FFLC BANCORP, INC.
                               2000 ANNUAL REPORT


                                   OUR MISSION


Our mission is to operate First Federal  Savings Bank as a community  bank, in a
manner consistent with the high expectations of our shareholders,  customers and
employees.  We will achieve  attractive  financial results for our stockholders,
provide  quality  financial  services and products to our  customers,  and offer
rewarding  careers to our employees,  while maintaining a high level of personal
service and integrity. The Company's primary goals are to:

     o   provide  an  attractive  return to its  shareholders,  as  measured  by
         long-term capital  appreciation and the continued payment of reasonable
         dividends,

     o   provide a competitive,  progressive  and profitable  array of financial
         services  and  products,  in a manner  focused  on  excellent  customer
         service,

     o   attract and retain highly-motivated,  top-quality employees, and

     o   make a positive impact on the communities that we serve.


                           FORWARD-LOOKING STATEMENTS

The  Private  Securities  Litigation  Reform  Act of  1995  evidences  Congress'
determination  that the disclosure of  forward-looking  information is desirable
for  investors  and  encourages  such  disclosure by providing a safe harbor for
forward-looking   statements  by  corporate  management.   This  Annual  Report,
including  the  Letter  to  Stockholders  and the  Management's  Discussion  and
Analysis  of   Financial   Condition   and  Results  of   Operations,   contains
forward-looking statements that involve risk and uncertainty. In order to comply
with the terms of the safe harbor,  the Company  notes that a variety of factors
could cause the Company's  actual  results and  experience to differ  materially
from the anticipated  results or other  expectations  expressed in the Company's
forward-looking  statements.  The risks and  uncertainties  that may  affect the
operations,  performance,  development,  growth  projections  and results of the
Company's  business include,  but are not limited to, the growth of the economy,
interest  rate  movements,  timely  development  by the  Company  of  technology
enhancements for its products and operating  systems,  the impact of competitive
products,  services and pricing,  customer business requirements,  Congressional
legislation  and similar  matters.  Readers of this report are  cautioned not to
place  undue  reliance  on  forward-looking  statements  which  are  subject  to
influence  by the named risk factors and  unanticipated  future  events.  Actual
results, accordingly, may differ materially from management expectations.

                                    CONTENTS

                                                                        Page
                                                                        ----

Corporate Profile, Corporate Organization and General Information ........1
Office Locations and Common Stock Prices and Dividends ...................2
Consolidated Financial Highlights ........................................3
Letter to Stockholders .................................................4-5
First Federal Website and Online Banking................................6-7
Selected Consolidated Financial Data and Financial Ratios...............8-9
Management's Discussion and Analysis of Financial
      Condition and Results of Operations ............................10-20
Consolidated Financial Statements ....................................21-51
Independent Auditors' Report.............................................52
Directors and Officers of FFLC Bancorp, Inc..............................53
Directors and Officers of First Federal Savings Bank of Lake County......54
Employees ...............................................................55


                                  Inside Cover


<PAGE>

CORPORATE PROFILE

FFLC  Bancorp,  Inc.  ("FFLC" or the  "Holding  Company")  was  incorporated  in
Delaware on September 16, 1993, and acquired First Federal  Savings Bank of Lake
County (the "Bank")  (together,  the  "Company") in  connection  with the Bank's
conversion  to stock form on January 4, 1994.  The Holding  Company is a savings
and  loan  holding  company  subject  to  regulation  by the  Office  of  Thrift
Supervision  ("OTS") which transacts its business  through its  subsidiary,  the
Bank.  The  Bank is a  community-oriented  savings  institution  which  offers a
variety of financial services to individuals and businesses primarily located in
Lake County, Sumter County and Citrus County,  Florida. The deposits of the Bank
are insured by the Federal Deposit  Insurance  Corporation  ("FDIC") through the
Savings Association Insurance Fund ("SAIF").

CORPORATE ORGANIZATION

Holding Company
      FFLC Bancorp, Inc.

Thrift Subsidiary
      First Federal Savings Bank of Lake County

Affiliate of Thrift Subsidiary
      Lake County Service Corporation

GENERAL INFORMATION

Corporate Headquarters
      800 North Boulevard West, Post Office Box 490420, Leesburg, Florida
      34749-0420
      Telephone:             Local               (352) 787-3311
                             Toll Free           (877) 955-2265
Annual Meeting
      The  Annual  Meeting  of the  Stockholders  will be  held at the  Leesburg
      Community  Building  located at 109 East Dixie  Avenue in Leesburg at 2:00
      p.m. on May 10, 2001.

Form 10-K
      A copy of the  Form  10-K,  as  filed  with the  Securities  and  Exchange
      Commission,  may be obtained by  stockholders  without charge upon written
      request to Sandra L. Rutschow,  Vice President - Secretary,  FFLC Bancorp,
      Inc., Post Office Box 490420, Leesburg,  Florida 34749-0420. The Company's
      SEC filings are also available at our web site, http://www.1stfederal.com.

Stockholder Assistance
      Stockholders  requiring a change of address,  records or information about
lost certificates, dividend checks or dividend reinvestment should contact:

           Registrar and Transfer Company
           10 Commerce Drive
           Cranford, New Jersey 07016
           800-368-5948
           Website:  rtco.com

Corporate Counsel
      George W. Murphy, Jr.
      Muldoon, Murphy & Faucette LLP
      5101 Wisconsin Avenue
      Washington, D.C. 20016

Independent Auditors
      Hacker, Johnson & Smith PA
      Certified Public Accountants
      930 Woodcock Road, Suite 211
      Orlando, Florida 32803


<PAGE>



                             [FIRST FEDERAL LOGO HERE]


[OFFICE LOCATIONS]


[GRAPHIC - MAP INSERT MAP - HALF PAGE]

















COMMON STOCK PRICES AND DIVIDENDS

FFLC's  common stock is traded in the  over-the-counter  market and is quoted on
the National  Association of Securities  Dealers Automated  Quotation - National
Market System  ("NASDAQ - National  Market  System")  under the symbol FFLC. The
following table sets forth market price information, based on closing prices, as
reported by the NASDAQ -National Market System for the common stock high and low
closing  sales prices and the amount of  dividends  paid on the common stock for
the periods indicated.  See Note 20 of the Consolidated Financial Statements for
a summary of quarterly financial data.

                                                                        Cash
                                                                      Dividends
                                                                        Paid
                                                   High      Low      Per Share
       Quarter Ended:

       March 31, 1999..........................   18.500    15.500      .11
       June 30, 1999 ..........................   19.000    16.000      .11
       September 30, 1999......................   18.125    17.500      .11
       December 31, 1999.......................   17.875    13.250      .11
       March 31, 2000..........................   15.250    11.250      .12
       June 30, 2000 ..........................   13.250    11.375      .12
       September 30, 2000......................   14.250    12.625      .12
       December 31, 2000.......................   15.250    13.500      .12

As of January 29, 2001,  the Company had 1,656 holders of record of common stock
(includes shares held by brokers).

                                       2
<PAGE>



CONSOLIDATED FINANCIAL  HIGHLIGHTS
(Dollars in thousands, except per share amounts)

<TABLE>
<CAPTION>

AT YEAR END:                                                2000              1999             1998
                                                            ----              ----             ----
<S>                                                      <C>                 <C>              <C>
Total assets ......................................      $  711,493          590,432          463,820
Loans receivable, net .............................      $  615,484          500,901          389,059
Securities ........................................      $   42,717           36,909           40,392
Deposits ..........................................      $  518,885          429,274          351,030
Equity ............................................      $   59,283           55,637           53,223
Book value per share ..............................      $    16.78            15.52            14.56
Shares outstanding ................................       3,532,561        3,583,938        3,655,620
Equity-to-assets ratio ............................            8.33%            9.42%           11.47%
Nonperforming assets to total assets ..............             .39%             .47%             .17%

FOR THE YEAR:

Interest income ...................................      $   49,350           38,612           32,173
Net interest income after provision for loan losses      $   18,405           16,679           14,220
Net income (1) ....................................      $    5,309            4,850            4,397
Basic income per share (1) ........................      $     1.50             1.37             1.22
Diluted income per share (1) ......................      $     1.46             1.32             1.16
Loan originations funded ..........................      $  188,141          195,034          151,411
Return on average assets (1) ......................             .82%             .93%            1.05%
Return on average equity (1) ......................            9.24%            8.88%            8.37%
Average equity to average assets ratio ............            8.88%           10.45%           12.52%
Noninterest expense to average assets .............            1.76%            1.97%            2.01%
</TABLE>

YIELDS AND RATES:

<TABLE>
<CAPTION>
                                                                  Weighted Average
                                                                   Rate or Yield        Average Rate or Yield During
                                                                  at December 31,         Year Ended December 31,
                                                                  ---------------        -------------------------
                                                                   2000      1999         2000      1999     1998
                                                                   ----      ----         ----      ----     ----
<S>                                                                <C>       <C>          <C>       <C>      <C>
Loans    ....................................................      8.17%     7.88%        8.12%     7.99%    8.27%
Securities...................................................      6.50%     6.22%        6.47%     5.83%    6.32%
All interest-earning assets .................................      8.02%     7.66%        7.98%     7.73%    7.96%
Deposits ....................................................      5.29%     4.53%        5.07%     4.56%    4.78%
All interest-bearing liabilities ............................      5.51%     4.84%        5.28%     4.70%    4.88%
Interest-rate spread (2).....................................      2.51%     2.82%        2.70%     3.03%    3.08%
Net yield on average interest-earning assets (3).............        N/A       N/A        3.12%     3.48%    3.69%
</TABLE>


(1)   Excludes gain in 1999 on sale of real estate held for  development of $886
      ($553 net of tax).
(2)   Average yield on all interest-earning assets less average rate paid on all
      interest-bearing liabilities.
(3)   Net interest income divided by average interest-earning assets.



<PAGE>



                                [GRAPHIC - LOGO]





Dear Stockholders:

I am pleased to report that the year 2000 was a solid year for your Company.  We
again enjoyed a successful  year, both in terms of the growth of the Bank and in
operating earnings. During 2000, we continued the tradition of record net income
from  operations and increased  quarterly cash dividends on our common stock. We
also  introduced our Internet  banking  solution,  First Federal Online Banking.
First Federal Savings Bank, the Company's subsidiary, set a new record for total
assets, ending the year with total assets in excess of $711 million. Our success
is truly a team effort,  and I want to take this opportunity to thank all of you
- our stockholders, our customers, our communities, and our employees - for your
efforts and support as we moved through 2000 and into the year 2001.

During 2000,  the  Company's  net income from  operations  increased 9%, to $5.3
million from $4.8 million in 1999. As we previously reported to you, during 1999
the Company recorded a non-recurring  $553,000 after-tax gain ($886,000 pre-tax)
on the sale of  commercial  land owned by Lake  County  Service  Corporation,  a
subsidiary of the Bank.  With that  non-recurring  gain added to net income from
operations for 1999,  the Company's  total net income for 1999 was $5.4 million.
On a per share basis,  basic income  increased 9% to $1.50 for 2000  compared to
$1.37 (or $1.52 with the  non-recurring  gain) per share for 1999.  On a diluted
basis,  net income per share increased 11% to $1.46 for 2000,  compared to $1.32
(or $1.47 with the non-recurring gain) for 1999.

In January 2001, our Board of Directors approved an 8% increase in the quarterly
cash dividend,  to $.13 per common share from the $.12 per common share paid for
the prior four quarters. That increase continues previous annual increases since
1994,  when the quarterly cash dividend was $.036 per common share (adjusted for
the five-for-three stock split in November 1997).

In July of 2000,  we introduced  our Internet  banking  solution,  First Federal
Online  Banking.  I am very pleased to report that First Federal  Online Banking
has received a warm reception from both our retail and commercial customers, and
enrollments have exceeded our expectations. If you haven't had a chance to check
out  First  Federal  Online  Banking,  I  encourage  you to visit  our  website,
1stfederal.com,  and  click  the  "Test  Drive"  button;  I  believe  you'll  be
pleasantly  surprised  at how  easily  and  completely  you  can  check  account
balances,  transfer funds, pay bills,  and access cash management  services (for
commercial  customers) on a 24-hour-a-day,  7-days-a-week basis. While you're at
our website,  I'd also  encourage you to note all the other useful  information,
including our loan and deposit products and pricing, links to our press releases
and financial reports,  local weather, and links to some other  "local-interest"
websites.

Asset  growth  continues to be an  important  focal point for the  Company.  The
Company's  total  assets grew 20%,  from $590.4  million at December 31, 1999 to
$711.5  million at December  31, 2000.  Although  the pace of loan  originations
declined  slightly during 2000 compared to 1999, the total loans receivable grew
21%,  from  $519.0  million to $630.4  million.  During  2000,  the Bank's  loan
originations  totaled  $220.1  million,  compared  to  $238.2  million  in 1999.
Originations  of residential  loans were $106.4 million,  commercial  loans were
$47.9  million,  and consumer  loans were $65.8  million for 2000.  Those volume
levels  compare  to  $133.3   million,   $59.2   million,   and  $45.7  million,
respectively, for 1999.

                                       4
<PAGE>



The  Company's  growth was  funded by an $89.6  million  increase  in the Bank's
deposits,  a $24 million  increase in Federal  Home Loan Bank  advances,  and $7
million of cash provided from operations.  During 2000, the Bank's deposits grew
from $429.3 million to $518.9 million, an increase of 21%. Of the total increase
in deposits,  checking and other transaction accounts grew $9.5 million (or 9%),
while certificates of deposit grew $80.1 million (or 25%). During 2000, advances
from the Federal Home Loan Bank grew 24%, from $99 million to $123 million.  For
2000, cash provided from  operations was $7.4 million,  compared to $5.5 million
for 1999.

As we look forward to 2001, we are excited about finishing the remodeling of our
Main Office. We appreciate our customers' patience enduring  "construction dust"
and the use of a temporary banking facility, while we improved and renovated our
Main Office facilities. We hope you will stop by to see the improvements and let
us thank you personally at our Grand Re-Opening, which we expect to occur during
the second quarter of 2001.

I am also pleased to report that the FFLC Bancorp,  Inc.  Dividend  Reinvestment
Plan (the "Plan") established in January 2000, has been a success, with over 200
shareholders participating.  The Plan allows registered stockholders of at least
50 shares of common stock to reinvest  regular  dividends on all or a portion of
their common stock into additional shares. The Plan also allows  participants to
make optional cash purchases of common stock.  The  administrative  costs of the
Plan,  including  brokerage  commissions  for  reinvestment  and  optional  cash
purchases,  are paid by the Company. A booklet describing the Plan in detail was
mailed to  stockholders  in January of 2000. If you would like more  information
about the Plan, please contact us.

In spite of the success we enjoyed this year,  the  performance of the Company's
stock during the first part of 2000 was negatively  impacted by six  consecutive
interest rate increases by the Federal  Reserve,  as well as the continued rally
in  technology  stocks in the early months of 2000.  Like most bank stocks,  our
stock  suffered  during the first part of the year,  then began a recovery  that
continued  through the rest of 2000. Our stock price was $15.25 at the beginning
of 2000,  declined  to a low of  $11.25 in March  2000,  and then  increased  to
$14.8125 at December 31, 2000.  While we wish the market would  consistently and
fully credit us with the success we are  experiencing,  we remain convinced that
our best strategy for creating  long-term value to our  stockholders is to focus
on profitability and excellence in customer service.

We truly appreciate the loyalty and support of our stockholders,  our customers,
and our  employees.  We remain  committed  to doing what we can to increase  the
long-term value of our Company.  That commitment  includes meeting our customers
needs,  the  investment  needs  of  our  stockholders,  and  the  needs  of  the
communities  in which we have the  privilege to serve.  We believe FFLC Bancorp,
Inc.  is well  positioned  to meet  those  needs,  and we  look  forward  to the
opportunities before us.

Cordially yours,


/S/ Stephen T. Kurtz
--------------------
Stephen T. Kurtz
President and Chief Executive Officer



                                       5

<PAGE>



                             [GRAPHIC - First Federal Logo]




[GRAPHIC - Picture Insert of First Federal Website.]






















Visit First Federal's website at http://www.1stfederal.com.  This site serves as
a portal  for First  Federal  banking  services,  local  news,  and  information
regarding our  communities.  From this site,  customers can gain access to First
Federal Online Banking,  our fully  interactive  banking system that allows bill
payments, account inquiries, transfer of funds and more. In addition, commercial
customers  can access  cash  management  tools,  make tax  payments  and perform
payroll  processing  through First Federal  Online  Banking.  Also  available at
1stfederal.com is current  information about the Bank's locations,  products and
services. Also, investors can get the latest information regarding FFLC Bancorp,
including stock quotes, press releases, and financial data.

                                       6

<PAGE>



                              First Federal Online



[GRAPHIC - Picture Insert of Online Banking Page]


















First Federal  introduced  First Federal Online Banking in July 2000 through the
Bank's  website at  http://www.1stfederal.com.  First Federal  customers can now
access practically their entire First Federal  relationship through the website,
24 hours a day, 7 days a week.  From the First  Federal  website,  customers can
take a drive  of the  online  banking  product  and  may  enroll  online.  After
receiving  their user ID and password,  customers may log-on to check  balances,
pay their bills online, reconcile their account statements,  transfer funds from
one account to another, review account histories, reorder checks and more. First
Federal Online Banking is just one more added  convenience to banking with First
Federal.

                                       7
<PAGE>



SELECTED CONSOLIDATED FINANCIAL DATA
(Dollars in thousands, except per share amounts)

<TABLE>
<CAPTION>
                                                                                    At December 31,
                                                           ----------------------------------------------------------------
                                                             2000           1999         1998          1997         1996
                                                             ----           ----         ----          ----          ----

<S>                                                        <C>            <C>           <C>           <C>           <C>
Total assets ......................................        $711,493       590,432       463,820       400,237       346,442
Loans receivable, net .............................         615,484       500,901       389,059       315,353       227,948
Cash and cash equivalents..........................          30,481        34,339        22,928        15,684        10,157
Securities ........................................          42,717        36,909        40,392        58,598        98,568
Deposits ..........................................         518,885       429,274       351,030       315,390       282,664
Borrowed funds ....................................         129,376       102,914        56,789        30,000         8,198
Stockholders' equity ..............................          59,283        55,637        53,223        51,429        53,626

</TABLE>

<TABLE>
<CAPTION>

                                                                               For the Year Ended December 31,
                                                          -----------------------------------------------------------------
                                                             2000           1999          1998          1997          1996
                                                             ----           ----          ----          ----          ----
<S>                                                      <C>               <C>           <C>           <C>           <C>
Interest income ...................................      $   49,350        38,612        32,173        28,156        24,218
Interest expense ..................................          30,065        21,214        17,271        15,416        12,959
Net interest income ...............................          19,285        17,398        14,902        12,740        11,259
Provision for loan losses .........................             880           719           682           649           107
Net interest income after provision for loan losses          18,405        16,679        14,220        12,091        11,152
Noninterest income (1) ............................           1,682         1,446         1,264         1,219           809
Noninterest expense (1) ...........................          11,414        10,313         8,446         7,473         6,644
Income before provision for income taxes (1) ......           8,673         7,812         7,038         5,837         5,317
Provision for income taxes (1) ....................           3,364         2,962         2,641         2,083         1,478
Net income (1) ....................................           5,309         4,850         4,397         3,754         3,216
Basic income per share (1) (2) ....................            1.50          1.37          1.22          1.01           .79
Weighted average number of common
         shares outstanding for basic (2) .........       3,541,400     3,548,568     3,592,253     3,700,220     4,069,825
Diluted income per share (1) (2) ..................      $     1.46          1.32          1.16           .96           .75
Weighted average number of common shares
         outstanding for diluted (2) ..............       3,615,740     3,677,038     3,777,085     3,911,256     4,267,992

</TABLE>

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

(1)   Excludes gain on sale of real estate held for development in March 1999 of
      $886 ($553 net of tax) and SAIF recapitalization  assessment in September,
      1996 of $1,655 ($1,032 net of tax).

