HAMILTON BANCORP INC, S-1/A, 1997-03-20

HAMILTON BANCORP INC
S-1/A, 1997-03-20
SAVINGS INSTITUTION, FEDERALLY CHARTERED

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 20, 1997

REGISTRATION NO. 333-20435
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549
---------------------

AMENDMENT NO. 2
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

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

HAMILTON BANCORP INC.
(Exact name of registrant as specified in its charter)
------------------------------

<TABLE>
<S> <C> <C>
FLORIDA 6712 65-0149935
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S Employer
Incorporation or Organization) Classification Code Number) Identification No.)
</TABLE>

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

3750 N.W. 87TH AVENUE
MIAMI, FLORIDA 33178
(305) 717-5613
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
------------------------------

EDUARDO A. MASFERRER
CHAIRMAN OF THE BOARD, PRESIDENT AND CHIEF EXECUTIVE OFFICER
HAMILTON BANCORP INC.
3750 N.W. 87TH AVENUE
MIAMI, FLORIDA 33178
(305) 717-5613
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
------------------------------

WITH COPIES TO:

<TABLE>
<S> <C>
ROBERT L. GROSSMAN, ESQ. LEE MEYERSON, ESQ.
GREENBERG, TRAURIG, HOFFMAN, SIMPSON THACHER & BARTLETT
LIPOFF, ROSEN & QUENTEL, P.A. 425 LEXINGTON AVENUE
1221 BRICKELL AVENUE NEW YORK, NEW YORK 10017
MIAMI, FLORIDA 33131 (212) 455-2000
(305) 579-0500
</TABLE>

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

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. / /

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration number of the earlier effective
registration statement for the same offering. / /

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
------------------------

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGITRANT SHALL FILE A
FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT SHALL
BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION
8(A), MAY DETERMINE.

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>

SUBJECT TO COMPLETION, DATED MARCH 20, 1997

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
2,000,000 SHARES

[LOGO]
HAMILTON BANCORP INC.
COMMON STOCK
------------------

All of the 2,000,000 shares of Common Stock offered hereby (the "Offering")
are being sold by Hamilton Bancorp Inc., a Florida bank holding company (the
"Company"). Prior to this Offering, there has been no public trading market for
the Common Stock and there can be no assurance that any active trading market
will develop. It is currently anticipated that the public offering price will be
between $14.00 and $16.00 per share. See "Underwriting" for information relating
to the factors to be considered in determining the initial public offering
price.

The Company's Common Stock has been approved for quotation on The Nasdaq
National Market System ("Nasdaq") under the symbol "HABK."

THE COMMON STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK. SEE "RISK
FACTORS" BEGINNING ON PAGE 8 HEREOF FOR A DISCUSSION OF CERTAIN FACTORS THAT
SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF SHARES OF COMMON STOCK.
---------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.

THESE SECURITIES ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION
OR ANY OTHER GOVERNMENT AGENCY.

<TABLE>
<CAPTION>
PRICE UNDERWRITING PROCEEDS TO
TO PUBLIC DISCOUNT(1) COMPANY(2)
<S> <C> <C> <C>
Per Share.......................................... $ $ $
Total(3)........................................... $ $ $
</TABLE>

(1) See "Underwriting" for information concerning indemnification of the
Underwriters and other information.
(2) Before deducting expenses of the offering payable by the Company estimated
at $ .
(3) The Company has granted the Underwriters an option, exercisable from time to
time within 30 days from the date hereof, to purchase up to 300,000
additional shares of Common Stock at the Price to Public per share, less the
Underwriting Discount, solely for the purpose of covering over-allotments,
if any. If the Underwriters exercise such option in full, the total Price to
Public, Underwriting Discount and Proceeds to Company will be $ ,
$ and $ , respectively. See "Underwriting."
------------------------

The shares of Common Stock are offered by the Underwriters when, as and if
delivered to and accepted by them, subject to their right to withdraw, cancel or
reject orders in whole or in part and subject to certain other conditions. It is
expected that delivery of certificates representing the shares of Common Stock
will be made against payment on or about , 1997 at the offices of
Oppenheimer & Co., Inc., Oppenheimer Tower, World Financial Center, New York,
New York 10281.
------------------------

OPPENHEIMER & CO., INC. NATWEST SECURITIES LIMITED

The date of this Prospectus is , 1997
<PAGE>

CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK.
SPECIFICALLY, THE UNDERWRITERS MAY OVERALLOT IN CONNECTION WITH THE OFFERING,
AND MAY BID FOR AND PURCHASE, SHARES OF THE COMMON STOCK IN THE OPEN MARKET. FOR
A DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."

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

ADDITIONAL INFORMATION

The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-1 (together with all
amendments, exhibits and schedules thereto, the "Registration Statement") under
the Securities Act of 1933, as amended (the "Act"), with respect to the Common
Stock offered hereby. This Prospectus, which is a part of the Registration
Statement, does not contain all of the information set forth in the Registration
Statement. For further information with respect to the Company and the Common
Stock offered hereby, reference is hereby made to such Registration Statement.
Statements contained in this Prospectus as to the contents of any contract or
other document are not necessarily complete and, in each instance, reference is
made to the copy of such contract or document filed as an exhibit to the
Registration Statement. Copies of the Registration Statement may be obtained
from the Commission's principal office at 450 Fifth Street, N.W., Washington,
D.C. 20549, upon payment of the fees prescribed by the Commission, or may be
examined without charge at the offices of the Commission. In addition, copies of
the Registration Statement and related documents may be obtained through the
Commission's Internet address at http://www.sec.gov.

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

The Company intends to furnish its shareholders with annual reports
containing audited financial statements which have been certified by its
independent public accountants, and quarterly reports containing unaudited
summary financial information for each of the first three quarters of each
fiscal year.

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<PAGE>
PROSPECTUS SUMMARY

THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY THE MORE DETAILED
INFORMATION AND FINANCIAL STATEMENTS APPEARING ELSEWHERE IN THIS PROSPECTUS.
UNLESS OTHERWISE INDICATED, ALL INFORMATION SET FORTH IN THIS PROSPECTUS (I)
ASSUMES THAT THE UNDERWRITERS' OVER-ALLOTMENT OPTION IS NOT EXERCISED, (II)
GIVES EFFECT TO A 6.5-FOR-1 STOCK SPLIT EFFECTED PRIOR TO THE OFFERING (THE
"STOCK SPLIT") AND (III) HAS BEEN ADJUSTED TO REFLECT A REORGANIZATION OF THE
CAPITAL STRUCTURE OF THE COMPANY CONSISTING OF (A) THE CONVERSION OF ALL
OUTSTANDING SHARES OF THE COMPANY'S SERIES B PREFERRED STOCK INTO 277,316 SHARES
OF COMMON STOCK (POST-STOCK SPLIT) AND ALL OUTSTANDING SHARES OF THE COMPANY'S
SERIES C PREFERRED STOCK INTO 188,852 SHARES OF COMMON STOCK (POST-STOCK SPLIT),
AND (B) THE ISSUANCE OF AN AGGREGATE OF 1,396,761 SHARES OF COMMON STOCK
(POST-STOCK SPLIT) FOR ALL OUTSTANDING WARRANTS TO PURCHASE SHARES OF COMMON
STOCK OF HAMILTON BANK, N.A. (COLLECTIVELY THE "REORGANIZATION"). THE
REORGANIZATION WAS COMPLETED IN MARCH 1997. REFERENCES IN THIS PROSPECTUS TO THE
"COMPANY" INCLUDE HAMILTON BANCORP, INC. ("BANCORP") AND ITS 99.7%-OWNED
SUBSIDIARY, HAMILTON BANK, N.A.

THE COMPANY

The Company, through its subsidiary, Hamilton Bank, N.A. (the "Bank"), is
engaged in providing global trade finance, with particular emphasis on trade
with and between South America, Central America, the Caribbean (collectively,
the "Region") and the United States or otherwise involving the Region.
Management believes that trade finance provides the Company with the opportunity
for substantial and profitable growth, primarily with moderate credit risk, and
that the Bank is the only domestic financial institution in the State of Florida
focusing primarily on financing foreign trade. Through its relationships with
approximately 500 correspondent banks and with importers and exporters in the
United States and the Region, as well as its location in South Florida, which is
becoming a focal point for trade in the Region, the Company has been able to
take advantage of substantial growth in this trade. Much of this growth has been
associated with the adoption of economic stabilization policies in the major
countries of the Region.

The Company operates in all major countries throughout the Region and has
been particularly active in several smaller markets, such as Guatemala, Ecuador,
Panama and Peru. Management believes that these smaller markets are not primary
markets for larger, multinational financial institutions and, therefore,
customers in such markets do not receive a similar level of service from such
institutions as that provided by the Company. To enhance its position in certain
markets, the Company has made minority investments in indigenous financial
institutions in Guyana, Haiti and El Salvador. The Company has also strengthened
its relationships with correspondent financial institutions in the Region by
acting as placement agent, from time to time, for debt instruments or
certificates of deposit issued by many of such institutions. As the Company has
grown, it has begun to expand its activities in larger markets in the Region,
such as Argentina and Brazil.

The Company seeks to generate income by participating in multiple aspects of
trade transactions that generate both fee and interest income. The Company earns
fees primarily from opening and confirming letters of credit and discounting
acceptances and earns interest on credit extended, primarily in the form of
commercial loans, for pre- and post-export financing, such as refinancing of
letters of credit, and to a lesser extent, from discounted acceptances. As the
economy in the Region has grown and stabilized and the Company has begun to
service larger customers, the balance of the Company's trade financing
activities has shifted somewhat from letters of credit to the discounting of
commercial trade paper and the granting of loans, resulting in less fee income
but increased interest income. Increased competition has also resulted in
decreased letter of credit fees. Virtually all of the Company's business is
conducted in United States dollars. Management believes that the Company's
primary focus on trade finance, its wide correspondent banking network in the
Region, broad range of services offered, management experience, reputation and
prompt decision-making and processing capabilities provide it with important
competitive advantages in the trade finance business. The Company seeks to
mitigate its credit risk through its knowledge and analysis of the markets it
serves, by obtaining third-party guarantees of both local banks and importers on

3
<PAGE>
many transactions, by often obtaining security interests in goods being financed
and by the short-term, self-liquidating nature of trade transactions. At
December 31, 1996, 80.6% of the Company's loan portfolio consisted of short-term
trade related loans with an average original maturity of approximately 180 days.
Credit is generally extended under specific credit lines for each customer and
country. These credit lines are reviewed at least annually.

Lending activities are funded primarily through domestic consumer and
commercial deposits gathered through a network of six branches in Florida as
well as deposits received from correspondent banks, corporate customers and
private banking customers within the Region. The Company is currently in the
process of opening an additional branch in West Palm Beach, Florida. The
Company's branches are strategically located in markets where it believes that
there is both a concentration of retail deposits and foreign trade activity. The
Company also participates in various community lending activities and under
several United States and Florida laws and regulations, the Bank is considered a
minority bank and is able to participate in certain minority programs involving
both deposits and loans.

The Company has experienced sustained growth in assets and earnings since
its acquisition by current management and shareholders in 1988, and has also
achieved a high level of profitability. For the three years ended December 31,
1996, average total loans increased from $270.8 million to $485.8 million, and
net income increased from $5.7 million to $9.7 million. For the years ended
December 31, 1995 and 1996, return on average assets was 1.50% and 1.41%,
respectively, and return on average total equity was 24.73% and 24.29%,
respectively. Along with its growth, the Company has maintained strong credit
quality. Net loan chargeoffs as a percentage of average outstanding loans were
0.58% and 0.36% for 1995 and 1996. At December 31, 1996, non-performing assets
represented 0.91% of total loans.

The Company's goal is to continue to grow its earnings and maintain a high
level of profitability while maintaining strong credit quality by continuing its
focus on trade finance. The Company's strategy is (i) to continue to take
advantage of the growing trade in the Region, (ii) to use the enhanced capital
base resulting from this Offering to expand credit limits to existing customers,
(iii) to take advantage of its enhanced capital base to expand the Bank's
involvement with larger banks in certain of the larger markets in the Region,
and (iv) to continue to expand its domestic branch system in order to attract
additional consumer and commercial deposits.

Bancorp is a bank holding company incorporated under the laws of Florida and
established in Miami, Florida, in 1988 to acquire the Bank (then known as
Alliance National Bank), a national bank. At December 31, 1996, the Company had
total assets of approximately $755.6 million, total deposits of approximately
$638.6 million and stockholders' equity of approximately $43.8 million. The
principal executive offices of the Company are located at 3750 N.W. 87th Avenue,
Miami, Florida 33178, and the Company's telephone number is (305) 717-5500.

4
<PAGE>
THE OFFERING

<TABLE>
<S> <C>
Common Stock offered by the Company................ 2,000,000 shares
Common Stock outstanding after this Offering....... 9,067,949 shares(1)(2)
Use of proceeds.................................... Contribution to the capital of the Bank
to support future growth in its trade
finance business.
NASDAQ symbol...................................... "HABK"
Risk Factors....................................... The Common Stock offered hereby
involves a high degree of risk. Risks
that should be considered by
prospective purchasers include Regional
economic conditions, potential
political instability, credit risks and
risks related to collateral, the
concentration of cross-border lending
activities, potential impact of changes
in interest rates, the concentration of
deposits, the ability of the Company to
continue its growth strategy,
dependence on management and key
personnel, competition and supervision
and regulation. See "Risk Factors."
Dividend Policy.................................... The Company intends to retain all
future earnings for the operation and
expansion of its business and does not
anticipate paying cash dividends on its
Common Stock in the forseeable future.
See "Dividend Policy."
</TABLE>

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

(1) Does not include an aggregate of 877,500 shares of Common Stock reserved for
issuance upon exercise of stock options granted or to be granted under the
Company's 1993 Stock Option Plan (the "1993 Plan"), pursuant to which
options to purchase 585,000 shares of Common Stock are issued and
outstanding at an exercise price of $9.23 per share, the fair market value
on the date of grant as determined by the Company's Board of Directors. See
"Management--Company Stock Option Plan."

(2) Upon consummation of the Offering, approximately 28.1% of the issued and
outstanding shares of Common Stock of the Company will be held by the
Company's officers, directors and beneficial owners of more than 5% of the
issued and outstanding shares of Common Stock (assuming no exercise of the
over-allotment option).

