<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                   FORM 10-Q/A

(Mark One)

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

       For the quarterly period ended JUNE 30, 1999

                                       OR

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

       For the transition period from ______________to_______________


                         Commission file number: 0-20960

                              HAMILTON BANCORP INC.
             ------------------------------------------------------
             (Exact Name of Registrant as Specified in Its Charter)


           FLORIDA                                               65-0149935
-------------------------------                            --------------------
(State or Other Jurisdiction of                              (I.R.S. Employer
  Incorporation or Organization)                            Identification No.)

                   3750 N.W. 87TH AVENUE, MIAMI, FLORIDA 33178
               ---------------------------------------------------
               (Address of Principal Executive Offices) (Zip Code)


      Registrant's Telephone Number, Including Area Code: (305) 717 - 5500

      ---------------------------------------------------------------------

Indicate by check [X] whether the registrant: (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

                             Yes [ ]   No [X]

                APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                  PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15 (d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.

                             Yes [ ]   No [ ]


<PAGE>   2
Item 1 and Item 2 of Part I of the Registrant's Form 10Q for the quarterly
period ended June 30, 1999 are hereby amended to read as follows:



ITEM 1

                          PART I. FINANCIAL INFORMATION

                     HAMILTON BANCORP INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CONDITION
                           (In thousands) (Unaudited)
<TABLE>
<CAPTION>

                                                                       As restated, see note 5  As restated, see note 5
                                                                               June 30,               December 31,
                                                                       -----------------------  -----------------------
                                                                                1999                    1998
                                                                       -----------------------  -----------------------
<S>                                                                         <C>                     <C>
                                        ASSETS
CASH AND DEMAND DEPOSITS WITH OTHER BANKS                                   $    20,200             $    24,213
FEDERAL FUNDS SOLD                                                               81,538                  87,577
                                                                            -----------             -----------
      Total cash and cash equivalents                                           101,738                 111,790

INTEREST EARNING DEPOSITS WITH OTHER BANKS                                      173,602                 200,203
SECURITIES AVAILABLE FOR SALE                                                    58,323                  69,725
SECURITIES HELD TO MATURITY                                                      44,752                  35,870
LOANS-NET                                                                     1,130,761               1,150,903
DUE FROM CUSTOMERS ON BANKERS ACCEPTANCES                                        34,004                  75,567
DUE FROM CUSTOMERS ON DEFERRED PAYMENT LETTERS OF CREDIT                          4,684                   6,468
PROPERTY AND EQUIPMENT-NET                                                        4,877                   4,775
ACCRUED INTEREST RECEIVABLE                                                      15,443                  19,201
GOODWILL-NET                                                                      1,746                   1,833
OTHER ASSETS                                                                     22,807                  16,894
                                                                            -----------             -----------
TOTAL                                                                       $ 1,592,737             $ 1,693,229
                                                                            ===========             ===========

                         LIABILITIES AND STOCKHOLDERS' EQUITY

DEPOSITS                                                                    $ 1,412,988             $ 1,477,052
TRUST PREFERRED SECURITIES                                                       12,650                  11,000
OTHER BORROWINGS                                                                     --                   6,116
BANKERS ACCEPTANCES OUTSTANDING                                                  34,004                  75,567
DEFERRED PAYMENT LETTERS OF CREDIT OUTSTANDING                                    4,684                   6,468
OTHER LIABILITIES                                                                 6,135                   7,784
                                                                            -----------             -----------
     Total liabilities                                                        1,470,461               1,583,987
                                                                            -----------             -----------

STOCKHOLDERS' EQUITY:
     Common stock, $.01 par value, 75,000,000 shares authorized,
       10,070,313 shares issued and outstanding at June 30, 1999
       and 10,050,062 shares issued
       and outstanding at December 31, 1998                                         101                     100
     Capital surplus                                                             60,422                  60,117
     Retained earnings                                                           62,012                  49,511
     Accumulated other comprehensive loss                                          (259)                   (486)
                                                                            -----------             -----------
     Total stockholders' equity                                                 122,276                 109,242
                                                                            -----------             -----------
TOTAL                                                                       $ 1,592,737             $ 1,693,229
                                                                            ===========             ===========
</TABLE>




See accompanying notes to consolidated financial statements.




                                       1
<PAGE>   3


                     HAMILTON BANCORP INC. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
            (Dollars in thousands except per share data) (Unaudited)

<TABLE>
<CAPTION>

                                                    Three Months Ended June 30,        Six Months Ended June 30,
                                                    ----------------------------      ----------------------------
                                                        1999             1998             1999             1998
                                                    -----------      -----------      -----------      -----------
<S>                                                 <C>              <C>              <C>              <C>
INTEREST INCOME:
  Loans, including fees                             $    25,606      $    26,406      $    51,136      $    49,813
  Deposits with other banks                               3,754            2,260            6,995            4,538
  Investment securities                                   1,744            1,120            4,499            2,130
  Federal funds sold                                        383              280              849              532
                                                    -----------      -----------      -----------      -----------
    Total                                                31,487           30,066           63,479           57,013
INTEREST EXPENSE:
  Deposits                                               16,846           16,842           35,014           31,579
  Trust preferred securities                                313               --              615               --
  Federal funds purchased and other borrowing                39              157              144              283
                                                    -----------      -----------      -----------      -----------
     Total                                               17,198           16,999           35,773           31,862
                                                    -----------      -----------      -----------      -----------
NET INTEREST INCOME                                      14,289           13,067           27,706           25,151
PROVISION FOR CREDIT LOSSES                               1,746            1,766            2,646            4,081
                                                    -----------      -----------      -----------      -----------
NET INTEREST INCOME AFTER PROVISION FOR CREDIT
  LOSSES                                                 12,543           11,301           25,060           21,070
                                                    -----------      -----------      -----------      -----------
NON-INTEREST INCOME:
  Trade finance fees and commissions                      3,442            3,228            6,432            6,623
  Structuring and syndication fees                        1,220              454            1,797              743
  Customer service fees                                     142              166              325              311
  Gain on sale of assets                                     27               --              214               --
  Other                                                     270              114              621              250
                                                    -----------      -----------      -----------      -----------
     Total                                                5,101            3,962            9,389            7,927
                                                    -----------      -----------      -----------      -----------
OPERATING EXPENSES:
  Employee compensation and benefits                      3,167            3,053            6,511            6,048
  Occupancy and equipment                                 1,037            1,066            1,997            2,136
  Other                                                   3,257            2,317            6,122            4,188
                                                    -----------      -----------      -----------      -----------
     Total                                                7,461            6,436           14,630           12,372
                                                    -----------      -----------      -----------      -----------

INCOME BEFORE PROVISION FOR INCOME TAXES                 10,183            8,827           19,819           16,625
PROVISION FOR INCOME TAXES                                3,750            3,273            7,318            6,166
                                                    -----------      -----------      -----------      -----------

NET INCOME                                          $     6,433      $     5,554      $    12,501      $    10,459
                                                    ===========      ===========      ===========      ===========
NET INCOME PER COMMON SHARE:
     BASIC                                          $      0.64      $      0.56      $      1.24      $      1.05
                                                    ===========      ===========      ===========      ===========
     DILUTED                                        $      0.63      $      0.54      $      1.22      $      1.02
                                                    ===========      ===========      ===========      ===========
AVERAGE SHARES OUTSTANDING:
     BASIC                                           10,065,908        9,988,481       10,061,037        9,917,070
                                                    ===========      ===========      ===========      ===========
     DILUTED                                         10,274,527       10,326,021       10,276,353       10,279,270
                                                    ===========      ===========      ===========      ===========


</TABLE>


See accompanying notes to consolidated financial statements.



                                       2
<PAGE>   4



                     HAMILTON BANCORP INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                           (In thousands) (Unaudited)

<TABLE>
<CAPTION>


                                                           Three Months Ended June 30,  Six Months Ended June 30,
                                                           ---------------------------- -------------------------
                                                                1999          1998          1999           1998
                                                              --------      --------      --------       --------
<S>                                                           <C>           <C>           <C>            <C>
NET INCOME                                                    $  6,433      $  5,554      $ 12,501       $ 10,459

OTHER COMPREHENSIVE INCOME, Net of tax:
   Unrealized appreciation (depreciation) in securities
        available for sale during period                            70            54           414            (90)
   Less:  Reclassification adjustment for write off of a
         foreign bank stock                                          0             0          (187)             0
                                                              --------      --------      --------       --------
                Total                                               70            54           227            (90)
                                                              --------      --------      --------       --------
COMPREHENSIVE INCOME                                          $  6,503      $  5,608      $ 12,728       $ 10,369
                                                              ========      ========      ========       ========
</TABLE>



See accompanying notes to consolidated financial statements

                                       3
<PAGE>   5


                     HAMILTON BANCORP INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                             As restated, see note 5
           (Dollars in thousands, except per share data) (Unaudited)
<TABLE>
<CAPTION>

                                                                                                  Accumulated
                                                 Common Stock                                        Other             Total
                                           -------------------------   Capital      Retained     Comprehensive     Stockholders'
                                              Shares        Amount     Surplus      Earnings         Loss             Equity
                                           --------------  ---------  -----------  -----------  ----------------  ----------------
<S>                                           <C>              <C>       <C>          <C>                 <C>            <C>
Balance, December 31, 1998                    10,050,062       $100      $60,117      $49,511             ($486)         $109,242

Issuance of 20,251 shares of common
   stock from exercise of options                 20,251          1          187                                              188

Reduction of tax liability due to
   deductibility of stock options excercised                                 118                                              118

Net change in unrealized loss on
  securities available for sale, net of taxes                                                               227               227

Net income for the six months ended
  June 30, 1999                                                                        12,501                              12,501
                                           --------------  ---------  -----------  -----------  ----------------  ----------------
Balance as of June 30, 1999                   10,070,313       $101      $60,422      $62,012             ($259)         $122,276
                                           ==============  =========  ===========  ===========  ================  ================
</TABLE>






See accompanying notes to consolidated financial statements.


