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
<TABLE>
<CAPTION>

<S>                                                                  <C>
For the fiscal year ended December 31, 2002                          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 incorporation                                      (I.R.S. Employer
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
                                                                                     --------------
</TABLE>

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)

Indicate  by check mark  whether  the  registrant  is an  accelerator  filer (as
defined in Rule 12b-2 of the Act). YES [X]  NO[_]

The  aggregate  market value of the voting and  nonvoting  common equity held by
nonaffiliates  was  $74,802,790  computed by reference to the price at which the
common  equity was last sold,  or the average bid and asked price of such common
equity,  as of June 30,  2002 the last  business  day of the  Registrant's  most
recently completed second fiscal quarter.

The Registrant had 3,584,897 shares outstanding as of March 7, 2003.

                       DOCUMENTS INCORPORATED BY REFERENCE

1.   Portions  of the Annual  Report to  Stockholders  for the Fiscal Year Ended
     December 31, 2002. (Part II and IV)
2.   Portions of Proxy  Statement for the 2003 Annual  Meeting of  Stockholders.
     (Part III)



<PAGE>
<TABLE>
<CAPTION>
                                      INDEX

PART I                                                                           Page
                                                                                 ----
<S>               <C>                                                           <C>
Item I.           Description of Business

                           Business                                                 3
                           Market Area and Competition                              3
                           Market Risk                                              4
                           Lending Activities                                     4-9
                           Asset Quality                                         9-14
                           Investment Activities                                   15
                           Mortgage-Backed Securities                              15
                           Investment Securities                                15-17
                           Sources of Funds                                     18-20
                           Borrowings                                           21-22
                           Subsidiary Activities                                22-23
                           Personnel                                               23
                           Regulation and Supervision                           23-29
                           Federal and State Taxation                           30-31

Item 2.           Properties                                                    32-33

Item 3.           Legal Proceedings                                                34

Item 4.           Submission of Matters to a Vote of Security Holders              34

PART II

Item 5.           Market for Registrant's Common Equity and Related
                           Stockholder Matters                                     34

Item 6.           Selected Financial Data                                          34

Item 7.           Management's Discussion and Analysis of Financial Condition
                           and Results of Operations                               34

Item 8.           Financial Statements and Supplementary Data                      34

Item 9.           Change In and Disagreements with Accountants on
                           Accounting and Financial Disclosure                     34

PART III

Item 10. Directors and Executive Officers of the Registrant                        34

Item 11. Executive Compensation                                                    35

Item 12. Security Ownership of Certain Beneficial Owners and Management            35

Item 13. Certain Relationships and Related Transactions                            35

Item 14. Controls and Procedures                                                   35

PART IV

Item 15. Exhibits, Financial Statement Schedules and Reports on Form 8-K           36

SIGNATURES                                                                         37

CERTIFICATIONS                                                                  37-39
</TABLE>



<PAGE>



                                     PART I


ITEM 1. DESCRIPTION OF BUSINESS

Business

FFLC Bancorp,  Inc.,  ("FFLC" or the "Company") was  incorporated in Delaware on
September 16, 1993, and acquired First Federal  Savings Bank of Lake County (the
"Bank") in  connection  with the Bank's  conversion  to stock form on January 4,
1994. The Company is a savings and loan holding company subject to regulation by
the Office of Thrift  Supervision  ("OTS")  which mainly  transacts its business
through its  subsidiary,  the Bank. At December 31, 2002,  the Company had total
assets of $915.8 million and stockholders' equity of $71.1 million.

The Bank was  established  in 1934 as a  federally-chartered  mutual savings and
loan  association.  The 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, 2002, the
Bank had total  assets  of  $915.1  million  and  stockholders'  equity of $72.4
million.

During 2001,  First  Alliance  Title,  L.L.C.  ("First  Alliance"),  a 90% owned
subsidiary  of the  Company,  was  formed to  operate  as a title  agency.  This
subsidiary had only a minimal amount of activity during 2001. During 2002, First
Alliance received commission income for issuing title insurance on approximately
fifty loans.

During 2002, the Holding Company formed FFLC Statutory Trust I (the "Trust"),  a
wholly-owned  subsidiary,  for the sole purpose of issuing  $5,000,000  of trust
preferred securities as more fully described in the Borrowings section.

Market Area and Competition

The Bank is a  community-oriented  savings  institution  offering  a variety  of
financial  services to meet the needs of the  communities it serves.  The Bank's
deposit  gathering  and  lending  markets  are  primarily  concentrated  in  the
communities surrounding its full service offices located in Lake, Sumter, Citrus
and Marion counties in central Florida. Management believes that its offices are
located in communities  that generally can be characterized as rural service and
retirement communities with residential neighborhoods comprised predominately of
one-to-four-family   residences.  The  Bank  is  the  largest  (by  asset  size)
locally-based  financial  institution in Lake County, and serves its market area
with a wide selection of residential  mortgage loans and other retail  financial
services.  Management considers the Bank's reputation for financial strength and
customer  service as a major advantage in attracting and retaining  customers in
its market area and believes it benefits from its community  orientation as well
as its established deposit base and level of core deposits.

The Bank's  competition  for loans  comes  principally  from  commercial  banks,
savings  institutions,  and mortgage banking  companies.  The Bank's most direct
competition for savings has  historically  come from commercial  banks,  savings
institutions  and credit  unions.  The Bank  faces  additional  competition  for
savings  from  money-market  mutual  funds and other  corporate  and  government
securities  funds.  The Bank also faces increased  competition for deposits from
other financial  intermediaries such as securities brokerage firms and insurance
companies.

                                       3
<PAGE>


Market Risk

Market risk is the risk of loss from adverse changes in market prices and rates.
The Company's market risk arises primarily from  interest-rate  risk inherent in
its lending and deposit  taking  activities.  To that end,  management  actively
monitors and manages its interest-rate risk exposure.  The measurement of market
risk associated  with financial  instruments is meaningful only when all related
and offsetting on- and  off-balance-sheet  transactions are aggregated,  and the
resulting  net  positions are  identified.  Disclosures  about the fair value of
financial instruments,  which reflect changes in market prices and rates, can be
found in Note 9 of Notes to Consolidated Financial Statements.

The Company's  primary objective in managing  interest-rate  risk is to minimize
the  adverse  impact of changes  in  interest  rates on the Bank's net  interest
income and capital,  and to adjust the  Company's  asset-liability  structure to
obtain the maximum  yield-cost  spread on that  structure.  The  Company  relies
primarily  on its  asset-liability  management  to control  interest-rate  risk.
However,  a sudden and  substantial  increase  in interest  rates may  adversely
impact the  Company's  earnings to the extent that the  interest  rates borne by
assets and liabilities do not change at the same speed,  to the same extent,  or
on the same basis. The Company does not engage in trading activities.

Lending Activities

Loan  Portfolio.  The Bank's loan portfolio  consists  primarily of conventional
first mortgage loans secured by one-to-four-family  residences.  At December 31,
2002, the Bank's total gross loans  outstanding  were $756.6  million,  of which
$395.1   million   or  52.2%  of  the   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,  approximately  45% were
fixed rate loans and 55% were  adjustable-rate  ("ARM") loans. At the same date,
commercial  real estate  loans and other loans on improved  real estate  totaled
$140.8  million,  or 18.6% of the  Bank's  total  loan  portfolio;  construction
(excluding construction/permanent loans) and land loans totaled $30.8 million or
4.1% of the Bank's total loan portfolio; and multi-family mortgage loans totaled
$22.8 million or 3.0% of the Bank's total loan portfolio.  Consumer,  commercial
and other  loans held by the Bank,  which  principally  consist  of home  equity
loans, deposit, consumer,  commercial and other loans, totaled $167.1 million or
22.1% of the Bank's total loan portfolio at December 31, 2002.