(2)   All per share  amounts  have been  restated to reflect the  five-for-three
      stock split in November, 1997.

                                       8

<PAGE>

SELECTED CONSOLIDATED FINANCIAL RATIOS
AND OTHER DATA:

<TABLE>
<CAPTION>
                                                                             At or For the Year Ended December 31,
                                                                             -------------------------------------
                                                                 2000           1999          1998         1997           1996
                                                                 ----           ----          ----         ----           ----
<S>                                                       <C>                  <C>           <C>           <C>           <C>
Return on average assets (6) ....................                .82%            .93%         1.05%         1.00%         0.96%
Return on average equity (6) ....................               9.24%           8.88%         8.37%         7.18%         5.80%
Dividend payout ratio ...........................              32.32%          28.95%        29.51%        28.51%        44.71%
Average equity to average assets ................               8.88%          10.45%        12.52%        13.93%        16.62%
Total equity to total assets ....................               8.33%           9.42%        11.47%        12.85%        15.48%
Interest rate spread during year(1) .............               2.70%           3.03%         3.08%         2.86%         2.73%
Net interest margin (2) .........................               3.12%           3.48%         3.69%         3.53%         3.50%
Nonperforming assets to total assets (3) ........                .39%           0.47%         0.17%         0.19%         0.30%
Nonperforming loans to total loans (4) ..........                .40%           0.46%         0.11%         0.07%         0.28%
Allowance for loan losses to non-performing loans             141.51%         119.01%       514.19%       695.87%       159.61%
Allowance for loan and REO
         losses to nonperforming assets .........             127.49%         101.77%       281.85%       224.83%       103.51%
Allowance for loan losses to gross loans ........                .56%           0.54%         0.57%         0.51%         0.45%
Operating expenses to average assets (6) ........               1.76%           1.97%         2.01%         1.99%         1.99%
Operating efficiency ratio (6) ..................              54.44%          54.73%        52.25%        53.54%        55.05%
Average interest-earning assets to
         average interest-bearing liabilities ...               1.09            1.11          1.14          1.16          1.18
Net interest income to noninterest expenses .....               1.69            1.69          1.76          1.70          1.36
Total shares outstanding (5) ....................          3,532,561       3,583,938     3,655,620     3,743,988     4,062,895
Book value per common share outstanding (5) .....         $    16.78           15.52         14.56         13.74         13.20
Number of banking offices (all full-service) ....                 12              12             9             9             9
</TABLE>


-------------
(1)   Difference between weighted average yield on all  interest-earning  assets
      and weighted average rate on all interest-bearing liabilities.
(2)   Based upon net interest income before provision for loan losses divided by
      average interest-earning assets.
(3)   Nonperforming  assets consist of  nonperforming  loans and foreclosed real
      estate.
(4)   Nonperforming loans consist of loans 90 days or more delinquent.
(5)   All per share  amounts  have been  restated to reflect the  five-for-three
      stock split in November, 1997.
(6)   Excludes gain on sale of real estate held for development in March 1999 of
      $886,000  ($553,000  net of tax) and SAIF  recapitalization  assessment in
      September, 1996 of $1,655,000 ($1,032,000 net of tax).


                                       9
<PAGE>


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

GENERAL

First Federal Savings Bank of Lake County, the subsidiary of FFLC, was organized
in 1934 as a federally chartered savings and loan association and converted to a
federally  chartered stock savings bank on January 4, 1994. The Bank's principal
business  continues to be attracting retail deposits from the general public and
investing  those  deposits,  together  with  principal  repayments  on loans and
investments  and funds  generated from  operations,  primarily in mortgage loans
secured by one-to-four-family,  owner-occupied homes, commercial loans, consumer
securities  and, to a lesser  extent,  construction  loans and other loans,  and
multi-family residential mortgage loans. In addition, the Bank holds investments
permitted by federal laws and  regulations  including  securities  issued by the
U.S.   Government  and  agencies  thereof.   The  Bank's  revenues  are  derived
principally from interest on its loan and mortgage-backed  securities portfolios
and interest and dividends on its investment securities.

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 and
Citrus  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  Company's net income from  operations  increased 9% to $5.3 million for the
year ended  December 31, 2000 from $4.8 million for the 1999 period.  The Bank's
total assets  increased 20.5% to $711.5 million at December 31, 2000 from $590.4
million at December 31, 1999.  That  increase  resulted  primarily  from a 22.9%
increase in net loans  receivable  to $615.5  million at December  31, 2000 from
$500.9  million at December 31, 1999,  reflecting  increased  local loan demand.
Cash and cash equivalents  decreased 11.2% to $30.5 million at December 31, 2000
from $34.3  million at December 31,  1999.  Securities  increased  15.7% or $5.8
million during 2000.  Deposits increased 20.9% to $518.9 million at December 31,
2000 from $429.3  million at December 31, 1999.  Advances  from the Federal Home
Loan Bank  increased $24 million,  to $123 million at December 31, 2000 from $99
million at December 31, 1999.

                                       10

<PAGE>


REGULATION AND LEGISLATION

General

The operating  results of the Bank are affected by Federal laws and  regulations
and the Bank is subject to extensive regulation,  examination and supervision by
the Office of Thrift  Supervision  ("OTS"),  as its chartering  agency,  and the
Federal Deposit Insurance Corporation ("FDIC"), as the deposit insurer. The Bank
is a member of the  Federal  Home  Loan Bank  ("FHLB")  System  and its  deposit
accounts  are  insured  up to  applicable  limits  by the  FDIC  under  the SAIF
("Savings  Association Insurance Fund"). 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 financial  institutions.  The OTS and
the FDIC  conduct  periodic  examinations  to test the  Bank's  compliance  with
various regulatory requirements.  The activities of the Company and the Bank are
governed by the Home Owner's Loan Act, as amended (the "HOLA"),  and, in certain
respects,  the Federal  Deposit  Insurance  Act (the  "FDIA").  A more  complete
description of the HOLA and FDIA is included in the Form 10-K.

Capital Requirements

The OTS capital regulations  require savings  institutions to meet three capital
standards: a 1.5% tangible capital standard; a 3% leverage (core capital) ratio;
and an 8% risk-based  capital  standard.  Under the OTS final rule  implementing
FDICIA,  generally, a well-capitalized  institution is defined as one that meets
the following capital standards:  a 5% tangible capital standard;  a 6% leverage
(core capital) ratio; and a 10% risk-based  capital  standard,  and has not been
notified by its Federal banking agency that it is in a "troubled  condition." At
December 31,  2000,  the Bank met each of its capital  requirements  and met the
criteria of a "well-capitalized" institution as defined above.

Insurance of Deposit Accounts

The FDIC has adopted a risk-based deposit insurance system that assesses deposit
insurance  premiums  according to the level of risk involved in an institution's
activities. An institution's risk category is based upon whether the institution
is  classified as "well  capitalized,"  "adequately  capitalized"  or "less than
adequately  capitalized" and one of three supervisory  subcategories within each
capital group.  The supervisory  subgroup to which an institution is assigned is
based on a supervisory  evaluation and information  which the FDIC determines to
be relevant to the institution's  financial  condition and the risk posed to the
deposit  insurance fund.  Effective January 1, 1997, the FDIC lowered the annual
assessment  rates  for  SAIF  members  to 0 to 27  basis  points.  The  FDIC has
authority to raise  premiums if deemed  necessary.  If such action is taken,  it
could have an adverse effect on the earnings of the institution.

Under the FDIA,  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.

CREDIT RISK

The Bank's primary business is lending on residential  real estate,  an activity
with the inherent  risk of  generating  potential  loan losses the  magnitude of
which depend on a variety of factors  affecting  borrowers  which are beyond the
control of the Bank.  The Bank has  underwriting  guidelines  and credit  review
procedures designed to minimize such credit losses.

                                       11

<PAGE>



RESULTS OF OPERATIONS

The  Company's  results of operations  are  dependent  primarily on net interest
income,   which  is  the   difference   between   the   income   earned  on  its
interest-earning  assets,  primarily its loans,  mortgage-backed  securities and
investment  securities,  and its  interest-bearing  liabilities,  consisting  of
deposits  and  borrowings.  The  operating  expenses of the Company  principally
consist of employee compensation,  occupancy expenses, federal deposit insurance
premiums and other general and administrative expenses. The Company's results of
operations are also  significantly  affected by general economic and competitive
conditions,  particularly changes in market interest rates,  government policies
and actions of regulatory authorities.

Net interest income represents the difference between income on interest-earning
assets and expense on interest-bearing  liabilities. Net interest income depends
upon the volume of interest-earning assets and interest-bearing  liabilities and
the interest rates earned or paid on them.


                                       12

<PAGE>

The following table sets forth, for the periods indicated, information regarding
(i) the total dollar amount of interest and dividend  income of the Company from
interest-earning  assets and the resultant average yields; (ii) the total dollar
amount of interest  expense on  interest-bearing  liabilities  and the resultant
average costs; (iii) net  interest/dividend  income; (iv) interest-rate  spread;
(v) net interest margin;  and (vi) weighted average yields and rates at December
31,  2000.  Yields and costs were  derived by dividing  income or expense by the
average balance of assets or liabilities,  respectively,  for the periods shown.
The average balance of loans receivable  includes loans on which the Company has
discontinued  accruing  interest.  The yields and costs  include  fees which are
considered to constitute adjustments to yields.

<TABLE>
<CAPTION>
                                                                                     Year Ended December 31,
                                                                   -----------------------------------------------------------------
                                                                               2000                               1999
                                                                   -------------------------------  --------------------------------
                                                     Yield At                              Average                          Average
                                                    December 31,   Average                  Yield/    Average                Yield/
                                                       2000        Balance     Interest     Cost      Balance     nterest     Cost
                                                       ----        -------     --------     ----      -------     -------     ----
                                                                                    (Dollars in thousands)
<S>                                                    <C>        <C>            <C>        <C>       <C>          <C>        <C>
Interest-earning assets:
      Loans receivable.............................    8.17%      $ 562,392      45,656     8.12%     $ 442,213    35,315     7.99%
      Securities...................................    6.50          37,382       2,417     6.47         37,951     2,213     5.83
      Other interest-earning assets (1)............    6.55          19,026       1,277     6.71         19,404     1,084     5.59
                                                                    -------      ------                 -------    ------

               Total interest-earning assets.......    8.02         618,800      49,350     7.98        499,568    38,612     7.73
                                                                                 ------                            ------

Noninterest-earning assets.........................                  28,090                              23,062
                                                                    -------                            --------

               Total assets........................               $ 646,890                           $ 522,630
                                                                    =======                             =======

Interest-bearing liabilities:
      NOW and money market
           accounts................................    2.67          82,710       2,182     2.64         66,892     1,631     2.44
      Passbook and statement savings
           accounts................................    1.99          20,179         421     2.09         22,170       485     2.19
      Certificates.................................    6.19         356,219      20,672     5.80        285,898    14,967     5.24
      FHLB advances................................    6.18         104,647       6,497     6.21         74,515     4,038     5.42
      Other borrowings.............................    5.25           5,729         293     5.11          1,916        93     4.85
                                                                   --------     -------                --------  --------

               Total interest-bearing
                 liabilities.......................    5.51         569,484      30,065     5.28        451,391    21,214     4.70
                                                                                 ------                            ------

Noninterest-bearing deposits.......................                  13,221                              10,411
Noninterest-bearing liabilities....................                   6,756                               6,202
Stockholders' equity...............................                  57,429                              54,626
                                                                    -------                            --------

               Total liabilities and equity........               $ 646,890                           $ 522,630
                                                                    =======                             =======

Net interest-earning assets and
      interest-rate spread (2).....................    2.51%      $  49,316                 2.70%     $  48,177               3.03%
                                                       ====         =======                 ====        =======               ====

Net interest income and net
      margin (3)...................................                            $ 19,285     3.12%                $ 17,398     3.48%
                                                                                 ======     ====                   ======     ====
Ratio of interest-earning assets
      to interest-bearing liabilities..............                    1.09                                1.11
                                                                       ====                                ====
</TABLE>


<TABLE>
<CAPTION>
                                                           Year Ended December 31,
                                                    --------------------------------------
                                                                   1998
                                                    --------------------------------------
                                                                                 Average
                                                     Average                      Yield/
                                                     Balance       Interest         Cost
                                                    -------       --------         ----
                                                            (Dollars in thousands)
<S>                                                 <C>              <C>           <C>
Interest-earning assets:
      Loans receivable............................. $ 343,967        28,450        8.27%
      Securities...................................    44,533         2,814        6.32
      Other interest-earning assets (1)............    15,606           909        5.82
                                                     --------       -------

               Total interest-earning assets.......   404,106        32,173        7.96
                                                                     ------

Noninterest-earning assets.........................    15,130
                                                     --------

               Total assets........................ $ 419,236
                                                      =======

Interest-bearing liabilities:
      NOW and money market
           accounts................................    49,862         1,088        2.18
      Passbook and statement savings
           accounts................................    23,683           517        2.18
      Certificates.................................   246,375        13,674        5.55
      FHLB advances................................    33,718         1,991        5.90
      Other borrowings.............................        14             1        7.14
                                                    ---------      --------

               Total interest-bearing
                 liabilities.......................   353,652        17,271        4.88
                                                                     ------

Noninterest-bearing deposits.......................     7,602
Noninterest-bearing liabilities....................     5,473
Stockholders' equity...............................    52,509
                                                      -------

               Total liabilities and equity........ $ 419,236
                                                      =======

Net interest-earning assets and
      interest-rate spread (2)..................... $  50,454                      3.08%
                                                      =======                      ====

Net interest income and net
      margin (3)...................................                $ 14,902        3.69%
                                                                     ======        ====
Ratio of interest-earning assets
      to interest-bearing liabilities..............      1.14
                                                         ====
</TABLE>


-------------
(1)   Includes interest-bearing deposits, federal funds sold and FHLB Stock.
(2)   Interest-rate  spread represents the difference  between the average yield
      on  interest-earning  assets  and the  average  cost of  interest  bearing
      liabilities.
(3)   Net   interest   margin  is  net  interest   income   divided  by  average
      interest-earning assets.


                                       13
<PAGE>


The following  table discloses the extent to which changes in interest rates and
changes  in  the  volume  of   interest-earning   assets  and   interest-bearing
liabilities  have affected the Company's  interest  income and interest  expense
during the periods  indicated.  Information  is provided in each  category  with
respect to (i)  changes  attributable  to changes in volume  (changes  in volume
multiplied by prior rate), (ii) changes attributable to changes in rate (changes
in rate multiplied by prior volume) and (iii) changes attributable to changes in
rate/volume (changes in rate multiplied by changes in volume).

<TABLE>
<CAPTION>
                                                 Year Ended December 31,                    Year Ended December 31,
                                                     2000 vs. 1999                               1999 vs. 1998
                                                  Increase (Decrease)                          Increase (Decrease)
                                         ---------------------------------------      ---------------------------------------
                                                        Due to                                         Due to
                                         ---------------------------------------      ---------------------------------------
                                                               Rate/                                          Rate/
                                         Rate       Volume     Volume       Net       Rate       Volume      Volume       Net
                                         ----       ------     ------       ---       ----       ------      ------       ---
                                                                         (Dollars in thousands)
<S>                                     <C>          <C>        <C>       <C>         <C>        <C>          <C>        <C>
Interest-earning assets:
      Loan receivable, net............  $   585      9,597      159       10,341      (981)      8,126        (280)      6,865
      Securities  ....................      241        (33)      (4)         204      (217)       (416)         32        (601)
      Other interest-earning (1)......      218        (21)      (4)         193       (37)        221          (9)        175
                                         ------     ------     ----      -------    ------      ------        ----      ------

                  Total...............    1,044      9,543      151       10,738     (1,235)     7,931        (257)      6,439
                                          -----      -----      ---       ------      -----      -----        ----       -----

Interest-bearing liabilities:
      NOW and money market accounts...      134        385       32          551        128        371          44         543
      Passbook and statement savings
            accounts..................      (22)       (44)       2          (64)         1        (33)          -         (32)
      Certificates....................    1,624      3,682      399        5,705       (776)     2,193        (124)      1,293
      FHLB advances...................      588      1,633      238        2,459       (164)     2,409        (198)      2,047
      Other borrowings................        5        185       10          200          -        136         (44)         92
                                        -------     ------     ----       ------    -------     ------        ----     -------

                  Total...............    2,329      5,841      681        8,851       (811)     5,076        (322)      3,943
                                          -----      -----      ---       ------      -----      -----        ----       -----

Net change in net interest
      income..........................  $(1,285)     3,702     (530)       1,887       (424)     2,855          65       2,496
                                          =====      =====      ===       ======      =====      =====        ====       =====
</TABLE>


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

(1)   Includes interest-bearing deposits, federal funds sold and FHLB Stock.


                                       14

<PAGE>


LIQUIDITY AND CAPITAL  RESOURCES

The Bank is required to maintain  minimum  levels of liquid assets as defined by
OTS regulations.  That  requirement,  which varies  periodically  depending upon
economic  conditions and deposit  flows,  is based upon a percentage of deposits
and  short-term  borrowings.   The  current  required  ratio  is  4%.  The  Bank
historically has maintained a level of liquid assets in excess of the regulatory
requirement.  Liquid assets  consist of cash,  cash  equivalents  and short- and
intermediate-term   U.S.  Government  and  government  agency  securities.   The
maintenance  of liquid assets allows for the  possibility  of  disintermediation
when interest rates fluctuate.  The Bank's liquidity ratios were 10.3% and 18.7%
at December 31, 2000 and December 31, 1999, respectively.

