SECURITIES AND EXCHANGE COMMISSION
                              Washington, D.C 20549

                                    FORM 10-K

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

For the fiscal year ended December 31, 1996       Commission File Number 0-22608


                               FFLC BANCORP, INC.
             (Exact name of registrant as specified in its charter)

        Delaware                                             59-3204891
(State or other jurisdiction of                          (I.R.S. Employer
incorporation or organization)                           Identification No.)

800 North Boulevard West, Post Office Box 490420,         
          Leesburg, Florida                                 34749-0420
(Address of principal executive offices)                    (Zip Code)

Registrant's telephone number, including area code:   (352) 787-3311

                                                       
          Securities registered pursuant to Section 12(b) of the Act:

                                      None

          Securities registered pursuant to Section 12(g) of the Act:

                     Common Stock, par value $.01 per share
                                (Title of Class)

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

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of  registrant's  knowledge,  in  definitive  proxy  or  other  information
statements  incorporated  by  reference  in Part  III of this  Form  10-K or any
amendment to this Form 10-K. [ X ]

The  aggregate  market  value of the voting stock held by  nonaffiliates  of the
registrant was  $50,006,603  and is based upon the last sales price as quoted on
the NASDAQ Stock Market for March 7, 1997.

The Registrant had 2,365,937 shares outstanding as of March 7, 1997.
<PAGE>

                       DOCUMENTS INCORPORATED BY REFERENCE 

1.  Portions  of the Annual  Report to  Stockholders  for the Fiscal  Year Ended
December 31, 1996.  (Part II and IV)

2.  Portions of Proxy  Statement  for the 1997 Annual  Meeting of  Stockholders.
(Part III) (Proxy to be filed separately on or about April 7, 1997).
<PAGE>
                                      INDEX

PART I                                                                        

Item I.                  Description of Business

                         Business                                             
                         Market Area and Competition                          
                         Lending Activities                                   
                         Asset Quality                                        
                         Investment Activities                                
                         Mortgage-Backed Securities                           
                         Investment Securities                                
                         Sources of Funds                                     
                         Borrowings                                           
                         Subsidiary Activities                                
                         Personnel                                            
                         Regulation and Supervision                           
                         Federal and State Taxation                           
                         Impact of New Accounting Issues                      

Item 2.         Properties                                                    

Item 3.         Legal Proceedings                                             

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

PART II

Item 5.         Market for Registrant's Common Equity and Related
                         Stockholder Matters                                  

Item 6.         Selected Financial Data                                       

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

Item 8.         Financial Statements and Supplementary Data                   

Item 9.         Change In and Disagreements with Accountants on
                         Accounting and Financial Disclosure                  

PART III

Item 10.        Directors and Executive Officers of the Registrant            

Item 11.        Executive Compensation                                        

Item 12.        Security Ownership of Certain Beneficial Owners and Management

Item 13.        Certain Relationships and Related Transactions                

PART IV

Item 14.        Exhibits, Financial Statement Schedules and Reports on Form 8-K

SIGNATURES
<PAGE>
                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS

Business

The registrant,  FFLC Bancorp,  Inc.  ("FFLC" or the  "Company"),  completed its
public  offering of  2,761,819  shares of its common  stock and  acquired  First
Federal  Savings Bank of Lake County ("the Savings Bank") in connection with the
Savings Bank's conversion from a federally  chartered mutual savings association
to a  federally  chartered  stock  savings  bank on  January  4,  1994.  The net
conversion proceeds totaled $26.6 million of which $13.3 million was invested in
the  Savings  Bank  and  $13.3  million  was  retained  by the  registrant.  The
registrant  loaned $2.2 million to the  Employee  Stock  Ownership  Plan and the
remaining  $11.1  million  has been  invested  through  the  Savings  Bank.  The
registrant,  which was  incorporated  in Delaware on September  16,  1993,  is a
savings and loan holding  company and is subject to  regulation by the Office of
Thrift  Supervision  ("OTS").  The  registrant  has not  transacted any material
business  other than through its  subsidiary,  the Savings Bank. At December 31,
1996, the Company had total assets of $346.4 million and stockholders' equity of
$53.6 million.

The Savings Bank was established in 1934 as a federally-chartered mutual savings
and loan association. The Savings Bank is a member of the Federal Home Loan Bank
("FHLB")  System and its deposit  accounts are insured to the maximum  allowable
amount by the Federal Deposit Insurance  Corporation  ("FDIC").  At December 31,
1996,  the Savings  Bank had total  assets of $346.4  million and  stockholders'
equity of $41.7 million.

The principal  business of the Savings Bank is attracting  retail  deposits from
the general  public and  investing  those  deposits,  together with payments and
repayments  on loans  and  investments  and  funds  generated  from  operations,
primarily in mortgage loans secured by  one-to-four-family  owner-occupied homes
and  mortgage-backed  securities,  and, to a lesser extent,  construction loans,
consumer  and other loans,  and  multi-family  residential  mortgage  loans.  In
addition,  the Savings  Bank holds  investments  permitted  by federal  laws and
regulations  including  securities  issued by the U.S.  Government  and agencies
thereof.  The Savings Bank's revenues are derived  principally  from interest on
its mortgage loan and  mortgage-backed  securities  portfolios  and interest and
dividends on its investment securities.

Market Area and Competition

The Savings Bank is a community-oriented  savings institution offering a variety
of  financial  services  to meet the needs of the  communities  it  serves.  The
Savings Bank's deposit gathering and lending markets are primarily  concentrated
in the  communities  surrounding  its full service  offices  located in Lake and
Sumter  counties in central  Florida.  The Savings Bank's  competition for loans
comes  principally from commercial  banks,  savings  institutions,  and mortgage
banking  companies.  The Savings Bank's most direct  competition for savings has
historically come from commercial banks, savings institutions and credit unions.
The Savings  Bank faces  additional  competition  for savings  from money market
mutual funds and other corporate and government  securities  funds.  The Savings
Bank  also  faces  increased  competition  for  deposits  from  other  financial
intermediaries such as securities brokerage firms and insurance companies.
<PAGE>
Lending Activities

Loan  Portfolio.  The  Savings  Bank's  loan  portfolio  consists  primarily  of
conventional first mortgage loans secured by one-to-four-family  residences.  At
December  31,  1996,  the Savings  Bank's  total loans  outstanding  were $236.9
million,  of which  $191.8  million or 80.95% of the Savings  Bank's  total loan
portfolio  were  one-to-four-family  residential  first mortgage  loans.  Of the
one-to-four-family  residential  mortgage loans outstanding at that date, 25.80%
were fixed rate loans and 74.20% were adjustable-rate ("ARM") loans. At the same
date,  commercial  real estate  loans and other  loans on  improved  real estate
totaled  $13.6  million,  or 5.73% of the Savings  Bank's total loan  portfolio;
construction  (excluding  construction/permanent  loans) and land loans  totaled
$5.5  million  or  2.32%  of  the  Savings  Bank's  total  loan  portfolio;  and
multi-family  mortgage loans totaled $4.2 million or 1.76% of the Savings Bank's
total loan portfolio.  Consumer and other loans held by the Savings Bank,  which
principally  consist of home equity  loans,  deposit,  consumer and other loans,
totaled  $21.9  million or 9.2% of the Savings  Bank's  total loan  portfolio at
December 31, 1996.
<PAGE>
The  following  table sets forth the  composition  of the  Savings  Bank's  loan
portfolio in dollar amounts and percentages at the dates indicated:
<TABLE>
<CAPTION>

                                             1992                      1993                      1994     
                                   -----------------------   -----------------------   -------------------
                                                    % of                      % of                      % of       
                                      Amount        Total       Amount        Total       Amount        Total      
                                                                                        (Dollars in thousands)
<S>                                <C>             <C>       <C>           <C>         <C>           <C>
Mortgage loans:
     One-to-four-family            $  98,388       83.61%    $ 107,228       82.91%    $ 130,195       82.80%   
     Construction and land             2,198        1.87%        2,886        2.23%        6,332        4.03%   
     Multi-family                      2,232        1.90%        2,160        1.67%        3,068        1.95%   
     Commercial real estate            5,604        4.76%        6,713        5.19%        6,153        3.91%   
                                    --------     -------      --------     -------      --------     -------    

               Total mortgage
                     loans           108,422       92.14%      118,987       92.00%      145,748       92.69%   

Consumer loans                         8,027        6.82%        9,298        7.19%       10,581        6.73%    

Other loans                            1,224        1.04%        1,054        0.81%          915        0.58%     
                                   ---------     -------     ---------     -------     ---------     -------      

               Total loans
                     receivable      117,673      100.00%      129,339      100.00%      157,244       100.00   
                                                  ======                    ======                     ======   

Less:
     Loans in process                  2,385                     5,969                     7,833   
     Unearned discounts,
          premiums and
          deferred loan fees,
          net                            421                       424                       256   
     Allowance for loan losses           520                       735                       869   
                                    --------                  --------                  --------   

               Loans receivable,
                     net           $ 114,347                 $ 122,211                 $ 148,286   
                                   =========                 =========                 =========   

<PAGE>
<CAPTION>
                                             1995                       1996  
                                   ----------------------    ---------------------  
                                                    % of                      % of     
                                     Amount        Total       Amount        Total  
                                                 (DOLLARS IN THOUSANDS)  
                                                                                             
<S>                                <C>             <C>       <C>           <C>       
Mortgage loans:                     
     One-to-four-family            $ 159,170       84.32%    $ 191,788       80.95%                  
     Construction and land             5,343        2.83%        5,489        2.32%         
     Multi-family                      3,098        1.64%        4,180        1.76%                    
     Commercial real estate            6,654        3.53%       13,565        5.73%         
                                     -------      ------       -------       -----          
                                                                                            
               Total mortgage                                                               
                     loans           174,265       92.32%      215,022       90.76%         
                                                                                            
Consumer loans                        13,375        7.09%       21,016        8.87%          
                                                                                            
Other loans                            1,118         .59%          883         .37%           
                                   ---------      ------     ---------                   
                                                                                            
               Total loans                                                                  
                     receivable      188,758      100.00%      236,921       100.0%         
                                                  ======                     =====          
                                                                                            
Less:                                                                                       
     Loans in process                  4,267                     8,007         
     Unearned discounts,                                                                    
          premiums and                                                                      
          deferred loan fees,                                                               
          net                             66                       (97)         
     Allowance for loan losses           977                     1,063         
                                   ---------                 ---------         
                                                                                            
               Loans receivable,                                                            
                     net           $ 183,448                 $ 227,948         
                                   =========                 =========         
                                                                                                     
</TABLE>
<PAGE>
Purchase of Mortgage Loans.  The Savings Bank has, from time to time,  purchased
mortgage  loans  originated  by  other  lenders,   primarily  loans  secured  by
one-to-four-family  homes.  At December 31, 1996,  $4.3 million,  or 1.8% of the
Savings  Bank's total loan  portfolio  consisted of purchased  mortgage loans or
loan   participations.   Purchased   mortgage  loans   consisted   primarily  of
one-to-four-family residential mortgage loans.

