FFLC
1998 ANNUAL REPORT

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 Shareholders 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
Selected Consolidated Financial Data and Financial Ratios................. 6-7
Management's Discussion and Analysis of Financial
Condition and Results of Operations .................................. 8-19
Consolidated Financial Statements ........................................ 20-50
Independent Auditors' Report.............................................. 51
Directors and Officers of FFLC Bancorp, Inc. ............................. 52
Directors and Officers of First Federal Savings Bank of Lake County....... 53
Employees ................................................................ 54

Inside Cover

CORPORATE PROFILE

FFLC Bancorp, Inc. ("FFLC" or the "Holding Company") became the holding company
for First Federal Savings Bank of Lake County (the "Savings Bank") (together,
the "Company") on January 4, 1994 upon the Savings Bank's conversion from a
federally chartered mutual savings association to a federally chartered stock
savings bank. The acquisition of the Savings Bank by the Holding Company was
accounted for as a pooling-of-interest. The Savings Bank is a community-oriented
savings institution offering a variety of financial services to meet the needs
of the communities it serves. The deposit accounts of the Savings Bank are
insured by the Federal Deposit Insurance Corporation.

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

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 6, 1999.

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.

Shareholder Assistance
Shareholders requiring a change of address, records or information about
lost certificates or dividend checks should contact:

Registrar and Transfer Company
10 Commerce Drive
Cranford, New Jersey 07016
800-368-5948

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

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

Visit First Federal's Internet Site at http://www.1stfederal.com. This site
provides up-to-date rates for certificates of deposit and mortgage loans, as
well as access to FFLC's current stock quotes and SEC filings.

FIRST FEDERAL LOGO HERE
OFFICE LOCATIONS

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 19 of the Consolidated Financial Statements for
a summary of quarterly financial data. All per share amounts have been restated
to give effect to the five-for-three stock split in November, 1997.

Cash
Dividends
Paid
High Low Per Share
---- --- ---------
Quarter Ended:

March 31, 1997................ 16 1/2 12 1/4 .07
June 30, 1997................. 17 1/8 15 .07
September 30, 1997............ 19 3/8 16 3/8 .07
December 31, 1997............. 23 1/2 18 1/2 .07
March 31, 1998................ 21 3/4 18 3/4 .09
June 30, 1998................. 21 3/4 19 .09
September 30, 1998........... 20 16 1/2 .09
December 31, 1998............. 17 3/8 14 3/4 .09

As of February 1, 1999, the Company had 855 holders of record of common stock.

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

AT YEAR END: 1998 1997 1996
---------- --------- ---------

Total assets ...................................... $ 463,820 400,237 346,442
Loans receivable, net ............................. $ 389,059 315,353 227,948
Securities ........................................ $ 40,392 58,598 98,568
Deposits .......................................... $ 351,030 315,390 282,664
Equity, substantially restricted .................. $ 53,223 51,429 53,626
Book value per share .............................. $ 14.56 13.74 13.20
Shares outstanding ................................ 3,655,620 3,743,988 4,062,895
Equity-to-assets ratio ............................ 11.47% 12.85% 15.48%
Nonperforming assets to total assets .............. .17% .19% 0.30%

FOR THE YEAR:

Interest income ................................... $ 32,173 28,156 24,218
Net interest income after provision for loan losses $ 14,220 12,091 11,152
Net income ........................................ $ 4,397 3,754 2,184
Basic income per share ............................ $ 1.22 1.01 .54
Diluted income per share .......................... $ 1.16 .96 .51
Loan originations ................................. $ 151,411 143,538 83,569
Return on average assets .......................... 1.05% 1.00% .65%
Return on average equity .......................... 8.37% 7.18% 3.94%
Average equity to average assets ratio ............ 12.52% 13.93% 16.62%
Noninterest expense to average assets ............. 2.01% 1.99% 2.49%

YIELDS AND RATES:

Weighted Average
Rate or Yield Average Rate or Yield During
at December 31, Year Ended December 31,
------------------- ---------------------------
1998 1997 1998 1997 1996
---- ---- ---- ---- ----

Loans .......................................... 7.96% 7.97% 8.27% 8.31% 8.33%
Securities ..................................... 6.37% 6.51% 6.32% 6.35% 6.22%
All interest-earning assets .................... 7.72% 7.87% 7.96% 7.80% 7.52%
Deposits ....................................... 4.58% 4.83% 4.78% 4.87% 4.79%
All interest-bearing liabilities ............... 4.67% 4.94% 4.88% 4.94% 4.79%
Interest-rate spread (1) ....................... 3.05% 2.93% 3.08% 2.86% 2.73%
Net yield on average interest-earning assets (2) N/A N/A 3.69% 3.53% 3.50%

(1) Average yield on all interest-earning assets less average rate paid on
all interest-bearing liabilities.

(2) Net interest income divided by average interest-earning assets.

LOGO HERE

Dear Stockholders:

Each year we are pleased to provide an annual report for review by our
stockholders and other interested parties. The purpose of the annual report is
to present you with detailed information regarding FFLC Bancorp, Inc., and to
describe ongoing activities of the Company.

The year 1998 was an excellent year in terms of financial performance by the
Company. Each quarter of the year set a new record for quarterly profit,
resulting in record earnings for the full year. The Company's subsidiary, First
Federal Savings Bank, enjoyed a year of increases in both loan volume and
deposits. The Bank ended the year with total assets greater in amount than ever
and with strong momentum going into 1999.

For FFLC Bancorp, earnings for the year totaled a record $4.4 million, a 17%
increase in net earnings over 1997, which had been the previous record with
earnings of $3.8 million. Basic earnings per share for 1998 were $1.22 compared
to $1.01 for 1997.

Growth of the Bank has been a primary focus and we achieved continued success
this past year. During 1998, loan originations totaled $198.7 million, a gain of
29% above the prior year. The Bank's residential loan volume amounted to $109.2
million, an increase of 14% above 1997. Commercial loans originated during the
year totaled $58.9 million, up 82% from 1997. Consumer lending also enjoyed
increased volume, with total originations of $27.3 million, a gain of 18% above
the prior year. Total loans outstanding at year-end were $401.5 million, an
increase of 22%. As you will recall, we started the commercial lending division
at the Bank in 1997 and the large percentage gain in that area is to be expected
in such a new division.

We also achieved growth in the Bank's deposit division. For the year, deposits
increased to a record of $351.0 million, a gain of $35.6 million, or 11%. As I
mentioned in the 1997 annual report, the Bank has been placing additional
emphasis on attracting checking and other types of transaction accounts. For
1998, we posted nearly half of the deposit gain in transaction accounts.

We continue to expand the Bank facilities in the Central Florida market. During
the first half of 1999, First Federal will open three new branch offices. The
first is in Inverness, the county seat of Citrus County. That location was
purchased as part of the NationsBank/Barnett Bank disposition of branch offices.
Citrus County is to the west of the two counties currently served by First
Federal and is a natural geographic extension for the Bank. The second location
is Bushnell, the county seat of Sumter County, located in the southern half of
that county. The Bushnell branch will have a storefront location in a new
Winn-Dixie shopping center and will complement the Bank's existing Wildwood
branch located in the northern half of Sumter County. The third office is being
constructed on the grounds of a new Winn-Dixie shopping center at the southern
end of Lake County. That is an area experiencing considerable growth in
population, and ours will be only the second bank in the immediate area.

The news media has been giving considerable attention to the impact of the
rollover from the year 1999 to 2000. We have been working for over two years in
preparing for the century change and the data processing firm that provides the
bulk of the Bank's data processing has been working at it for an even longer
period of time. Last November, First Federal and many other bank clients of the
data processing firm conducted extensive testing. We advanced our computers in
time to January 3, 2000, and performed all manner of transactions on deposit
accounts, loan accounts, and general ledger accounts. I am pleased to say the
test proved to be successful. Although there were minor problems with some
reports printed following the test, all transactions were successfully
performed. While we are pleased with the success of the test, we are
nevertheless continuing to work on preparation for the year 2000. We have
upgraded our computer network system and have replaced all non-compliant
hardware. While we have confidence that our systems will work properly, we have
been preparing contingency plans in the event that there are temporary
interruptions of power or communications. More than ever, I think it is worth
reminding our depositors that no one has ever lost a penny in an account insured
by the FDIC. Customers have trusted First Federal for over sixty-five years, and
we believe that the Bank continues to be the safest place for your money.

The directors, officers and staff of FFLC Bancorp appreciate the support of our
stockholders over the past five years. Our focus remains on profitably serving
the banking needs of our local communities, and we believe we have made
continued progress to that end.

Cordially yours,

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

SELECTED CONSOLIDATED FINANCIAL DATA
(Dollars in thousands, except per share amounts)
At December 31,
-----------------------------------------------------
1998 1997 1996 1995 1994
--------- ------- ------- ------- -------

Total assets.............................................. $ 463,820 400,237 346,442 325,832 310,622
Loans receivable, net..................................... 389,059 315,353 227,948 183,448 148,286
Cash and cash equivalents................................. 22,928 15,684 10,157 13,929 10,255
Securities ............................................... 40,392 58,598 98,568 119,148 144,854
Deposits ............................................... 351,030 315,390 282,664 267,703 251,752
Borrowed funds............................................ 56,789 30,000 8,198 150 3,150
Stockholders' equity...................................... 53,223 51,429 53,626 55,360 53,762

For the Year Ended December 31,
-----------------------------------------------------
1998 1997 1996 1995 1994
--------- --------- --------- --------- ---------

Interest income........................................... $ 32,173 28,156 24,218 22,493 19,480
Interest expense.......................................... 17,271 15,416 12,959 12,183 9,259
Net interest income....................................... 14,902 12,740 11,259 10,310 10,221
Provision for loan losses................................. 682 649 107 124 138
Net interest income after provision for loan losses....... 14,220 12,091 11,152 10,186 10,083
Noninterest income........................................ 1,264 1,219 809 709 647
Noninterest expense....................................... 8,446 7,473 8,299 5,874 5,212
Income before provision for income taxes.................. 7,038 5,837 3,662 5,021 5,518
Provision for income taxes................................ 2,641 2,083 1,478 1,928 1,948
Net income................................................ 4,397 3,754 2,184 3,093 3,570
Basic income per share (1)................................ 1.22 1.01 .54 .73 .84
Weighted average number of common
shares outstanding for basic (1).................... 3,592,253 3,700,220 4,069,825 4,232,498 4,253,033
Diluted income per share (1).............................. $ 1.16 .96 .51 .70 .81
Weighted average number of common shares
outstanding for diluted (1)......................... 3,777,085 3,911,256 4,267,992 4,427,098 4,409,715

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

SELECTED CONSOLIDATED FINANCIAL RATIOS
AND OTHER DATA:
At or For the Year Ended December 31,
-------------------------------------------------------
1998 1997 1996 1995 1994
--------- --------- --------- --------- ---------

Return on average assets..................................... 1.05% 1.00% 0.65% 0.98% 1.19%
Return on average equity..................................... 8.37% 7.18% 3.94% 5.59% 6.81%
Dividend payout ratio ....................................... 29.51% 28.51% 44.71% 25.86% 13.33%
Average equity to average assets............................. 12.52% 13.93% 16.62% 17.46% 17.47%
Total equity to total assets................................. 11.47% 12.85% 15.48% 16.99% 17.31%
Interest rate spread during year(1).......................... 3.08% 2.86% 2.73% 2.54% 2.83%
Net interest margin (2)...................................... 3.69% 3.53% 3.50% 3.35% 3.50%
Nonperforming assets to total assets (3)..................... 0.17% 0.19% 0.30% 0.10% 0.13%
Nonperforming loans to total loans (4)....................... 0.11% 0.07% 0.28% 0.09% 0.21%
Allowance for loan losses to non-performing loans............ 514.19% 695.87% 159.61% 561.49% 264.13%
Allowance for loan and REO
losses to nonperforming assets......................... 281.85% 224.83% 103.51% 288.48% 210.41%
Allowance for loan losses to gross loans..................... 0.57% 0.51% 0.45% 0.52% 0.55%
Operating expenses to average assets......................... 2.01% 1.99% 2.49% 1.85% 1.74%
Average interest-earning assets to
average interest-bearing liabilities................... 1.14 1.16 1.18 1.20 1.21
Net interest income to noninterest expenses.................. 1.76 1.70 1.36 1.76 1.96
Total shares outstanding (5)................................. 3,655,620 3,743,988 4,062,895 4,395,593 4,603,032
Book value per common share outstanding (5).................. $ 14.56 13.74 13.20 12.59 11.68
Number of banking offices (all full-service)................. 9 9 9 8 6

(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 real estate owned.
(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.