The Bank's  sources of funds include  proceeds from payments and  prepayments on
mortgage loans and mortgage-backed  securities,  proceeds from the maturities of
investment securities and deposits.  While maturities and scheduled amortization
of loans and investment  securities are  predictable  sources of funds,  deposit
inflows and mortgage  prepayments  are greatly  influenced by local  conditions,
general interest rates, and regulatory changes.

At December 31, 2000, the Bank had  outstanding  commitments to originate  $13.2
million of loans,  to fund unused lines of credit of $34.8 million,  to fund the
undisbursed  portion of loans in process of $12.1  million  and $1.5  million in
outstanding  standby  letters of  credit.  The Bank  believes  that it will have
sufficient  funds  available  to meet its  commitments.  At December  31,  2000,
certificates  of  deposit  which  were  scheduled  to mature in one year or less
totaled $316.3 million.  Management believes,  based on past experience,  that a
significant portion of these funds will remain with the Bank.

REGULATORY  CAPITAL  REQUIREMENTS

As a federally-chartered financial institution, the Bank is required to maintain
certain  minimum  amounts of  regulatory  capital.  Regulatory  capital is not a
valuation  allowance and has not been created by charges against  earnings.  The
following  table  provides a summary  of the  capital  requirements,  the Bank's
regulatory capital and the amounts in excess at December 31, 2000:

<TABLE>
<CAPTION>
                                             Tangible                    Core                   Risk-Based
                                      ---------------------     ----------------------     ---------------------
                                                    % of                       % of                   % of Risk-
                                                  Adjusted                   Adjusted                  Weighted
                                      Amount       Assets        Amount       Assets        Amount      Assets
                                      ------       ------        ------       ------        ------      ------
                                                               (Dollars in thousands)
<S>                                  <C>            <C>         <C>           <C>          <C>          <C>
         Regulatory capital.......   $ 55,470       7.80%       $ 55,470      7.80%        $ 58,702     13.17%
         Requirement..............     10,670       1.50          21,340      3.00           35,648      8.00
                                      -------       ----          ------      ----           ------     -----

         Excess   ................   $ 44,800       6.30%       $ 34,130      4.80%        $ 23,054      5.17%
                                     ========       ====          ======      ====           ======     =====
</TABLE>


MARKET RISK

Market  risk is the risk of loss from  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, while adjusting 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.

                                       15

<PAGE>


ASSET /LIABILITY MANAGEMENT

The Bank's primary  mission is to provide home  ownership by offering  permanent
and  construction  residential  mortgage  loans and  consumer  financing  and by
providing  conveniently located depository facilities with transaction,  savings
and   certificate   accounts.   The  Bank's   goal  is  to   continue  to  be  a
well-capitalized   and  profitable  operation  that  provides  service  that  is
professional, efficient and courteous. The Bank seeks to fulfill its mission and
accomplish  its goals by pursuing  the  following  strategies:  (i)  emphasizing
lending in the one-to-four-family  residential mortgage market; (ii) controlling
interest-rate  risk;  (iii)  managing  deposit  pricing and asset  growth;  (iv)
emphasizing  cost  control;  and (v)  maintaining  asset quality by investing in
mortgage-backed  securities which, in management's  judgment,  provide a balance
between  yield  and  safety  in  a  home  mortgage  related  investment.  It  is
management's   intention  to  continue  to  employ  these  strategies  over  the
foreseeable future.

The Bank's profitability, like that of most financial institutions, is dependent
to a large extent upon its net interest income,  which is the difference between
its interest income on interest-earning  assets, such as loans,  mortgage-backed
securities   and   investment   securities,   and  its   interest   expense   on
interest-bearing liabilities,  such as deposits and other borrowings.  Financial
institutions  continue to be  affected by general  changes in levels of interest
rates and other economic factors beyond their control. At December 31, 2000, the
Bank's one-year interest  sensitivity gap (the difference  between the amount of
interest-earning  assets anticipated by the Bank to mature or reprice within one
year and the amount of interest-bearing  liabilities  anticipated by the Bank to
mature  or  reprice  within  one year) as a  percentage  of total  assets  was a
positive 8.92%.  Generally,  an institution with a positive gap would experience
an increase in net  interest  income in a period of rising  interest  rates or a
decrease  in net  interest  income  in a period  of  declining  interest  rates.
However, certain shortcomings are inherent in the sensitivity analysis presented
above.  For example,  although  certain assets and  liabilities may have similar
maturities  or  periods to  repricing,  they may react in  different  manners to
changes in market interest rates.  Therefore, no assurance can be given that the
Bank will be able to maintain its net  interest-rate  spread as market  interest
rates fluctuate.

The Bank monitors its interest-rate risk through the  Asset/Liability  Committee
which meets monthly and reports the results of such monitoring  quarterly to the
Board of Directors.  The Bank's policy is to seek to maintain a balance  between
interest-earning  assets  and  interest-bearing  liabilities  so that the Bank's
cumulative  one-year  gap ratio is within a range which  management  believes is
conducive to maintaining  profitability  without  incurring undue risk. The Bank
has  increased  its  investment  in  adjustable-rate  and shorter  average life,
fixed-rate  mortgage-related  securities in order to position itself against the
consequences of rising interest rates.  The Bank also maintains liquid assets in
excess  of  the  regulatory   requirement,   allowing  for  the  possibility  of
disintermediation  when interest rates fluctuate.  The Bank's liquidity ratio of
10.3%  at  December  31,  2000  is  significantly  higher  than  the  regulatory
requirement  of 4%. In  addition,  the Bank's  large  stable core  deposit  base
resulting  from its  continuing  commitment  to  quality  customer  service  has
historically provided it with a steady source of funds.

                                       16

<PAGE>


The  following  table sets  forth the  amounts  of  interest-earning  assets and
interest-bearing  liabilities outstanding at December 31, 2000 that are expected
to reprice, based upon certain assumptions, in each of the future periods shown.

<TABLE>
<CAPTION>

                                                    More        More       More         More         More
                                                    than        than       than         than         than
                                                    Three       Six         One         Three        Five         More
                                       Three        Months     Months      Year         Years       Years         than
                                       Months       to Six     to 12        to 3         to 5       to 10         Ten
                                      or Less       Months     Months      Years        Years       Years        Years       Total
                                     --------      -------     ------     -------     --------     -------      ------      -------
<S>                                  <C>           <C>         <C>        <C>          <C>         <C>          <C>         <C>
Rate-sensitive assets:
    Mortgage loans, net of LIP ..    $113,624      65,846      79,077     165,083      45,879      24,558       13,824      507,891
    Commercial and consumer
      loans .....................      28,313      10,633      17,891      41,222      10,741       1,412          207      110,419
    Mortgage-backed
      securities ................       5,083       3,742       1,996       2,202         569         643          159       14,394
    Interest-earning deposits ...      14,445          --          --          --          --          --           --       14,445
    Investment securities .......       1,376          --       5,001      12,967          --          --           --       19,344
    Mutual funds ................       8,979          --          --          --          --          --           --        8,979
    FHLB stock ..................       6,150          --          --          --          --          --           --        6,150
                                     --------    --------    --------    --------    --------    --------     --------     --------

           Total interest-earning
               assets ...........     177,970      80,221     103,965     221,474      57,189      26,613       14,190      681,622
                                     --------    --------    --------    --------    --------    --------     --------     --------

Rate-sensitive liabilities:
    Deposits:
      Savings accounts ..........       1,328       1,236       2,221       6,283       3,533       3,465        1,077       19,143
      NOW and money
           market accounts ......       6,004       5,587      10,037      28,385      15,967      15,657        4,872       86,509
      Certificates ..............      60,121      46,211     139,584     146,564       7,418          --           --      399,898
    Borrowed funds ..............       6,376          --      20,000      89,000      14,000          --           --      129,376
                                     --------    --------    --------    --------    --------    --------     --------     --------

           Total interest-bearing
               liabilities ......      73,829      53,034     171,842     270,232      40,918      19,122        5,949      634,926
                                     --------    --------    --------    --------    --------    --------     --------     --------

Interest-sensitivity gap ........    $104,141      27,187     (67,877)    (48,758)     16,271       7,491        8,241       46,696
                                     ========    ========    ========    ========    ========    ========     ========     ========

Cumulative interest-
      sensitivity gap ...........    $104,141     131,329      63,452      14,693      30,964      38,455       46,696
                                    ========    ========    ========    ========     ========    ========     ========

Cumulative interest-earning
      assets ....................    $177,970     258,192     362,157     583,630     640,819     667,432      681,622
                                     ========    ========    ========    ========    ========    ========     ========

Cumulative interest-bearing
      liabilities ...............    $ 73,829     126,863     298,705     568,937     609,855     628,977      634,926
                                     ========    ========    ========    ========    ========    ========     ========

Cumulative interest-sensitivity
      gap as a percentage of
      total assets ..............       14.64%      18.46%       8.92%      2.07%        4.35%       5.40%        6.56%
                                     ========    ========    ========     ======     ========    ========     ========

Cumulative interest-earning
      assets as a percentage of
      cumulative interest-bearing
      liabilities ...............      241.06%     203.52%     121.24%    102.58%      105.08%     106.11%      107.35%
                                     ========    ========    ========   ========     ========    ========     ========
</TABLE>

                                       17

<PAGE>

               COMPARISON OF YEARS ENDED DECEMBER 31, 2000 TO DECEMBER 31, 1999


               General Operating Results. Net income for the year ended December
                    31, 2000 was $5.3 million,  or $1.50 and $1.46 per basic and
                    diluted share,  respectively,  compared to $5.4 million,  or
                    $1.52 and $1.47 per basic and diluted  share,  respectively,
                    for the  comparable  period in 1999. Net income for the 1999
                    period  included  a gain on sale of  real  estate  held  for
                    development of $886,000 ($553,000,  net of tax). Without the
                    1999 gain on sale,  net income for 2000  exceeded net income
                    for the 1999  period by  $460,000  or 9.5%.  An  increase in
                    interest  income  of  $10.7  million,  partially  offset  by
                    increases   in   interest   expense  of  $8.9   million  and
                    noninterest  expense  of  $1.1  million  contributed  to the
                    increase in net income during the current year.

               Interest  Income.  Interest  income  increased  $10.7  million or
                    27.8%,  from $38.6  million for the year ended  December 31,
                    1999 to $49.4 million for the comparable period in 2000. The
                    increase  was due to a $119.2  million or 23.9%  increase in
                    average  interest-earning  assets  outstanding  for the year
                    ended  December 31, 2000  compared to the 1999 period and an
                    increase in the  average  yield  earned on  interest-earning
                    assets  from 7.73% for the year ended  December  31, 1999 to
                    7.98% for the year ended December 31, 2000.

               Interest  Expense.  Interest  expense  increased  $8.9 million or
                    41.7%,  from $21.2  million for the year ended  December 31,
                    1999 to $30.1 million for the year ended  December 31, 2000.
                    The  increase  was due to an increase  of $118.1  million in
                    average      interest-bearing      liabilities.      Average
                    interest-bearing  liabilities  increased from $451.4 million
                    outstanding  during  the year  ended  December  31,  1999 to
                    $569.5 million  outstanding during the comparable period for
                    2000. The average yield paid on interest-bearing liabilities
                    increased from 4.70% for the year ended December 31, 1999 to
                    5.28% for the comparable 2000 period.

               Noninterest  Income.   Noninterest  income  for  the  year  ended
                    December 31, 1999 exceeded  noninterest  income for the year
                    ended  December  31,  2000  primarily  as a  result  of  the
                    previously discussed pretax gain on sale of real estate held
                    for development  recognized during 1999, partially offset by
                    an increase of $201,000 in deposit  account  fees during the
                    2000 period.

               Noninterest  Expense.   Noninterest  expense  increased  by  $1.1
                    million  or 10.7%,  from  $10.3  million  for the year ended
                    December  31,  1999 to  $11.4  million  for the  year  ended
                    December  31,  2000.  The  increase  was  primarily  due  to
                    increases  in salaries  and  employee  benefits of $506,000,
                    occupancy expense of $370,000 and data processing expense of
                    $288,000,  all of which related to the overall growth of the
                    Company.

               Provision for Income  Taxes.  The provision for federal and state
                    income taxes  decreased from $3.3 million for the year ended
                    December 31, 1999 (an  effective  tax rate of 37.9%) to $3.4
                    million   (an   effective   tax  rate  of  38.8%)   for  the
                    corresponding period for 2000.

                                       18

<PAGE>


               COMPARISON OF YEARS ENDED DECEMBER 31, 1999 TO DECEMBER 31, 1998

               General Operating Results. Net income for the year ended December
                    31,  1999,  was $5.4  million or $1.52 per basic  income per
                    share,  compared  to net income for the year ended  December
                    31,  1998 of $4.4  million  or $1.22  per basic  income  per
                    share.  The increase in net income was  primarily the result
                    of an increase of $2.5 million in net interest income before
                    provision for loan losses for 1999,  partially  offset by an
                    increase of $1.9 million in noninterest expenses in 1999.

               Interest Income.  Interest  income  increased  $6.4  million,  or
                    20.0%,  from $32.2  million for the year ended  December 31,
                    1998 to $38.6 million for the year ended  December 31, 1999.
                    The increase  was due to an increase in the average  balance
                    of total  interest-earning  assets,  primarily  loans,  from
                    $404.1  million  for the year  ended  December  31,  1998 to
                    $499.6  million for the year ended  December  31,  1999,  an
                    increase of $95.5 million,  or 23.6%,  partially offset by a
                    decrease in the  average  yield on  interest-earning  assets
                    from 7.96% for the year ended December 31, 1998 to 7.73% for
                    the year ended December 31, 1999. The average yield on loans
                    decreased from 8.27% for the year ended December 31, 1998 to
                    7.99% for the year ended  December  31,  1999.  The  average
                    yield on securities  decreased from 6.32% for the year ended
                    December  31, 1998 to 5.83% for the year ended  December 31,
                    1999.  The average yield on other  interest  earning  assets
                    decreased from 5.82% for the year ended December 31, 1998 to
                    5.59% for the year ended December 31, 1999.

               Interest Expense.  Interest  expense  increased $3.9 million from
                    $17.3  million  at  December  31,  1998 to $21.2  million at
                    December 31, 1999.  The increase was due to a $97.7  million
                    or  27.6%   increase  in  the   average   balance  of  total
                    interest-bearing  liabilities  from  $353.7  million for the
                    year ended  December 31, 1998 to $451.4 million for the year
                    ended  December 31, 1999 offset in part by a decrease in the
                    weighted-average  rate paid on interest-bearing  liabilities
                    from 4.88% during 1998 to 4.70% in 1999.

               Provision for Loan Losses.  The Bank's  provision for loan losses
                    increased from $682,000 for the year ended December 31, 1998
                    to  $719,000  for the year  ended  December  31,  1999.  The
                    increase of $37,000 reflects the Bank's continuing policy of
                    evaluating the adequacy of its allowance for loan losses and
                    prevailing standards within the thrift industry.  Generally,
                    such  evaluation  includes  consideration  of the  level  of
                    nonperforming  loans and the level  and  composition  of the
                    Bank's loan portfolio.

               Noninterest  Income.   Noninterest  income  increased  from  $1.3
                    million for the year ended December 31, 1998 to $2.3 million
                    for the year ended  December  31,  1999.  The  increase  was
                    primarily due to a $886,000 gain recognized in 1999 from the
                    sale of real  estate  held for  development  and a  $117,000
                    increase in other service charges and fees.

               Noninterest Expense.  Noninterest  expense consists  primarily of
                    salaries  and  employee  benefits  and  occupancy   expense.
                    Noninterest  expense  increased  $1.9  million  for the year
                    ended  December 31, 1999 compared to 1998.  The increase was
                    primarily  due  to  a  $998,000  increase  in  salaries  and
                    employee  benefits  and a  $459,000  increase  in  occupancy
                    expense,  all of  which  resulted  from  the  growth  of the
                    Company.

               Provision for Income  Taxes.  The provision for federal and state
                    income taxes  increased from $2.6 million for the year ended
                    December  31,  1998  to $3.3  million  for  the  year  ended
                    December 31, 1999.  The  effective tax rate  increased  from
                    37.5% for the year ended  December 31, 1998 to 37.9% for the
                    year ended December 31, 1999.

                                       19
<PAGE>



IMPACT OF INFLATION AND CHANGING PRICES

The Consolidated  Financial  Statements and Notes thereto  presented herein have
been  prepared in  accordance  with GAAP,  which  requires  the  measurement  of
financial  position and operating results in terms of historical dollars without
considering the changes in the relative  purchasing power of money over time due
to inflation.  The impact of inflation is reflected in the increased cost of the
Bank's operations.  Unlike most industrial companies,  nearly all the assets and
liabilities of the Bank are monetary in nature. As a result, interest rates have
a greater impact on the Bank's performance than do the effects of general levels
of inflation. Interest rates do not necessarily move in the same direction or to
the same extent as the price of goods and services.




                                       20



                               FFLC BANCORP, INC.

                           Consolidated Balance Sheets
                   ($ in thousands, except per share amounts)

<TABLE>
<CAPTION>
                                                                                December 31,
                                                                            -------------------
                                                                            2000           1999
                                                                            ----           ----
                   Assets
<S>                                                                      <C>               <C>
Cash and due from banks ............................................     $  16,036         17,313
Interest-bearing deposits ..........................................        14,445         17,026
                                                                         ---------      ---------

                   Cash and cash equivalents .......................        30,481         34,339

Securities available for sale ......................................        42,717         36,909
Loans receivable, net of allowance for loan losses of $3,552 in 2000
       and $2,811 in 1999 ..........................................       615,484        500,901
Accrued interest receivable:
       Securities ..................................................           506            407
       Loans receivable ............................................         3,244          2,408
Premises and equipment, net ........................................        11,490          9,386
Foreclosed real estate .............................................           276            400
Federal Home Loan Bank stock, at cost ..............................         6,150          4,950
Deferred income taxes ..............................................           240             --
Other assets .......................................................           905            732
                                                                         ---------      ---------

                   Total ...........................................     $ 711,493        590,432
                                                                         =========      =========

                   Liabilities and Stockholders' Equity

Liabilities:
       Noninterest-bearing demand deposits .........................        13,335         11,100
       NOW and money market accounts ...............................        86,509         77,293
       Savings accounts ............................................        19,143         21,110
       Certificates ................................................       399,898        319,771
                                                                         ---------      ---------

                   Total deposits ..................................       518,885        429,274
                                                                         ---------      ---------

Advances from Federal Home Loan Bank ...............................       123,000         99,000
Other borrowed funds ...............................................         6,376          3,914
Deferred income taxes ..............................................            --            102
Accrued expenses and other liabilities .............................         3,949          2,505
                                                                         ---------      ---------

                   Total liabilities ...............................       652,210        534,795
                                                                         ---------      ---------

Commitments and contingencies (Notes 4, 9 and 12)

Stockholders' equity:
       Preferred stock, $.01 par value, 1,000,000 shares authorized,
             none outstanding ......................................            --             --
       Common stock, $.01 par value, 9,000,000 shares authorized,
             4,491,646 in 2000 and 4,447,461 in 1999 shares issued .            45             44
       Additional paid-in-capital ..................................        31,010         30,273
       Retained income .............................................        47,132         43,539
       Accumulated other comprehensive income (loss) ...............            81           (182)
       Treasury stock, at cost (959,085 shares in 2000 and
             863,523 shares in 1999) ...............................       (18,985)       (17,721)
       Stock held by Incentive Plan Trusts .........................            --           (316)
                                                                         ---------      ---------

                   Total stockholders' equity ......................        59,283         55,637
                                                                         ---------      ---------

                   Total ...........................................     $ 711,493        590,432
                                                                         =========      =========
</TABLE>


See accompanying Notes to Consolidated Financial Statements.