Secondary  Market  Activities.  The Savings Bank  participates  in the secondary
market  through  a  correspondent  relationship,  originating  loans  (primarily
30-year fixed-rate loans) which are funded by the investor  correspondent rather
than by making and selling the loans,  thereby  eliminating  the Savings  Bank's
interest  rate risk on such loans.  Such loans are closed on the Savings  Bank's
documents with funds provided by the investor  correspondent at closing with all
credit  conditions  established by the investor  correspondent  being  satisfied
prior to the issuance of a loan commitment.  The Savings Bank receives a fee for
originating,  processing  and closing the loans and reports the loans to the OTS
as loans  originated and sold. In the year ended  December 31, 1996,  such loans
amounted to $2.4 million or 3.2% of total mortgage loans originated.
<PAGE>
Loan  Originations,  Purchases,  Sales and Principal  Repayments.  The following
table sets forth the Savings  Bank's  loan  originations,  purchases,  sales and
principal repayments for the periods indicated.
<TABLE>
<CAPTION>
                                                                 Year Ended December 31,
                                                          1994            1995          1996
                                                          ----            ----          ----
                                                                    (In thousands)
<S>                                                    <C>            <C>            <C>
Mortgage loans (gross):
     At beginning of year ........................     $ 118,987        145,748        174,265
     Mortgage loans originated:
          One-to-four-family (1) .................        40,649         46,082         62,906
          Construction and land ..................         3,899          2,104          2,292
          Multi-family ...........................         2,003          1,026          1,222
          Commercial real estate .................           876          1,047          7,982
                                                       ---------      ---------      ---------

               Total mortgage loans originated (1)        47,427         50,259         74,402

     Mortgage loans purchased ....................          --             --            2,106
                                                       ---------      ---------      ---------

               Total mortgage loans originated and
                         purchased ...............        47,427         50,259         76,508

     Transfer of loans to real estate owned ......          (232)          (478)          (287)
     Principal repayments ........................       (19,236)       (20,113)       (31,540)
     Sales of loans (1) ..........................        (1,198)        (1,151)        (3,924)
                                                       ---------      ---------      ---------

               At end of year ....................     $ 145,748        174,265        215,022
                                                       =========      =========      =========

Consumer loans (gross):
     At beginning of year ........................         9,298         10,581         13,375
     Loans originated ............................         4,631          6,141         12,399
     Principal repayments ........................        (3,348)        (3,347)        (4,758)
                                                       ---------      ---------      ---------

               At end of year ....................     $  10,581         13,375         21,016
                                                       =========      =========      =========

Other loans (gross):
     At beginning of year ........................         1,054            915          1,118
     Loans originated ............................           389            732            622
     Principal repayments ........................          (528)          (529)          (857)
                                                       ---------      ---------      ---------

               At end of year ....................     $     915          1,118            883
                                                       =========      =========      =========


(1)  Includes loans originated for and funded by correspondents of $1.2 million,
     $1.2 million and $2.4 million for 1994, 1995 and 1996, respectively.
</TABLE>
<PAGE>
Maturities of Loans. The following table shows the contractual maturities of the
Savings Bank's loan portfolio at December 31, 1996.  Loans that have  adjustable
rates are shown as  amortizing to final  maturity  rather than when the interest
rates are next  subject to change.  The table does not  include  prepayments  or
scheduled principal  repayments.  Prepayments and scheduled principal repayments
on the Savings  Bank's loans  totaled  $23.1  million,  $24.8  million and $35.7
million for the years ended December 31, 1994, 1995 and 1996, respectively.
<TABLE>
<CAPTION>
                                                                                  Mortgage Loans
                                           One-to-                                    Total
                                            Four-                        Other        Loans
                                           Family          Other         Loans      Receivable
                                          ---------     ----------    ----------    ---------- 
                                                               (In thousands)
<S>                                       <C>            <C>           <C>           <C>
 Amounts due:
     Within 1 year ..................     $     144            425         1,679         2,248
                                          ---------      ---------     ---------     ---------

     1 to 3 years ...................         2,661          1,638         9,060        13,359
     3 to 5 years ...................         2,184          1,150         3,958         7,292
     5 to 10 years ..................        13,625            619         5,751        19,995
     10 to 20 years .................        28,310          8,481         1,451        38,242
     Over 20 years ..................       144,864         10,921          --         155,785
                                          ---------      ---------     ---------     ---------

     Total due after 1 year .........       191,644         22,809        20,220       234,673
                                          ---------      ---------     ---------     ---------

     Total amounts due ..............       191,788         23,234        21,899       236,921

Less:
     Loans in process ...............         5,326          2,673             8         8,007
     Unearned discounts, premiums and
          deferred loan fees, net ...           (97)          --            --             (97)
     Allowance for loan losses ......           302            486           275         1,063
                                          ---------      ---------     ---------     ---------

Loans receivable, net ...............     $ 186,257         20,075        21,616       227,948
                                          =========      =========     =========     =========

</TABLE>
<PAGE>
Loans Due After  December 31, 1996.  The following  table sets forth at December
31,  1996 the  dollar  amount of all loans due or  scheduled  to  reprice  after
December  31,  1997,  classified  according  to whether such loans have fixed or
adjustable interest rates.
<TABLE>
<CAPTION>

                                                 Due after December 31, 1997
                                            Fixed      Adjustable          Total
                                                    (In thousands)
<S>                                        <C>            <C>            <C>
Mortgage loans:
     One-to-four-family ...........        $49,437        142,207        191,644
     Construction and land ........          5,489           --            5,489
     Multi-family .................             80          4,100          4,180
     Commercial real estate .......            718         12,422         13,140

Consumer loans ....................         20,141           --           20,141
Other loans .......................             79           --               79
                                           -------        -------        -------

          Total ...................        $75,944        158,729        234,673
                                           =======        =======        =======
</TABLE>
<PAGE>
One-to-Four-Family Mortgage Lending. The Savings Bank's primary lending emphasis
is on the  origination  of first  mortgage  loans secured by  one-to-four-family
residences within its primary lending area. Such residences are primarily single
family homes,  including  condominium and townhouses,  that serve as the primary
residence  of the owner.  To a lesser  degree,  the Savings  Bank makes loans on
residences used as second homes or as investments.  The Savings Bank also offers
second mortgage loans which are underwritten  applying the same standards as for
first mortgage loans.

In the years ended  December 31, 1994,  1995 and 1996,  the Savings Bank's total
mortgage loan  originations  amounted to $47.4 million,  $50.3 million and $74.4
million,  respectively, of which $40.6 million, $46.1 million and $62.9 million,
respectively, were secured by one-to-four-family properties.

At  December  31,   1996,   81.0%  of  total  loans   receivable   consisted  of
one-to-four-family residential loans, of which 74.2% were ARM loans. The Savings
Bank's ARM loans may carry an initial interest rate which is less than the fully
indexed rate for the loan.  The initial  discounted  rate is  determined  by the
Savings Bank in accordance with market and competitive factors. The Savings Bank
offers one-,  three- and five-year ARM loans which adjust by a maximum of 2% per
adjustment period,  with a lifetime cap on increases of 5% to 6%, depending upon
the program chosen.

The Savings  Bank's  policy on  one-to-four-family  residential  mortgage  loans
generally is to lend up to 80% of the appraised  value of property  securing the
loan,  or up to 95% if private  mortgage  insurance is obtained on the amount of
the loan which exceeds 80%.

Commercial and Multi-Family Real Estate Lending.  As of December 31, 1996, $13.6
million,  or 5.73% of the  Savings  Bank's  total loan  portfolio  consisted  of
commercial  real estate loans and $4.2 million,  or 1.80% of the Savings  Bank's
total loan portfolio, consisted of multi-family residential loans.

The  commercial  real estate loans in the Savings  Bank's  portfolio  consist of
fixed-rate and ARM loans which were originated at prevailing  market rates.  The
Savings  Bank's policy has been to originate  commercial or  multi-family  loans
only in its primary market area.  Commercial and multi-family  residential loans
are generally made in amounts up to 75% of the appraised  value of the property.
In making such loans,  the Savings Bank  primarily  considers  the net operating
income  generated by the real estate to support the debt service,  the financial
resources  and  income  level and  managerial  expertise  of the  borrower,  the
marketability of the property and the Savings Bank's lending experience with the
borrower.

Construction  and Land Loans.  The Savings Bank originates  loans to finance the
construction  of  one-to-four-family   homes  and,  to  a  much  lesser  extent,
originates loans for the acquisition and development of land (either  unimproved
land or improved  lots) on which the purchaser  can then build.  At December 31,
1996,  construction  (excluding  construction/permanent  loans)  and land  loans
totaled $5.5 million or 2.3% of the Savings Bank's total loan portfolio.
<PAGE>
At December 31, 1996,  the Savings Bank had loans in process  (undisbursed  loan
proceeds of construction  loans) of $8.0 million.  Of that amount,  $4.9 million
was  secured  by  residential  mortgages  $2.8  million  secured  by  commercial
mortgages,    and   $230,000    represented    loans   in   process   on   three
construction/permanent  loans to churches.  The Savings  Bank makes  residential
construction  loans  to  homeowners  on  a  long-term  basis  with  amortization
beginning  at the  conclusion  of  construction,  usually  a period of about six
months.  Such loans are carried in the  one-to-four-family  category and are not
separately classified as construction loans.  Residential  construction loans to
builders are carried in the construction and land category.

Construction   and   land   loans   also   include    construction   loans   for
one-to-four-family  residential  property  for which the  borrower  will  obtain
permanent  financing  from  another  lender.  Such  loans  bear a fixed  rate of
interest that equals prime plus 2.0% during the construction period. The Savings
Bank  obtains a commitment  for the  permanent  financing  from the other lender
prior to originating the construction loan.

Consumer and Other Lending.  At December 31, 1996,  $21.9 million or 9.2% of the
Savings  Bank's  total loan  portfolio  consisted  of consumer  and other loans,
including home equity loans and lines of credit for consumer  purposes and, to a
lesser extent, home improvement loans and secured and unsecured personal loans.

The Savings  Bank's  home  equity  loans are  originated  on  one-to-four-family
residences,  either on a  fixed-rate  basis with terms of up to 10 years or as a
balloon loan with terms up to five years with fifteen year amortization periods.
Those loans are generally limited to aggregate  outstanding  indebtedness on the
property  securing the loan of 80% of the loan to value ratio.  The Savings Bank
also offers  home  equity  lines of credit,  which bear  prime-based  adjustable
interest  rates with terms up to fifteen  years.  Such loans  generally  require
monthly payments of interest plus 1.5% of the balance outstanding.

Consumer loans are offered primarily on a fixed-rate,  short-term basis.  Except
for second  mortgage  loans which are  underwritten  pursuant  to the  standards
applicable to one-to-four-family  residential loans, the underwriting  standards
employed by the Savings Bank for consumer loans include a  determination  of the
applicant's  payment  history on other debts and an assessment of the borrower's
ability to make payments on the proposed loan and other indebtedness.

Loan  Approval  and  Authority.  Mortgage  loan  approval  authority  for  loans
exceeding  $100,000  has been  retained  by the Board of  Directors  which meets
weekly in its capacity as the Executive  Committee of the Board to consider loan
recommendations  of the Loan  Committee.  The Loan Committee is comprised of two
outside  directors,  the President and the Senior Lending Officer of the Savings
Bank.  Management has been delegated  authority to approve mortgage loans,  home
equity loans, home equity lines of credit,  consumer loans and other loans up to
$100,000.

The Savings  Bank's policy is to require title and hazard  insurance on all real
estate loans,  except home equity loans for which a title search is conducted in
lieu of obtaining title insurance. Borrowers may be permitted to pay real estate
taxes and hazard  insurance  premiums  applicable to the secured  property for a
mortgage  loan.  In some  instances,  borrowers may be required to advance funds
together  with each  payment of  principal  and  interest  to a mortgage  escrow
account from which the Savings Bank makes  disbursements  for items such as real
estate taxes, hazard insurance premiums and private mortgage insurance premiums.
<PAGE>
Asset Quality

Delinquent  Loans  and  Nonperforming  Assets.  Loans  are  generally  placed on
nonaccrual  status when the  collection  of  principal or interest is 90 days or
more past due, or earlier if  collection is deemed  uncertain.  The Savings Bank
provides  an  allowance  for  accrued  interest  deemed  uncollectible.  Accrued
interest  receivable is reported net of the allowance for uncollected  interest.
Loans may be reinstated to accrual status when all payments are brought  current
and, in the opinion of  management,  collection of the remaining  balance can be
reasonably expected.
<PAGE>
At December 31, 1994,  1995 and 1996,  delinquencies  in the Savings Bank's loan
portfolio were as follows:
<TABLE>
<CAPTION>

                                                  At December 31, 1994                     At December 31, 1995             
                                       -----------------------------------------   ---------------------------------------
                                          60-89 Days         90 Days or More            60-89 Days         90 Days or More  
                                       ------------------   -----------------      --------------------   ----------------  
                                       Number   Principal     Number   Principal    Number  Principal   Number  Principal   
                                        of       Balance       of      Balance       of      Balance     of      Balance    
                                       Loans    of Loans      Loans    of Loans     Loans   of Loans    Loans   of Loans    
                                       -----       -----    --------      -----    --------      -----    --------          
                                                                      (Dollars in thousands)
<S>                                       <C>      <C>        <C>      <C>         <C>      <C>         <C>     <C>
One-to-four-family ....................   7        276          8        324          6       244         1        52
Construction and land .................   1         47        --         --         --        --          3       115
Multi-family ..........................   1         75        --         --         --        --        --        --  
Commercial real estate ................ --         --         --         --         --        --        --        --  
                                        ---        ---        ---        ---        ---       ---       ---       ---