                                       4
<PAGE>   6


                     HAMILTON BANCORP INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                       (Dollars in thousands) (Unaudited)

<TABLE>
<CAPTION>
                                                                              For Six Months Ended June
                                                                              -------------------------
                                                                                 1999            1998
                                                                              ---------       ---------
<S>                                                                           <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
     Net income                                                               $  12,501       $  10,459
       Adjustments to reconcile net income to net cash
         provided by operating activities:
         Depreciation and amortization                                              665             567
         Provision for credit losses                                              2,646           4,081
         Deferred tax provision (benefit)                                            59            (831)
         Write off of available for sale security                                   187               0
         Gain on sale of loans                                                     (188)              0
         Net loss (gain) on sale of other real estate owned                         (26)             34
         Proceeds from the sale of bankers acceptances and
           loan participations, net of loan participations purchased                 77          60,749
       Increase in accrued interest receivable and other assets                  (2,304)         (7,557)
       (Decrease) increase in other liabilities                                  (1,550)            914
                                                                              ---------       ---------
         Net cash provided by operating activities                               12,067          68,416
                                                                              ---------       ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
     Decrease (increase) in interest-earning deposits with other banks           26,601          (8,358)
     Purchase of securities available for sale                                 (401,679)       (127,516)
     Purchase of securities held to maturity                                    (10,760)        (13,084)
     Proceeds from sales and maturities of securities available for sale        413,172         127,218
     Proceeds from paydowns of securities held to maturity                        1,864               0
     Proceeds from sale of loans                                                 11,148               0
     Decrease (increase) in loans-net                                             6,420        (287,564)
     Purchases of property and equipment-net                                       (581)           (712)
     Proceeds from sale of other real estate owned                                   38             122
                                                                              ---------       ---------
         Net cash provided by (used in) investing activities                     46,223        (309,894)
                                                                              ---------       ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
    Net (decrease) increase in deposits                                         (64,064)        211,521
    Proceeds from trust preferred securities offering                             1,650               0
    Payment of other borrowing                                                   (6,116)          6,116
    Net proceeds from exercise of common stock options                              188           1,854
                                                                              ---------       ---------
    Net cash (used in) provided by financing activities                         (68,342)        219,491
                                                                              ---------       ---------

NET DECREASE IN CASH AND CASH EQUIVALENTS                                       (10,052)        (21,987)
CASH AND CASH EQUIVALENTS AT BEGINNING OF THE PERIOD                            111,790          91,434
                                                                              ---------       ---------
CASH AND CASH EQUIVALENTS AT END OF THE PERIOD                                $ 101,738       $  69,447
                                                                              =========       =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
  INFORMATION:

  Interest paid during the period                                             $  37,002       $  29,670
                                                                              =========       =========
  Income taxes paid during the period                                         $   7,569       $   7,027
                                                                              =========       =========

</TABLE>

See accompanying notes to consolidated financial statements.




                                       5
<PAGE>   7


                        HAMILTON BANCORP AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                  JUNE 30, 1999

NOTE 1:  BASIS OF PRESENTATION

The consolidated statements of condition for Hamilton Bancorp Inc. and
Subsidiary (the "Company") as of June 30, 1999 and December 31, 1998, the
related consolidated statements of income, comprehensive income, stockholders'
equity and of cash flows for the six months ended June 30, 1999 and 1998
included in the Form 10-Q have been prepared by the Company in conformity with
the instructions to Form 10-Q and Article 10 of Regulation S-X and, therefore,
do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. The statements
are unaudited except for the consolidated statement of condition as of December
31, 1998.

The accounting policies followed for interim financial reporting are consistent
with the accounting policies set forth in Note 1 to the consolidated financial
statements appearing in the Company's Annual Report on Form 10-K/A for the year
ended December 31, 1998 as filed with the Securities and Exchange Commission.

NOTE 2: NET INCOME PER COMMON SHARE

Basic earnings per share is computed by dividing the Company's net income by the
weighted average number of shares outstanding during the period.

Diluted earnings per share is computed by dividing the Company's net income by
the weighted average number of shares outstanding and the dilutive impact of
potential common stock, primarily stock options. The dilutive impact of common
stock is determined by applying the treasury stock method.

NOTE 3: SALE OF LOANS

During the six months ended June 30, 1999, the Company sold $8.1 million of its
residential mortgage loan portfolio realizing a gain of $106 thousand. This sale
was the result of a status change during 1998 in the Bank's designation to a
wholesale bank for purposes of the Community Reinvestment Act. This designation
is due largely to the Company's focus on trade finance. In addition, the Company
sold a $3.0 million foreign loan realizing a gain of $82 thousand.

NOTE 4: TRUST PREFERRED SECURITIES

On December 28, 1998, the Company issued $11,000,000 of 9.75% Beneficial
Unsecured Securities, Series A (the "Preferred Securities") out of a guarantor
trust. On January 14, 1999, the Trust issued an additional $1,650,000 of
Preferred Securities upon the exercise of an over-allotment by the underwriters.
The Trust holds 9.75% Junior Subordinated Deferrable Interest Debentures, Series
A (the "Subordinated Debentures") of the Company purchased with the proceeds of
the securities issued. Interest from the Subordinated Debentures of the Company
is used to fund the preferred dividends of the Trust. Distributions on the
Preferred Securities are cumulative and are payable quarterly. The Trust must
redeem the Preferred Securities when the Subordinated Debentures are paid at
maturity on or after December 31, 2028, or upon earlier redemption. Subject to
the Company having received any required approval of regulatory agencies, the
Company has the option at any time on or after December 31, 2008 to redeem the
Subordinated Debentures, in whole or in part. Additionally, the Company has the
option at any time prior to December 31, 2008 to redeem the Subordinated
Debentures, in whole but not in part, if certain regulatory or tax events occur
or if there is a change in certain laws that require the Trust to register under
the law. The Preferred Securities are considered to be Tier I capital for
regulatory purposes.



                                       6
<PAGE>   8


NOTE 5: RESTATEMENT

Subsequent to the filing of the Company's quarterly report on Form 10Q for the
quarter ended June 30, 1999, the Company determined that the purchase of certain
securities and the sale of certain loans entered into by the Company in 1998
should have been recorded as an exchange transaction in accordance with SFAS No.
125, Accounting for Transfers and Servicing of Financial Assets and
Extinguishment of Liabilities, and that a loss of $22,223,000 ($14,304,000 after
tax) should have recorded on the exchange. The Company had previously accounted
for the purchases of the securities and sales of the loans as separate unrelated
transactions. The purchases were recorded at cost and the sales were recorded
based on the proceeds received for the loans sold, with no gain or loss being
recognized. During the second quarter of 2000 the OCC, through a temporary cease
and desist order dated April 25, 2000, required the Company to re-file its
regulatory reports to account for the purchase and sale transactions referred to
above as related transactions and to record a loss on such transactions. The
Company's Audit Committee, with the assistance of independent counsel, conducted
an investigation that began in August 2000 and was completed during December
2000 into these transactions, including the consideration of certain additional
information that the Company received from the OCC. After evaluating the results
of the investigation, the Company concluded that the above transactions should
have been accounted for as an exchange (i.e., one related transaction) rather
than as separate transactions and that a loss should be recorded. As a result
the Company restated its 1998 consolidated financial statements. The loss on
exchange created a lower cost basis, by a like amount, for the assets purchased.
The following table summarizes the items that have been restated in the June 30,
1999 consolidated financial statements as a result of the exchange in 1998:

<TABLE>
<CAPTION>

                                                                           As Previously             As
                                                                              Reported            Restated
                                                                           -------------          --------
<S>                                                                           <C>                 <C>
As of June 30, 1999:

Securities Held to Maturity (includes other investments)                      $ 54,173            $ 44,752

Loans - Net                                                                  1,143,563           1,130,761

Other Assets                                                                    14,918              22,807

Other Liabilities                                                                6,165               6,135

Retained Earnings                                                               76,316              62,012




As of December 31, 1998:

Securities Held to Maturity (includes other investments)                        45,291              35,870

Loans - Net                                                                  1,163,705           1,150,903

Other Assets                                                                     9,005              16,894

Other Liabilities                                                                7,814               7,784

Retained Earnings                                                               63,815              49,511


</TABLE>



                                       7
<PAGE>   9



ITEM 2.

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

INTRODUCTION

Hamilton Bancorp Inc. ("Bancorp") is a bank holding company which conducts
operations principally through its 99.8 percent subsidiary, Hamilton Bank, N.A.
(the "Bank" and, collectively with Bancorp, the "Company"). The Bank is a
national bank which specializes in financing trade flows between domestic and
international companies on a global basis, with particular emphasis on trade
with and between South America, Central America, the Caribbean (collectively,
the "Region") and the United States. The Bank has a network of eight
FDIC-insured branches with seven Florida locations in Miami, Sarasota, Tampa,
West Palm Beach and Winter Haven, and a branch in San Juan, Puerto Rico. On
March 8, 1999, the Company received regulatory approval for the opening of an
additional branch in Weston, Florida. This branch opened on July 6, 1999.