                                       21

<PAGE>



                               FFLC BANCORP, INC.

                        Consolidated Statements of Income
                   ($ in thousands, except per share amounts)

<TABLE>
<CAPTION>
                                                                                 Year Ended December 31,
                                                                     --------------------------------------------
                                                                          2000             1999            1998
                                                                          ----             ----            ----
<S>                                                                   <C>                 <C>             <C>
Interest income:
       Loans receivable ........................................      $   45,656          35,315          28,450
       Securities available for sale ...........................           2,417           1,798           1,169
       Securities held to maturity .............................              --             415           1,645
       Other interest-earning assets ...........................           1,277           1,084             909
                                                                      ----------      ----------      ----------

             Total interest income .............................          49,350          38,612          32,173
                                                                      ----------      ----------      ----------

Interest expense:
       Deposits ................................................          23,275          17,083          15,279
       Borrowed funds ..........................................           6,790           4,131           1,992
                                                                      ----------      ----------      ----------

             Total interest expense ............................          30,065          21,214          17,271
                                                                      ----------      ----------      ----------

             Net interest income ...............................          19,285          17,398          14,902

Provision for loan losses ......................................             880             719             682
                                                                      ----------      ----------      ----------

             Net interest income after provision for loan losses          18,405          16,679          14,220
                                                                      ----------      ----------      ----------

Noninterest income:
       Deposit account fees ....................................             825             624             558
       Other service charges and fees ..........................             679             735             618
       Gain on sale of real estate held for development ........              --             886              --
       Other ...................................................             178              87              88
                                                                      ----------      ----------      ----------

             Total noninterest income ..........................           1,682           2,332           1,264
                                                                      ----------      ----------      ----------

Noninterest expense:
       Salaries and employee benefits ..........................           6,722           6,216           5,218
       Occupancy expense .......................................           1,889           1,519           1,060
       Deposit insurance premium ...............................              90             214             195
       Advertising and promotion ...............................             328             333             278
       Data processing expense .................................             900             612             477
       Professional services ...................................             297             282             303
       Other ...................................................           1,188           1,137             915
                                                                      ----------      ----------      ----------

             Total noninterest expense .........................          11,414          10,313           8,446
                                                                      ----------      ----------      ----------

Income before income taxes .....................................           8,673           8,698           7,038

             Income taxes ......................................           3,364           3,296           2,641
                                                                      ----------      ----------      ----------

Net income .....................................................      $    5,309           5,402           4,397
                                                                      ==========      ==========      ==========

Basic income per share of common stock .........................      $     1.50            1.52            1.22
                                                                      ==========      ==========      ==========

Weighted-average number of shares outstanding for basic ........       3,541,400       3,548,568       3,592,253
                                                                      ==========      ==========      ==========

Diluted income per share of common stock .......................      $     1.46            1.47            1.16
                                                                      ==========      ==========      ==========

Weighted-average number of shares outstanding for diluted ......       3,615,740       3,677,038       3,777,085
                                                                      ==========      ==========      ==========
</TABLE>


See accompanying Notes to Consolidated Financial Statements.

                                       22

<PAGE>


                               FFLC BANCORP, INC.

           Consolidated Statements of Changes in Stockholders' Equity
                   ($ in thousands, except per share amounts)

<TABLE>
<CAPTION>

                                                                                              Stock
                                                                                              Held
                                                                                               By                      Accumulated
                                                           Additional                       Incentive      Other         Total
                                                 Common     Paid-In   Treasury     Plan     Retained   Comprehensive  Stockholders'
                                                  Stock     Capital    Stock      Trusts     Income     Income (Loss)    Equity
                                                 -------   ---------  --------  ----------   ------    ------------     --------

<S>                                             <C>          <C>      <C>          <C>      <C>             <C>          <C>
Balance at December 31, 1997 ..............     $    43      28,265   (12,466)     (947)    36,622          (88)         51,429
                                                                                                                        -------

Comprehensive income:

       Net income .........................          --          --        --        --      4,397           --           4,397

       Change in unrealized gains
           (losses) on securities available
           for sale, net of income taxes
           of $14 .........................          --          --        --        --         --           23              23
                                                                                                                        -------

Comprehensive income ......................                                                                               4,420
                                                                                                                        -------

Net proceeds from the issuance of
       58,895 shares of common
       stock ..............................           1         359        --        --         --           --             360

Shares committed to participants
       in incentive plans (109,794
       shares remain uncommitted
       at December 31, 1998) ..............          --         662        --       316         --           --             978

Dividends paid, net of $38 of
       dividends on ESOP shares
       recorded as compensation
       expense ............................          --          --        --        --     (1,305)          --          (1,305)

Purchase of treasury stock,
       148,263 shares .....................          --          --    (2,659)       --         --           --          (2,659)
                                                -------     -------   -------   -------    -------      -------         -------

Balance at December 31, 1998 ..............     $    44      29,286   (15,125)     (631)    39,714          (65)         53,223
                                                =======     =======   =======   =======    =======      =======         =======
</TABLE>

                                                                     (continued)


See accompanying Notes to Consolidated Financial Statements.

                                       23

<PAGE>



                               FFLC BANCORP, INC.

      Consolidated Statements of Changes in Stockholders' Equity, Continued
                   ($ in thousands, except per share amounts)

<TABLE>
<CAPTION>
                                                                                   Stock
                                                                                   Held
                                                                                    By                Accumulated
                                                      Additional                Incentive                Other         Total
                                             Common     Paid-In     Treasury       Plan    Retained  Comprehensive  Stockholders'
                                             Stock      Capital      Stock        Trusts    Income   Income  (Loss)   Equity
                                            -------    ---------   ----------   ----------  ------   --------------  --------
<S>                                         <C>          <C>        <C>          <C>        <C>            <C>        <C>

Balance at December 31, 1998                $    44      29,286     (15,125)     (631)      39,714          (65)      53,223
                                                                                                                     -------

Comprehensive income:

       Net income                                --          --          --        --        5,402           --        5,402

       Change in unrealized gains
           (losses) on securities available
           for sale, net of income taxes
           of $70                                --          --          --        --           --         (117)        (117)
                                                                                                        -------      -------

Comprehensive income                                                                                                   5,285
                                                                                                                     -------

Net proceeds from the issuance of
       75,420 shares of common
       stock                                     --         453          --        --           --           --          453

Shares committed to participants
       in incentive plans (57,355
       shares remain uncommitted
       at December 31, 1999)                     --         534          --       315           --           --          849

Dividends paid, net of $23 of
       dividends on ESOP shares
       recorded as compensation
       expense                                   --          --          --        --       (1,577)          --       (1,577)

Purchase of treasury stock,
       147,102 shares                            --          --      (2,596)       --           --           --       (2,596)
                                            -------     -------     -------    ------      -------      -------      -------

Balance at December 31, 1999                $    44      30,273     (17,721)     (316)      43,539         (182)      55,637
                                            =======     =======     =======    ======      =======      =======      =======
</TABLE>

                                                                     (continued)


                                       24

<PAGE>



                               FFLC BANCORP, INC.

      Consolidated Statements of Changes in Stockholders' Equity, Continued
                   ($ in thousands, except per share amounts)


<TABLE>
<CAPTION>
                                                                                             Stock
                                                                                              Held
                                                                                               By        Accumulated
                                                         Additional                         Incentive      Other        Total
                                                Common    Paid-In    Treasury      Plan     Retained   Comprehensive   Stockholders'
                                                Stock     Capital     Stock       Trusts     Income    Income (Loss)   Equity
                                               -------   --------   ---------    --------    -------   -------------  --------
<S>                                           <C>        <C>        <C>           <C>        <C>            <C>        <C>
Balance at December 31, 1999                  $    44    30,273     (17,721)      (316)      43,539         (182)      55,637
                                                                                                                      -------

Comprehensive income:

       Net income                                  --        --          --         --        5,309           --        5,309

       Change in unrealized gains
           (losses) on securities available
           for sale, net of income taxes
           of $158                                 --        --          --         --           --          263          263
                                                                                                                      -------

Comprehensive income                                                                                                    5,572
                                                                                                                      -------

Net proceeds from the issuance of
       34,217 shares of common
       stock, stock options exercised               1       210          --         --           --           --          211

Net proceeds from the issuance of
       9,968 shares of common stock
       under the Dividend Reinvestment
       Plan                                        --       132          --         --           --           --          132

Shares committed to participants
       in incentive plans (2,735 shares
       remain uncommitted at
       December 31, 2000)                          --       395          --        316           --           --          711

       Dividends paid                              --        --          --         --       (1,716)          --       (1,716)

Purchase of treasury stock,
       95,562 shares                               --        --      (1,264)        --           --           --       (1,264)
                                                ------  -------     -------    -------      -------      -------      -------

Balance at December 31, 2000                  $    45    31,010     (18,985)        --       47,132           81       59,283
                                              =======   =======     =======    =======      =======      =======      =======

</TABLE>

See accompanying Notes to Consolidated Financial Statements.

                                       25
<PAGE>



                               FFLC BANCORP, INC.

                      Consolidated Statements of Cash Flows
                                ($ in thousands)
<TABLE>
<CAPTION>
                                                                                                 Year Ended December 31,
                                                                                       ------------------------------------------
                                                                                             2000          1999           1998
                                                                                             ----          ----           ----
<S>                                                                                      <C>            <C>            <C>
Cash flows from operating activities:
       Net income                                                                       $   5,309          5,402          4,397
       Adjustments to reconcile net income
             to net cash provided by operations:
                   Provision for loan losses                                                  880            719            682
                   Depreciation                                                               760            575            406
                   Loss (gain) on sale of foreclosed real estate                                4            (34)           (36)
                   Gain on sale of real estate held for development                          --             (886)          --
                   Credit for deferred income taxes                                          (500)          (112)          (467)
                   Shares committed and dividends to incentive
                          plan participants                                                   711            872          1,016
                   Net amortization of premiums and discounts on securities                     5             69            (10)
                   Net deferral of loan fees and costs                                        (58)          (372)          (193)
                   Increase in accrued interest receivable                                   (935)          (573)          (108)
                   Increase in other assets                                                  (173)          (188)           (92)
                   Increase (decrease) in accrued expenses and other liabilities            1,444             11           (187)
                                                                                         ---------      ---------      ---------

                                Net cash provided by operating activities                   7,447          5,483          5,408
                                                                                         ---------      ---------      ---------

Cash flows from investing activities:
       Proceeds from principal repayments and maturities of securities
             held to maturity                                                                --            3,428         13,788
       Purchase of securities available for sale                                          (13,411)       (10,483)        (9,555)
       Proceeds from principal repayments and maturities of securities
             available for sale                                                             8,019         10,282         14,020
       Loan disbursements                                                                (188,141)      (195,034)      (151,411)
       Principal repayments on loans                                                       72,274         82,465         77,353
       Purchase of premises and equipment, net                                             (2,864)        (4,364)          (690)
       Purchase of Federal Home Loan Bank stock                                            (1,200)        (2,150)          (496)
       Proceeds from sales of foreclosed real estate                                          582            150             40
       Proceeds from sale of real estate held for development                                --            1,008           --
                                                                                        ---------      ---------      ---------

                                Net cash used in investing activities                    (124,741)      (114,698)       (56,951)
                                                                                        ---------      ---------      ---------
</TABLE>
                                                                     (continued)

                                       26
<PAGE>



                               FFLC BANCORP, INC.

                Consolidated Statements of Cash Flows, Continued
                                ($ in thousands)
<TABLE>
<CAPTION>
                                                                                                Year Ended December 31,
                                                                                      ----------------------------------------
                                                                                        2000            1999           1998
                                                                                        ----            ----           ----
Cash flows from financing activities:
<S>                                                                                    <C>            <C>            <C>
       Net increase in deposits                                                         89,611         78,244         35,640
       Net increase in Federal Home Loan Bank advances                                  24,000         43,000         26,000
       Net increase in other borrowed funds                                              2,462          3,125            789
       Issuance of common stock                                                            343            453            360
       Purchase of treasury stock                                                       (1,264)        (2,596)        (2,659)
       Cash dividends paid                                                              (1,716)        (1,600)        (1,343)
                                                                                     ---------      ---------      ---------

                          Net cash provided by financing activities                    113,436        120,626         58,787
                                                                                     ---------      ---------      ---------

Net (decrease) increase in cash and cash equivalents                                    (3,858)        11,411          7,244

Cash and cash equivalents at beginning of year                                          34,339         22,928         15,684
                                                                                     ---------      ---------      ---------

Cash and cash equivalents at end of year                                             $  30,481         34,339         22,928
                                                                                     =========      =========      =========

Supplemental disclosures of cash flow information Cash paid during the year for:
             Interest                                                                $  29,829         20,795         17,564
                                                                                     =========      =========      =========

             Income taxes                                                            $   3,700          3,456          3,076
                                                                                     =========      =========      =========

       Noncash investing and financing activities:

             Accumulated other comprehensive income (loss), net change in
                   unrealized loss on securities available for sale, net of tax      $     263           (117)            23
                                                                                     =========      =========      =========

             Transfers from loans to foreclosed real estate                          $     826            425            193
                                                                                     =========      =========      =========

             Loans originated on sales of foreclosed real estate                     $     364            275            297
                                                                                     =========      =========      =========

             Loans funded by and sold to correspondent                               $   1,121          6,988          8,383
                                                                                     =========      =========      =========

             Transfer securities from held to maturity to available for
                   sale upon adoption of FAS 133                                     $    --           14,784           --
                                                                                     =========      =========      =========
</TABLE>

See accompanying Notes to Consolidated Financial Statements.

                                       27

<PAGE>



                               FFLC BANCORP, INC.

                   Notes to Consolidated Financial Statements

                        December 31, 2000, 1999 and 1998


(1)  Summary of Significant Accounting Policies
       FFLC  Bancorp,  Inc. (the "Holding 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 Holding  Company is a savings
             and loan holding  company  subject to  regulation  by the Office of
             Thrift Supervision ("OTS") which transacts its business through its
             subsidiary,  the  Bank.  The Bank is a  community-oriented  savings
             institution  which  offers  a  variety  of  financial  services  to
             individuals and businesses primarily located in Lake County, Sumter
             County and Citrus  County,  Florida.  The  deposits of the Bank are
             insured  by the  Federal  Deposit  Insurance  Corporation  ("FDIC")
             through the Savings Association Insurance Fund ("SAIF").

       Principles  of  Consolidation.   The  consolidated  financial  statements
             include  the  accounts of the Holding  Company,  the Bank,  and the
             Bank's  wholly-owned  subsidiary,  Lake County Service  Corporation
             (the   "Service   Corporation").   All   significant   intercompany
             transactions and balances have been eliminated in consolidation.

       General. The accounting and reporting policies of FFLC Bancorp,  Inc. and
             its  subsidiaries  (together,  the "Company")  conform to generally
             accepted accounting  principles and to general practices within the
             thrift   industry.   The  following   summarizes  the   significant
             accounting policies of the Company:

       Use of Estimates.  In preparing   consolidated  financial  statements in
             conformity   with   generally   accepted   accounting   principles,
             management  is  required to make  estimates  and  assumptions  that
             affect the  reported  amounts of assets and  liabilities  as of the
             date of the balance  sheet and  reported  amounts of  revenues  and
             expenses during the reporting  period.  Actual results could differ
             from those  estimates.  Material  estimates  that are  particularly
             susceptible  to  significant  change in the near term relate to the
             determination  of the allowance for loan losses and foreclosed real
             estate.

       Cash  and Cash Equivalents.  For purposes of the consolidated  statements
             of cash flows, cash and cash equivalents  include cash and balances
             due from banks and interest-bearing deposits.

             The Bank is required to maintain  certain average reserve  balances
             pursuant  to  regulations  of  the  Federal  Reserve  Board.  These
             balances   must  be  maintained  in  the  form  of  vault  cash  or
             noninterest  bearing  deposits at a Federal  Reserve Bank. The Bank
             met this requirement at December 31, 2000 and 1999.

       Securities.  The Company may classify its  securities as either  trading,
             held to maturity or available for sale. Trading securities are held
             principally   for  resale  and   recorded  at  their  fair  values.
             Unrealized  gains and losses on  trading  securities  are  included
             immediately  in  earnings.  Held-to-maturity  securities  are those
             which the  Company has the  positive  intent and ability to hold to
             maturity  and are reported at  amortized  cost.  Available-for-sale
             securities   consist  of  securities   not  classified  as  trading
             securities nor as held-to-maturity  securities.  Unrealized holding
             gains and losses, net of tax, on available-for-sale  securities are
             excluded  from income and reported in other  comprehensive  income.
             Gains and losses on the sale of  available-for-sale  securities are
             recorded   on   the   trade   date   and   determined   using   the
             specific-identification   method.   Premiums   and   discounts   on
             securities  available for sale are  recognized  in interest  income
             using the interest method over the period to maturity.


                                       28

<PAGE>


       Loans Receivable.  Loans  receivable  that  management has the intent and
             ability to hold for the  foreseeable  future or until  maturity  or
             pay-off are reported at their  outstanding  principal  adjusted for
             any  charge-offs,  the allowance for loan losses,  and any deferred
             fees or costs on originated loans.

             Loan  origination fees and  certain direct origination   costs  are
             capitalized  and  recognized  as an  adjustment of the yield of the
             related loan.

             The accrual of interest  on loans is  discontinued  at the time the
             loan is 90 days delinquent unless the credit is well-secured and in
             process of collection. In all cases, loans are placed on nonaccrual
             or  charged-off  at an earlier date if  collection  of principal or
             interest is considered doubtful.

