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, 2004      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 __X__   No _____

The issuer's revenues for its most recent fiscal year were $43,357,549.

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 4, 2005, was $122,548,167  based on a per share price of $27.00,  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 4, 2005, there were 4,538,821  shares of the registrant's  Common Stock
outstanding.

This statement has not been reviewed, or confirmed for accuracy or relevance, by
the Federal Deposit Insurance Corporation.

Documents Incorporated by Reference

Portions of the  registrant's  definitive  Proxy  Statement  for the 2004 Annual
Meeting of  Shareholders  are  incorporated  by reference  into Part III of this
report.
================================================================================

<PAGE>




                          FLORIDA COMMUNITY BANKS, INC.

                          2004 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.................................................................            8

   Item 3.            Legal Proceedings..........................................................            8

   Item 4.            Submission of Matters to a Vote of Security Holders........................            8

   PART II

   Item 5.            Market for the Registrant's Common Equity and Related
                      Shareholder Matters........................................................            9

   Item 6.            Selected Financial Data....................................................           10

   Item 7.            Management's Discussion and Analysis of Financial
                      Condition and Results of Operations........................................           11

   Item 7A.           Quantitative and Qualitative Disclosures About Market Risk.................           11

   Item 8.            Financial Statements and Supplementary Data................................           32

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

   Item 9A.           Controls and Procedures....................................................           74

   Item 9B.           Other Information..........................................................           75

   PART III

   Item 10.           Directors, Executive Officers, Promoters and Control Persons;
                      Compliance with Section 16(a) of the Exchange Act..........................           75

   Item 11.           Executive Compensation.....................................................           75

   Item 12.           Security Ownership of Certain Beneficial Owners and Management.............           75

   Item 13.           Certain Relationships and Related Transactions.............................           75

   Item 14.           Principal Accountant Fees and Service......................................           75

   PART IV

   Item 15.           Exhibits and Financial Statements Schedules.................................           76
</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.  The  special  purpose  business  trust is not  consolidated  in the
financial  statements  that are  included  elsewhere  herein.  FCBI is a Florida
corporation registered with the Board of Governors of the Federal Reserve System
as a bank  holding  company  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,  Glades
and  Charlotte  counties.  At  December  31,  2004,  FCBI had  total  assets  of
approximately  $661 million,  total deposits of  approximately  $521 million and
stockholders' equity of approximately $53 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
Financial Services  ("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, Cape Coral and Ft. Myers.

     The Company  employs  approximately  160  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

                                       3
<PAGE>

     may use the  automated  teller  machines  (the  "ATMs") of other  financial
institutions  and  operates  drive-in  teller  services  and 24-hour  depository
vaults.

         The Bank offers the following loan services:

          (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. 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, 2004,  the Bank operated nine branch  offices,  with a tenth office
scheduled to open in January 2005.  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, on a  month-to-month  basis,
with  adjustments  made  annually to the lease cost based on the Consumer  Price
Index.  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 Bank owns the Punta
Gorda  branch  and the  underlying  land is subject  to a 99-year  lease,  which
commenced in 2000. Land for a second Cape Coral branch was purchased in 2003 and
the branch is scheduled to open in January  2005.  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  if 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 4%.  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 4% 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 4% 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.

     Corporate  Governance.  The  Sarbanes-Oxley  Act of  2002  ("Sarbanes-Oxley
Act"),  which became law on July 30, 2002, and added new legal  requirements for
public  companies  affecting  corporate  governance,  accounting  and  corporate
reporting.

The Sarbanes-Oxley Act provides for, among other things:

          |X|  a prohibition on personal loans made or arranged by the issuer to
               its directors and executive  officers (except for loans made by a
               bank subject to Regulation O);

          |X|  independence requirements for audit committee members;

          |X|  independence requirements for company auditors;

          |X|  certification  of  financial  statements  on Forms 10-K and 10-Q,
               reports  by the  chief  executive  officer  and  chief  financial
               officer;

          |X|  the  forfeiture  by the  chief  executive  officer  and the chief
               financial   officer   of   bonuses   or   other   incentive-based
               compensation and profits from the sale of an issuer's  securities
               by such officers in the twelve month period following the initial
               publication  of  any  financial  statements  that  later  require
               restatement due to corporate misconduct;

          |X|  disclosure of off-balance sheet transactions;

          |X|  two-business day filing requirements for insiders filing Form 4s;

          |X|  disclosure of a code of ethic for financial officers and filing a
               Form 8-K for a change in or waiver of such code;

                                       7
<PAGE>


          |X|  the  reporting of securities  violations  "up the ladder" by both
               in-house and outside attorneys;

          |X|  restrictions  on the use of  non-GAAP  financial  measures in the
               press release and SEC filings;

          |X|  the formation of a public accounting oversight board; and

          |X|  various increased criminal penalties for violations of securities
               laws.

     The  Sarbanes-Oxley  Act contains  provisions,  which became effective upon
enactment on July 30, 2002 and  provisions  that became  effective  over varying
periods.  The SEC has been  delegated  the task of enacting  rules to  implement
various  provisions.  In addition,  each of the  national  stock  exchanges  has
adopted new corporate governance rules,  including rules strengthening  director
independence requirements for boards, the adoption of corporate governance codes
and charters for the nominating, corporate governance and audit committees.

Recent Regulatory Developments

     Changes in the federal deposit  insurance  program were recommended  during
2003 by the FDIC and in the federal budget. A deposit insurance reform bill that
would,  among  other  things,  merge  the BIF and the SAIF,  increase  the index
deposit  insurance  coverage,  give  the FDIC  flexibility  in  setting  premium
assessments, and replace a fixed deposit reserve ratio with a reserve range, was
passed  by the  House of  Representatives  in April  2003,  but no action on the
subject  was taken by the Senate  during the  remainder  of the year.  It is not
possible to predict if deposit insurance reform legislation will be enacted,  or
if enacted, what its effect will be on our banking subsidiary.

     Federal banking  regulators  continued their  preparations for the expected
issuance  by the Basel  Committee  on Banking  Supervision  of final  "Basel II"
regulatory capital guidelines,  would mandate changes for large banks in the way
in which their risk-based  capital  requirements are calculated.  The guidelines
are widely  believed  likely to permit  significant  reductions in the levels of
required  capital for such banks.  It is  uncertain  at the present  time if our
banking  subsidiary  or the  Holding  Company  will  be  either  required  to or
permitted to make changes in the regulatory capital structure in accordance with
Basel II guidelines.

     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 Company cannot be determined at this time.

Available Information

     The Company presently does not have a website.

     Copies of the Annual  Report on Form 10-K,  quarterly  reports on Form 10-Q
and current reports on Form 8-K are available at no charge. Those who would like
a copy should contact Guy W. Harris, Chief Financial Officer,  Florida Community
Banks, Inc., 1400 North 15th Street, Immokalee, Florida 34142.

     We  currently  file  periodic  reports  with the  Securities  and  Exchange
Commission  (including Form 10-Ks, Form 10-Qs, Proxy Statements,  etc.). We file
these periodic reports  electronically via EDGAR and they can be reviewed at the
Securities and Exchange Commission's website: www.sec.gov.

ITEM 2.    PROPERTIES

     For the description of the property of the Company,  see "ITEM I - 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 2004.

                                       8

<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  2004, the Company issued 1.2 shares for 1.0 share stock split,
thereby increasing the number of shares outstanding from 3,766,384 to 4,519,321.

     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 2003 and 2004. To the best of management's  knowledge,  the last trade in
December was  executed at a price of $25.75 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
2004 (Split Adjusted):
<S>                                                                                 <C>              <C>
   First Quarter.................................................................   $       25.00    $       20.63
   Second Quarter................................................................           23.33            22.50
   Third Quarter.................................................................           25.00            23.33
   Fourth Quarter................................................................           25.75            24.19

2003 (Split Adjusted):
   First Quarter.................................................................   $       17.88    $       16.67
   Second Quarter................................................................           20.83            18.23
   Third Quarter.................................................................           19.62            17.19
   Fourth Quarter................................................................           20.63            19.97
</TABLE>

     As  of  March  4,  2005,  there  were  4,538,821  shares  of  Common  Stock
outstanding held by approximately 928 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 dividends of $.21 per share
(split-adjusted)  in the  fourth  and second  quarters  of 2004,  $.18 per share
(split-adjusted)  in the fourth quarter of 2003 and a dividend of $.24 per share
(split-adjusted) in the second quarter of 2002.

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, 2004.
<TABLE>
<CAPTION>

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

Equity Compensation Plans
<S>                                             <C>                  <C>                             <C>
   Approved by Shareholders.........            170,328              $       16.34                   54,551
Equity Compensation Plans
   Not Approved by Shareholders.....                 --                         --                       --
                                            -----------              -------------              -----------

   Total............................            170,328              $       16.34                   54,551
                                            ===========              =============              ===========
</TABLE>

                                       9
<PAGE>

ITEM 6.    SELECTED FINANCIAL DATA

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

                                                                          Years Ended December 31,
                                                       ------------------------------------------------------------
                                                           2004         2003        2002        2001        2000
                                                       ----------    ---------   ---------   ----------  ----------
                                                                (Dollars in thousands except per share data)

Earnings Summary:
<S>                                                    <C>           <C>         <C>         <C>         <C>
   Interest income...................................  $   39,584    $  33,520   $  31,266   $   27,903  $   24,991
   Interest expense..................................       9,200       10,081      11,787       12,018      10,276
   Net interest income...............................      30,384       23,439      19,479       15,885      14,715
   Provision for loan losses.........................       1,971        1,700       2,510          720       1,000
   Net interest income after provision for loan losses     28,413       21,739      16,969       15,165      13,715
   Non-interest income...............................       3,774        2,729       2,320        1,699       1,804
   Non-interest expense..............................      12,251       10,980       9,020        8,226       7,553
   Income before income taxes........................      19,936       13,488      10,269        8,638       7,966
   Applicable income taxes...........................       7,694        5,091       3,851        3,292       2,881
   Net income........................................      12,242        8,397       6,418        5,346       5,085

Per Common Share Data:
(Retroactively adjusted for effects of stock dividends
  and stock splits)
   Net income - basic ...............................  $     2.71    $    1.87   $    1.43    $    1.19   $    1.13
   Net income - diluted..............................        2.68         1.85        1.42         1.19        1.13
   Cash dividends declared per common share..........        0.42         0.18        0.24         0.48        0.44

Selected Average Balances:
   Total assets......................................  $  588,771    $ 513,583   $ 446,318   $  324,188  $  263,289
   Total loans.......................................     490,521      425,278     370,062      255,294     206,333
   Securities........................................      43,567       32,618      41,106       40,418      39,676
   Earning assets....................................     552,930      486,643     426,374      307,524     247,238
   Deposits..........................................     483,135      411,084     366,632      271,431     216,348
   Long-term borrowings..............................      50,762       55,660      41,701       17,478      15,607
   Shareholders' equity..............................      48,365       38,867      32,025       28,009      24,724
   Shares outstanding (split adjusted, in thousands).       4,516        4,497       4,497        4,497       4,497

Selected Period-End Balances:
   Total assets......................................  $  660,864    $ 525,508   $ 521,758   $  388,061  $  296,452
   Total loans.......................................     552,509      437,593     416,414      318,666     227,155
   Securities........................................      74,265       38,938      36,524       35,001      42,270
   Earning assets....................................     627,722      491,153     498,509      364,012     273,356
   Deposits..........................................     520,585      423,284     423,935      317,861     249,059
   Long-term borrowings..............................      70,310       50,332      60,349       37,580      15,093
   Shareholders' equity..............................      52,928       42,086      34,464       29,139      25,970
   Shares outstanding (split adjusted, in thousands).       4,519        4,497       4,497        4,497       4,497

Selected Ratios:
   Return on average equity..........................       25.31%       21.60%      20.04%       19.09%      20.57%
   Return on average assets..........................        2.08         1.63        1.44         1.65        1.93
   Net interest margin...............................        5.50         4.82        4.57         5.17        5.95
   Allowance for loan losses to loans................        1.77         1.84        1.52         1.19        1.44
   Net charge-offs to average loans..................        0.05        (0.01)       0.00         0.07        0.00
   Average equity to average assets..................        8.21         7.57        7.18         8.64        9.39

Cash Dividends Declared..............................  $    1,883    $     781   $   1,093   $    2,178  $    1,988
</TABLE>


                                       10
<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 2004 was $12,241,932, a 45.8% increase over 2003 net income.
Net income for 2003 was $8,396,549,  a 30.8% increase over 2002 net income.  Net
income for 2002 was $6,418,306,  a 20.1% increase over 2001 net income.  Diluted
net  income per common  share for 2004 was $2.68  compared  to $1.85 in 2003 and
$1.42 in 2002. Net income for 2001 was $5,346,217, a 5.1% increase from 2000 net
income of $5,085,061.

         The increases in net income from 2000 to 2001 and from 2001 to 2002
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. The increase from 2002 to 2003 and from 2003 to 2004 was primarily
attributable to an increase in the net interest margin as deposit costs
decreased more than loan yields decreased.

                                       11
<PAGE>


Earning Assets

     During 2004,  earning  assets  averaged  $553  million,  an increase of $66
million (13.6%) over 2003. During 2003, earning assets averaged $487 million, an
increase of $60 million (14.1%) over 2002. During 2002,  earning assets averaged
$426 million, an increase of $119 million (38.6%) over 2001.

     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,
                                                                           ----------------------------------------
                                                                               2004          2003          2002
                                                                           -----------   -----------    -----------
                                                                                        (In thousands)

<S>                                                                        <C>           <C>            <C>
Interest-bearing deposits with banks....................................   $       948   $       857    $    12,668
Securities..............................................................        74,265        38,938         36,524
Federal funds sold......................................................            --        13,765         32,902
Loans:
   Real estate..........................................................       492,966       381,709        361,420
   Commercial and other.................................................        59,543        55,884         54,994
                                                                           -----------   -----------    -----------
     Total loans........................................................       552,509       437,593        416,414
                                                                           -----------   -----------    -----------

Interest-earning assets ................................................   $   627,722   $   491,153    $   498,508
                                                                           ===========   ===========    ===========
</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 $65 million  (15.3%) in 2004 compared to 2003. 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 2004 was
funded primarily by issuance of brokered certificate of deposits,  as well as by
the  growth in the bank's  core  deposits  (demand  deposits,  money  market and
savings accounts).

     Average loans  increased $55 million  (14.9%) in 2003 compared to 2002. 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 2003 was
funded primarily by issuance of brokered certificates of deposit.

     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.



             [The remainder of this page intentionally left blank.]


                                       12
<PAGE>


     The following table sets forth the balances in certain  categories of loans
at December 31 for each of the five years ending December 31, 2004.
<TABLE>
<CAPTION>

                                                              Loan Portfolio

                                                                December 31,
                            2004                2003                2002              2001               2000
                     -----------------   -----------------   ----------------   ----------------  -----------------
                               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.  $ 51,378      9.26% $ 45,274    10.31%  $ 42,876   10.27% $ 38,007    11.92% $ 37,628    16.56%
Real estate -
  construction.....   270,016     48.69   172,890    39.37    140,723   33.70    93,049    29.17    73,665    32.42
Real estate -
  mortgage            222,950     40.20   208,819    47.55    220,697   52.84   179,261    56.20   110,409    48.60
Consumer...........     8,086      1.46    10,665     2.43     12,089    2.89     8,481     2.66     5,267     2.32
Other..............     2,181      0.39     1,487     0.34      1,226    0.30       157     0.05       221     0.10
                     --------  --------  --------  -------   --------  ------   -------  -------  --------  -------
                      554,611    100.00%  439,135   100.00%   417,611  100.00%  318,955   100.00%  227,190   100.00%
                                 ======             ======             ======            =======            =======

Unearned income....    (2,102)             (1,542)             (1,197)             (289)               (35)
Allowance for loan
  losses...........    (9,791)             (8,067)             (6,319)           (3,803)            (3,267)
                     --------            --------            --------           -------           --------

Net loans..........  $542,718            $429,526            $410,095          $314,863           $223,888
                     ========            ========            ========          ========           ========
</TABLE>


     The  following  table shows the  maturity  distribution  of  selected  loan
classifications at December 31, 2004, and an analysis of those loans maturing in
over one year:
<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............  $    22,280   $    26,598  $     2,500  $    51,378  $      19,348  $        9,750
Real estate - construction.....      156,238        93,257       20,521      270,016         86,689          27,089
                                 -----------   -----------  -----------  -----------  -------------  --------------

   Total.......................  $   178,518   $   119,855  $    23,021  $   321,394  $     106,037  $       36,839
                                 ===========   ===========  ===========  ===========  =============  ==============
</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 $35 million or 90.7% from 2003 to
2004.  The securities  portfolio  increased by $2.4 million or 6.6% from 2002 to
2003. The balance in the securities  portfolio increased by $1.5 million or 4.4%
from 2001 to 2002.  The increase in the  securities  portfolio from 2003 to 2004
was  largely  as a result of a $30  million  leverage  transaction  that was put
together to better utilize the banks excess capital.  From 2001 through 2003 the
securities were  relatively  flat as funds were allocated  primarily to the loan
portfolio throughout that period.

     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

                                       13
<PAGE>

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  2004,  2003 and 2002.  Held-to-Maturity  securities  are carried at
amortized  cost and  represent  the  largest  portion  of the  total  securities
portfolio. At December 31, 2004, 2003 and 2002 there were no material unrealized
gains (losses) in the Available-for-Sale  portfolio.  At December 31, 2004, 2003
and 2002,  net  unrealized  gains  (losses)  in the  Held-to-Maturity  portfolio
amounted to ($338,296), ($456,579), and $780,513, 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,
                                                                     ----------------------------------------------
                                                                         2004             2003            2002
                                                                     -------------   -------------   --------------
                                                                                     (In thousands)

 Held-to-Maturity:
<S>                                                                  <C>             <C>             <C>
   U.S. government and agencies.................................     $       1,997   $       1,768   $        3,000
   Mortgage-backed securities...................................            67,333          33,985           30,339
                                                                     -------------   -------------   --------------
     Total Held-to-Maturity.....................................            69,330          35,753           33,339
                                                                     -------------   -------------   --------------

 Available-for-Sale:
   Equity securities............................................             4,935           3,185            3,185
                                                                     -------------   -------------   --------------
     Total Available-for-Sale...................................             4,935           3,185            3,185
                                                                     -------------   -------------   --------------

Total Securities................................................     $      74,265   $      38,938   $       36,524
                                                                     =============   =============   ==============
</TABLE>


     The  following  table  indicates  the  respective  maturities  and weighted
average yields of securities (dollars in thousands):
<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, except percentages)
Securities Held-to-Maturity

<S>                                 <C>          <C>    <C>            <C>    <C>              <C>     <C>           <C>
   U.S. Government agencies......   $     --     0.00%  $   2,012      3.52%  $      --        0.00%   $      --     0.00%
   Mortgage-backed securities....         --     0.00         127      4.99       1,412        5.62       65,779     4.16
   Equity securities.............         --     0.00          --      0.00          --        0.00           --     0.00

Securities Available-for-Sale

   U.S. Government agencies......   $     --     0.00%  $      --      0.00%  $      --        0.00%   $      --     0.00%
   Mortgage-backed securities....         --     0.00          --      0.00          --        0.00           --     0.00
   Equity securities.............         --     0.00          --      0.00          --        0.00        4,935     3.68
                                    --------            ---------             ---------                 --------

Total Securities.................   $     --            $   2,139      3.61   $  1,412         5.62    $  70,714     4.11
                                    ========            =========             =========                 ========
</TABLE>

     There were no securities  held by the Company of which the aggregate  value
at December 31, 2004, 2003 and 2002 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.)