         Total mortgage loans .........   9        398          8        324          6       244         4       167

Consumer loans ........................ --         --           1          5          7        35         2         7

Other loans ........................... --         --         --         --         --        --        --        --  
                                        ---        ---        ---        ---        ---       ---       ---       ---

         Total loans ..................   9        398          9        329         13       279         6       174
                                        ===        ===        ===        ===        ===       ===       ===       ===

Delinquent loans to total loans .......            .25%                  .21%                 .15%                .09%
                                                   ===                   ===                  ===                 ===

<PAGE>
<CAPTION>
                                              At December 31, 1996    
                                   ----------------------------------------    
                                       60-89 Days          90 Days or More        
                                   ------------------   -------------------        
                                   Number   Principal   Number    Principal           
                                    of       Balance      of       Balance            
                                   Loans    of Loans     Loans    of Loans            
                                   -----    --------     -----    --------            
<S>                                 <C>        <C>        <C>     <C>
One-to-four-family ..............     3         77          8       545
Construction and land ...........    --          1         68
Multi-family ....................    --         --         --  
Commercial real estate ..........    --         --         --        --  
                                                ---        ---      ---

         Total mortgage loans ...     3         77                 9613 

Consumer loans ..................     2         46          4        53

Other loans .....................    --         --         --        --  
                                    ---        ---         ---    -----

         Total loans ............     5        123         13       666
                                    ===        ===        ===      ====

Delinquent loans to total loans .              .05%                 .28%
                                               ===                  ===
</TABLE>
<PAGE>
Nonperforming Assets. The following table sets forth information with respect to
the Savings Bank's nonperforming assets at the dates indicated.
<TABLE>
<CAPTION>
                                                              At December 31,
                                               -----------------------------------------
                                                1992     1993     1994     1995     1996
                                               -----    -----    -----    -----    -----
                                                          (Dollars in thousands)

<S>                                            <C>        <C>      <C>       <C>     <C>
Nonaccrual mortgage loans ..................   $ 381      588      324       70      613

Nonaccrual consumer loans ..................      17       18        5      104       53

Nonaccrual other loans .....................    --       --       --       --       --
                                               -----    -----    -----    -----    -----

Total nonperforming loans ..................     398      606      329      174      666

Real estate owned and insubstance foreclosed
     loans, net of related allowance for
     losses (1) ............................      70       72       84      165      361
                                               -----    -----    -----    -----    -----

          Total nonperforming assets .......   $ 468      678      413      339    1,027
                                               =====    =====    =====    =====    =====

Nonperforming loans to total loans .........     .34%     .47%     .21%     .09%     .28%
                                               =====    =====    =====    =====    =====

Total nonperforming assets to total assets .     .17%     .23%     .13%     .10%     .30%
                                               =====    =====    =====    =====    =====
</TABLE>
(1) The Savings Bank has no insubstance foreclosed loans.

At  December  31,  1996,  the  Savings  Bank had no  accruing  loans  which were
contractually  past  due 90 days or more as to  principal  and  interest  and no
troubled  debt  restructurings  as defined by Statement of Financial  Accounting
Standards No. 15.  Nonaccrual loans for which interest has been reduced totalled
approximately  $666,000,  $174,000 and $329,000 at December 31, 1996,  1995, and
1994,  respectively.  For the year ended December 31, 1996, interest income that
would  have  been  recorded  under the  original  terms of  nonaccrual  loans at
December 31, 1996 and interest income actually recognized is summarized below:


     Interest income that would have been recorded         $ 58,112
     Interest income recognized                             (35,474)
                                                           --------

     Interest income foregone                              $ 22,638
                                                           ========
<PAGE>
Classified Assets. Federal regulations and the Savings Bank's policy require the
classification  of loans and other assets,  such as debt and equity  securities,
considered  to be of  lesser  quality  as  "substandard",  "doubtful"  or "loss"
assets. An asset is considered  "substandard" if it is inadequately protected by
the  current net worth and paying  capacity of the obligor or of the  collateral
pledged,  if  any.  "Substandard"  assets  include  those  characterized  by the
"distinct  possibility"  that the  institution  will sustain  "some loss" if the
deficiencies are not corrected.  Assets classified as "doubtful" have all of the
weaknesses   inherent  in  those  classified   "substandard,"   with  the  added
characteristic  that the weaknesses  present make  "collection or liquidation in
full", on the basis of currently existing facts, conditions, and values, "highly
questionable and improbable."  Assets  classified as "loss" are those considered
"uncollectible"  and of such  little  value  that  their  continuance  as assets
without  the  establishment  of a specific  loss  reserve is not  warranted.  In
addition, the Savings Bank's policies require that assets which do not currently
expose the insured  institution to sufficient risk to warrant  classification as
substandard  but possess other  weaknesses are designated  "special  mention" by
management.

If an asset is  classified,  the estimated fair value of the asset is determined
and if that  value is less  than  the then  carrying  value  of the  asset,  the
difference is  established as a specific  reserve.  If an asset is classified as
loss, the amount of the asset  classified as loss is reserved.  General reserves
or  general  valuation  allowances  represent  loss  allowances  which have been
established to recognize the inherent risk  associated  with lending  activities
but, unlike specific reserves, are not allocated to particular assets.

The  following  table sets forth  information  concerning  the number and dollar
amount of loans and real estate owned  classified as  "substandard"  or "special
mention" at the dates  indicated.  No loans or real estate owned were classified
"doubtful" or "loss" at those dates.
<TABLE>
<CAPTION>
                                                 Substandard     Special Mention
                                              Number     Amount   Number  Amount
                                              ------     ------  -------  ------
                                                    (Dollars in thousands)
<S>                                           <C>        <C>       <C>    <C>
At December 31, 1996:
Loans ...................................         23     $1,114     -     $ --

Real estate owned:
     One-to-four-family properties ......          1        208     -       --
     Other ..............................          3        153     -       --
                                              ------     ------    --     ------

          Total .........................         27     $1,475     -     $ --
                                              ======     ======    ==     ======
At December 31, 1995:
Loans ...................................         22        785     -       --

Real estate owned:
     One-to-four-family properties ......          1        135     -       --
     Other ..............................          2         30     -       --
                                              ------     ------    --     ------

          Total .........................         25     $  950     -     $ --
                                              ======     ======    ==     ======
</TABLE>
<PAGE>
Allowance  for Loan  Losses.  The Savings  Bank's  allowance  for loan losses is
established  and  maintained  through  a  provision  for  loan  losses  based on
management's  evaluation  of the risk  inherent  in its loan  portfolio  and the
condition  of the  local  economy  in  the  Savings  Bank's  market  area.  Such
evaluation,  which  includes a review of all loans on which full  collectibility
may not be reasonably  assured,  considers,  among other matters,  the estimated
fair value of the underlying collateral, economic and regulatory conditions, and
other  factors that warrant  recognition  in providing for an adequate loan loss
allowance.  Although management believes it uses the best information  available
to make  determinations  with respect to the Savings  Bank's  allowance for loan
losses,  future  adjustments  may  be  necessary  if  economic  conditions  vary
substantially from the economic conditions in the assumptions used in making the
initial determinations or if other circumstances change.

The following  table sets forth the Savings Bank's  allowance for loan losses at
the dates  indicated,  the provisions  made and the  charge-offs  and recoveries
effected during the years indicated.
<TABLE>
<CAPTION>
                                           At or For the Year Ended December 31,
                                           -------------------------------------
                                            1992    1993    1994    1995    1996
                                           -----   -----   -----   -----   -----
                                                   (Dollars in thousands)
<S>                                        <C>       <C>     <C>     <C>     <C>
Balance at beginning of year ...........   $ 305     520     735     869     977
Provision for loan losses ..............     232     250     138     125     107
Charge-offs:
     One-to-four-family ................       3      21       2    --         9
     Construction and land .............    --      --      --        17    --
     Multi-family ......................    --      --      --      --      --
     Commercial real estate ............    --      --      --      --      --
     Consumer loans ....................      14      14    --      --        12
     Other loans .......................    --      --         2    --      --
                                           -----   -----   -----   -----   -----

          Total charge-offs by category       17      35       4      17      21

Recoveries .............................    --      --      --      --      --
                                           -----   -----   -----   -----   -----

Balance at end of year .................     520     735     869     977   1,063
                                           =====   =====   =====   =====   =====
</TABLE>
<PAGE>
The following table sets forth the ratios of the Savings Bank's  charge-offs and
allowances for losses for the years indicated.
<TABLE>
<CAPTION>
                                                1992      1993      1994      1995      1996
                                               ------    ------    ------    ------    ------ 
<S>                                            <C>       <C>       <C>       <C>       <C>    
Net charge-offs during the year
     as a percentage of average loans
     outstanding during the year ........        0.02%     0.02%       --%      .01%      .01%

Allowance for loan losses as a
     percentage of total loans receivable
     at end of year .....................        0.45%     0.57%     0.55%      .52%      .45%

Allowance for loan losses as a
     percentage of total nonperforming
     assets at end of year ..............      111.11%   108.41%   210.41%   288.48%   103.51%

Allowance for loan losses as a
     percentage of nonperforming loans
     at end of year .....................      130.65%   121.29%   264.13%   561.49%   159.61%
</TABLE>
<PAGE>
The following table sets forth the Savings Bank's specific and general allowance
for possible loan losses by type of loan for the years indicated.
<TABLE>
<CAPTION>
                                                                                   At December 31,
                                          1992                  1993                   1994                     1995        
                                  ------------------      ------------------      -----------------       ----------------- 
                                               % of                   % of                   % of                    % of   
                                             Loans to               Loans to               Loans to                Loans to 
                                              Total                  Total                  Total                   Total   
                                  Amount      Loans       Amount     Loans        Amount    Loans         Amount    Loans   
                                  ------      ------      ------    --------      ------   --------       ------   -------- 
                                                                    (Dollars in thousands)
At end of year allocated to:
     One-to-four-family            $ 100       83.61%      $ 175      82.91%       $ 240     82.80%        $ 275     84.32% 
     Construction and land            80         1.87         95        2.23         106       4.03          146       2.83 
     Multi-family                    100         1.90        140        1.67         165       1.95          183       1.64 
     Commercial real estate          100         4.76        120        5.19         135       3.91          150       3.53 
     Consumer loans                  140         6.82        205        7.19         223       6.73          223       7.09 
     Other loans                       -         1.04          -         .81           -        .58            -        .59 
                                   -----       ------      -----     ------        -----     ------        -----     ------  

          Total                    $ 520       100.00%     $ 735     100.00%       $ 869     100.00%       $ 977     100.00% 
                                   =====       ======      =====     ======        =====     ======        =====     ======  
<CAPTION>
                                               1996        
                                        ------------------ 
                                                    % of   
                                                  Loans to 
                                                   Total   
                                         Amount    Loans   
                                        -------   -------- 
                                      (Dollars in thousands)                        
<S>                                     <C>        <C>     
At end of year allocated to:             
     One-to-four-family                 $   302     80.95% 
     Construction and land                  152      2.32  
     Multi-family                           169      1.76  
     Commercial real estate                 165      5.73  
     Consumer loans                         275      8.87  
     Other loans                              -       .37  
                                        -------     -----  
                                                           
          Total                         $ 1,063    100.00% 
                                        =======    ====== 
</TABLE>
<PAGE>
Investment Activities

The investment  policy of the Savings Bank, which is established by the Board of
Directors and  implemented by the Chief  Executive  Officer who is designated as
the Investment Officer, is designed primarily to provide and maintain liquidity,
to generate a favorable return on investments  without  incurring undue interest
rate and credit risk, and to complement  the Savings Bank's lending  activities.
In  establishing  its  investment  strategies,  the Savings Bank  considers  its
business and growth plans, the economic environment,  the types of securities to
be held and other factors.  Federally  chartered  savings  institutions have the
authority  to  invest  in  various  types of  assets,  including  U.S.  Treasury
obligations,  securities of various federal  agencies,  certain  certificates of
deposit of insured banks and savings institutions,  certain bankers acceptances,
repurchase  agreements,  loans on federal funds, and, subject to certain limits,
commercial paper and mutual funds.