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 Savings 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,
securities and, to a lesser extent, construction loans, consumer and other
loans, and multi-family residential mortgage loans. In addition, the Savings
Bank holds investments permitted by federal laws and regulations including
securities issued by the U.S. Government and agencies thereof. The Savings
Bank's revenues are derived principally from interest on its mortgage loan and
mortgage-backed securities portfolios and interest and dividends on its
investment securities.

The Savings Bank is a community-oriented savings institution offering a variety
of financial services to meet the needs of the communities it serves. The
Savings Bank's deposit gathering and lending markets are primarily concentrated
in the communities surrounding its full service offices located in Lake, 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 Savings 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 Savings 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 Savings Bank had net income of $4.4 million for the year ended December 31,
1998, compared to net income of $3.8 million for the year ended December 31,
1997. At December 31, 1998, the Savings Bank had total assets of $463.8 million,
an increase of 16% over total assets of $400.2 million at December 31, 1997.
That increase resulted primarily from an $73.6 million, or 23%, increase in
loans receivable from $315.4 million at December 31, 1997 to $389 million at
December 31, 1998, reflecting increased local loan demand. Cash and cash
equivalents increased $7.2 million or 46% from $15.7 million to $22.9 million.
Securities decreased $18.2 million or 31.1% during 1998. Deposits increased
$35.6 million, or 11%, from $315.4 million at December 31, 1997 to $351 million
at December 31, 1998. Advances from Federal Home Loan Bank increased $26
million, while other borrowed funds increased $789,000 for a net increase of
$26.8 million or 89% in borrowings. Stockholders' equity increased $1.8 million.

REGULATION AND LEGISLATION

General

The operating results of the Savings Bank are affected by Federal laws and
regulations and the Savings 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 Savings Bank is a member of the Federal Home Loan Bank ("FHLB")
System and its deposit accounts are insured up to applicable limits by the FDIC
under the SAIF ("Savings Association Insurance Fund"). The Savings Bank must
file reports with the OTS and the FDIC concerning its activities and financial
condition in addition to obtaining regulatory approvals prior to entering into
certain transactions such as mergers with, or acquisitions of, other financial
institutions. There are periodic examinations by the OTS and the FDIC to test
the Savings Bank's compliance with various regulatory requirements. The
activities of savings institutions 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, 1998, the Savings 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, as discussed below.
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.

On September 30, 1996, legislation was enacted which, among other things,
imposed a special one-time assessment on SAIF member institutions, including the
Savings Bank, to recapitalize the SAIF and spread the obligations for payments
of Financing Corporation ("FICO") bonds across all SAIF and Bank Insurance Fund
("BIF") members. The FDIC special assessment levied amounted to 65.7 basis
points on SAIF assessable deposits held as of March 31, 1995. The special
assessment of $1.7 million before taxes was recognized by the Savings Bank in
the third quarter of 1996 and was tax deductible. That legislation eliminated
the substantial disparity between the amount that BIF and SAIF members had been
paying for deposit insurance premiums.

During 1998, BIF members paid a portion of the FICO payment equal to 1.22 basis
points on BIF-insured deposits, compared to 6.22 basis points payable by SAIF
members on SAIF-insured deposits, and will pay a pro rata share of the FICO
payment on the earlier of January 1, 2000 or the date upon which the last
savings association, such as the Savings Bank, ceases to exist. The legislation
also requires BIF and SAIF to be merged provided that subsequent legislation is
adopted to eliminate the savings association charter and no savings associations
remain as of that time.

Effective January 1, 1997, the FDIC lowered annual SAIF assessment rates to 0 to
27 basis points, a range comparable to those of BIF members, although SAIF
members continue to be subject to the higher FICO payments described above.
Management cannot predict the level of FDIC insurance assessments on an ongoing
basis or whether the BIF and SAIF will eventually be merged.

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

YEAR 2000 COMPLIANCE

The Company is acutely aware of the many areas affected by the Year 2000
computer issue, as addressed by the Federal Financial Institutions Examination
Council ("FFIEC") in its interagency statement which provided an outline for
institutions to manage the Year 2000 challenges effectively. A Year 2000 plan
has been approved by the Board of Directors which includes multiple phases,
tasks to be completed, and target dates for completion. Issues addressed in the
plan include awareness, assessment, renovation, validation, implementation,
testing, and contingency planning.

The Company has formed a Year 2000 committee that is charged with the oversight
of completing the Year 2000 project on a timely basis. The Company has completed
its awareness, assessment and renovation phases and is actively involved in
validating and implementing its plan. At the present time, the Company has
substantially completed its testing phase, the results of which indicate that
the Company's internal systems appear to be Year 2000 ready. Since it routinely
upgrades and purchases technologically advanced software and hardware on a
continual basis, the Company has determined that the cost of making
modifications to correct any Year 2000 issues will not materially affect
reported operating results. Management does not believe that the Company has
incurred or will incur material costs associated with the Year 2000 issue.

The Company's vendors and suppliers have been contacted for written confirmation
of their product readiness for Year 2000 compliance. Negative or deficient
responses are analyzed and periodically reviewed to prescribe timely actions
within the Company's contingency planning. The Company's main service provider
has completed testing of its mission critical application software and item
processing software; the test results, which have been documented and validated,
are deemed to be Year 2000 compliant. FFIEC guidance on testing Year 2000
compliance of service providers states that proxy tests are acceptable
compliance tests. In proxy testing, the service provider tests with a
representative sample of financial institutions that use a particular service,
with the results of such testing shared with all similarly situated clients of
the service provider. The Company has authorized the acceptance of proxy testing
since the proxy tests have been conducted with financial institutions that are
similar in type and complexity to its own using the same version of the Year
2000 ready software and the same hardware and operating systems.

The Company also recognizes the importance of determining that its borrowers are
facing the Year 2000 problem in a timely manner to avoid deterioration of the
loan portfolio solely due to this issue. All material relationships have been
identified and questionnaires have been completed to assess the inherent risks.
Deposit customers have received statement stuffers and informational material in
this regard. The Company plans to work on a one-on-one basis with any borrower
who has been identified as having high Year 2000 risk exposure.

Notwithstanding our actions, there can be no assurances that all hardware and
software that the Company will use will be Year 2000 compliant. Management
cannot predict the amount of financial difficulties it may incur due to
customers and vendors inability to perform according to their agreements with
the Company or the effects that other third parties may cause as a result of
this issue. Therefore, there can be no assurance that the failure or delay of
others to address the issue or that the costs involved in such process will not
have a material adverse effect on the Company's business, financial condition,
and results of operations.

Based on testing results to date (as noted above), the Company's mission
critical systems have been deemed to be Year 2000 ready. However, a written
contingency plan has been developed to address problems that might be caused
from Year 2000 system failures. Testing of the contingency plan is in progress
and is scheduled to be completed by June 30, 1999. With regard to non-mission
critical internal systems, the Company's contingency plans are to replace those
systems that test as being noncompliant. Alternatively, some systems could be
handled manually on an interim basis. Should outside service providers not be
able to provide compliant systems, the Company will terminate those
relationships and transfer to other vendors. It is anticipated that the
Company's deposit customers will have increased demands for cash in the latter
part of 1999 and, correspondingly, the Company will maintain higher liquidity
levels.

CREDIT RISK

The Savings 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 Savings Bank. The Savings Bank has underwriting
guidelines and credit review procedures designed to minimize such credit losses.

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 Company's operating expenses 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.

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, 1998. 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.

Year Ended December 31,
-----------------------------------------------------------------------------------
1998 1997 1996
---------------------------- ------------------------ ---------------------------
Yield At Average Average Average
December 31, Average Yield/ Average Yield/ Average Yield/
1998 Balance Interest Cost Balance Interest Cost Balance Interest Cost
---- ------- -------- ---- --------------------- ------- -------- ----
(Dollars in thousands)

Interest-earning assets:
Loans receivable (1)............... 7.96% $ 343,967 28,450 8.27% $ 268,425 22,318 8.31% $ 201,840 16,813 8.33%
Securities......................... 6.37 44,533 2,814 6.32 82,720 5,250 6.35 108,523 6,745 6.22
Other interest-earning assets (2).. 5.32 15,606 909 5.82 10,000 588 5.88 11,577 660 5.70
-------- ------- ------- ------ ------- -------

Total interest-earning assets. 7.72 404,106 32,173 7.96 361,145 28,156 7.80 321,940 24,218 7.52
------ ------ ------

Noninterest-earning assets............. 15,130 14,160 11,727
-------- ------- -------

Total assets.................. $ 419,236 $ 375,305 $ 333,667
========= ========= =========

Interest-bearing liabilities:
NOW and money market
accounts........................ 2.25 49,862 1,088 2.18 40,819 991 2.43 38,647 960 2.48
Passbook and statement savings
accounts........................ 2.00 23,683 517 2.18 24,963 687 2.75 24,218 629 2.60
Certificates....................... 5.44 246,375 13,674 5.55 227,271 12,601 5.54 206,471 11,311 5.48
FHLB advances...................... 5.27 33,718 1,991 5.90 13,226 814 6.15 150 11 7.33
Other borrowings................... - 14 1 7.14 5,629 323 5.74 849 48 5.65
--------- ------- ------- ------ ------- ------

Total interest-bearing
liabilities................. 4.67 353,652 17,271 4.88 311,908 15,416 4.94 270,335 12,959 4.79
------ ------ ------

Noninterest-bearing deposits........... 7,602 5,838 4,035
Noninterest-bearing liabilities........ 5,473 5,285 3,836
Stockholders' equity................... 52,509 52,274 55,461
------- ------- -------

Total liabilities and equity.. $ 419,236 $ 375,305 $ 333,667
========= ========= =========

Net interest-earning assets and
interest rate spread (3)........... 3.05% $ 50,454 3.08% $ 49,237 2.86% $ 51,605 2.73%
==== ========= ==== ========= ==== ========= ====

Net interest income and net
margin (4)......................... $ 14,902 3.69% $ 12,740 3.53% $ 11,259 3.50%
======== ==== ======== ==== ======== ====
Ratio of interest-earning assets
to interest-bearing liabilities.... 1.14 1.16 1.19
==== ==== ====

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

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).

Year Ended December 31, Year Ended December 31,
1998 vs. 1997 1997 vs. 1996
Increase (Decrease) Increase (Decrease)
------------------------------------------ ------------------------------------------
Due to Due to
------------------------------------------ ------------------------------------------
Rate/ Rate/
Rate Volume Volume Net Rate Volume Volume Net
------ ------ ------ ------ ------ ------ ------ ------
(Dollars in thousands)

Interest-earning assets:
Loan receivable, net........... $(116) 6,281 (33) 6,132 (31) 5,546 (10) 5,505
Securities .................... (23) (2,424) 11 (2,436) 143 (1,604) (34) (1,495)
Other interest-earning (1) .... (6) 330 (3) 321 21 (90) (3) (72)
------ ------ ------ ------ ------ ------ ------ ------

Total .................. (145) 4,187 (25) 4,017 133 3,852 (47) 3,938
------ ------ ------ ------ ------ ------ ------ ------

Interest-bearing liabilities:
NOW and money market accounts . (100) 220 (22) 98 (22) 54 (1) 31
Passbook and
statement savings accounts (142) (35) 7 (170) 37 20 1 58
Certificates .................. 13 1,059 1 1,073 137 1,139 14 1,290
FHLB advances ................. (24) 896 (18) 854 (2) 959 (154) 803
Other borrowings .............. -- -- -- -- 1 270 4 275
------ ------ ------ ------ ------ ------ ------ ------

Total .................. (253) 2,140 (32) 1,855 151 2,442 (136) 2,457
------ ------ ------ ------ ------ ------ ------ ------

Net change in net interest
income......................... $ 108 2,047 7 2,162 (18) 1,410 89 1,481
====== ====== ====== ====== ====== ====== ====== ======

(1) Includes interest-bearing deposits and FHLB Stock.