             All interest accrued but not collected for loans that are placed on
             nonaccrual or charged-off is reversed against interest income.  The
             interest  on these  loans is  accounted  for on the  cash-basis  or
             cost-recovery method, until qualifying for return to accrual. Loans
             are returned to accrual  status when all the principal and interest
             amounts  contractually  due are brought current and future payments
             are reasonably assured.

       Allowance for Loan Losses.  The allowance for loan losses is  established
             as losses are  estimated to have  occurred  through a provision for
             loan losses  charged to earnings.  Loan losses are charged  against
             the allowance when management  believes the  uncollectibility  of a
             loan  balance is  confirmed.  Subsequent  recoveries,  if any,  are
             credited to the allowance.

             The  allowance  for loan losses is evaluated on a regular  basis by
             management and is based upon  management's  periodic  review of the
             collectibility of the loans in light of historical experience,  the
             nature and volume of the loan  portfolio,  adverse  situations that
             may affect the borrower's ability to repay,  estimated value of any
             underlying  collateral and  prevailing  economic  conditions.  This
             evaluation is inherently  subjective as it requires  estimates that
             are susceptible to significant revision as more information becomes
             available.

             A loan is considered  impaired when,  based on current  information
             and  events,  it is  probable  that the  Company  will be unable to
             collect the  scheduled  payments of principal or interest  when due
             according to the contractual  terms of the loan agreement.  Factors
             considered by management in determining  impairment include payment
             status,   collateral  value,  and  the  probability  of  collecting
             scheduled  principal  and interest  payments  when due.  Loans that
             experience  insignificant  payment  delays and  payment  shortfalls
             generally are not classified as impaired. Management determines the
             significance  of  payment  delays  and  payment   shortfalls  on  a
             case-by-case   basis,   taking  into   consideration   all  of  the
             circumstances surrounding the loan and the borrower,  including the
             length of the delay,  the  reasons  for the delay,  the  borrower's
             prior payment  record,  and the amount of the shortfall in relation
             to the  principal  and interest  owed.  Impairment is measured on a
             loan by loan basis for commercial loans by either the present value
             of expected  future cash flows  discounted at the loan's  effective
             interest  rate,  the loan's  obtainable  market price,  or the fair
             value of the collateral if the loan is collateral dependent.

             Large groups of smaller balance  homogeneous loans are collectively
             evaluated  for  impairment.   Accordingly,  the  Company  does  not
             separately  identify  individual consumer and residential loans for
             impairment disclosures.

       Foreclosed Real Estate.  Real estate properties  acquired through,  or in
             lieu of, loan foreclosure are to be sold and are initially recorded
             at fair value at the date of  foreclosure  establishing  a new cost
             basis. After foreclosure,  valuations are periodically performed by
             management  and the real estate is carried at the lower of carrying
             amount or fair value less cost to sell.  Revenue and expenses  from
             operations  and changes in the valuation  allowance are included in
             the consolidated statements of income.


                                       29
<PAGE>


       Premises and Equipment.  Land is carried at cost. The Company's premises,
             furniture and equipment and leasehold  improvements  are carried at
             cost,  less  accumulated  depreciation  and  amortization  computed
             principally using the straight-line method.

       Transfer of Financial Assets. Transfers of financial assets are accounted
             for as sales,  when control  over the assets has been  surrendered.
             Control over  transferred  assets is deemed to be surrendered  when
             (1) the  assets  have  been  isolated  from  the  Company,  (2) the
             transferee  obtains the right (free of conditions that constrain it
             from taking  advantage  of that  right) to pledge or  exchange  the
             transferred assets, and (3) the Company does not maintain effective
             control  over  the  transferred  assets  through  an  agreement  to
             repurchase them before their maturity.

       IncomeTaxes.  Deferred tax assets and  liabilities  are determined  using
             the liability (or balance sheet) method. Under this method, the net
             deferred  tax asset or  liability  is  determined  based on the tax
             effects of the temporary differences between the book and tax bases
             of the  various  balance  sheet  assets and  liabilities  and gives
             current recognition to changes in tax rates and laws.

       Stock Compensation  Plans.  Statement of Financial  Accounting  Standards
             (SFAS) No. 123, Accounting for Stock-Based Compensation, encourages
             all entities to adopt a fair value based method of  accounting  for
             employee stock  compensation  plans,  whereby  compensation cost is
             measured  at the grant  date based on the value of the award and is
             recognized  over the service  period,  which is usually the vesting
             period.  However,  it also  allows an entity to continue to measure
             compensation  cost for those plans using the intrinsic  value based
             method of  accounting  prescribed by  Accounting  Principles  Board
             Opinion No. 25,  Accounting for Stock Issued to Employees,  whereby
             compensation cost is the excess, if any, of the quoted market price
             of the stock at the grant date (or other measurement date) over the
             amount an  employee  must pay to acquire the stock.  Stock  options
             issued  under the  Company's  stock  option plan have no  intrinsic
             value at the grant date,  and under Opinion No. 25 no  compensation
             cost is  recognized  for them.  The Company has elected to continue
             with the accounting methodology in Opinion No. 25 and, as a result,
             has  provided  proforma  disclosures  of net  income and income per
             share and other  disclosures,  as if the fair value based method of
             accounting had been applied. (See Note 16).

       Off-Balance Sheet  Instruments.  In the ordinary course of business,  the
             Company has entered into  off-balance-sheet  instruments consisting
             of  commitments   to  extend   credit,   unused  lines  of  credit,
             undisbursed  loans in process and standby  letters of credit.  Such
             financial instruments are recorded in the financial statements when
             they are funded.

       Fair  Values of  Financial  Instruments.  The fair  value of a  financial
             instrument  is the current  amount that would be exchanged  between
             willing parties, other than in a forced liquidation.  Fair value is
             best determined based upon quoted market prices.  However,  in many
             instances,  there are no quoted  market  prices  for the  Company's
             various financial instruments.  In cases where quoted market prices
             are not available, fair values are based on estimates using present
             value  or  other  valuation   techniques.   Those   techniques  are
             significantly  affected  by the  assumptions  used,  including  the
             discount rate and estimates of future cash flows. Accordingly,  the
             fair value estimates may not be realized in an immediate settlement
             of the instrument.  SFAS 107 excludes certain financial instruments
             and all nonfinancial  instruments from its disclosure requirements.
             Accordingly,  the aggregate  fair value  amounts  presented may not
             necessarily represent the underlying fair value of the Company. The
             following  methods  and  assumptions  were used by the  Company  in
             estimating fair values of financial instruments:

             Cash and Cash Equivalents. The carrying amounts of cash and short-
             term instruments approximate their fair value.

             Securities. Fair values for securities available for sale are based
             on quoted market prices,  where available.  If quoted market prices
             are not available, fair values are based on quoted market prices of
             comparable  instruments.  The  carrying  value of Federal Home Loan
             Bank stock approximates fair value.


                                       30
<PAGE>


             Loans Receivable.  For variable-rate  loans that reprice frequently
             and have no  significant  change in credit  risk,  fair  values are
             based on  carrying  values.  Fair  values  for  certain  fixed-rate
             mortgage (e.g.  one-to-four  family  residential),  commercial real
             estate and commercial  loans are estimated  using  discounted  cash
             flow analyses,  using interest  rates  currently  being offered for
             loans with similar terms to borrowers of similar credit quality.

             Deposit  Liabilities.  The fair values  disclosed for demand,  NOW,
             money market and savings deposits are, by definition,  equal to the
             amount  payable on demand at the  reporting  date  (that is,  their
             carrying  amounts).  Fair  values for  fixed-rate  certificates  of
             deposit are estimated using a discounted cash flow calculation that
             applies interest rates currently being offered on certificates to a
             schedule  of  aggregated   expected  monthly   maturities  of  time
             deposits.

             Borrowed Funds. The carrying amounts of borrowings under repurchase
             agreements  approximate  their fair values.  Fair values of Federal
             Home Loan Bank advances are estimated  using  discounted  cash flow
             analysis based on the Company's current incremental borrowing rates
             for similar types of borrowing arrangements.

             Accrued   Interest.   The  carrying  amounts  of  accrued  interest
             approximate their fair values.

             Off-Balance-Sheet  Instruments.  Fair values for  off-balance-sheet
             lending  commitments  are based on fees currently  charged to enter
             into similar agreements, taking into account the remaining terms of
             the agreements and the counterparties' credit standing.



                                       31
<PAGE>




       Income Per Share of Common Stock.  The Company  follows the provisions of
             Financial  Accounting Standards No. 128, "Earnings Per Share" (SFAS
             No. 128). SFAS No. 128 provides  accounting and reporting standards
             for calculating  income per share. Basic income per share of common
             stock has been  computed by dividing the net income for the year by
             the weighted-average number of shares outstanding. Shares of common
             stock  purchased by the Employee Stock Option Plan ("ESOP") and the
             Retention and  Recognition  Plan ("RRP")  incentive plans (see Note
             16) are only considered outstanding when the shares are released or
             committed to be released for allocation to  participants.  The ESOP
             initially  purchased  368,242  shares,  of which 4,383  shares were
             released for  allocation to  participants  each month  beginning in
             January,  1994. As of December 31, 2000,  all ESOP shares have been
             allocated.  The RRP initially  purchased  184,122 shares,  of which
             179,541, 179,373 and 181,387 were allocated to participants and are
             considered  outstanding for the years ended December 31, 1998, 1999
             and 2000,  respectively.  At December 31, 2000, 2,735 shares remain
             uncommitted  under the RRP plan and are not considered  outstanding
             for purposes of the  computation  of net income per share of common
             stock.  Diluted income per share is computed by dividing net income
             by the weighted average number of shares outstanding  including the
             dilutive  effect of stock options (see Note 16) computed  using the
             treasury  stock method  prescribed  by SFAS No. 128. The  following
             table  presents the  calculation  of net income per share of common
             stock:

<TABLE>
<CAPTION>
                                                                                               Year Ended December 31,
                                                                                      ----------------------------------------
                                                                                         2000           1999            1998
                                                                                         ----           ----            ----
<S>                                                                               <C>                      <C>            <C>
                   Weighted-average shares of common stock issued
                          and outstanding before adjustments for ESOP,
                          RRP and common stock options..........................       3,571,858       3,632,058     3,728,350

                   Adjustment to reflect the effect of unallocated
                          ESOP and RRP shares...................................         (30,458)        (83,490)     (136,097)
                                                                                      ----------      ----------     ---------

                   Weighted average shares for basic income per share...........       3,541,400       3,548,568     3,592,253
                                                                                       =========       =========     =========

                   Basic income per share.......................................  $         1.50           1.52           1.22
                                                                                    ============     ==========    ===========

                   Total weighted-average common shares and equivalents
                          outstanding for basic income per share
                          computation...........................................       3,541,400       3,548,568     3,592,253

                   Additional dilutive shares using the average market value for
                          the period utilizing the treasury stock method
                          regarding stock options...............................          74,340         128,470       184,832
                                                                                      ----------       ---------    ----------

                   Weighted-average common shares and equivalents
                          outstanding for diluted income per share..............       3,615,740       3,677,038     3,777,085
                                                                                       =========       =========     =========

                   Diluted income per share.....................................  $         1.46            1.47          1.16
                                                                                    ============   =============  ============
</TABLE>

       Reclassifications.  Certain  amounts  in the 1998  and 1999  consolidated
             financial  statements  have been  reclassified  to  conform  to the
             presentation for 2000.


                                       32
<PAGE>


(2)  Securities
       Securities have been classified  according to  management's  intent.  The
carrying  amounts  of  securities  and their  approximate  fair  values  were as
follows:

<TABLE>
<CAPTION>
                                                                                Gross         Gross
                                                                Amortized     Unrealized    Unrealized         Fair
                                                                  Cost          Gains         Losses           Value
                                                                --------       -------       --------         -------
                                                                                    (In thousands)
<S>                                                             <C>                <C>           <C>           <C>
             Securities available for sale:
             At December 31, 2000:
                   Mutual funds ........................        $ 9,130             --           (151)          8,979
                   U.S. Government and agency securities         17,849            119             --          17,968
                   Mortgage-backed securities ..........         14,244            150             --          14,394
                   Other investment securities .........          1,365             11             --           1,376
                                                                -------        -------        -------         -------

                          Total ........................        $42,588            280           (151)         42,717
                                                                =======        =======        =======         =======

             At December 31, 1999:
                   Mutual funds ........................          9,065             --           (236)          8,829
                   U.S. Government and agency securities          8,998             --            (79)          8,919
                   Mortgage-backed securities ..........         17,471            155           (136)         17,490
                   Other investment securities .........          1,666              5             --           1,671
                                                                -------        -------        -------         -------

                          Total ........................        $37,200            160           (451)         36,909
                                                                =======        =======        =======         =======
</TABLE>


       The scheduled maturities of securities available for sale at December 31,
2000 were as follows:

                                                    Amortized       Fair
                                                      Cost          Value
                                                      ----          -----
                                                         (In thousands)
             Due in less than one year .....        $ 4,994          5,002
             Due from one year to five years         12,855         12,966
             Due after ten years ...........          1,365          1,376
             Mortgage-backed securities ....         14,244         14,394
             Mutual funds ..................          9,130          8,979
                                                    -------        -------

                   Total ...................        $42,588         42,717
                                                    =======        =======

                                       33
<PAGE>




       Securities with a carrying value of  approximately  $6.5 million and $4.0
             million at December 31, 2000 and 1999,  respectively,  were pledged
             to secure  public  funds and tax  deposits.  The  Company  has also
             pledged  securities  with a  carrying  value  of $9.9  million  for
             borrowings  under retail  repurchase  agreements  with customers at
             December 31, 2000 (See Note 6).

             There were no sales of securities during  the years ended  December
             31, 2000, 1999 or 1998.

       The   Company's   portfolio   of   mortgage-backed   securities   include
             collateralized  mortgage  obligations  (CMOs).  CMOs are  generally
             divided  into  tranches  whereby  principal   repayments  from  the
             underlying mortgages are used sequentially to retire the securities
             according to the priority of the tranches.  The Company  invests in
             the  following   collateralized   mortgage   obligation   tranches:
             sequential, planned amortization class, targeted amortization class
             or support or companion  floating-rate tranches. Such tranches have
             stated  maturities  ranging  from 1-22 years;  however,  because of
             prepayments, the expected weighted-average life of these securities
             at December 31, 2000 is  approximately  3.4 years.  The majority of
             the CMOs owned by the  Company are  insured or  guaranteed,  either
             directly  or   indirectly,   through   mortgage-backed   securities
             underlying  the  obligations  by either  the  FNMA,  FHLMC or GNMA.
             Depending  on  the  amount  of  the  Company's   available-for-sale
             mortgage-backed  securities,  fluctuations  in  the  interest  rate
             environment and other factors,  the Company may experience material
             effects  on  its  capital  resources  due  to  categorizing   these
             securities as available for sale. The Company's CMOs may be subject
             to price movements  which  typically  result from prepayment on the
             underlying obligations.  The Company's CMOs of $942,000 have coupon
             rates ranging from 7.25% to 7.56% and had a  weighted-average  rate
             of 7.36% at December  31,  2000.  The Company  purchases  only CMOs
             rated AA or better by nationally recognized rating services.

       The   Company  adopted FAS 133 effective July 1, 1999. As allowed by this
             standard,  the Company reclassified all securities held to maturity
             with a book value of $14,784,000  and a market value of $14,969,000
             to available for sale on July 1, 1999.

(3)  Loans Receivable
       The components of loans were as follows:

<TABLE>
<CAPTION>
                                                                                        At December 31,
                                                                                   --------------------------
                                                                                   2000                  1999
                                                                                   ----                  ----
                                                                                         (In thousands)
<S>                                                                             <C>                    <C>
                   First mortgage loans secured by:
                          One-to-four-family residential.................       $ 409,600              354,317
                          Construction and land..........................          13,006               11,861
                          Multi-family units.............................          17,602               13,394
                          Commercial real estate, churches and other.....          79,729               61,052
                   Consumer loans........................................          95,824               64,042
                   Commercial loans......................................          14,677               14,285
                                                                                  -------             --------

                                Subtotal.................................         630,438              518,951

                   Undisbursed portion of loans in process...............         (12,128)             (15,907)
                   Net deferred loan costs...............................             726                  668
                   Allowance for loan losses.............................          (3,552)              (2,811)
                                                                                  -------             --------

                                Loans receivable, net....................       $ 615,484              500,901
                                                                                  =======              =======
</TABLE>



                                       34
<PAGE>


       An analysis of the change in the allowance for loan losses follows:

<TABLE>
<CAPTION>
                                                                              Year Ended December 31,
                                                                           -----------------------------
                                                                              2000      1999       1998
                                                                              ----      ----       ----
                                                                                   (In thousands)

<S>                                                                        <C>          <C>       <C>
                   Balance at January 1................................... $ 2,811      2,283     1,684
                   Net loans charged-off..................................    (139)      (191)      (83)
                   Provision for loan losses..............................     880        719       682
                                                                             -----     ------     -----

                   Balance at December 31................................. $ 3,552      2,811     2,283
                                                                             =====      =====     =====
</TABLE>


       There were no impaired loans recognized under SFAS 114 and 118 during the
             year ended December 31, 1998.  The following  summarizes the amount
             of impaired  loans at December 31, 2000 and 1999,  all of which are
             collateral dependent (in thousands):
<TABLE>
<CAPTION>
                                                                                           At December 31,
                                                                                           ---------------
                                                                                         2000           1999
                                                                                         ----           ----
<S>                                                                                     <C>            <C>
                   Loans identified as impaired:
                          Gross loans with no related allowance for losses..........    $    --           --
                          Gross loans with related allowance for losses recorded....      1,280        1,348
                          Less:  Allowances on these loans..........................       (192)        (202)
                                                                                          -----       ------

                   Net investment in impaired loans.................................    $ 1,088        1,146
                                                                                          =====        =====
</TABLE>


       The  average  net  investment  in  impaired  loans  and  interest  income
recognized  and received on impaired  loans during the years ended  December 31,
2000 and 1999 was as follows (in thousands):

<TABLE>
<CAPTION>
                                                                                   Year Ended December 31,
                                                                                  ------------------------
                                                                                    2000            1999
                                                                                    ----            ----
<S>                                                                               <C>               <C>
                   Average net investment in impaired loans...................    $ 1,117           1,152
                                                                                    =====           =====

                   Interest income recognized on impaired loans...............    $    46              84
                                                                                   ======          ======

                   Interest income received on impaired loans.................    $    46              84
                                                                                   ======          ======
</TABLE>

       The   Company originates or purchases nonresidential real property loans.
             These loans are considered by management to be of somewhat  greater
             risk of uncollectibility due to the dependency on income production
             or  future  development  of  the  real  estate.  Nearly  all of the
             Company's real property loans were  collateralized by real property
             in Lake, Sumter and Citrus Counties, Florida.