                                       14
<PAGE>


Deposits and Borrowed Funds

     Average  deposits  increased $72 million  (17.5%) in 2004 compared to 2003.
Average deposits increased $44 million (12.1%) in 2003 compared to 2002. Average
deposits  increased $95 million  (35.1%) in 2002 compared to 2001. In 2004,  the
largest growth area was again in  non-interest  bearing demand  deposits,  money
market and savings deposits, which increased $45.7 million in total. The largest
area of growth in 2003 was in average money market,  savings,  and  non-interest
bearing demand  deposits,  which increased $29.7 million in total.  From 2001 to
2002, the greatest increase was in time deposits, which increased $64.6 million.

     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%.

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

                                                                                      December 31,
                                                                     ----------------------------------------------
                                                                         2004             2003            2002
                                                                     -------------   -------------   --------------
                                                                                     (In thousands)

Noninterest-bearing deposits:
<S>                                                                  <C>             <C>             <C>
   Individuals partnerships and corporations....................     $     106,569   $      72,498   $       49,970
   U.S. Government and states and political subdivisions........             2,290           3,201            2,311
   Certified and official checks................................             4,358           2,598            2,197
                                                                     -------------   -------------   --------------
     Total non-interest-bearing deposits........................           113,217          78,297           54,478
                                                                     -------------   -------------   --------------

Interest-bearing deposits:
   Interest - bearing demand accounts...........................            38,158          29,885           24,774
   Savings accounts.............................................           120,171         103,060           92,109
   Certificates of deposit, less than $100,000..................            64,417          69,096          111,774
   Certificates of deposit, more than $100,000..................           184,622         142,946          140,800
                                                                     -------------   -------------   --------------
     Total interest-bearing deposits............................           407,368         344,987          369,457
                                                                     -------------   -------------   --------------

     Total deposits.............................................     $     520,585   $     423,284   $      423,935
                                                                     =============   =============   ==============
</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,
                                           -----------------------------------------------------------------------
                                                    2004                    2003                     2002
                                           ----------------------  ----------------------   -----------------------
                                              Amount       Rate       Amount       Rate       Amount        Rate
                                           ----------  ----------  ----------   ---------   ---------    ----------
                                                                   (Dollars in thousands)

<S>                                        <C>             <C>     <C>              <C>     <C>              <C>
Non interest-bearing deposits............  $   94,085      0.00%   $   64,306       0.00%   $  53,376        0.00%
Interest-bearing demand deposits.........      33,216      0.30        27,389       0.38       23,460        0.90
Savings deposits.........................     121,024      1.00       105,121       1.29       86,383        1.98
Time deposits............................     234,810      2.47       214,268       3.02      203,413        3.99
                                           ----------              ----------               ---------

  Total deposits.........................  $  483,135      1.47    $  411,084       1.93    $ 366,632        2.74
                                           ==========              ==========               =========
</TABLE>


                                       15
<PAGE>


     At December  31,  2004,  time  deposits  of $100,000 or greater  aggregated
approximately $184.6 million. The following table indicates,  as of December 31,
2004,  the dollar amount of $100,000 or more time deposits by the time remaining
until maturity (in thousands):
<TABLE>
<CAPTION>

                        Maturities of Large Time Deposits
                                 (In thousands)


<S>                                                                                                  <C>
   Three months or less..........................................................................    $       30,320
   Over three through six months.................................................................             2,185
   Over six through twelve months................................................................            54,964
   Over twelve months............................................................................            97,153
                                                                                                     --------------

     Total.......................................................................................    $      184,622
                                                                                                     ==============
</TABLE>

     At  December  31, 2004 and 2003,  respectively,  borrowed  funds  consisted
primarily of long-term  debt.  The Bank had  $54,000,000  in available  lines to
purchase  federal  funds and the Company had  $5,000,000  in available  lines to
purchase   federal  funds,   on  an  unsecured   basis,   from  other  financial
institutions.  At December 31, 2004,  the Bank had $3,851,000  advanced  against
those  lines and the Company had  $100,000  advanced  against  those  lines.  At
December 31, 2003,  the Bank had  $7,000,000  advanced  under one of those lines
and, 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. At December 31,
2004 the Company also had credit available of approximately $99 million with the
Federal  Home Loan Bank of  Atlanta,  of which  approximately  $39  million  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.  At December 31, 2003 and 2002 the Company had credit  available
of approximately $79 million with the Federal Home Loan Bank of Atlanta.  Of the
credit  available,  $46,000,000 (of which $6,000,000 was a letter of credit used
to secure public funds) and  $50,000,000  had been utilized at December 31, 2003
and 2002,  respectively.  The line is secured by residential and commercial real
estate loans and investment securities at December 31, 2004.

     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, 2004.
<TABLE>
<CAPTION>

                          Maturities of Long-term Debt
                                 (In thousands)

                                                          2005        2006        2007        2008         2009
                                                       ---------   ---------    --------    --------    -----------

<S>                                                    <C>         <C>          <C>         <C>         <C>
   Interest on indebtedness.........................   $   2,471   $   2,204    $  2,204    $    2,204  $     2,194
   Repayment of principal...........................      15,000          --          --            --        5,000
                                                       ---------   ---------    --------    ----------   ----------

                                                       $  17,471   $   2,204    $  2,204    $    2,204  $     7,194
                                                       =========   =========    ========    ==========  ===========
</TABLE>

Capital Resources

     Shareholders'  equity  increased  $10.8  million  to  $52.9  million  as of
December 31, 2004,  increased  $7.6 million to $42.1  million as of December 31,
2003,  and  increased  $5.3  million to $34.5  million as of December  31, 2002.
Shareholders'  equity increased $3.2 million to $29.1 million as of December 31,
2001.  The  increase  in  shareholders'  equity  for  2004,  2003  and  2002 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

                                       16
<PAGE>

all  obligations  of FCBI  Trust on a  subordinated  basis  with  respect to the
preferred securities.  The Company does not consolidate the FCBI Trust preferred
securities and accounts for the debentures issues to FCBI Trust as debt. Subject
to certain  limitations,  the  preferred  securities  qualify as Tier 1 capital,
although the Federal Reserve regulators are re-considering this treatment,  as a
result of recent  accounting  rules  changes,  discussed  more  fully  elsewhere
herein.  The 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.
<TABLE>
<CAPTION>

                           Return on Equity and Assets

                                                                         2004             2003            2002
                                                                     -------------   -------------   --------------

<S>                                                                           <C>   <C>              <C>
Return on average assets...........................................           2.08%           1.63%           1.44%
Return on average common equity....................................          25.31           21.60           20.04
Dividend payout ratio..............................................          15.38            9.30           17.03
Average common shareholders' equity to average
   assets ratio....................................................           8.21            7.57            7.18
</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 Bank repaid the
subordinated debt from the proceeds of the Trust Preferred securities, issued by
the Company and injected into the Bank as Tier I capital.


                                       17
<PAGE>


     The table below illustrates the Company's  regulatory  capital ratios under
federal guidelines at December 31, 2004, 2003 and 2002:

<TABLE>
<CAPTION>

                             Capital Adequacy Ratios

                                                             Statutory             Years ended December 31,
                                                                           ----------------------------------------
                                                              Minimum          2004          2003          2002
                                                            ------------   -----------   -----------    -----------
                                                                                    (Amounts in thousands)

<S>                                                                        <C>           <C>            <C>
  Tier I Capital...........................................                $    62,928   $    52,086    $    44,464
  Tier II Capital..........................................                      7,608         6,136          5,856
                                                                           -----------   -----------    -----------

  Total Qualifying Capital.................................                $    70,536   $    58,222    $    50,320
                                                                           ===========   ===========    ===========

  Risk Adjusted Total Assets (including
  off-balance-sheet exposures).............................                $   606,473   $   488,931    $   468,050
                                                                           ===========   ===========    ===========

  Adjusted quarterly average assets........................                $   620,487   $   508,561    $   485,977
                                                                           ===========   ===========    ===========

  Tier I Capital Ratio.....................................         4.00%        10.38%        10.65%         9.50%

  Total Capital Ratio......................................         8.00         11.63         11.91         10.75

  Leverage Ratio...........................................         4.00         10.14         10.24          9.15

</TABLE>

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

     On  December  31, 2004 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 non-interest-bearing deposit accounts. The Bank had
$50,150,000  and $34,500,000 of federal funds available at December 31, 2004 and
2003, respectively, and the Company had $4,900,000 of federal funds available at
December 31, 2004. The Bank also had available as a source of financing,  a line
of credit with the Federal  Home Loan Bank of Atlanta of which  $39,000,000  and
$32,700,000   was   available   and  unused  at  December  31,  2004  and  2003,
respectively,  subject to the  availability  of assets to pledge to secure  such
borrowings.

                                       18
<PAGE>


Contractual Obligations

     The Company and the Bank have  various  contractual  obligations  that they
must  fund as  part of  their  normal  operations.  The  following  table  shows
aggregate information about their contractual  obligations,  including interest,
and the periods in which  payments  are due.  The  amounts and time  periods are
measured from December 31, 2004.
<TABLE>
<CAPTION>

                                                               Payments due by period (in thousands)
                                            -----------------------------------------------------------------------
                                                             Less than                                           More than
                                                 Total        1 year         1-3 years         3-5 years          5 years
                                            --------------  ------------   --------------   --------------   --------------

<S>                                         <C>             <C>            <C>                 <C>            <C>
  Long-Term Debt........................    $       99,900  $     17,471   $        4,407      $     9,398    $      68,624
  Capital Lease Obligations.............                --            --               --               --               --
  Operating Lease Obligations...........             4,035           181              349              361            3,144
  Time Deposits.........................           258,849       125,886          124,742            8,221               --
                                            --------------  ------------    -------------   --------------    -------------

  Total.................................    $      362,784  $    143,538   $      129,498   $       17,980    $      71,768
                                            ==============  ============    =============   ==============    =============
</TABLE>

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, 2004.
<TABLE>
<CAPTION>

                       Interest Rate Sensitivity Analysis
                                 (In thousands)

                                         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............................  $   160,048  $    24,460  $   140,010  $   197,885  $    31,962   $   554,365
   Securities and federal funds sold        2,353           --          279       34,529       37,104        74,265
   Interest-bearing deposits in banks         948           --           --           --           --           948
                                      -----------  -----------  -----------  -----------  -----------   -----------
                                          163,349       24,460      140,289      232,414       69,066       629,578
                                      -----------  -----------  -----------  -----------  -----------   -----------
Interest-bearing liabilities (2)
   Demand deposits (3)..............       12,719       12,719       12,720           --           --        38,158
   Savings deposits (3).............       40,057       40,057       40,057           --           --       120,171
   Time deposits....................       18,151       23,138       82,011      125,738           --       249,038
   Short-term borrowings............       14,057           --           --           --           --        14,057
   Long-term borrowings.............        5,000           --       10,000        5,000       50,310        70,310
                                      -----------  ------------  -----------  ----------   -----------   ----------
                                           89,984       75,914      144,788      130,738       50,310       491,734
                                      -----------  -----------   ----------   ----------   -----------   ----------

Interest sensitivity gap............  $    73,365  $   (51,454) $    (4,499) $   101,676  $    18,756   $   137,844
                                      ===========  ===========  ===========  ===========  ============  ===========

Cumulative interest sensitivity gap.  $    73,365  $    21,911  $    17,412  $   119,088  $   137,844
                                      ===========  ===========  ===========  ===========  ===========

Ratio of interest-earning assets to
     Interest-bearing liabilities...         1.82         0.32         0.97         1.78         1.37

Cumulative ratio....................         1.82         1.13         1.06         1.27         1.28

Ratio of cumulative gap to total
   interest-earning assets..........         0.12         0.03         0.03         0.19         0.22

<FN>

(1) Excludes non-accrual 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>

                                       19
<PAGE>


     The above table indicates that in a rising interest rate  environment,  the
Company's  earnings may be positively  affected in the short-term,  (0-365 days)
due to earning assets re-pricing faster than  interest-bearing  liabilities.  As
seen in the preceding  table,  for the first 30 days of  re-pricing  opportunity
there is an  excess of  earning  assets  over  interest-bearing  liabilities  of
approximately  $73.4 million.  For the first 365 days,  interest  earning assets
exceed interest-bearing  liabilities by approximately $17.4 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.  It should be noted
that a matched interest-sensitive position by itself does not ensure maximum net
interest income.

     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  $6.9 million (29.6%) to $30.4
million in 2004 compared to 2003. Net interest  income  increased  approximately
$3.9 million  (20.3%) to $23.4  million in 2003  compared to 2002,  and interest
income  increased  $3.6 million  (22.6%) to $19.5 million from 2001 to 2002. The
increase  each year in the net  interest  income is  primarily  due to increased
volume in average loans outstanding during the periods.

     Interest income was $39.6 million in 2004, which represented an increase of
$6.1 million (18.1%) over 2003. Interest income was $33.5 million in 2003, which
represented  an  increase of $2.2  million  (7.2%)  over 2002.  Interest  income
produced by the loan portfolio increased $3.0 million (10.6%) in 2003 from 2002.
A significant  factor in the higher  interest income from loans in 2004 and 2003
was the effect of contractual  limits on the lowest level to which variable rate
loans could decline ("floors"). While floors on interest rates in loan contracts
have been  beneficial  in the current  low-rate  environment,  it is likely that
future  increases in interest  rates,  should that occur,  will not increase the
rates on "floored" loans as rapidly as interest expense will increase. Thus, net
interest income will be negatively  impacted.  At December 31, 2004,  management
estimated that  approximately  $191 million of the $354 million in variable rate
loans were at their floor rate.  Interest  income on securities  increased  $291
thousand  (21.9%)  from  2003 to 2004.  The  increase  in  income  was due to an
increase  in the  securities  purchased,  which  was  partially  offset by lower
yields.  Interest income on securities decreased $859 thousand (39.2%) from 2002
to  2003.  The  decrease  in  securities  income  from  2002 to 2003 was due the
combined effects of lower rates earned and lower average balances invested.

     Interest income was $31.3 million in 2002, which represented an increase of
12.1% over 2001.  Interest income produced by the loan portfolio  increased $3.9
million  (15.7%)  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  $299
thousand  (12.0%) in 2002 compared to 2001. The decrease in securities  interest
from 2001 to 2002  resulted  from a decline in yield caused by replacing  higher
rate U.S. Government Agency securities that were called during the year.

     Interest income other than loans and securities,  decreased by $95 thousand
in 2004,  increased  by $57 thousand in 2003 and  decreased by $258  thousand in
2002. In 2004,  the average amount  invested in fed funds sold  declined,  which
caused the decline in interest  income.  In 2003 the opposite was true and there
was an increase in fed


                                       20
<PAGE>

funds sold, which caused the increase in interest  income.  The decrease in 2002
was primarily due to the decline in rates.

     Total interest  expense  decreased by $881 thousand (8.7%) in 2004 compared
to 2003,  decreased  by $1.7  million  (14.5%)  in 2003  compared  to 2002,  and
decreased  by $231  thousand  (1.9%) in 2002  compared to 2001.  The decrease in
interest  expense  in 2004 was  caused  by lower  deposit  rates in  general;  a
carryover  from 2003's low rates.  The decrease in interest  expense in 2003 was
caused by lower time deposit rates.  The interest  expense decrease from 2001 to
2002 was  primarily  due to a decline in the rates,  which more than  offset the
increase in the volume of the time deposit accounts and FHLB advances.  (See the
"Rate/Volume Analysis" following this section.) Interest expense on time deposit
accounts  decreased  $1.6  million even though the average  volume  increased by
$10.9 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.

     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)  increased in 2004 to 7.16% compared
to 6.89% in 2003, decreased in 2003 to 6.89% compared to 7.33% in 2002. The drop
in Prime rate caused most of the decline  during 2002,  which  carried over into
2003 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 3.30% in 2002 to 2.49% in 2003 and to 2.08% in 2004.
The Bank's net interest margin (net interest income divided by average  interest
earning  assets)  increased in 2004 to 5.50% compared to 4.82% in 2003 and 4.57%
in 2002.  The increase  was caused by the Bank's  ability to utilize rate floors
(discussed  above) when rates were  declining  and lowering its cost of funds by
increasing its  non-interest  demand  deposits.  The Bank also benefited in 2003
when  interest  rates  were  dropping  and  the  longer-term   interest  bearing
liabilities  (primarily  certificates  of deposit) were  re-pricing at the lower
rates  (discussed  more fully in the section titled  "Interest Rate  Sensitivity
Management" elsewhere in this report).

     The net  interest  margin  decreased  60 basis points in 2002 from 5.17% in
2001 to 4.57%,  reflecting  a major  decline in the  average  Prime rate for the
year. The decline in rate was driven by national economic factors and was offset
by rapid loan growth  resulting in higher interest income on loans in 2002. That
loan growth required a significant  increase in brokered  certificate of deposit
utilization  to keep  rates  as low as  possible.  Raising  funds  in the  local
southwest  Florida  market  would  have  cost  more due to  competing  financial
institutions also offering higher than national rates.