                                       4
<PAGE>


The following table sets forth the composition of the Bank's loan portfolio in
dollar amounts and percentages at the dates indicated:

<TABLE>
<CAPTION>


                                                                      At December 31,
                           ------------------------------------------------------------------------------------------------
                                                    1998                      1999                      2000
                                                    ----                      ----                      ----
                                                    % of                      % of                      % of
                                      Amount        Total       Amount        Total       Amount        Total       Amount
                                      ------        -----       ------        -----       ------        -----       ------
                                                                          ($ in thousands)
<S>                                 <C>             <C>       <C>             <C>      <C>             <C>       <C>
Mortgage loans:
     One-to-four-family             $ 283,372       70.59%    $ 354,317       68.28%   $ 409,600       64.97%    $ 413,712
     Construction and land             11,683        2.91%       11,861        2.29%      13,006        2.06%       22,951
     Multi-family                       8,165        2.04%       13,394        2.58%      17,602        2.79%       20,304
     Commercial real estate
          and other                    44,211       11.01%       61,052       11.76%      79,729       12.65%      108,804
                                      -------      ------       -------      ------     --------      ------       -------

               Total mortgage
                     loans            347,431       86.55%      440,624       84.91%     519,937       82.47%      565,771

Consumer loans                         43,490       10.83%       64,042       12.34%      95,824       15.20%      119,357
Commercial loans                       10,532        2.62%       14,285        2.75%      14,677        2.33%       18,814
                                      -------      ------       -------      ------      -------     -------       -------

               Total loans
                     receivable (1)   401,453      100.00%      518,951      100.00%     630,438      100.00%      703,942
                                                   ======                    ======                   ======

Less:
     Loans in process                 (10,637)                  (15,907)                 (12,128)                  (14,310)
     Net deferred loan costs              526                       668                      726                       592
     Allowance for loan losses         (2,283)                   (2,811)                  (3,552)                   (4,289)
                                    ---------                   -------                 --------                  --------

               Loans receivable,
                     net            $ 389,059                 $ 500,901                $ 615,484                 $ 685,935
                                      =======                   =======                  =======                   =======

(1)  Total loans receivable
      outstanding by department
      consists of the following:
          Residential              $ 287,874        71.71%    $ 353,422       68.10%   $ 404,494       64.16%    $ 403,897
          Commercial                  70,089        17.46%      101,487       19.56%     130,120       20.64%      180,688
          Consumer                    43,490        10.83%       64,042       12.34%      95,824       15.20%      119,357
                                     -------       ------       -------      ------      -------      ------       -------

                                   $ 401,453       100.00%    $ 518,951      100.00%   $ 630,438      100.00%    $ 703,942
                                     =======       ======       =======      ======      =======      ======       =======
</TABLE>


                                               At December 31,
                               -------------------------------------------------
                                        2001                      2002
                                        ----                      ----
                                        % of                      % of
                                        Total       Amount        Total
                                        -----       ------        -----
                                               ($ in thousands)
Mortgage loans:
     One-to-four-family                58.77%     $ 395,116        52.23%
     Construction and land              3.26%        30,792         4.07
     Multi-family                       2.88%        22,796         3.01
     Commercial real estate
          and other                    15.46%       140,770        18.61
                                      ------        -------       -------

               Total mortgage
                     loans             80.37%       589,474        77.92

Consumer loans                         16.96%       138,202        18.26
Commercial loans                        2.67%        28,879         3.82
                                     -------       --------      --------

               Total loans
                     receivable       100.00%       756,555       100.00%
                                      ======                      ======

Less:
     Loans in process                               (16,770)
     Net deferred loan costs                            734
     Allowance for loan losses                       (5,181)
                                                  ----------

               Loans receivable,
                     net                          $ 735,338
                                                    ========

(1)  Total loans receivable
      outstanding by department
      consists of the following:
          Residential                  57.37%     $ 385,711        50.98%
          Commercial                   25.67%       229,930        30.39%
          Consumer                     16.96%       140,914        18.63%
                                      ------        -------       ------

                                      100.00%     $ 756,555       100.00%
                                      ======        =======       ======



                                       5
<PAGE>


Purchase of Mortgage Loans. From time to time, the Bank purchases mortgage loans
originated by other lenders.  At December 31, 2002, $5.3 million,  or .7% of the
Bank's  total loan  portfolio  consisted  of  purchased  mortgage  loans or loan
participations.   Purchased   or   participated   mortgage   loans   consist  of
one-to-four-family residential mortgage loans and commercial real estate loans.

Secondary  Market  Activities.  The Bank  participates  in the secondary  market
directly and through correspondent  relationships,  originating loans (primarily
30-year  fixed-rate  loans)  which  are  primarily  funded  by the Bank and then
reimbursed by the investor  correspondents.  Funding by the correspondent occurs
on some  loans.  These  loans are  closed on the  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 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,  2002,  total loans  originated  by the Bank and
through the correspondents  amounted to $64.7 million or 34.8% of total mortgage
loans originated.

Loan  Originations,  Sales and Principal  Repayments.  The following  table sets
forth the Bank's  loan  originations,  sales and  principal  repayments  for the
periods indicated.


<TABLE>
<CAPTION>

                                                                             Year Ended December 31,
                                                        --------------------------------------------
                                                          2000              2001                2002
                                                          ----              ----                ----
                                                                 (In thousands)
Mortgage loans (gross):
<S>                                                     <C>                <C>               <C>
     At beginning of year                               $ 440,624          519,937           565,771
                                                          -------          -------           --------
     Mortgage loans originated:
          One-to-four-family                              106,209          101,977           114,238
          Construction and land                             3,457            9,314            19,875
          Multi-family                                      3,800            4,475             1,875
          Commercial real estate                            9,950           12,408            50,362
                                                          -------          -------           -------

               Total mortgage loans originated            123,416          128,174           186,350

     Mortgage loans purchased or participated              -                 4,134           -
                                                          -------          -------           -------

               Total mortgage loans originated and
                         purchased or participated        123,416          132,308           186,350

     Transfer of loans to foreclosed assets                  (826)            (656)           (1,679)
     Principal repayments                                 (42,156)         (70,892)         (103,541)
     Sales of loans (1)                                    (1,121)         (14,926)          (57,427)
                                                           ------          --------          -------

               At end of year                           $ 519,937          565,771           589,474
                                                          =======          =======           =======

Consumer loans (gross):
     At beginning of year                                  64,042           95,824           119,357
     Loans originated                                      60,214           68,777            69,884
     Principal repayments                                 (28,432)         (45,244)          (51,039)
                                                          -------          -------           -------

               At end of year                           $  95,824          119,357           138,202
                                                          =======          =======           =======

Commercial loans (gross):
     At beginning of year                                  14,285           14,677            18,814
     Loans originated                                       5,632           12,782            17,560
     Principal repayments                                  (5,240)          (8,645)           (7,495)
                                                          -------          -------           -------

               At end of year                           $  14,677           18,814            28,879
                                                          =======          =======           =======
</TABLE>
(1) Represents loans originated for and funded by correspondents and loans
originated and sold by the Bank.



                                       6
<PAGE>

Maturities of Loans. The following table shows the contractual maturities of the
Bank's loan portfolio at December 31, 2002. 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
Bank's loans totaled $75.8  million,  $124.8  million and $162.1 million for the
years ended December 31, 2000, 2001 and 2002, respectively.



<TABLE>
<CAPTION>
                                         Mortgage Loans
                                          --------------
                                        One-to-                                                  Total
                                         Four-                    Commercial    Consumer         Loans
                                        Family          Other       Loans        Loans      Receivable
                                        ------          -----       -----        -----      ----------
                                                                    (In thousands)
<S>                                     <C>             <C>           <C>          <C>         <C>
 Amounts due:
     Within 1 year                      $   3,079       28,192        4,546        6,045       41,862
                                        ---------    ---------    ---------    ---------    ---------

     1 to 3 years                           1,499       24,695        6,965       27,095       60,254
     3 to 5 years                           3,263       26,765        6,072       49,590       85,690
     5 to 10 years                          7,917       24,295        3,838       17,774       53,824
     10 to 20 years                        75,899       71,925        7,458       37,654      192,936
     Over 20 years                        303,459       18,486         --             44      321,989
                                        ---------    ---------    ---------    ---------    ---------

     Total due after 1 year               392,037      166,166       24,333      132,157      714,693
                                        ---------    ---------    ---------    ---------    ---------

     Total amounts due                    395,116      194,358       28,879      138,202      756,555

     Loans in process                     (16,770)        --           --           --        (16,770)
     Net deferred loan fees and costs         749          (15)        --           --            734
     Allowance for loan losses               (840)      (2,850)        (434)      (1,057)      (5,181)
                                        ---------    ---------    ---------    ---------    ---------

Loans receivable, net                   $ 378,255      191,493       28,445      137,145      735,338
                                        =========    =========    =========    =========    =========
</TABLE>

Loans Due After  December 31, 2003.  The following  table sets forth at December
31,  2002,  the dollar  amount of all loans due or  scheduled  to reprice  after
December  31,  2003,  classified  according  to whether such loans have fixed or
adjustable interest rates.


                                         Due after December 31, 2003
                                         ---------------------------
                                          Fixed   Adjustable      Total
                                          -----   ----------      -----
                                                         (In thousands)
Mortgage loans:
     One-to-four-family                $137,423      254,614    392,037
     Construction and land               17,089       12,315     29,404
     Multi-family                        12,227       10,164     22,391
     Commercial real estate              25,840       88,531    114,371

Consumer loans                          116,914       15,243    132,157
Commercial loans                         13,677       10,656     24,333
                                       --------     --------   --------

          Total                        $323,170      391,523    714,693
                                       ========    ========   ========

One-to-Four-Family  Mortgage  Lending.  The Bank's primary  residential  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 Bank makes
loans on residences used as second homes or as investments. The Bank also offers
second mortgage loans which are underwritten  applying the same standards as for
first mortgage loans.

                                       7
<PAGE>

In the years ended  December 31, 2000,  2001 and 2002, the Bank's total mortgage
loan originations, including loans purchased or participated, amounted to $123.4
million,  $132.3  million  and $165.8  million,  respectively,  of which  $106.2
million,  $102.0  million  and $93.7  million,  respectively,  were  secured  by
one-to-four-family properties.