       Nonaccrual loans at December  31, 2000 and 1999  totaled  $2,510,000  and
             $2,362,000,  respectively.  For the year ended  December  31, 2000,
             interest  income on loans would have been  increased  approximately
             $230,000 if the interest on  nonaccrual  loans at December 31, 2000
             had been recorded under the original terms of such loans.

       Loans serviced for others,  consisting solely of participations sold, are
             not included in the accompanying  consolidated  balance sheets. The
             unpaid  principal   balances  of  these  loans  were  approximately
             $940,000   and   $1,040,000   at   December   31,  2000  and  1999,
             respectively.


                                       35
<PAGE>


(4)  Premises and Equipment
       Components of premises and equipment were as follows:

<TABLE>
<CAPTION>
                                                                        At December 31,
                                                                -------------------------------
                                                                   2000                  1999
                                                                   ----                  ----
                                                                          (In thousands)
<S>                                                              <C>                     <C>
             Cost:
                   Land   .................................      $  3,134                2,937
                   Building and improvements...............         8,799                6,475
                   Furniture and equipment.................         2,901                2,731
                   Construction in progress................           955                  931
                                                                  -------              -------

                          Total cost.......................        15,789               13,074

             Less accumulated depreciation.................        (4,299)              (3,688)
                                                                   ------               ------

                   Net book value..........................      $ 11,490                9,386
                                                                   ======               ======
</TABLE>


       Certain Company  facilities  are leased under various  operating  leases.
             Rental  expense was $180,000,  $195,000 and $101,000 in 2000,  1999
             and 1998, respectively. At December 31, 2000, future minimum rental
             commitments  under  noncancellable   leases  were  as  follows  (in
             thousands):

                   Year Ending
                   December 31,                                         Amount
                   ------------                                         ------

                          2001...................................      $ 152
                          2002...................................        133
                          2003...................................        137
                          2004...................................        142
                          2005...................................        147
                          Thereafter.............................        152
                                                                        ----

                                                                       $ 863

(5)  Deposits
       The aggregate amount of short-term  jumbo  certificates of deposit,  each
             with a minimum  denomination of $100,000,  was approximately  $61.9
             million and $37.3 million in 2000 and 1999, respectively.

       At December 31, 2000, the scheduled maturities of certificates of deposit
were as follows (in thousands):

                      Year Ending
                      -----------

                          2001..................................     $ 316,273
                          2002..................................        77,024
                          2003..................................         3,920
                          2004..................................           622
                          2005..................................         2,059
                                                                     ---------
                                                                      $399,898

                                       36
<PAGE>



(6)  Advances from Federal Home Loan Bank and Other Borrowings
       As    of December 31, 2000,  the Bank had $123.0  million in Federal Home
             Loan Bank of Atlanta ("FHLB") advances outstanding.  These advances
             had a  weighted-average  interest rate of 6.18% and interest  rates
             and maturities as follows (dollars in thousands):

<TABLE>
<CAPTION>
                                                                         At December 31,
                                                        Interest     ---------------------
                   Year Ending December 31,               Rate       2000             1999
                   ------------------------             -------      ----             ----
<S>                     <C>                              <C>       <C>               <C>
                        2000 ..................          5.95%     $     --          12,000
                        2000 ..................          5.98%           --          15,000
                        2002 ..................          6.10%        5,000           5,000
                        2002 ..................          6.26%           --           5,000
                        2002 ..................          6.09%           --          10,000
                        2002 ..................          5.96%       15,000              --
                        2003 ..................          4.90%       10,000          10,000
                        2003 ..................          4.30%           --           6,000
                        2004 ..................          6.05%       10,000          10,000
                        2005 ..................          6.39%       20,000              --
                        2005 ..................          6.60%       13,500              --
                        2005 ..................          6.68%       12,500              --
                        2005 ..................          6.31%        7,000              --
                        2005 ..................          6.04%       10,000              --
                        2005 ..................          6.00%        6,000              --
                        2009 ..................          4.17%           --          12,000
                        2009 ..................          6.39%       14,000          14,000
                                                                  ---------        --------
                                 Total......................       $123,000          99,000
                                                                   ========        ========
</TABLE>


       The security  agreement  with  FHLB  includes  a blanket  floating  lien
             requiring  the Bank to  maintain  first  mortgage  loans as pledged
             collateral in an amount equal to at least,  when  discounted at 75%
             of the unpaid principal balances,  100% of these advances. The FHLB
             stock is also pledged as collateral for these advances. At December
             31, 2000, the Bank could borrow up to $192.2 million under the FHLB
             security agreement.

       The Bank has  an $8  million  line of  credit  facility  with one of its
             correspondent  banks, under which the Bank may draw funds for daily
             liquidity.  Borrowings  under  this line of  credit  must be repaid
             within  seven days.  The line of credit  bears a floating  interest
             rate equal to the  average  federal  funds rate and expires on June
             30, 2001. As of December 31, 2000,  the Bank has not used this line
             of credit.

       Other borrowed funds were composed of retail  repurchase  agreements with
             customers.  The Company  enters into retail  repurchase  agreements
             with  customers in which the funds  received are  accounted  for as
             borrowings to the Company. The total amount outstanding under these
             agreements at December 31, 2000 and 1999 were $6.4 million and $3.9
             million,  respectively.  The  Company  pledged  securities  with  a
             carrying  value of $9.9 million and $7.9 million as collateral  for
             these agreements at December 31, 2000 and 1999, respectively.

(7)  Income Taxes
       The Holding Company  and its  subsidiaries file consolidated  federal and
             state income tax returns. Income taxes are allocated proportionally
             to the  Holding  Company  and each of the  subsidiaries  as  though
             separate income tax returns were filed.



                                       37
<PAGE>


       The income tax provision is summarized as follows:

<TABLE>
<CAPTION>
                                                                         Year Ended December 31,
                                                                   2000          1999           1998
                                                                   ----          ----           ----
                                                                            (In thousands)

<S>                                                               <C>             <C>           <C>
                   Current      ............................      $ 3,864         3,408         3,108
                   Deferred     ............................         (500)         (112)         (467)
                                                                   ------       -------        ------
                                                                  $ 3,364         3,296         2,641
                                                                    =====         =====         =====
</TABLE>


       The effective  tax  rate on income  before  income taxes differs from the
             U.S.  statutory rate of 34%. The following summary reconciles taxes
             at the U.S. statutory rate with the effective rates:
<TABLE>
<CAPTION>

                                                                            Year Ended December 31,
                                                           2000                     1999                   1998
                                                    ------------------        -----------------     -----------------
                                                     Amount       %           Amount       %        Amount        %
                                                     ------       -           ------       -        ------        -
                                                                            (Dollars in thousands)
<S>                                                  <C>         <C>          <C>         <C>        <C>        <C>
                   Taxes on income at U.S........
                          statutory rate ........    $2,949      34.0%        $2,957      34.0%      $2,393     34.0%
                   State income taxes, net of
                          federal tax benefit....       324       3.7            297       3.4          240      3.4
                   Other, net ...................        91       1.1             42        .5            8       .1
                                                     ------     -----         ------      ----       ------     ----

                   Taxes on income at
                          effective rates .......    $3,364      38.8%        $3,296      37.9%      $2,641     37.5%
                                                     ======      ====         ======      ====       ======     ====
</TABLE>

       Temporary differences  between the financial  statement  carrying amounts
             and  tax  bases  of  assets  and  liabilities  that  gave  rise  to
             significant  portions of the deferred tax asset (liability)  relate
             to the following:

<TABLE>
<CAPTION>
                                                                                    At December 31,
                                                                                    ---------------
                                                                                   2000          1999
                                                                                   ----          ----
                                                                                     (In thousands)
<S>                                                                               <C>              <C>
                   Deferred tax assets:
                          Allowance for loan losses ......................        $  902           490
                          Accrued interest ...............................            64            27
                          RRP incentive plan .............................            79            90
                          Deferred loan fees .............................            48            71
                          Unrealized loss on securities available for sale            --           109
                          Other ..........................................            81            --
                                                                                  ------        ------

                   Gross deferred tax assets .............................         1,174           787
                                                                                  ------        ------

                   Deferred tax liabilities:
                          FHLB stock dividends ...........................           347           340
                          Building and land ..............................           334           334
                          Accumulated depreciation .......................           183           188
                          Unrealized gain on securities available for sale            48            --
                          Deferred loan costs ............................            22            23
                          Other ..........................................            --             4
                                                                                  ------        ------

                   Gross deferred tax liabilities ........................           934           889
                                                                                  ------        ------

                   Net deferred tax asset (liability) ....................        $  240          (102)
                                                                                  ======        ======
</TABLE>


                                       38
<PAGE>



       Retained earnings at December  31, 2000 and 1999  includes  approximately
             $5,810,000  for which no deferred  federal income tax liability has
             been recognized.  This amount represents an allocation of income to
             bad debt deductions for tax purposes only.  Reduction of amounts so
             allocated   for  purposes   other  than  tax  bad  debt  losses  or
             adjustments  arising from  carryback of net operating  losses would
             create income for tax purposes only,  which would be subject to the
             then current  corporate  income tax rate. The  unrecorded  deferred
             income  tax  liability  on  the  above  amount  was   approximately
             $2,186,000 at December 31, 2000 and 1999.

       The   Small  Business Job Protection Act of 1996 (the "1996 Act") enacted
             on August 2, 1996 requires savings institutions,  such as the Bank,
             to  recapture  certain  portions  of  their  accumulated  bad  debt
             reserves, and eliminated the Percentage of Taxable Income Method of
             accounting for bad debts for tax purposes. The Bank was required to
             change  its  method of  accounting  for bad debts for tax  purposes
             effective  January 1, 1996.  In addition,  the Bank was required to
             recapture  the excess of its bad debt reserves at December 31, 1995
             over its base year  reserves at December 31,  1987,  ratably over a
             six-year  period  beginning in 1998. At December 31, 2000, the Bank
             had approximately $454,000 of deferred tax liabilities recorded for
             the recapture of its excess bad debt reserves.

(8)  Pension Plan
       The Company has a defined  contribution  profit sharing  401(k) plan (the
             "401(k)  Plan").  All  employees  who  have met a  minimum  service
             requirement  (1,000 hours of service in a twelve-month  period) may
             participate in the Plan.  Under the 401(k) Plan, a participant  may
             elect to contribute up to 15% of their annual compensation, subject
             to IRS limitations on total annual contributions.  The Company will
             make  contributions  to the 401(k)  Plan on a monthly  basis at two
             percent of participants' compensation.  Contributions to the 401(k)
             Plan for the years  ended  December  31,  2000,  1999 and 1998 were
             $65,700, $54,000 and $46,000, respectively.

       Effective January 1, 2001,  the Board of Directors  approved the transfer
             from the  multi-employer  401(k) plan the Company has  participated
             in,  to  a  single  employer  401(k)  plan,  and  the  simultaneous
             combination  of that plan with the Employee  Stock  Ownership  Plan
             discussed in Note 16. Under the modified 401(k) plan, participation
             will be open to all  employees  the  month  after  hire  date  (for
             purposes of  employer  contributions,  one year of service  will be
             required), and participants will have the twelve investment options
             offered  by the  previous  plan,  plus a Company  stock  fund.  The
             Company will make a  contribution  of 3% of  compensation  (for all
             participants  who have met the  one-year  of service  requirement),
             which will vest immediately.  In addition,  the Company will make a
             discretionary  matching contribution (for all participants who have
             met the  one-year  of service  requirement),  which will vest after
             five years of service.  For 2001, the Board has approved a matching
             contribution  equal to 100% of  employees'  deferrals,  up to 3% of
             compensation.  The amounts of employee and  employer  contributions
             under the 401(k) and the ESOP are subject to IRS limitations.

(9)  Financial Instruments
       The   Company is a party to financial instruments with  off-balance-sheet
             risk in the normal course of business to meet the  financing  needs
             of its customers and to reduce its own exposure to  fluctuations in
             interest  rates.  These  financial  instruments  are commitments to
             extend credit, unused lines of credit, undisbursed loans in process
             and standby letters of credit and may involve,  to varying degrees,
             elements of credit and  interest-rate  risk in excess of the amount
             recognized in the consolidated  balance sheet. The contract amounts
             of these instruments  reflect the extent of involvement the Company
             has in these financial instruments.

       The   Company's exposure to credit loss in the event of nonperformance by
             the other party to the  financial  instrument  for  commitments  to
             extend credit is  represented  by the  contractual  amount of those
             instruments.  The Company  uses the same credit  policies in making
             commitments as it does for on-balance-sheet instruments.



                                       39
<PAGE>


       Commitments to extend credit are agreements to lend to a customer as long
             as  there  is no  violation  of any  condition  established  in the
             contract.  Commitments  generally  have fixed  expiration  dates or
             other  termination  clauses and may require payment of a fee. Since
             some of the  commitments are expected to expire without being drawn
             upon, the total  commitment  amounts do not  necessarily  represent
             future cash  requirements.  The Company  evaluates each  customer's
             credit worthiness on a case-by-case basis. The amount of collateral
             obtained if deemed  necessary  by the  Company  upon  extension  of
             credit  is  based  on   management's   credit   evaluation  of  the
             counterparty.

       Standby  letters  of credit  are  conditional  commitments  issued by the
             Company to  guarantee  the  performance  of a  customer  to a third
             party.  The credit risk  involved  in issuing  letters of credit is
             essentially  the  same as  that  involved  in  extending  loans  to
             customers.

       The estimated fair values of the Company's financial  instruments were as
follows:

<TABLE>
<CAPTION>
                                                                      At December 31, 2000          At December 31, 1999
                                                                     ----------------------         --------------------
                                                                     Carrying       Fair            Carrying       Fair
                                                                      Amount        Value            Amount        Value
                                                                     ---------    ---------         --------      -------
                                                                                          (In thousands)
<S>                                                                 <C>             <C>             <C>           <C>
                       Financial assets:
                             Cash and cash equivalents............. $   30,481      30,481          34,339        34,339
                             Securities available for sale.........     42,717      42,717          36,909        36,909
                             Loans receivable......................    615,484     616,345         500,901       499,044
                             Accrued interest receivable...........      3,750       3,750           2,815         2,815
                             Federal Home Loan Bank stock..........      6,150       6,150           4,950         4,950

                       Financial liabilities:
                             Deposit liabilities...................    518,885     517,672         429,274       426,909
                             Advances from FHLB....................    123,000     123,201          99,000        99,314
                             Other borrowed funds..................      6,376       6,376           3,914         3,914
</TABLE>


       A summary of the notional amounts of the Company's financial  instruments
which approximates fair value, with off-balance-sheet risk at December 31, 2000,
follows:

                                                                     Notional
                                                                      Amount
                                                                  (In thousands)

                      Commitments to extend credit................  $ 13,178
                                                                     =======

                      Unused lines of credit......................  $ 34,775
                                                                      ======

                      Undisbursed portion of loans in process ....  $ 12,128
                                                                      ======

                      Standby letters of credit...................  $  1,480
                                                                     =======

(10)  Significant Group Concentration of Credit Risk
       The  Company  grants  real  estate,  commercial  and   consumer  loans to
             customers  primarily  in the State of Florida  with the majority of
             such loans in the Lake,  Sumter and Citrus County area.  Therefore,
             the Company's exposure to credit risk is significantly  affected by
             changes in the economy of the Lake,  Sumter and Citrus County area.
             In  addition,  the Company  has a  concentration  of  single-family
             residential  mortgage  loans in a specific  residential  retirement
             community of approximately $123.8 million at December 31, 2000.


                                       40
<PAGE>


       The contractual  amounts of credit  related financial instruments such as
             commitments  to extend  credit  represent  the amounts of potential
             accounting  loss  should the  contract  be fully  drawn  upon,  the
             customer  default and the value of any existing  collateral  become
             worthless.

(11)  Related Parties
       Loans to directors and executive officers of the Company were made in the
             ordinary  course of business  and did not involve  more than normal
             risk of  collectibility  or  present  other  unfavorable  features.
             Activity  in loans to  directors  and  executive  officers  were as
             follows:
                                                               Year Ended
                                                              December 31,
                                                          -------------------
                                                          2000           1999
                                                          ----           ----
                                                            (In thousands)

                   Beginning balance................     $ 4,983        3,406
                   Loans originated.................       1,436        1,675
                   Principal repayments.............      (1,006)         (98)
                                                           -----        -----

                          Ending balance............     $ 5,413        4,983
                                                           =====        =====

(12)  Commitments and Contingencies
       In the  ordinary   course  of   business,   the   Company   has   various
             outstanding  commitments  and contingent  liabilities  that are not
             reflected in the accompanying consolidated financial statements. In
             addition,  the Company is a defendant  in certain  claims and legal
             actions arising in the ordinary course of business.  In the opinion
             of management,  after consultation with legal counsel, the ultimate
             disposition  of these  matters is not  expected  to have a material
             adverse  effect  on the  consolidated  financial  condition  of the
             Company.

(13)  Restrictions on Retained Earnings
       The Bank is subject  to  certain  restrictions on the amount of dividends
             that it may declare without prior regulatory approval.  At December
             31, 2000,  approximately  $19.5  million of retained  earnings were
             available  for  dividend   declaration   without  prior  regulatory
             approval.

(14)  Regulatory Matters
       The Bank  is  subject  to  various   regulatory    capital   requirements
             administered  by the  federal  banking  agencies.  Failure  to meet
             minimum capital  requirements  can initiate  certain  mandatory and
             possibly  additional  discretionary  actions by regulators that, if
             undertaken,  could have a direct  material  effect on the Company's
             financial  statements.  Under capital  adequacy  guidelines and the
             regulatory  framework for prompt corrective  action,  the Bank must
             meet specific capital guidelines that involve quantitative measures
             of the Bank's assets,  liabilities,  and certain  off-balance-sheet
             items as calculated  under  regulatory  accounting  practices.  The
             Bank's  capital  amounts  and  classification  are also  subject to
             qualitative  judgements by the regulators  about  components,  risk
             weightings, and other factors.

       Quantitative  measures   established  by  regulation  to  ensure  capital
             adequacy require the Bank to maintain minimum amounts (set forth in
             the table  below) of total and Tier I capital  (as  defined  in the
             regulations)  to  risk-weighted  assets  (as  defined).  Management
             believes,  as of December 31, 2000, that the Bank meets all capital
             adequacy requirements to which it is subject.

       As of December 31,  2000,  the  most  recent  notification  from  the OTS
             categorized  the  Bank as well  capitalized  under  the  regulatory
             framework for prompt  corrective  action. To be categorized as well
             capitalized,  the  Bank  must  maintain  minimum  tangible,  tier I
             (core),  tier I (risk-based) and total risk-based capital ratios as
             set forth in the table.  There are no  conditions  or events  since
             that  notification  that  management   believes  have  changed  the
             institution's category.


