##### Table of Contents



U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-QSB

|  |  |                                                                                                                                
|- |  | -------------------------------------------------------------------------------------------------------------------------------
|x |  | QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2002
| 
|o |  | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION REPORT FROM

 TO         

Commission file number 0-23619

Tarpon Coast Bancorp, Inc.




(Exact name of small business issuer as specified in its charter)


|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Florida                                                        |  | 65-0772718                          
|                                                               |  |                                     
|(State or other jurisdiction of
incorporation or organization) |  | (I.R.S. Employer
Identification No.)

1490 Tamiami Trail
Port Charlotte, FL 33948




(Address of principal executive offices)


941-629-8111




(Issuers telephone number)


Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant, as required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.   
Yes   x
      No   o

State the number of shares outstanding of each of the issuers classes of
common equity as of the latest practicable date.

|                             |  |                                 
|---------------------------- |  | --------------------------------
|Class                        |  | Outstanding as of March 31, 2002
|                             |  |                                 
|Common Stock, $.01 par value |  | 1,182,151                       

Transitional Small Business Disclosure Format:
   
Yes   o
      No   x





---

TABLE OF CONTENTS



|                               |                                                                                               |                                            |  |  |  |  |  | 
|------------------------------ | --------------------------------------------------------------------------------------------- | ------------------------------------------ |  |  |  |  |  | 
|PART I  FINANCIAL INFORMATION
|                               | Item 1. Financial Statements                                                                 
|                               |                                                                                               | CONSOLIDATED BALANCE SHEETS               
|                               |                                                                                               | CONSOLIDATED STATEMENTS OF OPERATIONS     
|                               |                                                                                               | CONSOLIDATED STATEMENTS OF CASH FLOWS     
|                               |                                                                                               | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|                               | Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
|PART II  OTHER INFORMATION   
|                               | Item 4. Submission of Matters to a Vote of Security Holders                                  
|                               | Item 6. Exhibits and Reports on Form 8-K                                                     
|SIGNATURES                    



---



##### Table of Contents



TARPON COAST BANCORP, INC.

INDEX

|                               |                                                             |                                                                             |   |   |   | 
|------------------------------ | ----------------------------------------------------------- | --------------------------------------------------------------------------- | - | - | - | 
|PART I  FINANCIAL INFORMATION |                                                             |                                                                             |   |  
|                               | Item 1. Financial Statements                                |                                                                             |   |   |  
|                               |                                                             | Balance Sheets as of March 31, 2002 and December 31, 2001                   |   |   | 1 | 
|                               |                                                             | Statements of Operations for the Three Months
Ended March 31, 2002 and 2001 |   |   | 2 | 
|                               |                                                             | Statements of Cash Flows for the Three Months
Ended March 31, 2002 and 2001 |   |   | 3 | 
|                               |                                                             | Notes to Financial Statements                                               |   |   | 4 | 
|                               | Item 2. Managements Discussion and Analysis                |                                                                             |   | 5 |  
|PART II  OTHER INFORMATION    |                                                             |                                                                             |   |  
|                               | Item 4. Submission of Matters to a Vote of Security Holders |                                                                             |   | 7 |  
|                               | Item 6. Exhibits and Reports on Form 8-K                    |                                                                             |   | 7 |  
|SIGNATURES                     |                                                             |                                                                             | 7 |  