5
<PAGE>
SUMMARY CONSOLIDATED FINANCIAL DATA

(Dollars in thousands, except per share data)

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------------------------
1992 1993 1994 1995 1996
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net interest income........................................ $9,712 $13,209 $17,201 $24,143 $28,375
Provision for credit losses................................ 1,477 2,550 2,875 2,450 3,040
--------- --------- --------- --------- ---------
Net interest income after provision for credit losses...... 8,235 10,659 14,326 21,693 25,335
Trade finance fees and commissions......................... 5,535 6,572 7,422 8,173 7,590
Capital market fees, net................................... 1,036 1,634 1,410 318 112
Customer services fees..................................... 927 943 1,044 1,267 1,136
Net gain (loss) on sale of securities available for sale... 167 11 (168) 3 0
Other income............................................... 219 403 322 569 996
--------- --------- --------- --------- ---------
Total non-interest income.................................. 7,884 9,563 10,030 10,330 9,834
--------- --------- --------- --------- ---------
Operating expenses......................................... 10,795 13,014 14,946 18,849 19,604
--------- --------- --------- --------- ---------
Income before provision for income taxes................... 5,324 7,208 9,410 13,174 15,565
Provision for income taxes................................. 1,950 2,761 3,721 5,171 5,855
--------- --------- --------- --------- ---------
Net income................................................. $3,374 $4,447 $5,689 $8,003 $9,710
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
PER COMMON SHARE DATA:
Net income per common share(1)............................. $0.62 $0.82 $1.05 $1.47 $1.79
Book value per common share(1)............................. $2.30 $3.10 $5.06 $6.41 $8.07
Average weighted shares.................................... 5,430,030 5,430,030 5,430,030 5,430,030 5,430,030

PRO FORMA PER COMMON SHARE DATA (2):
Net income per common share................................ $1.33
Book value per common share................................ $6.01
Average weighted shares.................................... 7,292,949
</TABLE>

<TABLE>
<CAPTION>
DECEMBER 31, 1996
----------------------------------------
ACTUAL PRO FORMA(2) AS ADJUSTED(3)
--------- ------------- --------------

<S> <C> <C> <C>
BALANCE SHEET DATA:
Total assets............................................................. $ 755,570 $ 755,570 $782,570
Loans--net............................................................... 527,279 527,279 527,279
Total cash and cash equivalents.......................................... 33,106 33,106 60,106
Interest-earning deposits with other banks............................... 80,477 80,477 80,477
Securities available for sale............................................ 29,020 29,020 29,020
Due from customers on bankers' acceptances and on deferred payment
letters of credit...................................................... 68,104 68,104 68,104
Deposits................................................................. 638,641 638,641 638,641
Bankers' acceptances and deferred payment letters of credit
outstanding............................................................ 68,104 68,104 68,104
Total stockholders' equity............................................... 43,800 43,800 70,800
</TABLE>

6
<PAGE>
SELECTED FINANCIAL RATIOS:

<TABLE>
<CAPTION>
AT AND FOR THE YEARS ENDED DECEMBER 31,
-----------------------------------------------------
1992 1993 1994 1995 1996
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
PERFORMANCE RATIOS:
Net interest spread............................................. 4.51% 4.76% 4.33% 4.20% 3.85%
Net interest margin............................................. 5.40% 5.48% 5.06% 4.94% 4.52%
Return on average equity........................................ 29.35% 29.13% 25.63% 24.73% 24.29%
Return on average assets........................................ 1.49% 1.61% 1.45% 1.50% 1.41%
Efficiency ratio(4)............................................. 61.35% 57.15% 54.89% 54.68% 51.31%

ASSET QUALITY RATIOS:
Allowance for credit losses as a percentage of total loans...... 1.05% 1.66% 1.31% 1.05% 1.07%
Non-performing assets as a percentage of total loans............ 0.20% 1.33% 0.59% 1.07% 0.91%
Allowance for credit losses as a percentage of non-performing
assets........................................................ 520.87% 125.00% 221.13% 98.56% 117.97%
Net loan charge-offs as a percentage of average outstanding
loans......................................................... 0.66% 0.50% 0.74% 0.58% 0.36%

CAPITAL RATIOS:
Leverage capital ratio.......................................... 5.28% 5.21% 5.48% 5.68% 5.80%
Tier 1 capital.................................................. 9.71% 9.35% 10.30% 9.98% 10.20%
Total capital................................................... 10.96% 10.60% 11.47% 10.92% 11.50%
Average equity to average assets................................ 5.09% 5.53% 5.67% 6.05% 5.81%
</TABLE>

- ------------------------
(1) Represents net income and net book value, respectively, per share of Common
Stock and common stock equivalents.

(2) The pro forma information reflects the completion of the Reorganization.

(3) Adjusted to reflect the sale of 2,000,000 shares of Common Stock offered by
the Company at an assumed public offering price of $15.00 per share.

(4) Amount reflects operating expenses as a percentage of net interest income
plus non-interest income.

7
<PAGE>
RISK FACTORS

THE SHARES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK, INCLUDING THE RISKS
DESCRIBED BELOW. PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER THE SPECIFIC
FACTORS SET FORTH BELOW, AS WELL AS THE OTHER INFORMATION CONTAINED IN THIS
PROSPECTUS, BEFORE DECIDING TO INVEST IN THE COMMON STOCK OFFERED HEREBY.

THIS PROSPECTUS CONTAINS CERTAIN "FORWARD-LOOKING STATEMENTS" WHICH
REPRESENT THE COMPANY'S EXPECTATIONS OR BELIEFS, INCLUDING, BUT NOT LIMITED TO,
STATEMENTS CONCERNING INDUSTRY PERFORMANCE AND THE COMPANY'S OPERATIONS,
PERFORMANCE, FINANCIAL CONDITION, GROWTH AND STRATEGIES. FOR THIS PURPOSE, ANY
STATEMENTS CONTAINED IN THIS PROSPECTUS THAT ARE NOT STATEMENTS OF HISTORICAL
FACT MAY BE DEEMED TO BE FORWARD-LOOKING STATEMENTS. WITHOUT LIMITING THE
GENERALITY OF THE FOREGOING, WORDS SUCH AS "MAY," "WILL," "EXPECT," "BELIEVE,"
"ANTICIPATE," "INTEND," "COULD," "ESTIMATE" OR "CONTINUE" OR THE NEGATIVE OR
OTHER VARIATIONS THEREOF OR COMPARABLE TERMINOLOGY ARE INTENDED TO IDENTIFY
FORWARD-LOOKING STATEMENTS. THESE STATEMENTS BY THEIR NATURE INVOLVE SUBSTANTIAL
RISKS AND UNCERTAINTIES, CERTAIN OF WHICH ARE BEYOND THE COMPANY'S CONTROL, AND
ACTUAL RESULTS MAY DIFFER MATERIALLY DEPENDING ON A VARIETY OF IMPORTANT
FACTORS, INCLUDING THOSE DESCRIBED BELOW IN THIS "RISK FACTORS" SECTION AND
ELSEWHERE IN THIS PROSPECTUS.

REGIONAL ECONOMIC CONDITIONS. During the 1980s, many of the countries in
the Region experienced severe economic difficulties, including periods of slow
or negative growth, large government budget deficits, high inflation, currency
devaluations, government influence over the private sector, nationalization and
expropriation of assets, vulnerability to weakness in world prices for commodity
exports (particularly in smaller countries), large foreign indebtedness on the
part of their governments, and exchange controls and unavailability of foreign
exchange, including United States dollars. As a result, many governments and
public and private institutions in the Region were unable to make interest and
principal payments on their external debt. Much of this external debt of the
Region has now been restructured to provide for extensions of repayment
schedules, grace periods during which payments of principal are suspended and,
in certain cases, reduced rates of interest. In recent years there have been
significant improvements in the economies of many countries in the Region.
However, there have been periodic, serious economic downturns for countries in
the Region, and there can be no assurance that widespread economic difficulties
will not be experienced by countries in the Region at some time in the future.
Any such downturn could adversely affect business in the Region and could have a
material adverse effect on the Company's business, prospects, financial
condition and results of operations. See "Business--Economic Conditions in the
Region."

POTENTIAL POLITICAL INSTABILITY. Democracy has largely prevailed in the
Region since the early 1990s, and was endorsed as a key, shared principle at the
Presidential Summit of the Americas celebrated in Miami, Florida in December
1994 among 37 Presidents representing nations in the Region. Nevertheless, most
countries in the Region have a history of political instability involving
periodic, non-democratic forms of government. A number of these countries have
also experienced or are experiencing popular unrest, internal insurgencies,
terrorist activities, hostilities with neighboring countries, drug trafficking
and authoritarian military governments. A return to such non-democratic forms of
government or expansion of such destabilizing activities in one or more of the
key countries in the Region could affect investors' confidence not only in these
countries, but in the Region as a whole, reducing trade with the Region. This
could have a material adverse effect on the Company's business, prospects,
financial condition and results of operations.

CREDIT RISKS AND COLLATERAL. The financial difficulty or failure of
customers of the Company or of correspondent banks may adversely affect the
Company's ability to recover funds due to it. In addition, most of the Company's
trade financing activities involve collateral or guarantees. The Company, in its
trade financing, also runs the risk that such collateral or guarantees will be
inadequate, largely due to rapidly changing market conditions, deteriorating
financial condition of guarantors, or fraud in the underlying trade transaction,
which may leave either the Company or its customer holding documents of title to
non-existent or defective goods. Accordingly, the Company maintains an allowance
for credit losses. The allowance for credit losses is determined after
evaluating historic loan loss experience adjusted for

8
<PAGE>
current conditions and circumstances, ratio analyses of credit quality
classifications and their trend in light of current portfolio trends and
economic conditions, as well as other pertinent considerations, all of which
involve significant estimation and judgment and are subject to rapid changes
which may not be foreseeable. As a result, ultimate losses could vary
significantly from current estimates and may be either greater or less than the
Company's allowance for credit losses. See "Management's Discussion and Analysis
of Financial Condition and Results of Operations."

CONCENTRATION OF CROSS-BORDER LENDING ACTIVITIES. At December 31, 1996,
approximately 73.0% in principal amount of the Company's total loans were
outstanding to borrowers in over 25 countries outside the United States,
including Guatemala (14.8%), Panama (9.4%), Argentina (6.6%), Ecuador (5.6%), El
Salvador (5.3%) and Brazil (5.1%). A significant deterioration of economic or
political conditions or the imposition of currency exchange or similar controls
in one or more of these countries could have a material adverse effect on the
Company's business, prospects, financial condition and results of operations.

POTENTIAL IMPACT OF CHANGES IN INTEREST RATES. The Company's profitability
is primarily dependent on its net interest income, which is the difference
between its interest income on interest-earning assets, such as loans, and its
interest expense on interest-bearing liabilities, such as deposits. Financial
institutions, including the Bank, are affected by changes in general interest
rate levels and by other economic factors. A sharp increase in interest rates
could impact economic activity in the Region and the demand for the Company's
loans. Fluctuations in interest rates are not predictable or controllable and
may vary from country to country. Interest rate risk arises from mismatches
between repricing or maturity characteristics of assets and liabilities.
Although the Company has structured its assets and liabilities in an effort to
mitigate the impact of changes in interest rates, changes in interest rates on
retail deposits typically lag behind changes in interest rates on loans. There
can be no assurance that the Company will not experience a material adverse
effect on its net interest income in a changing rate environment. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."

ABILITY OF THE COMPANY TO CONTINUE ITS GROWTH STRATEGY. The Company has
historically achieved growth in its trade financing activities by attracting new
customers, expanding its services to existing customers and increasing its
deposit base. In 1995 and 1996, the Company's net loans, including discounted
acceptances, increased approximately 34.3% and 26.8% in the aggregate,
respectively, to approximately $416.0 million and $527.3 million, and deposits
increased by approximately 35.3% and 26.5% in the aggregate, respectively, to
approximately $505.1 million and $638.6 million, in each case, when compared to
the prior year. These growth rates were higher in 1995 than in 1996 as a result
of an infusion of capital from the sale of preferred stock in 1994. There can be
no assurance that the Company will be able to continue to grow at these rates in
the future. Historical growth rates are not necessarily indicative of future
results, and it becomes more difficult to maintain historical rates of growth as
a company increases in size. The Company's ability to further implement its
strategy for continued growth of its trade financing activities is largely
dependent upon the Company's ability to attract and retain quality customers for
the Company's services in a competitive market, on the business growth of those
customers, on the Company's ability to maintain, expand and develop
relationships with correspondent banks, and on the Company's ability to increase
deposit growth, all of which may be affected by a number of factors not within
the Company's control. As most of the Company's loans and deposits are
short-term in nature and thereby turn over rapidly, any decline or reversal of
the growth rate could occur more quickly than it would for most other financial
institutions. Moreover, as part of its growth strategy, the Company expects to
increase its exposure to certain customers and to attract larger customers. A
significant loss on these larger exposures could have a material adverse effect
on the Company's business, prospects, financial condition and results of
operations.

CONCENTRATION OF DEPOSITS. A significant portion of the Company's deposits
are comprised of certificates of deposit and other time deposits in amounts in
excess of $100,000. A majority of these deposits relate to existing lending
relationships. At December 31, 1996, approximately 26% and 12% of the

9
<PAGE>
Company's total deposits were comprised of certificates of deposit and other
time deposits in amounts in excess of $100,000, respectively. Most of the
Company's deposits closely match the maturity of its assets. Notwithstanding the
short-term nature of its loan portfolio, in the event that all or substantially
all of such deposits were withdrawn at or prior to their respective maturities,
the Company could be required to satisfy such deposit amounts through the (i)
use of available interbank funding, (ii) sale of bankers' acceptances, (iii)
interbank certificate of deposit network or (iv) liquidation of certain assets.
Although management believes that it has historically been successful in
matching the maturity dates of these deposits against its loan portfolio, there
can be no assurance that the Company will continue to be successful or that it
would not ultimately be required to liquidate assets in order to satisfy such
deposit amounts.

DEPENDENCE ON MANAGEMENT AND KEY PERSONNEL. The Company's success depends
to a significant degree upon the continued contributions of members of its
senior management, particularly Eduardo A. Masferrer, the Company's President
and Chief Executive Officer, Maura A. Acosta, an Executive Vice President, and
J. Carlos Bernace, an Executive Vice President, as well as other officers and
key personnel, many of whom would be difficult to replace. The future success of
the Company also depends on its ability to identify, attract and retain
additional qualified personnel, particularly managerial personnel with
experience in international trade financing. No employees or executive officers
have employment agreements with the Company. The loss of Mr. Masferrer, Ms.
Acosta and Mr. Bernace or other officers and key personnel could have a material
adverse effect on the Company's business, prospects, financial condition and
results of operations. The Company does not maintain key person life insurance
with respect to any of its officers. See "Management."

COMPETITION. International trade financing is a highly competitive industry
that is dominated by large, multinational financial institutions such as
Citibank, N.A., Swiss Bank Corporation and Barclays, among others. With respect
to trade finance in or relating to larger countries in the Region, primarily in
South America, these larger institutions are the Company's primary competition.
The Company has less competition from these multinational financial institutions
providing trade finance services with or in smaller countries in the Region,
primarily in Central America and the Caribbean, because the volume of trade
financing in such smaller countries has not been as attractive to these larger
institutions. With respect to Central American and Caribbean countries, as well
as United States domestic customers, the Company also competes with regional
United States and smaller local financial institutions engaged in trade finance.
Many of the Company's competitors, particularly multinational financial
institutions, have substantially greater financial and other resources than the
Company.

Although to date the Company has competed successfully, on a limited basis,
in those countries in the Region which have high trade volumes, such as Brazil
and Argentina, there can be no assurance that the Company will be able to
continue competing successfully in those countries with either large,
multinational financial institutions or regional United States or local
financial institutions. Any significant decrease in the Company's trade volume
in such large-volume countries could adversely affect the Company's results of
operations. Although the Company faces less competition from multinational
financial institutions in those countries in the Region, particularly countries
in Central America and the Caribbean, where the trading volume has not been
large enough to be meaningful for multinational financial institutions, there
can be no assurance that such financial institutions will not seek to finance
greater volumes of trade in those countries or that the Company would be able to
successfully compete with those financial institutions in the event of increased
competition. In addition, there is no assurance that the Company will be able to
continue to compete successfully in smaller countries with the regional United
States financial institutions and smaller local financial institutions engaged
in trade finance in such countries. Continued political stability and
improvement in economic conditions in such countries is likely to result in
increased competition. See "Business--Competition."

10
<PAGE>
SUPERVISION AND REGULATION. Bank holding companies and national banks
operate in a highly regulated environment and are subject to supervision and
examination by federal regulatory agencies. Bancorp is subject to the Bank
Holding Company Act of 1956, as amended (the "BHC Act"), and to regulation and
supervision by the Board of Governors of the Federal Reserve System (the "FRB").
The Bank, as a national bank that is a member of the Federal Reserve System and
insured by the Federal Deposit Insurance Corporation (the "FDIC"), is subject to
the primary regulation and supervision of the Office of the Comptroller of the
Currency (the "OCC"), and secondarily, of the FDIC. Federal laws and regulations
govern numerous matters including changes in the ownership or control of banks
and bank holding companies, maintenance of adequate capital and the financial
condition of a financial institution, permissible types, amounts and terms of
extensions of credit and investments, permissible non-banking activities, the
level of reserves against deposits, and restrictions on dividend payments. The
OCC and the FDIC possess cease and desist powers to prevent or remedy unsafe or
unsound practices or violations of law by national banks, and the FRB possesses
similar powers with respect to bank holding companies. These and other
restrictions limit the manner in which Bancorp and the Bank may conduct business
and obtain financing. Furthermore, the commercial banking business is affected
not only by general economic conditions, but also by the monetary policies of
the FRB. Changes in monetary or legislative policies may affect the interest
rates the Bank must offer to attract deposits and the interest rates it must
charge on its loans, as well as the manner in which it offers deposits and makes
loans. These monetary policies have had, and are expected to continue to have,
significant effects on the operating results of commercial banks, including the
Bank. See "Business--Regulation."

SEASONALITY AND VARIABILITY OF QUARTERLY RESULTS. The Company, as well as
the trade financing industry, has historically experienced and expects to
continue to experience slight seasonal fluctuations in its trade financing,
which generally has been slightly more active from July to December. A principal
reason for the slight fluctuation in the Company's trade financing is the
seasonality in the manufacture and/or sale of goods by many of the Company's
customers, as well as many of the customers of its correspondent banks, who
generally need more financing for the production and shipping of goods in
anticipation of various periods of the year such as the holiday season, the
Regional tourist season, the dry season and agricultural cycles in certain
portions of the Region. The Company realized approximately 55.0% of its annual
letter of credit and acceptance fees in each of 1995 and 1996 during the second
half of the fiscal year. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations."