              [The remainder of this page intentionally left blank]

                                       21
<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,
                          ----------------------------------------------------------------------------------------------------------
                                          2004                                   2003                             2002
                          ---------------------------------   -----------------------------------  ---------------------------------
                                      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)  $490,521    $37,743        7.69%   $   425,278    $ 31,874        7.49%     370,062 $   28,824      7.79%
   Securities:
     Taxable............     43,567      1,622        3.72         32,618       1,331        4.08       41,024      2,185      5.32
     Tax-exempt.........         --         --        0.00             --          --        0.00           82          5      7.32
                         ----------  ---------                ----------- -----------              ----------- ----------
       Total securities.     43,567      1,622        3.72         32,618       1,331        4.08       41,106      2,191      5.33
   Interest-bearing
    deposits in other
          banks.........      1,758         25        1.42          7,301          80        1.10        3,483         78      2.24
   Federal funds sold...     17,084        197        1.15         21,446         237        1.11       11,723        182      1.55
                         ----------  ---------  ----------    ----------- -----------  ----------  ----------- ---------- ---------
       Total interest-
         earning assets(2)  552,930     39,587        7.16        486,643      33,522        6.89      426,374     31,274      7.34
   Non-interest earning assets:
     Cash and
       due from banks        18,795                                19,688                               10,689
     Accrued interest and
       other assets.....     25,785                                14,373                               13,995
     Allowance for
       loan losses           (8,739)                               (7,121)                              (4,740)
                         ----------                           ------------                         -----------

       Total Assets..... $  588,771                           $    513,583                         $   446,318
                         ==========                           ============                         ===========

Liabilities and
  Shareholders' Equity:
   Interest-bearing liabilities:
     Demand deposits.... $   33,216 $      101        0.30%   $     27,389        104        0.38%      23,460        210     0.90%
     Savings deposits...    121,024      1,213        1.00         105,121      1,353        1.29       86,383      1,714      1.98
     Time deposits......    234,810      5,796        2.47         214,268      6,467        3.02      203,413      8,108      3.99
                            -------  ---------                ------------ ----------              ----------- ----------
       Total deposits...    389,050      7,110        1.83         346,778      7,924        2.29      313,256     10,032      3.20

     Long-term borrowings    50,762      2,034        4.01          55,660      2,131        3.83       41,701      1,699      4.07
     Short-term borrowings    3,083         56        1.82           2,239         26        1.16        2,759         56      2.03
                            -------  ---------                ------------ ----------              ----------- ----------
       Total interest-
        bearing
          liabilities       442,895      9,200        2.08         404,677     10,081        2.49      357,716     11,787      3.30
                           --------  ---------                ------------  -----------            -----------   --------

   Non interest-bearing
     liabilities:
     Demand deposits....    94,085                                  64,306                              53,376
     Accrued interest and
       other liabilities     3,426                                   5,733                               3,201
     Shareholders' equity   48,365                                  38,867                              32,025
                           -------                             -----------                          ----------
       Total Liabilities
         and Shareholders'
         Equity.........  $588,771                             $   513,583                          $  446,318
                          ========                             ===========                          ==========

   Net Interest Income/Net
     Interest Spread....                30,387       5.08%                     23,441        4.40%                  19,487    4.04%
                                                 ========                               =========                           =======

   Net yield on earning assets                       5.50%                                   4.82%                            4.57%
                                                 ========                               =========                           =======

   Taxable Equivalent
     adjustment:
     Securities.........                    --                                      --                                     1
     Loans..............                     3                                       2                                     6
                                      --------                                --------                              --------
       Total taxable
         equivalent
         adjustment.....                     3                                       2                                     7
                                       -------                                --------                              --------

   Net interest income..               $30,384                                $ 23,439                              $ 19,480
                                       =======                                ========                              ========

<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>


     The following tables set forth, for the years ended December 31, 2004, 2003
and 2002,  a summary of the  changes in  interest  income and  interest  expense
resulting from changes in interest rates and in changes in the volume of earning
assets and interest-bearing liabilities,  segregated by category. The change due
to volume is calculated by multiplying  the change in volume by the prior year's
rate. The change due to rate is calculated by multiplying  the change in rate by
the prior  year's  volume.  The change  attributable  to both volume and rate is
calculated by  multiplying  the change in volume by the change in rate.  Figures
are presented on a taxable equivalent basis.
<TABLE>
<CAPTION>

                                       22
<PAGE>
                          Rate/Volume Variance Analysis
                            Taxable Equivalent Basis

                                     Average Volume             Change in Volume             Average Rate
                             -------------------------------  -----------------------   ---------------------------
                               2004       2003       2002      2004-2003    2003-2002    2004       2003      2002
                             ---------  ---------  ---------  -----------  ----------   ------     ------    ------
                                                             (Dollars in thousands)
Earning assets:

Loans, net of unearned
<S>       <C>                <C>        <C>        <C>        <C>          <C>           <C>        <C>      <C>
   income (1)                $ 490,521  $ 425,278  $ 370,062  $    65,243  $  55,216     7.69%      7.49%    7.79%

Securities
   Taxable.................     43,567     32,618    41,024        10,949     (8,406)    3.72       4.08     5.32
   Tax exempt..............         --         --        82            --        (82)    0.00       0.00     6.10
                             ---------  ---------  ---------  -----------  ----------
     Total Securities......     43,567     32,618     41,106       10,949     (8,488)    3.72       4.08     5.33
                             ---------  ---------  ---------  -----------  ----------

Interest-bearing deposits
   with other banks........      1,758      7,301      3,483      ( 5,543)     3,818     1.42       1.10     2.24
Federal funds sold.........     17,084     21,446     11,723       (4,362)     9,723     1.15       1.11     1.55
                             ---------  ---------  ---------  -----------  ----------

     Total Earning Assets..  $ 552,930  $ 486,643  $ 426,374  $    68,287  $  60,269     7.16       6.89     7.33
                             =========  =========  =========  ===========  ==========

Interest-Bearing Liabilities
Deposits:
   Demand deposits.........  $  33,216  $  27,389  $  23,460  $     5,827  $   3,929     0.30       0.38     0.90
   Savings.................    121,024    105,121     86,383       15,903     18,738     1.00       1.29     1.98
   Time certificates.......    234,810    214,268    203,413       20,542     10,855     2.47       3.02     3.99
                             ---------  ---------  ---------  -----------  ----------
     Total Deposits........    389,050    346,778    313,256       42,272     33,522     1.83       2.29     3.20

Long-term borrowings.......     50,762     55,660     41,401       (4,898)    14,269     4.01       3.83     4.10
Other borrowings...........      3,083      2,239      2,759          844       (520)    1.82       1.16     2.03
                             ---------  ---------  ---------  -----------  ----------

     Total Interest-Bearing
       Liabilities.........  $ 442,895  $ 404,677  $ 357,416  $    38,218  $  47,261     2.08       2.49     3.30
                             =========  =========  =========  ===========  =========

Net interest income/net interest spread                                                  5.08       4.40     4.04

Net yield on earning assets                                                              5.50       4.82     4.57

Net cost of funds..........                                                              1.66       2.07     2.76

                                                                                             Variance Attributed to
                                   Interest
                               Income/Expense               Variance                 2004                     2003
                          ------------------------   --------------------  -----------------------  -----------------------
                           2004     2003     2002    2004-2003  2003-2002    Volume    Rate   Mix     Volume    Rate   Mix
                          ------   ------  -------   ---------- ---------  ---------  ------ -----  ---------  ------ ------
                                                                 (Dollars in thousands)
Earning assets:
Loans, net of
  unearned income....... $37,743  $31,873  $28,824   $   5,870  $   3,055  $   4,888  $  869 $ 113  $   4,300 $(1,083) $(162)
Securities:
   Taxable..............   1,622    1,332    2,184         290       (853)       476    (205)   19       (448)   (509)   105
   Tax exempt...........      --       --        5          --         (5)        --       --   --         (5)     (5)     5
                          ------   ------  -------   ----------  ---------  --------   ----- -----  ---------  ------  -----
     Total securities...   1,622    1,332    2,189         290       (858)       476     205    19       (453)   (514)   110
                          ------   ------  -------   ----------  ---------  --------   ----- -----  ---------  ------  -----
Interest-bearing deposits
   with other banks.....      25       80       78         (55)         3        (61)     24   (18)        86     (40)   (44)
Federal funds sold......     197      237      182         (40)        55        (48)      9    (1)       151     (52)   (44)
                          ------   ------  -------   ---------- ---------   --------   ----- -----  ---------  ------- ------
     Total earning assets 39,587   33,522   31,276        6,065     2,249      5,255     697   113      4,084  (1,689)  (140)
                          ------   ------  -------   ---------- ---------   --------   ----- -----  ---------  ------- ------

Interest-bearing liabilities:
Deposits:
   Demand...............     101      104      210          (3)      (108)        22     (21)   (4)        35    (121)   (20)
   Savings..............   1,213    1,353    1,714        (140)      (381)       205    (302)  (43)       372    (602)  (131)
   Time certificates....   5,796    6,467    8,108        (671)    (1,641)       620  (1,182) (109)       433  (1,969)  (105)
     Total deposits.....   7,110    7,924   10,032        (814)    (2,108)       847  (1,505) (156)       840  (2,692)  (256)

Long-term borrowings....   2,034    2,131    1,699         (97)       432       (188)     98    (7)       585    (114)   (39)
Short-term borrowings...      56       26       56          30        (30)        10      15     5        (11)    (24)     5
                          ------   ------  -------   ---------  ---------    -------  ------  -----  --------  ------- ------
     Total interest-
       bearing liabilities 9,200   10,081   11,787       (881)     (1,706)       669  (1,392) (158)     1,414  (2,830)   (290)
                          ------   ------  -------   ---------  ---------    -------  ------  -----   -------   ------ ------
Net interest income/net
   interest spread......  $30,387  $23,441 $19,480   $   6,946  $   3,955    $ 4,586  $2,089  $ 271   $ 2,670  $ 1,141 $  150
                          =======  ======= =======   =========  =========    =======  ======  =====   =======  ======= ======
</TABLE>
                                       23

<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. In addition to the lending officers, there is an independent loan
review  officer  responsible  for  reviewing  the  credit  ratings  on loans and
administering the loans.

     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.  Although recent historical loan losses have been minimal,  there
was a significant  increase in non-performing loans at December 31, 2003 causing
management to increase the allowance during 2004.

     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 $9,791,269 on December 31, 2004, and $8,066,817 on
December  31, 2003,  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]

                                       24
<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, 2004.
<TABLE>
<CAPTION>

                         Summary of Loan Loss Experience

                                                        2004         2003         2002         2001         2000
                                                     ---------    ---------     --------     --------     ---------
                                                                         (Dollars in thousands)

<S>                                                  <C>          <C>           <C>          <C>          <C>
Allowance for loan losses at beginning of year.....  $   8,067    $   6,319     $  3,803     $  3,267     $   2,261
Loans charged off:
  Commercial, financial and agricultural...........        209          139          161          162            50
  Real estate - mortgage...........................         85           10           --          185             8
  Consumer.........................................        161           74           46           43            52
                                                     ---------    ---------     --------     --------     ---------
    Total loans charged off........................        455          223          207          390           110
                                                     ---------    ---------     --------     --------     ---------

Recoveries on loans previously charged off:
  Commercial, financial and agricultural...........        143          245          193           47            33
  Real estate - mortgage...........................         30            2            3          131            72
  Consumer.........................................         35           23           17           28            11
                                                     ---------    ---------     --------     --------     ---------
    Total recoveries...............................        208          271          213          206           116
                                                     ---------    ---------     --------     --------     ---------

Net loans charged off (recovered)..................        247          (48)          (6)         184            (6)

Provision for loan losses..........................      1,971        1,700        2,510          720         1,000
                                                     ---------    ---------     --------     --------     ---------

Allowance for loan losses at end of period.........  $   9,791    $   8,067     $  6,319     $  3,803     $   3,267
                                                     =========    =========     ========     ========     =========

Loans, net of unearned income, at end of period....  $ 552,509    $ 437,593     $416,414     $318,666     $ 227,155

Average loans, net of unearned income,
  outstanding for the period.......................    490,521      425,278      370,062      255,294       206,333

Ratio of net charge-offs to net average loans......       0.05%       (0.01)%      (0.00)%       0.07%        (0.00)%

</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.  From 2000  through  2002,  management  allocated  the
allowance  for loan losses to specific  loan  categories  based on an average of
historical  losses and the volume of each loan  category.  In 2003, as presented
below,  management  began to allocate the allowance for loan losses based on the
level of non-performing loans in each category.  The change in method was due to
the minimal historical loan losses on which to base the allocation.

     Management  allocated  the  allowance  for loan  losses  to  specific  loan
categories as follows:
<TABLE>
<CAPTION>
                                                   Allocation of Allowance for Loan Losses

                                                             December 31,
                      --------------------------------------------------------------------------------------------------------------
                             2004                2003                      2002                   2001                    2000
                      ------------------   ----------------       ---------------------  -------------------   --------------------
                                  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                toTotal
                        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  $     271       9.26%  $    22    10.31%      $ 2,494      10.27%   $1,566      11.92%   $    544       16.56%
  Real estate - mortgage
  and construction..      9,512      88.89     8,039    86.92         3,357      86.54     2,021      85.37       2,647       81.02
  Consumer..........          8       1.85         6     2.77           468       3.19       216       2.71          76        2.42
                      ---------  ---------   -------  -------     ---------    -------   -------   --------     -------     -------

                      $   9,791     100.00%  $ 8,067   100.00%        6,319     100.00%   $3,803     100.00%   $  3,267      100.00%
                      =========  =========   =======  =======   ===========    =======   =======   ========    ========     =======
</TABLE>

                                       25
<PAGE>


Nonperforming Assets

     Nonperforming assets include nonperforming loans and foreclosed real estate
held for sale.  Nonperforming  loans include loans  classified as non-accrual or
renegotiated. The Bank's policy is to place a loan on non-accrual 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 non-accrual status,  interest
previously  accrued but not  collected is reversed and charged  against  current
earnings.  Recognition  of any interest while on non-accrual is accounted for on
the cash basis when actually received.

     The Bank had  nonperforming  assets at December 31, 2004, 2003, 2002, 2001,
and 2000 of approximately $10,012,000,  $22,269,000, $7,698,000, $2,367,000, and
$1,548,000, respectively.

     The following table presents information concerning outstanding balances of
nonperforming assets at December 31, 2004, 2003, 2002, 2001, and 2000.
<TABLE>
<CAPTION>

                              Nonperforming Assets

                                                                           December 31,
                                               --------------------------------------------------------------------
                                                  2004          2003           2002          2001          2000
                                               -----------   -----------   -----------   -----------    -----------
                                                               (Amounts in thousands, except ratios)

<S>                                            <C>           <C>           <C>           <C>            <C>
Nonaccruing loans...........................   $       247   $     9,727   $     5,036   $     1,333    $     1,352
Accruing loans 90 days or more past due.....            --         6,420         2,662           984              2
Restructured loans..........................         7,562            --            --            --             --
                                               -----------   -----------  ------------   -----------    -----------
     Total nonperforming loans..............         7,809        16,147         7,698         2,317          1,354
Nonaccruing securities......................            --            --            --            --             --
Other real estate...........................         2,203         6,122            --            50            194
                                               -----------   -----------   -----------   -----------    -----------

     Total..................................   $    10,012   $    22,269   $     7,698   $     2,367    $     1,548
                                               ===========   ===========   ===========   ===========    ===========

Ratios:
   Loan loss allowance to total
     nonperforming assets...................         0.978         0.362         0.821          1.607         2.110
                                               ===========   ===========   ===========   ============   ===========
   Total nonperforming loans to total loans
     (net of unearned interest).............         0.014         0.036         0.018          0.007         0.007
                                               ===========   ===========   ===========   ============   ===========

     Total nonperforming assets to total assets      0.015         0.042         0.015          0.006         0.005
                                               ===========   ===========   ============  ============   ===========
</TABLE>


     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 $1.05  million  (38.3%)  for the year  ended  December  31,  2004,
compared  to 2003 due  primarily  to the gain on the sale of other  real  estate
owned of $520 thousand and a gain from the sale of the old  drive-thru  building
in LaBelle of $415 thousand. Total noninterest income increased by $408 thousand
(17.6%)  for the year ended  December  31,  2003  compared to 2002 due to higher
secondary market fees and service charges on deposit accounts. Total noninterest
income  increased by $621 thousand  (36.6%) for the year ended December 31, 2002
compared to 2001.  The  increase  was due to higher  service  charges on deposit
accounts  (increased  $507  thousand)  and  gains on sale of  available-for-sale
securities (increased $36 thousand).

                                       26
<PAGE>


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

                                                                                        2003/2004       2002/2003
                                                Years Ended December 31,                Percent          Percent
                                      --------------------------------------------
                                          2004           2003            2002            Change          Change
                                      ------------   ------------    -------------    -------------  --------------
                                                 (Dollars in thousands)

<S>                                   <C>            <C>             <C>                       <C>             <C>
Service charges on deposits........   $      1,350   $      1,228    $       1,268             9.9%            (3.2)%
Service charges secondary market...            534            555              304            (3.7)            82.6
Exchange fees......................            554            416              390            33.2              6.7
Securities gains...................             --             --               36             0.0           (100.0)
Income/gains on other real estate..            589             69               13           753.6            430.8
Gain on sale of fixed assets.......            415             --               --           100.0              0.0
Safe deposit box rental............             66             66               67             0.0             (1.5)
Other..............................            266            394              242           (32.5)            62.8
                                      ------------   ------------    -------------

                                      $      3,774   $      2,728    $       2,320            38.3             17.6
                                      ============   ============    =============
</TABLE>

Noninterest Expenses

     From 2003 to 2004,  noninterest  expense  increased  $1.3 million  (11.6%).
Salaries and employee benefits in 2004 increased $721 thousand (10.3%) from 2003
to a total of $7.7 million.  The increase was due to the normal  increases  from
year to year for salaries, benefits and insurance costs.

     From 2002 to 2003,  noninterest  expense  increased  $2.0 million  (21.7%).
Salaries and employee  benefits in 2003 increased $1.4 million (26.2%) from 2002
to a total of $7.0  million.  The  increase  in was due to added staff for a new
branch and increased secondary market loan brokerage operations.

     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.

     Occupancy and equipment  expense  increased $198 thousand (12.9%) from 2003
to 2004,  decreased  $133  thousand  (7.9%)  from 2002 to 2003,  increased  $304
thousand  (22.3%) from 2001 to 2002.  During 2004 occupancy  expenses  increased
primarily due to the expense of additional  equipment added during 2003 and 2004
(increased depreciation and maintenance),  increased building repairs due to the
hurricanes in 2004 and higher  property taxes in general.  During 2003 occupancy
expenses  decreased  primarily  due to lower  maintenance  contract  costs.  The
occupancy and equipment  expense  increases in 2002 and 2001were a result of the
additional  property and equipment added as a result of new branch locations and
the associated depreciation expense.

     The  significant  increase in other  expenses  was due to $349  thousand in
other real estate  write-offs  and expanses in 2003 compared to no such costs in
2002. Other real estate write-offs and expenses were $479 thousand in 2004.



              [The remainder of this page intentionally left blank]


                                       27
<PAGE>


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

                                                                                        2003/2004       2002/2003
                                                Years Ended December 31,                Percent          Percent
                                      --------------------------------------------
                                          2004           2003            2002            Change          Change
                                      ------------   ------------    -------------   -------------   --------------
                                                 (Dollars in thousands)

<S>                                   <C>            <C>             <C>                       <C>             <C>
Salaries and employee benefits.....   $      7,729   $      7,008    $       5,552             10.3%           26.2%
Occupancy and equipment expense....          1,730          1,532            1,689             12.9            (9.3)
Professional fees..................            249            263              210             (5.3)           25.2
Advertising........................            226            218              135              3.7            61.5
Telephone..........................            188            175              136              7.4            28.7
Software maintenance...............            138            164               70            (15.9)          134.3
Regulatory fees and assessments....            176            154              139             14.3            10.8
Supplies...........................            171            152              182             12.5           (16.5)
ATM expense........................            147            137              124              7.3            10.5
Postage............................            123            136              137             (9.5)            0.0
Taxes and licenses.................             85             95              103            (10.5)           (7.8)
Director and committee fees........             67             67               67              0.0             0.0
Other..............................          1,222            879              476             39.0            84.7
                                      ------------   ------------    -------------

   Total...........................   $     12,251   $     10,980    $       9,020             11.6            21.7
                                      ============   ============    =============
</TABLE>

Income Taxes

     Income tax expense  increased $2.6 million  (51.1%) to $7.7 million for the
year ended December 31, 2004, increased $1.2 million (32.2%) to $5.1 million for
the year ended  December 31, 2003 and increased  $559  thousand  (17.0%) to $3.9
million  for the year ended  December  31,  2002.  The  effective  tax rate as a
percentage of pretax income was 38.6% in 2004, 37.7% in 2003, 37.5% in 2002. The
statutory  federal rate was 34 percent during 2004,  2003 and 2002.  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.

     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 re-priced 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.

                                       28
<PAGE>


     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 re-price 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
re-pricing  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
re-price 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,  re-pricing  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 re-price 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, 2004
         Projected change in:
<S>                                                                                           <C>                <C>
           Interest income..........................................................          (6.35)%            5.45%
           Interest expense.........................................................          (9.45)             10.63
           Net interest income......................................................          (5.42)              3.89
</TABLE>

Other Accounting Issues

     In January 2003, the Auditing  Standards Board issued Statement on Auditing
Standards  ("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
adoption  of SAS  No.  101 did  not  have a  material  impact  on the  Company's
consolidated financial statements.