LIQUIDITY AND CAPITAL RESOURCES

The Savings 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
Savings 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 Savings Bank's liquidity ratios were 8.8% and
8.7% at December 31, 1998 and December 31, 1997, respectively.

The Savings 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, 1998, the Savings Bank had outstanding commitments to originate
$9.2 million of loans, to fund unused lines of credit of $29.6 million and to
fund the undisbursed portion of loans in process of $10.6 million. The Savings
Bank believes that it will have sufficient funds available to meet its
commitments. At December 31, 1998, certificates of deposit which were scheduled
to mature in one year or less totaled $168.1 million. Management believes, based
on past experience, that a significant portion of these funds will remain with
the Savings Bank.

REGULATORY CAPITAL REQUIREMENTS

As a federally-chartered financial institution, the Savings 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 is a summary of the capital requirements, the Savings Bank's
regulatory capital and the amounts in excess at December 31, 1998:

Tangible Core Risk-Based
------------------- ------------------- ------------------
% of % of % of Risk-
Adjusted Adjusted Weighted
Amount Assets Amount Assets Amount Assets
------ ------ ------ ---- ------ -----
(Dollars in thousands)

Regulatory capital.... $ 46,082 9.94% $ 46,082 9.94% $ 48,243 18.02%
Requirement........... 6,957 1.50 13,913 3.00 10,711 4.00
------ ------ ------ ---- ------ -----

Excess................ $ 39,125 8.44% $ 32,169 6.94% $ 37,532 14.02%
====== ==== ====== ==== ====== =====

MARKET RISK

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

The Company's primary objective is 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 structure 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.

ASSET /LIABILITY MANAGEMENT

The Savings 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 Savings Bank's goal is to continue to be a
well-capitalized and profitable operation that provides service that is
professional, efficient and courteous. The Savings 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 Savings 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,
1998, the Savings Bank's one-year interest sensitivity gap (the difference
between the amount of interest-earning assets anticipated by the Savings Bank,
based on certain assumptions, to mature or reprice within one year and the
amount of interest-bearing liabilities anticipated by the Savings Bank, based on
certain assumptions, to mature or reprice within one year) as a percentage of
total assets was a positive 19.9%. Generally, an institution with a positive gap
would experience an increase in net interest income in a period of rising
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 Savings Bank will be able to maintain its net interest-rate
spread as market interest rates fluctuate.

The Savings Bank monitors its interest rate risk through the Asset/Liability
Committee which meets weekly and reports the results of such monitoring
quarterly to the Board of Directors. The Savings Bank's policy is to seek to
maintain a balance between interest-earning assets and interest-bearing
liabilities so that the Savings Bank's cumulative one-year gap ratio is within a
range which management believes is conducive to maintaining profitability
without incurring undue risk. The Savings Bank has increased its investment in
adjustable-rate and shorter average life, fixed-rate mortgage-related securities
and, generally, has not retained in its portfolio 30 year fixed-rate loans, in
order to position itself against the consequences of rising interest rates. The
Savings Bank also maintains liquid assets in excess of the regulatory
requirement, allowing for the possibility of disintermediation when interest
rates fluctuate. The Savings Bank's liquidity ratio of 8.8% at December 31, 1998
is significantly higher than the regulatory requirement of 4%. In addition, the
Savings 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.

The following table sets forth the amounts of interest-earning assets and
interest-bearing liabilities outstanding at December 31, 1998 that are expected
to reprice or mature, based upon certain assumptions, in each of the future
periods shown.

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 Other(1) Total
--------- ------ ------ ------ ------ ------ ----- ------ -------

Rate-sensitive assets:
Mortgage loans, net.......... $ 91,660 51,539 64,429 99,937 14,292 11,239 3,601 (1,453) 335,244
Consumer and other loans..... 17,348 4,504 7,736 17,778 5,757 892 104 (304) 53,815
Mortgage-backed
securities................ 11,639 5,974 1,620 3,396 1,620 468 - 65 24,782
Interest-earning deposits.... 13,413 - - - - - - - 13,413
Investment securities........ 2,885 1,160 - 655 - 1,713 - 66 6,479
Mutual funds................. 306 7,187 - 1,745 - - - (107) 9,131
FHLB stock................... 2,800 - - - - - - - 2,800
-------- --------- --------- ---------- --------- --------- -------- ------- --------

Total interest-earning
assets............... 140,051 70,364 73,785 123,511 21,669 14,312 3,705 (1,733) 445,664
------- ------ ------ ------- ------ ------ ------ ===== =======
Rate-sensitive liabilities:
Deposits:
Passbook and statement
savings................. 1,598 1,488 2,673 7,559 4,252 4,170 1,298 - 23,038
NOW accounts.............. 3,607 3,356 6,030 17,051 9,591 9,406 2,926 - 51,968
Money-market.............. 1,169 1,088 1,955 5,528 3,109 3,049 949 - 16,848
Certificates.............. 60,454 54,414 53,234 85,840 5,234 - - - 259,176
Borrowed funds............... 789 - - 6,000 45,000 5,000 - - 56,789
-------- --------- --------- -------- ------ ------ --------- ------- -------

Total interest-bearing
liabilities.......... 67,617 60,346 63,892 121,979 67,187 21,626 5,173 - 407,819
------- ------ ------ ------- ------ ------ ------ ------- -------

Interest-sensitivity gap......... $ 72,434 10,018 9,893 1,532 (45,518) (7,314) (1,468) (1,733) 37,845
====== ====== ====== ======== ====== ====== ====== ===== =======
Cumulative interest-
sensitivity gap.............. $ 72,434 82,452 92,345 93,877 48,360 41,046 39,578
====== ====== ====== ======= ====== ====== ======
Cumulative interest-sensitivity
gap as a percentage of
total assets................. 15.62% 17.78% 19.91% 20.24% 10.43% 8.85% 8.53%
====== ====== ====== ====== ====== ====== ======
Cumulative interest-earning assets
as a percentage of cumulative
interest-bearing liabilities. 207.12% 164.43% 148.13% 129.91% 112.69% 110.19% 109.70%
====== ====== ====== ====== ====== ====== ======

(1) Represents premiums, discounts, market value adjustments and provision for
loan losses.

COMPARISON OF YEARS ENDED DECEMBER 31, 1998 TO DECEMBER 31, 1997

General Operating Results. Net income for the year ended December 31, 1998, was
$4.4 million or $1.22 per share, compared to net income for the year ended
December 31, 1997 of $3.8 million or $1.01 per share. The increase in net
income was primarily the result of an increase of $2.2 million in net
interest income before provision for loan losses for 1998.

Interest Income. Interest income increased $4.0 million, or 14%, from $28.2
million for the year ended December 31, 1997 to $32.2 million for the year
ended December 31, 1998. The increase was due to an increase in the average
balance of total interest-earning assets, primarily loans, from $361.1
million for the year ended December 31, 1997 to $404.1 million for the year
ended December 31, 1998, an increase of $43 million, or 12% and an increase
in the average yield on interest-earning assets from 7.80% for the year
ended December 31, 1997 to 7.96% for the year ended December 31, 1998. The
average yield on loans decreased from 8.31% for the year ended December 31,
1997 to 8.27% for the year ended December 31, 1998. The average yield on
securities decreased from 6.35% for the year ended December 31, 1997 to
6.32% for the year ended December 31, 1998. The average yield on other
interest earning assets decreased from 5.88% for the year ended December 31,
1997 to 5.82% for the year ended December 31, 1998.

Interest Expense. Interest expense increased $1.9 million from $15.4 million at
December 31, 1997 to $17.3 million at December 31, 1998. The increase was
due to a $41.7 million or 13% increase in the average balance of total
interest-bearing liabilities from $311.9 million for the year ended December
31, 1997 to $353.6 million for the year ended December 31, 1998 offset in
part by a decrease in the weighted-average rate paid on interest-bearing
liabilities from 4.94% during 1997 to 4.88% in 1998.

Provision for Loan Losses. The Savings Bank's provision for loan losses
increased from $649,000 for the year ended December 31, 1997 to $682,000 for
the year ended December 31, 1998. The increase of $33,000 is due to the
growth of the loan portfolio and reflects the Savings 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 Savings Bank's loan portfolio.

Noninterest Income. Noninterest income increased from $1.2 million for the year
ended December 31, 1997 to $1.3 million for the year ended December 31,
1998. The increase was due to a $258,000 increase in other service charges
and fees and a $73,000 increase in deposit account fees, which was partially
offset by a $302,000 decrease in gain on sale of other assets.

Noninterest Expense. Noninterest expense consists primarily of salaries and
employee benefits and occupancy expense. Noninterest expense increased
$973,000 for the year ended December 31, 1998 compared to 1997. This
increase was primarily due to a $544,000 increase in salaries and employee
benefits and a $130,000 increase in occupancy expense, caused by growth of
the Company.

Provision for Income Taxes. The provision for federal and state income taxes
increased from $2.1 million for the year ended December 31, 1997 to $2.6
million for the year ended December 31, 1998. The effective tax rate
increased from 35.7% for the year ended December 31, 1997 to 37.5% for the
year ended December 31, 1998.

COMPARISON OF YEARS ENDED DECEMBER 31, 1997 TO DECEMBER 31, 1996

General Operating Results. Net income for the year ended December 31, 1997, was
$3.8 million or $1.01 per share, compared to net income for the year ended
December 31, 1996 of $2.2 million or $.54 per share. The increase in net
income was primarily the result of an increase of $1.5 million in net
interest income before provision for loan losses for 1997, and the effect of
the one-time SAIF assessment during 1996 of $1.7 million before taxes.

Interest Income. Interest income increased $3.9 million, or 16.3%, from $24.2
million for the year ended December 31, 1996 to $28.2 million for the year
ended December 31, 1997. The increase was due to an increase in the average
balance of total interest-earning assets from $321.9 million for the year
ended December 31, 1996 to $361.1 million for the year ended December 31,
1997, an increase of $39.2 million, or 12.2% and an increase in the average
yield on interest-earning assets from 7.52% for the year ended December 31,
1996 to 7.80% for the year ended December 31, 1997. The average yield on
loans decreased from 8.33% for the year ended December 31, 1996 to 8.31% for
the year ended December 31, 1997. The average yield on securities increased
from 6.22% for the year ended December 31, 1996 to 6.35% for the year ended
December 31, 1997. The average yield on other interest earning assets
increased from 5.70% for the year ended December 31, 1996 to 5.88% for the
year ended December 31, 1997.

Interest Expense. Interest expense increased $2.5 million from $13.0 million at
December 31, 1996 to $15.4 million at December 31, 1997. The increase was
due to a $41.6 million or 15.4% increase in the average balance of total
interest-bearing liabilities from $270.3 million for the year ended December
31, 1996 to $311.9 million for the year ended December 31, 1997 and an
increase in the weighted-average rate paid on interest-bearing liabilities
from 4.79% during 1996 to 4.94% in 1997.

Provision for Loan Losses. The Savings Bank's provision for loan losses
increased from $107,000 for the year ended December 31, 1996 to $649,000 for
the year ended December 31, 1997. The increase of $542,000 is due to the
growth of the commercial loan portfolio and reflects the Savings 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 Savings Bank's loan portfolio.

Noninterest Income. Noninterest income increased from $809,000 for the year
ended December 31, 1996 to $1.2 million for the year ended December 31,
1997. The increase was due to a gain on the sale of other assets during 1997
of $302,000, with no corresponding amount during 1996 and an increase in
other service charges and fees of $94,000 for the year ended December 31,
1997.

Noninterest Expense. Noninterest expense consists primarily of salaries and
employee benefits, occupancy expense and deposit insurance premiums.
Noninterest expense decreased $826,000 for the year ended December 31, 1997
compared to 1996. This decrease was primarily due to the one-time SAIF
recapitalization expense of $1.7 million during 1996 and a related decrease
in deposit insurance premium of $477,000 during 1997, partially offset by
increases in salaries and employee benefits of $934,000 and occupancy
expense of $118,000. The remaining items in noninterest expense increased
$254,000 for the year ended December 31, 1997 compared to the year ended
December 31, 1996 primarily due to the growth of the Company.