At December 31,  2002,  52.23% of total loans  consisted  of  one-to-four-family
residential  loans, of which  approximately  65% were ARM loans.  The 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 Bank in
accordance with market and competitive  factors.  The Bank offers one-,  three-,
and five-year ARM loans which adjust by a maximum of 2% per  adjustment  period,
with lifetime caps on increases of 5% to 6%, depending upon the program chosen.

The 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, 2002, $140.8
million,  or 18.61% of the Bank's total loan  portfolio  consisted of commercial
real  estate  loans  and  $22.8  million,  or 3.01%  of the  Bank's  total  loan
portfolio, consisted of multi-family mortgage loans.

The commercial real estate loans in the Bank's  portfolio  consist of fixed-rate
and ARM loans which were  originated  at  prevailing  market  rates.  The Bank's
policy  has been to  originate  commercial  or  multi-family  loans  only in its
primary market area.  Commercial and  multi-family  mortgage loans are generally
made in amounts up to 80% of the appraised value of the property. In making such
loans,  the 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 Bank's lending experience with the borrower.

Commercial  Loans. As of December 31, 2002, $28.9 million or 3.82% of the Bank's
total loan portfolio, consisted of commercial loans.

Construction   and  Land  Loans.  The  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,
2002,  construction  (excluding  construction/permanent  loans)  and land  loans
totaled $30.8 million or 4.07% of the Bank's total loan portfolio.

At December 31, 2002, the Bank had loans in process  (undisbursed  loan proceeds
of construction loans) of $16.8 million which were mainly secured by residential
mortgages.  The 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 1.0% during the  construction  period.  The Bank
obtains a commitment for the permanent  financing from the other lender prior to
originating the construction loan.

Consumer  Lending.  At December 31, 2002, $138.2 million or 18.26% of the Bank's
total loan portfolio consisted of consumer loans, including home equity loans of
$40.9 million, lines of credit of $19.0 million,  direct auto and truck loans of
$16.6 million,  indirect auto and truck loans of $22.8 million, home improvement
loans and other  secured  consumer  loans of $21.2  million,  lot loans of $16.8
million and unsecured personal loans of $.9 million.


                                       8
<PAGE>

The Bank's home equity loans are  originated on  one-to-four-family  residences,
either on a  fixed-rate  basis with terms of up to 15 years or as balloon  loans
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 or 90% of the loan to value  ratio.  The 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 1.5%
of the balance outstanding including interest.

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  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.  Loan  approval  authority  for loans  exceeding
$1,600,000 is vested in the Loan  Committee  which meets weekly to consider loan
recommendations of the Loan Committee.  The Loan Committee is comprised of three
outside  directors,  the President and the Senior Lending  Officers of the Bank.
Manaagement has been delegated  authority to approve mortgage loans,  commercial
loans, home equity loans, home equity lines of credit and secured consumer loans
up to $1,600,000.

The 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 Bank makes  disbursements for items such as real estate taxes,  hazard
insurance premiums and private mortgage insurance premiums.

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 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.

                                       9
<PAGE>


At December 31, 2000, 2001 and 2002, delinquencies in the Bank's loan portfolio
were as follows:

<TABLE>
<CAPTION>

                                                       At December 31, 2000                       At December 31, 2001
                                --------------------------------------------------------------------------------------
                                         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
                                   -----   --------       -----    --------     ------  ---------    ------  ---------
                                                                                                      ($ in thousands)

<S>                                  <C>      <C>            <C>   <C>              <C>     <C>          <C>   <C>
One-to-four-family                   5        $ 427          10    $    980          4      $ 126        12    $ 1,004
Construction and land                -           -            2         213          -          -         1         47
Multi-family                         -           -            -           -          -          -         -          -
Commercial real estate               -           -            1       1,279          -          -         2        390
                                    ---         ---         ---      -----       -----        ---        --         --

         Total mortgage loans        5          427          13       2,472          4        126        15      1,441

Consumer loans                       3           32           2           8         27        391        20        472
Commercial loans                     3          260           1          30          2        194         -         -
                                    --          ---         ---      ------         --        ---        --    -------

         Total loans                11        $ 719          16     $ 2,510         33      $ 711        35    $ 1,913
                                    ==          ===         ===       =====         ==        ===        ==      =====

Delinquent loans to total loans                 .11%                  .40%                    .10%                 .27%
                                                ===                   ===                     ===                  ===

</TABLE>

                                                       At December 31, 2002
                                -------------------------------------------
                                        60-89 Days          90 Days or More
                                ------------------       ------------------
                                Number   Principal       Number   Principal
                                    of     Balance           of     Balance
                                 Loans    of Loans        Loans    of Loans
                                 -----    --------        -----    --------


One-to-four-family                  10      $  793           27     $ 1,956
Construction and land                -           -            -           -
Multi-family                         -           -            -           -
Commercial real estate               -           -            2         254
                                  ----         ---           --         ---

         Total mortgage loans       10         793           29       2,210

Consumer loans                      49         584           14         152
Commercial loans                     -          -             1         230
                                              ---            --          --

         Total loans                59     $ 1,377           44     $ 2,592
                                    ==       =====           ==       =====

Delinquent loans to total loans                .19%                     .35%
                                                ==                       ==


                                       10
<PAGE>



Nonperforming Assets. The following table sets forth information with respect to
the Bank's nonperforming assets at
the dates indicated.

<TABLE>
<CAPTION>


                                                                                                      At December 31,
                                                           ----------------------------------------------------------
                                                               1998        1999         2000         2001        2002
                                                               ----        ----         ----         ----        ----
                                                                                                      ($ in thousands)

<S>                                                          <C>           <C>         <C>          <C>         <C>
Nonaccrual mortgage loans                                    $ 430         2,200       2,472        1,441       2,210

Nonaccrual commercial and consumer loans                        14           162          38          472         382
                                                               ---        ------     -------        -----      -------

Total nonperforming loans                                      444         2,362       2,510        1,913       2,592

Foreclosed assets                                              366           400         276          373         626
                                                            ------        ------      ------      -------      -------

          Total nonperforming assets                         $ 810         2,762       2,786        2,286       3,218
                                                               ===         =====       =====        =====       ======

Nonperforming loans to total loans                            .11%           .46%        .40%         .27%        .35%
                                                              ===         ======      ======       ======       =====

Total nonperforming assets to total assets                    .17%           .47%        .39%         .28%        .35%
                                                              ===         ======       =====       ======       =====
</TABLE>

At December 31, 2002,  the 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 totaled  approximately $2.6
million,  $1.9 million and $2.5  million at December  31,  2002,  2001 and 2000,
respectively.  For the year ended December 31, 2002,  interest income that would
have been recorded under the original terms of nonaccrual  loans at December 31,
2002 and interest income actually recognized is summarized below (in thousands):


     Interest income that would have been recorded                   $ 202
     Interest income recognized                                        (96)
                                                                      ----

     Interest income foregone                                        $ 106
                                                                      ====

Classified  Assets.  Federal  regulations  and the  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 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.







                                       11
<PAGE>


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  foreclosed  assets  classified  as  "special  mention"  or
"substandard"  at the  dates  indicated.  No loans  or  foreclosed  assets  were
classified "doubtful" or "loss" at those dates.

                                                Special Mention    Substandard
                                                ---------------    -----------
                                               Number   Amount   Number   Amount
                                               ------   ------   ------   ------
                                                                ($ in thousands)
At December 31, 2002:
Loans                                              20   $5,659       54   $3,076

Foreclosed assets:
     One-to-four-family properties               --       --          5      422

     Other                                       --       --         18      204
                                               ------   ------   ------   ------

          Total                                    20   $5,659       77   $3,702
                                               ======   ======   ======   ======

At December 31, 2001:
Loans                                               7    2,182       48    2,722

Foreclosed assets:
     One-to-four-family properties               --       --          2      139

     Other                                       --       --          5      234
                                               ------   ------   ------   ------

          Total                                     7   $2,182       55   $3,095
                                               ======   ======   ======   ======

Allowance for Loan Losses.  The 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 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 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.




                                       12
<PAGE>


The following table sets forth the 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,
                                         --------------------------------------------------
                                           1998       1999       2000       2001       2002
                                           ----       ----       ----       ----       ----
                                                                         ($ in thousands)

<S>                                     <C>          <C>        <C>        <C>        <C>
Balance at beginning of year            $ 1,684      2,283      2,811      3,552      4,289
Provision for loan losses                   682        719        880      1,115      1,845
Charge-offs:
     One-to-four-family                     (80)      --          (58)       (48)       (93)
     Construction and land                 --          (44)      --         --         --
     Multi-family                          --         --         --         --         --
     Commercial real estate                --         --         --          (90)      (150)
     Commercial and consumer loans           (6)      (166)       (99)      (258)      (753)
                                        -------    -------    -------    -------    -------

     Total charge-offs by category          (86)      (210)      (157)      (396)      (996)

Recoveries                                    3         19         18         18         43
                                        -------    -------    -------    -------    -------

Balance at end of year                  $ 2,283      2,811      3,552      4,289      5,181
                                        =======    =======    =======    =======    =======
</TABLE>

The following table sets forth the ratios of the Bank's charge-offs and
allowances for losses for the years indicated.