---



##### Table of Contents






PART I  FINANCIAL INFORMATION




Item 1. Financial Statements


TARPON COAST BANCORP, INC. AND SUBSIDIARIES




CONSOLIDATED BALANCE SHEETS


|                                     |                                                                                                               |                                            |            |                |            |                   |            |            |            | 
|------------------------------------ | ------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | ---------- | -------------- | ---------- | ----------------- | ---------- | ---------- | ---------- | 
|                                     |                                                                                                               |                                            |            | March 31, 2002 |            | December 31, 2001
|                                     |                                                                                                               |                                            |            |                |            |                  
|                                     |                                                                                                               |                                            |            | (Unaudited)    |            |                   |            |           
|ASSETS                               |                                                                                                               |                                            |            |                |            |                   |            |           
|Cash and due from banks              |                                                                                                               | $                                          | 7,061,690  |                |            | $                 | 5,666,844  |           
|Federal funds sold                   |                                                                                                               |                                            | 7,425,000  |                |            |                   | 10,150,000 |           
|                                     |                                                                                                               |                                            |            |                |            |                   |            |           
|                                     |                                                                                                               | Total cash and cash equivalents            |            |                | 14,486,690 |                   |            |            | 15,816,844 | 
|Securities available for sale        |                                                                                                               |                                            | 17,522,306 |                |            |                   | 18,655,222 |           
|Loans                                |                                                                                                               |                                            | 61,333,162 |                |            |                   | 55,667,184 |           
|Less allowance for loan losses       |                                                                                                               |                                            | (815,125   | )              |            |                   | (802,725   | )         
|                                     |                                                                                                               |                                            |            |                |            |                   |            |           
|Net loans                            |                                                                                                               |                                            | 60,518,037 |                |            |                   | 54,864,459 |           
|Premises and equipment, net          |                                                                                                               |                                            | 5,000,472  |                |            |                   | 5,093,499  |           
|Accrued interest & other assets      |                                                                                                               |                                            | 1,107,375  |                |            |                   | 944,161    |           
|                                     |                                                                                                               |                                            |            |                |            |                   |            |           
|                                     |                                                                                                               | Total assets                               |            | $              | 98,634,880 |                   |            | $          | 95,374,185 | 
|                                     |                                                                                                               |                                            |            |                |            |                   |            |           
|LIABILITIES AND SHAREHOLDERS EQUITY |                                                                                                               |                                            |            |                |            |                   |            |           
|Deposits:                            |                                                                                                               |                                            |            |                |            |                   |            |           
|                                     | Non-interest bearing                                                                                          |                                            | $          | 12,328,742     |            |                   | $          | 12,262,950 |           
|                                     | Interest bearing                                                                                              |                                            |            | 75,967,298     |            |                   |            | 72,554,294 |           
|                                     |                                                                                                               |                                            |            |                |            |                   |            |           
|                                     |                                                                                                               | Total deposits                             |            |                | 88,296,040 |                   |            |            | 84,817,244 | 
|Customer Repurchase Agreements       |                                                                                                               |                                            | 1,605,688  |                |            |                   | 1,653,728  |           
|Accrued interest & other liabilities |                                                                                                               |                                            | 341,278    |                |            |                   | 284,816    |           
|                                     |                                                                                                               |                                            |            |                |            |                   |            |           
|                                     |                                                                                                               | Total liabilities                          |            |                | 90,243,006 |                   |            |            | 86,755,788 | 
|Shareholders equity:                |                                                                                                               |                                            |            |                |            |                   |            |           
|                                     | Common stock, par value $.01 per share,
10,000,000 shares authorized; 1,182,151 shares
issued and outstanding |                                            |            | 11,821         |            |                   |            | 11,821     |           
|                                     | Additional paid-in capital                                                                                    |                                            |            | 10,940,915     |            |                   |            | 10,940,915 |           
|                                     | Deficit                                                                                                       |                                            |            | (2,422,100     | )          |                   |            | (2,405,150 | )         
|                                     | Unrealized loss on securities available for sale                                                              |                                            |            | (138,762       | )          |                   |            | 70,811     |           
|                                     |                                                                                                               |                                            |            |                |            |                   |            |           
|                                     |                                                                                                               | Total shareholders equity                 |            |                | 8,391,874  |                   |            |            | 8,618,397  | 
|                                     |                                                                                                               |                                            |            |                |            |                   |            |           
|                                     |                                                                                                               | Total liabilities and shareholders equity |            | $              | 98,634,880 |                   |            | $          | 95,374,185 | 
|                                     |                                                                                                               |                                            |            |                |            |                   |            |           

See accompanying notes to financial statements.

1



---



##### Table of Contents



TARPON COAST BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)