Provision for Income Taxes. The provision for federal and state income taxes
increased from $1.5 million for the year ended December 31, 1996 to $2.1
million for the year ended December 31, 1997. The effective tax rate
decreased from 40.4% for the year ended December 31, 1996 to 35.7% for the
year ended December 31, 1997.

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
Savings Bank's operations. Unlike most industrial companies, nearly all the
assets and liabilities of the Savings Bank are monetary in nature. As a result,
interest rates have a greater impact on the Savings 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.

FUTURE ACCOUNTING REQUIREMENTS

The FASB has recently issued the following Statement of Financial Accounting
Standards which is relevant to the Company:

Financial Accounting Standards 133 - Accounting for Derivative Investments
and Hedging Activities requires companies to record derivatives on the
balance sheet as assets or liabilities, measured at fair value. Gains or
losses resulting from changes in the values of those derivatives would be
accounted for depending on the use of the derivatives and whether they
qualify for hedge accounting. The key criterion for hedge accounting is that
the hedging relationship must be highly effective in achieving offsetting
changes in fair value or cash flows. The Company will be required to adopt
this Statement effective January 1, 2000. Management does not anticipate
that this Statement will have a material impact on the Company.

FFLC BANCORP, INC.

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

December 31,
------------------------
1998 1997
--------- --------

Assets

Cash and due from banks ................................................. $ 9,515 7,122
Interest-bearing deposits ............................................... 13,413 8,562
--------- --------
Cash and cash equivalents ................................... 22,928 15,684
--------- --------

Securities available for sale ........................................... 22,165 26,581
Securities held to maturity (market value of $18,425 in 1998
and $32,520 in 1997) ................................................ 18,227 32,017
Loans receivable, net of allowance for loan losses of $2,283 in 1998
and $1,684 in 1997 .................................................. 389,059 315,353
Accrued interest receivable:
Securities .......................................................... 352 537
Loans receivable .................................................... 1,890 1,597
Premises and equipment, net ............................................. 5,597 5,313
Foreclosed real estate .................................................. 366 507
Real estate held for development ........................................ 122 122
Restricted securities - Federal Home Loan Bank stock, at cost ........... 2,800 2,304
Other assets ............................................................ 314 222
--------- --------

Total ....................................................... $ 463,820 400,237
========= ========

Liabilities and Stockholders' Equity

Liabilities:
NOW and money market accounts ....................................... 68,816 50,597
Savings accounts .................................................... 23,038 24,503
Certificates ........................................................ 259,176 240,290
--------- --------

Total deposits .............................................. 351,030 315,390
--------- --------

Advances from Federal Home Loan Bank .................................... 56,000 30,000
Other borrowed funds .................................................... 789 --
Deferred income taxes ................................................... 284 737
Accrued expenses and other liabilities .................................. 2,494 2,681
--------- --------

Total liabilities ........................................... 410,597 348,808
--------- --------

Commitments and contingencies (Notes 4, 9, 12 and 20)

FFLC BANCORP, INC.

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

December 31,
------------------------
1998 1997
--------- --------

Stockholders' equity:
Preferred stock, $.01 par value, 1,000,000 shares authorized,
none outstanding ................................................ -- --
Common stock, $.01 par value, 9,000,000 shares authorized,
4,372,041 in 1998 and 4,312,146 in 1997 shares issued ........... 44 43
Additional paid-in-capital .......................................... 29,286 28,265
Retained income ..................................................... 39,714 36,622
Accumulated other comprehensive income, unrealized loss on securities
available for sale, net of tax of $39 in 1998 and $53 in 1997 ... (65) (88)
Treasury stock, at cost (716,421 shares in 1998 and
568,158 shares in 1997) ......................................... (15,125) (12,466)
Stock held by Incentive Plan Trusts ................................. (631) (947)
--------- --------

Total stockholders' equity .................................. 53,223 51,429
--------- --------

Total ....................................................... $ 463,820 400,237
========= =======

See accompanying Notes to Consolidated Financial Statements.

FFLC BANCORP, INC.

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

Year Ended December 31,
----------------------------------------
1998 1997 1996
---------- --------- ---------

Interest income:
Loans receivable ...................................... $ 28,450 22,318 16,813
Securities available for sale ......................... 1,169 2,440 1,344
Securities held to maturity ........................... 1,645 2,810 5,401
Other interest-earning assets ......................... 909 588 660
---------- --------- ---------

Total interest income ............................. 32,173 28,156 24,218
---------- --------- ---------
Interest expense:
Deposits .............................................. 15,279 14,279 12,900
Borrowed funds ........................................ 1,992 1,137 59
---------- --------- ---------

Total interest expense ............................ 17,271 15,416 12,959
---------- --------- ---------

Net interest income ............................... 14,902 12,740 11,259

Provision for loan losses ................................. 682 649 107
---------- --------- ---------

Net interest income after provision for loan losses 14,220 12,091 11,152
---------- --------- ---------
Noninterest income:
Deposit account fees .................................. 558 485 489
Other service charges and fees ........................ 618 360 266
Gain on sale of securities available for sale ......... -- 11 --
Gain on sale of other assets .......................... -- 302 --
Other ................................................. 88 61 54
---------- --------- ---------

Total noninterest income .......................... 1,264 1,219 809
---------- --------- ---------
Noninterest expense:
Salaries and employee benefits ........................ 5,218 4,674 3,740
Occupancy expense ..................................... 1,060 930 812
Deposit insurance premium ............................. 195 147 624
SAIF recapitalization assessment ...................... -- -- 1,655
Advertising and promotion ............................. 278 224 122
Data processing expense ............................... 477 429 384
Professional services ................................. 303 229 270
Other ................................................. 915 840 692
---------- --------- ---------

Total noninterest expense ......................... 8,446 7,473 8,299
---------- --------- ---------

FFLC BANCORP, INC.

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

Year Ended December 31,
----------------------------------------
1998 1997 1996
---------- --------- ---------

Income before income taxes ................................ 7,038 5,837 3,662

Income taxes ...................................... 2,641 2,083 1,478
---------- --------- ---------

Net income ................................................ $ 4,397 3,754 2,184
========== ===== =====

Basic income per share of common stock .................... $ 1.22 1.01 .54
========== ===== =====

Weighted-average number of shares outstanding for basic ... 3,592,253 3,700,220 4,069,825
========== ===== =====

Diluted income per share of common stock .................. $ 1.16 .96 .51
========== ===== =====

Weighted-average number of shares outstanding for diluted . 3,777,085 3,911,256 4,267,992
========== ===== =====

See accompanying Notes to Consolidated Financial Statements.

FFLC BANCORP, INC.

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

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

Balance at December 31, 1995........ $ 28 27,041 (2,373) (1,946) 32,704 (94) 55,360
------ ---
Comprehensive income:

Net income..................... - - - - 2,184 - 2,184

Change in unrealized gains
(losses) on securities available
for sale, net of income taxes
of $59....................... - - - - - (99) (99)
------ ---

Comprehensive income................ - - - - 2,184 (99) 2,085
------ --- ------
Net proceeds from the issuance
of 7,993 shares of common
stock.......................... - 80 - - - - 80

Shares committed to participants
in incentive plans (130,217
shares remain uncommitted
at December 31, 1996).......... - 265 - 684 - - 949

Dividends paid, net of $60 of
dividends on ESOP shares
recorded as compensation
expense........................ - - - - (926) - (926)

Purchase of treasury stock,
207,612 shares................. - - (3,922) - - - (3,922)
---- ------ ------ ------ ------ ---- ------
Balance at December 31, 1996........ 28 27,386 (6,295) (1,262) 33,962 (193) 53,626
==== ====== ====== ====== ====== ==== ======

(continued)

FFLC BANCORP, INC.

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

Balance at December 31, 1996........... $ 28 27,386 (6,295) (1,262) 33,962 (193) 53,626
------ ----- ------
Comprehensive income:

Net income........................ - - - - 3,754 - 3,754

Change in unrealized gains
(losses) on securities available
for sale, net of income taxes
of $63.......................... - - - - - 105 105
------ ----- ------

Comprehensive income................... - - - - 3,754 105 3,859
------ ----- ------

Net proceeds from the issuance of
34,825 shares of common
stock............................. - 283 - - - - 283

Shares committed to participants
in incentive plans (162,399
shares remain uncommitted
at December 31, 1997)............. - 596 - 315 - - 911

Dividends paid, net of $61 of
dividends on ESOP shares
recorded as compensation
expense........................... - - - - (1,079) - (1,079)

Purchase of treasury stock,
228,502 shares.................... - - (6,171) - - - (6,171)

Five-for-three stock split in
November, 1997.................... 15 - - - (15) - -
---- ------ ------- ------ ------- ---- ------

Balance at December 31, 1997........... 43 28,265 (12,466) (947) 36,622 (88) 51,429
==== ====== ======= ====== ======= ==== ======

(continued)

FFLC BANCORP, INC.

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

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................... - - - - 4,397 23 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
==== ====== ======= ====== ======= ==== ======

See accompanying Notes to Consolidated Financial Statements.

FFLC BANCORP, INC.

Consolidated Statements of Cash Flows
($ in thousands)

Year Ended December 31,
---------------------------------------
1998 1997 1996
-------- -------- -------

Cash flows from operating activities:
Net income ......................................................... $ 4,397 3,754 2,184
Adjustments to reconcile net income
to net cash provided by operations:
Provision for loan losses........................................ 682 649 107
Depreciation..................................................... 406 395 345
Gain on sale of securities available for sale.................... - (11) -
Gain on sale of foreclosed real estate........................... (36) (11) -
Credit for deferred income taxes................................. (467) (256) (116)
Shares committed and dividends to incentive
plan participants............................................ 1,016 972 1,009
Amortization of premiums or discounts on securities.............. (10) (44) (106)
Deferral of deferred loan fees and unearned interest............. 413 254 139
Purchase of Federal Home Loan Bank stock......................... (496) (365) (11)
Increase in accrued interest receivable.......................... (108) (115) (73)
(Increase) decrease in other assets.............................. (92) (38) 145
(Decrease) increase in accrued expenses and other liabilities.... (187) 1,657 (490)
-------- -------- -------

Net cash provided by operating activities................ 5,518 6,841 3,133
-------- -------- -------

Cash flows from investing activities:
Proceeds from principal repayments and maturities of securities
held to maturity..................................................... 13,788 18,135 28,300
Purchase of securities available for sale................................ (9,555) (7,490) (31,339)
Proceeds from principal repayments and maturities of securities
available for sale................................................... 14,020 28,590 23,567
Proceeds from sales of securities available for sale..................... - 958 -
Purchase of loans receivable............................................. - - (2,106)
Proceeds from sale of loans receivable................................... - - 1,557
Loan disbursements....................................................... (151,411) (143,538) (83,569)
Principal repayments on loans............................................ 76,747 54,840 39,106
Purchase of premises and equipment, net.................................. (690) (564) (672)
Proceeds from sales of foreclosed real estate............................ 40 255 70
-------- -------- -------

Net cash used in investing activities.................... (57,061) (48,814) (25,086)
-------- -------- -------

(continued)

FFLC BANCORP, INC.

Consolidated Statements of Cash Flows, Continued
($ in thousands)

Year Ended December 31,
-------------------------------------
1998 1997 1996
--------- ------- -------

Cash flows from financing activities:
Net increase in noninterest-bearing demand, savings,
NOW and money-market accounts ........................................ 16,754 4,382 3,152
Net increase in certificate accounts ..................................... 18,886 28,344 11,809
Net increase in Federal Home Loan Bank advances .......................... 26,000 29,850 --
Net increase (decrease) in other borrowed funds .......................... 789 (8,048) 8,048
Stock options exercised .................................................. 360 283 80
Purchase of treasury stock ............................................... (2,659) (6,171) (3,922)
Cash dividends paid ...................................................... (1,343) (1,140) (986)
-------- ------- -------

Net cash provided by financing activities .................... 58,787 47,500 18,181
-------- ------- -------

Net increase (decrease) in cash and cash equivalents ......................... 7,244 5,527 (3,772)

Cash and cash equivalents at beginning of year ............................... 15,684 10,157 13,929
-------- ------- -------

Cash and cash equivalents at end of year ..................................... $ 22,928 15,684 10,157
======== ======= =======
Supplemental disclosures of cash flow information
Cash paid during the year for:
Interest ............................................................. $ 17,564 15,125 12,937
======== ======= =======

Income taxes ......................................................... $ 3,076 2,212 1,500
======== ======= =======
Noncash investing and financing activities:

Accumulated other comprehensive income, change in unrealized
loss on securities available for sale, net of tax................. $ 23 105 (99)
======== ======= =======

Transfers from loans to foreclosed real estate........................ $ 193 444 287
======== ======= =======

Loans originated on sales of foreclosed real estate................... $ 297 54 21
======== ======= =======

Loans funded by and sold to correspondent ............................ $ 8,383 2,469 2,368
======== ======= =======

See accompanying Notes to Consolidated Financial Statements.