<TABLE>
<CAPTION>

                                                          1998          1999         2000         2001            2002
                                                          ----          ----         ----         ----            ----
<S>                                                     <C>           <C>          <C>          <C>             <C>
     Net charge-offs during the year
          as a percentage of average loans
          outstanding during the year                      .03%          .04%         .03%         .06%            .13%

     Allowance for loan losses as a
          percentage of gross loans receivable
          at end of year                                   .57%          .54%         .56%         .61%            .68%

     Allowance for loan losses as a
          percentage of total nonperforming
          assets at end of year                         281.85%       101.77%      127.49%      187.62%         161.00%

     Allowance for loan losses as a
          percentage of nonperforming loans
          at end of year                                514.19%       119.01%      141.51%      224.20%         199.88%
</TABLE>



                                       13
<PAGE>


The  following  table sets forth the Bank's  specific and general  allowance for
possible loan losses by type of loan for the years indicated.

<TABLE>
<CAPTION>

                                                  At December 31,
                               ----------------------------------
                                          1998               1999               2000               2001                 2002
                               -----------------------------------------------------------------------------------------------
                                          % of               % of               % of               % of                 % of
                                      Loans to           Loans to           Loans to           Loans to             Loans to
                                         Total              Total              Total              Total                Total
                               Amount    Loans    Amount    Loans    Amount    Loans    Amount    Loans      Amount    Loans
                               ------    -----    ------    -----    ------   -----     ------    -----      ------    -----
                                                                                        ($ in thousands)
At end of year allocated to:
<S>                            <C>       <C>      <C>       <C>      <C>       <C>      <C>        <C>       <C>        <C>
     One-to-four-family        $  575    70.59%   $  528    68.28%   $  609    64.97%   $  752     58.77%    $  840     52.23%
     Construction and land        338     2.91       408     2.29       423     2.06       595      3.26        693      4.07
     Multi-family                 295     2.04       301     2.58       488     2.79       353      2.88        376      3.01
     Commercial real estate       565    11.01       750    11.76       998    12.65     1,357     15.46      1,781     18.61
     Consumer loans               304    10.83       447    12.34       708    15.20       895     16.96      1,057     18.26
     Commercial loans             206     2.62       377     2.75       326     2.33       337      2.67        434      3.82
                               ------   ------    ------   ------    ------   ------    ------   -------     ------    ------

          Total                $2,283   100.00%   $2,811   100.00%   $3,552   100.00%   $4,289    100.00%    $5,181    100.00%
                               ======   ======    ======   ======    ======   ======    ======   =======     ======    ======

</TABLE>


                                       14
<PAGE>


Investment Activities

The  investment  policy  of the  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 Bank's  lending  activities.  In
establishing  its  investment  strategies,  the 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.

The Company follows  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.  At December 31,
2002, all securities have been classified as available for sale by management.

Mortgage-Backed Securities

The Company's  mortgage-backed  securities  consist of securities  issued by the
Government  National  Mortgage  Association  ("GNMA"),  the  Federal  Home  Loan
Mortgage  Corporation  ("FHLMC") or the Federal  National  Mortgage  Association
("FNMA").  These  mortgage-backed  securities  totaled $22.3 million or 28.8% of
total securities.

The  following  table  sets forth  mortgage-backed  security  purchases,  sales,
amortization and principal repayments during the periods indicated:





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

At beginning of year                           $ 17,490      14,394      10,943
Purchases                                         1,005         500      17,891
Amortization and principal repayments            (4,096)     (4,009)     (6,665)
Change in unrealized gain                            (5)         58         127
                                               --------    --------    --------

          At end of year                       $ 14,394      10,943      22,296
                                               ========    ========    ========

Investment Securities

At December  31,  2002,  the Bank held $55.0  million in  investment  securities
consisting  of $37.6  million in U.S.  Government  and agency  securities,  $9.4
million in mutual  funds and $8.0  million in other  investment  securities.  In
addition,  the Bank holds $49.2  million in  interest-earning  deposits and $7.7
million of FHLB of Atlanta stock.



                                       15
<PAGE>


The following table sets forth certain information  regarding the amortized cost
and  market  values of the  Bank's  interest-earning  deposits,  FHLB  stock and
investment securities at the dates indicated:

<TABLE>
<CAPTION>

                                                                                                      At December 31,
                                               ----------------------------------------------------------------------
                                                              2000                      2001                    2002
                                                              ----                      ----                    ----
                                               Amortized     Market      Amortized     Market    Amortized     Market
                                                 Cost         Value        Cost         Value      Cost        Value
                                                 ----         -----        ----         -----      ----        -----
                                                                             (In thousands)

<S>                                            <C>           <C>          <C>          <C>         <C>         <C>
Interest-earning deposits                      $ 14,445      14,445       30,183       30,183      49,237      49,237
                                                 ======      ======       ======       ======      ======      ======


FHLB stock                                     $  6,150       6,150        7,700        7,700       7,700       7,700
                                                 ======      ======       ======       ======     =======     =======

Investment securities-

     Available-for-sale:
          U.S. Government and
               agency securities                 17,849      17,968       32,670       33,241      36,801      37,649
          Other investment securities             1,365       1,376        6,268        6,276       7,990       8,005
          Investment in mutual funds              9,130       8,979        9,125        9,043       9,433       9,374
                                                 ------     -------       ------       ------     -------      ------

          Total available-for-sale             $ 28,344      28,323       48,063       48,560      54,224      55,028
                                                 ======      ======       ======       ======      ======      ======
</TABLE>


                                       16
<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, 2002.


<TABLE>
<CAPTION>



                                                                  Due After                Due After
                                                                One Through             Five Through                Due After
                               Due Within One Year               Five Years                 10 Years                 10 Years
                               -------------------               ----------             ------------               ----------
                                        Annualized               Annualized               Annualized               Annualized
                                         Weighted                 Weighted                 Weighted                 Weighted
                            Amortized     Average    Amortized     Average    Amortized     Average    Amortized    Average
                              Cost         Yield        Cost        Yield       Cost         Yield        Cost       Yield
                              ----         -----        ----        -----       ----         -----        ----       -----
                                              ($ in thousands)
FHLB stock (no
<S>                          <C>           <C>        <C>           <C>          <C>          <C>   <C>          <C>
     defined maturity)       $ 7,700       5.00%      $  --           --%        $--          --%       $    --        --%
                               =====       ====

Investment securities:
     U.S. Government
         and agency
         obligations          12,531       4.46        24,270       4.49          --          --             --        --

     Other investment
         securities             --                       --           --          --          --          7,990      3.37

     Mutual funds (no
     defined maturity)         9,433       2.60          --           --          --          --             --        --
                               -----                   ------       ----

         Total investment
              securities     $21,964       3.66%      $24,270       4.49%        $--          --%       $ 7,990      3.37%
                              ======       ====        ======       ====          ==          ==          =====      ====

</TABLE>

                                              Total
                                        -----------

                                        Approximate
                            Amortized      Market
                               Cost        Value
                               ----        -----

FHLB stock (no
     defined maturity)       $ 7,700      $ 7,700
                               =====        =====

Investment securities:
     U.S. Government
         and agency
         obligations          36,801       37,649

     Other investment
         securities            7,990        8,005

     Mutual funds (no
     defined maturity)         9,433        9,374
                               -----       ------

         Total investment
              securities     $54,224      $55,028
                              ======       ======








                                       17
<PAGE>


Sources of Funds

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

Deposits.  The Bank  offers a  variety  of  deposit  accounts  having a range of
interest  rates and terms.  The  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, 2002,  $53.0 million or 7.9%
consist of individual retirement accounts ("IRAs").

The Bank seeks to retain core  deposits  consisting  of passbook  and  statement
savings, money market,  noninterest-bearing  checking,  and NOW accounts,  which
contribute to a low cost of funds. Such core deposits  represented  22.9%, 25.7%
and 27.3% of total deposits at December 31, 2000, 2001 and 2002, respectively.

The following table shows the distribution of the 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, 2002 ($ in thousands).



