000,000  $         16,980  $            --  $      3,016,980
   Mortgage-backed securities...............        30,339,505           765,309            1,776        31,103,038
                                               ---------------  ----------------  ---------------  ----------------

                                               $    33,339,505  $        782,289  $         1,776  $     34,120,018
                                               ===============  ================  ===============  ================
December 31, 2001:
   U. S. Government and
     agency securities......................   $    16,097,906  $        251,668  $            --  $     16,349,574
   Mortgage-backed securities...............        16,833,171            37,844           42,386        16,828,629
   State and municipal securities...........           109,958             2,525               --           112,483
                                               ---------------  ----------------  ---------------  ----------------

                                               $    33,041,035  $        292,037  $        42,386  $     33,290,686
                                               ===============  ================  ===============  ================
</TABLE>

The  contractual  maturities  of  securities   held-to-maturity  and  securities
available-for-sale  at December 31, 2002, are shown below.  Expected  maturities
will differ from contractual  maturities because borrowers may have the right to
call or prepay obligations with or without call or prepayment penalties.
<TABLE>
<CAPTION>

                                                           Securities                        Securities
                                                        Held-to-Maturity                 Available-for-Sale
                                               --------------------------------   --------------------------------
                                                   Amortized          Fair            Amortized          Fair
                                                     Cost             Value             Cost             Value
                                               ---------------  ---------------   ---------------  ---------------

<S>                                            <C>              <C>               <C>              <C>
Due in one year or less.....................   $     5,417,889  $     5,520,191   $            --  $             --
Due after one year through five years.......        27,337,281        27,985,111               --                --
Due after five years through ten years......           584,335           614,716               --                --
Due after ten years.........................                --               --                --                --
Equity securities...........................                --               --         2,874,977         2,874,977
                                               ---------------  ---------------   ---------------  ----------------

                                               $    33,339,505  $     34,120,018  $     2,874,977  $      2,874,977
                                               ===============  ================  ===============  ================
</TABLE>

Mortgage-backed  securities have been included in the maturity tables based upon
the guaranteed payoff date of each security.

                                       53
<PAGE>

Note 3 - Securities - Continued

Gross  realized gains and losses from the sale of securities for the years ended
December 31 are as follows:
<TABLE>
<CAPTION>

                                                            2002                  2001                  2000
                                                     ------------------    ------------------    ------------------

<S>                                                  <C>                   <C>                   <C>
Realized gains....................................   $           36,083    $               --    $               --
Realized losses...................................                   --                    --                    --
</TABLE>

Dispositions  through calls,  maturities and paydowns resulted in no net gain or
loss during 2002, 2001 and 2000.

Equity  securities are restricted  investments in The Bankers Bank,  Independent
Bankers'  Bank and Federal  Home Loan Bank stock,  which must be  maintained  to
secure the  available  lines of credit.  The amount of  investment in the stocks
amounted  to  $2,874,977   and   $1,960,475  at  December  31,  2002  and  2001,
respectively.

Investment  securities pledged to secure public funds on deposit,  FHLB advances
and for other purposes as required by law amounted to approximately  $29,677,000
and $23,319,000 at December 31, 2002 and 2001, respectively.


Note 4 - Loans

The Company grants loans to customers primarily in Charlotte,  Collier,  Glades,
Hendry and Lee Counties of Southwest Florida.

The  major  classifications  of loans as of  December  31,  2002 and 2001 are as
follows:
<TABLE>
<CAPTION>

                                                                                  2002                  2001
                                                                           ------------------    ------------------

<S>                                                                        <C>                   <C>
Commercial, financial and agricultural.................................    $       42,875,563    $       38,006,782
Real estate - construction.............................................           140,722,900            93,049,392
Real estate - mortgage.................................................           220,696,703           179,260,826
Consumer...............................................................            12,089,782             8,480,764
Other..................................................................             1,226,777               157,061
                                                                           ------------------    ------------------
     Total.............................................................           417,611,725           318,954,825
Unearned income........................................................            (1,197,049)             (289,234)
Allowance for loan losses..............................................            (6,319,298)           (3,802,836)
                                                                           ------------------    ------------------

Net loans..............................................................    $      410,095,378    $      314,862,755
                                                                           ==================    ==================
</TABLE>

                                       54
<PAGE>


Note 4 - Loans - Continued

Deposits  reclassified as loans and included in the other loan category amounted
to $474,064 and $157,061, at December 31, 2002 and 2001, respectively.

Loans the Company  considered to be impaired  (including  non-accrual  loans) at
December 31, 2002 and 2001 totaled $5,035,395 and $4,581,704,  respectively. The
impaired loans at December 31, 2002 and 2001 had related  allowances of $757,906
and $632,321,  respectively.  The average recorded  investment in impaired loans
for the years ended December 31, 2002 and 2001 was approximately  $4,808,550 and
$3,791,619,  respectively.  For the years ended  December 31, 2002 and 2001, the
difference  between gross interest  income that would have been recorded in such
period if the  nonaccruing  loans had been  current  in  accordance  with  their
original  terms  and the  amount of  interest  income  on those  loans  that was
included in such  period's net income was  approximately  $350,302 and $187,850,
respectively.

The Company has no  commitments  to lend  additional  funds to the  borrowers of
non-accrual loans.

Net unamortized deferred loan fees and origination costs included in unearned
income amounted to $1,192,851 and $283,076, for the years ended as of December
31, 2002 and 2001.

Commercial and residential real estate loans pledged to secure Federal Home Loan
Bank advances amounted to approximately  $58,790,000 and $32,461,000 at December
31, 2001 and 2000, respectively (see Note 9).


Note 5 - Allowance for Loan Losses

Changes in the allowance for loan losses for the years ended  December 31, 2002,
2001 and 2000 were as follows:
<TABLE>
<CAPTION>

                                                            2002                  2001                  2000
                                                     ------------------    ------------------    ------------------

<S>                                                  <C>                   <C>                   <C>
   Balance at beginning of year...................   $        3,802,836    $        3,266,667    $        2,261,413

   Charge-offs....................................             (206,836)             (389,627)             (109,980)
   Recoveries.....................................              213,298               205,796               115,234
                                                     ------------------    ------------------    ------------------
     Net (charge-offs) recoveries.................                6,462              (183,831)                5,254
   Provision for loan losses......................            2,510,000               720,000             1,000,000
                                                     ------------------    ------------------    ------------------

   Balance at end of year.........................   $        6,319,298    $        3,802,836    $        3,266,667
                                                     ==================    ==================    ==================

</TABLE>

                                       55

<PAGE>


Note 6 - Premises and Equipment

Premises and equipment as of December 31, 2002 and 2001 is as follows:
<TABLE>
<CAPTION>

                                                                                  2002                  2001
                                                                           ------------------    ------------------

<S>                                                                        <C>                   <C>
   Land...............................................................     $        1,322,827    $          972,536
   Land improvements...................................................               311,725               336,369
   Building............................................................             8,420,405             6,668,709
   Furniture and equipment.............................................             3,776,619             3,491,079
   Automobiles.........................................................               286,038               301,342
   Construction in progress............................................               669,512               703,049
                                                                           ------------------    ------------------
                                                                                   14,787,126            12,473,084
   Less allowance for depreciation.....................................             4,677,874             4,534,234
                                                                           ------------------    ------------------

                                                                           $       10,109,252    $        7,938,850
                                                                           ==================    ==================
</TABLE>

The provision for  depreciation  charged to occupancy and equipment  expense for
the years ended  December 31, 2002,  2001 and 2000 was $687,466,  $555,439,  and
$527,415, respectively.


Note 7 - Deposits

The  aggregate  amounts  of  time  deposits  of  $100,000  or  more,   including
certificates  of deposit of $100,000 or more at December  31, 2002 and 2001 were
$140,799,724 and $75,786,468,  respectively. Time deposits of less than $100,000
totaled   $111,773,587   and   $86,992,478   at  December  31,  2002  and  2001,
respectively.  Demand deposits  reclassified as loan balances as of December 31,
2002 and 2001 amounted to $474,064 and $153,772, respectively.