|                                                    |                                   |   |                              |           |      |   |           |           | 
|--------------------------------------------------- | --------------------------------- | - | ---------------------------- | --------- | ---- | - | --------- | --------- | 
|                                                    |                                   |   | Three months ended March 31,
|                                                    |                                   |   |                             
|                                                    |                                   |   | 2002                         |           | 2001
|                                                    |                                   |   |                              |           |     
|Interest income:                                    |                                   |   |                              |           |      |   |           |          
|                                                    | Interest and fees on loans        |   | $                            | 1,095,135 |      |   | $         | 1,015,801 | 
|                                                    | Interest on securities            |   |                              | 284,476   |      |   |           | 171,638   | 
|                                                    | Interest on federal funds sold    |   |                              | 33,241    |      |   |           | 68,267    | 
|                                                    |                                   |   |                              |           |      |   |           |           | 
|Total interest income                               |                                   |   | 1,412,852                    |           |      |   | 1,255,706 |          
|Interest expense:                                   |                                   |   |                              |           |      |   |           |          
|                                                    | Interest on deposits              |   |                              | 542,108   |      |   |           | 586,526   | 
|                                                    | Interest on repurchase agreements |   |                              | 3,944     |      |   |           | 37,456    | 
|                                                    |                                   |   |                              |           |      |   |           |           | 
|Total interest expense                              |                                   |   | 546,052                      |           |      |   | 623,982   |          
|                                                    |                                   |   |                              |           |      |   |           |           | 
|Net interest income                                 |                                   |   | 866,800                      |           |      |   | 631,724   |          
|Provision for loan losses                           |                                   |   | 69,000                       |           |      |   | 69,000    |          
|                                                    |                                   |   |                              |           |      |   |           |           | 
|Net interest income after
provision for loan losses |                                   |   | 797,800                      |           |      |   | 562,724   |          
|Non-interest income                                 |                                   |   | 309,536                      |           |      |   | 154,899   |          
|Non-interest expense:                               |                                   |   |                              |           |      |   |           |          
|                                                    | Salaries and benefits             |   |                              | 623,002   |      |   |           | 424,268   | 
|                                                    | Occupancy and equipment expense   |   |                              | 191,630   |      |   |           | 130,384   | 
|                                                    | Other expense                     |   |                              | 309,654   |      |   |           | 204,777   | 
|                                                    |                                   |   |                              |           |      |   |           |           | 
|Total non-interest expense                          |                                   |   | 1,124,286                    |           |      |   | 759,429   |          
|                                                    |                                   |   |                              |           |      |   |           |           | 
|Net loss                                            |                                   |   | (16,950                      | )         |      |   | (41,806   | )        
|                                                    |                                   |   |                              |           |      |   |           |           | 
|Other comprehensive income (loss)                   |                                   |   | (209,573                     | )         |      |   | 63,837    |          
|                                                    |                                   |   |                              |           |      |   |           |           | 
|Comprehensive income (loss)                         |                                   | $ | (226,523                     | )         |      | $ | 22,031    |          
|                                                    |                                   |   |                              |           |      |   |           |           | 
|Net loss per share                                  |                                   | $ | (0.01                        | )         |      | $ | (0.04     | )        
|                                                    |                                   |   |                              |           |      |   |           |           | 
|Average shares outstanding                          |                                   |   | 1,182,151                    |           |      |   | 1,182,151 |          
|                                                    |                                   |   |                              |           |      |   |           |           | 

See accompanying notes to financial statements.

2



---



##### Table of Contents



TARPON COAST BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)