On January 1, 1994,  the  Company  adopted  Statement  of  Financial  Accounting
Standards  No. 115.  That  statement  requires  investment  and  mortgage-backed
securities  that the  Company  has the  positive  intent and  ability to hold to
maturity  to be  classified  as  held-to-maturity  securities  and  reported  at
amortized  cost.  Securities  that are held  principally for selling in the near
term are to be classified as trading securities and reported at fair value, with
unrealized  gains and losses included in earnings.  Securities not classified as
either held-to-maturity securities or trading securities are to be classified as
available-for-sale  securities and reported at fair value, with unrealized gains
and losses  excluded  from  earnings  and  reported in a separate  component  of
stockholders' equity.

Mortgage-Backed Securities

The Savings Bank invests in  collateralized  mortgage  obligations  ("CMOs") and
mortgage-backed  securities  such as government  pass-through  certificates.  At
December 31,  1996,  the Savings  Bank's  mortgage-backed  securities  portfolio
totaled $65.7 million, or 19.0% of total assets. The  weighted-average  interest
rate on the total mortgage-backed  securities portfolio at December 31, 1996 was
6.45%. The mortgage-backed securities are not due at a single maturity date, and
accordingly, contractual maturity information is not presented herein. CMOs, net
of related  premiums  and  discounts,  totaled  $34.2  million or 52.0% of total
mortgage-backed securities.

CMOs are typically issued by a special purpose entity, which may be organized in
any  of  a  variety  of  legal  forms,  such  as a  trust,  a  corporation  or a
partnership.  The entity  combines pools of pass-through  securities,  which are
used to collateralize the mortgage related securities.  Once combined,  the cash
flows can be divided into  different  "tranches"  or  "classes"  of  securities,
thereby  creating  more  predictable  average  lives for each  security than the
underlying  pass-through  pools.  Under this  security  structure  all principal
repayments   from  the   various   mortgage   pools  can  be   allocated   to  a
mortgage-related  securities class or classes  structured to have priority until
it has been paid off.  Thus,  these  securities  are  designed  to  address  the
reinvestment  concerns associated with mortgage-backed  security  pass-throughs,
namely that they tend to pay off more  rapidly  when  interest  rates fall.  The
Savings  Bank's CMOs have  coupon  rates  ranging  from 4.00% to 7.51% and had a
weighted average yield of 5.91% at December 31, 1996.

The Savings  Bank's  policy is to purchase CMOs rated AA or better by nationally
recognized  rating services.  The majority of the CMOs owned by the Savings Bank
are insured or guaranteed either directly or indirectly, through mortgage-backed
securities underlying the obligations issued by the FNMA, FHLMC or GNMA.
<PAGE>
At December 31, 1996,  the Savings Bank had $34.2  million in CMOs  representing
9.9% of total assets. Of that amount,  $12.4 million or 36.3% had floating rates
with caps ranging from 8.50% to 12.65% and which adjust on a monthly basis.

Other mortgage-backed  securities,  net, totaled $31.5 million or 48.0% of total
mortgage-backed   securities.   Other  mortgage-backed   securities  consist  of
pass-through certificates issued by the Government National Mortgage Association
("GNMA"),  the Federal Home Loan Mortgage Corporation  ("FHLMC") and the Federal
National Mortgage Association ("FNMA").

At December 31, 1996, the Savings Bank had mortgage-backed  securities available
for sale with an aggregate carrying value of $18.8 million,  consisting of CMOs,
FHLMC five year balloons and FNMA certificates.

The  following  table  sets forth  mortgage-backed  security  purchases,  sales,
amortization and repayments during the periods indicated:
<TABLE>
<CAPTION>
                                                   Year Ended December 31,
                                            -----------------------------------
                                               1994         1995        1996
                                            ---------    ---------    ---------
                                                        (In thousands)

<S>                                         <C>            <C>           <C>   
At beginning of year ....................   $ 109,077      117,003       93,883
Purchases ...............................      44,096        6,038        8,596
Amortization and repayments .............     (35,407)     (29,883)     (36,617)
Change in unrealized loss on securities
     available for sale .................        (763)         725         (126)
                                            ---------    ---------    ---------

          At end of year ................   $ 117,003       93,883       65,736
                                            =========    =========    =========
</TABLE>

Investment Securities

At  December  31,  1996,  the  Savings  Bank held $32.8  million  in  investment
securities consisting of $20.2 million in U.S. Government and agency securities,
classified as available for sale, and $8.9 million in mutual funds, $3.2 million
in  SBA-related  investment  securities,  classified  as held to  maturity,  and
$497,000 in other  investment  securities,  classified as available for sale. In
addition,  the Savings Bank holds $4.1 million in interest-earning  deposits and
$1.9 million of FHLB of Atlanta stock.
<PAGE>
The following table sets forth certain information  regarding the amortized cost
and market values of the Savings Bank's  interest-earning  deposits,  FHLB stock
and investment securities at the dates indicated:
<TABLE>
<CAPTION>
                                                                          At December 31,
                                                 --------------------------------------------------------------------
                                                         1994                   1995                     1996
                                                 ------------------     --------------------     --------------------
                                                 Amortized   Market     Amortized     Market     Amortized     Market
                                                   Cost      Value         Cost       Value         Cost       Value
                                                  ------     ------       ------      ------       ------      ------
                                                                                (In thousands)
<S>                                               <C>        <C>          <C>         <C>          <C>         <C>   
Interest-earning deposits                          4,732      4,732        8,924       8,924        4,077       4,077
                                                  ======     ======       ======      ======       ======      ======

FHLB stock                                         1,928      1,928        1,928       1,928        1,939       1,939
                                                  ======     ======       ======      ======       ======      ======

Investment securities:
     Held-to-maturity:
          U.S. Government and
               agency securities                   8,000      7,606          -           -            -           -
          SBA-related investment securities        4,014      3,818        3,441      3,472         3,239       3,271

     Available-for-sale:
          U.S. Government and
               agency securities                   3,000      2,986       11,475      11,392       20,208      20,176
          Other investment securities              4,118      4,051        1,523       1,532          495         497
          Investment in mutual funds               9,127      8,799        8,939       8,900        9,035       8,920

               Total investment securities        28,259     27,260       25,378      25,296       32,977      32,864
                                                  ======     ======       ======      ======       ======      ======
</TABLE>
<PAGE>
The following  table sets forth  information  concerning  the amortized cost and
weighted  average yields by maturity on investment  securities and FHLB stock at
December 31, 1996.
<TABLE>
<CAPTION>
                                                                 Due After                   Due After
                                                                One Through                 Five Through       
                                Due Within One Year             Five Years                   10 Years          
                             -----------------------     ------------------------    ------------------------- 
                                          Annualized                  Annualized                   Annualized  
                                           Weighted                    Weighted                     Weighted   
                              Amortized     Average        Amortized    Average        Amortized     Average   
                                Cost         Yield           Cost       Yield            Cost        Yield     
                             ----------    ---------     -----------  -----------     -----------  ----------- 
                                                                       (Dollars in thousands)
<S>                          <C>           <C>           <C>          <C>             <C>          <C>         
FHLB stock                                                                                                     
                                                                                                               
Investment securities:
     U.S. Government
         and agency
         obligations          $ 2,000         7.35%        18,208          6.01%           -               -   
     Other investment
         securities               205         5.58             85          6.50           205            7.88  
     Mutual funds                  -            -              -             -             -               -   
                              -------         ----       --------          ----         -----            ----  

         Total investment
              securities      $ 2,205         7.19%      $ 18,293          6.01%        $ 205            7.88% 
                              =======         ====       ========          ====         =====            ====  
<CAPTION>
                                    Due After                                        
                                    10 Years                      Total              
                              ------------------------    ------------------------   
                                           Annualized                                
                                            Weighted                   Approximate   
                               Amortized     Average        Amortized    Market      
                                 Cost        Yield            Cost        Value      
                              ----------- ------------      ----------  ----------   
                                                                                     
<S>                           <C>          <C>              <C>          <C>         
FHLB stock                     $   1,939         6.00%      $   1,939      1,939     
                               =========         ====       =========      =====     
Investment securities:                                                               
     U.S. Government                                                                 
         and agency                                                                  
         obligations               -               -            20,208    20,176     
     Other investment                                                                
         securities                3,239         6.38            3,734     3,768     
     Mutual funds                  9,035         6.10            9,035     8,920     
                                --------         ----         --------     -----     
                                                                                     
         Total investment                                                            
              securities        $ 12,274         6.17%        $ 32,977    32,864     
                                ========         ====         ========    ======     
</TABLE>
<PAGE>
Sources of Funds

General. Repayments of mortgage-backed securities, loan repayments, deposits and
cash flows  generated  from  operations  are the primary  sources of the Savings
Bank's funds for use in lending, investing and for other general purposes.

Deposits.  The Savings Bank offers a variety of deposit  accounts having a range
of interest  rates and terms.  The Savings  Bank's  deposits  consist of regular
savings,   non-interest-bearing   checking,  NOW  checking,   money  market  and
certificate  accounts.  Of the  deposit  accounts at December  31,  1996,  $25.4
million or 8.9% consist of individual retirement accounts ("IRAs").

The  Savings  Bank has  maintained  a  relatively  high  level of core  deposits
consisting of passbook and statement savings, money market, non-interest-bearing
checking,  and NOW checking,  which has contributed to a low cost of funds. Such
core  deposits  represented  30.40%,  25.24%  and  25.02% of total  deposits  at
December 31, 1994, 1995, and 1996, respectively.
<PAGE>
The following  table shows the  distribution  of the Savings Bank's  deposits by
type at the dates indicated and the weighted  average nominal  interest rates on
each category of deposits presented at December 31, 1996 (dollars in thousands).
<TABLE>
<CAPTION>
                                                         At December 31,
                           ------------------------------------------------------------------------------------------
                                     1994                     1995                              1996
                           -----------------------    ----------------------      -----------------------------------
                                          Percent                   Percent                    Percent       Weighted
                                          of Total                  of Total                   of Total      Average
                             Amount       Deposits      Amount      Deposits       Amount      Deposits        Rate
                           ---------       ------     ---------      ------       -------       ------          ---- 
<S>                        <C>             <C>        <C>            <C>          <C>           <C>             <C>  
Demand accounts:
     Noninterest bearing
          checking          $  3,653         1.45%      $ 3,482        1.30%    $   4,103         1.46%         0.00%
     NOW and money
          market accounts     41,914        16.65        37,272       13.92        39,203        13.86          2.38
     Passbook and 
          statement
          savings             30,967        12.30        26,811       10.02        27,412         9.70          2.74
                           ---------       ------     ---------      ------       -------       ------          ---- 

          Total               76,534        30.40        67,565       25.24        70,718        25.02          2.38
                           ---------       ------     ---------      ------       -------       ------          ---- 

Certificate accounts:
     1-3 months                7,353         2.92         5,866        2.19         8,204         2.90          4.57 
     91 days                     506         0.20           421        0.16           518          .18          4.40 
     182 day                  27,361        10.87        20,565        7.68        15,904         5.63          4.91 
     9 months                    -            -          14,593        5.45        17,173         6.07          5.31 
     12 months                50,919        20.23        59,925       22.38        53,577        18.96          5.10 
     12 month IRA             15,343         6.09        15,574        5.82        16,473         5.83          5.30 
     18 month                  4,459         1.77         3,931        1.47         3,136         1.11          5.19 
     24 month                 11,150         4.43        19,946        7.45        46,770        16.55          5.84 
     30 month                 18,816         7.47        15,225        5.69        10,628         3.76          5.53 
     60 month                 39,311        15.62        44,092       16.47        39,563        13.99          5.98 
                             -------       ------       -------      ------       -------       ------         ----- 
                                                                                                                     
          Total              175,218        69.60       200,138       74.76       211,946        74.98          5.45 
                             -------       ------       -------      ------       -------       ------         ----- 
                                                                                                                     
          Total deposits   $ 251,752       100.00%    $ 267,703      100.00%      282,664       100.00%         4.67%
                           =========       ======     =========      ======       =======       ======          ==== 
</TABLE>

<PAGE>

The following  table  presents the deposit  activity of the Savings Bank for the
years indicated.
<TABLE>
<CAPTION>
                                                   Year Ended December 31,
                                              ----------------------------------
                                                1994         1995         1996
                                              --------     --------     --------
                                                        (In thousands)

<S>                                           <C>           <C>          <C>    
Deposits ................................     $434,805      472,591      542,019
Withdrawals .............................      430,664      465,235      536,051
                                              --------     --------     --------