RESTATEMENT

Subsequent to the filing of the Company's quarterly report on Form 10Q for the
quarter ended June 30, 1999, the Company determined that the purchase of certain
securities and the sale of certain loans entered into by the Company in 1998
should have been recorded as an exchange transaction in accordance with SFAS No.
125, Accounting for Transfers and Servicing of Financial Assets and
Extinguishment of Liabilities, and that a loss of $22,223,000 ($14,304,000 after
tax) should have recorded on the exchange. The Company had previously accounted
for the purchases of the securities and sales of the loans as separate unrelated
transactions. The purchases were recorded at cost and the sales were recorded
based on the proceeds received for the loans sold, with no gain or loss being
recognized. During the second quarter of 2000 the OCC, through a temporary cease
and desist order dated April 25, 2000, required the Company to re-file its
regulatory reports (the "Call Reports") to account for the purchase and sale
transactions referred to above as related transactions and to record a loss on
such transactions. The Company's Audit Committee, with the assistance of
independent counsel, conducted an investigation that began in August 2000 and
was completed during December 2000 into these transactions, including the
consideration of certain additional information that the Company received from
the OCC. After evaluating the results of the investigation, the Company
concluded that the above transactions should have been accounted for as an
exchange (i.e., one related transaction) rather than as separate transactions
and that a loss should be recorded. As a result the Company restated its 1998
consolidated financial statements. The loss on exchange created a lower cost
basis, by a like amount, for the assets purchased. See Note 5 of the notes to
the unaudited consolidated financial statements for a discussion of these
restatements.

In addition, as part of this process, the Company will again re-file its Call
Reports to reflect the same accounting treatment and loss described above. This
action is being taken as the original loss of $24,602,000, which amount was
based on a directive of the OCC (under a temporary cease and desist order),
recorded by the Company for regulatory purposes in the previously re-filed Call
Reports differed from the Company's final conclusions and recording of the
$22,223,000 loss described above, which amount was based on management's
determination of the fair value of the assets acquired. The Company's
determination of the fair value was agreed to by the OCC in recent discussions
with the OCC. Therefore, the Company's restated consolidated financial
statements and the Company's re-filed Call Reports will be consistent as it
relates to this loss on exchange.

The Management's Discussion and Analysis of Financial Condition and Results of
Operations for the three and six months ended June 30, 1999 presented herein
have been adjusted to reflect the restatement described above.


                                       8
<PAGE>   10




FINANCIAL CONDITION - JUNE 30, 1999 VS. DECEMBER 31, 1998.

Total consolidated assets decreased $100.5 million, or 5.9 percent, during the
first six months of 1999, which included a decrease of $55.3 million in interest
earning assets and $45.2 million in non-interest earning assets. As a
consequence, total deposits decreased $64.1 million. The decrease in
consolidated assets reflects decreases of $20.1 million in loans-net, $26.6
million in interest-earning deposits with other banks and $6.0 million in
federal funds sold. During the quarter, the Company began to adjust its asset
composition to take advantage of a greater flow of goods into the U. S. market,
due to its high consumer demand and vibrant economic environment. As a
consequence, the Company's exposure in the Region was significantly reduced
relative to the U. S.

CASH, DEMAND DEPOSITS WITH OTHER BANKS AND FEDERAL FUNDS SOLD

Cash, demand deposits with other banks and federal funds sold are considered
cash and cash equivalents. Balances of these items fluctuate daily depending on
many factors which include or relate to the particular banks that are clearing
funds, loan payoffs, deposit gathering and reserve requirements. Cash, demand
deposits with other banks and federal funds sold totaled $101.7 million at June
30, 1999 compared to $111.8 million at December 31, 1998.

INTEREST-EARNING DEPOSITS WITH OTHER BANKS AND INVESTMENT SECURITIES

Interest-earning deposits with other banks decreased to $173.6 million at June
30, 1999 from $200.2 million at December 31, 1998. These deposits are placed
with correspondent banks in the Region, generally on a short term basis (less
than 365 days), to increase yields and enhance relationships with the
correspondent banks. The level of such deposits has diminished as the exposure
in the Region has decreased during the six months ended June 30, 1999. The
short-term nature of these deposits allows the Company the flexibility to later
redeploy assets into a higher yielding domestic loan component.

Investment securities decreased to $103.1 million at June 30, 1999 from $105.6
million at December 31, 1998. The decrease has been primarily in foreign
securities that matured and were partially replaced with U.S. government agency
securities. The government agency securities are short term in nature and allow
the Company the flexibility of liquidity and the ability to convert these assets
into higher yielding loans as these become accessible.



                                       9
<PAGE>   11




LOANS

The Company's gross loan portfolio decreased by $21.2 million, or 1.8 percent,
during the first six months of 1999 in relation to the year ended December 31,
1998. Commercial-domestic loans increased by $60.5 million and domestic
acceptances discounted increased by $15.1 million, a combined increase of 21.9
percent. This was offset by decreases in loans to banks and other financial
institutions - foreign of $39.7 million and commercial foreign loans of $21.1
million. Details on the loans by type are shown in the table below. At June 30,
1999 approximately 37.0 percent of the Company's portfolio consisted of loans to
domestic borrowers and 63 percent of the Company's portfolio consisted of loans
to foreign borrowers. The Company's loan portfolio is relatively short-term, as
approximately 52.8 and 65.8 percent of loans at June 30, 1999 were short-term
loans with average maturities of less than 180 and less than 365 days,
respectively. See "Interest Rate Sensitivity Report".

The following table sets forth the loans by type in the Company's loan portfolio
at the dates indicated.

LOANS BY TYPE
(in thousands)
<TABLE>
<CAPTION>

                                               June 30, 1999        December 31, 1998
                                              --------------        -----------------
<S>                                                  <C>                   <C>
Domestic:

Commercial (1)                                   $  349,519            $  289,032
Acceptances discounted                               71,783                56,706
Residential mortgages                                 2,148                10,494
Installment                                             205                   232
                                                 ----------            ----------

Subtotal Domestic                                   423,655               356,464
                                                 ----------            ----------

Foreign:

Banks and other financial institutions              262,697               302,371
Commercial and industrial (1)                       374,933               395,987
Acceptances discounted                               34,400                72,597
Government and official institutions                 49,873                39,309
                                                 ----------            ----------

Subtotal Foreign                                    721,903               810,264
                                                 ----------            ----------

Total Loans                                      $1,145,558            $1,166,728
                                                 ==========            ==========
</TABLE>

(1)  Includes pre-export financing, warehouse receipts and refinancing of letter
     of credits.






                                       10
<PAGE>   12




The following tables reflect largely both the Company's diversification in
financing trade flows between the United States and the Region in terms of loans
by country and cross-border outstandings by country. The aggregate amount of the
Company's crossborder outstandings by primary credit risk include cash and
demand deposits with other banks, interest earning deposits with other banks,
investment securities, due from customers on bankers acceptances, due from
customers on deferred payment letters of credit and loans-net. Exposure levels
in any given country at the end of each period may be impacted by the flow of
trade between the United States (and to a large extent Florida) and the given
countries, as well as the price of the underlying goods or commodities being
financed.

At June 30, 1999 approximately 28.6 percent in principal amount of the Company's
loans were outstanding to borrowers in four countries other than the United
States: Panama (10.0 percent), Brazil (8.7 percent), Guatemala (5.1 percent) and
Ecuador (4.8 percent).

LOANS BY COUNTRY
(Dollars in thousands)
<TABLE>
<CAPTION>

                                       June 30, 1999                           December 31, 1998
                           ------------------------------------    --------------------------------------
                                                 Percent of                                Percent of
Country                        Amount           Total Loans             Amount            Total Loans
                           ---------------    -----------------    -----------------    -----------------
<S>                             <C>                      <C>              <C>                      <C>
United States                   $ 423,655                37.0%            $ 356,464                30.6%
Argentina                          29,651                 2.6%               36,276                 3.1%
Bolivia                            15,856                 1.4%               20,816                 1.8%
Brazil                             99,573                 8.7%               54,862                 4.7%
British West Indies (1)            17,994                 1.6%                   --                   --
Colombia                           34,395                 3.0%               41,911                 3.6%
Dominican Republic (1)                 --                   --               29,563                 2.5%
Ecuador                            55,057                 4.8%               46,917                 4.0%
El Salvador                        31,275                 2.7%               37,196                 3.2%
Guatemala                          58,445                 5.1%              119,227                10.2%
Honduras                           44,302                 3.9%               59,564                 5.1%
Jamaica                            38,411                 3.4%               29,066                 2.5%
Mexico                             20,733                 1.8%               22,983                 2.0%
Panama                            115,054                10.0%              118,680                10.2%
Peru                               49,469                 4.3%               49,382                 4.2%
Suriname                           16,931                 1.5%               21,868                 1.9%
Venezuela                          20,395                 1.8%               19,756                 1.7%
Other (2)                          74,362                 6.4%              102,197                 8.7%
                           ---------------    -----------------    -----------------    -----------------
Total                         $ 1,145,558               100.0%          $ 1,166,728               100.0%
                           ===============    =================    =================    =================
</TABLE>


(1)  These countries had loans in periods presented which did not exceed 1
     percent of total assets.

(2)  Other consists of loans to borrowers in countries in which loans did not
     exceed 1 percent of total assets.



                                       11
<PAGE>   13


At June 30, 1999 approximately 31.8 percent in cross-border outstandings were
outstanding to borrowers in five countries other than the United States: Brazil
(10.7 percent), Panama (8.6 percent), Ecuador (4.5 percent), Guatemala (4.1
percent), and Argentina (3.9 percent).