The maturities of time certificates of deposit and other time deposits issued by
the Bank at December 31, 2002, are as follows:
<TABLE>
<CAPTION>

     Year Ending December 31,
     ------------------------
<S>                <C>                                                                           <C>
                   2003......................................................................    $      183,558,660
                   2004......................................................................            50,652,938
                   2005......................................................................            13,027,062
                   2006......................................................................             1,542,141
                   2007......................................................................             3,792,510
                                                                                                 ------------------

                                                                                                 $      252,573,311
                                                                                                 ==================
</TABLE>

Note 8 - Short-term Borrowings

Short-term  borrowings at December 31, 2001 consisted of Federal funds purchased
totaling $1,086,000.  No short-term  borrowings were outstanding at December 31,
2002.

                                       56

<PAGE>


Note 9 - Long-term Debt

At  December  31,  2002 and  2001,  the  Company  had  long-term  debt  totaling
$60,039,415 and $37,579,761, respectively.

Long-term debt consists of the following at December 31:
<TABLE>
<CAPTION>

                                                                                  2002                  2001
                                                                           ------------------    ------------------
Long-term Federal Home Loan Bank advances, with  varying
   maturities from December 2004 through March 2010, the
   interest rates have a variable base or are at a fixed
   rate between 1.49% to 6.37%,  secured  by real estate
<S>                                                                        <C>                   <C>
   mortgage loans and pledged securities...........................        $       50,000,000    $       32,500,000

Long-term FCBI Capital Trust I,   guaranteed   preferred
   securities;  interest   rate   prime  plus  0.5%, the
   debenture  has a 30-year life with a call  option  of
   5 years,  subject  to regulatory approval.......................                10,000,000                    --

Subordinated  Capital Note,  3.75% (Prime plus 1%),  for
   one year then  floating   prime,  due December  2013,
   unsecured  and   subordinated   to   depositors'  and
   unsecured  creditors' interests;  subject  to certain
   capital requirements............................................                        --              5,000,000

Notes  payable to Ford  Motor  Credit,   with   interest
   rates  varying  from  0.90%  to  5.90%,  interest and
   principal  paid monthly over 3-year periods,  various
   maturities in 2003, secured by vehicles.........................                    39,415                 79,761
                                                                           ------------------    -------------------

                                                                           $       60,039,415    $         37,579,761
                                                                           ==================    ====================

</TABLE>

In June 2002,  the Company  formed a wholly-owned  Delaware  statutory  business
trust,  FCBI Capital Trust I, which issued  $10,000,000 of guaranteed  preferred
securities  representing  undivided  beneficial  interests  in the assets of the
trust ("Trust  Preferred  Securities").  The common  securities of the trust are
owned by the  Company.  The proceeds  from the  issuance of the Trust  Preferred
Securities ($10,000,000) and common securities ($310,000) were used by the trust
to purchase $10,310,000 of junior subordinated deferrable interest debentures of
the  Company.  The  debentures,  which  bear  interest  at Prime rate plus 0.5%,
represent the sole asset of the trust. The Company is allowed to treat the Trust
Preferred  Securities  as Tier 1 capital  under  current  Federal  Reserve Board
guidelines.

The Company  has  entered  into an  agreement,  which fully and  unconditionally
guarantees  payment of accrued and unpaid  distributions  required to be paid on
the Trust Preferred  Securities,  with respect to any Trust Preferred Securities
called for redemption.

                                       57
<PAGE>


Note 9 - Long-term Debt - Continued

The Trust Preferred Securities mature in September 2032 and may be called by the
Company at any time after June 2007.  Maturities  of  long-term  debt  following
December 31, 2002, are as follows:
<TABLE>
<CAPTION>

     Year Ending December 31,
     -----------------------
<S>             <C>                                                                              <C>
                2003.........................................................................    $           17,754
                2004.........................................................................            10,518,567
                2005.........................................................................            15,003,094
                2006.........................................................................             4,500,000
                2007.........................................................................                    --
                Thereafter...................................................................            30,000,000
                                                                                                 ------------------

                                                                                                 $       60,039,415
                                                                                                 ==================
</TABLE>


Note 10 - Shareholders' Equity

At December 31, 2002 and 2001,  shareholders' equity of the Company consisted of
the following:

Common Stock:  10,000,000 shares authorized with a par value of $0.01 per share.
Voting rights equal to one vote per share.

Paid-in  Capital:  Represents the funds received in excess of par value upon the
issuance of stock,  net of issuance  costs and the related  effects of the stock
dividends and stock splits.

Retained  Earnings:  Represents the  accumulated  net earnings of the Company as
reduced by  dividends  paid to  shareholders  and the effect of stock  dividends
issued in previous periods.

Stock Dividends and Stock Splits:  In May 2000, the Bank issued a 1.2 shares for
1.0 share stock split,  thereby  increasing the number of shares  outstanding to
2,168,970. In conjunction with the split, the par value of the stock was reduced
from $5.00 per share to $4.00 per share.  In June  2001,  the Bank  issued a 1.2
shares  for 1.0 share  stock  split,  thereby  increasing  the  number of shares
outstanding to 2,602,764.  In conjunction  with the split,  the par value of the
stock was reduced from $4.00 per share to $3.20 per share.  In April 2002,  each
share of the Bank was converted  into one share of the Company's  $.01 par value
common  stock.  In December  2002,  the Company  issued a 1.2 for 1 common stock
split resulting in an increase in the number of outstanding shares to 3,213,316.
All per share amounts included in these consolidated  financial  statements have
been adjusted to give retroactive effect to the stock splits.

Accumulated Other Comprehensive  Income:  Represents the change in equity during
each  period  from the  effects  of  unrealized  holding  gains  and  losses  on
securities available-for-sale, net of tax.

                                       58

<PAGE>


Note 11 - Regulatory Capital Matters

The Company and the Bank are subject to various regulatory capital  requirements
administered by the state and federal banking agencies.  Failure to meet minimum
capital  requirements  can initiate  certain  mandatory and possible  additional
discretionary  actions by regulators,  which if undertaken,  could have a direct
material  effect  on the  Company's  consolidated  financial  statements.  Under
regulatory capital adequacy  guidelines and the regulatory  framework for prompt
corrective  action,  the  Company  and its  subsidiary  bank must meet  specific
capital  guidelines  involving  quantitative  measures of the  Company's and its
subsidiary bank's assets,  liabilities,  and certain  off-balance sheet items as
calculated under regulatory accounting practices. The Bank's capital amounts and
classification  under the  prompt  corrective  guidelines  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 Company and the Bank to maintain minimum amounts and ratios of Total
capital  and  Tier  I  capital  to  risk-weighted  assets  (as  defined  in  the
regulations),  and  Tier I  capital  to  adjusted  total  assets  (as  defined).
Management believes, as of December 31, 2002, that the Company and the Bank meet
all capital adequacy requirements to which they are subject.

As of December 31, 2002, the most recent  notification  from the Federal Deposit
Insurance  Corporation  categorized  the  Bank as  well  capitalized  under  the
regulatory framework for prompt corrective action. To remain categorized as well
capitalized,  the Bank will  have to  maintain  minimum  Total  capital,  Tier 1
capital,  and Tier 1 leverage ratios as disclosed in the table below.  There are
no changes in  conditions  or events  since the most  recent  notification  that
management believes have changed the Bank's prompt corrective action category.