Deposits in excess of withdrawals .......        4,141        7,356        5,968

Interest credited on deposits ...........        6,610        8,596        8,993
                                              --------     --------     --------

Total increase in deposits ..............     $ 10,751       15,952       14,961
                                              ========     ========     ========
</TABLE>

The following  table presents the amount of time deposit  accounts in amounts of
$100,000 or more at December 31, 1996 maturing as follows (in thousands):


Maturity Period
---------------
One month through three months                             $ 1,907
Over three through six months                                1,172
Over six through 12 months                                   2,749
Over 12 months                                               3,148
                                                           -------

     Total                                                 $ 8,976
                                                           =======

<PAGE>
The  following  table  presents,  by  various  rate  categories,  the  amount of
certificate  accounts  outstanding at December 31, 1994,  1995, and 1996 and the
periods to maturity of the  certificate  accounts  outstanding  at December  31,
1996.
<TABLE>
<CAPTION>
                                                                                 Period to Maturity from December 31, 1996
                                           At December 31,               -----------------------------------------------------------
                                 ----------------------------------      Within        1 to        2 to        3 to
                                   1994         1995         1996        1 Year       2 Years     3 Years      4 Years       Total
                                 --------     --------     --------     --------     --------     --------     --------     --------
                                                                           (In thousands)
<S>                              <C>           <C>          <C>          <C>           <C>           <C>         <C>         <C>    
3.01% to 4.00%                   $ 29,044         --           --           --           --           --           --           --
4.01% to 5.00%                     79,213       30,297       49,542       49,542         --           --           --         49,542
5.01% to 6.00%                     47,077      108,867      137,394       72,815       55,514        9,065         --        137,394
6.01% to 8.00%                     19,884       60,974       25,010       13,221         --           --         11,789       25,010
8.01% to 9.00%                       --           --           --           --           --           --           --           --
                                 --------     --------     --------     --------     --------     --------     --------     --------

                                 $175,218      200,138      211,946      135,578       55,514        9,065       11,789      211,946
                                 ========     ========     ========     ========     ========     ========     ========     ========
</TABLE>
<PAGE>
Borrowings

The Savings Bank is authorized to obtain advances from the FHLB of Atlanta which
generally would be  collateralized  by a blanket lien against the Savings Bank's
mortgage  portfolio.  Such  advances may be made  pursuant to several  different
credit  programs,  each  of  which  has its  own  interest  rate  and  range  of
maturities.  The maximum  amount that the FHLB of Atlanta will advance to member
institutions,  including  the Savings  Bank,  for  purposes  other than  meeting
withdrawals, fluctuates from time to time in accordance with the policies of the
OTS and the FHLB of Atlanta.

From time to time,  the  Savings  Bank enters into  agreements  with  nationally
recognized  primary  securities  dealers  under  which the  Savings  Bank  sells
securities subject to repurchase  agreements.  Such agreements are accounted for
as  borrowings  by the Savings Bank and are secured by the  securities  sold. At
December  31,  1996,  the  Savings  Bank had  $8.0  million  of such  borrowings
outstanding.
<PAGE>
The  following  table sets forth  certain  information  relating  to the Savings
Bank's borrowings at the dates indicated.
<TABLE>
<CAPTION>
                                                            At or For the Year Ended
                                                               Ended December 31,
                                                      ----------------------------------
                                                         1994          1995        1996
                                                      ----------    ----------    ------
                                                              (Dollars in thousands)
<S>                                                   <C>           <C>           <C>   
FHLB advances:
     Average balance outstanding ..................   $      150    $      150    $  150
                                                      ==========    ==========    ======
     Maximum amount outstanding at any month end
          during the year .........................   $      150    $      150    $  150
                                                      ==========    ==========    ======
     Balance outstanding at end of year ...........   $      150    $      150    $  150
                                                      ==========    ==========    ======
     Weighted average interest rate during the year         7.17%         7.17%     7.17%
                                                      ==========    ==========    ======
     Weighted average interest rate at end of year          7.17%         7.17%     7.17%
                                                      ==========    ==========    ======

Securities sold under agreements to repurchase
     Average balance outstanding ..................   $      107    $      470    $  849
                                                      ==========    ==========    ======
     Maximum amount outstanding at any month end
          during the year .........................   $    3,000    $    2,031    $8,048
                                                      ==========    ==========    ======
     Balance outstanding at end of year ...........   $    3,000    $     --      $8,048
                                                      ==========    ==========    ======
     Weighted average interest rate during the year         6.50%         6.20%     5.65%
                                                      ==========    ==========    ======
     Weighted average interest rate at end of year          6.50%         --        5.63
                                                      ==========    ==========    ======
<PAGE>
<CAPTION>
                                                            At or For the Year Ended
                                                               Ended December 31,
                                                      ----------------------------------
                                                         1994          1995        1996
                                                      ----------    ----------    ------
                                                              (Dollars in thousands)
<S>                                                   <C>           <C>           <C>   
Total borrowings:
     Average balance outstanding ..................   $      257    $      620    $  999
                                                      ==========    ==========    ======
     Maximum amount outstanding at any month end
          during the year .........................   $    3,150    $    2,181    $8,198
                                                      ==========    ==========    ======
     Balance outstanding at end of year ...........   $    3,150    $      150    $8,198
                                                      ==========    ==========    ======
     Weighted average interest rate during the year         6.53%         6.44%     5.68%
                                                      ==========    ==========    ======
     Weighted average interest rate at end of year          6.53%         7.17%     5.66%
                                                      ==========    ==========    ======
</TABLE>

Subsidiary Activities

The  Savings  Bank  has  one  wholly-owned   subsidiary,   Lake  County  Service
Corporation.  Lake County  Service  Corporation  was formed to develop a 100-lot
subdivision and is now substantially inactive, having sold all but one lot. Lake
County Service  Corporation  also owns an 8.4 acre  commercial  parcel and a one
acre lot adjoining the Savings Bank's main office.

Personnel

As of December 31,  1996,  the Savings Bank had 104  full-time  employees  and 8
part-time  employees.   The  employees  are  not  represented  by  a  collective
bargaining  unit,  and the Savings  Bank  considers  its  relationship  with its
employees to be good.

REGULATION AND SUPERVISION

General

The Company,  as a savings and loan holding company, is required to file certain
reports with, and otherwise  comply with the rules and regulations of the Office
of Thrift  Supervision  ("OTS") under the Home Owners' Loan Act, as amended (the
"HOLA").  In  addition,  the  activities  of savings  institutions,  such as the
Savings  Bank,  are governed by the HOLA and the Federal  Deposit  Insurance Act
("FDI Act").
<PAGE>
The Savings Bank is subject to extensive regulation, examination and supervision
by the OTS,  as its  primary  federal  regulator,  and the FDIC,  as the deposit
insurer.  The Savings  Bank is a member of the Federal  Home Loan Bank  ("FHLB")
System and its  deposit  accounts  are  insured up to  applicable  limits by the
Savings  Association  Insurance  Fund ("SAIF")  managed by the FDIC. The Savings
Bank must file reports with the OTS and the FDIC  concerning  its activities and
financial  condition  in addition to  obtaining  regulatory  approvals  prior to
entering into certain  transactions  such as mergers with, or  acquisitions  of,
other  savings   institutions.   The  OTS  and/or  the  FDIC  conduct   periodic
examinations to test the Savings Bank's safety and soundness and compliance with
various  regulatory   requirements.   Regulation  and  supervision  establish  a
comprehensive framework of activities in which an institution can engage and are
intended primarily for the protection of the insurance fund and depositors.  The
regulatory structure also gives the regulatory  authorities extensive discretion
in connection with their supervisory and enforcement  activities and examination
policies,  including  policies with respect to the  classification of assets and
the  establishment of adequate loan loss reserves for regulatory  purposes.  Any
change in such  regulatory  requirements  and policies,  whether by the OTS, the
FDIC or the Congress,  could have a material  adverse  impact on the Company and
the Savings Bank and their  operations.  Certain of the regulatory  requirements
applicable  to the  Savings  Bank and to the  Company  are  referred to below or
elsewhere  herein.  The  description  of statutory  provisions  and  regulations
applicable to savings institutions and their holding companies set forth in this
Form 10-K does not purport to be a complete  description  of such  statutes  and
regulations and their effects on the Savings Bank and the Company.

Holding Company Regulation

The Company is a nondiversified  unitary savings and loan holding company within
the meaning of the HOLA.  As a unitary  savings and loan  holding  company,  the
Company  generally  is not  restricted  under  existing  laws as to the types of
business  activities  in which it may engage,  provided  that the  Savings  Bank
continues  to  be a  qualified  thrift  lender  ("QTL").  See  "Federal  Savings
Institution Regulation - QTL Test." Upon any non-supervisory  acquisition by the
Company of another  savings  institution or savings bank that meets the QTL test
and is deemed to be a savings institution by the OTS, the Company would become a
multiple  savings and loan holding company (if the acquired  institution is held
as a separate  subsidiary) and would be subject to extensive  limitations on the
types of  business  activities  in which it could  engage.  The HOLA  limits the
activities of a multiple  savings and loan holding  company and its  non-insured
institution  subsidiaries  primarily to activities  permissible for bank holding
companies  under  Section  4(c)(8) of the Bank Holding  Company Act ("BHC Act"),
subject to the prior approval of the OTS, and certain  activities  authorized by
OTS regulation.
<PAGE>
The HOLA prohibits a savings and loan holding  company,  directly or indirectly,
or through one or more  subsidiaries,  from acquiring more than 5% of the voting
stock of another savings  institution or holding company thereof,  without prior
written approval of the OTS;  acquiring or retaining,  with certain  exceptions,
more than 5% of a nonsubsidiary  company engaged in activities  other than those
permitted  by the HOLA;  or  acquiring  or  retaining  control  of a  depository
institution  that is not  insured by the FDIC.  In  evaluating  applications  by
holding  companies to acquire  savings  institutions,  the OTS must consider the
financial  and  managerial  resources  and future  prospects  of the company and
institution involved, the effect of the acquisition on the risk to the insurance
funds, the convenience and needs of the community and competitive factors.

The OTS is  prohibited  from  approving any  acquisition  that would result in a
multiple savings and loan holding company  controlling  savings  institutions in
more than one state,  subject to two exceptions:  (i) the approval of interstate
supervisory  acquisitions  by savings and loan  holding  companies  and (ii) the
acquisition  of a savings  institution in another state if the laws of the state
of the target savings  institution  specifically  permit such acquisitions.  The
states  vary in the  extent to which they  permit  interstate  savings  and loan
holding company acquisitions.

Although savings and loan holding  companies are not subject to specific capital
requirements  or  specific  restrictions  on the payment of  dividends  or other
capital  distributions,  HOLA does  prescribe  such  restrictions  on subsidiary
savings institutions as described below. The Savings Bank must notify the OTS 30
days before  declaring any dividend to the Company.  In addition,  the financial
impact of a holding  company on its  subsidiary  institution is a matter that is
evaluated  by the OTS  and the  agency  has  authority  to  order  cessation  of
activities or divestiture of subsidiaries  deemed to pose a threat to the safety
and soundness of the institution.

Federal Savings Institution Regulation

Capital  Requirements.  The OTS capital regulations require savings institutions
to meet three minimum  capital  standards:  a 1.5% tangible  capital ratio, a 3%
leverage  (core) capital ratio and an 8% risk-based  capital ratio. In addition,
the prompt  corrective  action  standards  discussed  below also  establish,  in
effect,  a minimum 2% tangible  capital  standard,  a 4% leverage (core) capital
ratio (3% for  institutions  receiving the highest rating on the CAMEL financial
institution  rating system),  and, together with the risk-based capital standard
itself,  a 4% Tier I  risk-based  capital  standard.  Core capital is defined as
common stockholders' equity (including retained earnings), certain noncumulative
perpetual preferred stock and related surplus,  and minority interests in equity
accounts  of  consolidated  subsidiaries  less  intangibles  other than  certain
purchased  mortgage  servicing  rights and credit  card  relationships.  The OTS
regulations  also require  that, in meeting the  tangible,  leverage  (core) and
risk-based capital standards,  institutions must generally deduct investments in
and loans to  subsidiaries  engaged in activities not permissible for a national
bank.
<PAGE>
The  risk-based   capital  standard  for  savings   institutions   requires  the
maintenance of Tier I (core) and total capital (which is defined as core capital
and supplementary  capital) to risk-weighted  assets of 4% and 8%, respectively.
In determining the amount of risk-weighted assets, all assets, including certain
off-balance sheet assets,  are multiplied by risk-weight  factors of 0% to 100%,
as assigned by the OTS capital  regulation  based on the risks OTS  believes are
inherent  in the type of asset.  The  components  of Tier I (core)  capital  are
equivalent to those discussed earlier.  The components of supplementary  capital
currently include  cumulative  preferred stock,  long-term  perpetual  preferred
stock,  mandatory  convertible   securities,   subordinated  debt,  intermediate
preferred  stock and the  allowance  for loan and lease  losses  with the latter
limited to a maximum of 1.25% of risk-weighted  assets.  Overall,  the amount of
supplementary  capital  included as part of total capital  cannot exceed 100% of
core capital.