NO DIVIDENDS. Bancorp has not paid any cash dividends on its Common Stock
to date and does not intend to pay such cash dividends in the foreseeable
future. Bancorp intends to retain earnings to finance the development and
expansion of its business. In addition, Bancorp's ability to pay dividends in
the future is dependent upon its receipt of dividends paid to it by the Bank.
The Bank is subject to certain restrictions on the amount of dividends that it
may declare without prior regulatory approval. See "Dividend Policy."

DILUTION. Purchasers of the Common Stock offered hereby will experience
immediate and significant dilution of $7.62 per share ($7.41 per share if the
over-allotment option granted to the Underwriters is exercised in full) in the
net tangible book value of their shares assuming an initial public offering
price of $15.00 per share. See "Dilution."

ABSENCE OF PUBLIC MARKET; POSSIBLE FLUCTUATIONS OF STOCK PRICE. Prior to
this Offering, there has been no public market for Bancorp's Common Stock. There
can be no assurance that an active trading market for the Common Stock will
develop or that, if developed, it will be sustained after this Offering, or that
it will be possible to resell the shares of Common Stock at or above the initial
public offering price. The market price of the Common Stock could be subject to
significant fluctuations in response to the Company's operating results and
other factors. In addition, the stock market in recent years has experienced
extreme price and volume fluctuations that often have been unrelated or
disproportionate to the operating performance of individual companies. Such
fluctuations, and general economic and market

11
<PAGE>
conditions, may adversely affect the market price of the Common Stock. See
"Selected Consolidated Financial Data," "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and "Underwriting."

BROAD DISCRETION IN USE OF PROCEEDS. The Company intends to contribute
substantially all of the net proceeds of the Offering to the capital of the Bank
to support future growth in the Bank's trade finance business. Accordingly, the
Company will have broad discretion as to the application of such proceeds. An
investor will not have the opportunity to evaluate the economic, financial and
other relevant information which will be utilized by the Company in determining
the application of such proceeds. See "Use of Proceeds."

SHARES ELIGIBLE FOR FUTURE SALE. Upon consummation of this Offering,
Bancorp will have 9,067,949 shares of Common Stock outstanding (9,367,949 if the
over-allotment option granted to the Underwriters is exercised in full). Of
these shares, 6,430,643 shares (6,730,643 shares if the over-allotment option
granted to the Underwriters is exercised in full) will be freely tradeable
without restriction or registration under the Act, unless purchased by persons
deemed to be "affiliates" of the Company (as that term is defined under the
Act). All of the remaining 2,637,306 shares of Common Stock held by the current
shareholders of Bancorp will be "restricted securities" as that term is defined
in Rule 144 promulgated under the Act. Substantially all of the current
shareholders are agreeing not to sell any shares of Common Stock for 180 days
from the date of this Prospectus without the prior written consent of
Oppenheimer & Co., Inc. See "Underwriting." Additionally, upon consummation of
this Offering, 877,500 shares of Common Stock will have been reserved for
issuance under the Company's 1993 Plan and options to purchase 585,000 shares of
Common Stock, which are not exercisable until February 1998, have been issued
under the 1993 Plan at an exercise price of $9.23 per share, the fair market
value on the date of grant as determined by the Company's Board of Directors.
The Company intends to register under the Act all eligible shares reserved for
issuance under the 1993 Plan. Shares covered by such registration will be
eligible for resale in the public market, subject to Rule 144 limitations
applicable to affiliates. See "Management--Company Stock Option Plan." Future
sales of substantial amounts of Common Stock in the public market, or the
availability of such shares for future sale, could impair the Company's ability
to raise capital through an offering of securities and may adversely affect the
then-prevailing market prices. See "Shares Eligible for Future Sale."

CERTAIN POTENTIAL ANTI-TAKEOVER PROVISIONS. Certain provisions of the
Company's Amended and Restated Articles of Incorporation and Bylaws could delay
or frustrate the removal of incumbent directors and could make a merger, tender
offer or proxy contest involving the Company more difficult, even if such events
were perceived by shareholders as beneficial to their interests. In addition,
certain provisions of state and federal law may also have the effect of
discouraging or prohibiting a future takeover attempt in which shareholders of
the Company might otherwise receive a substantial premium for their shares over
then-current market prices. In addition, the Company's Amended and Restated
Articles of Incorporation authorize the issuance of "blank check" preferred
stock with such designations, rights and preferences as may be determined from
time to time by the Board of Directors. Accordingly, the Board of Directors is
empowered, without shareholder approval (unless otherwise required by the rules
of any stock exchange on which the Common Stock is then traded), to issue
preferred stock with dividend, liquidation, conversion, voting or other rights
which could adversely affect the voting power or other rights of the holders of
the Company's Common Stock. In the event of such issuance, the preferred stock
could be utilized, under certain circumstances, as a method of discouraging,
delaying or preventing a change in control of the Company. Although the Company
has no present intention to issue any shares of its preferred stock, there can
be no assurance that the Company will not do so in the future.

CONTINUING INSIDER INFLUENCE OVER THE COMPANY. Eduardo A. Masferrer,
Chairman of the Board, President and Chief Executive Officer of the Company,
will hold approximately 11.8% of the total voting power of the Company's
outstanding voting stock upon the consummation of this Offering, or 11.4% if the

12
<PAGE>

Underwriters' over-allotment option is exercised in full and as such, will
continue to be the single largest shareholder of the Company following this
Offering. Current directors, executive officers and other holders of 5% or more
of the Company's equity securities will hold approximately 28.1% of the total
voting power of the Company's outstanding voting stock upon the consummation of
this Offering, or 27.2% if the Underwriters' over-allotment option is exercised
in full. See "Description of Capital Stock" and "Principal Shareholders."

USE OF PROCEEDS

The net proceeds to be received by the Company from the sale of shares of
Common Stock offered hereby, based upon an assumed initial public offering price
of $15.00 per share and after deducting the underwriting discount and estimated
offering expenses, are estimated to be approximately $27.0 million ($31.2
million if the over-allotment option granted to the Underwriters is exercised in
full).

The Company intends to contribute substantially all of the net proceeds of
the Offering to the capital of the Bank to support future growth in the Bank's
trade finance business.

DIVIDEND POLICY

The Company intends to retain all future earnings for the operation and
expansion of its business, and does not anticipate paying cash dividends on its
Common Stock in the foreseeable future. Any future determination as to the
payment of cash dividends will depend upon the Company's results of operations,
financial condition and capital requirements and any regulatory restrictions or
restrictions under credit agreements or other funding sources of the Company
existing from time to time, as well as other factors which the Company's Board
of Directors may consider relevant. Bancorp's ability to pay dividends in the
future will be primarily dependent upon its receipt of dividends paid to it by
the Bank. The Bank is subject to certain restrictions on the amount of dividends
that it may declare without prior regulatory approval. See
"Business--Regulation."

DILUTION

The pro forma net tangible book value of the Company's Common Stock as of
December 31, 1996 (after giving effect to the Reorganization) was $41.6 million
or approximately $5.70 per pro forma share. Pro forma net tangible book value
per share is determined by dividing pro forma net tangible book value (tangible
assets less liabilities) of the Company by 7,292,949 pro forma shares of Common
Stock outstanding (including common stock equivalents).

Pro forma net tangible book value dilution per share represents the
difference between the amount per share paid by purchasers of shares of Common
Stock in the Offering and the pro forma net tangible book value per share of
Common Stock immediately after completion of the Offering. After giving effect
to the sale by the Company of 2,000,000 shares of Common Stock in the Offering
at an assumed initial public offering price of $15.00 per share, as well as the
application of the estimated net proceeds therefrom, the pro forma net tangible
book value of the Company as of December 31, 1996 would have been $68.6 million
or $7.38 per share. This would represent an immediate increase in net tangible
book value of $1.68 per share to the existing shareholders and an immediate
dilution in net tangible book value

13
<PAGE>
of $7.62 per share to purchasers of Common Stock in the Offering at the assumed
initial public offering price of $15.00 per share, as illustrated in the
following table.

<TABLE>
<S> <C> <C>
Assumed initial public offering price per share of Common Stock(1)...... $ 15.00
Pro forma net tangible book value per share as of December 31,
1996(2)............................................................... $ 5.70
Increase per share attributable to new investors...................... $ 1.68
Pro forma net tangible book value per share after the Offering(2)(3).... $ 7.38
---------
Pro forma net tangible book value dilution per share to new
investors(2)(3)....................................................... $ 7.62
---------
---------
</TABLE>

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

(1) Before deducting the underwriting discount and estimated expenses of the
Offering.

(2) Gives effect to the issuance of shares of Common Stock issuable upon
exercise of stock options granted under the Company's 1993 Plan, pursuant to
which options to purchase 585,000 shares of Common Stock at an exercise
price of $9.23 per share have been issued and are outstanding as of the date
of this Offering, and assumes the utilization of the exercise price to
repurchase shares of Common Stock for the treasury. Pursuant to their terms,
none of such outstanding options may be exercised until February 1998. See
"Management--Company Stock Option Plan."

(3) If the Underwriters exercise their over-allotment option in full, the pro
forma net tangible book value per share would be $7.59 and dilution of net
tangible book value per share to new investors would be $7.41.

The following table sets forth on a pro forma basis as of December 31, 1996
(after giving effect to the Reorganization) the difference between the existing
shareholders and the purchasers of shares in the Offering with respect to the
number of shares purchased from the Company, the total consideration paid and
the average price per share paid at the assumed initial offering price of $15.00
per share:

<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION AVERAGE
----------------------- -------------------------- PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
---------- ----------- ------------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Existing shareholders............................ 7,067,949 77.9%(1) $ 23,560,000 44.0% $ 3.33
New investors.................................... 2,000,000 22.1 30,000,000 56.0 15.00
---------- ----- ------------- -----
Total.......................................... 9,067,949 100.0% $ 53,560,000 100.0%
---------- ----- ------------- -----
---------- ----- ------------- -----
</TABLE>

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

(1) If the Underwriters exercise their over-allotment option in full, the
Company's existing shareholders will own 75.4% of the shares of Common
Stock outstanding upon completion of this Offering. See "Principal
Shareholders."

14
<PAGE>
CAPITALIZATION

The following table sets forth the capitalization of the Company as of
December 31, 1996, giving pro forma effect to the Reorganization to be effected
prior to the effective date of this Offering, and as adjusted for the sale of
the 2,000,000 shares of Common Stock offered hereby (at an assumed public
offering price of $15.00 per share) and the application of the estimated net
proceeds therefrom. See "Use of Proceeds."

<TABLE>
<CAPTION>
DECEMBER 31, 1996
-----------------------------------
PRO FORMA
ACTUAL (3) AS ADJUSTED
--------- ----------- -----------
(IN THOUSANDS)
<S> <C> <C> <C>
Deposits.................................................. $ 638,641 $ 638,641 $ 638,641
--------- ----------- -----------
--------- ----------- -----------
Stockholders' equity:
Preferred stock, non-voting, non-cumulative, 14% maximum
dividend rate, par value $.01 per share, 2,000,000
shares authorized, 101,207 shares issued and
outstanding; no shares issued and outstanding pro
forma and as adjusted................................. $ 1 $ -- $ --
Common stock, $.01 par value; 75,000,000 shares
authorized; 5,205,030 shares issued and outstanding;
7,067,949 pro forma shares issued and outstanding(1);
9,067,949 shares issued and outstanding, as
adjusted(2)........................................... 52 71 91
Capital surplus......................................... 17,318 17,300 44,280
Retained earnings....................................... 26,431 26,431 26,431
Net unrealized loss on securities available for sale,
net of taxes.......................................... (2) (2 ) (2 )
--------- ----------- -----------
Total stockholders' equity............................ $ 43,800 $ 43,800 $ 70,800
--------- ----------- -----------
Total capitalization.................................. $ 682,441 $ 682,441 $ 709,441
--------- ----------- -----------
--------- ----------- -----------
Ratios:
Tier 1 Capital Ratio...................................... 10.20% 10.20% 16.13%(3)
Total Capital Ratio....................................... 11.50% 11.50% 16.82%(3)
Leverage Ratio............................................ 5.80% 5.80% 9.00%(3)
</TABLE>

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

(1) The pro forma information reflects the completion of the Reorganization.

(2) Does not include an aggregate of 877,500 shares of Common Stock reserved for
issuance under the 1993 Plan, pursuant to which options to purchase 585,000
shares of Common Stock are issued and outstanding, or shares issuable
pursuant to the Underwriters' over-allotment option. See
"Management--Company Stock Option Plan" and "Underwriting."

(3) The net proceeds from this Offering will initially be deposited in cash and
cash equivalents and will subsequently be applied as described in "Use of
Proceeds." The ratios have been calculated assuming the net proceeds are
invested in assets with a weighted average risk weighting of 58%, which is
consistent with the Company's historical risk-weighted asset composition.

15
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

The selected consolidated income statement data for the three years ended
December 31, 1996, the balance sheet data at December 31, 1996 and the pro-forma
balance sheet data at December 31, 1996, set forth below have been derived from
the consolidated financial statements of the Company contained elsewhere herein.
The selected consolidated financial data set forth below with respect to the
Company's income statement data for the two years ended December 31, 1993 and
1994 are derived from audited consolidated financial statements not included
herein. The consolidated financial statements as of and for the years ended
December 31, 1992, 1993, 1994, 1995 and 1996 have been audited by Deloitte &
Touche LLP, independent auditors. The pro-forma financial information presented
below gives effect to the Reorganization. The data set forth below should be
read in conjunction with the consolidated financial statements and related
notes, and "Management's Discussion and Analysis of Financial Condition and
Results of Operations" included elsewhere in this Prospectus.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------------------------
<S> <C> <C> <C> <C> <C>
1992 1993 1994 1995 1996
--------- --------- --------- --------- ---------
INCOME STATEMENT DATA:
Net interest income........................................ $9,712 $13,209 $17,201 $24,143 $28,375
Provision for credit losses................................ 1,477 2,550 2,875 2,450 3,040
--------- --------- --------- --------- ---------
Net interest income after
provision for credit losses.............................. 8,235 10,659 14,326 21,693 25,335
Trade finance fees and commissions......................... 5,535 6,572 7,422 8,173 7,590
Capital market fees, net................................... 1,036 1,634 1,410 318 112
Customer services fees..................................... 927 943 1,044 1,267 1,136
Net gain (loss) on sale of securities available for sale... 167 11 (168) 3
Other income............................................... 219 403 322 569 996
--------- --------- --------- --------- ---------
Total non-interest income.................................. 7,884 9,563 10,030 10,330 9,834
--------- --------- --------- --------- ---------
Operating expenses......................................... 10,795 13,014 14,946 18,849 19,604
--------- --------- --------- --------- ---------
Income before provision for income taxes................... 5,324 7,208 9,410 13,174 15,565
Provision for income taxes................................. 1,950 2,761 3,721 5,171 5,855
--------- --------- --------- --------- ---------
Net income................................................. $3,374 $4,447 $5,689 $8,003 9,710
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
PER COMMON SHARE DATA:
Net income per common share(1)............................. $0.62 $0.82 $1.05 $1.47 $1.79
Book value per common share(1)............................. $2.30 $3.10 $5.06 $6.41 8.07
Average weighted shares.................................... 5,430,030 5,430,030 5,430,030 5,430,030 5,430,030

PRO FORMA PER COMMON SHARE DATA:(2)
Net income per common share................................ $1.33
Book value per common share................................ $6.01
Average weighted shares.................................... 7,292,949
</TABLE>

16
<PAGE>

<TABLE>
<CAPTION>
DECEMBER 31, 1996
--------------------------------------
ACTUAL PRO-FORMA AS ADJUSTED(3)
--------- ----------- --------------
<S> <C> <C> <C>
BALANCE SHEET DATA:
Total assets................................................................ $ 755,570 $ 755,570 $ 782,570
Loans--net.................................................................. 527,279 527,279 527,279
Total cash and cash equivalents............................................. 33,106 33,106 60,106
Interest-earning deposits with other banks.................................. 80,477 80,477 80,477
Securities available for sale............................................... 29,020 29,020 29,020
Due from customers on bankers' acceptances and on deferred payment letters
of credit................................................................. 68,104 68,104 68,104
Deposits.................................................................... 638,641 638,641 638,641
Bankers' acceptances and deferred payment letters of credit outstanding..... 68,104 68,104 68,104
Total stockholders' equity.................................................. 43,800 43,800 70,800
</TABLE>

SELECTED FINANCIAL RATIOS:

<TABLE>
<CAPTION>
AT AND FOR THE YEARS ENDED DECEMBER 31,
-----------------------------------------------------
<S> <C> <C> <C> <C> <C>
1992 1993 1994 1995 1996
--------- --------- --------- --------- ---------
PERFORMANCE RATIOS:
Net interest spread........................................ 4.51% 4.76% 4.33% 4.20% 3.85%
Net interest margin........................................ 5.40% 5.48% 5.06% 4.94% 4.52%
Return on average equity................................... 29.35% 29.13% 25.63% 24.73% 24.29%
Return on average assets................................... 1.49% 1.61% 1.45% 1.50% 1.41%
Efficiency ratio(4)........................................ 61.35% 57.15% 54.89% 54.68% 51.31%

ASSET QUALITY RATIOS:
Allowance for credit losses as a percentage of total
loans.................................................... 1.05% 1.66% 1.31% 1.05% 1.07%
Non-performing assets as a percentage of total loans....... 0.20% 1.33% 0.59% 1.07% 0.91%
Allowance for credit losses as a percentage of
non-performing assets.................................... 520.87% 125.00% 221.13% 98.56% 117.97%
Net loan charge-offs as a percentage of average outstanding
loans.................................................... 0.66% 0.50% 0.74% 0.58% 0.36%

CAPITAL RATIOS:
Leverage capital ratio..................................... 5.28% 5.21% 5.48% 5.68% 5.80%
Tier 1 capital............................................. 9.71% 9.35% 10.30% 9.98% 10.20%
Total capital.............................................. 10.96% 10.60% 11.47% 10.92% 11.50%
Average equity to average assets........................... 5.09% 5.53% 5.67% 6.05% 5.81%
</TABLE>

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

(1) Represents net income and net book value, respectively, per share of Common
Stock and common stock equivalents.