|                                                  |                                                                               |                                                               |            |                              |         |      |            |            |         | 
|------------------------------------------------- | ----------------------------------------------------------------------------- | ------------------------------------------------------------- | ---------- | ---------------------------- | ------- | ---- | ---------- | ---------- | ------- | 
|                                                  |                                                                               |                                                               |            | Three months ended March 31,
|                                                  |                                                                               |                                                               |            |                             
|                                                  |                                                                               |                                                               |            | 2002                         |         | 2001
|                                                  |                                                                               |                                                               |            |                              |         |     
|Cash flows from operating activities:             |                                                                               |                                                               |            |                              |         |      |            |           
|                                                  | Net loss                                                                      |                                                               | $          | (16,950                      | )       |      | $          | (41,806    | )      
|                                                  | Adjustments to reconcile net loss to net
cash used in operating activities:   |                                                               |            |                              |         |      |            |            |        
|                                                  |                                                                               | Depreciation                                                  |            |                              | 101,683 |      |            |            | 73,257  | 
|                                                  |                                                                               | Provision for loan losses                                     |            |                              | 69,000  |      |            |            | 69,000  | 
|                                                  |                                                                               | (Increase) Decrease in accrued interest
and other assets      |            |                              | (5,338  | )    |            |            | 51,488  | 
|                                                  |                                                                               | Increase (Decrease) in accrued interest
and other liabilities |            |                              | 56,462  |      |            |            | 145,620 | 
|                                                  |                                                                               |                                                               |            |                              |         |      |            |            |        
|                                                  | Total adjustments                                                             |                                                               |            | 221,807                      |         |      |            | 339,365    |        
|                                                  |                                                                               |                                                               |            |                              |         |      |            |            |        
|Net cash provided by operating activities         |                                                                               |                                                               | 204,857    |                              |         |      | 297,559    |           
|                                                  |                                                                               |                                                               |            |                              |         |      |            |            |        
|Cash flows from investing activities:             |                                                                               |                                                               |            |                              |         |      |            |           
|                                                  | Net increase in loans                                                         |                                                               |            | (5,722,578                   | )       |      |            | (5,335,428 | )      
|                                                  | Purchases of securities available for sale                                    |                                                               |            | (896,064                     | )       |      |            | (4,063,150 | )      
|                                                  | Maturities of securities available for sale                                   |                                                               |            | 1,661,531                    |         |      |            | 4,153,737  |        
|                                                  | Purchases of premises and equipment                                           |                                                               |            | (8,656                       | )       |      |            | (205,594   | )      
|                                                  |                                                                               |                                                               |            |                              |         |      |            |            |        
|Net cash used in investing activities             |                                                                               |                                                               | (4,965,767 | )                            |         |      | (5,450,435 | )         
|                                                  |                                                                               |                                                               |            |                              |         |      |            |            |        
|Cash flows from financing activities:             |                                                                               |                                                               |            |                              |         |      |            |           
|                                                  | Increase in deposits                                                          |                                                               |            | 3,478,796                    |         |      |            | 13,326,923 |        
|                                                  | Decrease in customer repurchase agreements                                    |                                                               |            | (48,040                      | )       |      |            | (643,309   | )      
|                                                  |                                                                               |                                                               |            |                              |         |      |            |            |        
|Net cash provided by financing activities         |                                                                               |                                                               | 3,430,756  |                              |         |      | 12,683,614 |           
|                                                  |                                                                               |                                                               |            |                              |         |      |            |            |        
|Increase (Decrease) in cash and cash equivalents  |                                                                               |                                                               | (1,330,154 | )                            |         |      | 7,530,738  |           
|Cash and cash equivalents, beginning of period    |                                                                               |                                                               | 15,816,844 |                              |         |      | 4,878,265  |           
|                                                  |                                                                               |                                                               |            |                              |         |      |            |            |        
|Cash and cash equivalents, end of period          |                                                                               | $                                                             | 14,486,690 |                              |         | $    | 12,409,003 |           
|                                                  |                                                                               |                                                               |            |                              |         |      |            |            |        
|Supplemental disclosure of cash flow information: |                                                                               |                                                               |            |                              |         |      |            |           
|                                                  | Cash paid during the period for interest                                      |                                                               | $          | 552,501                      |         |      | $          | 608,087    |        
|                                                  |                                                                               |                                                               |            |                              |         |      |            |            |        
|                                                  | Unrealized increase (decrease) in fair value
on securities available for sale |                                                               | $          | (209,573                     | )       |      | $          | 63,837     |        
|                                                  |                                                                               |                                                               |            |                              |         |      |            |            |        

See accompanying notes to financial statements.

3



---



##### Table of Contents



TARPON COAST BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 2002




NOTE A  ORGANIZATION AND BASIS OF PRESENTATION

Organization:

Tarpon Coast Bancorp, Inc. (the Company) was incorporated under the laws
of the state of Florida on August 7, 1997. Effective June 1, 1998, the
Companys new wholly owned subsidiary, Tarpon Coast National Bank (the Bank)
received federal regulatory approval to commence its banking operations.
Contemporaneously, the Company became a registered bank holding company under
the Bank Holding Company Act of 1956, as amended. Also effective June 1, 1998,
the Bank received approval from the Federal Deposit Insurance Corporation (the
FDIC) for deposit insurance. In 2000, the Company formed Tarpon Coast
Financial Services, Inc. as a wholly owned subsidiary of the Bank for the
purpose of selling insurance and investment products.

Basis of Presentation:

The accompanying unaudited consolidated financial statements include the
accounts of the Company and its subsidiaries. All inter-company accounts and
transactions have been eliminated in consolidation.

The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for
interim financial information and with instructions to Form 10-QSB.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary have been made for the fair presentation of the
Companys consolidated financial position and results of operations. Operating
results for the three-month period ended March 31, 2002 are not necessarily
indicative of the results that may be expected for the year ended December 31,
2002.