     In April 2003, the FASB issued SFAS No. 149,  Amendment of Statement 133 on
Derivative Instruments and Hedging Activities.  The provisions of this statement
are effective for contracts  entered into or modified  after June 20, 2003,  and
hedging relationships designated after June 30, 2003, and generally require that
contracts with comparable characteristics be accounted for similarly. Except for
the  provisions  related  to  FASB  Statement  133,  Accounting  for  Derivative
Instruments and Hedging  Activities,  all provisions of this statement should be
applied prospectively.  The provisions of the statement related to Statement 133
Implementation  Issues that have been  effective for fiscal  quarters that begin
prior to June 15, 2003,  should  continue to be applied in accordance with their
respective effective dates. The adoption of the provisions of this statement did
not have a material  effect on the  Company's  operating  results  or  financial
position.

     In May 2003, the FASB issued SFAS No. 150, Accounting for Certain Financial
Instruments with  Characteristics of both Liabilities and Equity. This statement
establishes  standards  for  how  an  issuer  classifies  and  measures  certain
financial  instruments with  characteristics  of both liabilities and equity. It
requires  liability  treatment  for  certain  financial  instruments  which  had
previously  been  recognized as equity.  The  provisions  of this  statement are
effective for financial instruments entered into or modified after May 31, 2003,
and  otherwise  are  effective  at the  beginning  of the first  interim  period
beginning  after  June  15,  2003.  It is to be  implemented  by  reporting  the
cumulative effect of a change in accounting principle for financial  instruments
created  before May 15, 2003,

                                       29
<PAGE>

     and still  existing at the  beginning  of the interim  period of  adoption.
Restatement is not  permitted.  The adoption of the provisions of this statement
did not have a material effect on the Company's  operating  results or financial
position.

     In  December  2003,  the FASB  revised  previously  issued  SFAS  No.  132,
Employers'  Disclosures about Pensions and Other Postretirement.  This statement
revises  employers'  disclosures  about pension  plans and other  postretirement
benefit plans.  It does not change the measurement or recognition of those plans
required by FASB Statements No. 87, Employers' Accounting for Pensions,  No. 88,
Employers'  Accounting  for  Settlements  and  Curtailments  of Defined  Benefit
Pension Plans and for Termination  Benefits,  and No 106, Employers'  Accounting
for  Postretirement  Benefits  Other Than Pensions.  This statement  retains the
disclosure   requirements  contained  in  FASB  Statement  No.  132,  Employers'
Disclosures about Pensions and Other Postretirement Benefits, which it replaces.
It requires additional  disclosures to those in the original Statement 132 about
the assets,  obligations,  cash flows,  and net periodic benefit cost of defined
benefit  pension  plans and other  defined  benefit  postretirement  plans.  The
required  information  should be provided  separately  for pension plans and for
other  postretirement  benefit  plans.  The  provisions  of this  statement  are
effective for financial  statements  with fiscal years ending after December 15,
2003. The  interim-period  disclosures  required by this statement are effective
for interim  periods  beginning  after  December 15,  2003.  The adoption of the
provisions  of this  revised  statement  did not have a  material  effect on the
Company's operating results or financial position.

     In December 2003, the FASB revised previously issued FIN 46,  Consolidation
of Variable  Interest  Entities,  ("FIN 46R") 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 reporting and
disclosure  requirements of this  Interpretation are effective for all financial
statements of public  companies  for the first period ending after  December 15,
2003 and for all other types of  entities  for  periods  ending  after March 15,
2004. The adoption of this  interpretation did not have a material impact on the
Company's consolidated financial statements.

     In December  2003,  the  Accounting  Standards  Executive  Committee of the
American  Institute of Certified Public Accountants issued Statement of Position
(SOP)  03-3,  Accounting  for  Certain  Loans or Debt  Securities  Acquired in a
Transfer,  which  addresses the accounting for differences  between  contractual
cash flows and expected  cash flows for loans  acquired in a transfer when those
differences  are  attributable  at least in part to a decline in credit quality.
The scope of SOP 03-3 includes loans where there is evidence of deterioration in
credit quality since origination,  and includes loans acquired individually,  in
pools or as part of a  business  combination.  Under  SOP 03-3,  the  difference
between  expected cash flows and the purchase price is accreted as an adjustment
to yield over the life. The Company does not expect the application of SOP 03-03
to have a material impact on our consolidated  financial  position or results of
operations.

     In March 2004, the Emerging Issues Task Force (EITF) reached a consensus on
the  remaining  portions  of EITF  03-01,  The  Meaning of  Other-Than-Temporary
Impairment and It's Application to Certain Investments,  effective for the first
fiscal year or interim period beginning after June 15, 2004. EITF 03-01 provides
guidance for  determining  when an investment is  considered  impaired,  whether
impairment is  other-than-temporary,  and measurement of an impairment  loss. An
investment  is considered  impaired if the fair value of the  investment is less
than its cost.  Generally,  an  impairment  is  considered  other-than-temporary
unless:  (1) the investor has the ability and intent to hold an investment for a
reasonable  period of time sufficient for an anticipated  recovery of fair value
up to (or beyond) the cost of the investment,  and (2) evidence  indicating that
the cost of the  investment is  recoverable  within a reasonable  period of time
outweighs  evidence  to  the  contrary.   If  impairment  is  determined  to  be
other-than-temporary,  then an impairment loss should be recognized equal to the
difference between the investment's cost and its fair value.  Certain disclosure
requirements of EITF 03-01 were adopted in 2003 and the Company began presenting
the new disclosure requirements in its consolidated financial statements for the
year ended December 31, 2003. The recognition  and  measurement  provisions were
initially effective for other-than-temporary impairment evaluations in reporting
periods beginning after June 15, 2004.  However in September 2004, the effective
date of these  provisions  was delayed until the  finalization  of an FASB Staff
Position to provide additional  implementation  guidance. Due to the recognition
and  measurement  provisions  being  suspended and the final rule  delayed,  the
Company is not able to determine  whether the  adoption of these new  provisions
will have a material impact on its consolidated financial position or results of
operations.

                                       30
<PAGE>


     In  March  2004,  the  Securities  and  Exchange  Commission  issued  Staff
Accounting Bulletin (SAB) No. 105, Application of Accounting  Principles to Loan
Commitments.  SAB 105 requires that the fair value  measurement of mortgage loan
commitments,  which are  derivatives,  exclude  any  expected  future cash flows
related to the customer  relationship or servicing  rights.  The guidance in SAB
105 must be applied to mortgage  loan  commitments  entered into after March 31,
2004.  The impact on the Company is not material  given the declines in mortgage
banking volume,  but could be in the future.  The impact is primarily the timing
of when gains should be recognized in the financial statements.

     In  December  2004,  the FASB  issued  Statement  of  Financial  Accounting
Standards No. 123 (revised 2004) entitled  Share-Based Payment ("SFAS No. 123R")
that will require compensation costs related to share-based payment transactions
to be recognized in the financial  statements.  This  Statement  eliminates  the
alternative  to use Opinion 25's intrinsic  value method of accounting  that was
provided in Statement 123 as originally issued.  Under Opinion 25, issuing stock
options to employees  generally resulted in recognition of no compensation cost.
This  statement  requires  entities to recognize  the cost of employee  services
received in exchange for awards of equity  instruments  based on the  grant-date
fair  value of those  awards  (with  limited  exceptions).  Recognition  of that
compensation  cost helps users of financial  statements to better understand the
economic transactions affecting an entity and to make better resource allocation
decisions.  The Company is currently  evaluating the provisions of SFAS No. 123R
and will adopt it on July 1, 2005.



                                       31

<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.


FLORIDA COMMUNITY BANKS, INC. AND SUBSIDIARY
CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>

                                                                                                              Page(s)
                                                                                                              ------
<S>                                                                                                              <C>
Report of Independent Registered Public Accounting Firm....................................................      33
Consolidated Statements of Financial Condition as of December 31, 2004 and 2003............................      35
Consolidated Statements of Income for the Years Ended December 31, 2004, 2003 and 2002.....................      36
Consolidated Statements of Shareholders' Equity for the Years Ended December 31, 2004, 2003 and 2002.......      37
Consolidated Statements of Cash Flows for the Years Ended December 31, 2004, 2003 and 2002.................      38
Notes to Consolidated Financial Statements.................................................................      40
Quarterly Results (Unaudited)..............................................................................      73
</TABLE>
                                       32

<PAGE>










Letterhead omitted



             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders
Florida Community Banks, Inc. and subsidiary:

     We have  audited the  accompanying  consolidated  statements  of  financial
condition of Florida  Community Banks, Inc. and subsidiary (the "Company") as of
December 31, 2004 and 2003, and the related  consolidated  statements of income,
shareholders'  equity,  and cash  flows for each of the years in the  three-year
period ended  December 31, 2004. We also have audited  management's  assessment,
included  in the  accompanying  "Management  Report  on  Internal  Control  Over
Financial  Reporting," that the Company  maintained  effective  internal control
over financial reporting as of December 31, 2004, based on criteria  established
in Internal Control - Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission  ("COSO").  The Company's management is
responsible  for  these  consolidated  financial  statements,   for  maintaining
effective internal control over financial  reporting,  and for its assessment of
the   effectiveness   of  internal   control  over  financial   reporting.   Our
responsibility  is  to  express  an  opinion  on  these  consolidated  financial
statements,  an  opinion  on  management's  assessment,  and an  opinion  on the
effectiveness of the Company's  internal control over financial  reporting based
on our audits.

     We  conducted  our audits in  accordance  with the  standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audits to obtain reasonable  assurance about whether the
financial  statements are free of material  misstatement  and whether  effective
internal  control  over  financial  reporting  was  maintained  in all  material
respects. Our audit of the consolidated financial statements included examining,
on a  test  basis,  evidence  supporting  the  amounts  and  disclosures  in the
financial  statements,  assessing the accounting principles used and significant
estimates made by management,  and  evaluating the overall  financial  statement
presentation.  Our audit of internal control over financial  reporting  included
obtaining  an  understanding  of  internal  control  over  financial  reporting,
evaluating  management's  assessment,  testing  and  evaluating  the  design and
operating   effectiveness  of  internal  control,   and  performing  such  other
procedures as we considered necessary in the circumstances.  We believe that our
audits provide a reasonable basis for our opinions.

     A company's internal control over financial reporting is a process designed
to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial  statements for external purposes in accordance
with generally accepted accounting principles. A company's internal control over
financial  reporting  includes those policies and procedures that (1) pertain to
the  maintenance  of records that, in reasonable  detail,  accurately and fairly
reflect the  transactions  and  dispositions  of the assets of the company;  (2)
provide  reasonable  assurance  that  transactions  are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted
accounting  principles,  and that receipts and  expenditures  of the company are
being made only in accordance with authorizations of management and directors of
the company; and (3) provide reasonable assurance regarding prevention or timely
detection of  unauthorized  acquisition,  use, or  disposition  of the company's
assets that could have a material effect on the financial statements.

                                       33
<PAGE>

     Because  of its  inherent  limitations,  internal  control  over  financial
reporting  may not prevent or detect  misstatements.  Also,  projections  of any
evaluation  of  effectiveness  to future  periods  are  subject to the risk that
controls may become  inadequate  because of changes in  conditions,  or that the
degree of compliance with the policies or procedures may deteriorate.

     In our opinion,  the financial statements referred to above present fairly,
in all  material  respects,  the  consolidated  financial  position  of  Florida
Community  Banks,  Inc. and subsidiary as of December 31, 2004 and 2003, and the
consolidated  results of their  operations  and their cash flows for each of the
years in the  three-year  period  ended  December  31, 2004 in  conformity  with
accounting principles generally accepted in the United States of America.  Also,
in our opinion,  management's  assessment that Florida Community Banks, Inc. and
subsidiary  maintained effective internal control over financial reporting as of
December  31, 2004 is fairly  stated,  in all  material  respects,  based on the
criteria  established in Internal Control - Integrated Framework issued by COSO.
Furthermore,  in our opinion,  Florida  Community  Banks,  Inc.  and  subsidiary
maintained, in all material respects,  effective internal control over financial
reporting  as of December 31, 2004,  based on criteria  established  in Internal
Control - Integrated Framework issued by COSO.

                                      /s/ Schauer Taylor Cox Vise & Morgan, P.C.
Birmingham, Alabama
March 15, 2005


                                       34
<PAGE>



                          FLORIDA COMMUNITY BANKS, INC.
                                 AND SUBSIDIARY

                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

                           DECEMBER 31, 2004 AND 2003

<TABLE>
<CAPTION>

                                                                                  2004                  2003
                                                                           ------------------    ------------------
Assets
<S>                                                                        <C>                   <C>
   Cash and due from banks.............................................    $       18,665,823    $       15,897,716
   Interest-bearing demand deposits with banks.........................               948,255               857,133
   Federal funds sold..................................................                    --            13,765,000
                                                                           -------------------    ------------------
       Cash and Cash Equivalents.......................................            19,614,078            30,519,849

   Securities available-for-sale.......................................             4,935,077             3,184,977
   Securities held-to-maturity, fair value of $68,991,864 in
     2004 and $35,296,326 in 2003......................................            69,330,160            35,752,905

   Loans, net of unearned income.......................................           552,509,155           437,592,827
   Allowance for loan losses...........................................            (9,791,269)           (8,066,817)
                                                                           ------------------    ------------------
       Net Loans.......................................................           542,717,886           429,526,010

   Premises and equipment, net.........................................            13,345,071            12,767,507
   Accrued interest....................................................             3,289,678             2,709,102
   Foreclosed real estate..............................................             2,203,435             6,121,833
   Deferred taxes, net.................................................             4,313,485             3,162,883
   Other assets........................................................             1,115,434             1,762,640
                                                                           ------------------    ------------------

       Total Assets....................................................    $      660,864,304    $      525,507,706
                                                                           ==================    ==================

Liabilities and Shareholders' Equity

Liabilities

Deposits
     Noninterest-bearing...............................................    $      113,217,461    $       78,296,949
     Interest-bearing..................................................           407,367,970           344,987,453
                                                                           ------------------    ------------------
       Total Deposits..................................................           520,585,431           423,284,402

   Short-term borrowings...............................................            14,057,000             7,500,000
   Accrued interest....................................................             1,407,563               858,783
   Deferred compensation...............................................               313,622               372,870
   Notes payable.......................................................                    --                21,698
   FHLB advances.......................................................            60,000,000            40,000,000
   Subordinated debentures.............................................            10,310,000            10,310,000
   Other liabilities...................................................             1,262,989             1,074,184
                                                                           ------------------    ------------------
       Total Liabilities...............................................           607,936,605           483,421,937

Shareholders' Equity
   Common stock - par value $0.01 per share, 10,000,000 shares authorized,
     4,519,321 shares issued and outstanding at December 31, 2004 and 4,497,169
     issued and outstanding at December 31, 2003.......................                45,193                44,971
   Paid-in capital.....................................................            17,155,534            16,672,566
   Retained earnings...................................................            35,726,972            25,368,232
                                                                           ------------------    ------------------
       Total Shareholders' Equity......................................            52,927,699            42,085,769
                                                                           ------------------    ------------------

       Total Liabilities and Shareholders' Equity......................    $      660,864,304    $      525,507,706
                                                                           ==================    ==================
               See notes to consolidated financial statements
                                       35
</TABLE>

<PAGE>


                          FLORIDA COMMUNITY BANKS, INC.
                                 AND SUBSIDIARY

                        CONSOLIDATED STATEMENTS OF INCOME

                  Years Ended December 31, 2004, 2003 and 2002
<TABLE>
<CAPTION>


                                                            2004                  2003                  2002
                                                     ------------------    ------------------    ------------------
Interest Income
<S>                                                  <C>                   <C>                   <C>
   Interest and fees on loans.....................   $       37,739,970    $       31,871,196    $       28,817,765
   Interest and dividends on securities:
     Taxable securities...........................            1,622,283             1,331,446             2,184,654
     Tax-exempt securities........................                   --                    --                 3,855
   Interest on federal funds sold.................              197,144               237,388               181,906
   Interest on deposits in banks..................               24,378                79,717                78,130
                                                     ------------------    ------------------    ------------------
       Total Interest Income......................           39,583,775            33,519,747            31,266,310
                                                     ------------------    ------------------    ------------------

Interest Expense
   Interest on deposits...........................            7,109,471             7,923,935            10,032,397
   Interest on FHLB advances......................            1,503,145             1,604,325             1,300,372
   Interest on short-term borrowings..............               56,072                25,547                55,987
   Interest on notes payable......................                   --                 2,254                91,759
   Interest on subordinated debentures............              530,931               524,680               306,715
                                                     ------------------    ------------------    ------------------
       Total Interest Expense.....................            9,199,619            10,080,741            11,787,230
                                                     ------------------    ------------------    ------------------

Net interest income...............................           30,384,156            23,439,006            19,479,080
Provision for loan losses.........................            1,970,768             1,700,000             2,510,000
                                                     ------------------    ------------------    ------------------

Net Interest Income After Provision
   For Loan Losses................................           28,413,388            21,739,006            16,969,080

Noninterest Income
   Customer service fees..........................            1,884,149             1,920,209             1,571,937
   Income and gain on sale from other real
     estate owned.................................              588,982               154,373                13,489
   Investment security gains......................                   --                    --                36,083
   Other operating income.........................            1,300,643               653,588               698,607
                                                     ------------------    ------------------    ------------------
       Total Noninterest Income...................            3,773,774             2,728,170             2,320,116
                                                     ------------------    ------------------    ------------------

Noninterest Expenses
   Salaries and employee benefits.................            7,728,811             7,007,575             5,551,509
   Occupancy and equipment expense................            1,730,033             1,532,288             1,689,334
   Expenses, write-down, and loss on sale
     from other real estate owned.................              479,159               349,052                    --
   Other operating expenses.......................            2,313,330             2,091,035             1,779,225
                                                     ------------------    ------------------    ------------------
       Total Noninterest Expenses.................           12,251,333            10,979,950             9,020,068
                                                     ------------------    ------------------    ------------------

Income before income taxes........................           19,935,829            13,487,226            10,269,128
Income tax expense................................            7,693,897             5,090,677             3,850,822
                                                     ------------------    ------------------    ------------------

Net Income........................................   $       12,241,932    $        8,396,549    $        6,418,306
                                                     ==================    ==================    ==================

Earnings Per Common Share
   Basic..........................................   $            2.71     $            1.87     $            1.43
   Diluted........................................                2.68                  1.85                  1.42

Cash Dividends Declared Per
   Common Share...................................                0.42                  0.18                  0.24

Weighted Average Shares Outstanding
   Basic..........................................            4,516,295             4,497,169             4,497,169
   Diluted........................................            4,564,882             4,531,813             4,521,826

               See notes to consolidated financial statements
</TABLE>

                                       36
<PAGE>


                          FLORIDA COMMUNITY BANKS, INC.
                                 AND SUBSIDIARY

                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

                  Years Ended December 31, 2004, 2003 and 2002

<TABLE>
<CAPTION>

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

Balance at
<S>         <C> <C>                    <C>                 <C>                <C>                 <C>
   December 31, 2001................   $         44,971    $     16,666,317   $      12,427,367   $      29,138,655

Net income - 2002...................                 --                  --           6,418,306           6,418,306
                                                                                                    ----------------
Comprehensive income................                 --                  --                  --           6,418,306
                                                                                                    ----------------
Cash dividends - Common
   $0.24 per share..................                 --                  --          (1,093,161)         (1,093,161)
                                       -----------------    -----------------   -----------------   ----------------