(2) The pro forma information reflects the completion of the Reorganization.

(3) Adjusted to reflect the sale of 2,000,000 shares of Common Stock offered by
the Company at an assumed public offering price of $15.00 per share."

(4) Amount reflects operating expenses as a percentage of net interest income
plus non-interest income.

17
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of the consolidated results of
operations and financial condition of the Company for the fiscal years ended and
as of December 31, 1994, 1995 and 1996 should be read in conjunction with the
Company's Consolidated Financial Statements, including the notes thereto, and
other information contained elsewhere in this Prospectus.

RESULTS OF OPERATIONS

The Company's principal business is conducted by the Bank and consists of
providing global trade finance with particular emphasis on the Region and the
United States or otherwise involving the Region. The Company's management
believes that trade finance provides the Company with the opportunity for
substantial and profitable growth, primarily with moderate credit risk, and that
the Bank is the only domestic financial institution in the State of Florida
focusing primarily on financing foreign trade.

The Company seeks to generate income by participating in multiple aspects of
trade transactions that generate both fee and interest income. The Company earns
fees primarily from opening and confirming letters of credit and discounting
acceptances and earns interest on credit extended for pre- and post-export
financing, such as refinancing of letters of credit and discounted acceptances.
Market conditions may affect the type and mix of products offered by the Company
and the corresponding fees or interest income earned thereon. Economic growth
and stabilization generally lead to increased volume in the discounting of
commercial trade paper and decreased volume of letters of credit, as there
generally is less of a need to confirm third party credit under such conditions
(since the perceived credit risk tends to decline). An increase in the volume of
business with larger, more stable customers also generally has this effect. As
the economy in the Region has grown and stabilized and the Company has begun to
service larger customers, the balance of the Company's trade financing
activities has shifted somewhat from letters of credit to the discounting of
commercial trade paper and the granting of loans, resulting in less fee income,
but increased interest income. Increased competition has also resulted in
decreased letter of credit fees.

During the last three fiscal years of its operations, the Company has
achieved significant earnings growth primarily as a result of (i) increases in
net interest income (which is the difference between the interest income the
Company receives on interest-bearing loans and investments and the interest
expense it pays on interest-bearing liabilities such as deposits and
borrowings), and (ii) improved operating efficiencies. More recently, and due to
economic growth and stabilization in the Region, as well as the Company's
servicing larger customers and increased competition, growth in trade finance
fees has not been as much of a factor as increased net interest income in the
increases in the Company's net income.

The following discussions make reference to average balances of certain
assets and liabilities as well as volume and rate changes. For further
information with respect to these matters see the tables set forth on pages 22
through 25.

YEAR ENDED DECEMBER 31, 1996 COMPARED TO YEAR ENDED DECEMBER 31, 1995

NET INTEREST INCOME. Net interest income constitutes the Company's
principal source of income. Net interest income increased from $24.1 million for
1995 to $28.4 million for 1996, a 17.8% increase. The primary reason for the
increase was an increase in average earning assets offset, to some extent, by a
decrease in net interest margin. Average earning assets increased from $454.2
million for 1995 to $597.2 million for 1996, a 31.5% increase. The increase was
generally due to economic stability in the Region resulting in increased trade
activity, as well as the Company's growth, which allowed it to provide more
trade financing. Average loans and acceptances discounted increased from $370.6
million for 1995 to $485.8 million for 1996, a 31.1% increase, while average
interest earning deposits with other banks increased from $39.5 million for 1995
to $62.4 million for 1996, a 58.0% increase. Net interest margin

18
<PAGE>
decreased from 4.94% for 1995 to 4.52% for 1996, an 8.5% decrease. The primary
reasons for this decrease were that (i) loan yields relative to reference rates
decreased in certain countries in the Region as a result of perceived economic
stability and lower credit risk, (ii) loans to larger corporate and bank
customers, which command more competitive pricing, increased as a percentage of
total loans, (iii) changes in interest rates on retail deposits lagged behind
changes in interest rates charged on loans, as is customary in a decreasing rate
environment, and (iv) certificates of deposit, which have a higher cost to the
Company but typically are more stable relative to other deposits, continued to
grow.

Interest income increased from $47.7 million for 1995 to $57.8 million for
1996, a 21.2% increase, reflecting an increase in loans in the Region, partially
offset by a decrease in prevailing interest rates and a tightening of loan
spreads in the Region, as discussed above. Interest expense increased from $23.5
million for 1995 to $29.4 million for 1996, a 25.1% increase, reflecting growth
in deposits to fund asset growth. Average interest-bearing deposits increased
from $397.7 million for 1995 to $525.3 million for 1996, a 32.1% increase. The
growth in deposits was primarily a result of the Bank seeking new deposits of
such types to fund asset growth. As the Company's other sources of deposits
increased, deposits obtained through the interbank certificate of deposit
network decreased to $495,000 at December 31, 1996 from $3.4 million at December
31, 1995.

PROVISION FOR CREDIT LOSSES. The Company's provision for credit losses
increased from $2.5 million for 1995 to $3.0 million for 1996, a 20.0% increase.
Net loan chargeoffs during 1995 amounted to $2.1 million compared to net loan
chargeoffs of $1.8 million for 1996. The allowance for credit losses was
increased from $4.5 million at December 31, 1995 to $5.7 million at December 31,
1996, a 26.7% increase. This increase was primarily due to an increase in the
size of the Company's loan portfolio. The ratio of the allowance for credit
losses to total loans increased slightly from approximately 1.05% at December
31, 1995 to approximately 1.07% at December 31, 1996. See "--Financial
Condition" for a more detailed discussion on the provision and allowance for
credit losses.

NON-INTEREST INCOME. Non-interest income decreased from approximately $10.3
million for 1995 to $9.8 million for 1996, a 4.9% decrease. Trade finance fees
and commissions decreased by $582,000 due largely to lower fees earned on
letters of credit resulting from perceived economic stability in the Region.
Capital market fees decreased by $206,000 as a result of fewer capital market
transactions. Customer service fees decreased by $131,000 as a result of lower
overdrafts experienced in the period. Net gains on sale of securities available
for sale were nominal as the Company generally holds securities until maturity.
For a more detailed analysis of the Company's non-interest income, see
"--Non-Interest Income."

OPERATING EXPENSES. Operating expenses increased from $18.8 million for
1995 to $19.6 million for 1996, a 4.3% increase. Employee compensation and
benefits increased from $10.0 million for 1995, to $10.9 million for 1996, a
9.0% increase. This increase was primarily due to an increase in the number of
employees from 203 at December 31, 1995 to 220 at December 31, 1996, as well as
raises for existing personnel. Occupancy expenses increased from $2.8 million
for 1995 to $2.9 million for 1996, a 3.6% increase, primarily due to expenses
related to the occupancy and maintenance of additional space at Company
headquarters to accommodate the increase in personnel. In addition, occupancy
expenses increased due to additional equipment rentals related to the Company's
branch network. Other operating expenses remained stable from 1995 to 1996. FDIC
assessments decreased from $487,000 for 1995 to $173,000 for 1996, a 64.5%
decrease, due to a non-recurring decrease in assessments by the FDIC. Management
continues to monitor operating expenses closely. The Company's efficiency ratio
is favorably below the industry average at 51.3% for 1996, an improvement from
54.7% reported for the prior year. For a more detailed analysis of the Company's
non-interest expense, see "--Non-Interest Expense."

19
<PAGE>
YEAR ENDED DECEMBER 31, 1995 COMPARED TO YEAR ENDED DECEMBER 31, 1994

NET INTEREST INCOME. Net interest income increased from $17.2 million for
1994, to $24.1 million for 1995, a 40.1% increase. The primary factor resulting
in increased net interest income was an increase in average earning assets. Loan
fees, which are included in net interest income but excluded from the
calculation of net interest margin, rose substantially. These positive factors
were offset, to some extent, by a decrease in net interest margin. Average
earning assets increased from $328.9 million for 1994 to $454.2 million for
1995, a 38.1% increase. This increase was primarily due to economic growth and
stability in the Region, resulting in increased trade activity in the Region, as
well as the Company's growth, which allowed it to provide more trade financing.
Average loans and acceptances discounted increased from $270.8 million for 1994
to $370.6 million for 1995, a 36.9% increase, while average interest-earning
deposits with other banks increased from $29.5 million for 1994 to $39.5 million
for 1995, a 33.9% increase. Loan fees increased to $1.7 million in 1995 from
$580,000 in 1994. Net interest margin decreased from 5.06% for 1994 to 4.94% for
1995, a 2.4% decrease. The primary reason for the decrease was that the
Company's cost of funds increased more rapidly than the yield on earning assets
due to the rapid growth in the Company's certificates of deposit, which
represent the Company's most expensive source of funds. The growth in
certificates of deposit and the rates paid on these deposits reflect the
Company's strategy to expand this more stable source of funds, particularly in
the branches acquired in late 1994.

Interest income increased from $29.2 million for 1994 to $47.7 million for
1995, a 63.4% increase, reflecting an increase in interest-bearing assets in the
Region and an increase in yields on earning assets. Interest expense increased
from $12.0 million for 1994 to $23.5 million for 1995, a 95.8% increase,
reflecting a growth in deposits and the higher cost of deposits, especially more
stable certificates of deposit. Average interest-bearing deposits increased from
$273.3 million in 1994 to $397.7 million in 1995, a 45.5% increase. The majority
of the growth in the Company's deposits was generated by deposits at the
Company's Tampa and Winter Haven, Florida branches, which were acquired by the
Company in October 1994. These branches were a significant source of funding for
the Company during 1995, with deposits totalling $115.0 million at December 31,
1995 compared to $13.6 million at the time of the Company's acquisition of these
branches in October 1994. This increase was primarily the result of the Company
paying at least market rates on these deposits. Prior to the acquisition of
these branches by the Company, rates paid on deposits at these locations were
below market. Deposits from these branches were utilized to decrease deposits
obtained through the interbank certificate of deposit network to $3.4 million at
December 31, 1995 from $40.8 million at December 31, 1994.

PROVISION FOR CREDIT LOSSES. The Company's provision for credit losses
decreased from $2.9 million for 1994 to $2.5 million for 1995, a 13.8% decrease.
Net loan chargeoffs during 1994 amounted to $2.0 million compared to net loan
chargeoffs of $2.1 million for 1995. The allowance for credit losses was
increased from $4.1 million for 1994 to $4.5 million for 1995, a 9.8% increase.
This increase was primarily due to an increase in the size of the Company's loan
portfolio. The ratio of the allowance for credit losses to total loans decreased
from approximately 1.31% at December 31, 1994 to approximately 1.05% at December
31, 1995. This decrease was due to an overall improvement in the quality of the
Company's loan portfolio. See "Financial Condition" for a more detailed
discussion on the provision and allowance for credit losses.

NON-INTEREST INCOME. Non-interest income increased from $10.0 million in
1994 to $10.3 million in 1995, a 3.0% increase. This increase in non-interest
income was primarily due to an increase in trade finance fees and commissions
from $7.4 million at December 31, 1994 to $8.2 million at December 31, 1995,
particularly acceptance fees through growth in acceptances discounted, and
customer liabilities on acceptances due to a trend toward larger customers with
stronger credit. Capital market fees decreased from $1.4 million at December 31,
1994 to $318,000 at December 31, 1995 as a result of a decrease in the number of
financing arrangements. Net gain (losses) on sale of securities available for
sale were nominal as

20
<PAGE>
the Company generally holds securities until maturity. For a more detailed
analysis of the Company's non-interest income, see "--Non-Interest Income."

OPERATING EXPENSES. Operating expenses increased from $14.9 million for
1994 to $18.8 million for 1995, a 26.2% increase. Employee compensation and
benefits increased from $7.8 million for 1994 to $10.0 million for 1995, a 28.2%
increase. This increase was primarily due to an increase in the number of
employees from 178 at December 31, 1994 to 203 at December 31, 1995. Additional
employees were hired during 1995 to meet the 34.3% growth in assets and
additional personnel were required for the Tampa and Winter Haven, Florida
branches. Occupancy expenses increased from $2.3 million for 1994 to $2.8
million for 1995, a 21.7% increase, as a result of expansion on one floor of the
Company's corporate headquarters to accommodate the increase in personnel and
additional occupancy expenses incurred for the Tampa and Winter Haven, Florida
branches. Other operating expenses increased from $3.5 million for 1994 to $4.7
million for 1995, a 34.3% increase. This increase was primarily attributable to
one-time expenses incurred in connection with the acquisition of the Tampa and
Winter Haven, Florida branches of $126,000, an increase in legal fees of
$530,000 which related to several matters and were largely of a non-recurring
nature and increases in travel expenses of $319,000 to expand and monitor the
Company's foreign loan and placement portfolio. For a more detailed analysis of
the Company's non-interest expense, see "--Non-Interest Expense."

21
<PAGE>
YIELDS EARNED AND RATES PAID

The following tables set forth certain information relating to the
categories of the Company's interest-earning assets and interest-bearing
liabilities for the periods indicated. Net interest margin is net interest
income less loan fees divided by average interest-earning assets. Non-accrual
loans are included in asset balances for the appropriate periods, whereas
recognition of interest on such loans is discontinued and any remaining accrued
interest receivable is reversed, in conformity with federal regulations.