TOTAL CROSS-BORDER OUTSTANDINGS BY COUNTRY
(Dollars in millions)
<TABLE>
<CAPTION>

                                June 30, 1999                  December 31, 1998
                        ---------------------------    ----------------------------
                                       % of Total                      % of Total
                          Amount         Assets           Amount         Assets
                        ------------   ------------    -------------   ------------
<S>                            <C>            <C>              <C>            <C>
Argentina                      $ 62           3.9%             $ 57           3.4%
Bahamas (1)                      30           1.9%                -              -
Bolivia                          20           1.3%               26           1.5%
Brazil                          171          10.7%               94           5.6%
British West Indies              36           2.3%               36           2.1%
Colombia                         44           2.8%               49           2.9%
Costa Rica                       13           0.8%               16           0.9%
Dominican Republic               20           1.3%               48           2.8%
Ecuador                          72           4.5%              100           5.9%
El Salvador                      48           3.0%               52           3.1%
Guatemala                        66           4.1%              131           7.7%
Honduras                         60           3.8%               69           4.1%
Jamaica                          42           2.6%               40           2.4%
Mexico                           21           1.3%               23           1.4%
Nicaragua (1)                    --           0.0%               15           0.9%
Panama                          137           8.6%              118           7.0%
Peru                             62           3.9%               56           3.3%
Suriname                         20           1.3%               27           1.6%
Venezuela                        19           1.2%               19           1.1%
Other (2)                        41           2.6%               76           4.5%
                        ------------   ------------    -------------   ------------
Total                         $ 984          61.8%          $ 1,052          62.1%
                        ============   ============    =============   ============
</TABLE>


(1)  These countries had outstandings in periods presented which did not exceed
     0.75 percent of total assets.

(2)  Other consists of cross-border outstandings to countries in which such
     cross-border outstandings did not exceed 0.75 percent of the Company's
     total assets at any of the dates shown.



                                       12
<PAGE>   14


CONTINGENCIES - COMMERCIAL LETTERS OF CREDIT
(in thousands)

The following table sets forth the total volume and average monthly volume of
the Company's export and import letters of credit for each of the periods
indicated. As shown by the table, the volume of commercial letters of credit
decreased by 43.3 percent to $230.4 million for the six months ended June 30,
1999 when compared to the same period in 1998. This is a result of shifts
towards more on-balance sheet financing and an increase in financing a greater
domestic component.

<TABLE>
<CAPTION>

(in thousands)                                  Six Months Ended June 30,                           Year Ended
                                  -----------------------------------------------------    ------------------------------
                                            1999                       1998                      December 31, 1998
                                  -------------------------- --------------------------    ------------------------------
                                                 Average                     Average                         Average
                                     Total       Monthly         Total       Monthly           Total         Monthly
                                     Volume       Volume        Volume       Volume            Volume         Volume
                                  -------------------------- --------------------------    ------------------------------
<S>                                  <C>           <C>           <C>          <C>               <C>             <C>
Export Letters of Credit (1)         $ 104,352     $ 17,392      $ 226,106    $ 37,684          $ 397,683       $ 33,140
Import Letters of Credit (1)           126,031       21,005        180,083      30,014            349,099         29,092
                                  -------------------------- --------------------------    ------------------------------
Total                                $ 230,383     $ 38,397      $ 406,189    $ 67,698          $ 746,782       $ 62,232
                                  ========================== ==========================    ==============================
</TABLE>


(1)  Represents certain contingent liabilities not reflected on the Company's
     balance sheet.



                                       13
<PAGE>   15


The following table sets forth the distribution of the Company's contingent
liabilities by country of the applicant and issuing bank for import and export
letters of credit, respectively. As shown by the table, contingent liabilities
increased by 11.7 percent from December 31, 1998 to June 30, 1999. Individual
fluctuations reflect relative changes in the flow of trade or instruments used
in financing such trade.

CONTINGENT LIABILITIES (1)
(in thousands)

                                  June 30, 1999           December 31, 1998
                                  -------------           -----------------
Argentina (2)                       $     --                  $  1,680
Bolivia                                1,697                     3,890
Brazil (2)                             6,945                        --
Costa Rica                             8,527                     2,846
Dominican Republic                     6,526                     7,015
Ecuador (2)                               --                     3,703
El Salvador                            2,531                     1,995
Guatemala                              8,930                    26,132
Guyana                                 3,867                     2,374
Haiti                                  4,839                     2,088
Honduras                               2,447                     2,427
Panama                                 9,219                    14,538
Paraguay (2)                              --                     1,961
Peru (2)                               2,176                        --
Suriname (2)                              --                    11,690
Switzerland                            2,119                     1,588
United States                         74,924                    39,415
Venezuela (2)                          1,781                        --
Other (3)                              7,218                     5,374
                                    --------                  --------
Total                               $143,746                  $128,716
                                    ========                  ========




(1)  Includes export and import letters of credit, standby letters of credit and
     letters of indemnity.

(2)  These countries had contingencies which represented less than 1 percent of
     the Company's total contingencies at each of the above dates.

(3)  Other includes those countries in which contingencies represent less than 1
     percent of the Company's total contingencies at each of the above dates.

ALLOWANCE FOR CREDIT LOSSES

The allowance for credit losses reflects management's judgment of the level of
allowance adequate to provide for reasonably foreseeable losses, based upon the
following factors: (i) the economic conditions in those countries in the Region
in which the Company conducts trade finance activities; (ii) the credit
condition of its customers and correspondent banks, as well as the underlying
collateral, if any; (iii) historical experience; and (iv) the average maturity
of its loan portfolio.

In addition, although the Company's credit losses have been relatively limited
to date, management believes that the level of the Company's allowance should
reflect the potential for political and economic instability in certain
countries of the Region and the possibility that serious economic difficulties
in a country could adversely affect all of the Company's loans to borrowers in
or doing business with that country.




                                       14
<PAGE>   16


Determining the appropriate level of the allowance for credit losses requires
management's judgment, including application of the factors described above to
assumptions and estimates made in the context of changing political and economic
conditions in many of the countries of the Region. Accordingly, there can be no
assurance that the Company's current allowance for credit losses will prove to
be adequate in light of future events and developments. At June 30, 1999 the
allowance for credit losses was approximately $12.7 million.

The following table provides certain information with respect to the Company's
allowance for credit losses, provision for credit losses, charge-off and
recovery activity for the periods shown.

CREDIT LOSS EXPERIENCE
(in thousands)
<TABLE>
<CAPTION>

                                                                       Six Months Ended          Year Ended
                                                                        June 30, 1999          December 31, 1998
                                                                       -----------------       -----------------
<S>                                                                      <C>                      <C>
Balance of allowance for credit losses at beginning of period            $    12,794              $    10,317
Charge-offs:
Domestic:
   Commercial                                                                   (639)                  (3,357)
   Acceptances                                                                    --                     (100)
   Installment                                                                    (1)                      --
                                                                         -----------              -----------
 Total Domestic                                                                 (640)                  (3,457)
                                                                         -----------              -----------
Foreign:
   Banks and other financial institutions                                         --                   (3,901)
   Commerical and industrial                                                  (2,101)                      --
                                                                         -----------              -----------
 Total Foreign                                                                (2,101)                  (3,901)
                                                                         -----------              -----------
Total charge-offs                                                             (2,741)                  (7,358)
                                                                         -----------              -----------
Recoveries:
Domestic:
   Commercial                                                                      1                       12
Foreign:
  Banks and other financial institutions                                          --                      202
                                                                         -----------              -----------
 Total recoveries                                                                  1                      214
                                                                         -----------              -----------
Net (charge-offs) recoveries                                                  (2,740)                  (7,144)
Provision for credit losses                                                    2,646                    9,621
                                                                         -----------              -----------
Balance at end of the period                                             $    12,700              $    12,794
                                                                         ===========              ===========
Average loans                                                            $ 1,151,965              $ 1,165,224
Total loans                                                              $ 1,145,558              $ 1,166,728
Net charge-offs to average loans                                                0.24%                    0.61%
Allowance to total loans                                                        1.11%                    1.10%

</TABLE>



                                       15
<PAGE>   17



The following tables set forth an analysis of the allocation of the allowance
for credit losses by category of loans and the allowance for credit losses
allocated to foreign loans. The allowance is established to cover potential
losses inherent in the portfolio as a whole or is available to cover potential
losses on any of the Company's loans. Because of the decrease in foreign loans,
the allowance allocated to foreign loans was also reduced which reflects a
negative provision for credit losses attributable to foreign loans.