Balance at
   December 31, 2002................             44,971          16,666,317          17,752,512          34,463,800

Net income - 2003...................                 --                  --           8,396,549           8,396,549
                                                                                                    ----------------
Comprehensive income................                 --                  --                  --           8,396,549
                                                                                                    ----------------
Issuance of stock options...........                 --               6,249                  --               6,249
Cash dividends - Common
   $0.18 per share..................                  --                   --            (780,829)           (780,829)
                                       -----------------    -----------------   -----------------   ----------------

Balance at
   December 31, 2003................             44,971          16,672,566          25,368,232          42,085,769

Net income - 2004...................                 --                  --          12,241,932          12,241,932
                                                                                                    ----------------
Comprehensive income................                 --                  --                  --          12,241,932
                                                                                                    ----------------
Sale of common stock................                222             464,980                  --             465,202
Issuance of stock options...........                 --              17,988                  --              17,988
Cash dividends - Common
   $0.42 per share..................                 --                  --          (1,883,192)         (1,883,192)
                                       -----------------    -----------------   -----------------   ----------------

Balance at
   December 31, 2004................    $         45,193   $     17,155,534     $    35,726,972    $     52,927,699
                                        ================   ================     =================  =================

</TABLE>

               See notes to consolidated financial statements
                                       37
<PAGE>



                          FLORIDA COMMUNITY BANKS, INC.
                                 AND SUBSIDIARY

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                  Years Ended December 31, 2004, 2003 and 2002
<TABLE>
<CAPTION>


                                                            2004                  2003                  2002
                                                     ------------------    ------------------    ------------------

Operating Activities
<S>                                                  <C>                   <C>                   <C>
   Net income.....................................   $       12,241,932    $        8,396,549    $        6,418,306
   Adjustments to reconcile net income to
     net cash provided by operating activities:
       Provision for loan losses..................            1,970,768             1,700,000             2,510,000
       Depreciation, amortization,
         and accretion, net.......................              943,682               917,628               752,624
       Deferred tax benefit.......................           (1,150,602)           (1,202,370)             (849,154)
       Realized investment securities gains.......                   --                    --               (36,083)
       Gain on disposition of other
         real estate..............................             (579,244)                   --               (13,489)
       Gain on disposition of
         premises and equipment...................             (414,508)                   --                    --
       (Increase) decrease in accrued
         interest receivable......................             (580,576)              195,047              (215,985)
       Increase (decrease) in accrued
         interest payable.........................              548,780            (1,008,041)              178,011
       Other, net.................................              829,720                40,660               (45,523)
                                                     ------------------    ------------------    ------------------
       Net Cash Provided By
         Operating Activities.....................           13,809,952             9,039,473             8,698,707
                                                     ------------------    ------------------    ------------------

Investing Activities
   Purchases of securities available-for-sale.....           (1,750,100)             (500,000)           (1,251,919)
   Purchases of investment securities
     held-to-maturity.............................          (40,246,598)          (29,251,273)          (21,968,075)
   Proceeds from sales, maturities, calls
     and pay-downs of investment
     securities held-to-maturity..................            6,437,208            26,647,486            21,624,634
   Proceeds from sale of securities
     available-for-sale...........................                   --               500,000                63,500
   Proceeds from maturity of interest-
     bearing deposits with other banks............                   --                    --             2,500,000
   Net increase in loans to customers.............         (111,333,522)          (27,502,464)          (97,754,367)
   Purchase of premises and equipment.............           (1,593,109)           (3,345,158)           (2,919,987)
   Proceeds from disposition of
     premises and equipment.......................              718,505                21,842                62,119
   Proceeds from disposition of
     foreclosed real estate.......................              715,564                    --                75,000
                                                     ------------------    ------------------    ------------------
       Net Cash Used In
         Investing Activities.....................         (147,052,052)          (33,429,567)          (99,569,095)
                                                     ------------------    ------------------    ------------------
</TABLE>


                          (Continued on following page)

               See notes to consolidated financial statements
                                       38
<PAGE>



                          FLORIDA COMMUNITY BANKS, INC.
                                 AND SUBSIDIARY

                CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED

                  Years Ended December 31, 2004, 2003 and 2002

<TABLE>
<CAPTION>

                                                            2004                  2003                  2002
                                                     ------------------    ------------------    ------------------

Financing Activities
   Net increase in demand deposits, NOW
<S>                                                  <C>                   <C>                   <C>
     accounts, and savings accounts...............   $       60,294,535    $       39,881,549    $       16,278,817
   Net increase (decrease) in certificates
     of deposit...................................           37,006,494           (40,531,669)           89,794,365
   Net increase (decrease) in short-term
     borrowings...................................            6,457,000             7,500,000            (1,086,000)
   Issuance of long-term debt.....................           25,000,000                    --            25,055,696
   Repayments of long-term debt...................           (5,021,698)          (10,000,000)           (7,593,792)
   Sale of common stock...........................              465,202                    --                    --
   Repayment of subordinated capital note.........                   --                    --            (5,000,000)
   Issuance of subordinated debentures............                   --                    --            10,310,000
   Compensation associated with the
     issuance of options, net of tax..............               17,988                 6,227                    --
   Cash dividends.................................           (1,883,192)             (780,829)           (1,093,161)
                                                     ------------------    ------------------    ------------------
       Net Cash Provided By (Used In)
          Financing Activities....................          122,336,329            (3,924,722)          126,665,925
                                                     ------------------    ------------------    ------------------

Net (Decrease) Increase in Cash and
   Cash Equivalents...............................          (10,905,771)          (28,314,816)           35,795,537

Cash and Cash Equivalents
   at Beginning of Year...........................           30,519,849            58,834,665            23,039,128
                                                     ------------------    ------------------    ------------------

Cash and Cash Equivalents
   at End of Year.................................   $       19,614,078    $       30,519,849    $       58,834,665
                                                     ==================    ==================    ==================
</TABLE>



               See notes to consolidated financial statements

                                       39
<PAGE>


                          FLORIDA COMMUNITY BANKS, INC.
                                 AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        December 31, 2004, 2003 and 2002


                                       73
Note 1 - Summary of Significant Accounting Policies

     Florida  Community  Banks,  Inc.  ("FCBI") (a Florida  corporation) and its
wholly  owned  subsidiary,  Florida  Community  Bank  (the  "Bank")  (a  Florida
corporation)  collectively referred to herein as the "Company," is headquartered
in Immokalee, Florida. The Bank's main office is in Immokalee, Florida with nine
additional  branch offices in Southwest  Florida and a tenth office scheduled to
open in January  2006.  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  and to general  practice
within the banking  industry.  The following  summarizes the most significant of
these policies.

Business Combination

     Florida  Community Banks,  Inc. 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., and the Bank. 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


                                       40
<PAGE>

                          FLORIDA COMMUNITY BANKS, INC.
                                 AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        December 31, 2004, 2003 and 2002

Note 1 - Summary of Significant Accounting Policies - Continued

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 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>
                          FLORIDA COMMUNITY BANKS, INC.
                                 AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        December 31, 2004, 2003 and 2002


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>
                          FLORIDA COMMUNITY BANKS, INC.
                                 AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        December 31, 2004, 2003 and 2002


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, 2004, 2003 and 2002.

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,  2004,  2003 and 2002
amounted to approximately $226,000, $218,000 and $135,000, respectively.


                                       43
<PAGE>
                          FLORIDA COMMUNITY BANKS, INC.
                                 AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        December 31, 2004, 2003 and 2002


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

     At December 31, 2004, the Company had a stock-based  employee  compensation
plan,  which is more fully  described  in Note 12.  Prior to 2003,  the  Company
accounted for this plan under the recognition and measurement  provisions of APB
No.  25,   Accounting   for  Stock   Issued  to   Employees,   and  the  related
Interpretations.  Accordingly,  no stock-based compensation cost was included in
net earnings for the year ended December 31, 2002, as all options  granted under
this plan had an  exercise  price  equal to the market  value of the  underlying
common  stock on the date of grant.  Effective  January  1,  2003,  the  Company
adopted the fair value  recognition  provisions of SFAS No. 123,  Accounting for
Stock-Based   Compensation,   as  provided  by  SFAS  No.  148,  Accounting  for
Stock-Based Compensation - Transition and Disclosure.  SFAS No. 148 allows for a
prospective   method  of  adoption  of  SFAS  123,  whereas,   the  Company  can
prospectively account for the current expense of options granted during 2003 and
thereafter.  Results of prior years have not been restated.  The following table
illustrates  the effects on net income and  earnings per share if the fair value
based method had been applied to all outstanding awards in each period.
<TABLE>
<CAPTION>

                                                                        Years Ended December 31,
                                                     --------------------------------------------------------------
                                                            2004                  2003                  2002
                                                     ------------------    ------------------    ------------------

<S>                                                  <C>                   <C>                   <C>
   Net Income, as reported........................   $       12,241,932    $        8,396,549    $        6,418,306

   Add: Stock-based compensation
     expense included in net income, net
     of related taxes.............................               19,597                 6,227                    --

   Deduct: Total stock-based employee
     compensation expense determined under
     the fair value method for all awards,
     net of related taxes.........................              (33,638)              (21,053)              (41,145)
                                                     ------------------    ------------------    ------------------

   Pro Forma Net Income...........................   $       12,227,891    $        8,381,723    $        6,377,161
                                                     ==================    ==================    ==================

                                       44
<PAGE>
                          FLORIDA COMMUNITY BANKS, INC.
                                 AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        December 31, 2004, 2003 and 2002


Note 1 - Summary of Significant Accounting Policies - Continued

                                                                        Years Ended December 31,
                                                     --------------------------------------------------------------
                                                            2004                  2003                  2002
                                                     ------------------    ------------------    ------------------
   Basic Earnings per Common Share
     As reported..................................   $             2.71    $             1.87    $             1.43
     Pro Forma....................................                 2.71                  1.86                  1.42

   Diluted Earnings per Common Share
     As reported..................................                 2.68                  1.85                  1.42
     Pro Forma....................................                 2.68                  1.85                  1.41

   Weighted Average Fair Value of Options
     Granted during the year......................                 2.58                  1.09                    --

   Assumptions:
     Average Risk Free Interest Rate..............                 3.97%                 3.31%                   --
     Average Expected Volatility..................                11.10                  6.60                    --
     Expected Dividend Yield......................                 3.75                  3.17                    --
     Expected Life................................            8.0 years             6.6 years                    --
</TABLE>

     The  effects  of  applying  SFAS No.  123 as  amended  by SFAS No.  148 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.

Retirement Plan

     During 2003 the Company had a defined  contribution Pension Plan, which was
terminated as of December 31, 2003. The Company also has a  Profit-Sharing  Plan
covering all  eligible  employees  that was amended as of December 31, 2003,  to
allow employee elective  contributions under Internal Revenue Code section 401K.
The Company also adopted an Employee Stock  Ownership Plan ("ESOP"),  which also
allows elective employee contributions.  Employer contributions to the plans are
included in salaries and employee benefits expense.  Pension Plan  contributions
were  required  at  10  percent  of  total   eligible   employee   compensation.
Profit-Sharing  and ESOP 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 funded.


                                       45
<PAGE>
                          FLORIDA COMMUNITY BANKS, INC.
                                 AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        December 31, 2004, 2003 and 2002


Note 1 - Summary of Significant Accounting Policies - Continued

     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
(approximately  $98,900,000  at December 31,  2004),  of which  $38,900,000  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.

     The Bank  also  has  available  as a source  of  short-term  financing  the
purchase of federal funds from other  commercial  banks and commercial  lines of
credit.  At  December  31,  2004,  the total  amount  available  for  short-term
financing was $50,150,000.

     The Company also has available a $5,000,000 line of credit with the Bankers
Bank.  This line is  secured  by 51% of the  bank's  common  stock and is due on
demand by the  lender.  At December  31,  2004,  $4,900,000  was  available  for
additional funding.

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 2003 and 2002 have been reclassified to conform with the
2004 presentation.

Recently Issued Accounting Standards

     In January 2003, the Auditing  Standards Board issued Statement on Auditing
Standards  ("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
adoption  of SAS  No.  101 did  not  have a  material  impact  on the  Company's
consolidated financial statements.

     In April 2003, the FASB issued SFAS No. 149,  Amendment of Statement 133 on
Derivative Instruments and Hedging Activities.  The provisions of this statement
are effective for contracts  entered into or modified  after June 20, 2003,  and
hedging relationships designated after June 30, 2003, and generally require that
contracts with comparable characteristics be accounted for similarly. Except for
the  provisions  related  to  FASB  Statement  133,  Accounting  for  Derivative
Instruments and Hedging  Activities,  all provisions of this statement should be
applied prospectively.  The provisions of the statement related to Statement 133
Implementation  Issues that have been  effective for fiscal  quarters that begin
prior to June 15, 2003,  should  continue to be applied in accordance with their
respective effective dates. The adoption of the provisions of this statement did
not have a material  effect on the  Company's  operating  results  or  financial
position.


                                       46
<PAGE>
                          FLORIDA COMMUNITY BANKS, INC.
                                 AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        December 31, 2004, 2003 and 2002


Note 1 - Summary of Significant Accounting Policies - Continued

     In May 2003, the FASB issued SFAS No. 150, Accounting for Certain Financial
Instruments with  Characteristics of both Liabilities and Equity. This statement
establishes  standards  for  how  an  issuer  classifies  and  measures  certain
financial  instruments with  characteristics  of both liabilities and equity. It
requires  liability  treatment  for  certain  financial  instruments  which  had
previously  been  recognized as equity.  The  provisions  of this  statement are
effective for financial instruments entered into or modified after May 31, 2003,
and  otherwise  are  effective  at the  beginning  of the first  interim  period
beginning  after  June  15,  2003.  It is to be  implemented  by  reporting  the
cumulative effect of a change in accounting principle for financial  instruments
created  before May 15, 2003, and still existing at the beginning of the interim
period of adoption. Restatement is not permitted. The adoption of the provisions
of this  statement  did not have a material  effect on the  Company's  operating
results or financial position.

     In  December  2003,  the FASB  revised  previously  issued  SFAS  No.  132,
Employers'  Disclosures about Pensions and Other Postretirement.  This statement
revises  employers'  disclosures  about pension  plans and other  postretirement
benefit plans.  It does not change the measurement or recognition of those plans
required by FASB Statements No. 87, Employers' Accounting for Pensions,  No. 88,
Employers'  Accounting  for  Settlements  and  Curtailments  of Defined  Benefit
Pension Plans and for Termination  Benefits,  and No 106, Employers'  Accounting
for  Postretirement  Benefits  Other Than Pensions.  This statement  retains the
disclosure   requirements  contained  in  FASB  Statement  No.  132,  Employers'
Disclosures about Pensions and Other Postretirement Benefits, which it replaces.
It requires additional  disclosures to those in the original Statement 132 about
the assets,  obligations,  cash flows,  and net periodic benefit cost of defined
benefit  pension  plans and other  defined  benefit  postretirement  plans.  The
required  information  should be provided  separately  for pension plans and for
other  postretirement  benefit  plans.  The  provisions  of this  statement  are
effective for financial  statements  with fiscal years ending after December 15,
2003. The  interim-period  disclosures  required by this statement are effective
for interim  periods  beginning  after  December 15,  2003.  The adoption of the
provisions  of this  revised  statement  did not have a  material  effect on the
Company's operating results or financial position.

     In December 2003, the FASB revised previously issued FIN 46,  Consolidation
of Variable  Interest  Entities,  ("FIN 46R") 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 reporting and
disclosure  requirements of this  Interpretation are effective for all financial
statements of public  companies  for the first period ending after  December 15,
2003 and for all other types of  entities  for  periods  ending  after March 15,
2004. The adoption of this  interpretation did not have a material impact on the
Company's consolidated financial statements.

     In December  2003,  the  Accounting  Standards  Executive  Committee of the
American  Institute of Certified Public Accountants issued Statement of Position
(SOP)  03-3,  Accounting  for  Certain  Loans or Debt  Securities  Acquired in a
Transfer,  which  addresses the accounting for differences  between  contractual
cash flows and expected  cash flows for loans  acquired in a transfer when those
differences  are  attributable  at least in part to a decline in credit quality.
The scope of SOP 03-3 includes loans where there is evidence


                                       47
<PAGE>
                          FLORIDA COMMUNITY BANKS, INC.
                                 AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        December 31, 2004, 2003 and 2002


Note 1 - Summary of Significant Accounting Policies - Continued

     of  deterioration in credit quality since  origination,  and includes loans
acquired individually, in pools or as part of a business combination.  Under SOP
03-3,  the  difference  between  expected  cash flows and the purchase  price is
accreted as an  adjustment  to yield over the life.  The Company does not expect
the  application  of SOP 03-03 to have a  material  impact  on our  consolidated
financial position or results of operations.

     In March 2004, the Emerging Issues Task Force (EITF) reached a consensus on
the  remaining  portions  of EITF  03-01,  The  Meaning of  Other-Than-Temporary
Impairment and It's Application to Certain Investments,  effective for the first
fiscal year or interim period beginning after June 15, 2004. EITF 03-01 provides
guidance for  determining  when an investment is  considered  impaired,  whether
impairment is  other-than-temporary,  and measurement of an impairment  loss. An
investment  is considered  impaired if the fair value of the  investment is less
than its cost.  Generally,  an  impairment  is  considered  other-than-temporary
unless:  (1) the investor has the ability and intent to hold an investment for a
reasonable  period of time sufficient for an anticipated  recovery of fair value
up to (or beyond) the cost of the investment,  and (2) evidence  indicating that
the cost of the  investment is  recoverable  within a reasonable  period of time
outweighs  evidence  to  the  contrary.   If  impairment  is  determined  to  be
other-than-temporary,  then an impairment loss should be recognized equal to the
difference between the investment's cost and its fair value.  Certain disclosure
requirements of EITF 03-01 were adopted in 2003 and the Company began presenting
the new disclosure requirements in its consolidated financial statements for the
year ended December 31, 2003. The recognition  and  measurement  provisions were
initially effective for other-than-temporary impairment evaluations in reporting
periods beginning after June 15, 2004.  However in September 2004, the effective
date of these  provisions  was delayed  until the  finalization  of a FASB Staff
Position to provide additional  implementation  guidance. Due to the recognition
and  measurement  provisions  being  suspended and the final rule  delayed,  the
Company is not able to determine  whether the  adoption of these new  provisions
will have a material impact on its consolidated financial position or results of
operations.

     In  March  2004,  the  Securities  and  Exchange  Commission  issued  Staff
Accounting Bulletin (SAB) No. 105, Application of Accounting  Principles to Loan
Commitments.  SAB 105 requires that the fair value  measurement of mortgage loan
commitments,  which are  derivatives,  exclude  any  expected  future cash flows
related to the customer  relationship or servicing  rights.  The guidance in SAB
105 must be applied to mortgage  loan  commitments  entered into after March 31,
2004.  The impact on the Company is not material  given the declines in mortgage
banking volume,  but could be in the future.  The impact is primarily the timing
of when gains should be recognized in the financial statements.