YIELDS EARNED AND RATES PAID
<TABLE>
<CAPTION>
FOR THE YEARS ENDED
-----------------------------------------------------------------------------------
DECEMBER
DECEMBER 31, 1994 DECEMBER 31, 1995 31, 1996
----------------------------------- ----------------------------------- ---------
AVERAGE AVERAGE AVERAGE AVERAGE AVERAGE
BALANCE INTEREST(1) YIELD/RATE BALANCE INTEREST(1) YIELD/RATE BALANCE
--------- ----------- ----------- --------- ----------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS)
Total earning assets
Loans:
Commercial loans......................... $ 197,569 $ 17,253 8.73% $ 272,046 $ 27,953 10.28% $ 375,054
Acceptances discounted .................. 56,604 5,201 9.19% 80,592 8,540 10.60% 93,511
Residential mortgage loans............... 10,449 874 8.36% 11,059 941 8.51% 11,089
Installment loans........................ 459 42 9.15% 348 33 9.48% 400
Other.................................... 5,717 1,009 17.65% 6,523 1,151 17.65% 5,704
--------- ----------- ----------- --------- ----------- ----------- ---------
Total Loans................................ $ 270,798 $ 24,379 9.00% $ 370,568 $ 38,618 10.42% $ 485,758
Investment securities...................... 20,094 1,040 5.18% 26,277 1,652 6.29% 25,498
Federal funds sold......................... 8,538 428 5.01% 17,899 1,144 6.39% 23,490
Interest earning deposits with other
banks.................................... 29,473 2,789 9.46% 39,480 4,550 11.52% 62,404
--------- ----------- ----------- --------- ----------- ----------- ---------
Total investment securities and interest
earning deposits with other banks...... 58,105 4,257 7.33% 83,656 7,346 8.78% 111,392
Total interest earning assets.............. $ 328,903 $ 28,636 8.71% $ 454,224 $ 45,964 10.12% $ 597,150
----------- ----------- ----------- -----------
Total non-interest earning assets.......... $ 62,703 $ 80,502 $ 90,840
--------- --------- ---------
Total assets............................... $ 391,606 $ 534,726 $ 687,990
--------- --------- ---------
--------- --------- ---------

<CAPTION>
AVERAGE
INTEREST(1) YIELD/RATE
----------- -----------
<S> <C> <C>
Total earning assets
Loans:
Commercial loans......................... $ 36,454 9.72%
Acceptances discounted .................. 9,395 10.05%
Residential mortgage loans............... 936 8.44%
Installment loans........................ 39 9.75%
Other.................................... 1,007 17.65%
----------- -----------
Total Loans................................ $ 47,831 9.85%
Investment securities...................... 1,551 6.08%
Federal funds sold......................... 1,274 5.42%
Interest earning deposits with other
banks.................................... 5,751 9.22%
----------- -----------
Total investment securities and interest
earning deposits with other banks...... 8,576 7.70%
Total interest earning assets.............. $ 56,407 9.45%
----------- -----------
Total non-interest earning assets..........
Total assets...............................
</TABLE>

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

(1) Interest on loans excludes uncollected overdraft fees and other loan fees of
approximately $580,000, $1.7 million and $1.4 million for the years ended
December 31, 1994, 1995 and 1996, respectively.

22
<PAGE>
YIELDS EARNED AND RATES PAID
<TABLE>
<CAPTION>
FOR THE YEARS ENDED
-------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
DECEMBER 31, 1994 DECEMBER 31, 1995 DECEMBER 31, 1996
----------------------------- ----------------------------- -----------------------------

<CAPTION>
AVERAGE AVERAGE AVERAGE AVERAGE AVERAGE AVERAGE
BALANCE INTEREST(1) YIELD/RATE BALANCE INTEREST(1) YIELD/RATE BALANCE INTEREST(1) YIELD/RATE
-------- --------- -------- -------- --------- -------- -------- --------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Interest-bearing
liabilities
Deposits:
Super NOW, NOW......... $ 9,813 $ 226 2.30% $ 16,232 $ 465 2.86% $ 16,086 $ 515 3.20%
Money market........... 22,385 881 3.94% 29,236 1,637 5.60% 40,779 2,021 4.96%
Presidential market.... 3,895 119 3.06% 3,140 125 3.98% 3,370 127 3.77%
SuperSavings,
savings.............. 6,749 170 2.52% 8,750 280 3.20% 8,636 281 3.25%
Certificate of deposits
(including IRA)...... 177,779 8,151 4.58% 274,916 17,028 6.19% 362,724 21,435 5.91%
Time deposits from
banks................ 51,648 2,373 4.59% 65,354 4,006 6.13% 93,670 5,010 5.35%
Collateral accounts.... 1,080 27 2.50% 121 4 3.31% 71 3 4.23%
-------- --------- -------- -------- --------- -------- -------- --------- --------
Total deposits........... $273,349 $11,947 4.37% $397,749 $23,545 5.92% $525,336 $29,392 5.59%
Federal funds
purchased.............. 1,042 38 3.65% 0 0 0.00% 240 14 5.83%
Other borrowings......... 460 33 7.17% 0 0 0.00% 164 10 6.10%
-------- --------- -------- -------- --------- -------- -------- --------- --------
Total interest-bearing
liabilities............ $274,851 $12,018 4.37% $397,749 $23,545 5.92% $525,740 $29,416 5.60%
-------- --------- -------- -------- --------- -------- -------- --------- --------
Non-interest bearing
liabilities
Demand deposits........ 43,827 46,583 49,052
Other liabilities...... 50,733 58,036 73,229
-------- -------- --------
Total non-interest
bearing liabilities.... $ 94,560 $104,619 $122,281
Stockholders' equity..... 22,195 32,358 39,969
-------- -------- --------
Total liabilities and
stockholders' equity... $391,606 $534,726 $687,990
-------- -------- --------
-------- -------- --------
Net interest income/net
interest spread........ $16,618 4.33% $22,419 4.20% $26,991 3.85%
--------- -------- --------- -------- --------- --------
--------- -------- --------- -------- ---------
Margin:
Interest income/interest
earning assets......... 8.71% 10.12% 9.45%
Interest expense/interest
earning assets......... 3.65% 5.18% 4.93%
-------- -------- --------
Net interest
margin........... 5.06% 4.94% 4.52%
-------- -------- --------
-------- -------- --------
</TABLE>

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

(1) Interest on loans excludes uncollected overdraft fees and other loan fees of
approximately $580,000, $1.7 million, and $1.4 million for the years ended
December 31, 1994, 1995 and 1996, respectively.

23
<PAGE>
YIELDS EARNED -- DOMESTIC AND FOREIGN EARNING ASSETS
<TABLE>
<CAPTION>
FOR THE YEARS ENDED
----------------------------------------------------------------------------
DECEMBER 31, 1994 DECEMBER 31, 1995
---------------------------------------------------- ----------------------
AVERAGE AVERAGE % OF TOTAL AVERAGE
BALANCE INTEREST(1) YIELD/RATE AVERAGE ASSETS BALANCE INTEREST(1)
--------- ----------- ----------- --------------- --------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS)
INTEREST-EARNING ASSETS
Loans:
Domestic..................................... $ 122,052 $ 11,919 9.77% 31.2% $ 145,952 $ 15,702
Foreign...................................... 148,746 12,460 8.38% 38.0 224,616 22,916
--------- ----------- ----------- ------ --------- -----------
Total loans.............................. 270,798 24,379 9.00% 69.2 370,568 38,618
Investments and time deposits with banks.......
Domestic..................................... 26,455 1,250 4.73% 6.8 40,114 2,379
Foreign...................................... 31,650 3,007 9.50% 8.1 43,542 4,967
--------- ----------- ----------- ------ --------- -----------
Total investments and time deposits with
banks...................................... 58,105 4,257 7.33% 14.9 83,656 7,346
--------- ----------- ----------- ------ --------- -----------
Total interest-earning assets.................. $ 328,903 $ 28,636 8.71% 84.1 $ 454,224 $ 45,964
--------- ----------- ------ --------- -----------
--------- ------
Total non-interest earning assets.............. 62,703 15.9 80,502
--------- ------ ---------
Total assets............................... $ 391,606 100.00 $ 534,726
--------- ------ ---------
--------- ------ ---------

DECEMBER 31, 1996
----------------------------------------------------

AVERAGE % OF TOTAL AVERAGE AVERAGE % OF TOTAL

YIELD/RATE AVERAGE ASSETS BALANCE INTEREST(1) YIELD/RATE AVERAGE ASSETS

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

INTEREST-EARNING ASSETS
Loans:
Domestic..................................... 10.76% 27.3% $ 156,453 $ 17,079 10.92% 22.7%

Foreign...................................... 10.20% 42.0 329,305 30,752 9.34% 47.9

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

Total loans.............................. 10.42% 69.3 485,758 47,831 9.85% 70.6

Investments and time deposits with banks.......
Domestic..................................... 5.93% 7.5 44,655 2,416 5.41% 6.5

Foreign...................................... 11.41% 8.1 66,737 6,160 9.23% 9.7

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

Total investments and time deposits with
banks...................................... 8.78% 15.6 111,392 8,576 7.70% 16.2

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

Total interest-earning assets.................. 10.12% 84.9 $ 597,150 $ 56,407 9.45% 86.8

------ ---------
------ ---------
Total non-interest earning assets.............. 15.1 90,840 13.2

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

Total assets............................... 100.00 $ 687,990 100.00

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

</TABLE>

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

(1) Interest on loans excludes uncollected overdraft fees of approximately
$580,000, $1.7 million and $1.4 million for the years ended December 31,
1994, 1995 and 1996, respectively.

24
<PAGE>
RATE/VOLUME ANALYSIS

Net interest income is affected by changes in volume and changes in rates.
Volume changes are caused by differences in the level of earning assets and
interest-bearing liabilities. Rate changes result from differences in yields
earned on assets and rates paid on liabilities. The following tables set forth a
summary analysis of changes in net interest income of the Company resulting from
changes in average asset and liability balances (volume) and changes in interest
rates for the periods indicated. Volume and rate variances have been calculated
based on movements in average balances over the period and changes in interest
rates on average interest-earning assets and average interest-bearing
liabilities. The changes in interest income and interest expense are allocated
to volume and rate categories based upon the respective changes in average
balances and prior period average rate.

RATE/VOLUME ANALYSIS

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1995 YEAR ENDED DECEMBER 31, 1996
COMPARED TO YEAR ENDED COMPARED TO YEAR ENDED
DECEMBER 31, 1994 DECEMBER 31, 1995
------------------------------- -------------------------------
CHANGES DUE TO: CHANGES DUE TO:
------------------------------- -------------------------------
VOLUME RATE TOTAL VOLUME RATE TOTAL
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
(IN THOUSANDS)
Increase (decrease) in net interest income due to:
Loans:
Commercial loans.......................................... $ 6,502 $ 4,198 $ 10,700 $ 10,589 $ (2,088) $ 8,501
Residential mortgage loans................................ 51 16 67 3 (8) (5)
Acceptances discounted.................................... 2,204 1,135 3,339 1,369 (514) 855
Installment loans......................................... (10) 1 (9) 5 1 6
Other (Overdrafts)........................................ 142 0 142 (145) 1 (144)
Investments:
Investment securities..................................... 320 292 612 (49) (52) (101)
Federal funds sold........................................ 469 247 716 357 (227) 130
Interest earning deposits with other banks................ 947 814 1,761 2,642 (1,441) 1,201
--------- --------- --------- --------- --------- ---------
Total earning assets.................................... $ 10,625 $ 6,703 $ 17,328 $ 14,771 $ (4,328) $ 10,443
--------- --------- --------- --------- --------- ---------
Deposits:
Super NOW, NOW............................................ 148 91 239 (4) 54 50
Money market.............................................. 270 486 756 646 (262) 384
Presidential market....................................... (23) 29 6 9 (7) 2
Super Savings, Savings.................................... 50 60 110 (4) 5 1
Certificates of deposits.................................. 4,449 4,428 8,877 5,435 (1,028) 4,407
Time deposits from banks.................................. 629 1,004 1,633 1,736 (732) 1,004
Collateral accounts....................................... (24) 1 (23) (2) 1 (1)
Federal funds purchased..................................... (38) 0 (38) 0 14 14
Other borrowings............................................ (33) 0 (33) 0 10 10
--------- --------- --------- --------- --------- ---------
Total interest-bearing liabilities.......................... $ 5,428 $ 6,099 $ 11,527 $ 7,816 $ (1,945) $ 5,871
--------- --------- --------- --------- --------- ---------
Change in interest income................................... $ 5,197 $ 604 $ 5,801 $ 6,955 $ (2,383) $ 4,572
--------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- ---------
</TABLE>

RATE/VOLUME ANALYSIS--DOMESTIC AND FOREIGN

25
<PAGE>
NON-INTEREST INCOME

The following table sets forth detail regarding the components of
non-interest income for the periods indicated.

NON-INTEREST INCOME
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
-------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1994 TO 1995 1995 TO 1996
PERCENTAGE PERCENTAGE
1994 CHANGE 1995 CHANGE 1996
--------- ------------- --------- ------------- ---------

<CAPTION>
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Trade finance fees and commissions........................... $ 7,422 10.1% $ 8,173 (7.1)% $ 7,590
Capital market fees, net..................................... 1,410 (77.4) 318 (64.8) 112
Customer service fees........................................ 1,044 21.4 1,267 (10.3) 1,136
Net gain (loss) on sale of securities available for sale..... (168) 101.8 3 (100.0) --
Other........................................................ 322 76.7 569 (75.0) 996
--------- ----- --------- ------ ---------
Total non-interest income.................................... $ 10,030 3.0% $ 10,330 (4.8)% $ 9,834
--------- ----- --------- ------ ---------
--------- ----- --------- ------ ---------
</TABLE>

OPERATING EXPENSES

The following table sets forth detail regarding the components of operating
expenses for the periods indicated.

OPERATING EXPENSES
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
-------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1994 TO 1995 1995 TO 1996
PERCENTAGE PERCENTAGE
1994 CHANGE 1995 CHANGE 1996
--------- ------------- --------- ------------- ---------

<CAPTION>
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Employee compensation and benefits............................. $ 7,796 28.1% $ 9,990 9.2% $ 10,908
Occupancy and equipment........................................ 2,308 22.3 2,822 1.3 2,858
Other operating expenses....................................... 3,531 34.2 4,738 (1.5) 4,666
Directors' fees................................................ 664 22.3 812 23.0 999
Insurance and examination fees (FDIC and OCC).................. 647 (24.7) 487 (64.5) 173
--------- ----- --------- ----- ---------
Total operating expenses....................................... $ 14,946 26.1% $ 18,849 4.0% $ 19,604
--------- ----- --------- ----- ---------
--------- ----- --------- ----- ---------
</TABLE>

INCOME TAXES

The Company is subject to United States Federal income tax and state income
tax for the State of Florida.

The effective income tax rates for the years ended December 31, 1994, 1995
and 1996 were 39.0%, 39.0% and 37.5%, respectively. These rates were net of
foreign tax credits arising from withholding taxes assessed by various foreign
countries on interest paid to the Company. Foreign tax credits represented a
federal tax benefit of $521,000, $609,000 and $890,000 for the years ended
December 31, 1994, 1995 and 1996, respectively.

FINANCIAL CONDITION

The Company's total assets increased from $458.0 million at December 31,
1994, to $615.1 million at December 31, 1995, and to $755.6 million at December
31, 1996. This continued increase in total assets generally reflects increases
in loans-net, due from customers on bankers' acceptances, securities and

26
<PAGE>
interest earning deposits with other banks and cash, demand deposits with other
banks and federal funds sold as described below. The Company's growth has been
funded primarily through retained earnings, the sale of preferred stock, which
is being converted into Common Stock in the Reorganization, a substantial
increase in deposits, both from growth in existing branch offices and foreign
deposits, and, more recently, through deposits in new branch offices. The
Company is in the process of opening two new Bank branch offices that are
intended to further support this growth.

CASH, DEMAND DEPOSITS WITH OTHER BANKS AND FEDERAL FUNDS SOLD

Cash, demand deposits with other banks and federal funds sold are considered
cash and cash equivalents. Balances of these items fluctuate daily depending on
many factors, which include or relate to the particular banks that are clearing
funds, loan payoffs, deposit gathering and reserve requirements. In addition,
balances have tended to increase as the Company has grown in size. Cash, demand
deposits with other banks and federal funds sold were $25.1 million at December
31, 1994, $46.6 million at December 31, 1995 and $33.1 million at December 31,
1996.

INVESTMENT SECURITIES AND INTEREST-EARNING DEPOSITS WITH OTHER BANKS

Investment securities increased from $23.4 million at December 31, 1994 to
$28.9 million at December 31, 1995 and to $29.0 million at December 31, 1996.
The portfolio has grown as the Company has grown and presently consists
primarily of United States treasury bills. See "Business--Investment
Securities."

Utilizing the Company's overall experience and relationships with
correspondent banks and to enhance its relationships and increase yield, the
Company places its funds with banks in the Region generally on a short-term
basis (less than 365 days). Interest-earning deposits with other banks increased
from $33.6 million at December 31, 1994 to $38.4 million at December 31, 1995
and to $80.5 million at December 31, 1996. The level of such deposits has grown
as the overall assets of the Company have increased during the three year period
ended December 31, 1996. See "Business--Interest-Earning Deposits With Other
Banks" for further information regarding the Company's investments.