The  Company's  and the  Bank's  actual  capital  amounts  and  ratios  are also
presented in the table.
<TABLE>
<CAPTION>

                                                                                                  To Be Well
                                                                                              Capitalized Under
                                                                    For Capital               Prompt Corrective
                                          Actual                 Adequacy Purposes            Action Provisions
                                 -----------------------      -----------------------     ------------------------
                                    Amount        Ratio         Amount         Ratio         Amount        Ratio
                                 -----------    --------      -----------   ---------     -----------    ---------
                                                                   (In thousands)
As of December 31, 2002:

Total Capital
<S>                              <C>               <C>        <C>                <C>      <C>               <C>
   Consolidated..............    $    50,320       10.75%     $    37,444        8.00%    $    46,805       10.00%
   Florida Community
     Bank....................         49,736       10.64           37,412        8.00          46,765       10.00
Tier 1 Capital
   Consolidated..............         44,464        9.50           18,722        4.00          28,083        6.00
   Florida Community
     Bank....................         43,885        9.38           18,706        4.00          28,059        6.00
Tier 1 Leverage
   Consolidated..............         44,464        9.15           19,439        4.00          24,299        5.00
   Florida Community
     Bank....................         43,885        9.04           19,420        4.00          24,275        5.00
</TABLE>

                                       59
<PAGE>


Note 11 - Regulatory Capital Matters - Continued

<TABLE>
<CAPTION>

As of December 31, 2001(Bank Only):

<S>                              <C>               <C>        <C>                <C>      <C>               <C>
   Total Capital.............    $    37,342       10.65%     $    28,041        8.00%    $    35,052       10.00%
   Tier 1 Capital............         29,139        8.31           14,021        4.00          21,031        6.00
   Tier 1 Leverage...........         29,139        8.29           14,056        4.00          17,570        5.00

</TABLE>

Note 12 - Stock Option Plans

The Company has adopted its 2002 Key Employee Stock  Compensation  Program under
which it has granted  statutory and  non-statutory  stock options to certain key
employees  to purchase up to 55,200  shares (as adjusted for the stock split) at
$15.00 per  share.  The  options  granted  provide  for these key  employees  to
purchase  shares of the  Company's  $0.01 par value common stock at no less than
the market  value at the dates of grant.  The options  granted may be  exercised
within ten years from the dates of grant.

The following  sets forth certain  information  regarding  stock options for the
years ended December 31, 2002 and 2001.

Fixed Options
<TABLE>
<CAPTION>
                                                                       2002                        2001
                                                             -------------------------   --------------------------
                                                                             Weighted                  Weighted
                                                                              Average                    Average
                                                                             Exercise                   Exercise
                                                               Options         Price        Options       Price
                                                             -----------   -----------   -----------   ------------

Outstanding at beginning of year...........................      55,200    $     15.00            --   $         --
<S>                                                                                           <C>             <C>
   Granted.................................................          --             --        55,200          15.00
   Exercised...............................................          --             --            --             --
   Forfeited...............................................          --             --            --             --
                                                             ----------                  -----------

Outstanding at end of year.................................      55,200          15.00        55,200          15.00
                                                             ==========                  ===========
Weighted average fair value of
   options granted during the year.........................                       0.00                         1.74

</TABLE>
<TABLE>
<CAPTION>
                                                                                        Expiration       Options
                                                                          Number           Date        Exercisable
                                                                       -------------  -------------  --------------

<S>                               <C>                                         <C>          <C>   <C>         <C>
Options with an Exercise Price of $15.00..........................            55,200       10-25-11          22,080
</TABLE>

Of the 55,200 outstanding  options at December 31, 2002, 22,080 were exercisable
with the remaining 33,120 having remaining vesting periods of up to three years.
Total unexercised  options of 55,200 have a weighted average contractual life of
8.82 years and a weighted average exercise price of $15.00.

At December 31, 2002,  the shares under option include  nonqualified  options of
7,350 and  incentive  stock options of 47,850 issued to certain key employees of
the Company.

                                       60

<PAGE>


Note 12 - Stock Option Plans - Continued

The number of shares and weighted  average  exercise price have been restated to
give effect for the 1.2 for 1 stock split effective December 2002.

If the Company had elected to recognize compensation cost for options granted in
2002 and 2001,  based on the fair value of the options as  permitted by SFAS No.
123,  net income and earnings per share would have been reduced to the pro forma
amounts indicated below:
<TABLE>
<CAPTION>

                                                                                      Years Ended December 31,
                                                                                  ---------------------------------
                                                                                      2002                2001
                                                                                  -------------      --------------

Net Income:
<S>                                                                               <C>                <C>
   As reported...............................................................     $   6,418,306      $    5,346,217
   Pro forma.................................................................         6,389,537           5,325,276

Basic Earnings Per Share:
   As reported...............................................................     $        2.05      $         1.71
   Pro forma.................................................................              2.05                1.71

Diluted Earnings Per Share:
   As reported...............................................................     $        2.04      $         1.71
   Pro forma.................................................................              2.03                1.70
</TABLE>

All options are assumed to be exercised in the  calculation  of diluted  average
common shares  outstanding,  causing the equivalent number of shares outstanding
on a diluted  basis to be 17,123 and 2,929  greater  than that used to calculate
basic earnings per share for 2002 and 2001, respectively.  There was a $0.01 and
$0.00  dilutive  effect on earnings  per share for the years ended  December 31,
2002 and 2001, respectively.

The Company's  options  outstanding have a weighted average  contractual life of
8.83 years. The fair value of each grant is estimated on the date of grant using
the Black-Scholes option pricing model with the following assumptions:
<TABLE>
<CAPTION>

                                                                                  2002                  2001
                                                                           ------------------    ------------------

<S>                                                                                                    <C>
   Expected stock price volatility.....................................                    --          0.085%
   Expected dividend yield.............................................                    --          2.600%
   Risk-free interest rate.............................................                    --          4.070%
   Expected option life................................................                    --          5 years
</TABLE>

The effects of applying SFAS No. 123 for providing proforma  disclosures are not
likely to be  representative  of the  effects on  reported  earnings  for future
years, nor are the dividend estimates  representative of commitments on the part
of the Company's Board.

                                       61

<PAGE>

Note 13 - Other Operating Expenses

The  major  components  of other  operating  expenses  included  in  noninterest
expenses at December 31, 2002, 2001 and 2000 are as follows:
<TABLE>
<CAPTION>

                                                            2002                  2001                  2000
                                                     ------------------    ------------------    ------------------

<S>                                                  <C>                   <C>                   <C>
   Professional fees..............................   $          209,776    $          191,238    $          169,547
   Supplies.......................................              181,958               135,019               127,776
   Examination and assessment.....................              139,128               105,540                86,966
   Postage........................................              137,112                98,590                86,674
   Telephone......................................              136,195               121,962               102,704
   Promotions and public relations................              135,472               129,716               161,149
   ATM expense....................................              124,029               124,261               101,468
   Taxes and licenses.............................              102,911               106,613               118,486
   Bank charges...................................               95,300               135,274               120,487
   Courier........................................               94,705                71,141                64,768
   Software maintenance...........................               70,155               119,690                98,159
   Director's board and committee fees............               67,200                67,200                71,750
   Dues and subscriptions.........................               44,109                31,241                24,619
   Employee educational expenses..................               41,400                39,528                35,031
   Litigation settlement..........................                   --                    --               200,000
   Other..........................................              199,775               144,803               109,687
                                                     ------------------    ------------------    ------------------

                                                     $        1,779,225    $        1,621,816    $        1,679,271
                                                     ==================    ==================    ==================
</TABLE>

Note 14 - Income Taxes

Federal and state income taxes receivable  (payable) as of December 31, 2002 and
2001  included  in other  assets and other  liabilities,  respectively,  were as
follows:
<TABLE>
<CAPTION>


                                                                                  2002                  2001
                                                                           ------------------    ------------------
Current
<S>                                                                        <C>                   <C>
   Federal.............................................................    $           76,180    $           30,694

   State...............................................................                13,006               (13,532)
</TABLE>

                                       62

<PAGE>


Note 14 - Income Taxes - Continued

The  components of the deferred  income tax asset included in other assets as of
December 31, 2002 and 2001 are as follows:
<TABLE>
<CAPTION>

                                                                                  2002                  2001
                                                                           ------------------    ------------------

Deferred tax asset:
<S>                                                                        <C>                   <C>
   Federal.............................................................    $        1,773,225    $          991,061
   State...............................................................               295,537               160,318
                                                                           ------------------    ------------------
     Total deferred income tax asset...................................             2,068,762             1,151,379
                                                                           ------------------    ------------------

Deferred tax liability:
   Federal.............................................................               (92,785)              (34,448)
   State...............................................................               (15,464)               (5,572)
                                                                           ------------------    ------------------
     Total deferred income tax liability...............................              (108,249)              (40,020)
                                                                           ------------------    ------------------