     In  December  2004,  the FASB  issued  Statement  of  Financial  Accounting
Standards No. 123 (revised 2004) entitled  Share-Based Payment ("SFAS No. 123R")
that will require compensation costs related to share-based payment transactions
to be recognized in the financial  statements.  This  Statement  eliminates  the
alternative  to use Opinion 25's intrinsic  value method of accounting  that was
provided in Statement 123 as originally issued.  Under Opinion 25, issuing stock
options to employees  generally resulted in recognition of no compensation cost.
This statement requires entities to recognize the cost of employee


                                       48
<PAGE>
                          FLORIDA COMMUNITY BANKS, INC.
                                 AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        December 31, 2004, 2003 and 2002


Note 1 - Summary of Significant Accounting Policies - Continued

     services received in exchange for awards of equity instruments based on the
grant-date fair value of those awards (with limited exceptions).  Recognition of
that compensation cost helps users of financial  statements to better understand
the  economic  transactions  affecting  an entity  and to make  better  resource
allocation decisions. The Company is currently evaluating the provisions of SFAS
No. 123R and will adopt it on July 1, 2005.

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 2004, 2003 and 2002. The following reconciles the weighted
average number of shares outstanding:
<TABLE>
<CAPTION>

                                                            2004                  2003                  2002
                                                     ------------------    ------------------    ------------------

<S>     <C>    <C>    <C>    <C>    <C>    <C>
Weighted average of common
   shares outstanding.............................            4,516,295             4,497,169             4,497,169
Effect of dilutive options........................               48,587                34,644                24,657
                                                     ------------------    ------------------    ------------------

Weighted average of common shares
   outstanding effected for dilution..............            4,564,882             4,531,813             4,521,826
                                                     ==================    ==================    ==================
</TABLE>

     In December  2002,  December  2003,  and December  2004, 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

     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 has no such
items to be reclassified at December 31, 2004, 2003 and 2002.

                                       49
<PAGE>
                          FLORIDA COMMUNITY BANKS, INC.
                                 AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        December 31, 2004, 2003 and 2002


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, 2004.
<TABLE>
<CAPTION>

                                                                        Years Ended December 31,
                                                     --------------------------------------------------------------
                                                            2004                  2003                  2002
                                                     ------------------    ------------------    ------------------

<S>                                                  <C>                   <C>                   <C>
   Cash paid during the year for interest.........   $        8,650,839    $       11,088,782    $       11,609,219

   Cash paid during the year for income
     taxes, net...................................            8,159,604             6,550,908             4,772,000

   Non-cash Disclosures:

   Loans transferred to foreclosed
     real estate during the year..................               62,346             6,371,833               133,743

   Proceeds from sale of foreclosed real
     estate financed through loans................            3,891,469                    --               121,998

</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, 2004 and 2003,  were
approximately $8,879,000 and $5,954,000, 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, 2004
and 2003 were as follows:
<TABLE>
<CAPTION>

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

December 31, 2004:
<S>                                            <C>              <C>               <C>              <C>
   Equity securities........................   $     4,935,077  $            --   $            --  $      4,935,077
                                               ===============  ===============   ===============  ================

December 31, 2003:
   Equity securities........................   $     3,184,977  $            --   $            --  $      3,184,977
                                               ===============  ===============   ===============  ================


                                       50
<PAGE>


Note 3 - Securities - Continued

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

Securities Held-to-Maturity

December 31, 2004:
   U. S. Government and
     agency securities......................   $     1,996,586  $             --  $         9,186  $      1,987,400
   Mortgage-backed securities...............        67,333,574            96,466          425,576        67,004,464
                                               ---------------  ----------------  ---------------  ----------------

                                               $    69,330,160  $         96,466  $       434,762  $     68,991,864
                                               ===============  ================  ===============  ================
December 31, 2003:
   U. S. Government and
     agency securities......................   $     1,768,406  $         52,182  $           438  $      1,820,150
   Mortgage-backed securities...............        33,984,499           140,176          648,499        33,476,176
                                               ---------------  ----------------  ---------------  ----------------

                                               $    35,752,905  $        192,358  $       648,937  $     35,296,326
                                               ===============  ================  ===============  ================
</TABLE>

     The following table shows our investments' gross unrealized losses and fair
value,  aggregated  by  investment  category and length of time that  individual
securities have been in a continuous  unrealized loss position,  at December 31,
2004.
<TABLE>
<CAPTION>

                                   Less Than 12 Months           12 Months or More                 Total
                               ---------------------------  --------------------------  ---------------------------
                                    Fair       Unrealized       Fair        Unrealized       Fair       Unrealized
   Description of Securities        Value        Losses         Value         Losses         Value        Losses
-----------------------------  -------------   -----------  -------------  -----------  -------------   -----------

U.S. Government and
<S>                            <C>             <C>          <C>             <C>           <C>             <C>
   agency securities.........  $   1,987,400   $     9,186  $          --  $        --  $   1,987,400   $     9,186
Mortgage-backed
   securities................     21,480,599       274,039      8,030,582      151,537     29,511,181       425,576
                               -------------   -----------  -------------  -----------  -------------   -----------

     Total Temporarily
     Impaired Securities.....  $  23,467,999   $   283,225  $   8,030,582  $   151,537  $  31,498,581   $   434,762
                               =============   ===========  =============  ===========  =============   ===========
</TABLE>

     Management  evaluates  securities  for  other-than-temporary  impairment at
least on a quarterly basis, and more frequently when economic or market concerns
warrant such  evaluation.  Consideration  is given to (1) the length of time and
the extent to which the fair value has been less than  cost,  (2) the  financial
condition and near-term  prospects of the issuer, and (3) the intent and ability
of the  Company  to retain  its  investment  in the  issuer for a period of time
sufficient to allow for any anticipated recovery in fair value.

     At December 31, 2004, the Company had 3 individual  securities that were in
an  unrealized  loss  position or impaired  for the  timeframe 12 months or more
indicated above. All of these investment positions'


                                       51
<PAGE>
                          FLORIDA COMMUNITY BANKS, INC.
                                 AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        December 31, 2004, 2003 and 2002


Note 3 - Securities - Continued

     impairments  are  deemed  not  to  be   other-than-temporary   impairments.
Substantially  all of these positions are backed by 1-4 family mortgages and the
related  securities  have  experienced  volatility  in their market  prices as a
result of the fluctuating home mortgage  interest rate environment  during 2004.
The  Company  does not expect any  other-than-temporary  impairments  to develop
related to the investment positions.

     The contractual  maturities of securities  held-to-maturity  and securities
available-for-sale  at December 31, 2004, are shown below. Actual maturities may
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.....................   $            --  $             --  $            --  $            --
Due after one year through five years.......         2,138,853         2,115,519               --               --
Due after five years through ten years......         1,411,776         1,475,457               --               --
Due after ten years.........................        65,779,531        65,400,888               --               --
Equity securities...........................                --                --        4,935,077         4,935,077
                                               ----------------  -----------------  ---------------  ----------------

                                               $    69,330,160  $     68,991,864  $     4,935,077  $      4,935,077
                                               ===============  ================  ===============  ================
</TABLE>

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

                                                            2004                  2003                  2002
                                                     ------------------    ------------------    ------------------

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

     Dispositions  through calls,  maturities  and pay-downs  resulted in no net
gain or loss during 2004, 2003 and 2002.

     Equity  securities  include  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
these stocks  amounted to  $4,125,077  and  $2,374,977  at December 31, 2004 and
2003,  respectively.  Additional equity securities at December 31, 2004 and 2003
consist of a $310,000 investment in the FCBI Capital Trust I (see Note 9) and at
December  31,  2004  and  2003  a  $500,000  investment  in  Capital  Securities
Investors, LLC, which amounts to a 20% ownership in this entity.

     Investment  securities  pledged to secure  public  funds on  deposit,  FHLB
advances  and for other  purposes as required by law  amounted to  approximately
$52,912,000 and $23,218,000 at December 31, 2004 and 2003, respectively.

                                       52
<PAGE>
                          FLORIDA COMMUNITY BANKS, INC.
                                 AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        December 31, 2004, 2003 and 2002


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, 2004 and 2003 are as
follows:
<TABLE>
<CAPTION>

                                                                                  2004                  2003
                                                                           ------------------    ------------------

<S>                                                                        <C>                   <C>
Commercial, financial and agricultural.................................    $       51,378,263    $       45,274,352
Real estate - construction.............................................           270,016,418           172,890,197
Real estate - mortgage.................................................           222,949,441           208,818,843
Consumer...............................................................             8,086,107            10,665,451
Other..................................................................             2,180,902             1,486,507
                                                                           ------------------    ------------------
   Total...............................................................           554,611,131           439,135,350
Unearned income........................................................            (2,101,976)           (1,542,523)
Allowance for loan losses..............................................            (9,791,269)           (8,066,817)
                                                                           ------------------    ------------------

Net loans..............................................................    $      542,717,886    $      429,526,010
                                                                           ==================    ==================
</TABLE>

     Deposit  overdrafts  reclassified  as loans and  included in the other loan
category  amounted  to $382,482  and  $225,303,  at December  31, 2004 and 2003,
respectively.

     Loans the Company considered to be impaired  (including  non-accrual loans)
at December 31, 2004 and 2003 totaled approximately  $7,809,000 and $16,147,000,
respectively.  The  impaired  loans at  December  31,  2004 and 2003 had related
allowances of $1,171,334  and  $2,422,050,  respectively.  The average  recorded
investment in impaired  loans for the years ended December 31, 2004 and 2003 was
approximately  $9,600,345  and  $3,748,755,  respectively.  For the years  ended
December 31, 2004 and 2003,  the difference  between gross interest  income that
would  have been  recorded  in such  period if the  non-accruing  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 $31,692 and $450,861, 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 $2,101,976 and $1,542,523,  as of December 31, 2004
and 2003.

     Commercial and residential real estate loans pledged to secure Federal Home
Loan Bank advances and letters of credit amounted to  approximately  $38,457,000
and  $33,225,000  at  December  31,  2004 and 2003,  respectively  (see Note 9).
Commercial  and  residential  real  estate  loans  pledged to secure the Federal
Reserve Bank line of credit amounted to approximately $14,685,000 and $5,856,910
at December 31, 2004 and 2003, respectively.


                                       53
<PAGE>
                          FLORIDA COMMUNITY BANKS, INC.
                                 AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        December 31, 2004, 2003 and 2002


Note 5 - Allowance for Loan Losses

Changes in the allowance for loan losses for the years ended December 31, 2004,
2003 and 2002 were as follows:
<TABLE>
<CAPTION>

                                                            2004                  2003                  2002
                                                     ------------------    ------------------    ------------------

<S>                                                  <C>                   <C>                   <C>
   Balance at beginning of year...................   $        8,066,817    $        6,319,298    $        3,802,836

   Charge-offs....................................             (455,318)             (222,911)             (206,836)
   Recoveries.....................................              209,002               270,430               213,298
                                                     ------------------    ------------------    ------------------
     Net (charge-offs) recoveries.................             (246,316)               47,519                 6,462
   Provision for loan losses......................            1,970,768             1,700,000             2,510,000
                                                     ------------------    ------------------    ------------------

   Balance at end of year.........................   $        9,791,269    $        8,066,817    $        6,319,298
                                                     ==================    ==================    ==================
</TABLE>


Note 6 - Premises and Equipment

Premises and equipment as of December 31, 2004 and 2003 is as follows:
<TABLE>
<CAPTION>

                                                                                  2004                  2003
                                                                           ------------------    ------------------

<S>                                                                            <C>                   <C>
   Land................................................................        $    3,128,438        $    3,186,438
   Land improvements...................................................               409,011               388,324
   Building............................................................             9,974,358            10,107,444
   Furniture and equipment.............................................             3,889,338             3,790,919
   Automobiles.........................................................               352,194               319,228
   Construction in progress............................................             1,147,838                56,777
                                                                           ------------------    ------------------
                                                                                   18,901,177            17,849,130
   Less allowance for depreciation.....................................            (5,556,106)           (5,081,623)
                                                                           ------------------    ------------------

                                                                           $       13,345,071    $       12,767,507
                                                                           ==================    ==================
</TABLE>

     The provision for depreciation  charged to occupancy and equipment  expense
for the years ended December 31, 2004, 2003 and 2002 was $711,547,  $669,386 and
$687,466, respectively.



              [The remainder of this page intentionally left blank]


                                       54
<PAGE>
                          FLORIDA COMMUNITY BANKS, INC.
                                 AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        December 31, 2004, 2003 and 2002


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, 2004 and 2003 were
$184,621,865 and $142,946,476, respectively. Time deposits of less than $100,000
totaled $64,417,437 and $69,095,166 at December 31, 2004 and 2003, respectively.
Demand deposit overdrafts  reclassified as loan balances as of December 31, 2004
and 2003 amounted to $382,482 and $225,303, respectively.

     The  maturities  of time  certificates  of deposit and other time  deposits
issued by the Bank at December 31, 2004, are as follows:
<TABLE>
<CAPTION>

     Year Ending December 31,
<S>                <C>                                                                           <C>
                   2005......................................................................    $      123,301,052
                   2006......................................................................           110,416,347
                   2007......................................................................             7,485,022
                   2008......................................................................             4,470,022
                   2009......................................................................             3,366,859
                                                                                                 ------------------

                                                                                                 $      249,039,302
                                                                                                 ==================
</TABLE>

Note 8 - Short-term Borrowings

Short-term borrowings at December 31, 2004 and 2003 consist of the following:
<TABLE>
<CAPTION>

                                                                                  2004                  2003
                                                                           ------------------    ------------------

<S>                                                                        <C>                   <C>
Federal funds purchased................................................    $        3,851,000    $        7,000,000
Line of credit with an unaffiliated financial institution..............               100,000               250,000
Balance due on investment in limited
   liability investment company........................................                    --               250,000
Securities sold under agreements to repurchase.........................            10,106,000                    --
                                                                           ------------------    -------------------

                                                                           $       14,057,000    $        7,500,000
                                                                           ==================    ==================
</TABLE>



              [The remainder of this page intentionally left blank]


                                       55
<PAGE>
                          FLORIDA COMMUNITY BANKS, INC.
                                 AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        December 31, 2004, 2003 and 2002


Note 8 - Short-term Borrowings - Continued

     Securities sold under  agreements to repurchase are reflected at the amount
of cash  received in connection  with the  transaction.  Information  concerning
securities sold under agreements to repurchase is summarized as follows:
<TABLE>
<CAPTION>

                                                                                  2004                  2003
                                                                           ------------------    ------------------

<S>                                                                        <C>                   <C>
Average balance during the year........................................    $          246,191    $               --
Average interest rate during the year..................................                  2.44%                   --
Maximum month-end balance during the year..............................    $       10,106,000    $               --

U.S. Agency, municipal and mortgage-backed securities underlying the agreements
   at year end:

Carrying value.........................................................    $       10,302,842    $               --
Estimated fair value...................................................            10,303,069                    --
</TABLE>


Note 9 - Long-term Debt

     At December  31, 2004 and 2003,  the Company had  long-term  debt  totaling
$70,310,000 and $50,331,698, respectively.

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

                                                                                                   2004                  2003
                                                                                       ------------------    ------------------

Long-term  Federal  Home Loan Bank  advances,  with varying  maturities  from
 April 2005   through  December  2014,  the interest  rates have a variable
 base or are at a fixed   rate  between  2.61% to 6.37%,  secured by real
<S>                                                                                    <C>                  <C>
 estate  mortgage  loans and  pledged  securities...............................       $       60,000,000   $       40,000,000

Long-term  subordinated  debentures;  interest rate prime plus 0.5%, the
   debenture has a 30-year life with a call option of 5 years, subject to
   regulatory approval..........................................................               10,310,000           10,310,000

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.........................................................                       --                21,698
                                                                                       -------------------    ------------------

                                                                                       $       70,310,000   $       50,331,698
                                                                                       ===================   ===================
</TABLE>

                                       56
<PAGE>
                          FLORIDA COMMUNITY BANKS, INC.
                                 AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        December 31, 2004, 2003 and 2002


Note 9 - Long-term Debt - Continued

     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 has fully and unconditionally
guaranteed all obligations of the Trust on a subordinated  basis with respect to
the Trust Preferred  Securities.  In accordance with the provisions of Financial
Interpretation No. 46R, the Company accounts for the Trust Preferred  Securities
as a long-term debt liability to the Trust in the amount of $10,310,000. Subject
to  certain  limitations,  the  Trust  Preferred  Securities  qualify  as Tier 1
capital.

     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.

     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, 2004, are as follows:
<TABLE>
<CAPTION>

     Year Ending December 31,
<S>             <C>                                                                              <C>
                2005.........................................................................    $       15,000,000
                2006.........................................................................                    --
                2007.........................................................................                    --
                2008.........................................................................                    --
                2009.........................................................................             5,000,000
                Thereafter...................................................................            50,310,000
                                                                                                 ------------------

                                                                                                 $       70,310,000
                                                                                                 ==================
</TABLE>

Note 10 - Shareholders' Equity

     At  December  31,  2004  and  2003,  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.

                                       57
<PAGE>
                          FLORIDA COMMUNITY BANKS, INC.
                                 AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        December 31, 2004, 2003 and 2002


Note 10 - Shareholders' Equity - Continued

     Stock Splits:  In April 2002, each share of the Bank was converted into one
share of the  Company's  $0.01 par value common  stock.  In December  2002,  the
Company issued a 1.2 for 1.0 common stock split  resulting in an increase in the
number of outstanding shares to 3,123,316.  In December 2003, the Company issued
a 1.2 for 1.0 common  stock  split  resulting  in an  increase  in the number of
outstanding shares to 3,747,641.  In December 2004, the Company issued a 1.2 for
1.0 common  stock split  resulting  in an increase in the number of  outstanding
shares  to  4,519,321.  All per share  amounts  included  in these  consolidated
financial  statements have been adjusted to give retroactive effect to the stock
splits.


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, 2004, that the Company and the Bank meet
all capital adequacy requirements to which they are subject.

     As of December  31,  2004,  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 remainder of this page intentionally left blank]


                                       58
<PAGE>
                          FLORIDA COMMUNITY BANKS, INC.
                                 AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        December 31, 2004, 2003 and 2002


Note 11 - Regulatory Capital Matters - Continued

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, 2004:

Total Capital
<S>                              <C>               <C>        <C>                <C>
   Consolidated..............    $    70,536       11.63%     $    48,518        8.00%            N/A           N/A
   Florida Community
     Bank....................         69,844       11.53           48,477        8.00     $    60,597        10.00%
Tier 1 Capital
   Consolidated..............         62,928       10.38           24,259        4.00             N/A           N/A
   Florida Community
     Bank....................         62,242       10.27           24,239        4.00          36,358         6.00
Tier 1 Leverage
   Consolidated..............         62,928       10.14           24,819        4.00             N/A           N/A
   Florida Community
     Bank....................         62,242       10.05           24,774        4.00          30,968         5.00

As of December 31, 2003:

Total Capital
   Consolidated..............    $    58,222       11.91%     $    39,114        8.00%            N/A           N/A
   Florida Community
     Bank....................         57,721       11.82           39,061        8.00     $    48,827        10.00%
Tier 1 Capital
   Consolidated..............         52,086       10.65           19,557        4.00             N/A           N/A
   Florida Community
     Bank....................         51,593       10.57           19,531        4.00          29,296         6.00
Tier 1 Leverage
   Consolidated..............         52,086       10.24           20,342        4.00             N/A           N/A
   Florida Community
     Bank....................         51,593       10.14           20,342        4.00          25,428         5.00
</TABLE>


                                       59
<PAGE>
                          FLORIDA COMMUNITY BANKS, INC.
                                 AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        December 31, 2004, 2003 and 2002


Note 12 - Stock Option Plans

     The Company adopted the 2002 Key Employee Stock Compensation  Program under
which  statutory and  non-statutory  stock options may be granted to certain key
employees to purchase up to 170,328  shares (as  adjusted  for stock  splits) at
various prices from $10.42 to $22.92 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  subject to
vesting requirements.