FFLC BANCORP, INC.

Notes to Consolidated Financial Statements

December 31, 1998, 1997 and 1996

(1) Summary of Significant Accounting Policies
FFLCBancorp, Inc. (the "Holding Company") was incorporated in Delaware on
September 16, 1993 as a unitary savings and loan holding company. The
Holding Company completed its public offering of 4,603,032 shares
(adjusted for stock split) of common stock on January 4, 1994 and
acquired First Federal Savings Bank of Lake County (the "Savings Bank")
in connection with the Savings Bank's conversion from a
federally-chartered mutual savings association to a federally-chartered
stock savings bank. The Holding Company's acquisition of the Savings
Bank was accounted for as a pooling-of-interest. The Savings Bank was
established in 1934 as a federally-chartered mutual savings and loan
association. The Savings 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 Savings 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 Savings Bank, and the Savings
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. All per share amounts presented reflect the effect of the
five-for-three stock split in November, 1997. The following summarizes
the significant accounting policies of the Company:

Estimates. The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ
from those estimates.

Cash and Cash Equivalents. For the purpose of presentation in the
consolidated statements of cash flows, cash and cash equivalents are
defined as those amounts included in the balance-sheet caption "cash and
cash equivalents."

The Savings 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 Savings Bank exceeded
this requirement, which was $1.1 million and $843,000 at December 31,
1998 and 1997, respectively.

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 reported as a net amount in a separate component of
stockholders' equity until realized. Gains and losses on the sale of
available-for-sale securities are determined using the
specific-identification method. Premiums and discounts on securities
available for sale and held to maturity are recognized in interest
income using the interest method over the period to maturity.

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 impaired loans is discontinued when, in
management's opinion, the borrower may be unable to meet payments as
they become due. When interest accrual is discontinued, all unpaid
accrued interest is reversed. Interest income is subsequently recognized
only to the extent cash payments are received.

The allowance for loan losses is increased by charges to income and
decreased by charge-offs (net of recoveries). Management's periodic
evaluation of the adequacy of the allowance is based on the Company's
past loan loss experience, known and inherent risks in the portfolio,
adverse situations that may affect the borrower's ability to repay, the
estimated value of any underlying collateral, and current economic
conditions.

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.

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 by
the straight-line method.

Income Taxes. Deferred tax assets and liabilities are reflected at currently
enacted income tax rates applicable to the period in which the deferred
tax assets or liabilities are expected to be realized or settled. As
changes in tax laws or rates are enacted, deferred tax assets and
liabilities are adjusted through the provision for income taxes.

Stock-Based Compensation. Statement of Financial Accounting Standards No.
123, "Accounting for Stock-Based Compensation" establishes a "fair
value" based method of accounting for stock-based compensation plans and
encourages all entities to adopt that method of accounting for all of
their employee stock compensation plans. 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 APB Opinion
No. 25, "Accounting for Stock Issued to Employees." The Company has
elected to follow APB Opinion 25 and related interpretations in
accounting for its employee stock options.

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 and commitments under lines of credit. Such
financial instruments are recorded in the financial statements when they
are funded.

FairValues of Financial Instruments. 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 are based on quoted market
prices. If quoted market prices are not available, fair value is based
on quoted market prices for similar securities.

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.

Federal Home Loan Bank Stock. Fair value of the Bank's investment in
FHLB stock is based on its redemption value, which is its cost of $100
per share.

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 on time deposits.

Borrowed Funds. The carrying amounts of borrowings under repurchase
agreements approximate their fair values. Fair values of FHLB 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.

Income Per Share of Common Stock. During 1997, the Company adopted the
provisions of Financial Accounting Standards No. 128, "Earnings Per
Share" (SFAS No. 128). SFAS No. 128 provides accounting and reporting
standards for calculating earnings 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. The RRP initially
purchased 184,122 shares, of which 177,517, 179,541 and 179,541 were
allocated to participants and are considered outstanding for the years
ended December 31, 1996, 1997 and 1998, respectively. At December 31,
1998, 109,794 shares remain uncommitted under both plans 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:

Year Ended December 31,
------------------------------------------
1998 1997 1996
---------- ---------- -----------

Weighted-average shares of common stock issued
and outstanding before adjustments for ESOP,
RRP and common stock options ................................... 3,728,350 3,890,019 4,317,500

Adjustment to reflect the effect of unallocated
ESOP and RRP shares ............................................ (136,097) (189,799) (247,675)
---------- ---------- ----------

Weighted average shares for basic income per share ................. 3,592,253 3,700,220 4,069,825
========== ========== ==========

Basic income per share.............................................. $ 1.22 1.01 .54
========== ========== ==========
Total weighted-average common shares and equivalents
outstanding for basic income per share
computation .................................................... 3,592,253 3,700,220 4,069,825

Additional dilutive shares using the average market value for the
period utilizing the treasury stock method
regarding stock options ........................................ 184,832 211,036 198,167
---------- ---------- ----------

Weighted-average common shares and equivalents
outstanding for diluted income per share ....................... 3,777,085 3,911,256 4,267,992
========== ========== ==========

Diluted income per share............................................ $ 1.16 .96 .51
========== ========== ==========

Future Accounting Requirements. The FASB has recently issued the following
Statement of Financial Accounting Standards which is relevant to the
Company:

Financial Accounting Standards 133 - Accounting for Derivative
Investments and Hedging Activities requires companies to record
derivatives on the balance sheet as assets or liabilities, measured at
fair value. Gains or losses resulting from changes in the values of
those derivatives would be accounted for depending on the use of the
derivatives and whether they qualify for hedge accounting. The key
criterion for hedge accounting is that the hedging relationship must be
highly effective in achieving offsetting changes in fair value or cash
flows. The Company will be required to adopt this Statement effective
January 1, 2000. Management does not anticipate that this Statement will
have a material impact on the Company.

Reclassifications. Certain amounts in the 1996 and 1997 consolidated
financial statements have been reclassified to
conform to the presentation for 1998.

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

Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
---- ----- ------ -----
(In thousands)

Securities available for sale:
At December 31, 1998:
Mutual funds........................................ $ 9,238 - (107) 9,131
U.S. Government and agency securities............... 4,036 22 - 4,058
Mortgage-backed securities.......................... 8,898 - (21) 8,877
Other investment securities......................... 97 2 - 99
-------- ---- ---- ------

Total........................................... $ 22,269 24 (128) 22,165
======== ==== ==== ======

Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
---- ----- ------ -----
(In thousands)

At December 31, 1997:
Mutual funds........................................ 9,258 - (75) 9,183
U.S. Government and agency securities............... 7,965 2 (30) 7,937
Mortgage-backed securities.......................... 9,348 - (43) 9,305
Other investment securities......................... 151 5 - 156
-------- ---- ---- ------

Total........................................... $ 26,722 7 (148) 26,581
======== ==== ==== ======
Securities held to maturity:
December 31, 1998:
SBA-related investment securities................... 2,320 46 - 2,366
Mortgage-backed securities.......................... 15,907 152 - 16,059
-------- ---- ---- ------

Total........................................... $ 18,227 198 - 18,425
======== ==== ==== ======
At December 31, 1997:
SBA-related investment securities................... 3,031 46 - 3,077
Mortgage-backed securities.......................... 28,986 457 - 29,443
-------- --- ---- ------

Total........................................... $ 32,017 503 - 32,520
======== === ==== ======

The scheduled maturities of securities at December 31, 1998 were as follows:

Held-to-Maturity Securities Available-for-Sale Securities
--------------------------- -----------------------------
Amortized Fair Amortized Fair
Cost Value Cost Value
-------- ------ ------ ------
(In thousands)

Due from one year to five years.................. $ - - 4,036 4,058
Due from five years to ten years................. - - 97 99
Due after ten years.............................. 2,320 2,366 - -
Mortgage-backed securities....................... 15,907 16,059 8,898 8,877
Mutual funds..................................... - - 9,238 9,131
-------- ------ ------ ------

Total ..................................... $ 18,227 18,425 22,269 22,165
======== ====== ====== ======

Securities with a carrying value of approximately $2.9 million and $3.4
million at December 31, 1998 and 1997, respectively, were pledged to
secure public funds and tax deposits. The Company has also pledged
securities with a carrying value of $3.1 million for borrowings under
retail repurchase agreements with customers at December 31, 1998 (See
Note 6).

There were no sales of securities during the years ended December 31, 1998,
1997 and 1996.

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, 1998 is approximately 1.3 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 $4.7 million have
coupon rates ranging from 5.30% to 7.53% and had a weighted-average rate
of 6.35% at December 31, 1998. The Company purchases only CMOs rated AA
or better by nationally recognized rating services.

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

At December 31,
----------------------
1998 1997
--------- --------
(In thousands)

First mortgage loans secured by:
One-to-four-family residential................... $ 283,372 245,524
Construction and land............................ 11,683 3,528
Multi-family units............................... 8,165 4,464
Commercial real estate, churches and other....... 44,211 37,975
Consumer loans....................................... 43,490 32,834
Commercial loans..................................... 10,532 4,632
--------- --------

Subtotal..................................... 401,453 328,957

Undisbursed portion of loans in process.......... (10,637) (12,253)
Net deferred loan costs.......................... 526 333
Allowance for loan losses........................ (2,283) (1,684)
--------- --------

Loans receivable, net........................ $ 389,059 315,353
========= =======

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

Year Ended December 31,
-------------------------------------
1998 1997 1996
------- ----- -----
(In thousands)

Balance at January 1............ $ 1,684 1,063 977
Net loans charged off........... (83) (28) (21)
Provision for loan losses....... 682 649 107
------- ----- -----

Balance at December 31.......... $ 2,283 1,684 1,063
======= ===== =====

There were no impaired loans recognized under SFAS 114 and 118 during the
years ended December 31, 1998, 1997 and 1996.

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 and Sumter
Counties, Florida.

Nonaccrual loans at December 31, 1998 and 1997 totaled $444,000 and
$242,000, respectively. For the year ended December 31, 1998, interest
income on loans would have been increased approximately $31,000 if the
interest on nonaccrual loans at December 31, 1998 had been recorded
under the original terms of such loans. All of the nonaccrual loans at
December 31, 1998 and 1997 were first-mortgage, single-family
residential loans or consumer loans.

Mortgage loans serviced for others are not included in the accompanying
consolidated balance sheets. The unpaid principal balances of these
loans were approximately $930,000 and $1.2 million at December 31, 1998
and 1997, respectively.

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

At December 31,
-----------------------
1998 1997
------- -----
(In thousands)

Cost:
Land.................................... $ 1,754 1,754
Building and improvements............... 4,357 4,380
Furniture and equipment................. 2,193 2,152
Construction in progress................ 424 11
------- -----

Total cost.......................... 8,728 8,297

Less accumulated depreciation............... 3,131 2,984
------- -----

Net book value.......................... $ 5,597 5,313

Certain company facilities are leased under various operating leases. Rental
expense was $101,000, $51,000 and $22,000 in 1998, 1997 and 1996,
respectively. At December 31, 1998, future minimum rental commitments
under noncancellable leases were as follows (in thousands):

Year Ending
December 31, Amount
------------ ------
1999........................................ $ 176
2000........................................ 122
2001........................................ 125
2002........................................ 129
2003........................................ 132
-----
$ 684
=====
(5) Deposits
The aggregate amount of short-term jumbo certificates of deposit, each with
a minimum denomination of $100,000, was approximately $18.2 million and
$12.2 million in 1998 and 1997, respectively.