                                       41
<PAGE>


       The Bank's actual  capital  amounts and  percentages at December 31, 2000
and 1999 are also presented in the tables.

<TABLE>
<CAPTION>
                                                                                                              To Be Well
                                                                                      Minimum                Capitalized
                                                                                     For Capital              For Prompt
                                                                                      Adequacy            Corrective Action
                                                                Actual                Purposes                Provisions
                                                         -------------------      ----------------      ---------------------
                                                            %        Amount         %       Amount          %       Amount
                                                          -----      ------       -----     ------       -------    ------
                                                                                (Dollars in thousands)
<S>                                                       <C>        <C>           <C>    <C>              <C>    <C>
                As of December 31, 2000:
               Stockholders' equity,
                    and ratio to total
                    assets   .......................       7.88%  $  56,130
               Less: investment in
                    nonincludable
                    subsidiary......................                   (485)
               Add back: unrealized loss on
                    available-for-sale
                    securities......................                   (175)
                                                                   --------

               Tangible capital,
                    and ratio to adjusted
                    total assets....................       7.80%  $  55,470        1.5%   $ 10,670
                                                                  =========               ========

               Tier 1 (core) capital, and
                    ratio to adjusted total
                    assets   .......................       7.80%  $  55,470        3.0%   $ 21,340         5.0%   $ 35,567
                                                                  =========               ========                ========

               Tier 1 capital, and ratio
                    to risk-weighted assets.........      12.45%     55,470        4.0%   $ 17,824         6.0%   $ 26,736
                                                                                          ========                 =======

               Less: nonincludable
                    investment in 80%
                    land loans......................                   (245)

               Tier 2 capital (allowance for
                    loan losses)....................                  3,477
                                                                   --------

               Total risk-based capital,
                    and ratio to risk-
                    weighted assets.................      13.17% $   58,702        8.0%   $ 35,648        10.0%   $ 44,560
                                                                 ==========               ========                 =======

               Total assets  .......................              $ 712,001
                                                                  =========

               Adjusted total assets................              $ 711,341
                                                                  =========

               Risk-weighted assets.................              $ 445,597
                                                                  =========

</TABLE>


                                       42
<PAGE>

<TABLE>
<CAPTION>
                                                                                                              To Be Well
                                                                                      Minimum                Capitalized
                                                                                     For Capital              For Prompt
                                                                                      Adequacy            Corrective Action
                                                                Actual                Purposes                Provisions
                                                         -------------------      ----------------      ---------------------
                                                            %        Amount         %       Amount          %       Amount
                                                          -----      ------       -----     ------       -------    ------
                                                                                (Dollars in thousands)
<S>                                                       <C>        <C>           <C>    <C>              <C>    <C>

               As of December 31, 1999:
               Stockholders' equity,
                    and ratio to total
                    assets   .........................     8.87%  $  52,356
               Less: investment in
                    nonincludable
                    subsidiary........................               (1,214)
               Add back: unrealized loss on
                    available-for-sale
                    securities........................                   35
                                                                  ---------

               Tangible capital,
                    and ratio to adjusted
                    total assets......................     8.68%  $  51,177        1.5%   $  8,841
                                                                  =========                ========

               Tier 1 (core) capital, and
                    ratio to adjusted total
                    assets   .........................     8.68% $   51,177        3.0%   $ 17,681         5.0%   $ 29,469
                                                                  =========               ========                =======

               Tier 1 capital, and ratio
                    to risk-weighted assets...........    14.17%     51,177        4.0%   $ 14,447         6.0%   $ 21,670
                                                                                          ========                =======

               Less: nonincludable
                    investment in 80%
                    land loans........................                  (93)

               Tier 2 capital (allowance for
                    loan losses)......................                2,810
                                                                  ---------

               Total risk-based capital,
                    and ratio to risk-
                    weighted assets...................    14.92%  $  53,894        8.0%   $ 28,893        10.0%   $ 36,117
                                                                  =========               ========                ========

               Total assets  .........................            $ 590,562
                                                                  =========

               Adjusted total assets..................            $ 589,383
                                                                  =========

               Risk-weighted assets...................            $ 361,168
                                                                  =========
</TABLE>


                                       43
<PAGE>




(15)  Conversion to Stock Savings Bank
       The Bank successfully completed a conversion  from a  federally chartered
             mutual savings  association to a federally  chartered stock savings
             bank on January 4, 1994  pursuant  to the Plan of  Conversion.  The
             Plan of Conversion  provided for the establishment of a Liquidation
             Account  equal to the  retained  income of the Bank as of September
             30, 1993 (the date of the most recent financial statement presented
             in the final  conversion  prospectus).  The Liquidation  Account is
             established  to provide a limited  priority  claim to the assets of
             the  Bank  to  qualifying  depositors  as  of  September  30,  1992
             (Eligible Account Holders) who continue to maintain deposits in the
             Bank  after  conversion.  In  the  unlikely  event  of  a  complete
             liquidation  of the Bank,  and only in such  event,  each  Eligible
             Account  Holder  would  receive  from  the  Liquidation  Account  a
             liquidation  distribution based on their proportionate share of the
             then total remaining qualifying deposits.

      Current regulations  allow the Bank to pay  dividends  on its  stock after
               the  conversion  if its  regulatory  capital would not thereby be
               reduced  below the amount then  required  for the  aforementioned
               Liquidation Account. Also, capital distribution regulations limit
               the Bank's  ability to make capital  distributions  which include
               dividends,  stock redemptions and repurchases,  cash-out mergers,
               interest   payments  on  certain   convertible   debt  and  other
               transactions  charged  to the  capital  account  based  on  their
               capital level and supervisory condition.



                                       44
<PAGE>



(16)  Stock Benefit Plans

       The Company follows the provisions of  Statement of Financial Accounting
             Standards No. 123, "Accounting for Stock-Based Compensation" ("SFAS
             No. 123"). SFAS No. 123 applies to stock-based  compensation  under
             the Company's  incentive  stock option plan (the "Option Plan") and
             under the Company's Recognition and Retention Plan discussed below.
             As allowed by SFAS No.  123,  the  Company  elected to  continue to
             measure  compensation  cost for the options or shares granted under
             either  plan  using  the  intrinsic   value  method  of  accounting
             prescribed by APB Opinion No. 25,  "Accounting  for Stock Issued to
             Employees."  SFAS  No.  123 does not  apply to the  Employee  Stock
             Ownership Plan discussed below.

       During the years ended  December 31, 2000,  1999 and 1998, 5,035,  16,250
             and 18,000 options were granted under the Option Plan. SFAS No. 123
             requires pro forma fair value  disclosures  if the intrinsic  value
             method is being  utilized.  In order to calculate the fair value of
             the options,  it was assumed that the  risk-free  interest rate was
             7.0% for each period, an annualized dividend yield of approximately
             2.0% would apply over the exercise period, the expected life of the
             options would be the entire  exercise period and the expected stock
             volatility was 37%, 36% and 42%,  respectively,  for 2000, 1999 and
             1998.  For purposes of pro forma  disclosures,  the estimated  fair
             value was  included in expense in the period  vesting  occurs.  The
             proforma  information  has been  determined  as if the  Company had
             accounted  for its stock  options and share  awards  under the fair
             value  method  of SFAS No.  123 and is as  follows  (in  thousands,
             except per share amounts):
<TABLE>
<CAPTION>
                                                                                    Year Ended December 31,
                                                                               -------------------------------
                                                                                    2000        1999      1998
                                                                                    ----        ----      ----
<S>                                                                             <C>              <C>       <C>
                    Weighted-average grant-date fair value of options
                             issued during the year......................       $     28         133       166
                                                                                 =======      ======    ======

                    Proforma net earnings................................       $  5,182       5,288     4,303
                                                                                   =====       =====     =====

                    Proforma basic earnings per share....................       $   1.46        1.49      1.20
                                                                                  ======      ======    ======
</TABLE>


                                       45
<PAGE>



       Stock Option  Plan.  The  Company  has a Stock  Option  Plan under  which
             460,303  common  shares are  authorized to be granted to directors,
             officers and employees of the Bank. Shares granted under the Option
             Plan are exercisable at the market price at the date of grant. Such
             incentive  stock  options  granted to officers  and  employees  are
             exercisable  in three  equal  annual  installments,  with the first
             installment  becoming  exercisable one year from the date of grant.
             Options granted to outside  directors are exercisable  immediately,
             but any common shares obtained from exercise of the options may not
             be sold  prior to one year  from the  date of  grant.  All  options
             expire at the earlier of ten years for  officers  and  employees or
             twenty  years  for  directors  from  the  date of grant or one year
             following the date which the outside director,  officer or employee
             ceases to serve in such  capacity.  At December  31,  2000,  33,714
             shares remain available for grant to future directors, officers and
             employees.

       The following is a summary of option transactions:

<TABLE>
<CAPTION>
                                                                                                  Weighted-
                                                                                 Range of         Average
                                                                   Number        Per Share       Per Share
                                                                 of Shares      Option Price        Price
                                                                 ---------      ------------        -----

<S>                                                              <C>          <C>                  <C>
                   Outstanding, December 31, 1997.............   330,428      $   6.00-21.25         6.58
                   Granted      ..............................    18,000          16.25-19.25       18.08
                   Exercised    ..............................   (59,895)             6.00           6.00
                   Forfeited    ..............................   (15,333)         12.00-19.25       17.84
                                                                 -------

                   Outstanding, December 31, 1998.............   273,200           6.00-21.25        6.83
                   Granted      ..............................    16,250          16.75-17.63       17.56
                   Exercised    ..............................   (75,420)            6.00            6.00
                                                                 -------

                   Outstanding, December 31, 1999.............   214,030           6.00-21.25        7.93

                   Granted      ..............................     5,035             12.56          12.56
                   Exercised    ..............................   (34,217)          6.00-12.00        6.16
                   Forfeited    ..............................        --
                                                                 -------

                   Outstanding, December 31, 2000.............   184,848         $ 6.00-21.25      $ 8.49
                                                                 =======         ============      ======
</TABLE>


       The weighted-average  remaining   contractual  life  of  the  outstanding
             stock options at December 31, 2000,  1999 and 1998 was 7.9, 8.6 and
             5.3 years, respectively.  The increase from 1998 to 1999 was due to
             the Company  approving  an amendment to the Plan to extend the life
             of options issued to directors to twenty years from ten years.

       The outstanding options at December 31, 2000 were exercisable as follows:

<TABLE>
<CAPTION>

                                                   Number                        Weighted-Average
                                                     of        Weighted-Average      Remaining
                   Year Ending                     Shares       Exercise Price    Contractual Life
                   -----------                     ------       --------------    ----------------
                                                                  (In years)

<S>                <C>                             <C>            <C>                     <C>
                   Currently exercisable.....      166,980        $  7.57                 7.5
                   2001  ....................       12,452          15.33                13.3
                   2002  ....................        5,416          17.56                 9.0
                                                  --------        -------               -----

                                                   184,848        $  8.49                 7.9
                                                   =======        =======               =====
</TABLE>



                                       46
<PAGE>


       Employee Stock  Ownership  Plan.  Through  December 31, 2000, the Company
             sponsored a leveraged  ESOP that  covered  eligible  employees  who
             completed a year of service. The Bank made quarterly  contributions
             to the ESOP  equal  to the  ESOP's  debt  service.  The ESOP  Trust
             purchased  368,242 shares of common stock in the Company's  initial
             public  offering  with the  proceeds  from a loan from the Company.
             That  loan  bore  interest  at a  fixed-rate  of six  percent  with
             principal and interest payable in equal quarterly installments over
             seven years and the loan was  paid-off in December  2000.  The ESOP
             shares  initially  were pledged as collateral  for its debt. As the
             debt was repaid, shares were released from collateral and allocated
             to active  employees  based on the  proportion of debt service paid
             during the year.  The Company  accounted for its ESOP in accordance
             with Statement of Position 93-6. Accordingly,  the debt of the ESOP
             was  recorded  as  debt  and  the  cost of the  shares  pledged  as
             collateral were reported as a contra equity account. As shares were
             released  from  collateral,   the  Company  recorded   compensation
             expense, and an offsetting credit to capital,  equal to the current
             market price of the shares,  and the shares became  outstanding for
             income per share  computations.  Dividends  on all ESOP shares were
             recorded as compensation  expense as it was management's  intention
             to allocate  the  dividends  along with the shares when  allocated.
             Compensation  expense for the years ended  December 31, 2000,  1999
             and 1998 included the following ESOP related costs:

<TABLE>
<CAPTION>
                                                                                       Year Ended December 31,
                                                                                       -----------------------
                                                                                    2000         1999        1998
                                                                                    ----         ----        ----
                                                                                           (In thousands)

<S>                <C>                                                              <C>           <C>         <C>
                   Amortization of the original cost, $6 per share............      $ 316         315         316
                   Market appreciation of the FFLC shares.....................        395         534         662
                   Dividends on ESOP shares...................................          -          23          38
                                                                                    -----       -----        ----

                          Total ........................................            $ 711         872       1,016
                                                                                    =====        ====       =====
</TABLE>


       The ESOP shares were as follows:

<TABLE>
<CAPTION>
                                                                                              At December 31,
                                                                                       ---------------------------
                                                                                          2000               1999
                                                                                          ----               ----
                                                                                             ($ in thousands)

<S>                                                                                       <C>              <C>
                   Allocated shares and shares released for allocation...........         321,209          282,781
                   Unreleased shares.............................................          -                52,606
                                                                                       ----------          -------

                   Total ESOP shares.............................................         321,209          335,387
                                                                                       ==========          =======

                   Fair value of unreleased shares...............................      $     -                 802
                                                                                       ==========          =======
</TABLE>


       Effective  January 1,  2001,  the Board of  Directors  has  approved  the
             combining of the ESOP with the Company's 401(k) Plan. (See Note 8).
             In   connection   therewith,   the  Company  will  make   quarterly
             profit-sharing  contributions in amounts approved by the Board, and
             those   contributions   will  be   allocated  to  the  accounts  of
             participating employees on a quarterly basis. Company contributions
             under the ESOP will vest after five years of service. For 2001, the
             Board  has  approved  profit-sharing  contributions  equal  to four
             percent (4%) of the Bank's operating net income, which will be made
             each quarter based on the actual results of the preceding  quarter.
             The Plan  allows  the  Company to fund such ESOP  contributions  by
             either issuing shares,  or purchasing the required number of shares
             on the open market.  As these  shares are  allocated on a quarterly
             basis, the Company will record compensation  expense, and either an
             offsetting  credit to capital (in the event that shares are issued)
             or to cash (in the event  that  shares  are  purchased  on the open
             market),  equal to the  current  market  price of the  shares.  The
             shares become  outstanding for income per share  computations  when
             allocated.


                                       47
<PAGE>


       Recognition and Retention Plan. The Company adopted, and the shareholders
             approved,  an RRP for  directors,  officers and employees to enable
             the Bank to attract and retain  experienced and capable  personnel.
             On January 4, 1994, the conversion  date,  184,122 shares of common
             stock  were  purchased  for the RRP  which  included  8,067  shares
             reserved for future directors,  officers and employees.  The shares
             are granted in the form of  restricted  stock to be earned in three
             equal annual  installments  beginning April 4, 1995. The RRP shares
             purchased  in  the   conversion   initially   were   excluded  from
             stockholders'  equity. The Company recognized  compensation expense
             in the amount of the fair market  value of the common  stock at the
             grant date of $6 per share, pro rata over the years (1996, 1995 and
             1994)  during which the shares were earned and payable and recorded
             a credit to  shareholders'  equity.  The shares are entitled to all
             voting and other shareholder rights,  except that the shares, while
             restricted,  cannot be sold,  pledged or otherwise disposed of, and
             are required to be held in escrow.

       If    a holder of restricted  stock under the RRP  terminated  employment
             for reasons other than death,  disability,  retirement or change of
             control in the Company,  such  employee  forfeits all rights to any
             allocated  shares which are still  restricted.  If  termination  is
             caused by death, disability, retirement or change in control of the
             Company, all allocated shares become unrestricted.  Forfeitures are
             reallocated  to eligible  participants  annually.  At December  31,
             2000, 2,735 shares remain reserved for future  directors,  officers
             and employees.

(17)  Parent Company Only Financial Statements
       Condensed financial  statements of the Holding Company as of December 31,
             2000 and 1999 and for each of the  years in the  three-year  period
             ended December 31, 2000 are presented below. Amounts shown as cash,
             investment  in  subsidiary,  loans  to  subsidiary  and  equity  in
             earnings of subsidiary are eliminated in consolidation.

                            Condensed Balance Sheets
<TABLE>
<CAPTION>
                                                                                         At December 31,
                                                                                     ---------------------
                                                                                     2000             1999
                                                                                     ----             ----
                                                                                         (In thousands)
<S>                                                                                <C>                  <C>
                   Assets
             Cash, deposited with subsidiary.................................      $    668             481
             Investment in subsidiary........................................        56,130          52,356
             Loans to subsidiary.......................................               2,500           2,816
                                                                                     ------         -------

                          Total assets.......................................      $ 59,298          55,653
                                                                                     ======          ======

                   Liabilities and Stockholders' Equity

             Accrued expense and other liabilities...........................            15              16
             Stockholders' equity............................................        59,283          55,637
                                                                                     ------          ------

                          Total liabilities and stockholders' equity.........      $ 59,298          55,653
                                                                                     ======          ======
</TABLE>

                                       48
<PAGE>


                         Condensed Statements of Income
<TABLE>
<CAPTION>
                                                                                           Year Ended December 31,
                                                                                   ---------------------------------------
                                                                                    2000            1999             1998
                                                                                    ----            ----             ----
                                                                                               (In thousands)
<S>                                                                               <C>              <C>               <C>

             Revenues     .........................................               $   179            261               410
             Expenses     ...........................................                 170            190               243
                                                                                    -----          -----            ------

                          Income before earnings of subsidiary............              9             71               167
                          Earnings of subsidiary..........................          5,300          5,331             4,230
                                                                                    -----          -----             -----

                          Net income                                              $ 5,309          5,402             4,397
                                                                                    =====          =====             =====
</TABLE>



<TABLE>
<CAPTION>
                       Condensed Statements of Cash Flows
                                                                                                Year Ended December 31,
                                                                                       ----------------------------------------
                                                                                        2000             1999             1998
                                                                                        ----             ----             ----
                                                                                                    (In thousands)
<S>                                                                                     <C>              <C>             <C>
       Cash flows from operating activities:
             Net income   ........................................................      $ 5,309          5,402           4,397
             Adjustments to reconcile net income to net cash
               provided by operations:
                   Equity in earnings of subsidiary...............................      (5,300)         (5,331)         (4,230)
                   Decrease in other assets.......................................          --              --               2
                   (Decrease) increase in accrued expenses and other liabilities..          (1)             13               4
                                                                                       -------         -------        --------

                          Net cash provided by operating activities...............           8              84             173
                                                                                       -------         -------         -------

       Cash flows from investing activities-
                   Repayment of loan to subsidiary................................         316           3,315             316
                                                                                       -------           -----         -------

       Cash flows from financing activities:
                   Purchase of treasury stock.....................................      (1,264)         (2,596)         (2,659)
                   Proceeds from issuance of stock................................         343             453             360
                   Cash dividends paid............................................      (1,716)         (1,600)         (1,344)
                   Cash dividends received........................................       2,500              --           3,502
                                                                                       -------        --------           -----

                          Net cash used in financing activities...................        (137)         (3,743)           (141)
                                                                                       -------           -----          ------

       Net increase (decrease) in cash............................................         187            (344)            348

       Cash at beginning of year..................................................         481             825             477
                                                                                       -------          ------          ------

       Cash at end of year........................................................    $    668             481             825
                                                                                       =======           =====          ======
</TABLE>


                                       49
<PAGE>


(18)  Stock Repurchase Program
       In January and August  1996, the  Company's Board of Directors  approved
             stock  repurchase  programs  which  allowed  the Company to acquire
             common stock in the open market.  The Company received OTS approval
             for the programs and began repurchasing  shares within one month of
             approval.  During the year ended  December  31,  1996,  all 132,000
             shares  approved  under the January 1996 program were  repurchased.
             During the years  ended  December  31,  1996 and 1997,  all 126,000
             shares approved under the August 1996 program were repurchased.