The OTS regulatory  capital  requirements also incorporate an interest rate risk
component.  Savings institutions with "above normal" interest rate risk exposure
are subject to a deduction from total capital for purposes of calculating  their
risk-based capital requirements.  A savings institution's  interest rate risk is
measured  by the decline in the net  portfolio  value of its assets  (i.e.,  the
difference  between  incoming  and outgoing  discounted  cash flows from assets,
liabilities  and  off-balance   sheet   contracts)  that  would  result  from  a
hypothetical  200 basis point  increase or  decrease  in market  interest  rates
divided  by the  estimated  economic  value  of  the  institution's  assets.  In
calculating  its total  capital  under the  risk-based  capital  rule, a savings
institution whose measured interest rate risk exposure exceeds 2% must deduct an
amount equal to one-half of the difference  between the  institution's  measured
interest rate risk and 2%,  multiplied by the  estimated  economic  value of the
institution's  assets.  The  Director  of the OTS may  waive or defer a  savings
institution's  interest rate risk component on a  case-by-case  basis. A savings
institution with assets of less than $300 million and risk-based  capital ratios
in excess of 12% is not subject to the interest rate risk component,  unless the
OTS  determines   otherwise.   For  the  present  time,  the  OTS  has  deferred
implementation  of the interest rate risk  component.  At December 31, 1996, the
Savings  Bank  met each of its  capital  requirements,  in each  case on a fully
phased-in basis and it is anticipated  that the Savings Bank will not be subject
to the interest rate risk component.
<PAGE>
The following table presents the Savings Bank's capital position at December 31,
1996 relative to fully phased-in regulatory requirements.
<TABLE>
<CAPTION>
                                                                        Capital Ratios
                                                      Excess         ---------------------
                             Actual      Required  (Deficiency)       Actual      Required
                            Capital      Capital      Amount         Percent       Percent
                            -------      -------      ------         -------       -------
                                               (Dollars in thousands)
<S>                         <C>          <C>          <C>            <C>          <C> 
Tangible                    $41,651        5,198       36,453         12.02%       1.50%
Core (leverage)              41,651       10,395       31,256         12.02        3.00
Risk-based:
     Tier I (core)           41,651        6,338       35,313         26.29        4.00
     Total                   42,714       12,676       30,038         26.96        8.00
</TABLE>

Prompt  Corrective  Regulatory  Action.  Under the OTS prompt  corrective action
regulations,  the OTS is required to take certain  supervisory  actions  against
undercapitalized   institutions,   the  severity  of  which   depends  upon  the
institution's degree of undercapitalization. Generally, a savings institution is
considered  "well  capitalized"  if its ratio of total capital to  risk-weighted
assets is at least  10%,  its ratio of Tier I (core)  capital  to  risk-weighted
assets is at least 6%, its ratio of core capital to total assets is at least 5%,
and it is not  subject to any order or  directive  by the OTS to meet a specific
capital  level.  A  savings  institution  generally  is  considered  "adequately
capitalized" if its ratio of total capital to  risk-weighted  assets is at least
8%, its ratio of Tier I (core) capital to  risk-weighted  assets is at least 4%,
and its  ratio  of core  capital  to  total  assets  is at  least  4% (3% if the
institution receives the highest CAMEL rating). A savings institution that has a
ratio of total capital to risk weighted  assets of less than 8%, a ratio of Tier
I (core)  capital  to  risk-weighted  assets  of less than 4% or a ratio of core
capital to total  assets of less than 4% (3% or less for  institutions  with the
highest  examination rating) is considered to be  "undercapitalized."  A savings
institution  that has a total  risk-based  capital  ratio less than 6%, a Tier 1
capital  ratio  of less  than 3% or a  leverage  ratio  that is less  than 3% is
considered to be "significantly undercapitalized" and a savings institution that
has a tangible  capital to assets ratio equal to or less than 2% is deemed to be
"critically  undercapitalized."  Subject  to a  narrow  exception,  the  banking
regulator is required to appoint a receiver or  conservator  for an  institution
that is  "critically  undercapitalized."  The  regulation  also  provides that a
capital restoration plan must be filed with the OTS within 45 days of the date a
savings   institution   receives   notice   that   it   is   "undercapitalized,"
"significantly  undercapitalized" or "critically  undercapitalized."  Compliance
with the plan must be guaranteed  by any parent  holding  company.  In addition,
numerous  mandatory  supervisory  actions  become  immediately  applicable to an
undercapitalized   institution,   including,   but  not  limited  to,  increased
monitoring by regulators and restrictions on growth,  capital  distributions and
expansion.  The OTS  could  also  take  any  one of a  number  of  discretionary
supervisory  actions,  including  the  issuance of a capital  directive  and the
replacement of senior executive officers and directors.
<PAGE>
Insurance  of Deposit  Accounts.  Deposits  of the  Savings  Bank are  presently
insured by the SAIF.  Both the SAIF and the Bank  Insurance  Fund ("BIF"),  (the
deposit  insurance  fund  that  covers  most  commercial  bank  deposits),   are
statutorily  required to be recapitalized to a 1.25% of insured reserve deposits
ratio.  Until recently,  members of the SAIF and BIF were paying average deposit
insurance  premiums of between 24 and 25 basis points.  The BIF met the required
reserve  in 1995,  whereas  the  SAIF was not  expected  to meet or  exceed  the
required  level  until  2002  at the  earliest,  due in  part  to the  statutory
requirement that SAIF members make payments on bonds issued in the late 1980s by
the Financing Corporation ("FICO") to recapitalize the predecessor to the SAIF.

Once the BIF achieved the 1.25% ratio,  the FDIC adopted a new  assessment  rate
schedule of from 0 to 27 basis  points  under  which 92% of BIF members  paid an
annual premium of only $2,000, but retained the previously  existing  assessment
rate schedule  applicable to SAIF member  institutions of 23 to 31 basis points.
Thus,  SAIF  members,  such as the  Savings  Bank were  placed at a  substantial
competitive  disadvantage  to BIF members  with  respect to pricing of loans and
deposits and the ability to achieve lower operating costs.

On September 30, 1996, the President signed into law the Deposit Insurance Funds
Act of 1996 (the  "Funds  Act")  which,  among other  things,  imposed a special
one-time assessment on SAIF member institutions,  including the Savings Bank, to
recapitalize  the SAIF. As required by the Funds Act, the FDIC imposed a special
assessment of 65.7 basis points on SAIF assessable deposits held as of March 31,
1995,  payable  November  27,  1996 (the "SAIF  Special  Assessment").  The SAIF
Special  Assessment  was  recognized  by the  Savings  Bank as an expense in the
quarter  ended  September  30, 1996 and is generally  tax  deductible.  The SAIF
Special  Assessment  recorded by the Savings Bank  amounted to $1.7 million on a
pre-tax basis and $1.0 million on an after-tax basis.

The Funds Act also spreads the  obligations for payment of the FICO bonds across
all SAIF and BIF  members.  Beginning on January 1, 1997,  BIF deposits  will be
assessed for FICO payment of 1.3 basis points, while SAIF deposits will pay 6.48
basis points.  Full pro rata sharing of the FICO  payments  between BIF and SAIF
members  will  occur on the  earlier  of January 1, 2000 or the date the BIF and
SAIF are merged. The Funds Act specifies that the BIF and SAIF will be merged on
January 1, 1999, provided no savings associations remain as of that time.

As a result of the Funds Act, the FDIC lowered SAIF assessments to 0 to 27 basis
points as of January 1, 1997, a range  comparable  to that of BIF members.  SAIF
members will also continue to make the FICO payments described above. Management
cannot  predict the level of FDIC insurance  assessments  on an on-going  basis,
whether the savings  association  charter will be  eliminated or whether the BIF
and SAIF will eventually be merged.

The Savings Bank's  assessment  rate for fiscal 1996 was 23 basis points and the
premium paid for 1996,  excluding the SAIF special assessment,  was $624,000.  A
significant  increase in SAIF  insurance  premiums  would likely have an adverse
effect on the operating expenses and results of operations of the Savings Bank.

Under the FDI Act,  insurance of deposits may be  terminated  by the FDIC upon a
finding that the institution has engaged in unsafe or unsound  practices,  is in
an unsafe or unsound  condition  to  continue  operations  or has  violated  any
applicable law, regulation,  rule, order or condition imposed by the FDIC or the
OTS. The management of the Savings Bank does not know of any practice, condition
or violation that might lead to termination of deposit insurance.
<PAGE>
Thrift  Rechartering  Legislation.  The Funds Act provides that the BIF and SAIF
will merge on January 1, 1999 if there are no more  savings  associations  as of
that date. That legislation also requires that the Department of Treasury submit
a report to Congress by March 31,  1997 that makes  recommendations  regarding a
common financial  institutions charter,  including whether the separate charters
for thrifts and banks should be  abolished.  Various  proposals to eliminate the
federal thrift  charter,  create a uniform  financial  institutions  charter and
abolish  the OTS have been  introduced  in  Congress.  The bills  would  require
federal savings institutions to convert to a national bank or some type of state
charter by a specified  date (January 1, 1998 in one bill,  June 30, 1998 in the
other) or they would  automatically  become  national banks.  Converted  federal
thrifts  would  generally  be  required  to conform  their  activities  to those
permitted for the charter selected and divestiture of nonconforming assets would
be required over a two year period, subject to two possible one year extensions.
State chartered  thrifts would become subject to the same federal  regulation as
applies to state commercial banks.  Holding  companies for savings  institutions
would become  subject to the same  regulation as holding  companies that control
commercial banks, with a limited  grandfather  provision for unitary savings and
loan holding company  activities.  The Savings Bank is unable to predict whether
such  legislation  would be enacted,  the extent to which the legislation  would
restrict  or  disrupt  its  operations  or  whether  the BIF and SAIF funds will
eventually merge.

Loans to One  Borrower.  Under  the HOLA,  savings  institutions  are  generally
subject to the limits on loans to one  borrower  applicable  to national  banks.
Generally, savings institutions may not make a loan or extend credit to a single
or related  group of  borrowers in excess of 15% of its  unimpaired  capital and
surplus.  An additional  amount may be lent, equal to 10% of unimpaired  capital
and surplus, if such loan is secured by readily-marketable  collateral, which is
defined to include certain  financial  instruments and bullion.  At December 31,
1996,  the Savings  Bank's limit on loans to one borrower was $6.4  million.  At
December 31, 1996, the Savings Bank's largest aggregate  outstanding  balance of
loans to one borrower was $1.8 million.

QTL Test. The HOLA requires  savings  institutions to meet a QTL test. Under the
QTL test, a savings and loan association is required to maintain at least 65% of
its "portfolio assets" (total assets less: (i) specified liquid assets up to 20%
of total assets; (ii) intangibles,  including  goodwill;  and (iii) the value of
property used to conduct  business) in certain  "qualified  thrift  investments"
(primarily  residential  mortgages and related  investments,  including  certain
mortgage-backed securities) in at least 9 months out of each 12 month period.