Net deferred tax asset.................................................    $        1,960,513    $        1,111,359
                                                                           ==================    ==================

</TABLE>

The tax  effects  of each  type of  income  and  expense  item that gave rise to
deferred taxes are:
<TABLE>
<CAPTION>


                                                                                  2002                  2001
                                                                           ------------------    ------------------

<S>                                                                        <C>                   <C>
   Depreciation........................................................    $         (108,249)   $          (40,020)
   Allowance for loan losses...........................................             1,906,373               964,439
   Directors benefit plan..............................................               141,163               155,653
   Officers benefit plan...............................................                21,226                31,287
                                                                           ------------------    ------------------

   Net deferred tax asset..............................................    $        1,960,513    $        1,111,359
                                                                           ==================    ==================
</TABLE>

The components of income tax expense for the years ended December 31, 2002, 2001
and 2000 were as follows:
<TABLE>
<CAPTION>

                                                            2002                  2001                  2000
                                                     ------------------    ------------------    ------------------
   Current
<S>                                                  <C>                   <C>                   <C>
     Federal......................................   $        4,009,514    $        3,031,351    $        2,762,291
     State........................................              690,462               511,042               477,750

   Deferred
     Federal......................................             (723,827)             (215,930)             (309,221)
     State........................................             (125,327)              (34,929)              (50,021)
                                                     ------------------    ------------------    ------------------

                                                     $        3,850,822    $        3,291,534    $        2,880,799
                                                     ==================    ==================    ==================
</TABLE>

                                       63

<PAGE>

Note 14 - Income Taxes - Continued

There were no material  tax  effects of  securities  transactions  for the years
ended December 31, 2002, 2001 and 2000.

The  principal  reasons for the  difference  in the  effective  tax rate and the
federal  statutory  rate are as follows for the years ended  December  31, 2002,
2001 and 2000:
<TABLE>
<CAPTION>

                                                            2002                  2001                  2000
                                                     ------------------    ------------------    ------------------

<S>                                                                <C>                  <C>                   <C>
Statutory federal income tax rate.................                 34.0%                34.0%                 34.0%

Effect on rate of:
   Tax-exempt securities..........................                  0.0                 (0.1)                 (0.2)
   Insurance proceeds.............................                  0.0                  0.0                  (1.1)
   State income tax, net of
     federal tax benefit .........................                  3.2                  3.5                   3.4
   Other..........................................                  0.3                  0.7                   0.1
                                                     ------------------    -----------------     -----------------

Effective income tax rate.........................                 37.5%                38.1%                 36.2%
                                                     ==================    =================     =================

</TABLE>

Note 15 - Benefit Plans

The Company has two qualified  employee benefit plans: 1) A Pension Plan, and 2)
A Profit Sharing Plan. The Plans cover  substantially all employees,  subject to
similar  eligibility  requirements.  The  Company  contributes  10% of  eligible
compensation under the Pension Plan, annually. The Company's annual contribution
to the  Profit  Sharing  Plan is  discretionary  as  determined  by the board of
directors.  For the years ended December 31, 2002,  2001 and 2000, the Company's
contributions charged to operations amounted to $347,214,  $274,904 and $235,412
for the Pension Plan and $362,215,  $289,170 and $253,285 for the Profit Sharing
Plan, respectively.

The Company also has a Director's  Benefit Plan (the  "Benefit  Plan")  covering
certain  directors  and a Salary  Continuation  Plan (the  "Salary  Plan") for a
former officer.  These plans were obtained resulting from a business combination
that occurred in 1998.

The  Benefit  Plan  provides  for  the  payment  of  scheduled  benefits  to the
participants or their  beneficiaries at age 65 or their normal  retirement date,
whichever  occurs later. If the participant  dies prior to receiving 180 monthly
payments,  the  participant's  beneficiary  shall receive any remaining  monthly
payments.  Payment  of  benefits  under  the  Benefit  Plan  requires  that  the
participant fulfill certain conditions related to age and length of service. The
Company is accruing  the present  value of the future  benefits to be paid under
the Benefit Plan over the term of each participant's service period.

                                       64
<PAGE>

Note 15 - Benefit Plans - Continued

The Salary Plan provides for the payment of a retirement  benefit of $30,000 per
year for a period of ten years.  Payment of these benefits  commenced on January
1, 1995, and continued throughout the current year according to the terms of the
Plan.  The Company has  accrued the present  value of the future  benefits to be
paid under the Salary Plan.

The Company has determined  that the following  disclosures  are relevant to the
Benefit  Plan and the Salary  Plan,  however,  the plans are  non-qualified  and
unfunded.  Payments  to  retired  directors  and  officers  are  funded  through
operations.

Net pension cost for the  Director's  Benefit  Plan and the Salary  Continuation
Plan for 2002, 2001 and 2000 included the following components:
<TABLE>
<CAPTION>

                                                            2002                  2001                  2000
                                                     ------------------    ------------------    ------------------

<S>                                                  <C>                   <C>                   <C>
   Service cost...................................   $           23,171    $           20,878    $            1,800
   Interest cost..................................               39,373                41,439                43,902
                                                     ------------------    ------------------    ------------------

     Net periodic pension cost....................   $           62,544    $           62,317    $           45,702
                                                     ==================    ==================    ==================
</TABLE>

The  following  table  sets  forth the  accumulated  benefit  obligation  of the
Director's  Benefit  Plan and the Salary  Continuation  Plan  recognized  in the
Company's statements of financial condition at December 31, 2002 and 2001.
<TABLE>
<CAPTION>

                                                                                  2002                  2001
                                                                           ------------------    ------------------

Present value of benefit obligation:
<S>                                                                        <C>                   <C>
   Vested..............................................................    $          424,746    $          473,267
   Nonvested...........................................................                    --                    --
                                                                           ------------------    ------------------

Accumulated benefit obligation/pension liability.......................    $          424,746    $          473,267
                                                                           ==================    ==================
</TABLE>

The weighted  average  discount  rate used in  determining  present value of the
projected  benefit  obligation  for  the  Director's  Benefit  Plan  and  Salary
Continuation Plan was nine percent.


Note 16 - Commitments and Contingencies

In the normal  course of  business,  the Company  offers a variety of  financial
products  to its  customers  to aid  them  in  meeting  their  requirements  for
liquidity, credit enhancement, and interest rate protection.  Generally accepted
accounting  principles  recognize these  transactions as contingent  liabilities
and,  accordingly,  they  are not  reflected  in the  accompanying  consolidated
financial statements.

                                       65
<PAGE>

Note 16 - Commitments and Contingencies - Continued

Loan  commitments  are made to accommodate  the financial needs of the Company's
customers.  Standby  letters of credit  commit the  Company to make  payments on
behalf of customers when certain  specified  future events occur.  Historically,
most loan commitments and standby letters of credit expire unused. The Company's
exposure to credit loss in the event of  nonperformance  by the counter-party to
the financial  instrument for loan  commitments and standby letters of credit is
represented by the contractual amount of those instruments. The Company uses the
same underwriting standards in making commitments and conditional obligations as
it does for on-balance sheet instruments.  The amount of collateral  obtained is
based on management's credit evaluation of the customer. Collateral held varies,
but may include accounts receivable,  inventory, property, plant, and equipment,
and income-producing commercial properties.

The total  amounts  of loan  commitments  and  standby  letters  of  credit  are
summarized as follows at December 31:
<TABLE>
<CAPTION>

                                                                                          Contract or
                                                                                        Notional Amount
                                                                           ----------------------------------------
                                                                                  2002                  2001
                                                                           ------------------    ------------------

<S>                                                                        <C>                   <C>
Loan commitments.......................................................    $       94,694,000    $       79,515,000
Standby letters of credit..............................................             5,852,000             1,306,000
                                                                           ------------------    ------------------

   Total unfunded commitments..........................................    $      100,546,000    $       80,821,000
                                                                           ==================    ==================
</TABLE>

Management  conducts  regular  reviews  of these  instruments  on an  individual
customer basis,  and the results are considered in assessing the adequacy of the
Company's  allowance for loan losses.  The total reserve  allocated for unfunded
commitments  was  approximately  $374,000  and $265,000 at December 31, 2002 and
2001, respectively


Note 17 - Concentrations of Credit

Most of the Company's loans, commitments,  and commercial and standby letters of
credit have been granted to customers in the  Company's  market area.  Many such
customers are depositors of the Company. The concentrations of credit by type of
loan are set forth in note 4. The  distribution  of commitments to extend credit
related  primarily  to unused real estate  draw  lines.  Commercial  and standby
letters of credit were granted primarily to commercial borrowers.