       In January 1997, the  Company's  Board  of Directors  approved  a program
             which allowed the Company to acquire additional common stock in the
             open  market.  During the year ended  December  31,  1997,  178,690
             shares or 60.6% of the 294,928  shares  approved under that program
             were repurchased.

       In September 1998, the  Company's Board of  Directors  approved a program
             which allowed the Company to acquire 369,285  additional  shares of
             common stock in the open market. During the year ended December 31,
             1998, the remaining  shares approved under the January 1997 program
             were  repurchased.  During the year ended  December 31, 1998 32,025
             shares or 8.7% of the September 1998 program were repurchased.

       During 2000 and 1999, the Company repurchased  95,562 and 147,102 shares,
             respectively or 25.9% and 39.8%,  respectively  under the September
             1998  program.   At  December  31,  2000,  the  Company  can  still
             repurchase  an additional  94,596  shares under the September  1998
             program.

(19)  Dividend Reinvestment Plan
       On January 7, 2000,  the  Company  established  a  Dividend  Reinvestment
              Plan (the  "DRP").  The DRP was approved by the Board of Directors
              on December  30, 1999 and is intended to provide  stockholders  of
              record of at least 50 shares with a convenient  and economical way
              to automatically reinvest all or a portion of their cash dividends
              and to invest  optional  cash  payments,  subject to  minimum  and
              maximum  purchase  limitations,  in  additional  shares  of common
              stock.   Stockholders   pay  no  service   charges  or   brokerage
              commissions  for common stock  purchased under the DRP. During the
              year ended  December 31, 2000,  19,969 shares of common stock were
              purchased  under the DRP of which 9,968 were new shares  issued by
              the Company and 10,001 shares were purchased in the open market.


                                       50
<PAGE>




(20) Quarterly Financial Data (Unaudited)
       The following  tables  present  summarized  quarterly data (in thousands,
       except per share amounts):

<TABLE>
<CAPTION>
                                                                                        Year Ended December 31, 2000
                                                                          -------------------------------------------------------
                                                                           First      Second        Third      Fourth
                                                                          Quarter     Quarter      Quarter     Quarter     Total
<S>                                                                      <C>           <C>          <C>        <C>         <C>
                   Interest income.................................      $ 11,120      11,862       12,833     13,535      49,350
                   Interest expense................................         6,395       7,016        8,013      8,641      30,065
                                                                          -------      ------      -------     ------     -------

                   Net interest income.............................         4,725       4,846        4,820      4,894      19,285

                   Provision for loan losses.......................           200         260          210        210         880
                                                                          -------      ------      -------     ------    --------
                   Net interest income after provision
                          for loan losses..........................         4,525       4,586        4,610      4,684      18,405
                                                                           ------      ------      -------     ------     -------

                   Noninterest income..............................           403         443          413        423       1,682
                   Noninterest expense.............................         2,756       2,791        2,888      2,979      11,414
                                                                           ------      ------      -------     ------     -------

                   Income before income taxes......................         2,172       2,238        2,135      2,128       8,673

                   Income taxes ...................................           855         861          828        820       3,364
                                                                         --------     -------      -------    -------    -------

                   Net income   ...................................      $  1,317       1,377        1,307      1,308       5,309
                                                                         ========     =======      =======     ======    =======

                   Basic income per common share...................      $    .37         .39          .37        .37        1.50
                                                                         ========     =======      =======    =======    ========

                   Diluted income per common share.................      $    .36         .38          .36        .36        1.46
                                                                         ========     =======      =======    =======    ========
</TABLE>


<TABLE>
<CAPTION>
                                                                                         Year Ended December 31, 1999
                                                                          -------------------------------------------------------
                                                                           First       Second       Third    Fourth
                                                                          Quarter      Quarter     Quarter   Quarter       Total
                                                                          -------      -------     -------   -------       -----
<S>                                                                       <C>           <C>         <C>       <C>         <C>
                   Interest income.................................       $ 8,851       9,317       9,801     10,643      38,612
                   Interest expense................................         4,748       5,005       5,365      6,096      21,214
                                                                            -----       -----       -----     ------     -------

                   Net interest income.............................         4,103       4,312       4,436      4,547      17,398

                   Provision for loan losses.......................           200         150         150        219         719
                                                                           ------      ------      ------     ------    --------
                   Net interest income after provision
                          for loan losses..........................         3,903       4,162       4,286      4,328      16,679
                                                                           ------       -----       -----     ------     -------

                   Noninterest income..............................         1,289         370         319        354       2,332
                   Noninterest expense.............................         2,374       2,562       2,642      2,735      10,313
                                                                            -----       -----       -----     ------     -------

                   Income before income taxes......................         2,818       1,970       1,963      1,947       8,698

                   Income taxes ...................................         1,084         739         739        734       3,296
                                                                            -----       -----      ------     ------    -------

                   Net income   ...................................      $  1,734       1,231       1,224      1,213       5,402
                                                                         ========       =====      ======     ======    =======

                   Basic income per common share...................      $    .49         .34         .35        .34       1.52
                                                                         ========     =======      ======     ======    ========

                   Diluted income per common share.................      $    .47         .33         .33        .34       1.47
                                                                         ========     =======      ======     ======    ========
</TABLE>


                                       51
<PAGE>



                          Independent Auditors' Report



The Board of Directors
FFLC Bancorp, Inc.
Leesburg, Florida:

               We have audited the accompanying  consolidated  balance sheets of
FFLC  Bancorp,  Inc. (the parent  company of First Federal  Savings Bank of Lake
County) and Subsidiary (together the "Company") as of December 31, 2000 and 1999
and the related  consolidated  statements  of income,  changes in  stockholders'
equity  and cash  flows for each of the  years in the  three-year  period  ended
December 31, 2000.  These  financial  statements are the  responsibility  of the
Company's  management.  Our  responsibility  is to  express  an opinion on these
financial statements based on our audits.

               We conducted our audits in  accordance  with  generally  accepted
auditing  standards.  Those standards require that we plan and perform the audit
to obtain reasonable  assurance about whether the financial  statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting  the amounts and  disclosures in the financial  statements.  An audit
also includes assessing the accounting principles used and significant estimates
made by  management,  as well as  evaluating  the  overall  financial  statement
presentation.  We believe  that our audits  provide a  reasonable  basis for our
opinion.

               In our opinion, the consolidated financial statements referred to
above present fairly, in all material  respects,  the financial  position of the
Company as of December 31, 2000 and 1999 and the results of its  operations  and
its cash flows for each of the years in the three-year period ended December 31,
2000 in conformity with generally accepted accounting principles.






HACKER, JOHNSON & SMITH PA
Orlando, Florida
January 12, 2001




                                       52
<PAGE>


                               FFLC BANCORP, INC.

                             DIRECTORS AND OFFICERS



Directors:                    Occupation
----------                    ----------

Joseph J. Junod               Retired, General Manager, Avesta Sheffield Pipe
Chairman of the Board

Claron D. Wagner              President, Woody Wagner, Inc.
Vice Chairman

James P. Logan                President/Owner, Logan Sitework Contractors, Inc.
Ted R. Ostrander, Jr.         President, Lassiter-Ware, Inc.
H.D. Robuck, Jr.              Attorney; CEO, Ro-Mac Lumber & Supply, Inc.
Howart H. Hewitt              President/Owner, Hewitt Construction Company
Stephen T. Kurtz              President, FFLC Bancorp, Inc. & Subsidiary
Paul K. Mueller               Executive Vice President, FFLC Bancorp, Inc.
                              & Subsidiary

Advisory Directors:
-------------------

James R. Gregg                President, Jarol Company
James H. Herlong              General Partner, A.S. Herlong, Ltd.
Horace D. Robuck              President, Ro-Mac Lumber & Supply, Inc.

Officers:
---------

Stephen T. Kurtz
President and Chief Executive Officer

Paul K. Mueller
Executive Vice President and Treasurer

Sandra L. Rutschow
Vice President and Secretary



                                       53
<PAGE>



                           FIRST FEDERAL SAVINGS BANK
                                 OF LAKE COUNTY

                        DIRECTORS, OFFICERS AND MANAGERS


<TABLE>
<CAPTION>

<S>                                                      <C>
DIRECTORS                                                Vickie S. Baxter
                                                         Assistant Vice President and Loan Officer
Joseph J. Junod
Chairman of the Board                                    Victoria M. Boren
                                                         Assistant Vice President and Deposit Administrator
Claron D. Wagner
Vice Chairman                                            Donna Boyett
                                                         Assistant Vice President and Branch
James P. Logan                                           Operations Coordinator
Ted R. Ostrander, Jr.
H.D. Robuck, Jr.                                         Norma Caron
Howard H. Hewitt                                         Assistant Vice President and Checking Department Manager
Stephen T. Kurtz
Paul K. Mueller                                          James M. Combs
                                                         Assistant Vice President and Indirect Loan Manager
Advisory Directors
                                                         Stephanie Hodges
James R. Gregg                                           Assistant Vice President and Secondary Market Manager
James H. Herlong
Horace D. Robuck                                         Penny Hollis
                                                         Assistant Vice President and Compliance Officer
OFFICERS
                                                         Cindy Lay
Stephen T. Kurtz                                         Assistant Vice President and Data Manager &
President                                                MIS Coordinator
Chief Executive Officer
                                                         Charles L. Lee
Paul K. Mueller                                          Assistant Vice President and Security Officer
Executive Vice President
and Treasurer                                            Sandra A. Rowe
                                                         Assistant Vice President and Loan Servicing Manager
Dwight L. Hart
Senior Vice President and Mortgage Loan Manager          Craig S. Cannon
                                                         Bushnell Branch Manager
Joseph D. Cioppa
Senior Vice President and Commercial Loan Manager        Barbara A. Cordes
                                                         Information Systems Manager
Paul S. Allen
Senior Vice President, Audit, Planning and Budget        James R. Cummings
                                                         Collections Manager
Jay Bartholomew
Senior Vice President and Retail Banking Manager         Karen A. Dixon
                                                         Inverness Loan Officer
Brenda M. Grubb
Senior Vice President and Human Resources Manager        Dee Dee Dye
                                                         Lady Lake Office Manager
Susan L. Berkebile
Vice President and Area Loan Manager                     Lori Farfaglia
                                                         Citrus Ridge Branch Manager
Michael J. Cox
Vice President and Area Loan Manager                     Greg Heckler
                                                         Main Street Office Manager
Jankie Dhanpat
Vice President, SEC Reporting & Controller               Doris E. Hyatt
                                                         Loan Closing Manager
James D. Haug
Vice President and Lady Lake Branch Manager              Tara Keane
                                                         Eustis Branch Manager
Lawrence E. Hoag
Vice President and Operations Manager                    Mark Lachowicz
                                                         Inverness Office Manager
Brian R. Hofer
Vice President and Commercial Loan Officer               Marilyn Leugers
                                                         Main Office Branch Manager
Karen Hollister
Vice President and Loan Operations Manager               Hilda Lozano
                                                         Eustis Office Manager
Dennis R. Rogers
Vice President and Wildwood Branch Manager               Michael J. Price
                                                         Eustis Loan Officer
Sandra L. Rutschow
Vice President and Corporate Secretary                   Carol A. Sieder
                                                         South Leesburg Office Manager
Sandra L. Seaton
Vice President and South Leesburg Branch Manager         Leigh S. Skehan
                                                         Marketing Officer
Raynard S. (Ray) Taylor
Vice President and Commercial Loan Officer               Craig Smith
                                                         Fruitland Park Branch Manager
Phil Tompetrini
Vice President and Inverness Branch Manager              Catherine M. Wallin
                                                         Lake Square Office Manager
Tara Wainwright
Vice President and Clermont Branch Manager               Betty Wolcott
                                                         Facilities & Purchasing Manager
Lynda F. Wemple
Vice President and Accounting Manager                    Sylvie Zimmerman
                                                         Wildwood Office Manager
</TABLE>

                                       54
<PAGE>


                    FIRST FEDERAL SAVINGS BANK OF LAKE COUNTY
                     is Proud of the Outstanding Service its
           Employees Provide to the Community and the People it Serves


<TABLE>
<CAPTION>

MAIN OFFICE:
<S>                            <C>                             <C>
Paul S. Allen                  Tricka M. Parker                Janice M. Hull
Patricia A. Baldwin            Jennette L.Roode                Janna R. Mitchell
Jay R. Bartholomew             Sandra A. Rowe                  Leslie A. Rocha
Kathy E. Bauer                 Landa A. Russell                Sharon M. Slack
Vickie S. Baxter               Sandra L. Rutschow              Antoinette D. Smith
Victoria M. Boren              James Schaeffer                 Tara H. Wainwright
Barbara Boscana                Margaret M. Siegel              Darla Jean Williams
Deena M. Bryant                Leigh S. Skehan
Norma J. Caron                 Claire M. Smith                 EUSTIS OFFICE:
Maryann D. Chantos             Jill S. Spires
Linda S. Chapman               Lynn P. Stoffel                 Amanda L. Collier
Shu Een Chen-Noble             Raynard S. Taylor               Michael Cox
Joseph D. Cioppa               Michelle M. Thompson            Vivian R. Curry
Tina R. Clancy                 Virginia D. Vann                Tara A. Keane
Sheila C. Coffey               Orpha M. Vogt                   Hilda Lozano
Carlos E. Colon                Robert R. Wedlock               Katherine R. Mantlo
James M. Combs                 Lynda F. Wemple                 Natasha L. Pender
Diane S. Cook                  Margaret R. White               Michael J. Price
Barbara A. Cordes              Jacqueline E. Widows            Carolyn A. Rodgers
Jewel M. Correll               Joyce L. Williams               Tamika J. Rolle
Robert Cumm                    Betty L. Wolcott                Joan G. Sullivan
James R. Cummings              Lisa K. Woolwine                Juanita L. Taylor
Cheryl A. Davis                Jeffrey W. Wright
Dawn Rene Davison                                              WILDWOOD OFFICE:
Ginger L. Devine               FRUITLAND PARK OFFICE:
Carol A. Dewey                                                 Dana L. Fields
Jankie Dhanpat                 Judith M. Barber                Linda Gallop
Alma H. Dunbar                 Kimberly L. Jones               Latahna J. Green
Mary A. Durre                  Brandi L. Shaw                  Sophia A. Hamilton
Martha M. Duty                 Craig R. Smith                  Crystal L. House
Amy L. Eckert                  Delphine C. Williams            Michelle E. Odell
ReAnna R. Farlow                                               Dennis R. Rogers
Ruth E. Franzoni               LADY LAKE OFFICE:               Holly D.     Sanders
Terry J. French                                                Cathy H.     Smart
Joan P. Gibson                 Karen L. Bednarik               Sylvie M. Zimmerman
Linda J. Giggey                Sonja K. Craig
Zoann Goodman                  Estelle E. Crawley              SOUTH LEESBURG OFFICE:
Virginia I. Grantham           Deedee A. Dye
Jennifer Grovesteen            James D. Haug                   Cynthia M. Deeb
Brenda M. Grubb                Constance L. Merrell-Kasch      Sandra L. Seaton
Peggy L. Harris                Mindy L. Mueller                Carol A. Sieder
Dwight L. Hart                 Brenda A. Simmons               Brandi  M. Simko
Lawrence E. Hoag               Patricia L. Sizemore            Eva J. Snead
Stephanie Hodges               Heather L. Varner
Carol B. Holley                Vanessa D. Wall                 INVERNESS:
Penny M. Hollis                Betty T. Woods
Karen L. Hollister                                             Karen A. Dixon
Doris E. Hyatt                 MAIN STREET OFFICE:             Jamie R. Hemmendinger
Patricia B. Inman                                              Teresa A. Kuechle
Bobby H. Inscoe                Donna L. Boyett                 Mark Lachowicz
Juanita F. Jackson             Kari K. Caulk                   Judith Lamontagne
Jennifer D. Jennings           Brandy A. Dawkins               Jean Reese
Sondra Jones                   Gregory F. Heckler              Lillian G. Russo
Stephen T. Kurtz               Cynthia M. Page                 Phil P. Tompetrini
Linda N. Landers               Angela Nicole Phillips
Nancy J. Lane                  Rhonda L.Wilkerson              CITRUS RIDGE
Linda B. Law
Cynthia M. Lay                 LAKE SQUARE                     Stephany M. Barr
Leslie A. Leach                MALL OFFICE:                    Dana L. Decker
Charles L. Lee                                                 Lori M. Farfaglia
Betty J. Leech                 Melissa R. Adams                Trinia C. McClendon
Marilyn A. Leugers             Shannon J. Peters               Whitney L. White
Pamela J. Linville             Regina D. Shiver                Sarah L. Williams
Angie R. Liston                Catherine M. Wallin
Margaret H. Locke                                              BUSHNELL:
Cynthia A. Lord                CLERMONT OFFICE:
Pamela A. Malcolm                                              Elaine C. Buzzerd
Annette McCullough             Susan Lynn Berkebile            Craig S. Cannon
Suzanne Mission                Dena M. Castro                  Betty J. Hewett
Erika R. Morgan                Lynda S. Cole                   Natalie D.     Langford
Keri L. Morris                 Zaida I. Colon                  Inge Pelfrey
Paul K. Mueller                Donna L. Franklin
John R. Nelson                 Judy L. Garafola
Marquisa L. Parham             Brian R. Hofer
</TABLE>

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