At December 31, 1998, the scheduled maturities of certificate of deposit
were as follows (in thousands):

Year Ending
-----------
1999............................................ $ 168,086
2000............................................ 82,793
2001............................................ 3,031
2002............................................ 2,083
2003 and thereafter............................. 3,183
---------
$ 259,176
=========

(6) Advances from Federal Home Loan Bank and Other Borrowings
As of December 31, 1998, the Savings Bank had $56 million in Federal Home
Loan Bank of Atlanta ("FHLB") advances outstanding. These advances had a
weighted-average interest rate of 5.28% and interest rates and
maturities as follows (dollars in thousands):

At December 31,
Interest --------------------
Year Ending December 31, Rate 1998 1997
------------------------ ---- ---- ----

2000........................ 4.30% $ 6,000 -
2002........................ 6.10% 5,000 5,000
2002........................ 6.26% 5,000 5,000
2002........................ 6.09% 10,000 10,000
2002........................ 5.75% 10,000 10,000
2003........................ 3.90% 5,000 -
2003........................ 4.90% 10,000 -
2008........................ 4.19% 5,000 -
-------- ------
Total....................... $ 56,000 30,000
======== ======

The security agreement with FHLB includes a blanket floating lien requiring
the Savings 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, 1998, the
Savings Bank could borrow up to $100 million under the FHLB security
agreement.

Other borrowed funds were composed of retail repurchase agreements with
customers during 1998 and dollar reverse repurchase agreements during
1997. The Company enters into retail repurchase agreements with
customers in which the funds received are accounted for as borrowings to
the Company. Mortgage-backed securities sold under dollar reverse
repurchase agreements were delivered to the broker-dealers who arranged
the transactions. The broker-dealers may have sold, loaned, or otherwise
disposed of such securities to other parties in the normal course of
their operations, and have agreed to resell to the Company substantially
identical securities at the maturities of the agreements.

Information concerning other borrowed funds is summarized as follows:

Year Ended December 31,
----------------------------
1998 1997
------- ------
(Dollars in thousands)

Average balance during the year............................ $ 14 5,629
======= ======

Average interest rate during the year...................... 4.65% 5.74%
======= ======

Maximum month-end balance during the year.................. $ 789 11,952
======= ======

Securities as collateral under the agreements at year end:

Carrying value......................................... $ 3,073 -
======= ======

Fair value............................................. $ 3,073 -
======= ======

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

The income tax provision is summarized as follows:

Year Ended December 31,
----------------------------------------------
1998 1997 1996
(In thousands)

Current ............... $ 3,108 2,339 1,594
Deferred .............. (467) (256) (116)
------- ----- -----

$ 2,641 2,083 1,478
======= ===== =====

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:

Year Ended December 31,
-------------------------------------------------------------------------
1998 1997 1996
Amount % Amount % Amount %
------- ---- ------- ---- ------- ----
(Dollars in thousands)

Taxes on income at U.S.
statutory rate........ $ 2,393 34.0% $ 1,985 34.0% $ 1,245 34.0%
State income taxes, net of
federal tax benefit... 240 3.4 192 3.3 131 3.6
Other, net................ 8 .1 (94) (1.6) 102 2.8
------- ---- ------- ---- ------- ----
Taxes on income at
effective rates....... $ 2,641 37.5% $ 2,083 35.7% $ 1,478 40.4%
======= ==== ======= ==== ======= ====

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 liability relate to the following:

At December 31,
---------------
1998 1997
---- ----
(In thousands)

Deferred tax liabilities:
Deferred loan fees ................................... $-- 27
Allowance for loan losses ............................ -- 256
FHLB stock dividends ................................. 304 304
Depreciation ......................................... 181 222
Certain accrued interest ............................. 12 17
Other ................................................ 96 82
---- ----

Gross deferred tax liabilities ........................... 593 908
---- ----

Deferred tax assets:
Allowance for loan losses ............................ 140 --
Unrealized loss on securities available for sale ..... 39 53
Deferred loan fees ................................... 33 --
RRP incentive plan ................................... 97 118
---- ----

Gross deferred tax assets ................................ 309 171
---- ----

Net deferred tax liabilities ............................. $284 737
==== ===

Retained earnings at December 31, 1998 and 1997 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, 1998 and 1997.

The Small Business Job Protection Act of 1996 (the "1996 Act") enacted on
August 2, 1996 requires savings institutions, such as the Savings 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 Savings Bank was required to change its
method of accounting for bad debts for tax purposes effective January 1,
1996. In addition, the Savings 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, 1998, the Savings Bank had approximately
$757,000 of deferred tax liabilities recorded for the recapture of its
excess bad debt reserves.

(8) Pension Plan
Prior to 1996, the Company participated in a multi-employer defined benefit
pension plan (the "Pension Plan") which covered substantially all of its
employees. The Company's funding policy with respect to the Pension Plan
was to make an annual contribution determined by the Pension Plan's
actuaries that would not be less than the minimum required contribution,
nor greater than the maximum federal income tax deductible limit. The
Company's contributions for the Pension Plan for the year ended December
31, 1995 was $65,000. During 1996, the Company decided to withdraw from
participation in the Pension Plan, and accordingly, participants'
benefits were frozen and participants became fully vested at that date.
The Company did not make a contribution to the Pension Plan for 1996.

In connection with the above, the Company adopted a new defined
contribution profit sharing 401(k) plan (the "401(k) Plan") effective
April 1, 1996. 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 year ended December 31, 1998
and 1997 were $46,000 and $37,000, respectively.

(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 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.

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.

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

At December 31, 1998 At December 31, 1997
-------------------- --------------------
Carrying Fair Carrying Fair
Amount Value Amount Value
--------- ------ ------ ------
(In thousands)

Financial assets:
Cash and cash equivalents......................... $ 22,928 22,928 15,684 15,684
Securities held to maturity....................... 18,227 18,425 32,017 32,520
Securities available for sale..................... 22,165 22,165 26,581 26,581
Loans receivable.................................. 389,059 391,616 315,353 316,528
Accrued interest receivable....................... 2,242 2,242 2,134 2,134
Federal Home Loan Bank stock...................... 2,800 2,800 2,304 2,304

Financial liabilities:
Deposit liabilities............................... 351,030 350,801 315,390 316,689
Advances from FHLB................................ 56,000 56,000 30,000 30,376
Other borrowed funds.............................. 789 789 - -

A summary of the notional amounts of the Company's financial instruments
which approximates fair value, with off-balance-sheet risk at December
31, 1998, follows:

Notional
Amount
---------
(In thousands)

Commitments to extend credit.................. $ 9,240

Unused lines of credit........................ $ 29,543

Undisbursed portion of loans in process ...... $ 10,637

(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 and Sumter County area. Therefore, the Company's exposure to
credit risk is significantly affected by changes in the economy of the
Lake and Sumter County area.

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,
1998 1997
------- -----
(In thousands)

Beginning balance................................... $ 1,728 1,030
Amounts related to new officers and directors....... - 135
Loans originated.................................... 1,313 725
Principal repayments................................ (365) (162)
------- -----

Ending balance.................................. $ 3,406 1,728
======= =====

(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 Savings Bank is subject to certain restrictions on the amount of
dividends that it may declare without prior regulatory approval. At
December 31, 1998, approximately $16.9 million of retained earnings were
available for dividend declaration without prior regulatory approval.

(14) Regulatory Matters
The Savings Bank is subject to various regulatory capital requirement
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 Savings Bank must meet
specific capital guidelines that involve quantitative measures of the
Savings Bank's assets, liabilities, and certain off-balance-sheet items
as calculated under regulatory accounting practices. The Savings 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 Savings 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, 1998, that the Savings Bank meets all capital adequacy
requirements to which it is subject.

As of December 31, 1998, the most recent notification from the OTS
categorized the Savings Bank as well capitalized under the regulatory
framework for prompt corrective action. To be categorized as well
capitalized, the Savings 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.

The Savings Bank's actual capital amounts and percentages at December 31,
1998 and 1997 are also presented in the tables.

To Be Well
Minimum Capitalized
For Capital For Prompt
Adequacy Corrective Action
Actual Purposes Provisions
------------------- ------------------- -------------------
% Amount % Amount % Amount
As of December 31, 1998: ---- --------- ---- -------- ---- --------
(Dollars in thousands)

Stockholders' equity,
and ratio to total
assets.................... 9.97% $ 46,270
Less: investment in
nonincludable
subsidiary................ (187)
Add back: unrealized loss on
available-for-sale
securities................ (1)
---------
Tangible capital,
and ratio to adjusted
total assets.............. 9.94% $ 46,082 1.5% $ 6,957
========= ========
Tier 1 (core) capital, and
ratio to adjusted total
assets.................... 9.94% $ 46,082 3.0% $ 13,913 5.0% $ 23,189
========= ======== ========
Tier 1 capital, and ratio
to risk-weighted assets... 17.21% 46,082 4.0% $ 10,711 6.0% $ 16,067
======== ========
Less: nonincludable
investment in 80%
land loans................ (122)

Tier 2 capital (allowance for
loan losses).............. 2,283
---------
Total risk-based capital,
and ratio to risk-
weighted assets........... 18.02% $ 48,243 8.0% $ 21,422 10.0% $ 26,778
========= ======== ========

Total assets.................. $ 463,962
=========

Adjusted total assets......... $ 463,774
=========

Risk-weighted assets.......... $ 267,778
=========

To Be Well
Minimum Capitalized
For Capital For Prompt
Adequacy Corrective Action
Actual Purposes Provisions
------------------- ------------------- -------------------
% Amount % Amount % Amount
As of December 31, 1997: ---- --------- ---- -------- ---- --------
(Dollars in thousands)

Stockholders' equity,
and ratio to total
assets.................... 11.12% $ 44,502
Less: investment in
nonincludable
subsidiary................ (195)
Add back: unrealized loss on
available-for-sale
securities................ 42
---------
Tangible capital,
and ratio to adjusted
total assets.............. 11.08% $ 44,349 1.5% $ 6,003
========= ========

Tier 1 (core) capital, and
ratio to adjusted total
assets.................... 11.08% $ 44,349 3.0% $ 12,006 5.0% $ 20,009
========= ======== ========

Tier 1 capital, and ratio
to risk-weighted assets... 20.90% 44,349 4.0% $ 8,486 6.0% $ 12,730
======== ========
Tier 2 capital (allowance for
loan losses).............. 1,684
---------
Total risk-based capital,
and ratio to risk-
weighted assets........... 21.70% $ 46,033 8.0% $ 16,973 10.0% $ 21,216
========= ======== ========

Total assets.................. $ 400,339
=========

Adjusted total assets......... $ 400,186
=========

Risk-weighted assets.......... $ 212,162
=========

On September 30, 1996, legislation was enacted which, among other things,
imposed a special one-time assessment on SAIF member institutions,
including the Savings Bank, to recapitalize the SAIF and spread the
obligations for payments of Financing Corporation ("FICO") bonds across
all SAIF and BIF members. The FDIC special assessment levied amounted to
65.7 basis points on SAIF assessable deposits held as of March 31, 1995.
The special assessment was recognized in the third quarter of 1996 and
was tax deductible. The Savings Bank recorded a charge of $1.7 million
before taxes during 1996 as a result of the FDIC special assessment.
That legislation eliminated the substantial disparity between the amount
that BIF and SAIF members had been paying for deposit insurance
premiums.

Beginning on January 1, 1997, BIF members will pay a portion of the FICO
payment equal to 1.3 basis points on BIF-insured deposits, compared to
6.48 basis points payable by SAIF members on SAIF-insured deposits, and
will pay a pro rata share of the FICO payment on the earlier of January
1, 2000 or the date upon which the last savings association, such as
the Savings Bank, ceases to exist. The legislation also requires BIF
and SAIF to be merged by January 1, 1999 provided that subsequent
legislation is adopted to eliminate the savings association charter and
no savings associations remain as of that time.

The FDIC substantially lowered SAIF assessments to a range comparable to
those of BIF members, although SAIF members will continue to pay the
higher FICO payments described above. Management cannot predict the
level of FDIC insurance assessments on an ongoing basis or whether the
BIF and SAIF will eventually be merged.