<TABLE>
<CAPTION>


                                                             At December 31,
                           -------------------------------------------------------------------------------------------
                                              2000                      2001                       2002
                                              ----                      ----                       ----
                                           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          $   13,335        2.57%   $  14,334        2.45%    $  18,867         2.82%          -   %
     NOW and money-
          market accounts       86,509       16.67      111,961       19.13       137,858        20.64            .85
     Passbook and
          statement savings     19,143        3.69       24,093        4.12        25,403         3.80            .82
                               -------     -------      -------     -------      --------       ------         ------

          Total                118,987       22.93      150,388       25.70       182,128        27.26            .76
                               -------      ------      -------      ------       -------       ------         ------

Certificate accounts:
     Custom                     19,141        3.69       38,854        6.64        31,600         4.73           1.61
     91 day                        220         .04          279         .05           209          .03           1.39
     182 day                     6,630        1.28       10,085        1.72        10,599         1.59           1.90
     7 months                       50         .01          325         .06        -              -              -
     9 months                    8,631        1.66       17,974        3.07        11,042         1.65           2.14
     10 months                   4,772         .92        -            -           -              -              -
     12 months                  32,190        6.21       55,356        9.46        62,564         9.36           2.55
     13 months                      61         .01       88,670       15.15        18,078         2.71           3.00
     14 months                 137,618       26.52       18,835        3.22        -              -              -
     15 months                 -             -            -            -           34,654         5.19           2.73
     18 months                  12,647        2.44       27,374        4.68        26,363         3.95           3.76
     20 months                      24         .00           26         .00        -              -              -
     21 months                  24,432        4.71       94,807       16.20        50,623         7.58           4.30
     22 months                 101,945       19.65        4,721         .81        -              -              -
     24 months                  15,784        3.04       25,414        4.34       112,025        16.77           3.88
     25 months                  17,609        3.39       18,193        3.11       -               -              -
     30 months                   8,869        1.71       21,471        3.67        19,202         2.87           4.55
     36 months                     100         .02        2,615         .45        41,388         6.20           4.08
     54 months                 -              -         -              -           51,537         7.71           4.51
     60 months                   9,175        1.77        9,741        1.67        16,046         2.40           4.97
                               -------     -------     --------     -------      --------      -------           ----

          Total                399,898       77.07      434,740       74.30       485,930        72.74           3.54
                               -------      ------      -------      ------       -------       ------           -----

          Total deposits     $ 518,885      100.00%   $ 585,128      100.00%    $ 668,058       100.00%          2.78%
                               =======      ======      =======      ======       =======       ======           ====
</TABLE>

                                       18
<PAGE>


The following table presents the deposit activity of the Bank for the years
indicated.


<TABLE>
<CAPTION>

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

<S>                                        <C>             <C>             <C>
     Deposits                              $ 1,898,638     2,394,602       3,161,518
     Withdrawals                            (1,826,173)   (2,353,541)     (3,094,131)
                                             ---------     ---------       ---------

     Deposits in excess of withdrawals          72,465        41,061          67,387

     Interest credited on deposits              17,146        25,182          15,543
                                            ----------    ----------       ---------

     Total increase in deposits           $     89,611        66,243          82,930
                                            ==========    ==========       =========
</TABLE>

The following table presents the amount of time deposit accounts in amounts of
$100,000 or more at December 31, 2002 maturing as follows (in thousands):

                       Maturity Period
                       ---------------

          One month through three months             $  25,177
          Over three through six months                 11,342
          Over six through 12 months                    29,403
          Over 12 months                                74,656
                                                      --------

                     Total                           $ 140,578
                                                      ========


                                       19
<PAGE>


The  following  table  presents,  by  various  rate  categories,  the  amount of
certificate  accounts  outstanding  at December 31, 2000,  2001 and 2002 and the
periods to maturity of the  certificate  accounts  outstanding  at December  31,
2002.

<TABLE>
<CAPTION>


                                At December 31,                                    Period to Maturity from December 31, 2002
                                ---------------                                    -----------------------------------------
                         --------------------------------------Within       1 to        2 to         3 to        4 to
                            2000        2001       2002        1 Year      2 Years     3 Years      4 Years     5 Years       Total
                            ----        ----       ----        ------      -------     -------      -------     -------       -----
                                                                       (In thousands)

<S>                       <C>           <C>         <C>        <C>         <C>          <C>          <C>         <C>        <C>
     2.00% or less        $     -           -        48,547     46,437       2,110         -           -            -        48,547
     2.01% to 3.00%             -        48,916     112,037     78,015      31,833       2,189         -            -       112,037
     3.01% to 4.00%             -        92,048     122,814     64,169      33,985      17,467         256        6,937     122,814
     4.01% to 5.00%          24,433     141,637     171,116     44,837      57,323      22,618      13,461       32,877     171,116
     5.01% to 6.00%         128,393      68,394      30,092     17,950       2,558         974       7,075        1,535      30,092
     6.01% to 8.00%         247,072      83,745       1,324        149         -         1,095          80          -         1,324
                            -------     -------     -------    -------     -------     -------      ------      -------     -------

                          $ 399,898     434,740     485,930    251,557     127,809      44,343       20,872      41,349     485,930
                            =======     =======     =======    =======     =======      ======       ======      ======    ========
</TABLE>

                                       20
<PAGE>


Borrowings

Guaranteed Preferred Beneficial Interest in Junior Subordinated  Debentures.  On
September 26, 2002, the Trust sold  adjustable-rate  Trust Preferred  Securities
due  September  26, 2032 in the aggregate  principal  amount of $5,000,000  (the
"Capital  Securities")  in a pooled trust  preferred  securities  offering.  The
interest rate on the Capital Securities  adjusts  quarterly,  to a rate equal to
the then current  three-month  London  Interchange Bank Offering Rate ("LIBOR"),
plus 340 basis points. In addition,  the Holding Company  contributed capital of
$155,000 to the Trust for the  purchase of the common  securities  of the Trust.
The proceeds  from these sales were paid to the Holding  Company in exchange for
$5,155,000  of  its   adjustable-rate   Junior   Subordinated   Debentures  (the
"Debentures")  due September 26, 2032. The Debentures have the same terms as the
Capital  Securities.  The Holding Company then invested  $3,000,000 as a capital
contribution  in the Bank.  The sole  asset of the  Trust,  the  obligor  on the
Capital Securities, is the Debentures.

The Holding  Company has guaranteed  the Trust's  payment of  distributions  on,
payments on any redemptions of, and any  liquidation  distribution  with respect
to, the Capital  Securities.  Cash  distributions on both the Capital Securities
and the  Debentures  are  payable  quarterly  in arrears  on March 26,  June 26,
September  26 and  December  26 of each year.  Issuance  costs of  approximately
$169,000  associated with the Capital  Securities  have been  capitalized by the
Holding Company and are being amortized over the life of the securities.

                                                      Capital
                                    Securities Outstanding at
                                           December 31,
                                    -------------------          Prepayment
            Name                    2002           2001          Option Date
            ----                    ----           ----          -----------
                                       (In thousands)

        FFLC Statutory Trust I     $ 5,000         -         September 26, 2007
                                     =====        =====

The Capital Securities are subject to mandatory redemption (i) in whole, but not
in part,  upon repayment of the Debentures at stated  maturity or, at the option
of the Holding Company, their earlier redemption in whole upon the occurrence of
certain  changes  in the tax  treatment  or  capital  treatment  of the  Capital
Securities,  or a change in the law such that the Trust would be  considered  an
investment  company  and  (ii)  in  whole  or in part  at any  time on or  after
September 26, 2007 contemporaneously with the optional redemption by the Holding
Company of the  Debentures in whole or in part.  The  Debentures  are redeemable
prior to maturity at the option of the Holding Company (i) on or after September
26, 2007,  in whole at any time or in part from time to time,  or (ii) in whole,
but not in  part,  at any time  within  90 days  following  the  occurrence  and
continuation of certain changes in the tax treatment or capital treatment of the
Capital  Securities,  or a change in law such that the Trust would be considered
an Investment  Company,  required to be registered under the Investment  Company
Act of 1940.

The Company has  entered  into a five year  interest  rate swap  agreement  that
effectively  converted the floating  interest  rate of these Capital  Securities
into a fixed  interest rate of 6.85%,  thus reducing the impact of interest rate
changes on future interest expense for the five year period.  In accordance with
Statement of Financial  Accounting  Standards No. 133 "Accounting for Derivative
Instruments and Hedging Activities," this interest rate swap qualifies as a cash
flow hedge. The fair value of this interest rate swap is recorded as an asset or
liability on the consolidated balance sheet with an offsetting entry recorded in
other comprehensive  income, net of the income tax effect. At December 31, 2002,
the unrealized  loss of the derivative  instrument was $120,000  ($75,000 net of
tax).

                                       21
<PAGE>


Federal Home Loan Bank Advances and Other Borrowings

The Bank is  authorized  to  obtain  advances  from the  Federal  Home Loan Bank
("FHLB") of Atlanta which are generally collateralized by a blanket lien against
the 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 Bank, for purposes other than meeting  withdrawals,
fluctuates  from time to time in  accordance  with the  policies  of the Federal
Housing  Finance Board and the FHLB of Atlanta.  At December 31, 2002,  the Bank
had $149.0 million in FHLB advances outstanding.

The Bank also borrows under retail  repurchase  agreements with customers of the
Bank.  These  agreements  are  accounted  for as  borrowings  and are secured by
securities owned by the Bank.