ALLOCATION OF ALLOWANCE FOR CREDIT LOSSES
(in thousands)
<TABLE>
<CAPTION>

                                                                   As of               As of
                                                               June 30, 1999      December 31, 1998
                                                               --------------     -----------------
<S>                                                          <C>                   <C>
Allocation of the allowance by category of loans:
Domestic:
   Commercial                                                $   3,621             $     945
   Acceptances                                                     742                   211
   Residential                                                      18                    66
   Installment                                                       4                     3
   Overdraft                                                        60                   190
                                                             ---------             ---------
       Total domestic                                            4,445                 1,415
Foreign:
   Government and official institutions                            604                    --
   Banks and other financial institutions                        2,970                 3,033
   Commercial and industrial                                     4,323                 8,010
   Acceptances discounted                                          358                   336
                                                             ---------             ---------
      Total foreign                                              8,255                11,379
Total                                                        $  12,700             $  12,794
                                                             =========             =========
Percent of loans in each category to total loans:
Domestic:
   Commercial                                                     30.5%                 24.8%
   Acceptances                                                     6.3%                  4.9%
   Residential                                                     0.2%                  0.9%
   Installment                                                     0.0%                  0.0%
   Overdraft                                                       0.0%                  0.0%
                                                             ---------             ---------
      Total domestic                                              37.0%                 30.6%
Foreign:
   Banks and other financial institutions                         22.9%                 25.9%
   Commercial and industrial                                      32.7%                 33.9%
   Acceptances discounted                                          3.0%                  6.2%
   Government and official Institutions                            4.4%                  3.4%
                                                             ---------             ---------
      Total foreign                                               63.0%                 69.4%
Total                                                            100.0%                100.0%
                                                             =========             =========

</TABLE>



                                       16
<PAGE>   18


ANALYSIS OF ALLOWANCE FOR CREDIT LOSSES ALLOCATED TO FOREIGN LOANS
(in thousands)


                                      June 30, 1999      December 31, 1998
                                      -------------      -----------------

Balance, beginning of period            $ 11,379             $  7,890
Provision for credit losses               (1,023)               7,188
Net charge-offs                           (2,101)              (3,699)
                                        --------             --------
Balance, end of period                  $  8,255             $ 11,379
                                        ========             ========


The Company does not have a rigid charge-off policy but instead charges off
loans on a case-by-case basis as determined by management and approved by the
Board of Directors. In some instances, loans may remain in the nonaccrual
category for a period of time during which the borrower and the Company
negotiate restructured repayment terms.

The Company attributes its favorable asset quality to the short-term nature of
its loan portfolio, the composition of its borrower base, the importance that
borrowers in the Region attach to maintaining their continuing access to
financing for foreign trade and the Company's loan underwriting policies.

The Company accounts for impaired loans in accordance with Statement of
Financial Accounting Standards ("SFAS") No. 114, Accounting by Creditors for
Impairment of a Loan. Under these standards, individually identified impaired
loans are measured based on the present value of payments expected to be
received, using the historical effective loan rate as the discount rate.
Alternatively, measurement may also be based on observable market prices or, for
loans that are solely dependent on the collateral for repayment, measurement may
be based on the fair value of the collateral. The Company evaluates commercial
loans individually for impairment, while groups of smaller-balance homogeneous
loans (generally residential mortgage and installment loans) are collectively
evaluated for impairment.

The following table sets forth information regarding the Company's nonperforming
loans at the dates indicated.

NONPERFORMING LOANS
(in thousands)
<TABLE>
<CAPTION>

                                                  June 30, 1999     December 31, 1998
                                                  -------------     -----------------
<S>                                                   <C>                <C>
Domestic:
   Non accrual                                        $1,545             $2,189
   Past due over 90 days and accruing                     92                 69
                                                      ------             ------
      Total domestic nonperforming loans               1,637              2,258
                                                      ------             ------

Foreign
   Non accrual                                         8,187              6,396
   Past due over 90 days and accruing                     --                404
                                                      ------             ------
      Total foreign nonperforming loans                8,187              6,800
                                                      ------             ------
Total nonperforming loans                             $9,824             $9,058
                                                      ======             ======

Total nonperforming loans to total loans                0.86%              0.78%
Total nonperforming assets to total assets              0.62%              0.53%
</TABLE>


At June 30, 1999 and December 31, 1998 the Company had no nonaccruing investment
securities.



                                       17
<PAGE>   19


DUE FROM CUSTOMERS ON BANKERS' ACCEPTANCES AND DEFERRED PAYMENT LETTERS OF
CREDIT.

Due from customers on bankers' acceptances and deferred payment letters of
credit were $34.0 million and $4.7 million, respectively, at June 30, 1999
compared to $75.6 million and $6.5 million, respectively, at December 31, 1998.
These assets represent a customer's liability to the Company while the
Company's" corresponding liability to third parties is reflected on the balance
sheet as "Bankers Acceptances Outstanding" and "Deferred Payment Letters of
Credit Outstanding".

DEPOSITS

The primary sources of the Company's domestic time deposits are its eight Bank
branches located in Florida and Puerto Rico. The Company opened a branch in
Weston, Florida on July 6, 1999. In pricing its deposits, the Company analyzes
the market carefully, attempting to price its deposits competitively with the
other financial institutions in the area.

Total deposits were $1,413.0 million at June 30, 1999 compared to $1,477.1
million at December 31, 1998. The decrease in deposits during the six month
period was largely in certificates of deposits over $100,000 which decreased by
$125.3 million. This decrease was offset by certificates of deposit under
$100,000 which increased by $25.6 million.

 The following table indicates the maturities and amounts of certificates of
deposit and other time deposits issued in denominations of $100,000 or more as
of June 30, 1999:

MATURITIES OF AND AMOUNTS OF CERTIFICATES OF DEPOSIT AND OTHER TIME DEPOSITS
$100,000 OR MORE

(in thousands)
<TABLE>
<CAPTION>

                                 Certificates of Deposit    Other Time Deposits
                                    $100,000 or More        $100,000 or More               Total
                                 ----------------------   ----------------------    -------------------
<S>                                     <C>                     <C>                     <C>
Three months or less                    $104,074                $ 53,475                $157,549
Over 3 through 6 months                  138,638                   4,261                 142,899
Over 6 through 12 months                 129,126                   2,402                 131,528
Over 12 months                            33,255                      --                  33,255
                                        --------                --------                --------
Total                                   $405,093                $ 60,138                $465,231
                                        ========                ========                ========
</TABLE>


TRUST PREFERRED SECURITIES

The trust preferred securities increased by $1.7 million as a result of the
exercise of the over allotment option by the underwriter. See Note 4 to the
Consolidated Financial Statements for further details.

STOCKHOLDERS' EQUITY

The Company's stockholders' equity at June 30, 1999 was $122.3 million compared
to $109.2 million at December 31, 1998. During this period stockholders' equity
increased by $13.0 million primarily due to the retention of net income.


                                       18
<PAGE>   20



INTEREST RATE SENSITIVITY

The following table presents the projected maturities or interest rate
adjustments of the Company's earning assets and interest-bearing funding sources
based upon the contractual maturities or adjustment dates at June 30, 1999. The
interest-earning assets and interest-bearing liabilities of the Company and the
related interest rate sensitivity gap given in the following table may not be
reflective of positions in subsequent periods.

<TABLE>
<CAPTION>
                                                INTEREST RATE SENSITIVITY REPORT
                                                     (Dollars in thousands)


                                            0 to 30      31 to 90     91 to 180    181 to 365      1 to 5        Over 5
                                             Days          Days          Days         Days          Years        Years     Total
                                            -------      --------     ---------    ----------      ------        ------    ------
<S>                                       <C>          <C>           <C>          <C>          <C>          <C>          <C>
Earning Assets:
Loans                                     $  177,392   $  230,665    $  196,565   $  149,588   $  324,446   $   66,902   $1,145,558

Federal funds sold                            81,538                                                                         81,538

Investment securities                         40,940        2,036         6,503        1,200          600       50,090      101,369

Interest earning deposits with
other banks                                   55,825       13,850        56,450       47,477           --                   173,602
                                          ----------   ----------    ----------   ----------   ----------   ----------   ----------
Total                                        355,695      246,551       259,518      198,265      325,046      116,992    1,502,067
                                          ----------   ----------    ----------   ----------   ----------   ----------   ----------
Funding Sources:
Savings and transaction deposits              85,918       29,336                                                           115,254

Certificates of deposits of $100 or more      35,270       68,804       138,638      129,126       33,255           --      405,093

Certificates of deposits under $100           59,695      173,978       202,548      249,996       12,054           78      698,349

Other time deposits                           43,170       10,305         4,261        2,402                                 60,138

Funds overnight                               51,900                                                                         51,900

Trust preferred securities                                                                                      12,650       12,650
                                          ----------   ----------    ----------   ----------   ----------   ----------   ----------
Total                                     $  275,953   $  282,423    $  345,447   $  381,524   $   45,309   $   12,728   $1,343,384
                                          ==========   ==========    ==========   ==========   ==========   ==========   ==========
Interest sensitivity gap                  $   79,742   $  (35,872)   $  (85,929)  $ (183,259)  $  279,737   $  104,264   $  158,683
                                          ==========   ==========    ==========   ==========   ==========   ==========   ==========
Cumulative gap                            $   79,742   $   43,870    $  (42,059)  $ (225,318)  $   54,419   $  158,683
                                          ==========   ==========    ==========   ==========   ==========   ==========
Cumulative gap as a percentage
of total earning assets                         5.31%        2.92%       -2.80%      -15.00%         3.62%       10.56%
                                          ==========   ==========    ==========   ==========   ==========   ==========
</TABLE>



                                       19
<PAGE>   21


LIQUIDITY

Cash and cash equivalents decreased by $10.1 million from December 31, 1998.
During the first quarter of 1999, net cash provided by operating activities was
$12.1 million, net cash provided by investing activities was $46.2 which was
offset by net cash used by financing activities of $68.3 million. For further
information on cash flows, see the Consolidated Statement of Cash Flows.

The Company's principal sources of liquidity and funding are its diverse deposit
base and the sales of bankers' acceptances as well as loan participations. The
level and maturity of deposits necessary to support the Company's lending and
investment activities is determined through monitoring loan demand and through
its asset/liability management process. Consideration in managing the Company's
liquidity position include, but is not limited to, scheduled cash flows from
existing assets, contingencies and liabilities, as well as projected liquidity
needs arising from anticipated extensions of credit. Furthermore, the liquidity
position is monitored daily by management to maintain a level of liquidity
conducive to efficient operations and is continuously evaluated as part of the
asset/liability management process.