The  following  information  relates  to options  outstanding  under the plan at
December 31, 2004.
<TABLE>
<CAPTION>

                                                                                       Weighted
                                                          Number of                     Average           Number of
                                                           Options     Expiration   Contractual            Options
                                                         Outstanding      Date             Life          Exercisable
                                                       --------------  ----------   -----------         ------------
10/25/01 Options with an Exercise
<S>      <C>                                                   <C>      <C>   <C>          <C>               <C>
Price of $10.42......................................          79,488   10/25/11           6.81              63,590
01/17/03 Options with an Exercise
Price of $13.89......................................           8,640   01/17/13           8.04               3,456
12/22/03 Options with an Exercise
Price of $20.00......................................          16,800   12/22/13           8.97               6,720
09/16/04 Options with an Exercise
Price of $22.92......................................          65,400   09/16/14           9.71                   --
                                                       --------------                                   ------------

Total................................................         170,328                      8.20              73,766
                                                       ==============                                   ===========
</TABLE>

The  following  table  presents  the  activity  in the plan for the years  ended
December 31, 2004, 2003 and 2002:
<TABLE>
<CAPTION>

                                                2004                       2003                       2002
                                    --------------------------  --------------------------   ----------------------
                                                    Weighted                    Weighted                 Weighted
                                                     Average                     Average                  Average
                                                    Exercise                    Exercise                 Exercise
                                       Shares        Price         Shares        Price        Shares      Price
                                    -------------  ------------ -----------  -------------   --------   -----------

<S>                    <C>                <C>      <C>               <C>     <C>                        <C>
Outstanding at January 1,........         104,928  $      12.24      79,488  $       10.42         --   $     0.00
   Granted.......................          65,400         22.92      25,440          17.92     79,488        10.42
   Exercised.....................              --          0.00          --           0.00         --         0.00
   Forfeited.....................              --          0.00          --           0.00         --         0.00
   Expired.......................              --          0.00          --           0.00         --         0.00
                                    --------------              -----------                  --------

Outstanding at December 31,......         170,328         16.34     104,928          12.24     79,488        10.42
                                    -------------               -----------                  --------

Exercisable at December 31,......          73,766         11.45      47,693          10.42     26,496        10.42
                                    =============               ===========                  ========

Weighted average fair value
   of options granted............                  $       2.58              $        0.92              $       --
                                                   ============              =============              ==========
</TABLE>

                                       60
<PAGE>
                          FLORIDA COMMUNITY BANKS, INC.
                                 AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        December 31, 2004, 2003 and 2002


Note 13 - Other Operating Expenses

The  major  components  of other  operating  expenses  included  in  noninterest
expenses at December 31, 2004, 2003 and 2002 are as follows (in thousands):
<TABLE>
<CAPTION>

                                                            2004                  2003                  2002
                                                     ------------------    ------------------    ------------------

<S>                                                  <C>                   <C>                   <C>
   Professional fees..............................   $              249    $              263    $              210
   Promotions and public relations................                  226                   218                   135
   Telephone......................................                  188                   175                   136
   Examination and assessment.....................                  176                   154                   139
   Supplies.......................................                  171                   152                   182
   ATM expense....................................                  147                   137                   124
   Software maintenance...........................                  138                   164                    70
   Courier........................................                  127                   113                    95
   Postage........................................                  123                   136                   137
   Bank charges...................................                   91                    74                    95
   Taxes and licenses.............................                   85                    95                   103
   Employee educational expenses..................                   70                    68                    41
   Director's board and committee fees............                   67                    67                    67
   Dues and subscriptions.........................                   48                    44                    44
   Other..........................................                  407                   231                   201
                                                     ------------------    ------------------    ------------------

                                                     $            2,313    $            2,091    $            1,779
                                                     ==================    ==================    ==================
</TABLE>


Note 14 - Income Taxes

Federal and state income taxes receivable  (payable) as of December 31, 2004 and
2003  included  in other  assets and other  liabilities,  respectively,  were as
follows:
<TABLE>
<CAPTION>

                                                                                  2004                  2003
                                                                           ------------------    ------------------
Current
<S>                                                                        <C>                   <C>
   Federal.............................................................    $          (42,924)   $          300,272

   State...............................................................               (25,381)               26,754
</TABLE>

                                       61
<PAGE>
                          FLORIDA COMMUNITY BANKS, INC.
                                 AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        December 31, 2004, 2003 and 2002


Note 14 - Income Taxes - Continued

The  components of the deferred  income tax asset included in other assets as of
December 31, 2004 and 2003 are as follows:
<TABLE>
<CAPTION>

                                                                                  2004                  2003
                                                                           ------------------    ------------------

Deferred tax asset:
<S>                                                                        <C>                   <C>
   Federal.............................................................    $        3,969,027    $        2,908,651
   State...............................................................               661,505               484,772
                                                                           ------------------    ------------------
     Total deferred income tax asset...................................             4,630,532             3,393,423
                                                                           ------------------    ------------------

Deferred tax liability:
   Federal.............................................................              (271,755)             (197,587)
   State...............................................................               (45,292)              (32,931)
                                                                           ------------------    ------------------
     Total deferred income tax liability...............................              (317,047)             (230,518)
                                                                           ------------------    ------------------

Net deferred tax asset.................................................    $        4,313,485    $        3,162,905
                                                                           ==================    ==================
</TABLE>

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

                                                                                  2004                  2003
                                                                           ------------------    ------------------

<S>                                                                        <C>                   <C>
   Depreciation........................................................    $         (317,047)   $         (230,518)
   Allowance for loan losses...........................................             3,497,212             2,560,873
   Directors benefit plan..............................................               120,744               132,005
   Deferred loan fees..................................................               808,526               592,723
   Write-down of other real estate owned...............................               204,050                96,250
   Officers benefit plan...............................................                    --                11,550
   Issuance of stock options...........................................                    --                    22
                                                                           ------------------    ------------------

   Net deferred tax asset..............................................    $        4,313,485    $        3,162,905
                                                                           ==================    ==================
</TABLE>

The components of income tax expense for the years ended December 31, 2004, 2003
and 2002 were as follows:
<TABLE>
<CAPTION>

                                                            2004                  2003                  2002
                                                     ------------------    ------------------    ------------------
   Current
<S>                                                  <C>                   <C>                   <C>
     Federal......................................   $        7,615,497    $        4,962,156    $        4,009,514
     State........................................            1,232,895               865,210               690,462

   Deferred
     Federal......................................             (989,535)             (631,451)             (723,827)
     State........................................             (164,960)             (105,238)             (125,327)
                                                     ------------------    ------------------    ------------------

                                                     $        7,693,897    $        5,090,677    $        3,850,822
                                                     ==================    ==================    ==================
</TABLE>

                                       62
<PAGE>
                          FLORIDA COMMUNITY BANKS, INC.
                                 AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        December 31, 2004, 2003 and 2002


Note 14 - Income Taxes - Continued

There were no material  tax  effects of  securities  transactions  for the years
ended December 31, 2004, 2003 and 2002.

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, 2004,
2003 and 2002.
<TABLE>
<CAPTION>

                                                  2004                     2003                        2002
                                        -----------------------   -----------------------    -----------------------

Federal income tax
<S>                                     <C>                <C>    <C>                <C>     <C>                <C>
   at statutory rates.................  $   6,778,182      34.0%  $    4,585,657     34.0%   $   3,491,504      34.0%
Add (deduct)
   State income tax, net of
     federal tax benefit..............        704,837       3.5          501,582      3.7          372,989       3.6
   Other..............................        210,878       1.1            3,438      0.0          (13,671)     (0.1)
                                        -------------  --------   --------------  -------    -------------  --------

Totals................................  $   7,693,897      38.6%  $    5,090,677     37.7%   $   3,850,822      37.5%
                                        =============  ========   ==============  =======    =============  ========
</TABLE>


Note 15 - Benefit Plans

     During the years ended  December 31, 2004,  2003 and 2002,  the Company had
three qualified  employee  benefit plans: 1) a Pension Plan, 2) a Profit Sharing
Plan  and  3) an  Employee  Stock  Ownership  Plan  ("ESOP").  The  Plans  cover
substantially all employees,  subject to similar eligibility  requirements.  The
Company  contributed  10% of eligible  compensation  to the Pension Plan for the
year ended 2002.  The Pension Plan was  terminated as of December 31, 2003.  The
Company's  contribution  to the plan for the year ended  December 31, 2002,  was
$347,214.  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,  2004,  2003 and 2002,  the  Company's  contributions  charged  to
operations  for the Profit  Sharing  Plan  amounted to  $506,733,  $438,163  and
$362,215, respectively. Effective January 1, 2003, the Company adopted the ESOP.
The Company's annual  contribution to the ESOP is discretionary as determined by
the board of directors. The Company's contribution to the ESOP for 2004 and 2003
was $575,626 and $433,523, 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.

                                       63
<PAGE>
                          FLORIDA COMMUNITY BANKS, INC.
                                 AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        December 31, 2004, 2003 and 2002


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 2004, 2003 and 2002 included the following components:
<TABLE>
<CAPTION>

                                                            2004                  2003                  2002
                                                     ------------------    ------------------    ------------------

<S>                                                  <C>                   <C>                   <C>
   Service cost...................................   $           29,369    $           27,952    $           23,171
   Interest cost..................................               29,233                36,608                39,373
                                                     ------------------    ------------------    ------------------

     Net periodic pension cost....................   $           58,602    $           64,560    $           62,544
                                                     ==================    ==================    ==================
</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, 2004 and 2003.
<TABLE>
<CAPTION>

                                                                                  2004                  2003
                                                                           ------------------    ------------------

Present value of benefit obligation:
<S>                                                                        <C>                   <C>
   Vested..............................................................    $          313,622    $          372,870
   Non-vested..........................................................                    --                    --
                                                                           ------------------    ------------------

Accumulated benefit obligation/pension liability.......................    $          313,622    $          372,870
                                                                           ==================    ==================
</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.



              [The remainder of this page intentionally left blank]


                                       64
<PAGE>
                          FLORIDA COMMUNITY BANKS, INC.
                                 AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        December 31, 2004, 2003 and 2002


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.

     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 Company  records a liability  for the  estimated  fair value of
standby letters of credit based on the fees charged for these  arrangements.  At
December 31, 2004 and 2003 these  recorded  liabilities  amounted to $40,712 and
$46,152, respectively.

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

                                                                                          Contract or
                                                                                        Notional Amount
                                                                                  2004                  2003
                                                                           ------------------    ------------------

<S>                                                                        <C>                   <C>
Loan commitments.......................................................    $      133,865,000    $       99,186,000
Standby letters of credit..............................................             3,715,000             3,810,000
                                                                           ------------------    ------------------

   Total unfunded commitments..........................................    $      137,580,000    $      102,996,000
                                                                           ==================    ==================
</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  $386,000  and $185,000 at December 31, 2004 and
2003, respectively



                                       65
<PAGE>
                          FLORIDA COMMUNITY BANKS, INC.
                                 AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        December 31, 2004, 2003 and 2002


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 balances in commercial  banks are insured by the FDIC up to
$100,000.  Total  uninsured  balances  held at  correspondent  commercial  banks
amounted  to  $1,720,085   and   $7,431,961  at  December  31,  2004  and  2003,
respectively.


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,  2005,  the Bank can declare
dividends,  without prior regulatory approval, of approximately $17,974,000 plus
an additional amount equal to its net profits for 2005.


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.




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                                       66
<PAGE>
                          FLORIDA COMMUNITY BANKS, INC.
                                 AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        December 31, 2004, 2003 and 2002


Note 20 - Leases

     The Company leased facilities under non-cancelable  operating leases during
2004,  2003 and 2002.  The leases  provided  for renewal  options and  generally
required the Company to pay maintenance,  insurance, and property taxes. For the
years ended December 31, 2004, 2003 and 2002, rental expense for such leases was
$177,520, $175,620 and $182,870,  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, 2004, are as follows:
<TABLE>
<CAPTION>

     Year Ending December 31,
<S>               <C>                                                                            <C>
                  2005.......................................................................    $          180,537
                  2006.......................................................................               175,086
                  2007.......................................................................               174,413
                  2008.......................................................................               178,520
                  2009.......................................................................               182,730
                  Thereafter.................................................................             3,144,004
                                                                                                 ------------------

     Total minimum lease payments............................................................    $        4,035,290
                                                                                                 ==================
</TABLE>


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  2004 and 2003.  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>

                                                                                  2004                  2003
                                                                           ------------------    ------------------

<S>                                                                        <C>                   <C>
Balance at Beginning of Year...........................................    $        6,254,498    $        8,446,838
New loans..............................................................             4,402,105             4,363,704
Repayments.............................................................            (2,524,236)           (6,556,044)
                                                                           ------------------    ------------------

Balance at End of Year.................................................    $        8,132,367    $        6,254,498
                                                                           ==================    ==================
</TABLE>

Deposits: Deposits held from related parties were $14,428,433 and $13,855,659 at
December 31, 2004 and 2003, 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%.

                                       67
<PAGE>
                          FLORIDA COMMUNITY BANKS, INC.
                                 AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        December 31, 2004, 2003 and 2002


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.

     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 fees charged for these
arrangements.

                                       68
<PAGE>
                          FLORIDA COMMUNITY BANKS, INC.
                                 AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        December 31, 2004, 2003 and 2002


Note 22 - Fair Value of Financial Instruments - Continued

The estimated fair values of the Company's financial  instruments as of December
31, 2004 and 2003 are as follows:
<TABLE>
<CAPTION>

                                                             2004                               2003
                                               ---------------------------------  ---------------------------------
                                                  Carrying            Fair           Carrying            Fair
                                                   Amount             Value            Amount            Value
                                               ---------------  ----------------  ---------------  ----------------
                                                        (in thousands)                     (in thousands)
Financial Assets
<S>                                            <C>              <C>               <C>              <C>
   Cash and short-term investments..........   $        19,614  $         19,614  $        30,520  $         30,520
   Securities...............................            74,265            73,927           38,938            38,481
   Loans....................................           552,509           552,948          437,593           441,604
   Accrued interest receivable..............             3,290             3,290            2,709             2,709
                                               ---------------  ----------------  ---------------  ----------------

     Total Financial Assets.................   $       649,678  $        649,779  $       509,760  $        513,314
                                               ===============  ================  ===============  ================

Financial Liabilities
   Deposits.................................   $       520,585  $        521,618  $       423,284  $        423,666
   Short-term borrowings....................            14,057            14,057            7,500             7,500
   Long-term debt...........................            70,310            70,310           50,332            50,332
   Accrued interest payable.................             1,408             1,408              859               859
                                               ---------------  ----------------  ---------------  ----------------

     Total Financial Liabilities............   $       606,360  $        607,393  $       481,975  $        482,357
                                               ===============  ================  ===============  ================

Financial Instruments
   Commitments to extend credit.............   $       133,865  $          1,339  $        99,186  $            992
   Standby letters of credit................             3,715                41            3,810                46
                                               ---------------  ----------------  ---------------  ----------------

     Total Unrecognized Financial
       Instruments..........................   $       137,580  $          1,380  $       102,996  $          1,038
                                               ===============  ================  ===============  ================
</TABLE>




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                                       69
<PAGE>
                          FLORIDA COMMUNITY BANKS, INC.
                                 AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        December 31, 2004, 2003 and 2002


Note 23 - Condensed Parent Company Information


Statements of Financial Condition
<TABLE>
<CAPTION>

                                                                                  2004                  2003
                                                                           ------------------    ------------------
Assets

<S>                                                                        <C>                   <C>
   Cash and due from banks.............................................    $          400,493    $          291,212
   Securities available-for-sale.......................................               810,000               810,000
   Investment in subsidiaries (equity method) -
     eliminated upon consolidation.....................................            62,242,329            51,592,894
   Other assets........................................................               156,422               226,996
                                                                           ------------------    ------------------

     Total Assets......................................................    $       63,609,244    $       52,921,102
                                                                           ==================    ==================

Liabilities and Shareholders' Equity

Liabilities

   Subordinated debentures.............................................    $       10,310,000    $       10,310,000
   Other debt..........................................................               100,000               500,000
   Other liabilities...................................................               271,545                25,333
                                                                           ------------------    ------------------
     Total Liabilities.................................................            10,681,545            10,835,333

     Total Shareholders' Equity........................................            52,927,699            42,085,769
                                                                           ------------------    ------------------

     Total Liabilities and Shareholders' Equity........................    $       63,609,244            52,921,102
                                                                           ==================    ==================

</TABLE>



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                                       70
<PAGE>
                          FLORIDA COMMUNITY BANKS, INC.
                                 AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        December 31, 2004, 2003 and 2002


Note 23 - Condensed Parent Company Information - Continued


Statements of Income
<TABLE>
<CAPTION>

                                                                                  2004                  2003
                                                                           ------------------    ------------------
Income
<S>                                                                        <C>                   <C>
   Dividends from subsidiaries - eliminated upon consolidation.........    $        2,030,304    $        1,119,270
   Interest and other..................................................                34,319                   333
                                                                           ------------------    ------------------
     Total Income......................................................             2,064,623             1,119,603
                                                                           ------------------    ------------------

Expenses
   Salaries and employee benefits......................................                94,476                18,353
   Interest............................................................               531,660               524,681
   Other expenses......................................................               120,933               133,407
                                                                           ------------------    ------------------
     Total Expenses....................................................               747,069               676,441
                                                                           ------------------    ------------------

Income before income taxes and equity in
   undistributed earnings of subsidiary................................             1,317,554               443,162
Income tax benefit.....................................................               274,943               245,684
                                                                           ------------------    ------------------

Income before equity in undistributed
   earnings of subsidiary..............................................             1,592,497               688,846
Equity in undistributed earnings of subsidiary.........................            10,649,435             7,707,703
                                                                           ------------------    ------------------

     Net Income........................................................    $       12,241,932    $        8,396,549
                                                                           ==================    ==================

</TABLE>



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                                       71
<PAGE>
                          FLORIDA COMMUNITY BANKS, INC.
                                 AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        December 31, 2004, 2003 and 2002


Note 23 - Condensed Parent Company Information - Continued


Statements of Cash Flows
<TABLE>
<CAPTION>

                                                                                  2004                  2003
                                                                           ------------------    ------------------
Operating Activities
<S>                                                                        <C>                   <C>
   Net income..........................................................    $       12,241,932    $        8,396,549
   Adjustments to reconcile net income to net
     cash provided by operating activities:
     Equity in undistributed income of subsidiary......................           (10,649,435)           (7,707,703)
     Other.............................................................               316,786               172,026
                                                                           ------------------    ------------------
       Net Cash Provided By Operating Activities.......................             1,909,283               860,872
                                                                           ------------------    ------------------

Investing Activities
Investment in equity securities........................................                    --              (500,000)
                                                                           ------------------    ------------------
       Net Cash Used In Investing Activities...........................                    --              (500,000)
                                                                           ------------------    ------------------

Financing Activities
   Sale of common stock................................................               465,202                    --
   Repayment of short-term debt........................................              (400,000)                   --
   Issuance of short-term borrowings...................................                    --               500,000
   Costs associated with the issuance of options.......................                17,988                 6,227
   Cash dividends......................................................            (1,883,192)             (780,829)
                                                                           ------------------    ------------------
     Net Cash Used In Financing Activities.............................            (1,800,002)             (274,602)
                                                                           ------------------    ------------------

Net Increase In Cash and Cash Equivalents..............................               109,281                86,270

Cash and Cash Equivalents at Beginning of Year.........................               291,212               204,942
                                                                           ------------------    ------------------

Cash and Cash Equivalents at End of Year...............................    $          400,493    $          291,212
                                                                           ==================    ==================

Cash Paid During the Year For:
   Interest............................................................    $          531,660    $          524,681

</TABLE>



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                                       72
<PAGE>
                          FLORIDA COMMUNITY BANKS, INC.
                                 AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        December 31, 2004, 2003 and 2002


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)
2004:
<S>                                   <C>            <C>             <C>            <C>            <C>
Total interest income..............   $       9,058  $       9,596   $      10,141  $      10,789  $         39,584
Total interest expense.............           2,172          2,245           2,283          2,500             9,200
Provision for loan losses..........             300            200             750            721             1,971
Net interest income after
   provision for loan losses.......           6,586          7,151           7,108          7,568            28,413
Other noninterest income...........             727          1,118             659          1,270             3,774
Other noninterest expense..........           2,848          3,028           2,962          3,413            12,251
Income tax expense.................           1,680          1,975           1,805          2,234             7,694
Net income.........................           2,785          3,266           3,000          3,191            12,242
Per common share
   Basic earnings..................            0.62           0.73            0.66           0.70              2.71
   Diluted earnings................            0.61           0.72            0.66           0.69              2.68

2003:
Total interest income..............   $       8,304  $       8,447   $       8,502  $       8,267  $         33,520
Total interest expense.............           2,818          2,737           2,381          2,145            10,081
Provision for loan losses..........             300            300             700            400             1,700
Net interest income after
   provision for loan losses.......           5,186          5,410           5,421          5,722            21,739
Other noninterest income...........             626            666             663            773             2,728
Other noninterest expense..........           2,557          2,647           2,934          2,842            10,980
Income tax expense.................           1,226          1,302           1,185          1,377             5,090
Net income.........................           2,029          2,127           1,965          2,276             8,397
Per common share
   Basic earnings..................            0.45           0.48            0.43           0.51              1.87
   Diluted earnings................            0.45           0.47            0.43           0.50              1.85

2002:
Total interest income..............   $       7,004  $       7,653   $       8,228  $       8,381  $         31,266
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.......           3,866          4,459           4,177          4,467            16,969
Investment securities gains........              36             --              --             --                36
Other noninterest income...........             611            528             525            620             2,284
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..................            0.33           0.38            0.33           0.39              1.43
   Diluted earnings................            0.33           0.38            0.33           0.38              1.42
</TABLE>




                                       73
<PAGE>


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

              None.