LOANS--NET

The Company's total loans, net of unearned income, equaled $314.0 million
(68.6% of total assets) at December 31, 1994, compared to total loans, net of
unearned income, of $420.4 million (68.4% of total assets) at December 31, 1995
and $533.0 million (70.5% of total assets) at December 31, 1996. The allowance
for loan losses was $4.1 million at December 31, 1994 compared to $4.5 million
at December 31, 1995 and $5.7 million at December 31, 1996. Total non-accruing
loans at December 31, 1994, December 31, 1995 and December 31, 1996 were $1.9
million, $3.6 million and $4.7 million, respectively.

ALLOWANCE FOR CREDIT LOSSES

The allowance for credit losses reflects management's judgment of the level
of an allowance adequate to provide for reasonably foreseeable losses, based
upon the following factors: (i) the economic conditions in those countries in
the Region in which the Company conducts trade finance activities; (ii) the
credit condition of its customers and correspondent banks, as well as the
underlying collateral, if any; and (iii) historical experience.

In addition, although the Company's credit losses have been relatively
limited to date, management believes that the level of the Company's allowance
should reflect the potential for political and economic instability in certain
countries of the Region and the possibility that serious economic difficulties
in a country could adversely affect all of the Company's loans to borrowers in
or doing business with that country. See "Risk Factors."

27
<PAGE>
Determining the appropriate level of the allowance for credit losses
necessarily requires management's judgment, including application of the factors
described above to assumptions and estimations made in the context of rapidly
changing political and economic conditions in many of the countries of the
Region. Accordingly, there can be no assurance that the Company's current
allowance for credit losses will prove to be adequate in light of future events
and developments. At December 31, 1996, the allowance for credit losses was
approximately $5.7 million.

The following tables provide certain information with respect to the
Company's allowance for credit losses, provision for credit losses and chargeoff
and recovery activity for the periods shown.

CREDIT LOSS EXPERIENCE

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------------------------
1992 1993 1994 1995 1996
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS)
Balance of allowance for credit losses at
beginning of year........................... $ 1,064 $ 1,672 $ 3,270 $ 4,133 $ 4,450
Charge-offs:
Domestic:
Commercial................................ (879) (474) (352) (1,097) (951)
Acceptances............................... 0 0 0 0 0
Residential............................... (5) (13) 0 0 0
Installment............................... (13) 0 0 (3) (8)
---------- ---------- ---------- ---------- ----------
Total domestic.............................. (897) (487) (352) (1,100) (959)
Foreign:
Government and official institutions...... 0 0 0 0 0
Banks and other financial institutions.... 0 0 0 0 (824)
Commercial and industrial................. 0 (534) (1,686 (1) (1,044 (1) 0
Acceptances discounted.................... 0 0 0 0 0
---------- ---------- ---------- ---------- ----------
Total foreign............................... 0 (534) (1,686) (1,044) (824)
---------- ---------- ---------- ---------- ----------
Total charge-offs........................... (897) (1,021) (2,038) (2,144) (1,783)
Recoveries:
Domestic:
Commercial................................ 19 60 19 10 16
Acceptances............................... 0 0 0 0 0
Residential............................... 1 0 0 0 0
Installment............................... 8 9 7 1 2
Foreign....................................... 0 0 0 0 0
---------- ---------- ---------- ---------- ----------
Total recoveries............................ 28 69 26 11 18
---------- ---------- ---------- ---------- ----------
Net charge-offs............................... (869) (952) (2,012) (2,133) (1,765)

Provision for credit losses................... 1,477 2,550 2,875 2,450 3,040
---------- ---------- ---------- ---------- ----------
Balance at end of year........................ $ 1,672 $ 3,270 $ 4,133 $ 4,450 $ 5,725
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
Average loans................................. $ 131,306 $ 190,364 $ 270,798 $ 370,568 $ 485,758
Total loans................................... $ 159,185 $ 197,341 $ 315,533 $ 422,980 $ 535,559
Net charge-offs to average loans.............. 0.66% 0.50% 0.74% 0.58% 0.36%
Allowance to total loans...................... 1.05% 1.66% 1.31% 1.05% 1.07%
</TABLE>

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

(1) Related to extensions of credit to a domestic-based business operated by a
company organized under the laws of a foreign country.

28
<PAGE>
The following tables set forth an analysis of the allocation of the
allowance for credit losses by category of loans and the allowance for credit
losses allocated to foreign loans. The allowance is established to cover
potential losses inherent in the portfolio as a whole and is available to cover
potential losses on any of the Company's loans.

ALLOCATION OF ALLOWANCE FOR CREDIT LOSSES

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------------------------
1992 1993 1994 1995 1996
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS)
Allocation of the allowance by category of loans:
Domestic:
Commercial................................................... $ 1,079 $ 1,834 $ 1,694 $ 639 $ 1,900
Acceptances.................................................. 195 373 299 333 226
Residential.................................................. 30 45 55 57 54
Installment.................................................. 20 7 4 4 6
Overdraft.................................................... 11 101 19 37 58
--------- --------- --------- --------- ---------
Total domestic........................................... $ 1,335 $ 2,360 $ 2,071 $ 1,070 $ 2,244
Foreign:
Government and official institutions......................... 0 0 0 0 0
Banks and other financial institutions....................... 0 369 550 1,900 2,112
Commercial and industrial.................................... 337 450 1,381 1,101 920
Acceptances discounted....................................... 0 91 131 379 449
--------- --------- --------- --------- ---------
Total foreign............................................ $ 337 $ 910 $ 2,062 $ 3,380 $ 3,481
Total............................................................ $ 1,672 $ 3,270 $ 4,133 $ 4,450 $ 5,725
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
</TABLE>

<TABLE>
<S> <C> <C> <C> <C> <C>
Percent of loans in each category to total
loans:
Domestic:
Commercial.................................. 34.8% 25.8% 20.6% 21.9% 20.1%
Acceptances................................. 24.6% 24.5% 13.6% 7.8% 4.4%
Residential................................. 4.7% 4.5% 3.5% 2.7% 2.0%
Installment................................. 0.4% 0.3% 0.1% 0.1% 0.1%
Overdraft................................... 0.0% 4.7% 0.5% 0.8% 0.4%
--------- --------- --------- --------- ---------
Total domestic.......................... 64.5% 59.8% 38.3% 33.3% 27.0%
Foreign:
Government and official institutions........ 0.0% 0.3% 0.2% 0.2% 0.1%
Banks and other financial institutions...... 0.0% 23.4% 30.5% 32.3% 24.2%
Commercial and industrial................... 35.5% 16.3% 24.7% 19.3% 33.6%
Acceptances discounted...................... 0.0% 0.2% 6.3% 14.9% 15.1%
--------- --------- --------- --------- ---------
Total foreign........................... 35.5% 40.2% 61.7% 66.7% 73.0%
Total........................................... 100.0% 100.0% 100.0% 100.0% 100.0%
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
</TABLE>

29
<PAGE>
ANALYSIS OF ALLOWANCE FOR CREDIT LOSSES ALLOCATED TO FOREIGN LOANS

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

(1) Related to extensions of credit to a domestic-based business operated by a
company organized under the laws of a foreign country.

The Company does not have a rigid chargeoff policy but instead charges off
loans on a case-by-case basis as determined by management and approved by the
Board of Directors. In some instances, loans have remained in the nonaccrual
category for an extended period during which the borrower and the Company
negotiated restructured repayment terms.

The Company attributes its favorable asset quality to the short-term nature
of its loan portfolio, the composition of its borrower base, the importance that
borrowers in the Region attach to maintaining their continuing access to
financing for foreign trade and to the Company's loan underwriting policies. See
"Business--Credit Policies and Procedures."

The Company usually places an asset on nonaccrual status when any payment of
principal or interest is over 90 days past due or earlier if management
determines the collection of principal or interest to be unlikely. Loans over 90
days past due may not be placed on nonaccrual if they are in the process of
collection and are either secured by property having a realizable value at least
equal to the outstanding debt and accrued interest or are fully guaranteed by a
financially responsible party whom the Company believes is willing and able to
discharge the debt, including accrued interest. In most cases, if a borrower has
more than one loan outstanding under its line with the Company and any of its
individual loans becomes over 90 days past due, the Company places all
outstanding loans to that borrower on nonaccrual status.

The Company accounts for impaired loans in accordance with Financial
Accounting Standards ("SFAS") No. 114, Accounting by Creditors for Impairment of
a Loan. Under these standards, individually identified impaired loans are
measured based on the present value of payments expected to be received, using
the historical effective loan rate as the discount rate. Alternatively,
measurement may also be based on observable market prices, or for loans that are
solely dependent on the collateral for repayment, measurement may be based on
the fair value of the collateral. The Company evaluates commercial loans
individually for impairment, while groups of smaller-balance homogeneous loans
(generally residential mortgage and installment loans) are collectively
evaluated for impairment.

The following table sets forth information regarding the Company's
nonperforming loans at the dates indicated.

30
<PAGE>
NONPERFORMING LOANS

<TABLE>
<CAPTION>
AT DECEMBER 31,
-----------------------------------------------------
1992 1993 1994 1995 1996
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS)
Domestic:
Non accrual........................................................ $ 316 $ 458 $ 584 $ 1,345 $ 3,087
Past due over 90 days and accruing................................. 5 2,158 0 582 0
--------- --------- --------- --------- ---------
Total domestic nonperforming loans............................... $ 321 $ 2,616 $ 584 $ 1,927 $ 3,087
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
Foreign
Non accrual........................................................ $ 0 $ 0 $ 1,285 $ 2,287 $ 1,654
Past due over 90 days and accruing................................. 0 0 0 301 112
--------- --------- --------- --------- ---------
Total foreign nonperforming loans................................ $ 0 $ 0 $ 1,285 $ 2,588 $ 1,766
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
Total nonperforming loans(1)....................................... $ 321 $ 2,616 $ 1,869 $ 4,515 $ 4,853
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
Total nonperforming loans to total loans........................... 0.20% 1.33% 0.59% 1.07% 0.91%
Total nonperforming assets to total assets......................... 0.13% 0.83% 0.41% 0.73% 0.64%
</TABLE>

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

(1) During such periods the Company did not have any loans which were deemed to
be "troubled debt restructurings" as defined in SFAS No. 15.

For the year ended December 31, 1996, the amount of interest income that was
accrued and that would have been accrued on the loans in the previous table in
accordance with their contractual terms were approximately $211,000, all of
which represented interest income on domestic loans, and $521,000, of which
$377,000 represented interest income on domestic loans and $144,000 represented
interest income on foreign loans, respectively.

Management does not believe that there is a material amount of loans not
included in the foregoing table where known information about possible credit
problems of the borrowers would cause management to have serious doubts as to
the ability of the borrowers to comply with the present loan repayment terms and
which may result in such loans becoming nonaccruing loans.

At December 31, 1995 and 1996, the Company had no nonaccruing investment
securities.

DUE FROM CUSTOMERS ON BANKERS' ACCEPTANCES AND DEFERRED PAYMENT LETTERS OF
CREDIT

Due from customers on bankers' acceptances and deferred payment letters of
credit were $43.6 million and $9.1 million, respectively, at December 31, 1994,
compared to $64.6 million and $6.4 million, respectively, at December 31, 1995
and $60.8 million and $7.3 million, respectively, at December 31, 1996. These
assets represent a customer liability to the Company while the Company's
corresponding liability to third parties is reflected on the balance sheet as
"Bankers Acceptances Outstanding" and "Deferred Payment Letters of Credit
Outstanding." The Company's involvement with these types of instruments has
increased as international trade in the Region has increased and as the Region
has become more stable. See "Business--Contingencies."

DEPOSITS

Total deposits were $373.4 million at December 31, 1994, compared to $505.1
million at December 31, 1995 and $638.6 million at December 31, 1996. Deposits
have grown in order to fund asset growth. See "Business--Funding Sources."

31
<PAGE>
STOCKHOLDERS' EQUITY

The Company's stockholders' equity at December 31, 1994, was $27.5 million
compared to $34.8 million at December 31, 1995 and $43.8 million at December 31,
1996. Stockholders' equity has increased by an average of approximately 37% each
year since 1992. During 1994, the Company issued 101,207 shares of preferred
stock. The preferred stock, which was non-voting and accrued dividends at a rate
of 14%, increased stockholders' equity by $5.1 million. The Company paid
quarterly dividends on the preferred stock since December 31, 1994 and will pay
dividends, if applicable, on a prorated basis through the date on which the
preferred stock is converted to Common Stock in the Reorganization.

ASSET/LIABILITY MANAGEMENT

The Company seeks to manage its assets and liabilities to reduce the
potential adverse impact on net interest income that might result from changes
in interest rates. Control of interest rate risk is conducted through systematic
monitoring of maturity mismatches. The Company's investment decision-making
takes into account not only the rates of return and their underlying degree of
risk, but also liquidity requirements, including minimum cash reserves,
withdrawal and maturity of deposits and additional demand for funds. For any
given period, the pricing structure is matched when an equal amount of assets
and liabilities reprice. An excess of assets or liabilities over these matched
items results in a gap or mismatch, as shown on the following table. A negative
gap denotes liability sensitivity and normally means that a decline in interest
rates would have a positive effect on net interest income while an increase in
interest rates would have a negative effect on net interest income. However,
because different types of assets and liabilities with similar maturities may
reprice at different rates or may otherwise react differently to changes in
overall market rates or conditions, changes in prevailing interest rates may not
necessarily have such effects on net interest income. Substantially all of the
Company's assets and liabilities are denominated in dollars and therefore the
Company has no material foreign exchange risk.

32
<PAGE>
INTEREST RATE SENSITIVITY

The following table presents the projected maturities or interest rate
adjustments of the Company's earning assets and interest-bearing funding sources
based upon the contractual maturities or adjustment dates at December 31, 1996.
The interest-earning assets and interest-bearing liabilities of the Company and
the related interest rate sensitivity gap given in the following table may not
be reflective of positions in subsequent periods.

INTEREST RATE SENSITIVITY
<TABLE>
<CAPTION>
DECEMBER 31, 1996
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
91 TO 181 TO
0 TO 30 31 TO 90 180 365 1 TO 5 OVER 5
DAYS DAYS DAYS DAYS YEARS YEARS TOTAL
---------- ---------- ---------- ----------- --------- --------- ----------

<CAPTION>
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Earning Assets:
Loans......................... $ 126,669 $ 155,461 $ 149,523 $ 46,737 $ 46,019 $ 11,150 $ 535,559
Federal funds sold............ 18,300 0 0 0 0 0 18,300
Investment securities......... 11,651 7,935 6,885 0 995 1,554 29,020
Interest-earning deposits with
other banks................. 21,988 29,650 14,690 14,149 0 0 80,477
-
---------- ---------- ---------- ----------- --------- --------- ----------
Total........................... $ 178,608 $ 193,046 $ 171,098 $ 60,886 $ 47,014 $ 12,704 $ 663,356
-
-
---------- ---------- ---------- ----------- --------- --------- ----------
---------- ---------- ---------- ----------- --------- --------- ----------
Funding Sources:
Savings and transaction
deposits.................... $ 16,800 $ 50,834 $ 0 $ 0 $ 0 $ 0 $ 67,634
Time deposits of $100 or
more........................ 32,686 40,190 32,362 53,076 5,936 104 164,354
Time deposits under $100...... 30,578 53,436 41,171 132,868 12,047 87 270,187
Other time deposits........... 32,456 1,112 0 2,575 80 0 36,223
Funds overnight............... 41,970 0 0 0 0 0 41,970
-
---------- ---------- ---------- ----------- --------- --------- ----------
Total........................... $ 154,490 $ 145,572 $ 73,533 $ 188,519 $ 18,063 $ 191 $ 580,368
-
-
---------- ---------- ---------- ----------- --------- --------- ----------
---------- ---------- ---------- ----------- --------- --------- ----------
Interest sensitivity gap........ $ 24,118 $ 47,474 $ 97,565 $ (127,633) $ 28,951 $ 12,513 $ 82,988
-
-
---------- ---------- ---------- ----------- --------- --------- ----------
---------- ---------- ---------- ----------- --------- --------- ----------
Cumulative gap.................. $ 24,118 $ 71,592 $ 169,157 $ 41,524 $ 70,475 $ 82,988 --
-
-
---------- ---------- ---------- ----------- --------- --------- ----------
---------- ---------- ---------- ----------- --------- --------- ----------
Cumulative gap as a percentage
of total earning assets....... 3.64% 10.79% 25.50% 6.26% 10.62% 12.51% --
-
-
---------- ---------- ---------- ----------- --------- --------- ----------
---------- ---------- ---------- ----------- --------- --------- ----------
</TABLE>

33
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES

The Company's principal sources of liquidity and funding are its diverse
deposit base and sales of bankers' acceptances as well as loan participations.
The level and maturity of deposits necessary to support the Company's lending
and investment activities is determined through monitoring loan demand and
through its asset/liability management process. Considerations in managing the
Company's liquidity position include scheduled cash flows from existing assets,
contingencies and liabilities, as well as projected liquidity needs arising from
approved extensions of credit. Furthermore, the liquidity position is monitored
daily by management to maintain a level of liquidity conducive to efficient
operations and is continuously evaluated as part of the asset/liability
management process.