The  Company  maintains  its cash  accounts at various  commercial  banks in the
United  States.  The total cash balances in commercial  banks are insured by the
FDIC up to $100,000.  Total uninsured balances held at correspondent  commercial
banks  amounted to  $5,967,875  and  $13,017,358  at December 31, 2002 and 2001,
respectively.

                                       66

<PAGE>

Note 18 - Restrictions on Dividends

The Bank is subject to the dividend  restrictions set forth by the State Banking
Department  (Florida).  Under such  restrictions,  the Bank may not, without the
prior approval of the State Banking  Department,  declare dividends in excess of
the sum of the current year's earnings plus the retained earnings from the prior
two  years.  For the year  ending  December  31,  2003,  the  Bank  can  declare
dividends,  without prior regulatory approval, of approximately  $8,343,375 plus
an additional amount equal to its net profits for 2003.


Note 19 - Litigation

While  the  Company  is party to  various  legal  proceedings  arising  from the
ordinary course of business,  management  believes after consultation with legal
counsel that there are no proceedings  threatened or pending against the Company
that will,  individually or in the aggregate,  have a material adverse effect on
the business or financial condition of the Company.


Note 20 - Leases

The Company leased facilities under non-cancelable operating leases during 2002,
2001 and 2000. The leases  provided for renewal  options and generally  required
the Company to pay  maintenance,  insurance  and property  taxes.  For the years
ended  December  31,  2002,  2001 and 2000,  rental  expense for such leases was
$182,870,  $160,342 and $13,126,  respectively.  The Company also entered into a
sale/leaseback  transaction  with a related  party in January  2001 for a branch
facility,  future  minimum  payments  under this lease are included in the table
below (see also Note 21).

Future  minimum lease  payments under such  non-cancelable  operating  leases at
December 31, 2002 are as follows:
<TABLE>
<CAPTION>

     Year Ending December 31,
     -----------------------
<S>               <C>                                                                            <C>
                  2003.......................................................................    $          168,164
                  2004.......................................................................               171,805
                  2005.......................................................................               166,750
                  2006.......................................................................               164,906
                  2007.......................................................................               168,913
                  Thereafter.................................................................             1,753,876
                                                                                                 ------------------

     Total minimum lease payments............................................................    $        2,594,414
                                                                                                 ==================
</TABLE>

                                       67

<PAGE>


Note 21 - Related Party Transactions

Loans:  Certain  directors,   executive  officers  and  principal  shareholders,
including  their  immediate  families and associates  were loan customers of the
Company  during  2002 and 2001.  Such loans are made in the  ordinary  course of
business at normal credit terms,  including interest rates and collateral and do
not represent more than a normal risk of  collection.  A summary of activity and
amounts   outstanding   are   as   follows:
<TABLE>
<CAPTION>

                                                                                  2002                  2001
                                                                           ------------------    ------------------

<S>                                                                        <C>                   <C>
Balance at Beginning of Year...........................................    $        9,525,429    $       10,242,034
New loans..............................................................             7,166,439             2,319,483
Repayments.............................................................            (8,245,030)           (3,036,088)
                                                                           ------------------    ------------------

Balance at End of Year.................................................    $        8,446,838    $        9,525,429
                                                                           ==================    ==================
</TABLE>

Deposits:  Deposits held from related parties were $9,446,535 and $10,793,946 at
December 31, 2002 and 2001, respectively.

Other:  On  January  11,  2001,  the board of  directors  of the Bank  adopted a
resolution  to sell the land and  premises  of the  Cypress  Lake Branch at fair
market value to a Bank  Director  and lease the property  back at a fair rental.
The sales price of $1,855,000  is greater than the appraised  value and is based
on the cost to the Bank of the land,  building and closing costs.  The agreement
specifies  a 15-year net lease of $11,805  per month with  annual  increases  of
2.5%.


Note 22 - Fair Value of Financial Instruments

The following  methods and  assumptions  were used to estimate the fair value of
each class of financial instruments for which it is practicable to estimate that
value:

Cash and Short-Term Investments:  For those short-term instruments, the carrying
amount is a reasonable estimate of fair value.

Securities: For securities  available-for-sale and securities  held-to-maturity,
fair  values  are based on quoted  market  prices  or dealer  quotes.  For other
securities  held as  investments,  fair value equals  quoted  market  price,  if
available.  If a quoted market price is not  available,  fair value is estimated
using quoted market prices for similar securities.

Loans:  For certain  homogeneous  categories of loans,  such as some residential
mortgage,  credit card  receivables,  and other  consumer  loans,  fair value is
estimated using the quoted market prices for securities backed by similar loans,
adjusted for differences in loan characteristics.  The fair value of other types
of loans is  estimated  by  discounting  the future cash flows using the current
rates at which  similar  loans would be made to borrowers  with  similar  credit
ratings and for the same remaining maturities.

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

                                       68

<PAGE>

Note 22 - Fair Value of Financial Instruments - Continued

Deposits: The fair value of demand deposits, savings accounts, and certain money
market  deposits is the amount payable on demand at the reporting date. The fair
value of  fixed-maturity  certificates  of deposit is estimated  using the rates
currently offered for deposits of similar remaining maturities.

Accrued  Interest  Payable:  The  carrying  amount of accrued  interest  payable
approximates its fair value.

Short-Term Borrowings: The carrying amounts of short-term borrowings approximate
their fair values.

Long-Term Debt:  Rates currently  available to the Company for debt with similar
terms and remaining maturities are used to estimate fair value of existing debt.

Commitments  to  Extend  Credit,   Standby  Letters  of  Credit,  and  Financial
Guarantees  Written:  The fair value of  commitments,  letters  of  credit,  and
financial  guarantees is estimated to be approximately  the same as the notional
amount of the related commitment.

The estimated fair values of the Company's financial  instruments as of December
31, 2002 and 2001 are as follows:
<TABLE>
<CAPTION>


                                                             2002                               2001
                                               ---------------------------------  ---------------------------------
                                                  Carrying            Fair           Carrying            Fair
                                                   Amount             Value            Amount            Value
                                               ---------------  ----------------  ---------------  ----------------
                                                        (in thousands)                     (in thousands)
Financial Assets
<S>                                            <C>              <C>               <C>              <C>
   Cash and short-term investments..........   $        58,835  $         58,835  $        25,539  $         25,539
   Securities...............................            36,214            36,995           35,002            35,251
   Loans....................................           416,415           418,079          318,666           323,556
   Accrued interest receivable..............             2,904             2,904            2,688             2,688
                                               ---------------  ----------------  ---------------  ----------------

     Total Financial Assets.................   $       514,368  $        516,813  $       381,895  $        387,034
                                               ===============  ================  ===============  ================

Financial Liabilities
   Deposits.................................   $       423,935  $        424,121  $       317,861  $        317,949
   Short-term borrowings....................                --                --            1,086             1,086
   Long-term debt...........................            60,039            60,039           37,580            37,928
   Accrued interest payable.................             1,867             1,867            1,689             1,689
                                               ---------------  ----------------  ---------------  ----------------

     Total Financial Liabilities............   $       485,841  $        476,027  $       358,216  $        358,652
                                               ===============  ================  ===============  ================

Unrecognized Financial Instruments
   Commitments to extend credit.............   $        94,694  $         94,694  $        79,515  $         79,515
   Standby letters of credit................             5,852             5,852            1,306             1,306
                                               ---------------  ----------------  ---------------  ----------------

     Total Unrecognized Financial
       Instruments..........................   $       100,546  $        100,546  $        80,821  $         80,821
                                               ===============  ================  ===============  ================
</TABLE>

                                       69

<PAGE>


Note 23 - Condensed Parent Company Information


Statement of Financial Condition
<TABLE>
<CAPTION>

                                                                                                        2002
                                                                                                  -----------------
Assets
<S>                                                                                               <C>
   Cash and due from banks....................................................................    $         104,942
   Federal funds sold.........................................................................              100,000
   Investment in subsidiaries (equity method) -
     eliminated upon consolidation............................................................           44,195,191
   Other assets...............................................................................              373,667
                                                                                                  -----------------

       Total Assets...........................................................................    $      44,773,800
                                                                                                  =================

Liabilities and Shareholders' Equity
   Guaranteed preferred beneficial interest in the Company's
     subordinated debentures..................................................................    $      10,310,000
   Other liabilities..........................................................................                   --
                                                                                                  -----------------
       Total Liabilities......................................................................           10,310,000

       Total Shareholders' Equity.............................................................           34,463,800
                                                                                                  -----------------

       Total Liabilities and Shareholders' Equity.............................................    $      44,773,800
                                                                                                  =================
</TABLE>


             [The remainder of this page intentionally left blank.]