The following table sets forth certain information relating to the Bank's
borrowings at the dates indicated:



<TABLE>
<CAPTION>

                                                                                                   At or For the Year
                                                                                                   Ended December 31,
                                                                                 ------------------------------------
                                                                                    2000           2001        2002
                                                                                    ----           ----        ----
                                                                                           ($ in thousands)
FHLB advances:
<S>                                                                              <C>         <C>          <C>
     Average balance outstanding                                                 $ 104,647   $   136,041  $   160,235
                                                                                   =======       =======      =======
     Maximum amount outstanding at any month end during the year                 $ 123,000   $   154,000  $   164,000
                                                                                   =======       =======      =======
     Balance outstanding at end of year                                          $ 123,000   $   154,000  $   149,000
                                                                                   =======       =======      =======
     Weighted average interest rate during the year                                   6.21%         6.07%        5.62%
                                                                                   =======       ======       =======
     Weighted average interest rate at end of year                                    6.18%         5.73%        5.40%
                                                                                   =======       ======       =======

Other borrowed funds:
     Average balance outstanding                                                 $   5,729   $    11,842  $    16,915
                                                                                  ========       =======      =======
     Maximum amount outstanding at any month end during the year                 $   8,013   $    18,427  $    24,216
                                                                                  ========       =======      =======
     Balance outstanding at end of year                                          $   6,376   $    13,327  $    19,303
                                                                                   =======       =======      =======
     Weighted average interest rate during the year                                   5.11%        3.91%         2.12%
                                                                                  ========       =======      =======
     Weighted average interest rate at end of year                                    5,25%        2.15%         5.08%
                                                                                  ========       =======      =======

Total borrowings:
     Average balance outstanding                                                 $ 110,376   $   147,883  $   177,150
                                                                                   =======       =======      =======
     Maximum amount outstanding at any month end during the year                 $ 131,013   $   172,427  $   188,216
                                                                                   =======       =======      =======
     Balance outstanding at end of year                                          $ 129,376   $   167,327  $   168,303
                                                                                   =======       =======      =======
     Weighted average interest rate during the year                                   6.15%         5.90%        5.29%
                                                                                   =======       =======      =======
     Weighted average interest rate at end of year                                    6.13%         5.44%        5.38%
                                                                                   =======       =======      =======
</TABLE>

Subsidiary Activities

The  Bank  has  a  wholly-owned  subsidiary,  Lake  County  Service  Corporation
("LCSC"), originally formed to develop a 100-lot subdivision. LCSC sold the last
remaining lots during 2001.  LCSC's primary activity is now investment  services
for the Bank's customers. During the second quarter of 2001, the Bank introduced
an Investment  Services  Program  through a joint venture with T.H.E.  Financial
Group,  Ltd., an independent  securities  broker-dealer firm and a member of the
National   Association  of  Securities  Dealers  and  the  Securities   Investor
Protection  Corporation.  Through this  program,  the Bank offers  mutual funds,
annuities,  discount brokerage and financial planing services to bank customers.
The services are offered through LCSC, which receives monthly fees on sales made
through this program. During 2002 and 2001, LCSC recognized fees of $295,000 and
$114,000 and expenses of $227,000  and  $123,000  (including  $37,000 of initial
start-up costs in 2001), respectively from this program.

                                       22

<PAGE>



During  2001,  First  Alliance  was  formed  to  facilitate  the  sale of  title
insurance.  This  subsidiary  recognized fees of $26,000 and expenses of $12,000
during 2002. They did not have a material amount of activity during 2001.

During 2002,  the Trust was formed  solely to issue trust  preferred  securities
(see Borrowings).

Personnel

As of February 13, 2003,  the Bank had 234 full-time  employees and 14 part-time
employees. The employees are not represented by a collective bargaining unit and
the Bank considers its relationship with its employees to be good.

REGULATION AND SUPERVISION

General

As a savings and loan holding company, the Company is required by federal law to
file reports with, and otherwise  comply with, the rules and  regulations of the
OTS. The 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 Bank is a member of the Federal  Home Loan Bank System and,  with respect to
deposit insurance, of the Savings Association Insurance Fund ("SAIF") managed by
the FDIC.  The 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 Bank's safety and  soundness and  compliance
with  various   regulatory   requirements.   This   regulation  and  supervision
establishes a comprehensive  framework of activities in which an institution can
engage and is 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,  the Bank and their  operations.  Certain of the
regulatory  requirements  applicable to the 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 Bank and the Company.

Holding Company Regulation

The Company is a nondiversified  unitary savings and loan holding company within
the meaning of federal law. Under prior law, a unitary  savings and loan holding
company,  such as the Company was not  generally  restricted  as to the types of
business activities in which it may engage,  provided that the Bank continued to
be a qualified thrift lender. See "Federal Savings Institution  Regulation - QTL
Test." The  Gramm-Leach-Bliley  Act of 1999 provides that no company may acquire
control of a savings association after May 4, 1999 unless it engages only in the
financial  activities permitted for financial holding companies under the law or
for multiple savings and loan holding companies as described below. Further, the
Gramm-Leach-Bliley   Act  specifies  that  existing  savings  and  loan  holding
companies  may only  engage  in such  activities.  The  Gramm-Leach-Bliley  Act,
however, grandfathered the unrestricted authority for activities with respect to
unitary savings and loan holding  companies  existing prior to May 4, 1999, such
as the Company,  so long as the Bank continues to comply with the QTL Test. Upon
any non-supervisory acquisition by the Company of another savings institution or
Bank that meets the


                                       23
<PAGE>

qualified  thrift lender 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 generally
be limited to activities  permissible  for bank holding  companies under Section
4(c)(8) of the Bank Holding  Company Act,  subject to the prior  approval of the
OTS, and certain activities authorized by OTS regulation.

A savings and loan holding company is prohibited  from,  directly or indirectly,
acquiring  more than 5% of the voting stock of another  savings  institution  or
savings and loan holding company,  without prior written approval of the OTS and
from  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 considers the financial and managerial resources
and future prospects of the company and institution involved,  the effect of the
acquisition on the risk to the deposit  insurance  funds,  the  convenience  and
needs of the community and competitive factors.

The OTS may not approve 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,  federal  regulations do prescribe such  restrictions on
subsidiary savings institutions as described below. The 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

Business Activities. The activities of federal savings institutions are governed
by federal law and regulations.  These laws and regulations delineate the nature
and extent of the  activities  in which  federal  associations  may  engage.  In
particular,  many types of lending  authority  for  federal  association,  e.g.,
commercial,  non-residential real property loans and consumer loans, are limited
to a specified percentage of the institution's capital or assets.

Capital  Requirements.  The OTS capital regulations require savings institutions
to meet three minimum  capital  standards:  a 1.5% tangible  capital ratio, a 4%
leverage ratio (3% for  institutions  receiving the highest rating on the CAMELS
rating  system) 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 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 1 risk-based
capital  standard.  The OTS  regulations  also  require  that,  in  meeting  the
tangible, leverage and risk-based capital standards, institutions must generally
deduct  investments  in and  loans to  subsidiaries  engaged  in  activities  as
principal that are not permissible for a national bank.

The  risk-based   capital  standard  for  savings   institutions   requires  the
maintenance of Tier 1 (core) and total capital (which is defined as core capital
and  supplementary  capital)  to  risk-weighted  assets  of at  least 4% and 8%,
respectively.  In determining the amount of  risk-weighted  assets,  all assets,
including  certain  off-balance  sheet assets,  are  multiplied by a risk-weight
factor of 0% to 100%,  assigned by the

                                       24

<PAGE>

OTS  capital  regulation  based on the risks  believed  inherent  in the type of
asset.  Core  (Tier  1)  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 mortgage servicing rights and
credit card relationships.

The components of supplementary  capital currently include cumulative  preferred
stock,  long-term perpetual preferred stock,  mandatory convertible  securities,
subordinated  debt and intermediate  preferred stock, the allowance for loan and
lease losses limited to a maximum of 1.25% of risk-weighted assets and up to 45%
of  unrealized  gains  on  available-for-sale  equity  securities  with  readily
determinable fair market values.  Overall,  the amount of supplementary  capital
included as part of total capital cannot exceed 100% of core capital.

The  capital  regulations  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.  For the present time, the OTS has deferred implementation
of the interest  rate risk capital  charge.  At December 31, 2002,  the Bank met
each of its capital requirements.

The following table presents the Bank's capital position at December 31, 2002.


                                                                 Capital Ratios
                                                                 --------------
                     Actual       Required      Excess      Actual     Required
                     Capital      Capital       Amount      Percent     Percent
                     -------      -------       ------      -------     -------
                                                                ($ in thousands)

Tangible            $ 71,139       13,719       57,420        7.78%       1.50%
Core (Leverage)     $ 71,139       27,439       43,700        7.78        3.00
Risk-based          $ 75,645       47,794       27,851       12.66        8.00

Prompt  Corrective  Regulatory  Action.  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 that has a ratio of total capital to risk weighted assets of
less than 8%, a ratio of Tier 1 (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 OTS 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.

Insurance  of  Deposit  Accounts.  The Bank is a member  of the  SAIF.  The FDIC
maintains a risk-based  assessment system by which  institutions are assigned to
one of  three  categories  based  on  their  capitalization  and  one  of  three
subcategories based on examination ratings and other supervisory information. An
institution's  assessment  rate  depends  upon  the  categories  to  which it is
assigned.