Historically, the Company has increased its level of deposits to allow for
its planned asset growth. Customer deposits have increased through the
acquisition of branches and increased trade activity, as well as through
flexible competitive pricing and the provision of trade-related services. The
level of deposits is also influenced by general interest rates, economic
conditions and competition, among other things. The Company's average total
deposits have increased from $317.2 million for 1994 to $444.3 million for 1995
and $574.4 million for 1996. Most of this growth has occurred in time deposits.

Most of the Company's deposits are short-term and closely match the
short-term nature of the Company's assets. See "--Interest Rate Sensitivity." At
December 31, 1996, loans and interest-earning deposits with other banks maturing
within six months were $498.0 million, representing 75.1% of total earning
assets, and loans and interest-earning deposits with other banks maturing within
one year were $558.9 million, representing 84.3% of total earning assets. The
short-term nature of the loan portfolio and the fact that a portion of the loan
portfolio consists of bankers' acceptances provides additional liquidity to the
Company. Liquid assets at December 31, 1996 were $141.1 million, 18.7% of total
assets, and consisted of cash and cash equivalents, due from banks-time and
United States treasury bills. At December 31, 1996, the Company had been advised
of $67.7 million in available interbank funding.

The Company and the Bank are subject to various regulatory capital
requirements administered by the federal banking agencies. Failure to meet
minimum capital requirements can result in certain mandatory and possibly
additional discretionary actions by regulators that, if undertaken, could have a
direct material effect on the Company's financial statements. The regulations
require the Company and the Bank to meet specific capital adequacy guidelines
that involve quantitative measures of their assets, liabilities, and certain
off-balance sheet items as calculated under regulatory accounting practices. The
Company's and the Bank's capital classification is also subject to qualitative
judgments by the regulators about interest rate risk, concentration of credit
risk and other factors.

Quantitative measures established by regulation to ensure capital adequacy
require the Company and the Bank to maintain minimum amounts and ratios (set
forth in the table below) of Tier I capital (as defined in the regulations) to
total average assets (as defined), and minimum ratios of Tier I and total
capital (as defined) to risk-weighted assets (as defined). The Company's and the
Bank's actual capital amounts and ratios are also presented in the table.

34
<PAGE>
COMPANY CAPITAL RATIOS

<TABLE>
<CAPTION>
DECEMBER 31, 1995 DECEMBER 31, 1996
-------------------------------
--------------------
<S> <C> <C> <C> <C>
(DOLLARS IN
THOUSANDS)
Tier 1 risk-weighted capital:
Actual............................................................ $ 32,445 10.0% $ 41,634 10.2%
Minimum........................................................... $ 13,004 4.0% $ 16,329 4.0%
Total risk-weighted capital:
Actual............................................................ $ 35,505 10.9% $ 46,744 11.5%
Minimum........................................................... $ 26,008 8.0% $ 32,657 8.0%
Leverage:
Actual............................................................ $ 32,445 5.7% $ 41,634 5.8%
Minimum........................................................... $ 17,076 3.0% $ 21,713 3.0%
</TABLE>

BANK CAPITAL RATIOS

<TABLE>
<CAPTION>
DECEMBER 31, 1995 DECEMBER 31, 1996
-------------------------------
--------------------
<S> <C> <C> <C> <C>
(DOLLARS IN
THOUSANDS)
Tier 1 risk-weighted capital:
Actual............................................................ $ 32,156 9.9% $ 41,351 10.1%
Minimum to be well capitalized.................................... $ 19,506 6.0% $ 24,534 6.0%
Minimum to be adequately capitalized.............................. $ 13,004 4.0% $ 16,356 4.0%
Total risk-weighted capital:
Actual............................................................ $ 35,206 10.8% $ 46,470 11.4%
Minimum to be well capitalized.................................... $ 32,510 10.0% $ 40,890 10.0%
Minimum to be adequately capitalized.............................. $ 26,008 8.0% $ 32,712 8.0%
Leverage:
Actual............................................................ $ 32,156 5.7% $ 41,351 5.7%
Minimum to be well capitalized.................................... $ 27,976 5.0% $ 36,261 5.0%
Minimum to be adequately capitalized.............................. $ 22,831 4.0% $ 29,009 4.0%
</TABLE>

SEASONALITY

In general, the market for the Company's services and products has
historically been slightly more active from July to December. A principal reason
for the slight seasonal fluctuation in the Company's trade financing is the
seasonality in the manufacture and/or sale of goods by many of the Company's
customers, as well as many of the customers of its correspondent banks, who
generally need more financing for the production and shipping of goods in
anticipation of various specific periods of the year, such as the holiday
season, the Regional tourist season, and the dry season and agricultural cycles
in certain portions of the Region. The Company realized approximately 55.0% of
its annual letter of credit and acceptance fees in each of 1995 and 1996 during
the second half of the fiscal year. See "Risk Factors."

IMPACT OF INFLATION

The Consolidated Financial Statements and related data presented herein have
been prepared in accordance with generally accepted accounting principles, which
require the measurement of financial position and operating results in terms of
historical dollars without considering changes in the relative purchasing power
of money over time due to inflation. Financial institutions have an asset and
liability structure that is essentially monetary in nature, and their general
and administrative costs constitute a relatively small percentage of total
expenses. Thus, increases in the general price levels for goods and services
have a relatively minor effect on the total expenses of the Company. Interest
rates have a more significant impact on the Company's financial performance than
the effect of general inflation. Interest rates do not necessarily move in the
same direction or change in the same magnitude as the prices of goods and
services, although periods of increased inflation may accompany a rising
interest rate environment.

35
<PAGE>
BUSINESS

GENERAL

The Company, through the Bank, is engaged in providing global trade finance
with particular emphasis on trade with and between the Region and the United
States or otherwise involving the Region. Management believes that trade finance
provides the Company with the opportunity for substantial and profitable growth,
primarily with moderate credit risk, and that the Bank is the only domestic
financial institution in the State of Florida focusing primarily on financing
foreign trade. Through its relationships with approximately 500 correspondent
banks and with importers and exporters in the United States and the Region, as
well as its location in South Florida, which is becoming a focal point for trade
in the Region, the Company has been able to take advantage of substantial growth
in this trade. Much of this growth has been associated with the adoption of
economic stabilization policies in the major countries of the Region.

The Company operates in all major countries throughout the Region and has
been particularly active in several smaller markets, such as Guatemala, Ecuador,
Panama and Peru. Management believes that these smaller markets are not primary
markets for the larger, multinational financial institutions and, therefore,
customers in such markets do not receive a similar level of service from such
institutions as that provided by the Company. To enhance its position in certain
markets, the Company has made minority investments in indigenous financial
institutions in Guyana, Haiti and El Salvador. The Company has also strengthened
its relationships with correspondent financial institutions in the Region by
acting as placement agent, from time to time, for debt instruments or
certificates of deposit issued by many of such institutions. As the Company has
grown, it has begun to expand its activities in larger markets in the Region,
such as Argentina and Brazil.

Lending activities are funded primarily through domestic consumer deposits
gathered through a network of six branches in Florida as well as deposits
received from correspondent banks, corporate customers and private banking
customers within the Region. The Company is currently in the process of opening
an additional branch in West Palm Beach, Florida. The Company's branches are
strategically located in markets where it believes that there is both a
concentration of retail deposits and foreign trade activity. The Company also
participates in various community lending activities, and under several United
States and Florida laws and regulations the Bank is considered a minority bank
and is able to participate in certain beneficial minority programs involving
both deposits and loans.

36
<PAGE>
The Company has experienced sustained growth in assets and earnings since
its acquisition by current management and shareholders in 1988, and has also
achieved a high level of profitability. For the three years ended December 31,
1996, average total loans increased from $270.8 million to $485.8 million, and
net income increased from $5.7 million to $9.7 million. For the years ended
December 31, 1995 and 1996, return on average assets was 1.50% and 1.41%,
respectively, and return on average total equity was 24.73% and 24.29%,
respectively. Along with its growth, the Company has maintained strong credit
quality. Net loan chargeoffs as a percentage of average outstanding loans were
0.58% for 1995 and 0.36% for 1996. At December 31, 1996, non-performing assets
represented 0.91% of total loans.

BACKGROUND OF THE COMPANY

Bancorp (initially known as Southern Bancorp) was formed as a bank holding
company in 1988 in Miami, Florida, to acquire 99.7% of the issued and
outstanding shares (not including warrants to purchase shares of Common Stock of
the Bank issued to initial employees of the Bank, which are in the process of
being acquired by Bancorp) of the Bank, a Miami-based national bank then known
as Alliance National Bank. The Bank was acquired by Bancorp to take advantage of
perceived opportunities to finance foreign trade between United States corporate
customers and companies in the Region, as the area emerged from the Latin
American debt crisis of the 1980s, particularly since most non-Regional
financial institutions had limited interest in financing trade with the Region
at that time. Members of Bank management, who had extensive experience in trade
finance in the Region, re-established contacts in the Region, primarily with
banks. The Bank initially offered its services confirming letters of credit for
banks in the Region. The Bank then began to market its other trade related
services and products to beneficiaries of its letters of credit. As the Bank's
relationships with correspondent banks developed and as it developed corporate
clients in the United States, the Bank's trade finance activity continued to
increase. The Bank's business expanded into its other products and services,
which primarily included other types of trade financing instruments. See
"--Credit Activities and Policies--Trade Finance Services and Products." The
Bank also began serving as a placement agent for indebtedness and certificates
of deposit of correspondent banks in the Region, which it has done from time to
time. See "--Capital Markets".

MARKET FOR COMPANY SERVICES

International trade between the United States and the Region as well as
between the State of Florida and the Region has grown significantly during the
five year period ended December 31, 1995. The level of imports and exports
("international trade") between the United States and the Region increased from
$125.9 billion in 1991 to $200.2 billion in 1995. This represented 13.9% and
15.1% of the total international trade between the United States and the world
for 1991 and 1995, respectively. International trade between the State of
Florida and the Region increased from $18.2 billion in 1991 to $31.7 billion in
1995. This represented 54.0% and 60.8% of the total international trade between
the State of Florida and the world for 1991 and 1995, respectively. The State of
Florida's top five trading partners in the Region for the year ended December
31, 1995 were Brazil ($5.0 billion), Colombia ($3.6 billion), Venezuela ($2.9
billion), the Dominican Republic ($2.8 billion) and Argentina ($2.0 billion).
Recent treaties and agreements relating to trade are expected to eliminate
certain trade barriers and open up certain economic sectors to competition, as
well as to liberalize trade between the United States and many countries with
respect to a variety of goods and services. See "--Economic Conditions in the
Region." A high and increasing percentage of this trade requires financing. The
growth and importance of trade in the United States and the Region also
increases the number of small and medium-sized firms engaged in trade and in
need of trade finance services. Many financial institutions in the United States
in general and Florida in particular are not adequately staffed to handle such
financing on a large scale, or to judge the creditworthiness of companies or
banks in the Region and, accordingly, eschew trade financing or limit the scope
of their trade financing activity. This has been partially responsible for the
expanding market for the Company's trade financing services.

37
<PAGE>
Management believes that the Company has carved out a niche for itself as
the only Florida financial institution the business of which is focused
predominantly on financing foreign trade in the Region. The Company initially
focused on providing services and products to smaller banks and corporate
customers in the Region and smaller companies in Florida doing business in the
Region, as well as financial institutions and customers in smaller countries in
the Region where a more limited number of large, multinational banks conduct
business. The Company's willingness to provide trade financing in these
situations frequently results in it obtaining business from the same customers
involving larger countries in the Region, as well. A significant percentage of
the Company's trade financing business now involves such larger countries. The
Company does not, however, have a significant share of the overall market in
larger countries in the Region, such as Brazil and Argentina, where it competes
more frequently with larger, multinational financial institutions. The Company
also provides products and services for multinational corporations, such as
major commodities houses, and purchases participation interests in the trade
financing of multinational financial institutions to companies in the Region.
The Company's trade financing allows for the movement of commodities such as
sugar, grain and steel, and consumer goods such as textiles and appliances, as
well as computer hardware, capital equipment and other items.

Most of the Company's customers are serviced through its International
Banking and Domestic Corporate Trade Departments. The International Banking
Department services the Company's international corporate and correspondent
banking customers. The Domestic Corporate Trade Department services United
States-based relationships, primarily with domestic corporate clients. Each
corporate customer's account is coordinated by a specific officer at the
Company. Each such customer will also generally do business with the Company
officers responsible for the countries involved in a particular transaction.
Company officers meet in person with key officials from each of the
correspondent banks and corporate customers at least twice each year, and in
many cases more often. In addition, the Company communicates with its
correspondent banks and corporate customers in a variety of other ways.

STRATEGY

The Company's goal is to continue to grow its earnings and maintain a high
level of profitability while maintaining strong credit quality by continuing its
focus on trade finance.

The Company intends to achieve its goal by implementing the following
strategies:

- CONTINUE TO TAKE ADVANTAGE OF GROWING TRADE IN THE REGION. International
trade, particularly between the United States, including notably Florida,
and the Region is increasing significantly. This growth began after many
of the countries of the Region undertook dramatic market-based economic
reforms subsequent to the Latin American debt crisis of the 1980s. See
"--Economic Conditions in the Region." This expansion provides significant
opportunities for the Company to grow its business, which focuses on the
financing of international trade. The Company's focus on international
trade financing, the expansion of international trade, the Company's
location and base in Florida, the gateway to the Region and a central
distribution point for international trade finance, as well as the
Company's correspondent banking network, make the Company well-positioned
to benefit from this expansion and assist its customers in engaging in
international trade. In addition, growth in trade has been largely based
on the expansion in the number of companies, particularly small and
medium-sized companies, involved in trade. The Company believes that it
has a particular competitive advantage servicing the trade finance
business of these smaller and medium-size customers, as their traditional
banks either lack expertise in trade finance or the ability to provide
trade finance services to the middle market.

- EXPAND CREDIT LIMITS TO EXISTING CUSTOMERS. The Company's trade financing
capabilities with respect to its customers, including correspondent banks,
are restricted by regulatory and internal lending limits relating to the
extension of credit to one borrower or to borrowers in any one country.
The enhanced capital base resulting from this Offering will allow the
Company to expand credit limits to existing customers immediately
following the Offering in accordance with and subject to its

38
<PAGE>
customary credit policies and procedures, including those relating to the
level of appropriate risk, thereby increasing the Company's ability to
satisfy the needs of its larger customers. Following the Offering, the
Company's unsecured loan to one commercial borrower limitation under
United States law will expand from $6.6 million to $10.7 million.

- EXPAND THE COMPANY'S INVOLVEMENT WITH LARGER BANKS AND IN LARGER
MARKETS. The Company has been involved in trade finance in larger South
American countries such as Brazil and Argentina. This involvement has
developed primarily through its relationships with correspondent banks in
these countries, domestic United States corporate customers doing business
in these countries and the purchase of risk participations in trade
financing activities of multinational financial institutions involving
these countries. While the Company's trade financing in these countries
represents a significant percentage of the Company's business, it
represents a very small percentage of the overall trade finance volume of
these countries. Given the Company's size, it has been unable to develop
important relationships with many of the larger financial institutions in
the Region or to penetrate the larger markets to a significant extent. The
Company's enhanced capital base resulting from this Offering will result
in larger lending limits as described above, which it believes will allow
it to be a more important lending source for larger financial institutions
and customers that it does not presently service and to become more
competitive in these larger markets. The Company intends to attempt to
expand its activities with these larger financial institutions and
customers and in these larger markets immediately following the Offering.