                                       70
<PAGE>

Note 23 - Condensed Parent Company Information - Continued


Statement of Income
<TABLE>
<CAPTION>


                                                                                                        2002
                                                                                                   ----------------
Income
   From subsidiaries - eliminated upon consolidation
<S>                                                                                                <C>
     Dividends..................................................................................   $      1,405,510
     Interest...................................................................................              1,261
                                                                                                   ----------------
       Total Income.............................................................................          1,406,771
                                                                                                   ----------------

Expenses
   Salaries and employee benefits...............................................................             14,706
   Interest.....................................................................................            306,752
   Other expenses...............................................................................             58,329
                                                                                                   ----------------
       Total Expenses...........................................................................            379,787
                                                                                                   ----------------

Income before income taxes and equity in
   undistributed earnings of subsidiaries.......................................................          1,026,984
Income tax benefit..............................................................................            144,786
                                                                                                   ----------------

Income before equity in undistributed
   earnings of subsidiaries.....................................................................          1,171,770
Equity in undistributed earnings of subsidiaries................................................          5,246,536
                                                                                                   ----------------

       Net Income...............................................................................   $      6,418,306
                                                                                                   ================
</TABLE>


             [The remainder of this page intentionally left blank.]

                                       71
<PAGE>

Note 23 - Condensed Parent Company Information - Continued


Statement of Cash Flows
<TABLE>
<CAPTION>

                                                                                                         2002
                                                                                                   ----------------
Operating Activities
<S>                                                                                                <C>
   Net income...................................................................................   $      6,418,306
   Adjustments to reconcile net income to net
     cash provided by operating activities:
     Equity in undistributed income of subsidiaries.............................................         (5,246,536)
     Other......................................................................................            (93,855)
                                                                                                   ----------------
       Net Cash Provided By Operating Activities................................................          1,077,915
                                                                                                   ----------------

Investing Activities
   Investment in subsidiaries...................................................................         (9,810,000)
                                                                                                   ----------------
       Net Cash Used In Investing Activities....................................................         (9,810,000)
                                                                                                   ----------------

Financing Activities
   Issuance of guaranteed preferred beneficial interest in the
     Company's subordinated debentures, net of issuance costs...................................         10,030,188
   Cash dividends...............................................................................         (1,093,161)
                                                                                                   ----------------
       Net Cash Provided By Financing Activities................................................          8,937,027
                                                                                                   ----------------

Net increase in cash and cash equivalents.......................................................            204,942

Cash and Cash Equivalents at Beginning of Year..................................................                 --
                                                                                                   ----------------

Cash and Cash Equivalents at End of Year........................................................   $        204,942
                                                                                                   ================

Cash Paid During the Year For:
   Interest.....................................................................................   $        306,752

</TABLE>

Florida  Community Banks,  Inc., the parent holding company of Florida Community
Bank and FCBI Capital Trust I, was formed during the second  quarter of 2002 and
had no assets, liabilities or income for the years 2001 and 2000.

                                       72
<PAGE>


Note 24 - Quarterly Results of Operations (Unaudited)

Selected quarterly results of operations for the four quarters ended December 31
are as follows:
<TABLE>
<CAPTION>

                                          First          Second          Third         Fourth
                                         Quarter         Quarter        Quarter        Quarter           Total
                                      -------------  -------------   -------------  -------------  ----------------
                                                                    (In Thousands)
2002:
<S>                                   <C>            <C>             <C>            <C>            <C>
Total interest income..............   $       7,080  $       7,729   $       8,304  $       8,457  $         31,570
Total interest expense.............           2,808          2,914           2,951          3,114            11,787
Provision for loan losses..........             330            280           1,100            800             2,510
Net interest income after
   provision for loan losses.......           3,942          4,535           4,253          4,543            17,273
Investment securities
   gains (losses)..................              36             --              --             --                36
Other noninterest income...........             535            452             449            544             1,980
Other noninterest expense..........           2,123          2,242           2,312          2,343             9,020
Income tax expense.................             898          1,024             902          1,027             3,851
Net income.........................           1,492          1,721           1,488          1,717             6,418
Per common share
   Basic earnings..................            0.48           0.55            0.48           0.54              2.05
   Diluted earnings................            0.48           0.55            0.48           0.53             2.04

2001:
Total interest income..............   $       6,921  $       7,449   $       6,851  $       6,682  $         27,903
Total interest expense.............           3,181          3,085           2,931          2,821            12,018
Provision for loan losses..........             150            150             150            270               720
Net interest income after
   provision for loan losses.......           3,590          4,214           3,770          3,591            15,165
Investment securities
   gains (losses)..................              --             --              --             --                --
Other noninterest income...........             387            416             326            570             1,699
Other noninterest expense..........           2,026          2,135           2,112          1,953             8,226
Income tax expense.................             724            933             798            837             3,292
Net income.........................           1,227          1,562           1,186          1,371             5,346
Per common share
   Basic earnings..................            0.39           0.50            0.38           0.44              1.71
   Diluted earnings................            0.39           0.50            0.38           0.44             1.71

2000:
Total interest income..............   $       5,833  $       6,007   $       6,419  $       6,731  $         24,990
Total interest expense.............           2,239          2,324           2,709          3,004            10,276
Provision for loan losses..........             150            550             150            150             1,000
Net interest income after
   provision for loan losses.......           3,444          3,133           3,560          3,577            13,714
Investment securities
   gains (losses)..................              --             --              --             --                --
Other noninterest income...........             373            736             330            365             1,804
Other noninterest expense..........           1,805          1,934           1,909          1,904             7,552
Income tax expense.................             747            624             735            775             2,881
Net income.........................           1,265          1,311           1,246          1,263             5,085
Per common share
   Basic earnings..................            0.41           0.42            0.40           0.40              1.63
   Diluted earnings................            0.41           0.42            0.40           0.40             1.63
</TABLE>

                                       73
<PAGE>


ITEM 9.  CHANGES  IN  AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
         FINANCIAL DISCLOSURE.

         None.


                                    PART III


ITEM 10.  DIRECTORS,   EXECUTIVE   OFFICERS,   PROMOTERS  AND  CONTROL  PERSONS;
          COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

     The  information  appearing  under the headings  "ELECTION  OF  DIRECTORS,"
"BOARD OF  DIRECTORS"  and  "COMPLIANCE  WITH  SECTION  16(a) OF THE  SECURITIES
EXCHANGE ACT OF 1934" on pages 3 to 6 and 11 in the Proxy  Statement  (the "2003
Proxy Statement") relating to the annual meeting of shareholders of the Company,
scheduled to be held on April 17, 2003, is incorporated herein by reference.


ITEM 11. EXECUTIVE COMPENSATION

     The information  appearing under the headings "EXECUTIVE  COMPENSATION" and
"EMPLOYEE BENEFITS" on pages 6 to 10 of the 2003 Proxy Statement is incorporated
herein by reference.


ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND Management

     The  information  appearing  under the heading  "ELECTION OF  DIRECTORS" on
pages 3 to 5 of the 2002 Proxy  Statement and from Item 5 above is  incorporated
herein by reference.


ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The information  appearing  under the heading  "CERTAIN  RELATIONSHIPS  AND
RELATED  TRANSACTIONS"  on  pages  10 to 11  of  the  2003  Proxy  Statement  is
incorporated herein by reference.


ITEM 14. CONTROLS AND PROCEDURES

     (a)  Evaluation of disclosure controls and procedures.

          The Company has evaluated the effectiveness of its disclosure controls
          and procedures  pursuant to Securities  Exchange Act Rule 13a-14.  The
          evaluation  was  performed   under  the   supervision   and  with  the
          participation of management, including the chief executive officer and
          the chief financial  officer,  within 90 days prior to the date of the
          filing of this  annual

                                       74
<PAGE>

          report.  Based on this  evaluation,  the chief  executive  officer and
          chief  financial  officer have concluded that the disclosure  controls
          and procedures are effective in ensuring that all material information
          required to be disclosed in this annual  report has been  communicated
          to them in a manner  appropriate to allow timely  decisions  regarding
          required disclosure.

     (b)  Changes in internal controls.

          Subsequent to the date of their evaluation,  there were no significant
          changes in internal controls or other factors that could significantly
          affect internal controls, including any corrective actions with regard
          to significant deficiencies and material weaknesses.


ITEM 15. EXHIBITS AND REPORTS ON FORM 8-K
<TABLE>
<CAPTION>

Exhibit No.                                               Exhibit                                          Page

<S>                                                                                                         <C>
     (a)  Financial Statements, Financial Schedules and Exhibits.

     3.1  Articles of  Incorporation  of FCBI (included as Exhibit 3.1 to FCBI's
          Registration  Statement  on Form 8-A  filed  with the SEC on April 15,
          2002 and incorporated herein by reference).

     3.2  By-laws  of FCBI  (included  as  Exhibit  3.2 to  FCBI's  Registration
          Statement  on Form  8-A  filed  with  the SEC on  April  15,  2002 and
          incorporated herein by reference).

     4.1  Subordinated Promissory Note, dated December 24, 2001, between Florida
          Community Bank and  Independent  Bankers Bank of Florida  (included as
          Exhibit 4.1 to the Bank's Form 10-KSB for the year ended  December 31,
          2001, and incorporated herein by reference).

     4.2  Specimen Common Stock  Certificate of FCBI (included as Exhibit 4.1 to
          FCBI's Registration  Statement on Form 8-A filed with the SEC on April
          15, 2002 and incorporated herein by reference).

     10.1 Employment  agreement  with  Thomas S. Junker  dated  December 9, 1997
          (included as Exhibit 10.1 to the Bank's Registration Statement on Form
          10-SB-A for the year ended December 31, 1998 and  incorporated  herein
          by reference).

     10.2 2002 Key  Employee  Stock  Compensation  Program of FCBI  (included as
          Appendix D to the Bank's Definitive  Schedule 14-A filed with the FDIC
          on March 22, 2002 and incorporated herein by reference).
</TABLE>

                                       75

<PAGE>

<TABLE>
<CAPTION>

Exhibit No.                                               Exhibit                                          Page

<S>  <C>                                                                                                    <C>
     10.3 Amended and Restated Trust  Agreement among Florida  Community  Banks,
          Inc. as  depositor,  Wilmington  Trust  Company as  property  trustee,
          Wilmington Trust Company,  as Delaware trustee,  and Stephen L. Price,
          and Thomas V.  Ogletree as  administrators,  dated as of June 21, 2002
          (included as Exhibit 10.3 to the  Company's  Form 10-Q for the quarter
          ended June 30, 2002, and incorporated herein by reference).

     10.4 Guarantee   Agreement   between  Florida   Community  Banks,  Inc.  as
          guarantor, and Wilmington Trust Company as guarantee trustee, dated as
          of June 21, 2002  (included as Exhibit 10.4 to the Company's Form 10-Q
          for the  quarter  ended  June 30,  2002,  and  incorporated  herein by
          reference).

     10.5 Junior  Subordinated  Indenture  between Florida Community Banks, Inc.
          (as Company) and  Wilmington  Trust Company (as trustee),  dated as of
          June 21, 2002 (included as Exhibit 10.5 to the Company's Form 10-Q for
          the  quarter  ended  June  30,  2002,  and   incorporated   herein  by
          reference).

     10.6 Term Loan Agreement  between  Florida  Community  Banks,  Inc. and The
          Bankers  Bank,  Atlanta,  Georgia,  dated June 13, 2002  (included  as
          Exhibit 10.6 to the Company's Form 10-Q for the quarter ended June 30,
          2002, and incorporated herein by reference).

     11   Statement re: computation of earnings per common share                                            77

     12   Statement re: computation of ratios                                                               77

     21   Subsidiaries of the Registrant                                                                    78

     24   Power of Attorney                                                                                 81

     99.1 Code of Ethics  (included  as Exhibit 99.1 to the  Company's  Form 8-K
          filed on March 3, 2003, and incorporated herein by reference.)

     99.2 Chief Executive Officer - Certification  pursuant to 18 U.S.C. Section
          1350, as adopted pursuant to Section 906 of the  Sarbanes-Oxley Act of
          2002                                                                                              79

     99.3 Chief Financial Officer - Certification  pursuant to 18 U.S.C. Section
          1350, as adopted pursuant to Section 906 of the  Sarbanes-Oxley Act of
          2002                                                                                              79

     (b)  Reports on Form 8-K

          During the quarter ended December 31, 2002,  Florida  Community Banks,
          Inc.  filed  Form 8-K,  dated  November  11,  2002 for the  purpose of
          notifying the  shareholders of a change in dividend  policy.  The item
          reported  under this  Report  was Item 5 Other  Events.  No  financial
          statements were filed therewith.
</TABLE>

                                       76
<PAGE>

EXHIBIT 11 - STATEMENTS RE: COMPUTATION OF PER SHARE EARNINGS

                          Florida Community Banks, Inc.
                   Computation of Net Income Per Common Share

The following  tabulation presents the calculation of basic and diluted earnings
per common share for the years ended December 31, 2002, 2001 and 2000.
<TABLE>
<CAPTION>

                                                                        2002               2001             2000
                                                                 ----------------   ---------------    ---------------
Basic Earnings Per Share:
<S>                                                              <C>                <C>                <C>
   Net income................................................    $      6,418,306   $     5,346,217    $     5,085,061
                                                                 ================   ===============    ===============

   Earnings on common shares.................................    $      6,418,306   $     5,346,217    $     5,085,061
                                                                 ================   ===============    ===============

   Weighted average common shares outstanding - basic........           3,123,316         3,123,316          3,123,316
                                                                 ================   ===============    ===============

   Weighted average common shares outstanding - diluted......           3,140,439         3,126,245          3,123,316
                                                                 ================   ===============    ===============

   Basic earnings per common share...........................    $          2.05    $          1.71    $          1.63
                                                                 ===============    ===============    ===============

   Diluted earnings per common share.........................    $          2.04    $          1.71    $          1.63
                                                                 ===============    ===============    ===============
</TABLE>


Exhibit 12 - Statements Re: Computation of Ratios

                          Florida Community Banks, Inc.
                Computation of Ratio of Earnings to Fixed Charges
<TABLE>
<CAPTION>


                                                                               Year Ended December 31,
                                                                  -------------------------------------------------
                                                                       2002             2001              2000
                                                                  --------------    -------------    --------------
                                                                               (Dollars in thousands)

<S>                                                               <C>               <C>              <C>
Pretax income.................................................    $       10,269    $       8,638    $        7,966
Add fixed charges:
   Interest on deposits.......................................            10,032           10,909             8,939
   Interest on borrowings.....................................             1,448            1,109             1,337
   Portion of rental expense representing interest expense....                60               53                 4
                                                                  --------------    -------------    --------------
     Total fixed charges......................................            11,540           12,071            10,280
                                                                  --------------    -------------    --------------

Income before fixed charges...................................    $       21,809    $      20,709    $       18,246
                                                                  ==============    =============    ==============