(15) Conversion to Stock Savings Bank
The Savings 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
adopted by the Savings Bank's Board of Directors on June 17, 1993 and
subsequently approved by regulatory authorities and members of the
Bank. FFLC Bancorp, Inc. was created as the holding company for the
Savings Bank as part of this conversion, generating proceeds of $23.3
million (net of shares purchased by the Savings Bank for employee stock
incentive plans) from the sale of 4,603,032 shares of stock at the
price of $6 per share in a subscription and community offering.

The Plan of Conversion provided for the establishment of a Liquidation
Account equal to the retained income of the Savings 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
Savings Bank to qualifying depositors as of September 30, 1992
(Eligible Account Holders) who continue to maintain deposits in the
Savings Bank after conversion. In the unlikely event of a complete
liquidation of the Savings 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 Savings 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
Savings 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. Federal regulations also preclude any repurchase
of the stock by the Savings Bank or its holding company for three years
after conversion except for purchases of qualifying shares of a
director and repurchases pursuant to an offer made on a pro rata basis
to all stockholders and with prior approval of the Office of Thrift
Supervision or pursuant to an open-market stock repurchase program that
complies with certain regulatory criteria. See also Note 18 for
information regarding the Savings Bank's Stock Repurchase Program.

(16) Stock Benefit Plans
During 1996, the Company adopted 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, 1998, 1997 and 1996, 18,000, 10,867 and
8,332 options were granted under the Option Plan, and 0, 2,014 and
6,000 shares were awarded under the Recognition and Retention 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% would
apply over the exercise period, the expected life of the options would
be the entire exercise period and the expected stock volatility was
42%, 23% and 14%, respectively, for 1998, 1997 and 1996. For purposes
of pro forma disclosures, the estimated fair value was included in
expense in the period vesting occurs. The following information
pertains to the options granted to purchase common stock and shares
awarded in 1998, 1997 and 1996 (in thousands, except per share
amounts):

Year Ended December 31,
-------------------------------------
1998 1997 1996
-------- ----- -----

Weighted-average grant-date fair value of options
issued during the year..................................... $ 166 84 39
======== ===== =====

Proforma net earnings........................................... $ 4,303 3,663 2,149
======== ===== =====

Proforma basic earnings per share............................... $ 1.20 .99 .53
======== ===== =====

Stock Option Plan. During 1993, the Company adopted and the shareholders
approved the Option Plan. On January 4, 1994, upon conversion of the
Savings Bank to a stock association, stock options for 460,303 common
shares were authorized to be granted to directors, officers and
employees of the Savings Bank including 66,343 shares reserved for
future directors, officers and employees. 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 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, 1998, 54,999 shares remain available for
grant to future directors, officers and employees.

The following is a summary of option transactions:

Weighted-
Range of Average
Number Per Share Per Share
of Shares Option Price Price
--------- ------------ -----

Outstanding, December 31, 1995...................... 373,580 $ 6.00-9.52 $ 6.05
Granted............................................. 8,332 12.00 12.00
Forfeited........................................... (2,778) 6.00 6.00
Exercised........................................... (13,321) 6.00 6.00
--------
Outstanding, December 31, 1996...................... 365,813 6.00-12.00 6.19
Granted............................................. 10,867 15.30-21.25 18.06
Exercised........................................... (46,252) 6.00-9.52 6.13
--------

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
======== ============= =======

The weighted-average remaining contractual life of the outstanding stock
options at December 31, 1998, 1997 and 1996 was 5.3, 6.2 and 7.1 years,
respectively.

The outstanding options at December 31, 1998 were exercisable as follows:

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

Currently exercisable................... 264,979 $ 6.54 5.2
1999.................................... 3,111 15.91 8.6
2000.................................... 3,110 15.91 8.6
2001.................................... 2,000 16.25 9.0
-------
273,200 $ 6.83 5.3
======= ======= ===

Employee Stock Ownership Plan. The Company sponsors a leveraged ESOP that
covers eligible employees who have a twelve-month period of employment
with the Savings Bank during which they worked at least 1,000 hours and
who have attained age 21. The Savings Bank makes 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. This loan bears interest
at a fixed-rate of six percent with principal and interest payable in
equal quarterly installments over seven years. The ESOP shares initially
were pledged as collateral for its debt. As the debt is repaid, shares
are released from collateral and allocated to active employees based on
the proportion of debt service paid during the year. The Company
accounts for its ESOP in accordance with Statement of Position 93-6.
Accordingly, the debt of the ESOP is recorded as debt and the cost of
the shares pledged as collateral are reported as a contra equity
account. As shares are released from collateral, the Company records
compensation expense, and an offsetting credit to capital, equal to the
current market price of the shares, and the shares become outstanding
for earnings per share computations. Dividends on all ESOP shares are
recorded as compensation expense as it is management's intention to
allocate the dividends along with the shares when allocated.
Compensation expense for the years ended December 31, 1998, 1997 and
1996 included the following ESOP related costs:

Year Ended December 31,
-----------------------------
1998 1997 1996
------- ---- ---
(In thousands)

Amortization of the original cost, $6 per share........... $ 315 315 315
Market appreciation of the FFLC shares.................... 663 597 265
Dividends on ESOP shares.................................. 38 61 60
------- ---- ---

Total................................................. $ 1,016 973 640
======= === ===

The ESOP shares were as follows:

At December 31,
----------------------------
1998 1997
---------- --------
($ in thousands)

Allocated shares and shares released for allocation... 238,413 199,479
Unreleased shares..................................... 105,212 157,818
---------- --------

Total ESOP shares..................................... 343,625 357,297
---------- --------

Fair value of unreleased shares....................... $ 1,710 3,433
========== ========

Recognition and Retention Plan. The Company adopted, and the shareholders
approved, an RRP for directors, officers and employees to enable the
Savings 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. Compensation
expense attributable to the RRP amounted to $368,000 in 1996, 1995 and
1994. No compensation expense attributable to the RRP was recognized in
1997 or 1998. 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, 1998, 4,581 shares
remain reserved for future directors, officers and employees.

(17) Parent Company Only Financial Statements
Condensed financial statements of the Holding Company as of and for the
years ended December 31, 1998 and 1997 are presented below. Amounts
shown as investment in subsidiary, loans to subsidiary and equity in
earnings of subsidiary are eliminated in consolidation.

Condensed Balance Sheets

At December 31,
--------------------
1998 1997
------- -------
(In thousands)
Assets

Cash, deposited with subsidiary ...................... $ 825 477
Investment in subsidiary ............................. 46,270 44,503
Loans to subsidiary .................................. 6,131 6,447
Other assets ......................................... -- 2
------- ------
Total assets ................................. $53,226 51,429
======= ======

Liabilities and Stockholders' Equity

Accrued expense and other liabilities ................ 4 --
Stockholders' equity ................................. 53,223 51,429
------- ------

Total liabilities and stockholders' equity ... $53,226 51,429
======= ======

Condensed Statements of Income

Year Ended December 31,
------------------------------
1998 1997 1996
------- ----- -----
(In thousands)

Revenues..................................................................... $ 410 532 772
Expenses..................................................................... 243 280 396
------- ----- -----
Income before earnings of subsidiary................................. 167 252 376
Earnings of subsidiary............................................... 4,230 3,502 1,808
------- ----- -----

Net income $ 4,397 3,754 2,184
======= ===== =====

Condensed Statements of Cash Flows
Year Ended December 31,
------------------------------
1998 1997 1996
------- ----- -----
(In thousands)

Cash flows from operating activities:
Net income.................................................................... $ 4,397 3,754 2,184
Adjustments to reconcile net income to net cash
provided by operations:
Equity in earnings of subsidiary.......................................... (4,230) (3,502) (1,808)
Decrease (increase) in other assets....................................... 2 (2) 6
Decrease in current income taxes payable.................................. - - (4)
Increase (decrease) in accrued expenses and other liabilities............. 4 (12) (4)
------- ----- -----
Net cash provided by operating activities............................. 173 238 374
------- ----- -----
Cash flows from investing activities-
Repayment of loan to subsidiary........................................... 316 4,815 1,316
------- ----- -----
Cash flows from financing activities:
Purchase of treasury stock................................................ (2,659) (6,171) (3,922)
Proceeds from sale of common stock........................................ 360 283 80
Cash dividends paid....................................................... (1,344) (1,141) (986)
Cash dividends received................................................... 3,502 1,808 2,654
------- ----- -----

Net cash (used in) provided by financing activities................... (141) (5,221) (2,174)
------- ----- -----

Net increase (decrease) in cash................................................... 348 (168) (484)

Cash at beginning of year......................................................... 477 645 1,129
------- ----- -----

Cash at end of year............................................................... $ 825 477 645
======== === ===

(18) Stock Repurchase Program
In December 1994, the Company's Board of Directors approved a Stock
Repurchase Program ("Program") which allows the Company to acquire its
outstanding common stock in the open market. The Company subsequently
received OTS approval for the Program, and began repurchasing shares
early in 1995. Under the Program, the Company was limited to
repurchasing no more than 5%, or approximately 138,000 shares of its
publicly-held common stock over a one-year period ending January 16,
1996. During the year ended December 31, 1995, 132,044 shares or 95.6%
of the maximum number of shares approved under the Program were
repurchased.

In January and August 1996, the Company's Board of Directors approved
programs which allow the Company to acquire additional 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
allows 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 allows the Company to acquire 369,285 additional 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.

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

Year Ended December 31, 1998
---------------------------------------------------------
First Second Third Fourth
Quarter Quarter Quarter Quarter Total
------- ------- ------- ------- -----

Interest income............................... $ 7,753 7,889 8,110 8,421 32,173
Interest expense.............................. 4,144 4,195 4,367 4,565 17,271
------- ----- ----- ----- ------

Net interest income........................... 3,609 3,694 3,743 3,856 14,902

Provision for loan losses..................... 148 225 154 155 682
------- ----- ----- ----- ------
Net interest income after provision
for loan losses........................... 3,461 3,469 3,589 3,701 14,220
------- ----- ----- ----- ------

Noninterest income............................ 228 326 318 392 1,264
Noninterest expense........................... 2,017 2,049 2,139 2,241 8,446
------- ----- ----- ----- ------

Income before income taxes.................... 1,672 1,746 1,768 1,852 7,038

Income taxes.................................. 681 650 636 674 2,641
------- ----- ----- ----- ------

Net income.................................... $ 991 1,096 1,132 1,178 4,397
======= ===== ===== ===== =====

Basic income per common share................. $ .28 .30 .31 .33 1.22
======= === === === ====

Diluted income per common share............... $ .26 .29 .30 .31 1.16
======= === === === ====

Year Ended December 31, 1997
---------------------------------------------------------
First Second Third Fourth
Quarter Quarter Quarter Quarter Total
------- ------- ------- ------- -----

Interest income............................... $ 6,483 6,880 7,264 7,529 28,156
Interest expense.............................. 3,439 3,741 4,051 4,185 15,416
------- ----- ----- ----- ------

Net interest income........................... 3,044 3,139 3,213 3,344 12,740

Provision for loan losses..................... 68 70 364 147 649
------- ----- ----- ----- ------
Net interest income after provision
for loan losses........................... 2,976 3,069 2,849 3,197 12,091
------- ----- ----- ----- ------

Noninterest income............................ 198 216 541 264 1,219
Noninterest expense........................... 1,631 1,883 1,917 2,042 7,473
------- ----- ----- ----- ------

Income before income taxes.................... 1,543 1,402 1,473 1,419 5,837

Income taxes.................................. 570 500 547 466 2,083
------- ----- ----- ----- ------

Net income.................................... $ 973 902 926 953 3,754
======= === === === =====

Basic income per common share................. $ .26 .24 .25 .26 1.01
======= === === === ====

Diluted income per common share............... $ .24 .23 .24 .25 .96
======= === === === ===

(20) Year 2000 Issues
The Company is acutely aware of the many areas affected by the Year 2000
computer issue, as addressed by the Federal Financial Institutions
Examination Council ("FFIEC") in its interagency statement which
provided an outline for institutions to manage the Year 2000 challenges
effectively. A Year 2000 plan has been approved by the Board of
Directors which includes multiple phases, tasks to be completed, and
target dates for completion. Issues addressed in the plan include
awareness, assessment, renovation, validation, implementation, testing,
and contingency planning.

to be Year 2000 ready. Since it routinely upgrades and purchases
technologically advanced software and hardware on a continual basis, the
Company has determined that the cost of making modifications to correct
any Year 2000 issues will not materially affect reported operating
results. Management does not believe that the Company has incurred or
will incur material costs associated with the Year 2000 issue.