4



---



##### Table of Contents






Item 2. Managements Discussion and Analysis of Financial Condition and
Results of Operations

General

The following is a discussion of the Companys financial condition and results
of operations for the period ended March 31, 2002:

Financial Condition

At March 31, 2002, the Company had approximately $88.3 million in deposits and
$1.6 million in customer repurchase agreements as compared to $84.8 million and
$1.7 million, respectively, at December 31, 2001. Stockholders equity comprised
$8.4 million at March 31, 2002 and $8.6 million at December 31, 2001 reflecting
a net loss for the period of $17,000 coupled with unrealized losses in the
Companys investment portfolio of $209,000.

At March 31, 2002, the Company used these funds to generate $61.3 million in
loans outstanding ($55.7 million at December 31, 2001). At March 31, 2002 the
Company also had approximately $12.9 million in unfunded loan commitments
outstanding. At March 31, 2002 it held approximately $17.5 million ($18.6
million at December 31, 2001) in investment securities and carried $5 million
($5.1 million at December 31, 2001) in premises and equipment. The Companys
remaining liquidity at March 31, 2002, less current cash reserve requirements,
was invested in overnight federal funds of $7.4 million ($10.1 million at
December 31, 2001).

Results of Operations

For the three-month period ended March 31, 2002, the Company reported a net
loss of $16,950, compared to $41,806 for the comparable period in 2001.
Interest income for the three-month periods were $1,412,852 in 2002 and
$1,255,706 in 2001 or a yield on average earning assets of 6.66% and 8.23%,
respectively. Net interest income was $866,800 in 2002 and $631,724 in 2001
(net interest margins of 4.09% and 4.14%, respectively) after deducting
interest expense of $546,052 in 2002 and $623,982 in 2001 or an average rate
paid on interest-bearing funds of 2.89% and 4.90%, respectively. The rate
variances between the comparable three-month periods of 2001 and 2000 impacted
net interest income by approximately ($11,000) while the corresponding volume
variance impacts were approximately $246,000.

As the Bank has limited historical loan loss experience, the provision for loan
losses of $69,000 for the three-month period ended March 31, 2002 has been
based principally on peer industry data of comparable commercial banks,
adjusted to reflect the managements assessment of the potential impacts of
current economic conditions on the credit quality of the portfolio.

Non-interest income is comprised principally of service charges on deposit
accounts, fees on residential lending secondary market activities and fees and
commissions from the sale of investment products. Non-interest income
aggregated $309,536 and $154,899 for the three-month periods ended March 31,
2002 and 2001, respectively.

5



---



##### Table of Contents



Amounts for the three-month periods ended March 31, 2002 and 2001 include
commission and fee income from the sales of insurance and investment products
aggregating $111,000 and $49,000, respectively. The Bank expanded its
residential lending secondary market activities in the forth quarter of 2001,
which generated fee income of $113,000 for the first three months of 2002
compared with $41,000 for the corresponding period in 2001. The balance of the
increase in non-interest income is generally consistent with the increase in
the volume of deposit activity.

Non-interest expenses for the comparable three-month periods were $1,124,286
and $759,429, comprised principally of salaries and benefits ($623,002 in 2002
and $424,269 in 2001) and occupancy costs ($191,630 in 2002 and $130,384 in
2001). At March 31, 2002, the Company had 49 employees and three full-service
banking facilities compared to 33 employees and two full-service facilities a
year earlier.

The expansion in facilities and personnel is in accordance with the Companys
strategic growth and expansion initiative, which is designed to fully leverage
the Companys capital position and attain critical mass. Incremental losses
associated with this expansion during the three-month period ended March 31,
2002 aggregated $118,000. Additional incremental losses associated with the
Companys expansion activities may impact and extend losses until such time as
the Bank can generate volumes of loans and deposits, and other fee generating
services, sufficient to cover these additional costs.

6



---



##### Table of Contents






PART II  OTHER INFORMATION




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

During the first quarter, there were no matters submitted to a vote of
security holders.




Item 6. Exhibits and Reports on Form 8-K

1. Exhibits

None.

2. Reports on Form 8-K

The Company did not file a Current Report on Form 8-K during the quarter
ended March 31, 2002.




SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereto duly
authorized.

|                     |  |                                             
|-------------------- |  | --------------------------------------------
|Date: April 29, 2002 |  | /s/ George E. Cline, III                    
|                     |  |                                             
|                     |  | George E. Cline, III
Chief Financial Officer
|                    
|Date: April 29, 2002 |  | /s/ Lewis S. Albert                         
|                     |  |                                             
|                     |  | Lewis S. Albert
Chief Executive Officer     

7