A savings  institution  that fails the QTL test is subject to certain  operating
restrictions  and may be required to convert to a bank  charter.  As of December
31, 1996, the Savings Bank maintained 93.6% of its portfolio assets in qualified
thrift investments and, therefore, met the QTL test.
<PAGE>
Limitation on Capital Distributions. OTS regulations impose limitations upon all
capital distributions by savings institutions,  such as cash dividends, payments
to  repurchase  or otherwise  acquire its shares,  payments to  shareholders  of
another institution in a cash-out merger and other distributions charged against
capital.  The rule  establishes  three  tiers of  institutions,  which are based
primarily on the  institutions'  capital levels. An institution that exceeds all
fully  phased-in  capital  requirements  before  and  after a  proposed  capital
distribution  ("Tier 1 Bank") and has not been  advised by the OTS that it is in
need of more than normal  supervision,  could,  after  prior  notice but without
obtaining approval of the OTS, make capital distributions during a calendar year
equal to the greater of (i) 100% of its net earnings to date during the calendar
year plus the amount that would reduce by one-half its "surplus  capital  ratio"
(the  excess  capital  over its fully  phased-in  capital  requirements)  at the
beginning  of the  calendar  year or (ii) 75% of its net income for the previous
four  quarters.   Any  additional  capital  distributions  would  require  prior
regulatory  approval.  In the event the Savings  Bank's  capital  fell below its
regulatory  requirements or the OTS notified it that it was in need of more than
normal  supervision,  the Savings Bank's  ability to make capital  distributions
could be  restricted.  In addition,  the OTS could  prohibit a proposed  capital
distribution  by any  institution,  which would  otherwise  be  permitted by the
regulation,  if the OTS determines that such  distribution  would  constitute an
unsafe or unsound practice. In December 1994, the OTS proposed amendments to its
capital  distribution  regulation that would generally  authorize the payment of
capital  distributions  without OTS approval  provided that the payment does not
cause the  institution to be  undercapitalized  within the meaning of the prompt
corrective  action  regulation.  However,  institutions  in  a  holding  company
structure would still have a prior notice requirement. At December 31, 1996, the
Savings Bank was a Tier 1 Bank.

Liquidity.  The Savings Bank is required to maintain an average daily balance of
specified  liquid assets equal to a monthly average of not less than a specified
percentage of its net withdrawable deposit accounts plus short-term  borrowings.
This liquidity  requirement is currently 5% but may be changed from time to time
by the OTS to any amount within the range of 4% to 10%  depending  upon economic
conditions and the savings flows of member  institutions.  OTS regulations  also
require each member savings  institution to maintain an average daily balance of
short-term liquid assets at a specified  percentage  (currently 1%) of the total
of its net withdrawable  deposit accounts and borrowings  payable in one year or
less.  Monetary  penalties  may be imposed for  failure to meet these  liquidity
requirements.  The Savings Bank's liquidity and short-term  liquidity ratios for
December  31,  1996  were  13.5%  and  4.3%  respectively,  which  exceeded  the
applicable  requirements.  The Savings  Bank has never been  subject to monetary
penalties for failure to meet its liquidity requirements.

Assessments.  Savings institutions are required to pay assessments to the OTS to
fund the agency's  operations.  The general  assessments,  paid on a semi-annual
basis,  are computed  upon the savings  institution's  total  assets,  including
consolidated  subsidiaries,  as reported in the Savings Bank's latest  quarterly
thrift financial report. The assessments paid by the Savings Bank for the fiscal
years  ended   December  31,  1996  and  1995  totalled   $83,000  and  $79,000,
respectively.
<PAGE>
Branching.  OTS regulations permit nationwide  branching by federally  chartered
savings  institutions  to the extent  allowed by federal  statute.  This permits
federal   savings   institutions  to  establish   interstate   networks  and  to
geographically  diversify their loan  portfolios and lines of business.  The OTS
authority  preempts any state law  purporting  to regulate  branching by federal
savings institutions.

Transactions  with Related  Parties.  The Savings Bank's  authority to engage in
transactions  with  related  parties or  "affiliates"  (e.g..,  any company that
controls or is under common control with an  institution,  including the Company
and any non-savings institution subsidiaries) is limited by Sections 23A and 23B
of the Federal Reserve Act ("FRA").  Section 23A limits the aggregate  amount of
covered  transactions  with any  individual  affiliate to 10% of the capital and
surplus of the savings institution. The aggregate amount of covered transactions
with all affiliates is limited to 20% of the savings  institution's  capital and
surplus.  Certain  transactions  with  affiliates  are required to be secured by
collateral in an amount and of a type  described in Section 23A and the purchase
of low quality  assets from  affiliates  is  generally  prohibited.  Section 23B
generally  provides that certain  transactions with affiliates,  including loans
and asset purchases, must be on terms and under circumstances,  including credit
standards,  that are  substantially  the same or at  least as  favorable  to the
institution  as those  prevailing at the time for comparable  transactions  with
non-affiliated companies. In addition,  savings institutions are prohibited from
lending to any affiliate that is engaged in activities  that are not permissible
for  bank  holding  companies  and  no  savings  institution  may  purchase  the
securities of any affiliate other than a subsidiary.

The Savings Bank's authority to extend credit to executive  officers,  directors
and 10% shareholders ("insiders"),  as well as entities such persons control, is
governed by Sections  22(g) and 22(h) of the FRA and  Regulation  O  thereunder.
Among other  things,  such loans are required to be made on terms  substantially
the same as those offered to  unaffiliated  individuals  and not to involve more
than the normal risk of repayment.  Recent legislation  created an exception for
loans  made  pursuant  to a  benefit  or  compensation  program  that is  widely
available to all employees of the  institution  and does not give  preference to
executive officers over other employees. Regulation O also places individual and
aggregate  limits on the amount of loans the  Savings  Bank may make to insiders
based,  in part, on the Savings  Bank's  capital  position and requires  certain
board approval procedures to be followed.

Enforcement.  Under the FDI Act, the OTS has primary enforcement  responsibility
over savings  institutions  and has the authority to bring  actions  against the
institution and all institution-affiliated  parties, including stockholders, and
any  attorneys,   appraisers  and   accountants   who  knowingly  or  recklessly
participate  in wrongful  action likely to have an adverse  effect on an insured
institution.  Formal enforcement action may range from the issuance of a capital
directive or cease and desist order to removal of officers  and/or  directors to
institution  of   receivership,   conservatorship   or  termination  of  deposit
insurance.  Civil  penalties  cover a wide range of violations and can amount to
$25,000 per day, or even $1 million per day in especially egregious cases. Under
the FDI Act, the FDIC has the  authority to recommend to the Director of the OTS
enforcement action to be taken with respect to a particular savings institution.
If action  is not taken by the  Director,  the FDIC has  authority  to take such
action  under  certain  circumstances.  Federal  law also  establishes  criminal
penalties for certain violations.
<PAGE>
Standards for Safety and Soundness.  The federal  banking  agencies have adopted
Interagency   Guidelines   Prescribing   Standards   for  Safety  and  Soundness
("Guidelines")  and a final rule to  implement  safety and  soundness  standards
required  under the FDI Act. The  Guidelines  set forth the safety and soundness
standards that the federal banking agencies use to identify and address problems
at  insured  depository   institutions  before  capital  becomes  impaired.  The
standards set forth in the Guidelines  address internal controls and information
systems;  internal  audit  system;  credit  underwriting;   loan  documentation;
interest rate risk exposure; asset growth; and compensation,  fees and benefits.
If the appropriate  federal banking agency  determines that an institution fails
to meet any standard  prescribed by the  Guidelines,  the agency may require the
institution  to submit to the agency an  acceptable  plan to achieve  compliance
with the  standard,  as  required  by the FDI Act.  The final  rule  establishes
deadlines for the submission and review of such safety and soundness  compliance
plans when such plans are required.

Federal Reserve System

The Federal Reserve Board regulations  require savings  institutions to maintain
non-interest  earning reserves against their transaction accounts (primarily NOW
and regular  checking  accounts).  During fiscal 1996, the Federal Reserve Board
regulations  generally  required that reserves be maintained  against  aggregate
transaction  accounts as follows: for accounts aggregating $52.0 million or less
(subject to adjustment by the Federal Reserve Board) the reserve  requirement is
3%; and for  accounts  aggregating  greater  than  $52.0  million,  the  reserve
requirement  is $1.6  million  plus 10%  (subject to  adjustment  by the Federal
Reserve  Board  between 8% and 14%) against  that  portion of total  transaction
accounts  in excess  of $52.0  million.  The first  $4.3  million  of  otherwise
reservable  balances  (subject to adjustments by the Federal Reserve Board) were
exempted from the reserve  requirements.  The Savings Bank is in compliance with
the  foregoing  requirements.  The  balances  maintained  to  meet  the  reserve
requirements  imposed  by the  Federal  Reserve  Board  may be used  to  satisfy
liquidity requirements imposed by the OTS.
<PAGE>
                           FEDERAL AND STATE TAXATION

Federal Taxation

General.  The Company and the Savings Bank report their income on a consolidated
basis using the accrual method of accounting,  and are subject to federal income
taxation  in the  same  manner  as  other  corporations  with  some  exceptions,
including particularly the Savings Bank's reserve for bad debts discussed below.
The  following  discussion of tax matters is intended only as a summary and does
not purport to be a comprehensive description of the tax rules applicable to the
Savings  Bank or the  Company.  The Savings Bank was last audited by the IRS for
the year ended December 31, 1989. For its 1996 taxable year, the Savings Bank is
subject to a maximum federal income tax rate of 34%.

Bad Debt Reserves.  For fiscal years beginning prior to January 1, 1996,  thrift
institutions  which  qualified  under  certain   definitional  tests  and  other
conditions  of the Internal  Revenue Code of 1986,  as amended (the "Code") were
permitted to use certain favorable provisions to calculate their deductions from
taxable income for annual  additions to their bad debt reserve.  A reserve could
be  established  for bad debts on  qualifying  real  property  loans  (generally
secured by interests in real property  improved or to be improved) under (i) the
Percentage of Taxable  Income  Method (the "PTI Method") or (ii) the  Experience
Method.  The reserve for  nonqualifying  loans was computed using the Experience
Method.

The Small  Business  Job  Protection  Act of 1996 (the  "1996  Act"),  which was
enacted on August 2, 1996,  requires  savings  institutions to recapture  (i.e.,
take into income) certain portions of their  accumulated bad debt reserves.  For
fiscal years beginning after December 31, 1995,  thrift  institutions that would
be  treated  as small  banks  are  allowed  to  utilize  the  Experience  Method
applicable to such institutions,  while thrift  institutions that are treated as
large banks (those  generally  exceeding $500 million in assets) are required to
use only the specific charge-off method.  Thus, the PTI Method of accounting for
bad debts is no longer available for any financial institution.

Use of the PTI Method had the effect of reducing  the  marginal  rate of federal
tax on the  Savings  Bank's  income  to  31.3%,  exclusive  of  any  minimum  or
environmental  tax, as compared to the maximum corporate federal income tax rate
of 34%.

A thrift institution required to change its method of computing reserves for bad
debts will treat such change as a change in method of  accounting,  initiated by
the taxpayer,  and having been made with the consent of the IRS. Any  adjustment
required  to be taken  into  income  with  respect  to such  change in method of
accounting  generally will be taken into income ratably over a six-taxable  year
period, beginning with the first taxable year beginning after December 31, 1995,
subject to the residential loan  requirement.  At December 31, 1996, the Savings
Bank had  approximately  $900,000 of deferred tax  liabilities  recorded for the
recapture of its bad debt reserves.
<PAGE>
Under  the  residential  loan  requirement  provision,   the  recapture  of  the
applicable  excess reserves  required by the 1996 Act will be suspended for each
of two  successive  taxable  years,  beginning  with the Savings  Bank's current
taxable  year,  in which the Savings Bank  originates  in that year a minimum of
certain  residential  loans based upon the average of the  principal  amounts of
such loans made by the Savings Bank during its six taxable  years  preceding its
current taxable year. Also for its current and future taxable years, the Savings
Bank is permitted to make additions to its tax bad debt  reserves.  In addition,
the Savings  Bank is required to recapture  (i.e.,  take into income) over a six
year  period  the  excess  of the  balance  of its tax bad debt  reserves  as of
December 31, 1995 over the balance of such reserves as of December 31, 1987.

Distributions.  Under the 1996 Act,  if the  Savings  Bank  makes  "non-dividend
distributions"  to the Company,  such  distributions  will be considered to have
been made from the Savings Bank's  unrecaptured tax bad debt reserves (including
the balance of its reserves as of December 31, 1987) to the extent thereof,  and
then from the Savings Bank's  supplemental  reserve for losses on loans,  to the
extent thereof, and an amount based on the amount distributed (but not in excess
of the amount of such  reserves)  will be included in the Savings Bank's income.
Non-dividend distributions include distributions in excess of the Savings Bank's
current and accumulated  earnings and profits,  as calculated for federal income
tax purposes, distributions in redemption of stock, and distributions in partial
or complete  liquidation.  Dividends  paid out of the Savings  Bank's current or
accumulated  earnings and profits will not be so included in the Savings  Bank's
income.