The majority of the Company's deposits are short-term and closely match the
short-term nature of the Company's assets. See "Interest Rate Sensitivity
Report." At June 30, 1999 interest-earning assets maturing within six months
were $861.8 million, representing 57.4 percent of total earning assets and
earning assets maturing within one year were $1.060 billion or 70.6 percent of
total earning assets. The interest bearing liabilities maturing within six
months were $903.8 million or 67.3 percent of total interest bearing liabilities
and maturing within one year were $1.285 billion or 95.7 percent of the total at
June 30, 1999.

The short-term nature of the loan portfolio and the fact that a portion of the
loan portfolio consists of bankers' acceptances provides additional liquidity to
the Company. Liquid assets at June 30, 1999 were $315 million, 19.8 percent of
total assets, and consisted of cash and cash equivalents, due from banks-time
and U. S. government agency securities that are unpledged. At June 30, 1999 the
Company had been advised of $66 million in available interbank funding.

CAPITAL RESOURCES

Bancorp and the Bank are subject to various regulatory capital requirements
administered by the federal banking agencies. Failure to meet minimum capital
requirements can result in certain mandatory and possibly additional
discretionary actions by regulators that, if undertaken, could have a direct
material effect on the Company's financial statements. The regulations require
Bancorp and the Bank to meet specific capital adequacy guidelines that involve
quantitative measures of their assets, liabilities and certain off-balance sheet
items as calculated under regulatory accounting practices. Bancorp's and the
Bank's capital classification are also subject to qualitative judgments by the
regulators about interest rate risk, concentration of credit risk and other
factors.

Quantitative measures established by regulation to ensure capital adequacy
require Bancorp and the Bank to maintain minimum amounts and ratios (set forth
in the table below) of Tier I capital (as defined in the regulations) to total
averages assets (as defined) and minimum ratios of Tier I and total capital (as
defined) to risk-weighted assets (as defined). Bancorp's and the Bank's actual
capital amounts and ratios are also presented in the table.



                                       20
<PAGE>   22



BANCORP CAPITAL RATIOS
(Dollars in thousands)
<TABLE>
<CAPTION>

                                                            June 30, 1999                         December 31, 1998
                                                ------------------------------------    ------------------------------------
                                                     Amount             Ratio                Amount             Ratio
                                                ------------------------------------    ------------------------------------
<S>                                                 <C>                       <C>           <C>                       <C>
Tier 1 risk-weighted
Capital:
   Actual                                           $     113,880             10.8%         $     118,964             11.1%
   Minimum                                                 42,115              4.0%                43,816              4.0%
Total risk-weighted
Capital:

   Actual                                                 123,437             11.7%               131,758             12.0%
   Minimum                                                 84,230              8.0%                87,633              8.0%
Leverage:
   Actual                                                 113,880              7.4%               118,964              7.3%
   Minimum                                                 46,350              3.0%                49,102              3.0%
</TABLE>


BANK CAPITAL RATIOS
(Dollars in thousands)
<TABLE>
<CAPTION>

                                                       June 30, 1999                      December 31, 1998
                                             ----------------------------------    ----------------------------------
                                                  Amount           Ratio                Amount           Ratio
                                             ----------------------------------    ----------------------------------
<S>                                                 <C>                       <C>           <C>                       <C>
Tier 1 risk-weighted capital:

   Actual                                          $  108,311            10.0%           $  108,410             9.9%
   Minimum to be well capitalized                      64,942             6.0%               65,461             6.0%
   Minimum to be adequately capitalized                43,295             4.0%               43,787             4.0%
Total risk-weighted capital:
   Actual                                             117,660            10.9%              121,204            11.1%
   Minimum to be well capitalized                     108,237            10.0%              109,467            10.0%
   Minimum to be adequately capitalized                86,590             8.0%               87,574             8.0%
Leverage:
  Actual                                              108.311             7.0%              108,410             6.6%
   Minimum to be well capitalized                      77,078             5.0%               81,856             5.0%
   Minimum to be adequately capitalized                61,662             4.0%               65,485             4.0%

</TABLE>


MARKET RISK MANAGEMENT

In the normal course of conducting business activities, the Company is exposed
to market risk which includes both price and liquidity risk. The Company's price
risk arises from fluctuations in interest rates and foreign exchange rates that
may result in changes in values of financial instruments. The Company does not
have material direct market risk related to commodity and equity prices.
Liquidity risk arises from the possibility that the Company may not be able to
satisfy current and future financial commitments or that the Company may not be
able to liquidate financial instruments at market prices. Risk management
policies and procedures have been established and are utilized to manage the
Company's"exposure to market risk. The strategy of the Company is to operate at
an acceptable risk environment while maximizing its earnings.

Market risk is managed by the Asset Liability Committee which formulates and
monitors the performance of the Company based on established levels of market



                                       21
<PAGE>   23


risk as dictated by policy. In setting the tolerance levels of market risk, the
Committee considers the impact on both earnings and capital, based on potential
changes in the outlook in market rates, global and regional economies,
liquidity, business strategies and other factors.

The Company's" asset and liability management process is utilized to manage
interest rate risk through the structuring of balance sheet and off-balance
sheet portfolios. It is the strategy of the Company to maintain as neutral an
interest rate risk position as possible. By utilizing this strategy the Company
"locks in" a spread between interest earning assets and interest-bearing
liabilities. Given the matching strategy of the Company and the fact that it
does not maintain significant medium and/or long-term exposure positions, the
Company's"interest rate risk will be measured and quantified through an interest
rate sensitivity report. An excess of assets or liabilities over these matched
items results in a gap or mismatch. A positive gap denotes asset sensitivity and
normally means that an increase in interest rates would have a positive effect
on net interest income. On the other hand a negative gap denotes liability
sensitivity and normally means that a decline in interest rates would have a
positive effect in net interest income. However, because different types of
assets and liabilities with similar maturities may reprice at different rates or
may otherwise react differently to changes in overall market rates or
conditions, changes in prevailing interest rates may not necessarily have such
effects on net interest income.

Interest Rate Sensitivity Report as of June 30, 1999 shows that interest bearing
liabilities maturing or repricing within one year exceed interest earning assets
by $225.3 million. The Company monitors that the assets and liabilities are
closely matched to minimize interest rate risk. On June 30, 1999 the interest
rate risk position of the Company was not significant since the impact of a 100
basis point rise or fall of interest rates over the next 12 months is estimated
at 2.2 percent of net income.

The level of imbalance between the repricing of rate sensitive assets and rate
sensitive liabilities will be measured through a series of ratios. Substantially
all of the Company's"assets and liabilities are denominated in dollars;
therefore the Company has no material foreign exchange risk. In addition, the
Company has no trading account securities; therefore it is not exposed to market
risk resulting from trading activities.

On a daily basis the Bank's Senior Vice President of Finance and the Bank's
Treasurer are responsible for measuring and managing market risk.

RESULTS OF OPERATIONS-SIX MONTHS

NET INTEREST INCOME

Net interest income is the difference between interest and fees earned on loans
and investments and interest paid on deposits and other sources of funds, and it
constitutes the Company's principal source of income. Net interest income
increased to $27.7 million for the six months ended June 30, 1999 from $25.2
million for the same period in 1998, a 9.9 percent increase. The increase was
due largely to an increase in average earning assets offset, to some extent, by
a decrease in net interest margin. Average earning assets increased to $1.495
billion for the six months ended June 30, 1999 from $1.277 billion for the same
period in 1998, a 17.1 percent increase. Average loans and acceptances
discounted increased to $1.152 billion for the six months ended June 30, 1999
from $1.092 billion for the same period in 1998, a 5.5 percent increase. The
increase in loans was largely attributable to an increase in the U. S. component
of the loan portfolio. Average interest earning deposits with other banks
increased to $158.8 million for the six months ended June 30, 1999 from $100.2
million for the same period in 1998, a 58.5 percent increase. Net interest
margin decreased to 3.73 percent for the six months ended June 30, 1999 from
3.98 percent for the same period in 1998, a 25 basis point decrease. The primary
reasons for this decrease were (i) the temporary increase of lower yielding U.S.
government agency securities while assets are redeployed into the higher
yielding loan category and (ii) transactions with larger customers and
transactions with multi-national companies which command more competitive
pricing, but in turn tend to be stronger in terms of credit quality.



                                       22
<PAGE>   24



Interest income increased to $63.5 million for the six months ended June 30,
1999 from $57.0 million for the same period in 1998, an 11.4 percent increase,
reflecting an increase in loans, partially offset by a decrease in prevailing
interest rates, as well as the temporary increase in liquid lower yielding U. S.
government agency securities as discussed above. Interest expense increased to
$35.8 million for the six months ended June 30, 1999 from $31.9 million for the
same period in 1998, a 12.2 percent increase, reflecting the additional deposits
to fund asset growth. Average interest-bearing deposits increased to $1.329
billion for the six months ended June 30, 1999 from $1.121 billion for the same
period in 1998, a 18.6 percent increase.