Pretax income.................................................    $       10,269    $       8,638    $        7,966
Add fixed charges (excluding interest on deposits):
   Interest on borrowings.....................................             1,448            1,109             1,337
   Portion of rental expense representing interest expense....                60               53                 4
                                                                  --------------    -------------    --------------
     Total fixed charges......................................             1,508            1,162             1,341
                                                                  --------------    -------------    --------------

Income before fixed charges (excluding interest on
   deposits)..................................................    $       11,777    $       9,800    $        9,307
                                                                  ==============    =============    ==============

Ratio of Earnings to Fixed Charges
   Including interest on deposits.............................              1.89             1.72              1.77
   Excluding interest on deposits.............................              7.81             8.44              6.94
</TABLE>

                                       77
<PAGE>

Exhibit 21 - SUBSIDIARIES OF THE REGISTRANT

Subsidiaries - Direct/Wholly-owned                       State of Incorporation
----------------------------------                       ----------------------
Florida Community Bank                                         Florida
FCBI Capital Trust I                                           Delaware


                                       78

<PAGE>

EXHIBIT 99.2

                CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350
                    AS ADOPTED PURSUANT TO SECTION 906 OF THE
                           SARBANES-OXLEY ACT OF 2002


In connection with Florida Community Banks,  Inc.'s ("Company") Annual Report on
Form  10-K for the  period  ended  December  31,  2002  ("Report"),  each of the
undersigned certify that:

1.   The Report fully complies with the  requirements  of Section 13(a) or 15(d)
     of the Securities Exchange Act of 1934; and

2.   The information  contained in the Report fairly  presents,  in all material
     respects, the financial condition and results of operations of the Company.





Date:   March 20, 2003                  By:   /s/ Stephen L. Price
                                           -------------------------------------
                                           Stephen L. Price
                                           President and Chief Executive Officer


EXHIBIT 99.3

                CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350
                    AS ADOPTED PURSUANT TO SECTION 906 OF THE
                           SARBANES-OXLEY ACT OF 2002


In connection with Florida Community Banks,  Inc.'s ("Company") Annual Report on
Form  10-K for the  period  ended  December  31,  2002  ("Report"),  each of the
undersigned certify that:

1.   The Report fully complies with the  requirements  of Section 13(a) or 15(d)
     of the Securities Exchange Act of 1934; and

2.   The information  contained in the Report fairly  presents,  in all material
     respects, the financial condition and results of operations of the Company.





Date:   March 20, 2003                  By:   /s/ Thomas V. Ogletree
                                           -------------------------------------
                                           Thomas V. Ogletree
                                           Chief Financial Officer

                                       79

<PAGE>

                                   SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the  registrant  has duly  caused  this report to be signed on its
behalf by the undersigned, thereunto duly authorized.


                                                   FLORIDA COMMUNITY BANKS, INC.

Date:  March 20, 2003                    By:    /s/ Stephen L. Price
                                            ------------------------------------
                                            Stephen L. Price
                                            Chairman and Chief Executive Officer


Date:  March 20, 2003                    By:    /s/ Thomas V. Ogletree
                                            ------------------------------------
                                            Thomas V. Ogletree
                                            Chief Financial Officer


                                       80
<PAGE>

Exhibit 24 - POWER OF ATTORNEY

                                POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS,  that each person whose signature  appears below
constitutes  and  appoints  Stephen L. Price and Thomas V.  Ogletree and each of
them,  his  true  and  lawful  attorney-in-fact,  as agent  with  full  power of
substitution and resubstitution for him and in his name, place and stead, in any
and all  capacity,  to sign any or all  amendments to this Form 10-K and to file
the  same,  with  all  exhibits  thereto,  and  other  documents  in  connection
therewith,  with the Federal Deposit Insurance  Corporation,  granting unto said
attorney-in-fact  and agents in full power and  authority to do and perform each
and every  act and thing  requisite  and  necessary  to be done in and about the
premises,  as fully and to all intents and purposes as they might or could be in
person,  hereby  ratifying and  confirming all that said  attorneys-in-fact  and
agents,  and their  substitutes,  may  lawfully do or cause to be done by virtue
hereof.

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 capacities and on the dates indicated.
<TABLE>
<CAPTION>

                Directors                                                                      Date
----------------------------------------                                        -----------------------------------

<S>                                                                                             <C> <C>
/s/ Beauford E. Davidson                                                                  March 20, 2003
----------------------------------------
Beauford E. Davidson


/s/ Patrick B. Langford                                                                   March 20, 2003
----------------------------------------
Patrick B. Langford


/s/ Lewis J. Nobles, Jr.                                                                  March 20, 2003
----------------------------------------
Lewis J. Nobles, Jr.


/s/ Jon R. Olliff                                                                         March 20, 2003
----------------------------------------
Jon R. Olliff


/s/ James O'Quinn                                                                         March 20, 2003
----------------------------------------
James O'Quinn


/s/ Stephen L. Price                                                                      March 20, 2003
----------------------------------------
Stephen L. Price


/s/ Bernard T. Rasmussen                                                                  March 20, 2003
----------------------------------------
Bernard T. Rasmussen


/s/ R. A. Roberts                                                                         March 20, 2003
----------------------------------------
R. A. Roberts


/s/ Daniel G. Rosbough                                                                    March 20, 2003
----------------------------------------
Daniel G. Rosbough


/s/ James E. Williams, Jr.                                                                March 20, 2003
----------------------------------------
James E. Williams, Jr.
</TABLE>

                                       81

<PAGE>

CERTIFICATIONS

I, Stephen L. Price, certify that:

1.   I have reviewed this annual report on Form 10-K of Florida Community Banks,
     Inc.

2.   Based on my  knowledge,  this  annual  report  does not  contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this annual report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information included in this annual report,  fairly present in all material
     respects the financial  condition,  results of operations and cash flows of
     the registrant as of, and for, the periods presented in this annual report;

4.   The  registrant's  other  certifying  officers  and I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a)   designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  registrant,   including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities,  particularly  during the period in which this annual report
          is being prepared;

     b)   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures as of a date within 90 days prior to the filing date of
          this annual report (the "Evaluation Date"); and

     c)   presented   in  this   annual   report  our   conclusions   about  the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date;

5.   The registrant's other certifying  officers and I have disclosed,  based on
     our most recent  evaluation,  to the  registrant's  auditors  and the audit
     committee of  registrant's  board of directors (or persons  performing  the
     equivalent function):

     a)   all  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and

     b)   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls; and

6.   The  registrant's  other  certifying  officers and I have indicated in this
     annual  report  whether or not there were  significant  changes in internal
     controls  or in other  factors  that could  significantly  affect  internal
     controls  subsequent to the date of our most recent  evaluation,  including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.

Date:  March 20, 2003

/s/    Stephen L. Price
-------------------------
Stephen L. Price
Chief Executive Officer

                                       82

<PAGE>

CERTIFICATIONS

I, Thomas V. Ogletree, certify that:

1.   I have reviewed this annual report on Form 10-K of Florida Community Banks,
     Inc.

2.   Based on my  knowledge,  this  annual  report  does not  contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this annual report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information included in this annual report,  fairly present in all material
     respects the financial  condition,  results of operations and cash flows of
     the registrant as of, and for, the periods presented in this annual report;

4.   The  registrant's  other  certifying  officers  and I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a)   designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  registrant,   including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities,  particularly  during the period in which this annual report
          is being prepared;

     b)   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures as of a date within 90 days prior to the filing date of
          this annual report (the "Evaluation Date"); and

     c)   presented   in  this   annual   report  our   conclusions   about  the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date;

5.   The registrant's other certifying  officers and I have disclosed,  based on
     our most recent  evaluation,  to the  registrant's  auditors  and the audit
     committee of  registrant's  board of directors (or persons  performing  the
     equivalent function):

     a)   all  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and

     b)   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls; and

6.   The  registrant's  other  certifying  officers and I have indicated in this
     annual  report  whether or not there were  significant  changes in internal
     controls  or in other  factors  that could  significantly  affect  internal
     controls  subsequent to the date of our most recent  evaluation,  including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.

Date:  March 20, 2003

/s/   Thomas V. Ogletree
-------------------------
Thomas V. Ogletree
Chief Financial Officer

                                       83