ITEM 9A.      CONTROLS AND PROCEDURES

              Disclosure Controls and Procedures

              Management of the Company, with the participation and under the
              supervision of the Chief Executive Officer and Chief Financial
              Officer, has evaluated the effectiveness of the Company's
              disclosure controls and procedures (as defined in Exchange Act
              Rule 13a-15(e)) as of the end of the period covered by this annual
              report. Based on this evaluation the Chief Executive Officer and
              Chief Financial Officer have concluded that the Company's
              disclosure controls and procedures are effective as of the end of
              the period covered by this annual report to provide reasonable
              assurance that material information required to be disclosed by
              the Company in the reports that it files or submits under the
              Exchange Act is recorded, processed, summarized and reported
              within the time periods specified by the Securities and Exchange
              Commission's rules and forms. A controls system, no matter how
              well designed and operated, cannot provide absolute assurance that
              the objectives of the controls are met, and no evaluation of
              controls can provide absolute assurance that all controls and
              instances of fraud, if any, within a company have been detected.

              Management Report On Internal Control Over Financial Reporting

              The management of the Company is responsible for establishing and
              maintaining adequate internal control over financial reporting.
              Internal control over financial reporting is defined in Rule
              13a-15(f) or 15d-15(f) promulgated under the Securities Exchange
              Act of 1934 as a process designed by, or under the supervision of,
              the Company's principal executive and principal financial officers
              and effected by the Company's board of directors, management and
              other personnel, to provide reasonable assurance regarding the
              reliability of financial reporting and the preparation of
              financial statements for external purposes in accordance with
              generally accepted accounting principles and includes those
              policies and procedures that:

               o    Pertain to the  maintenance  of records  that in  reasonable
                    detail  accurately and fairly reflect the  transactions  and
                    dispositions of the assets of the Company;

               o    Provide reasonable  assurance that transactions are recorded
                    as necessary to permit  preparation of financial  statements
                    in accordance with generally accepted accounting principles,
                    and that receipts and  expenditures of the Company are being
                    made only in accordance  with  authorizations  of management
                    and directors of the Company; and

               o    Provide reasonable  assurance regarding prevention or timely
                    detection of unauthorized acquisition, use or disposition of
                    the  Company's  assets that could have a material  effect on
                    the financial statements.

              Because of its inherent limitations, internal control over
              financial reporting may not prevent or detect misstatements.
              Projections of any evaluation of effectiveness to future periods
              are subject to the risk that controls may become inadequate
              because of changes in conditions, or that the degree of compliance
              with the policies or procedures may deteriorate.

              The Company's management assessed the effectiveness of the
              Company's internal control over financial reporting as of December
              31, 2004. In making this assessment, the Company's management used
              the criteria set forth by the Committee of Sponsoring
              Organizations of the Treadway Commission ("COSO") in Internal
              Control-Integrated Framework.

              Based on our assessment, management believes that, as of December
              31, 2004, the Company's internal control over financial reporting
              is effective based on those criteria.


                                       74
<PAGE>


              The Company's independent auditors have issued an audit report on
              our assessment of the Company's internal control over financial
              reporting. This report appears in Part II, Item 8 of this report.

              There was no change in the Company's internal control over
              financial reporting that occurred during the Company's most
              recently completed fiscal quarter that materially affected, or is
              reasonably likely to materially affect, the Company's internal
              control over financial reporting.

ITEM 9B.      OTHER INFORMATION

              The Company did not fail to file any Form 8-K to disclose any
              information required to be disclosed therein during the fourth
              quarter of 2004.


                                    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 14 in the Proxy  Statement  (the "2005
Proxy Statement") relating to the annual meeting of shareholders of the Company,
scheduled to be held on April 21, 2005, is incorporated herein by reference.  On
March 3, 2003, the Company adopted a Code of Ethic applicable to Chief Financial
Officer and its Chief Executive Officer.


ITEM 11.      EXECUTIVE COMPENSATION

     The information  appearing under the headings "EXECUTIVE  COMPENSATION" and
"EMPLOYEE BENEFITS" on pages 7 to 13 of the 2005 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 2005 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  13 to 14  of  the  2005  Proxy  Statement  is
incorporated herein by reference.


ITEM 14.      PRINCIPAL ACCOUNTANT FEES AND SERVICES

     Audit Fees The aggregate fees billed for  professional  services by Schauer
Taylor in connection with the audit of the annual  financial  statements and the
reviews of the financial  statements included in the Company's quarterly filings
with the Securities and Exchange  Commission for the fiscal years ended December
31, 2004 and 2003, were $64,501 and $75,200, respectively.

     Audit-Related  Fees:  In 2004 and 2003,  Schauer  Taylor  also  billed  the
Company $92,997 and $59,230,  respectively,  for fees reasonably  related to the
performance of its audit and reviews of financial statements. Such fees included
travel and miscellaneous related fees.

     Tax Fees: In 2004 and 2003,  Schauer Taylor also billed the Company $11,550
and  $12,800,  respectively,  for  tax  compliance  and  advice,  including  the
preparation of the Company's corporate tax returns.

     In all  instances,  Schauer  Taylor's  performance  of those  services  was
pre-approved by the Company's Audit Committee.

                                       75
<PAGE>


                                                     PART IV

ITEM 15.      EXHIBITS AND FINANCIAL STATEMENTS SCHEDULES

     (a)       1. Financial Statements.

                  The following consolidated financial statements are located in
Item              8 of this Report:

                  Report of Independent Registered Public Accounting Firm
                  Consolidated Statements of Financial Condition as of December
                  31, 2004 and 2003 Consolidated Statements of Income for the
                  Years Ended December 31, 2004, 2003 and 2002 Consolidated
                  Statements of Shareholders' Equity for the Years Ended
                  December 31, 2004, 2003 and 2002 Consolidated Statements of
                  Cash Flows for the Years Ended December 31, 2004, 2003 and
                  2002 Notes to Consolidated Financial Statements Quarterly
                  Results (Unaudited)

               2. Financial Statement Schedules.

                  Schedules  to  the  consolidated  financial  statements  are
                  omitted, as the required information is not applicable.

               3. Exhibits.

                  The following exhibits are filed or incorporated by reference
as                part of this Report:
<TABLE>
<CAPTION>

Exhibit No.                                               Exhibit                                          Page

<S> <C>                                                                                                   <C>
    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). *




                                       76
<PAGE>


Exhibit No.                                               Exhibit                                          Page

    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).

    10.7       Employee  Stock  Ownership  Plan  (included as Exhibit 10.5 to
               the Company's Form S-8 filed May 6, 2004,and incorporated herein by reference).

    11         Statement re: computation of per share earnings                                                   80

    12         Statement re: computation of ratios                                                               80

    14         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.)

    21         Subsidiaries of the Registrant                                                                    81

    24         Power of Attorney                                                                                 85

    31.1       Chief Executive  Officer - Certification  of principal  executive
               officer  pursuant to the Exchange Act Rule 13(a) - 14(a) or 15(d) - 14(a).                        82

    31.2       Chief Financial  Officer - Certification  of principal  financial
               officer  pursuant to the Exchange Act Rule 13(a) - 14(a) or 15(d) - 14(a).                        83

    32.1       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               84

    32.2       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               84
</TABLE>





* The referenced exhibit is a compensatory contract, plan or arrangement.


                                       77
<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 15, 2005          By:    /s/ Stephen L. Price
                                    --------------------------------------------
                                    Stephen L. Price
                                    Chairman and Chief Executive Officer


Date:  March 15, 2005          By:    /s/ Guy W. Harris
                                    --------------------------------------------
                                    Guy W. Harris
                                    Chief Financial Officer

                                       78
<PAGE>


                                  EXHIBIT INDEX

         The following exhibits are filed as part of this report (in addition to
those exhibits listed in Item 15 which are filed as a part of this report and
incorporated by reference):
<TABLE>
<CAPTION>


         Exhibit Number                                Description of Exhibit

<S>           <C>
              11                    Statement re: Computation of Per Share Earnings

              12                    Statement re: Computation of Ratios

              21                    Subsidiaries of the Registrant

              31.1                  Certification  of President and Chief Executive  Officer Pursuant to Section 302
                                    of Sarbanes-Oxley Act of 2002.

              31.2                  Certification   of  Chief   Financial   Officer   Pursuant  to  Section  302  of
                                    Sarbanes-Oxley Act of 2002.

              32.1                  Certification of President and Chief Executive  Officer Pursuant to Section 906
                                    of Sarbanes-Oxley Act of 2002.

              32.2                  Certification   of  Chief  Financial   Officer   Pursuant  to  Section  906  of
                                    Sarbanes-Oxley Act of 2002.
</TABLE>


                                       79
<PAGE>


EXHIBIT 11 - STATEMENT 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, 2004, 2003 and 2002.
<TABLE>
<CAPTION>

                                                                        2004               2003             2002
                                                                 ----------------   ---------------    ---------------
Basic Earnings Per Share:
<S>                                                              <C>                <C>                <C>
   Net income................................................    $     12,241,932   $     8,396,549    $     6,418,306
                                                                 ================   ===============    ===============

   Earnings on common shares.................................    $     12,241,932   $     8,396,549    $     6,418,306
                                                                 ================   ===============    ===============

   Weighted average common shares outstanding - basic........           4,516,295         4,497,169          4,497,169
                                                                 ================   ===============    ===============

   Weighted average common shares outstanding - diluted......           4,564,882         4,531,813          4,521,826
                                                                 ================   ===============    ===============

   Basic earnings per common share...........................    $          2.71    $          1.87    $          1.43
                                                                 ===============    ===============    ===============

   Diluted earnings per common share.........................    $          2.68    $          1.85    $          1.42
                                                                 ===============    ===============    ===============
</TABLE>


EXHIBIT 12 - STATEMENT RE: COMPUTATION OF RATIOS

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

                                                                               Year Ended December 31,
                                                                  -------------------------------------------------
                                                                       2004             2003              2002
                                                                  --------------    -------------    --------------
                                                                               (Dollars in thousands)

<S>                                                               <C>               <C>              <C>
Pretax income.................................................    $       19,936    $      13,487    $       10,269
Add fixed charges:
   Interest on deposits.......................................             7,109            7,924            10,032
   Interest on borrowings.....................................             2,090            2,157             1,755
   Portion of rental expense representing interest expense....                59               60                62
                                                                  --------------    -------------    --------------
     Total fixed charges......................................             9,258           10,141            11,849
                                                                  --------------    -------------    --------------

Income before fixed charges...................................    $       29,194    $      23,628    $       22,118
                                                                  ==============    =============    ==============

Pretax income.................................................    $       19,935    $      13,487    $       10,269
Add fixed charges (excluding interest on deposits):
   Interest on borrowings.....................................             2,090            2,157             1,755
   Portion of rental expense representing interest expense....                59               60                62
                                                                  --------------    -------------    --------------
     Total fixed charges......................................             2,149            2,217             1,817
                                                                  --------------    -------------    --------------

Income before fixed charges (excluding interest on
   deposits)..................................................    $       22,084    $      15,704    $       12,086
                                                                  ==============    =============    ==============

Ratio of Earnings to Fixed Charges
   Including interest on deposits.............................             3.17              2.33              1.87
   Excluding interest on deposits.............................            10.28              7.08              6.65
</TABLE>

                                       80
<PAGE>


EXHIBIT 21 - SUBSIDIARIES OF THE REGISTRANT




Subsidiaries - Direct/Wholly-owned                        State of Incorporation

Florida Community Bank                                                   Florida

FCBI Capital Trust I                                                    Delaware



                                       81
<PAGE>


EXIHIBIT 31.1

                    CERTIFICATION OF CHIEF EXECUTIVE OFFICER

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 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 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 report;

4.            The registrant's other certifying officer and I are responsible
              for establishing and maintaining disclosure controls and
              procedures (as defined in Exchange Act Rules 13a-15(e) and
              15d-15(e)) and internal control over financial reporting (as
              defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the
              registrant and have:

a)            designed such disclosure controls and procedures, or caused such
              disclosure controls and procedures to be designed under our
              supervision, 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 report is being prepared;

b)            designed such internal control over financial reporting, or caused
              such internal control over financial reporting to be designed
              under our supervision, to provide reasonable assurance regarding
              the reliability of financial reporting and the preparation of
              financial statements for external purposes in accordance with
              generally accepted accounting principles;

c)            evaluated the effectiveness of the registrant's disclosure
              controls and procedures and presented in this report our
              conclusions about the effectiveness of the disclosure controls and
              procedures, as of the end of the period covered by this report
              based on such evaluation; and

d)            disclosed in this report any change in the registrant's internal
              control over financial reporting that occurred during the
              registrant's fourth quarter that has materially affected or is
              reasonably likely to materially affect, the registrant's internal
              control over financial reporting; and

5.            The registrant's other certifying officer and I have disclosed,
              based on our most recent evaluation of internal control over
              financial reporting, to the registrant's auditors and the audit
              committee of registrant's board of directors (or persons
              performing the equivalent functions):

a)            all significant deficiencies and material weaknesses in the design
              or operation of internal control over financial reporting which
              are reasonably likely to adversely affect the registrant's ability
              to record, process, summarize and report financial information;
              and

b)            any fraud, whether or not material, that involves management or
              other employees who have a significant role in the registrant's
              internal control over financial reporting.


Date:  March 15, 2005   By:   /s/  Stephen L. Price
                         -------------------------------------------------------
                         Stephen L. Price, President, Chief Executive Officer
                         and Chairman of the Board of Directors

                                       82
<PAGE>


EXIHIBIT 31.2

                    CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, Guy W. Harris, certify that:

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

2.            Based on my knowledge, this 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 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 report;

4.            The registrant's other certifying officer and I are responsible
              for establishing and maintaining disclosure controls and
              procedures (as defined in Exchange Act Rules 13a-15(e) and
              15d-15(e)) and internal control over financial reporting (as
              defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the
              registrant and have:

a)            designed such disclosure controls and procedures, or caused such
              disclosure controls and procedures to be designed under our
              supervision, 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 report is being prepared;

b)            designed such internal control over financial reporting, or caused
              such internal control over financial reporting to be designed
              under our supervision, to provide reasonable assurance regarding
              the reliability of financial reporting and the preparation of
              financial statements for external purposes in accordance with
              generally accepted accounting principles;

c)            evaluated the effectiveness of the registrant's disclosure
              controls and procedures and presented in this report our
              conclusions about the effectiveness of the disclosure controls and
              procedures, as of the end of the period covered by this report
              based on such evaluation; and

d)            disclosed in this report any change in the registrant's internal
              control over financial reporting that occurred during the
              registrant's fourth quarter that has materially affected or is
              reasonably likely to materially affect, the registrant's internal
              control over financial reporting; and

5.            The registrant's other certifying officer and I have disclosed,
              based on our most recent evaluation of internal control over
              financial reporting, to the registrant's auditors and the audit
              committee of registrant's board of directors (or persons
              performing the equivalent functions):

a)            all significant deficiencies and material weaknesses in the design
              or operation of internal control over financial reporting which
              are reasonably likely to adversely affect the registrant's ability
              to record, process, summarize and report financial information;
              and

b)            any fraud, whether or not material, that involves management or
              other employees who have a significant role in the registrant's
              internal control over financial reporting.


Date:  March 15, 2005   By: /s/  Guy W. Harris
                           -----------------------------------------------------
                           Guy W. Harris
                           Chief Financial Officer

                                       83
<PAGE>



EXHIBIT 32.1

                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, 2004 ("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 15, 2005         By:   /s/ Stephen L. Price
                                     -------------------------------------------
                                     Stephen L. Price
                                     President and Chief Executive Officer



EXHIBIT 32.2

                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, 2004 ("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 15, 2005         By:   /s/ Guy W. Harris
                                     -------------------------------------------
                                     Guy W. Harris
                                     Chief Financial Officer


                                       84
<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 Guy W. Harris and each of them,
his true and lawful attorney-in-fact, as agent with full power of substitution
and re-substitution 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 15, 2005
----------------------------------------
Beauford E. Davidson


/s/ Patrick B. Langford                                                                   March 15, 2005
----------------------------------------
Patrick B. Langford


/s/ Lewis J. Nobles, Jr.                                                                  March 15, 2005
----------------------------------------
Lewis J. Nobles, Jr.


/s/ Jon R. Olliff                                                                         March 15, 2005
----------------------------------------
Jon R. Olliff


/s/ James O'Quinn                                                                         March 15, 2005
----------------------------------------
James O'Quinn


/s/ Stephen L. Price                                                                      March 15, 2005
----------------------------------------
Stephen L. Price


/s/ Bernard T. Rasmussen                                                                  March 15, 2005
----------------------------------------
Bernard T. Rasmussen


/s/ Daniel G. Rosbough                                                                    March 15, 2005
----------------------------------------
Daniel G. Rosbough


/s/ James E. Williams, Jr.                                                                March 15, 2005
----------------------------------------
James E. Williams, Jr.
</TABLE>

                                       85