                                       23
<PAGE>   25

<TABLE>
<CAPTION>

                                                      YIELDS EARNED AND RATE PAID
---------------------------------------------------------------------------------------------------------------------------------
                                                                                   FOR THE SIX MONTHS ENDED
                                                              JUNE 30, 1999                                 JUNE 30, 1998
                                              ----------------------------------------   ----------------------------------------
                                                  AVERAGE       REVENUE/     YIELD/          AVERAGE       REVENUE/     YIELD/
                                                  BALANCE       EXPENSE       RATE           BALANCE        EXPENSE      RATE
                                              ----------------------------------------   ----------------------------------------
<S>                                                <C>             <C>          <C>              <C>          <C>          <C>
TOTAL EARNING ASSETS
LOANS:
    Commercial loans                               $1,025,491      $44,994      8.73%            $943,288     $42,500      8.96%
    Acceptances discounted                            113,276        5,031      8.83%             125,176       5,820      9.25%
    Overdraft                                           9,271          985     21.13%              11,305         994     17.49%
    Mortgage loans                                      3,711          116      6.22%              11,787         486      8.20%
    Installment loans                                     216           10      9.21%                 274          13      9.44%
                                              -----------------------------              -----------------------------
TOTAL LOANS                                         1,151,965       51,136      8.83%           1,091,830      49,813      9.07%

Time deposits with banks                              158,758        6,995      8.76%             100,225       4,538      9.01%
Investments                                           149,586        4,499      5.98%              65,262       2,130      6.49%
Federal funds sold                                     34,764          849      4.86%              19,258         532      5.49%
                                              -----------------------------              -----------------------------
     Total investments and time
       deposits with banks                            343,108       12,343      7.16%             184,745       7,200      7.75%
                                                              -------------                               ------------
Total interest earning assets                       1,495,073       63,479      8.44%           1,276,575      57,013      8.88%
                                                              -------------                               ------------
Total non interest earning assets                     112,522                                     131,509
                                              ----------------                           -----------------
TOTAL ASSETS                                       $1,607,595                                  $1,408,084
                                              ================                           =================
INTEREST BEARING LIABILITIES

DEPOSITS:

    NOW amd savings accounts                          $22,756          271      2.37%             $20,230         211      2.07%
    Money Market                                       44,762        1,028      4.57%              45,046       1,016      4.49%
    Presidential Money Market                          33,119          789      4.74%               2,769          38      2.73%
    Certificate of Deposits (including IRA)         1,121,146       30,444      5.40%             900,038      26,244      5.80%
    Time Deposits with Banks (IBF)                     99,461        2,286      4.57%             151,651       4,049      5.31%
    Other                                               8,234          196      4.73%                 973          21      4.29%
                                              -----------------------------              -----------------------------
TOTAL DEPOSITS                                      1,329,478       35,014      5.24%           1,120,707      31,579      5.60%
Trust Preferred Securities                             12,522          615      9.77%                   0           0      0.00%
Other Borrowings                                        2,734          103      7.49%               3,100         117      7.51%
Federal Funds Purchased                                 1,614           41      5.05%               5,837         166      5.66%
                                              -----------------------------              -----------------------------
Total interest bearing liabilities                  1,346,348       35,773      5.28%           1,129,644      31,862      5.61%
                                              -----------------------------              -----------------------------
Non interest bearing liabilities
    Demand Deposits                                    73,940                                      69,428
    Other Liabilities                                  71,932                                      95,351
                                              ----------------                           -----------------
Total non interest bearing liabilities                145,872                                     164,779
Stockholders equity                                   115,375                                     105,364
                                              ----------------                           -----------------

TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY         $1,607,595                                  $1,399,787
                                              ================                           =================
NET INTEREST INCOME/NET INTEREST SPREAD                            $27,706      3.16%                         $25,151      3.27%
                                                              =============  =========                    ============ ==========
MARGIN

INTEREST INCOME/INTEREST EARNING ASSETS                                         8.56%                                      9.01%

INTEREST EXPENSE/INTEREST EARNING ASSETS                                        4.83%                                      5.03%
                                                                             ---------                                 ----------

    NET INTEREST MARGIN                                                         3.73%                                      3.98%
                                                                             =========                                 ==========

</TABLE>



                                       24
<PAGE>   26


PROVISION FOR CREDIT LOSSES

The Company's provision for credit losses decreased to $2.6 million for the six
months ended June 30, 1999 from $4.1 million for the same period in 1998. Net
loan charge-offs during the first six months of 1999 amounted to $2.7 million
compared to $994 thousand for the same period in 1998. The allowance for credit
losses decreased from $12.8 million at December 31, 1998 to $12.7 million at
June 30, 1999. The ratio of the allowance for credit losses to total loans was
1.11 percent at June 30, 1999 increasing from approximately 1.10 percent at
December 31, 1998. This increase in the ratio is due primarily to the decrease
in loans during the first six months of 1999.

NON-INTEREST INCOME

Non-interest income increased to $9.4 million for the six months ended June 30,
1999 from $7.9 million for the same period in 1998, a 19.0 percent increase.
Structuring and syndication fees increased by $1.1 million as a result of
several transactions completed during the period. This was offset by a decrease
in trade finance fees and commissions of $191 thousand. The increase in other
non-interest income is due to an increase in account analysis fees. In addition,
non-interest income included a gain on sale of loans of $188 thousand due
largely to the sale of the residential mortgage portfolio discussed in Note 3 to
the consolidated financial statements.

The following table sets forth details regarding the components of non-interest
income for the periods indicated.

NON-INTEREST INCOME
<TABLE>
<CAPTION>

(Dollars in thousands)                         For the Six Months Ended June 30,
                                        -----------------------------------------------
                                                         1998 to 1999
                                            1999        Percent Change        1998
                                        -------------   ----------------  -------------
<S>                                         <C>                    <C>        <C>
Trade finance fees and commissions          $  6,432              -2.9%       $  6,623
Structuring and syndication fees                                 141.9%
                                               1,797                               743
Customer service fees                                              4.5%
                                                 325                               311
Gain on sale of assets                           214             100.0%
Other                                            621             148.4%            250
                                        -------------   ----------------  -------------
Total non-interest income                   $  9,389              18.4%       $  7,927
                                        =============   ================  =============
</TABLE>


OPERATING EXPENSES

Operating expenses increased to $14.6 million for the six months ended June 30,
1999 from $12.4 million for the same period in 1998, a 17.7 percent increase.
The majority of this increase was in other expenses which increased to
$6.1million for the six months ended June 30, 1999 from $4.2 million for the
same period in 1998. This increase was largely due to increased legal expenses
as well as miscellaneous losses and charge offs. The increase in legal expenses
was the result of an increase in the number of litigation cases in the ordinary
course of business during the period. The Company's efficiency ratio increased
to 39.4 percent for the six month period ended June 30, 1999 from 37.4 percent
for the same period in 1998.



                                       25
<PAGE>   27


The following table sets forth details regarding the components of operating
expenses for the periods indicated.

OPERATING EXPENSES
(Dollars in thousands)

<TABLE>
<CAPTION>

                                                         For the Six Months Ended June 30,
                                                   ---------------------------------------------
                                                                  1998 to 1999
                                                      1999       Percent Change         1998
                                                   -----------  -----------------    -----------
<S>                                                   <C>                   <C>         <C>
Employee compensation and benefits                    $ 6,511               7.7%        $ 6,048
Occupancy and equipment                                 1,997              -6.5%          2,136
Other operating expenses                                6,122              46.2%          4,188
                                                   -----------  -----------------    -----------
Total operating expenses                              $14,630              18.3%        $12,372
                                                   ===========  =================    ===========
</TABLE>


YEAR 2000

The Company began the process in June 1996 of assessing and preparing its
computer systems and applications to be functional on January 1, 2000. The
Company has also been communicating with third parties which interface with the
Company, such as customers, counter parties, payment systems, vendors and
others, to determine whether they will be functional. The Company has
incorporated Year 2000 as part of its credit policy process and addresses the
issues in each new loan and as part of its credit renewals.

The Company believes that the process of modifying all mission critical
applications of the Company has been completed in accordance with guidelines
dictated by FFIEC (Federal Financial Institutions Examination Council). The
non-critical systems will continue to be reviewed and tested and management will
determine if changes or replacement is deemed necessary.

Research to verify compatibility of counter parties, payment systems, vendors
and others has been conducted. These systems were divided into critical and
non-critical categories. The Company believes that those identified as critical
have demonstrated to be Year 2000 compliant or were replaced by parties or
systems that are Year 2000 compliant. Those identified as non-critical will
continue to be reviewed and tested and management will determine if changes or
replacement is deemed necessary.

The Company provided compliance certification questionnaires to each of its
customers in order to determine their ability to be Year 2000 compliant. The
Company amended its Credit Policy Manual which require the Company to terminate
business with a customer unless the Company is assured that such customer is or
will be Year 2000 compliant in the near future, except in such instances where
the customer's failure to be Year 2000 compliant will not, either individually
or in the aggregate, have a material adverse effect on the Company. If a
customer did not respond to the questionnaire or if its response did not provide
the Company with adequate assurance that such customer's failure to be Year 2000
compliant would not have a material adverse effect on the Company, the Company
did not renew its current relationship with that customer.

Concurrently, the Company is in the process of upgrading its computers systems
to accommodate the growth of the past two years. These new systems being
installed are Year 2000 compliant. The Company believes the total costs relating
exclusively to Year 2000 compliance will be approximately $250,000, which amount
is not material to the Company's financial position or results of operations. To
date, the Company has incurred approximately $115,000 of these estimated
expenses. Any purchased hardware or software in connection with this process
will be capitalized in accordance with normal Company policy. Personnel and all
other costs are being expensed as incurred.



                                       26
<PAGE>   28


There can be no assurance that all of the parties mentioned above will become
Year 2000 compliant on a timely basis. The costs and dates on which the Company
plans to complete the Year 2000 process are based on the Company's best
estimates. However, there can be no assurance that these estimates will be
achieved and actual results could differ.