The amount of additional taxable income triggered by a non-dividend is an amount
that, when reduced by the tax attributable to the income, is equal to the amount
of the distribution. Thus, if the Savings Bank makes a non-dividend distribution
to the  Company,  approximately  one  and  one-half  times  the  amount  of such
distribution  (but  not in  excess  of the  amount  of such  reserves)  would be
includable  in income for federal  income tax  purposes,  assuming a 35% federal
corporate  income tax rate.  The Savings  Bank does not intend to pay  dividends
that would result in a recapture of any portion of its bad debt reserves.

SAIF Recapitalization  Assessment. The Funds Act levied a 65.7 cent fee on every
$100 of  thrift  deposits  held on  March  31,  1995.  For  financial  statement
purposes,  this  assessment  of $1.7  million  before  taxes was recorded by the
Savings Bank as an expense for the quarter ended  September 30, 1996.  The Funds
Act includes a provision which states that the amount of any special  assessment
paid to capitalize SAIF under this  legislation is deductible  under Section 162
of the Code in the year of payment.
<PAGE>
Corporate Alternative Minimum Tax. The Code imposes a tax on alternative minimum
taxable income  ("AMTI") at a rate of 20%. For fiscal years  beginning  prior to
January  1,  1996,  the  excess  of the bad debt  reserve  deduction  using  the
percentage  of taxable  income  method over the  deduction  that would have been
allowable  under the  experience  method is  treated  as a  preference  item for
purposes of computing the AMTI.  Only 90% of AMTI can be offset by net operating
loss carryovers.  The adjustment to AMTI based on book income is an amount equal
to 75% of the amount by which a corporation's  adjusted current earnings exceeds
its AMTI  (determined  without regard to this  adjustment and prior to reduction
for net  operating  losses).  In addition,  for taxable  years  through 1995, an
environmental  tax of .12% of the  excess of AMTI (with  certain  modifications)
over $2.0  million is imposed  on  corporations,  including  the  Savings  Bank,
whether or not an Alternative Minimum Tax ("AMT") is paid. The Savings Bank does
not expect to be subject to the AMT.

Dividends Received Deduction and Other Matters. The Company may exclude from its
income 100% of dividends  received from the Savings Bank as a member of the same
affiliated group of corporations.  The corporate dividends received deduction is
generally 70% in the case of dividends  received from unaffiliated  corporations
with which the  Company and the Savings  Bank will not file a  consolidated  tax
return, except that if the Company and the Savings Bank own more than 20% of the
stock of a corporation  distributing a dividend,  80% of any dividends  received
may be deducted.

Florida  Taxation.  The Savings Bank files Florida  franchise  tax returns.  For
Florida  franchise tax purposes,  savings  institutions are presently taxed at a
rate  equal to 5.5% of  taxable  income.  For  this  purpose,  "taxable  income"
generally  means  federal  taxable  income,   subject  to  certain   adjustments
(including the addition of interest income on State and municipal  obligations).
The  Savings  Bank is not  currently  under  audit with  respect to its  Florida
franchise tax returns.
<PAGE>
                         IMPACT OF NEW ACCOUNTING ISSUES

The FASB has issued Statement of Financial  Accounting  Standards No. 125 ("SFAS
125"). The statement provides  accounting and reporting  standards for transfers
and servicing of financial assets as well as extinguishments of liabilities. The
statement also provides  consistent  standards for  distinguishing  transfers of
financial assets that are sales from transfers that are secured borrowings. SFAS
125 is effective  for  transfers  and  servicing of financial  assets as well as
extinguishments of liabilities occurring in 1997. Management does not anticipate
SFAS 125 will have a material impact on the Company.
<PAGE>
ITEM 2.        PROPERTIES

The Savings  Bank  conducts  its  business  through its main office and 8 branch
offices.  The  following  table sets forth  certain  information  regarding  the
Savings Bank's office properties:
<TABLE>
<CAPTION>
                                                                                                        Book Value
                                                                                                       of Land and
                                                                         Date                          Buildings at
Location                                                               Acquired                      December 31, 1996
--------                                                               --------                      -----------------
                                                                                                  (Dollars in thousands)
<S>                                                                         <C>                          <C>   
Main Office 
800 North Boulevard, West
Leesburg, Florida  34749-0420                                               1961                         $  395

Wildwood
837 South Main Street
Wildwood, Florida  34785-0006                                               1967                            245

Main Street
1409 West Main Street
Leesburg, Florida  34749-0330                                               1972                            183

Clermont
481 East Highway 50
Clermont, Florida  34712-0730                                               1982                            608

Eustis
2901 South Bay Street
Eustis, Florida  32727-1270                                                 1979                            385

Fruitland Park
410 Palm Street
Fruitland Park, Florida  34731                                              1983                            340

Lady Lake
431 US Highway 441/27
Lady Lake, Florida  32158                                                   1995                          1,340

Lake Square
10105 US Highway 441
Leesburg, Florida  34788                                                    1995                            524

South Leesburg (1)
27405 US Highway 27, Suite 123
Leesburg, Florida  34748                                                    1996                             27

South Leesburg (2)
US Highway 27
Leesburg, Florida  34748                                                    1996                            375
</TABLE>
(1) Leased branch office opened February, 1997.
(2) Parcel of land  purchased  by the Savings  Bank for a future  branch  office
    location.
<PAGE>
     The Savings Bank owns and operates personal computers, teller terminals and
     associated  equipment.  At December 31, 1996, such equipment had a net book
     value of $326,735.

ITEM 3.        LEGAL PROCEEDINGS

There are no material pending legal proceedings to which FFLC Bancorp,  Inc., or
any of its subsidiaries is a party or to which any of their property is subject.

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

No  matters  were  submitted  to a vote of the  stockholders  during  the fourth
quarter of the fiscal year ended December 31, 1996,  through the solicitation of
proxies or otherwise.

                                     PART II

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

The   above-captioned   information  appears  under  "Common  Stock  Prices  and
Dividends"  in the  Registrant's  1996  Annual  Report  to  Stockholders  and is
incorporated herein by reference.

ITEM 6.        SELECTED FINANCIAL DATA

The above-captioned  information appears under "Selected  Consolidated Financial
Data" on page 6 of the  Registrant's  1996 Annual Report to Stockholders  and is
incorporated herein by reference.


ITEM 7.        MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
               AND RESULTS OF OPERATIONS

The  above-captioned  information  appears under  "Management's  Discussion  and
Analysis of Financial  Condition and Results of Operations" in the  Registrant's
1996 Annual  Report to  Stockholders  on pages 7 through 17 and is  incorporated
herein by reference.

ITEM 8.        FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The  Consolidated  Financial  Statements of FFLC Bancorp,  Inc. and  Subsidiary,
together with the report thereon by Hacker, Johnson, Cohen & Grieb appear in the
Registrant's  1996 Annual Report to  Stockholders on pages 18 through 47 and are
incorporated herein by reference.

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

There  have  been no  disagreements  with the  Registrant's  accountants  on any
matters  of   accounting   principles   or  practices  or  financial   statement
disclosures.
<PAGE>
                                    PART III

ITEM 10.       DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

The information related to Directors and Executive Officers of the Registrant is
incorporated  herein by reference to the  Registrant's  Proxy  Statement for the
Annual Meeting of Stockholders to be held on May 8, 1997 at pages 4 through 7.

ITEM 11.       EXECUTIVE COMPENSATION

The information  relating to executive  compensation  is incorporated  herein by
reference  to the  Registrant's  Proxy  Statement  for  the  Annual  Meeting  of
Stockholders to be held on May 8, 1997 at pages 13 through 16.

ITEM 12.       SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
               MANAGEMENT

The information  relating to security ownership of certain beneficial owners and
management  is  incorporated  herein  by  reference  to the  Registrant's  Proxy
Statement for the Annual  Meeting of  Stockholders  to be held on May 8, 1997 at
pages 5 through 7.

ITEM 13.       CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information  relating to certain  relationships and related  transactions is
incorporated  herein by reference to page 16 of the Registrant's Proxy Statement
for the Annual Meeting of Stockholders to be held on May 8, 1997.
<PAGE>
                                     PART IV

ITEM 14.       EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM
               8-K.

(a)       The following documents are filed as a part of this report:

     (1)  Consolidated  Financial  Statements of the Company are incorporated by
     reference from the following  indicated  pages of the 1996 Annual Report to
     Stockholders.

                                                                         Page
                                                                         ----

     Independent Auditor's Report                                          47

     Consolidated Balance Sheets as of December 31, 1996 and 1995          18

     Consolidated Statements of Income for the Years Ended
          December 31, 1996, 1995 and 1994                                 19

     Consolidated Statements of Stockholders' Equity for the
          Years Ended December 31, 1996, 1995 and 1994                  20-22

     Consolidated Statements of Cash Flows for the Years
          Ended December 31, 1996, 1995 and 1994                        23-24

     Notes to Consolidated Financial Statements for the Years
          Ended December 31, 1996, 1995, and 1994                       25-46

     The remaining information appearing in the Annual Report to Stockholders is
     not deemed to be filed as part of this report, except as expressly provided
     herein.

     (2) All schedules are omitted  because they are not required or applicable,
     or  the  required  information  is  shown  in  the  consolidated  financial
     statements or the notes thereto.

     (3)  Exhibits

          (a)  The following exhibits are filed as part of this report.
<TABLE>
<CAPTION>
<S>                      <C>
                3.1      Certificate of Incorporation of FFLC Bancorp, Inc.*
                3.2      Bylaws of FFLC Bancorp, Inc.*
                4.0      Stock Certificate of FFLC Bancorp, Inc.*
               10.1      First Federal Savings Bank of Lake County Recognition and Retention Plan**
               10.2      First Federal Savings Bank of Lake County Recognition and Retention Plan
                         for Outside Directors**
               10.3      FFLC Bancorp, Inc. Incentive Stock Option Plans for Officers and Employees**
               10.4      FFLC Bancorp, Inc. Stock Option Plan for Outside Directors**
               13.0      Annual Report to Stockholders (filed herewith)
               99        Proxy Statement for Annual Meeting (filed herewith)
</TABLE>
<PAGE>
     *    Incorporated  herein by reference into this document from the Exhibits
          to Form S-1, Registration Statement,  initially filed on September 27,
          1993, Registration No. 33-69466.

     **   Incorporated  herein by reference  into this  document  from the Proxy
          Statement for the Annual  Meeting of  Stockholders  filed  pursuant to
          Regulation 14A within 120 days of the Registrant's fiscal year end.

          (b)  Reports on Form 8-K.
               No  reports  on Form 8-K were  filed by the  Company  during  the
               fourth quarter.
<PAGE>
Pursuant to the  requirements  of Section 13 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.

                                       FFLC BANCORP, INC.


                                       By: /s/ Stephen T. Kurtz
                                           ---------------------
                                       Stephen T. Kurtz
                                       Chief Executive Officer and President

                                       Dated:


Pursuant to the  requirements  of the Securities and Exchange Act of 1934,  this
report has been signed by the  following  persons in the  capacities  and on the
dates indicated.
<TABLE>
<CAPTION>
Name                                                     Title                                    Date
----                                                     -----                                    ----
<S>                                               <C>                                         <C>
/s/ James R. Gregg                                Chairman of the Board                       March 20, 1997
------------------
James R. Gregg

/s/ Joseph J. Junod                               Vice Chairman of the Board                  March 20, 1997
-------------------
Joseph J. Junod

/s/ James P. Logan                                Director                                    March 20, 1997
------------------
James P. Logan

/s/ Ted R. Ostrander, Jr.                         Director                                    March 20, 1997
-------------------------
Ted R. Ostrander

/s/ Claron D. Wagner                              Director                                    March 20, 1997
--------------------
Claron D. Wagner

/s/ Stephen T. Kurtz                              Chief Executive Officer,
Stephen T. Kurtz                                  President and Director                      March 20, 1997

/s/ Paul K. Mueller                               Executive Vice President, Chief
Paul K. Mueller                                   Operating Officer and Treasurer
                                                  and Director                                March 20, 1997
</TABLE>