The Company's vendors and suppliers have been contacted for written
confirmation of their product readiness for Year 2000 compliance.
Negative or deficient responses are analyzed and periodically reviewed
to prescribe timely actions within the Company's contingency planning.
The Company's main service provider has completed testing of its mission
critical application software and item processing software; the test
results, which have been documented and validated, are deemed to be Year
2000 compliant. FFIEC guidance on testing Year 2000 compliance of
service providers states that proxy tests are acceptable compliance
tests. In proxy testing, the service provider tests with a
representative sample of financial institutions that use a particular
service, with the results of such testing shared with all similarly
situated clients of the service provider. The Company has authorized the
acceptance of proxy testing since the proxy tests have been conducted
with financial institutions that are similar in type and complexity to
its own using the same version of the Year 2000 ready software and the
same hardware and operating systems.

The Company also recognizes the importance of determining that its borrowers
are facing the Year 2000 problem in a timely manner to avoid
deterioration of the loan portfolio solely due to this issue. All
material relationships have been identified and questionnaires have been
completed to assess the inherent risks. Deposit customers have received
statement stuffers and informational material in this regard. The
Company plans to work on a one-on-one basis with any borrower who has
been identified as having high Year 2000 risk exposure.

Notwithstanding our actions, there can be no assurances that all hardware
and software that the Company will use will be Year 2000 compliant.
Management cannot predict the amount of financial difficulties it may
incur due to customers and vendors inability to perform according to
their agreements with the Company or the effects that other third
parties may cause as a result of this issue. Therefore, there can be no
assurance that the failure or delay of others to address the issue or
that the costs involved in such process will not have a material adverse
effect on the Company's business, financial condition, and results of
operations.

Based on testing results to date (as noted above), the Company's mission
critical systems have been deemed to be Year 2000 ready. However, a
written contingency plan has been developed to address problems that
might be caused from Year 2000 system failures. Testing of the
contingency plan is in progress and is scheduled to be completed by June
30, 1999. With regard to non-mission critical internal systems, the
Company's contingency plans are to replace those systems that test as
being noncompliant. Alternatively, some systems could be handled
manually on an interim basis. Should outside service providers not be
able to provide compliant systems, the Company will terminate those
relationships and transfer to other vendors. It is anticipated that the
Company's deposit customers will have increased demands for cash in the
latter part of 1999 and, correspondingly, the Company will maintain
higher liquidity levels.

Independent Auditors' Report

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

We have audited the accompanying consolidated balance sheets of FFLC Bancorp,
Inc. and Subsidiary (the "Company") (the parent company of First Federal Savings
Bank of Lake County) as of December 31, 1998 and 1997 and the related
consolidated statements of income, stockholders' equity and cash flows for each
of the years in the three-year period ended December 31, 1998. 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 audits 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, 1998 and 1997 and the results of its operations and its cash flows
for each of the years in the three-year period ended December 31, 1998 in
conformity with generally accepted accounting principles.

HACKER, JOHNSON, COHEN & GRIEB PA
Orlando, Florida
January 15, 1999

FFLC BANCORP, INC.

DIRECTORS AND OFFICERS

Directors:
- ----------

Joseph J. Junod
Chairman of the Board

Claron D. Wagner
Vice Chairman

James P. Logan
Ted R. Ostrander, Jr.
H.D. Robuck, Jr.
Stephen T. Kurtz
Paul K. Mueller

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

James R. Gregg
James H. Herlong
Horace D. Robuck

Officers:
- ---------

Stephen T. Kurtz
President and Chief Executive Officer

Paul K. Mueller
Executive Vice President and Treasurer

Dwight L. Hart
Senior Vice President

Joseph D. Cioppa
Senior Vice President

Lawrence E. Hoag
Vice President

Brenda M. Grubb
Vice President

Jay Bartholomew
Vice President

Sandra L. Rutschow
Vice President and Secretary

Occupation
- ----------

Retired, General Manager, Avesta Sheffield Pipe

President, Woody Wagner, Inc.

President/Owner, Logan Sitework Contractors, Inc.
President, Lassiter-Ware, Inc.
Attorney; CEO, Ro-Mac Lumber & Supply, Inc.
President, FFLC Bancorp, Inc. & Subsidiary
Executive Vice President, FFLC Bancorp, Inc. &
Subsidiary

President, Jarol Company
General Partner, A.S. Herlong, Ltd.
President, Ro-Mac Lumber & Supply, Inc.

FIRST FEDERAL SAVINGS BANK
OF LAKE COUNTY

DIRECTORS AND OFFICERS

DIRECTORS

Joseph J. Junod
Chairman of the Board

Claron D. Wagner
Vice Chairman

James P. Logan
Ted R. Ostrander, Jr.
H.D. Robuck, Jr.
Stephen T. Kurtz
Paul K. Mueller

Advisory Directors

James R. Gregg
James H. Herlong
Horace D. Robuck

OFFICERS

Stephen T. Kurtz
President
Chief Executive Officer

Paul K. Mueller
Executive Vice President
and Treasurer

Dwight L. Hart
Senior Vice President and Mortgage Loan Manager

Joseph D. Cioppa
Senior Vice President and Commercial Loan Manager

Jay Bartholomew
Vice President and Retail Banking Manager

Susan L. Berkebile
Vice President and Area Loan Manager

Michael J. Cox
Vice President and Area Loan Manager

Jankie Dhanpat
Vice President and SEC Reporting & Compliance

Brenda M. Grubb
Vice President and Human Resources Manager

James D. Haug
Vice President and Lady Lake Branch Manager

Lawrence E. Hoag
Vice President and Operations Manager

Brian R. Hofer
Vice President and Commercial Loan Officer

Karen Hollister
Vice President and Loan Operations Manager

Dennis R. Rogers
Vice President and Wildwood Branch Manager

Yvonne K. Ross
Vice President and Loan Officer

Sandra L. Rutschow
Vice President and Corporate Secretary

Sandra L. Seaton
Vice President and South Leesburg Branch Manager

Raynard S. (Ray) Taylor
Vice President and Commercial Loan Officer

Phil Tompetrini
Vice President and Inverness Branch Manager

Lynda F. Wemple
Vice President and Accounting Manager

Vickie S. Baxter
Assistant Vice President and Loan Officer

Donna Boyett
Assistant Vice President and Branch
Operations Coordinator

Stephanie Hodges
Assistant Vice President and Loan Underwriter

Cindy Lay
Assistant Vice President and Data Manager &
MIS Coordinator

Charles L. Lee
Assistant Vice President and Security Officer

Debra L. McFarlane
Assistant Vice President
Deposit Administrator

Sandra A. Rowe
Assistant Vice President and Loan Servicing Manager

Dee Dee Dye
Fruitland Park Office Manager

Terry French
Main Street Office Manager

Linda C. Gallop
Clermont Branch Manager

Doris E. Hyatt
Loan Closing Manager

Jennifer Kitchens
Bushnell Branch Manager

Victoria Ledford
Eustis Branch Manager

Marilyn Leugers
Main Office Branch Manager

Carmen C. Passwaters
Benefits Administrator

Angie Phillips
Lake Square Office Manager

Michael J. Price
Eustis Loan Officer

Betty Wolcott
Facilities & Purchasing Manager

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

MAIN OFFICE:

Stephen T. Kurtz
Paul K. Mueller
Dwight L. Hart
Joseph D. Cioppa
Brenda M. Grubb
Lawrence E. Hoag
Jay R. Bartholomew
Sandra L. Rutschow
Lynda F. Wemple
Yvonne K. Ross
Doris E. Hyatt
Vickie S. Baxter
Debra L. McFarlane
Sandra A. Rowe
Betty L. Wolcott
Carmen C. Passwaters
Charles L. Lee
Cynthia M. Lay
Karen L. Hollister
Jankie Dhanpat
Marilyn A. Leugers
Stephanie Hodges
Raynard S. Taylor
Linda N. Landers
Dawn Rene Davison
Carlos E. Colon
Virgina D. Vann
Cheryl A. Davis
Michelle M. Thompson
Jewel M. Correll
Pamela Ali
Barbara Boscana
Pamela J. Linville
Joan P. Gibson
Lisa K. Woolwine
Patricia B. Inman
Leslie A. Leach
Jennifer Grovesteen
Juanita F. Jackson
Barbara A. Cordes
Shu Een Chen
Diane S. Cook
Theresa R. Wells
Michelle M. Strickland
Adriane M. Lacey
Landa A. Russell

Margaret M. Siegel
Lynn P. Stoffel
Ruth E. Fielding
Linda J. Giggey
Sondra Jones
Penny M. Hollis
Andrea Hanson
Norma J. Caron
Zoann Goodman
Sheila C. Coffey
Carla J. Milow
Pamela A. O'Neal
Maryann D. Chantos
Margaret R. White
Constance A. Poitier-Christian
Aimee N. Barto
Taneira N. O'Neal
Annette McCullough
Carol A. Dewey
Cynthia A. Lord
Beverly L. Ross
Leigh S. Skehan
Jacqueline E. Widows
James R. Cummings
Judith A. Cook
Karen M. Falconer
Nicole Schlosser
Lilia Hanson
Gregory F. Heckler
Tina R. Clancy
Dorene K. Adkins
Betty J. Leech

HOME OFFICE - PART TIME:

Camilla R. Clark
Louise Eleanor Whitlock
James Schaeffer
Robert Cumm
Shirley N. Williams
Bobby H. Inscoe
Dana L. Morris
Natalie L. Rojas
Mary A. Durre
Joseph J. Lavallie

FRUITLAND PARK OFFICE:

Delphine C. Williams
Virginia I. Gatlin
Deedee A. Dye

LADY LAKE OFFICE:

James D. Haug
Melissa J. Chapman
Patricia L. Sizemore
Betty T. Woods
Brandi L. Shaw
Shanda R. Gamble
Heather L. Varner
Margaret A. Slimm

MAIN STREET OFFICE:

Donna L. Boyett
Rhonda L. Wilkerson
Constance L. Merrell-Kasch
Victoria J. Langford
Dawn M. O'Day

LAKE SQUARE
MALL OFFICE:

Angela Nicole Phillips
Melissa J. Miller
Regina Simmons
Cynthia G. Sheffield

CLERMONT OFFICE:

Brian R. Hofer
Susan Lynn Berkebile
Glenda S. Riggs
Linda Gallop
Tammy R. Imundi
Trinia C. McClendon
Arthur E. Middleton
Sharon M. Slack
Donna L. Franklin
Sharon S. Dziorney
Annette D. Rector
Janna R. Michell
Tina M. Bragg
Holly Ogg
Erin M. Ferguson

EUSTIS OFFICE:

Michael Cox
Victoria M. Ledford
Michael J. Price
Hilda Lozano
Kristina L. Keel
Natasha L. Pender
Juanita L. Taylor
Vivian R. Curry
Tina M. Carter
Krystal L. Rushton
Latonya M. May

WILDWOOD OFFICE:

Dennis R. Rogers
Paula D. Williams
Rebecca D. Moreno
Wanetta Mae Bannister
Linda J. Hooks
Mona M. Riggs
Sharon K. Styx
Shirley A. Davis

SOUTH LEESBURG OFFICE:

Sandra L. Seaton
Eva J. Snead
Carol A. Sieder
Orpha M. Vogt
Patti L. Martel-Spencer

INVERNESS:

Phil P. Tompetrini
Teresa A. Kuechle
Suzanne Mission
Lillian G. Russo
Judith Latmontagne
Jamie R. Daniels
Jean Toles

FOUR CORNERS

Lori M. Farfaglia
Terry J. French
Janis K. Spencer
Amy Romaniello
Sarah L. Williams

BUSHNELL:

Jennifer Kitchens
Sylvie M. Zimmerman
Angela B. Giangrossi
Inge Pelfrey