RESULTS OF OPERATIONS-SECOND QUARTER

NET INTEREST INCOME

Net interest income is the difference between interest and fees earned on loans
and investments and interest paid on deposits and other sources of funds, and it
constitutes the Company's principal source of income. Net interest income
increased to $14.3 million for the quarter ended June 30, 1999 from $13.1
million for the same period in 1998, a 9.2 percent increase. The increase was
due largely to an increase in average earning assets and an increase in net
interest margin. Average earning assets increased to $1.461 billion for the
quarter ended June 30, 1999 from $1.348 billion for the same period in 1998, a
8.4 percent increase. Average loans and acceptances discounted remained
relatively consistent at $1.154 billion for the quarter ended June 30, 1999
compared to $1.160 for the same period in 1998, a .5% decrease. The increase in
average interest earning assets for the quarter was primarily in time deposits
with other banks which increased by 62.6 percent to $162.3 million and
investments which increased by 66.9 percent to $113.3 million for the quarter.
Net interest margin increased slightly to 3.97 percent for the quarter ended
June 30, 1999 from 3.89 percent for the same period in 1998. The primary reason
for the increase is the 39 basis point decrease in the cost of funds rate. The
cost of funds decreased to 5.21 percent for the quarter ended June 30, 1999 from
5.60 percent for the same period in 1998.

Interest income increased to $31.5 million for the quarter ended June 30, 1999
from $30.1 million for the same period in 1998, a 4.7 percent increase,
reflecting an increase in loans in the U. S. This increase was partially offset
by a decrease in prevailing interest rates, as well as the temporary increase in
liquid lower yielding U. S. government agency securities as discussed above.
Interest expense increased to $17.2 million for the quarter ended June 30, 1999
from $17.0 million for the same period in 1998, a 1.2 percent increase,
reflecting the additional deposits to fund asset growth. Average
interest-bearing deposits increased to $1.293 billion for the quarter ended June
30, 1999 from $1.190 billion for the same period in 1998, an 8.6 percent
increase.


                                       27
<PAGE>   29


<TABLE>
<CAPTION>

                                                 YIELDS EARNED AND RATE PAID
----------------------------------------------------------------------------------------------------------------------------------
                                                                               FOR THE QUARTER ENDED
                                                              JUNE 30, 1999                            JUNE 30, 1998
                                               ---------------------------------------  ------------------------------------------
                                                   AVERAGE        REVENUE/    YIELD/        AVERAGE        REVENUE/      YIELD/
                                                   BALANCE        EXPENSE      RATE         BALANCE        EXPENSE        RATE
                                               ---------------------------------------  ------------------------------------------
<S>                                                  <C>             <C>        <C>           <C>             <C>           <C>
TOTAL EARNING ASSETS
LOANS:
    Commercial loans                                 $1,035,906      $22,879    8.83%         $1,003,498      $22,681       8.94%
    Acceptances discounted                              109,550        2,389    8.72%            133,748        2,984       8.83%
    Overdraft                                             6,505          289   17.77%             10,986          491      17.68%
    Mortgage loans                                        2,322           45    7.75%             11,653          242       8.22%
    Installment loans                                       215            5    9.30%                315            7       8.79%
                                               ------------------------------           ------------------------------
TOTAL LOANS                                           1,154,498       25,607    8.87%          1,160,200       26,405       9.00%

Time deposits with banks                                162,295        3,754    9.25%             99,833        2,260       8.96%
Investments                                             113,251        1,744    6.16%             67,927        1,120       6.52%
Federal funds sold                                       31,084          383    4.93%             20,028          281       5.55%
                                               ------------------------------           ------------------------------
     Total investments and time
       deposits with banks                              306,630        5,881    7.67%            187,788        3,661       7.71%
                                                                -------------                            -------------
Total interest earning assets                         1,461,128       31,488    8.62%          1,347,988       30,066       8.82%
                                                                -------------                            -------------
Total non interest earning assets                        95,695                                  114,949
                                               -----------------                        -----------------
TOTAL ASSETS                                         $1,556,823                               $1,462,937
                                               =================                        =================
INTEREST BEARING LIABILITIES

DEPOSITS:

    NOW amd savings accounts                            $23,847          162    2.72%            $19,835          103       2.05%
    Money Market                                         43,686          499    4.57%             45,979          511       4.40%
    Presidential Money Market                            40,482          484    4.78%              2,236           17       3.01%
    Certificate of Deposits (including IRA)           1,082,645       14,556    5.38%            969,388       14,172       5.78%
    Time Deposits with Banks (IBF)                       95,669          982    4.11%            151,243        2,024       5.29%
    Other                                                 6,476          163   10.07%              1,230           15       4.82%
                                               ------------------------------           ------------------------------
TOTAL DEPOSITS                                        1,292,805       16,846    5.21%          1,189,911       16,842       5.60%
Trust Preferred Securities                               12,650          313    9.90%                  0            0       0.00%
Other Borrowings                                              0            0    0.00%              6,034          114       7.47%
Federal Funds Purchased                                   3,101           39    5.03%              2,989           43       5.69%
                                               ------------------------------           ------------------------------
Total interest bearing liabilities                    1,308,556       17,198    5.26%          1,198,934       16,999       5.61%
                                               ------------------------------           ------------------------------
Non interest bearing liabilities
    Demand Deposits                                      72,389                                   66,284
    Other Liabilities                                    57,151                                   89,148
                                               -----------------                        -----------------
Total non interest bearing liabilities                  129,540                                  155,432
Stockholders equity                                     118,727                                  108,571
                                               -----------------                        -----------------

TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY           $1,556,823                               $1,462,937
                                               =================                        =================
NET INTEREST INCOME/NET INTEREST SPREAD                              $14,290    3.36%                         $13,067       3.21%
                                                                ============= ========                   =============  ==========
MARGIN

INTEREST INCOME/INTEREST EARNING ASSETS                                         8.74%                                       8.95%

INTEREST EXPENSE/INTEREST EARNING ASSETS                                        4.77%                                       5.06%
                                                                              --------                                  ----------
    NET INTEREST MARGIN                                                         3.97%                                       3.89%
                                                                              ========                                  ==========
</TABLE>






                                       28
<PAGE>   30


PROVISION FOR CREDIT LOSSES

The Company's provision for credit losses remained relatively consistent at $1.7
million for the quarters ended June 30, 1999 and 1998. Net loan charge-offs
during the second quarter of 1999 amounted to $2.6 million compared to $827
thousand for the same period in 1998. The allowance for credit losses decreased
from $12.8 million at December 31, 1998 to $12.7 million at June 30, 1999. The
ratio of the allowance for credit losses to total loans was 1.11 percent at June
30, 1999 increasing from approximately 1.10 percent at December 31, 1998.

NON-INTEREST INCOME

Non-interest income increased to $5.1 million for the quarter ended June 30,
1999 from $4.0 million for the same period in 1998, a 27.5 percent increase.
Structuring and syndication fees increased by $766 thousand while trade finance
fees increased by $214 thousand.

The following table sets forth details regarding the components of non-interest
income for the periods indicated.

NON-INTEREST INCOME
(Dollars in thousands)

<TABLE>
<CAPTION>

                                                 For the Three Months Ended
                                                          June 30,
                                        -----------------------------------------------
                                                         1998 to 1999
                                            1999        Percent Change        1998
                                        -------------   ----------------  -------------
<S>                                         <C>                    <C>        <C>
Trade finance fees and commissions          $  3,442               6.6%       $  3,228
Structuring and syndication fees                                 168.7%
                                               1,220                               454
Customer service fees                                            -14.5%
                                                 142                               166
Gain on sale of assets                                           100.0%
                                                  27                                 -
Other                                                            136.8%
                                                 270                               114
                                        -------------   ----------------  -------------
Total non-interest income                  $   5,101              28.7%       $  3,962
                                        =============   ================  =============
</TABLE>


OPERATING EXPENSES

Operating expenses increased to $7.4 million for the quarter ended June 30, 1999
from $6.4 million for the same period in 1998, a 15.6 percent increase. The
majority of this increase was in other expenses which increased to $3.3 million
for the quarter ended June 30, 1999 from $2.3 million for the same period in
1998. This increase was largely due to increased legal expenses. The increase in
legal expenses was the result of an increase in the number of litigation cases
in the ordinary course of business during the period. The Company's efficiency
ratio increased to 38.5 percent for the three month period ended June 30, 1999
from 38.1 percent for the same period in 1998.



                                       29
<PAGE>   31


The following table sets forth details regarding the components of operating
expenses for the periods indicated.

OPERATING EXPENSES
(Dollars in thousands)
<TABLE>
<CAPTION>

                                                            For the Three Months Ended
                                                                     June 30,
                                                   ---------------------------------------------
                                                                  1998 to 1999
                                                      1999       Percent Change         1998
                                                   -----------  -----------------    -----------
<S>                                                   <C>                   <C>          <C>
Employee compensation and benefits                    $ 3,167               3.7%         $3,053
Occupancy and equipment                                                    -2.7%
                                                        1,037                             1,066
Other operating expenses                                                   40.6%
                                                        3,257                             2,317
                                                   -----------  -----------------    -----------
Total operating expenses                              $ 7,461              15.9%         $6,436
                                                   ===========  =================    ===========
</TABLE>




                                       30
<PAGE>   32






                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

Date:  December 18, 2000             Hamilton Bancorp, Inc.


                                     /s/ J. Carlos Bernace
                                     ------------------------------------
                                     J. Carlos Bernace,
                                     Executive Vice President


                                     /s/ Eva Lynn Hernandez
                                     ------------------------------------
                                     Eva Lynn Hernandez,
                                     Vice President - Finance, Controller
                                     and Chief Accounting Officer






                                       31