                                       25
<PAGE>


Assessment rates for SAIF member institutions are determined semiannually by the
FDIC and currently range from zero basis points for the healthiest  institutions
to 27 basis points for the riskiest.

In addition to the assessment for deposit  insurance,  institutions are required
to make payments on bonds issued in the late 1980s by the Financing  Corporation
("FICO") to  recapitalize  the  predecessor  to the SAIF. By law, there has been
equal  sharing of FICO  payments  between SAIF and BIF members  since January 1,
2000.

The Bank did not pay an assessment for deposit insurance in 2002,  however,  its
payments toward the FICO bonds amounted to approximately  $104,000. The FDIC has
authority to increase  insurance  assessments.  A  significant  increase in SAIF
insurance premiums would likely have an adverse effect on the operating expenses
and results of operations of the Bank.  Management cannot predict what insurance
assessment rates will be in the future.

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 Bank does not know of any  practice,  condition  or violation
that might lead to termination of deposit insurance.

Loans to One  Borrower.  Federal law  provides  that  savings  institutions  are
generally subject to the limits on loans to one borrower  applicable to national
banks. A savings institution 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 secured by specified readily-marketable  collateral. At December
31, 2002,  the Bank's  limit on loans to one borrower was $11.3  million and the
Bank's  largest  aggregate  outstanding  loans and  extensions  of credit to one
borrower was $9.6 million.

QTL Test.  The HOLA requires  savings  institutions  to meet a qualified  thrift
lender test. Under the test, a savings association is required to either qualify
as a "domestic building and loan association" under the Internal Revenue Code or
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 qualified thrift lender test is subject to
certain operating restrictions and may be required to convert to a bank charter.
As of December 31, 2002,  the Bank  maintained  77% of its  portfolio  assets in
qualified  thrift  investments and,  therefore,  met the qualified thrift lender
test.  Recent  legislation  has  expanded the extent to which  education  loans,
credit card loans and small business loans may be considered  "qualified  thrift
investments."

Limitation on Capital Distributions. OTS regulations impose limitations upon all
capital  distributions  by a  savings  institution,  including  cash  dividends,
payments  to  repurchase  its shares and  payments  to  shareholders  of another
institution  in a cash-out  merger.  Under a new regulation  effective  April 1,
1999, an  application  to and the prior approval of the OTS is required prior to
any capital  distribution  if the  institution  does not meet the  criteria  for
"expedited  treatment" of applications under OTS regulations  (i.e.,  generally,
examination ratings in the two top categories),  the total capital distributions
for the  calendar  year  exceed  net  income  for that year  plus the  amount of
retained  net  income for the  preceding  two years,  the  institution  would be
undercapitalized  following the distribution or the distribution would otherwise
be contrary to a statute, regulation or agreement with OTS. If an application is
not  required,


                                       26

<PAGE>

the  institution  must  still  provide  prior  notice  to  OTS  of  the  capital
distribution if, like the Bank, it is a subsidiary of a holding company.  In the
event the Bank's  capital  fell  below its  regulatory  requirements  or the OTS
notified  it that it was in need of more than  normal  supervision,  the  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.

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 Bank's latest  quarterly  thrift
financial report.  The Bank was assessed  approximately  $164,000 for the fiscal
year ended December 31, 2002.

Transactions   with  Related   Parties.   The  Bank's  authority  to  engage  in
transactions  with  "affiliates"  (e.g.,  any company that  controls or is under
common control with an  institution,  including the Company and its  non-savings
institution  subsidiaries)  is limited by federal law. The  aggregate  amount of
covered  transactions  with any  individual  affiliate  is limited 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 federal law. The
purchase of low quality  assets from  affiliates  is generally  prohibited.  The
transactions with affiliates must be on terms and under circumstances,  that are
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.


                                       27
<PAGE>


The recently enacted Sarbanes-Oxley Act of 2002 generally prohibits loans by the
Company to its executive  officers and directors.  However,  that Act contains a
specific exception for loans by the Bank to its executive officers and directors
in compliance with federal  banking laws. The Bank's  authority to extend credit
to executive officers,  directors and 10% shareholders ("insiders"),  as well as
entities such persons  control,  is also governed by federal law. Such loans are
required  to be  made on  terms  substantially  the  same as  those  offered  to
unaffiliated individuals and not 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 insiders over other  employees.  The
law limits both the individual  and aggregate  amount of loans the Bank may make
to insiders based, in part, on the Bank's capital  position and requires certain
board approval procedures to be followed.

Enforcement.  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.  The  FDIC  has the
authority to recommend to the Director of the OTS that 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.

Standards for Safety and Soundness.  The federal  banking  agencies have adopted
Interagency  Guidelines  prescribing  Standards  for Safety and  Soundness.  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.   If  the  OTS  determines  that  a  savings
institution fails to meet any standard prescribed by the guidelines, the OTS may
require the institution to submit an acceptable plan to achieve  compliance with
the standard.

Federal Home Loan Bank System

The Bank is a member  of the  Federal  Home  Loan Bank  ("FHLB")  System,  which
consists of 12  regional  FHLBs.  The FHLB  provides a central  credit  facility
primarily for member institutions. In order to borrow from the FHLB, the Bank is
required to purchase  shares of the FHLB's  nonmarketable  equity  securities at
par. The Bank,  as a member of the FHLB,  is required to acquire and hold shares
of  capital  stock  in that  FHLB in an  amount  at  least  equal to 1.0% of the
aggregate principal amount of its unpaid residential  mortgage loans and similar
obligations at the beginning of each year, or 1/20 of its advances  (borrowings)
from the  FHLB,  whichever  is  greater.  The Bank was in  compliance  with this
requirement  with an  investment  in FHLB  stock at  December  31,  2002 of $7.7
million.  For the year ended December 31, 2002, the dividend yield on FHLB stock
was 5.2%.

The FHLBs are required to provide funds for the resolution of insolvent  thrifts
in the late 1980s and to contribute funds for affordable housing programs. These
requirements  could reduce the amount of  dividends  that the FHLBs pay to their
members and could also result in the FHLBs imposing a higher rate of interest on
advances to their members. If dividends were reduced, or interest on future FHLB
advances increased, the Bank's net interest income would likely also be reduced.
Recent  legislation  has changed the structure of the FHLBs funding  obligations
for  insolvent  thrifts,   revised  the  capital  structure  of  the  FHLBs  and
implemented entirely voluntary  membership for FHLBs.  Management cannot predict
the effect that these changes may have with respect to its FHLB membership.




                                       28
<PAGE>



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).  The regulations generally provide that reserves
be maintained against aggregate  transaction  accounts as follows:  for accounts
aggregating  $42.1 million or less (subject to adjustment by the Federal Reserve
Board) the reserve requirement is 3%; and for accounts  aggregating greater than
$42.1  million,  the reserve  requirement is $1.083 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 $42.1 million. The first $6.0 million
of otherwise  reservable balances (subject to adjustments by the Federal Reserve
Board) are exempted  from the reserve  requirements.  At December 31, 2002,  the
Bank complied with the foregoing requirements.

Community Reinvestment Act

Under the Community Reinvestment Act ("CRA"), as implemented by Office of Thrift
Supervision regulations,  a savings association has a continuing and affirmative
obligation  consistent with its safe and sound operation to help meet the credit
needs of its entire community,  including low and moderate income neighborhoods.
The CRA does  not  establish  specific  lending  requirements  or  programs  for
financial institutions nor does it limit an institution's  discretion to develop
the types of  products  and  services  that it  believes  are best suited to its
particular  community,  consistent  with the CRA. The CRA requires the Office of
Thrift  Supervision,  in connection with its  examination of an institution,  to
assess the institution's record of meeting the credit needs of its community and
to take such record  into  account in its  evaluation  of  applications  by such
institution.  The CRA requires public disclosure of an institution's CRA rating.
The latest CRA rating of the Bank received from the Office of Thrift Supervision
was "Satisfactory."


                                       29
<PAGE>


Federal and State Taxation

General.  The Company and the 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 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
Bank or the  Company.  The Bank was last  audited  by the IRS for the year ended
December 31, 1996.  For its 2002 taxable year,  the Bank is subject to a maximum
federal income tax rate of 35%.

Bad Debt Reserves. For fiscal years beginning prior to December 31, 1995, thrift
institutions  which  qualified  under  certain   definitional  tests  and  other
conditions of the Internal  Revenue Code of 1986 (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 20, 1996,  requires  savings  institutions to recapture (i.e.,
take into income) certain portions of their  accumulated bad debt reserves.  The
1996 Act repeals the reserve  method of accounting  for bad debts  effective for
tax years beginning  after 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.

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 Section
481(a)  adjustment  required to be taken into income with respect to such change
generally  will be taken into income  ratably  over a  six-taxable  year period,
beginning  with the first  taxable  year  beginning  after 1995,  subject to the
residential loan requirement.

Under the residential loan requirement provision,  the recapture required by the
1996 Act is suspended for each of two successive  taxable years,  beginning with
1996, in which the Bank originates a minimum of certain  residential loans based
upon the average of the principal  amounts of such loans made by the Bank during
its six taxable years  preceding its current  taxable year.  Under the 1996 Act,
for its  current  and  future  taxable  years,  the  Bank is  permitted  to make
additions to its tax bad debt  reserves.  In  addition,  the 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.  At December  31,  2002,  the Bank had
approximately $111,000 of deferred tax liabilities recorded for the recapture of
its bad debt reserves.

Distributions.   Under  the  1996   Act,   if  the  Bank   makes   "non-dividend
distributions"  to the Company,  such  distributions  will be considered to have
been made from the 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 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  Bank's  income.   Non-dividend
distributions  include  distributions  in  excess  of  the  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 Bank's  current or accumulated  earnings
and profits will not be so included in the Bank's income.



                                       30

<PAGE>

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 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 Bank does not intend to pay dividends that would result in a recapture
of any portion of its bad debt reserves.

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 Bank, whether or not
an  Alternative  Minimum  Tax  ("AMT")  is paid.  The 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  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 Bank will not file a  consolidated  tax return,
except  that if the  Company  and the 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 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  Bank is not
currently under audit with respect to its Florida franchise tax returns.


                                       31

<PAGE>


ITEM 2.   PROPERTIES

The Bank  conducts its business  through its main office and 14 branch  offices.
The following table sets forth certain  information  regarding the Bank's office
properties:

                                                         Net Book Value of Land
                                        Date                 and Buildings at
Location                               Acquired              December 31, 2002
--------                               --------              -----------------
                                                               (In thousands)
Main Office
800 North Boulevard, West
Leesburg, Florida  34748-5053             1961                        $ 2,221

Wildwood
837 South Main Street
Wildwood, Florida  34785-5302             1967                            243

Main Street
1409 West Main Street
Leesburg, Florida  34748-4854             1972                            336

Clermont
481 East Highway 50
Clermont, Florida  34711-4032             1982                            623

Eustis
2901 South Bay Street
Eustis, Florida  32726-6551               1979                            490

Fruitland Park
410 Palm Street
Fruitland Park, Florida  34731-4013       1983                            450

Lady Lake
431 US Highway 441/27
Lady Lake, Florida  32159-3046            1995                          1,127

Lake Square (1)
32612 Vista Avenue
Leesburg, Florida  34788-3952             2002                          1,280

South Leesburg
US Highway 27
Leesburg, Florida  34748                  1996                          1,248

Inverness
2709 East Gulf to Lake Highway
Inverness, Florida 34453-3245             1998                            798

Citrus Ridge
16550 Woodcrest Way
Clermont, Florida 34711-7004              1998                            978

                                                                     (continued)

                                       32
<PAGE>



                                                         Net Book Value of Land
                                        Date                 and Buildings at
Location                               Acquired              December 31, 2002
--------                               --------              -----------------
                                                               (In thousands)
Bushnell (2)
1128 North Main Street
Bushnell, Florida 33513                   1998                       $    227

Administration
715 West Oak Terrace Drive
Leesburg, Florida  34748                  1961                          1,811

Sumter County (3)                         1999                            418

Boulevard (4)
900 North Boulevard West
Leesburg, Florida  34748                  2000                            305

Accounting and Human Resource Offices
800 North Lee Street
Leesburg, Florida  34748                  2001                            220

Kings Ridge (5)
4299 South Highway 27
Clermont, Florida  34711                  2001                          1,539

Spruce Creek (1)
17801 SE 109th Avenue
Summerfield, Florida  34491               2002                          2,027

Old Lake Square (6)
10105 U.S. Highway 441
Leesburg, Florida  34788                  1995                            384

Office Park  (7)                          2002                            304



(1)  Branch office acquired in 2002.
(2)  Leased branch office opened May, 1999.
(3)  Two parcels of land  purchased  by Lake  County  Service  Corp.  for future
     branch office locations.
(4)  Storage facility owned by the Bank.
(5)  Construction completed and branch opened in 2002.
(6)  Unused branch office.
(7)  Building  purchased  in 2002 to be  remodeled  for future  expansion of the
     accounting and operations departments.

The Bank owns and operates personal  computers,  teller terminals and associated
equipment.  At  December  31,  2002,  such  equipment  had a net  book  value of
$1,524,000.  The Bank also had $816,000 in  construction  in process at December
31, 2002.



                                       33
<PAGE>




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, 2002,  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  2002  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 8 and 9 of the Registrant's 2002 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
2002 Annual Report to  Stockholders  on pages 10 through 20 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 & Smith PA appear in the
Registrant's  2002 Annual Report to  Stockholders on pages 21 through 53 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.

                                    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, 2003 at pages 6 through 9.


                                       34
<PAGE>


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, 2003 at pages 12 through 13.

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, 2003 at
pages 5 through 8.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information  relating to certain  relationships and related  transactions is
incorporated  herein by reference to pages 14 and 15 of the  Registrant's  Proxy
Statement for the Annual Meeting of Stockholders to be held on May 8, 2003.

ITEM 14. CONTROLS AND PROCEDURES

     a.   Evaluation  of  disclosure   controls  and  procedures.   The  Company
          -------------------------------------------------------
          maintains controls and procedures  designed to ensure that information
          required  to be  disclosed  in the reports  that the Company  files or
          submits  under  the  Securities  Exchange  Act of  1934  is  recorded,
          processed,  summarized and reported within the time periods  specified
          in the rules  and forms of the  Securities  and  Exchange  Commission.
          Based upon their evaluation of those controls and procedures performed
          within 90 days of the filing date of this report,  the chief executive
          and  chief  financial  officers  of the  Company  concluded  that  the
          Company's disclosure controls and procedures were adequate.

     b.   Changes in internal controls.  The Company made no significant changes
          -----------------------------
          in its internal controls or in other factors that could  significantly
          affect these  controls  subsequent  to the date of the  evaluation  of
          those controls by the Chief Executive and Chief Financial officers.



                                       35
<PAGE>


                                     PART IV

ITEM 15. 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 2002 Annual Report to
     Stockholders.
<TABLE>
<CAPTION>

                                                                                   Page
                                                                                   ----

<S>                                                                                  <C>
     Independent Auditors' Report                                                    54

     Consolidated Balance Sheets as of December 31, 2002 and 2001                    21

     Consolidated Statements of Income for the Years Ended
          December 31, 2002, 2001 and 2000                                           22

     Consolidated Statements of Changes in Stockholders' Equity for the
          Years Ended December 31, 2002, 2001 and 2000                            23-25

     Consolidated Statements of Cash Flows for the Years
          Ended December 31, 2002, 2001 and 2000                                  26-27

     Notes to Consolidated Financial Statements for the Years
          Ended December 31, 2002, 2001 and 2000                                  28-53
</TABLE>

     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.
               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)
               99.1 CEO   Certification    required   under   Section   906   of
                    Sarbanes-Oxley Act of 2002
               99.2 CFO   Certification    required   under   Section   906   of
                    Sarbanes-Oxley Act of 2002

     *    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 held on May 12, 1994.
     ***  Incorporated herein by reference into this document from the September
          30, 1999 Form 10-Q, filed November 3, 1999.

          (b)  Reports  on Form 8-K.  No  reports  on Form 8-K were filed by the
               Company during the fourth quarter.





                                       36
<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: March 13, 2003


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/ Claron D. Wagner          Chairman of the Board                    March 13, 2003
--------------------
Claron D. Wagner

/s/ James P. Logan            Vice Chairman of the Board               March 13, 2003
------------------
James P. Logan

/s/ Joseph J. Junod           Director                                 March 13, 2003
-------------------
Joseph J. Junod

/s/ Ted R. Ostrander, Jr.     Director                                 March 13, 2003
-------------------------
Ted R. Ostrander

/s/ H.D. Robuck, Jr.          Director                                 March 13, 2003
--------------------
H.D. Robuck, Jr.

/s/ Howard H. Hewitt          Director                                 March 13, 2003
--------------------
Howard H. Hewitt

/s/ Stephen T. Kurtz          Chief Executive Officer,
--------------------               President and Director              March 13, 2003
Stephen T. Kurtz

/s/ Paul K. Mueller           Executive Vice President, Chief
-------------------              Operating Officer and Treasurer
Paul K. Mueller                  and Director                          March 13, 2003
</TABLE>



                                       37
<PAGE>



                                 CERTIFICATIONS
                                 --------------



I, Stephen T. Kurtz, certify, that:

1.   I have reviewed this annual report on Form 10-K of FFLC Bancorp, Inc.;

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



                                       38
<PAGE>

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

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

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

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

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

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

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

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

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


Date: March 13, 2003                 By:  /s/ Stephen T. Kurtz
     ---------------------------          --------------------------------------
                                          Stephen T. Kurtz, President and Chief
                                                          Executive Officer


     I,   Paul K. Mueller, certify, that:

     1.   I have reviewed this annual report on Form 10-K of FFLC Bancorp, Inc.;


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

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

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

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

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

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

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

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

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

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



Date: March 13, 2003              By:  /s/ Paul K. Mueller
     -----------------------           -----------------------------------------
                                       Paul K. Mueller, Executive Vice President
                                       and Treasurer

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