- CONTINUE TO EXPAND DOMESTIC BRANCH SYSTEM. The Company presently has six
Bank branches located in Florida and is in the process of adding one new
branch. Branch deposits serve as a significant source of funds for the
Company's financing activities. The significant expansion of the number of
branches and the amount of deposits in such branches since October 1994
has allowed the Company to diversify its funding sources and reduce its
dependency on (i) interbank deposits from correspondent banks, (ii)
commercial deposits and (iii) certificates of deposits placed directly by
the Company's Treasury Department with institutional investors in the
United States. The Company strategically locates Bank branches in areas
where the Company believes that significant concentrations of deposits are
located, with significant trade activity and in which the Company believes
that it can intermediate into the local trade flow. Although the Company
does not presently have any definitive plans other than with respect to
its new branch office being opened in West Palm Beach, Florida, the
Company intends to establish other Bank branches when the Company believes
it to be strategically appropriate, including possibly in states other
than Florida and at locations with significant trade activity, in order to
continue to develop a stronger deposit base. The Company does not
presently intend to open more than a few branches at a time and then not
to open additional branches until these new branches have been
successfully integrated. Management believes that new branches will help
fund future growth and create further opportunities for the Company.

Management believes that the Company's primary focus on trade finance, its wide
correspondent banking network in the Region, broad range of services offered,
management experience, reputation and prompt decision-making and processing
capabilities provide it with important competitive advantages in the trade
finance business which will assist it in implementing the foregoing strategies
and meeting its goals. The Company believes that each of its strategies is
interrelated and equally important to meeting its goals, although continued
growing trade in the Region is necessary for continued earnings growth.

CREDIT ACTIVITIES AND POLICIES

TRADE FINANCE SERVICES AND PRODUCTS

The manufacture or production and distribution of any products or goods
generally results in a number of trade transactions which, together, make up a
trade cycle. For example, a seller of shirts purchases buttons and materials,
arranges for manufacture and often contracts with a distributor who sells

39
<PAGE>
the products to retailers. The Company attempts to become involved in and to
finance as many stages of a trade cycle as possible. Since the Company's primary
focus is on trade finance, the Company offers a wider array of trade finance
products and services than most financial institutions it competes with,
although some of the Company's products and services, such as import and export
letters of credit, are offered by almost all financial institutions engaged in
trade finance, and most of the Company's products are offered by some financial
institutions. The principal trade-related products and services which the
Company offers include:

- COMMERCIAL DOCUMENTARY LETTERS OF CREDIT. Commercial documentary letters
of credit are obligations issued by a financial institution in connection
with trade transactions where the financial institution's credit is
effectively substituted for that of its customer, who is buying goods or
services from the beneficiaries of those letters of credit. When the bank
issuing a letter of credit is not well known or is an unacceptable risk to
the beneficiary, the issuing bank must obtain a guarantee or confirmation
of the letter of credit by an acceptable bank in the beneficiary's market.
When the Company confirms a letter of credit it assumes the credit risk of
the issuing bank and generally takes a security interest in the goods
being financed. These obligations, which are governed by their own special
set of legal rules, call for payment by the financial institution against
presentation of certain documents showing that the purchased goods or
services have been provided or are forthcoming. From time to time, a
financial institution issues a commercial documentary letter of credit
("back-to-back") against receipt of a letter of credit from another bank
in order to finance the purchase of goods. The Company commenced its trade
financing activities by confirming letters of credit for correspondent
financial institutions in the Region and then began to sell other products
and services to the beneficiaries of such letters of credit. Commercial
letters of credit are contingent liabilities of the Company that are not
recorded on the Company's balance sheet and which generate fee income.
Upon payment of a letter of credit, the Company may refinance the
obligation through a loan which will be reflected on the Company's balance
sheet as "Loans-net."

- BANKERS' ACCEPTANCES. A bankers' acceptance is a time draft drawn on a
bank and accepted by it. Acceptance of the draft obligates the bank to
unconditionally pay the face value to whomever presents it at maturity.
Drafts accepted by the Company are reflected on the asset side of the
Company's balance sheet as "Due from Customers on Bankers' Acceptances"
and on the liability side as "Bankers' Acceptances Outstanding." The
Company receives a fee upon acceptance of a draft. Discounted bankers'
acceptances represent the purchase by a financial institution of a draft
at a discount. This assists an exporter in providing terms to an importer
under a letter of credit and also provides liquidity to the exporter.
Discounted bankers' acceptances are discounts of forward maturity items
and are included on the Company's balance sheet under "Loans-net." The
Company receives both fee and interest income from discounted bankers'
acceptances.

- DISCOUNTED TRADE ACCEPTANCES. Discounted trade acceptances represent an
obligation of an importer to pay money on a certain date in the future,
which obligation has been accepted by the importer as payable to the
exporter, then sold by the exporter at a discount to a financial
institution. If with recourse, at maturity of the acceptance, the
financial institution as holder of this instrument has recourse to either
the importer or the exporter. If without recourse, the financial
institution holding the acceptance has no recourse to the exporter, but
only to the accepting importer. Discounted trade acceptances are discounts
of forward maturity items and are included on the Company's balance sheet
under "Loans-net." The Company receives primarily interest income from
discounted trade acceptances.

- PRE-EXPORT FINANCING. Pre-export financing is provided by a financial
institution, either directly or indirectly through a second bank, to an
exporter who has a definitive international contract for the sale of
certain goods or services. Such financing funds the exporter's
manufacture, assembly and sale of these goods or services to the purchaser
abroad. Pre-export financing is reflected on the

40
<PAGE>
balance sheet as "Loans-net." The Company receives primarily interest
income from pre-export financing.

- WAREHOUSE RECEIPT FINANCING. Warehouse receipt financing provides
temporary financing, usually at a significant loan to collateral discount,
for goods temporarily held in an independent warehouse pending their sale
and/or delivery in a trade transaction. The goods are evidenced by a
receipt issued by the independent warehouse where the goods are stored.
Possession of that receipt gives the financial institution a perfected
security interest in those goods to collateralize the credit that it is
providing. Warehouse receipt financing is reflected on the balance sheet
as "Loans-net." The Company receives primarily interest income from
warehouse receipt financing.

- DOCUMENTARY COLLECTIONS. For a fee, a United States financial institution
will assist financial institutions to collect at maturity various drafts,
acceptances or other obligations which have come due and which are owed by
parties abroad or in the United States. Documentary collections are not
reflected on the balance sheet and are not contingent obligations of the
Company. The Company receives fee income from documentary collections.

- FOREIGN EXCHANGE TRANSACTIONS. Foreign exchange services consist of the
purchase of foreign currency on behalf of a customer. This service
includes both spot and forward transactions. Such transactions may be
conducted in both hard and soft currencies (i.e., those which are widely
accepted internationally and those that are not). The Company conducts
such transactions in both types of currencies. Foreign exchange
transactions are not reflected on the balance sheet and represent
contingent liabilities of the Company. The Company receives fee income
from foreign exchange transactions.

- STANDBY LETTERS OF CREDIT. Standby letters of credit effectively represent
a guarantee of payment to a third party by a financial institution,
usually not in connection with an individual trade transaction. The
Company does not favor standby letters of credit. They are only issued by
the Company in situations where the Company believes it is adequately and
properly secured or that the customer is in very strong financial
condition. Standby letters of credit are not reflected on the balance
sheet and represent contingent liabilities of the Company. The Company
receives fee income from standby letters of credit.

- INTERNATIONAL CASH MANAGEMENT. The Company assists corporations and banks
in the Region with the clearing of checks drawn on United States financial
institutions. As a United States financial institution and a member of the
Federal Reserve System, the Bank is able to provide quick and efficient
clearing of these items. The provision of these services often leads to
the Company providing other products and services to corporations and
banks.

Although other financial institutions, many of which are much larger than
the Company, offer products similar to many of the Company's products, trade
finance usually occupies a small percentage of the business of most financial
institutions, including larger multinational financial institutions, while it
represents the core of the Company's business. Other financial institutions
often have limitations in providing as complete a line of products as the
Company due to internal policies which could make such institutions adverse to
certain country risks (unless insured) or to certain products, such as
discounting trade acceptances without recourse or back-to-back letters of
credit. During the past eight years, the Company has developed a network of over
500 correspondent banks worldwide, primarily in the Region. The Company plays an
active role in the financial intermediation of trade flows between and involving
the United States and the Region, as well as Asia and Europe. For example, the
Company has adopted the Phoenician Export Program pursuant to which the Company
tracks United States beneficiaries of letters of credit for the purpose of
offering them additional products. Pursuant to this program, after confirming a
letter of credit for a United States beneficiary and absorbing the exporter's
foreign country risk, the Company offers to improve the exporter's cash flow by
providing pre-export financing against confirmed letters of credit. Most
multinational financial institutions do not continue with marketing efforts
after

41
<PAGE>
confirming a letter of credit. The Company markets the advantage of dealing with
a single bank, rather than having to access multiple banks in the United States,
as well as access to the Company's extensive correspondent banking network. This
translates into savings for exporters on advising and wire fees. Furthermore,
the Company also provides package deals which consist of pre-negotiated pricing
for confirmation fees and discounting of bankers' acceptances based on the
volume of trade directed through the Company. In addition, the Company routinely
goes beyond the traditional letter of credit business to provide custom-made
financial products and services such as some of those described above.

In confirming, negotiating, advising and/or paying letters of credit issued
by other banks, the Company seeks to lower its risk in various ways, such as by
obtaining a security interest in the underlying original documents representing
title to the goods until it is paid or its obligation terminates, obtaining
other collateral or relying on the guarantee of a correspondent bank. The
Company also makes direct loans to finance international trade. In addition,
when payment is made by the Company under some of the above instruments, a third
party's reliance on the Company's credit converts to a loan or advance by the
Company to its customer. Virtually all of the Company's loans are short-term. At
December 31, 1996, the Company's loan portfolio had an average original maturity
of approximately 180 days.

CREDIT POLICIES AND PROCEDURES

The Company, through the Bank, provides trade financing and general banking
services for the purpose of achieving a reasonable rate of return consistent
with prudent risk exposure. The Company's credit approval procedures are based
on the delegation of authority through structured levels of authorization. In
particular, the Company's lending activities are delegated to the Bank's Senior
Loan Committee, Officers' Loan Committee and the Chairman of the Board and
officers of the Bank, and are supervised by the Board of Directors of the Bank.

The Company generally establishes lines of credit with each of its
customers, but is generally not committed to lend under those lines and must
approve each proposed borrowing on a case-by-case basis. In establishing such
lines of credit, consideration is given to, among other factors, the customer's
or bank's capital, the value of applicable collateral, the structure of the
transaction, as well as the Company's historical experience with and the
creditworthiness of the borrower. Commercial lines of credit in amounts up to
$25,000 require the approval of two officers having credit authority while
commercial lines of credit up to $50,000 and lines of credit up to $100,000
extended to correspondent banks require the approval of an area head and an
officer having credit authority. Commercial lines of credit or transactions not
under approved lines of credit in amounts up to $500,000 and correspondent
banking lines of credit or transactions not under approved lines of credit in
amounts up to $2.0 million are approved by the Bank's Officer's Loan Committee,
which committee consists of the Bank's President, Executive Vice Presidents and
Senior Vice Presidents, or the Chief Executive Officer with the approval of two
officers having credit authority with respect to such credit transaction.
Commercial lines of credit or transactions not under approved lines of credit in
amounts exceeding $500,000 and correspondent banking transactions in amounts
exceeding $2.0 million are approved by the Senior Loan Committee, which consists
of all of the Bank's directors and an Executive Vice President. Once a line of
credit has been approved, credit is extended after receipt of a request from the
customer for financing related to a specific trade transaction identified to the
Company and the approval of the loan officers. All extensions of credit under
approved lines of credit must be approved by two loan officers. The pricing of
credit extended under such approvals is generally determined at the time of
approval of the credit facility at a specific spread over a reference rate. All
credit extended by the Company in excess of $100,000 is required to be reported
to the Bank's Senior Loan Committee and the Bank's Board of Directors. In the
event the Company wishes to enter into a transaction which would otherwise
exceed applicable statutory lending limits, the Company will sell participations
in such transaction to other financial institutions, thus staying within those
limits. During the course of the year the Bank's Loan Review Committee reviews a
sampling of credit transactions, including all significant credit transactions,
in order to determine, among other things, whether they comply with

42
<PAGE>
applicable guidelines established at the time each such transaction was approved
by the Company and the
value of applicable collateral.

The Company uses a credit risk rating system ("CRRS") as a statistical
credit-based tool to assist lending officers in evaluating and tracking risks of
individual transactions and relationships on a continuing basis, as well to
enable the Company to monitor and manage the risk of its credit portfolio. The
CRRS is designed to measure the degree of risk of potential loss and consists of
two components: borrower risk ("Borrower Grade") and transaction risk ("Facility
Grade"). Borrower Grade reflects the degree of risk of potential loss driven by
factors intrinsic to a specific customer (i.e., the riskiness of the industry in
which the customer operates and the financial condition of the customer). In the
case of a corporate customer, the Borrower Grade is determined by a loan
officer's consideration of the customer's industry, product segment, market,
earnings, operating cash flow, assets and liabilities, management experience,
debt capacity and prior credit history with the Company. The Facility Grade
measures the potential for loss of principal and interest of a specific credit
transaction in accordance with its terms and conditions (i.e., collateral,
terms, support and tenor). The Borrower Grade is indexed into eight groups with
the highest being favorable risk and the lowest being definite loss. The
Facility Grade is utilized in order to enhance the grade of a customer due to
the structure of the proposed credit transaction. For example, in the case of an
unsecured transaction, the risk of credit will always be that of the customer
and, accordingly, the risk rating will always be the Borrower Grade. By
utilizing both grading methods, customers are considered on the basis of their
ability to repay the credit obligation while allowing the Company to maintain
acceptable risk levels.

At regular intervals, the Company conducts a credit review of each of its
customers and each country in which the Company does business. The Company's
credit review includes an analysis of the customer's financial condition, trends
in the customer's financial condition, peer group comparisons, a review of
credit references and a review of economic conditions in the customer's home
country. On the basis of its credit review, the Company establishes credit
limits for each country and each of its customers. Limits for each country in
which the Company does business are established based on a country risk rating
system which takes into consideration different risks, including risks related
to economic conditions and political stability, as well as external position and
foreign exchange availability, and the maximum limit by type of risk. Country
risks, which range from a low risk to a high risk, are based on factors in the
country such as political stability, economic conditions and foreign exchange
availability. A country risk rating of high or moderate risk will not preclude
the Company from entering into a transaction in which the risk level and credit
grades are viewed as being satisfactory or where the Company is able to
structure the transaction in such a way as to seek to mitigate this risk, such
as through the use of collateral or the assignment of proceeds under a purchase
and sale agreement. The Bank's Senior Loan Committee annually reviews and
approves the credit limits for each country in the Region. By setting and
annually reviewing country limits and monthly monitoring country exposures and
making changes in such limits as circumstances warrant, the Company attempts to
maintain a high quality international portfolio.

The Company's loans are generally secured or otherwise guaranteed, sometimes
by correspondent banks. Typical collateral other than guarantees include bills
of lading, warehouse receipts and other documents of title, as well as proceeds,
receivables and trade acceptances. However, the coverage ratio varies depending
upon, among other factors, the customer's financial condition, the economic
conditions in the customer's home country and the value and type of collateral,
including cash and deposits with the Company. In certain instances, based upon
its credit review of the customer, the economic and political situation and
trends in the customer's home country and other relevant criteria, the Company
may determine that the loan need not be secured.

The Company has developed credit information on its customers over an
extended period. Many of the Company's customers have been customers or
shareholders for a number of years. The Company services all of the loans in its
loan portfolio. The Company believes that its existing personnel and systems are
adequate to support foreseeable growth in assets. See "--Credit Activities and
Policies--Trade Finance Services and Products."

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<PAGE>
LOAN PORTFOLIO

At December 31, 1996 approximately 27% of the Company's portfolio consisted
of loans to domestic borrowers and 73% of the Company's portfolio consisted of
loans to foreign borrowers. The Company's loan portfolio has increased in size
as international trade and, consequently, the market for trade finance in the
Region have increased. The Company's primary goal in managing its portfolio of
loans is to minimize the risk of loss and maintain sufficient liquidity while
achieving the highest possible level of net interest income. The Company's loan
portfolio is relatively short-term, as approximately 80.6% of loans at December
31, 1996 were short-term trade finance loans with average original maturities of
180 days.

In accordance with the Company's commercial loan underwriting procedures, in
reviewing a customer's request for an extension of credit, the Company will
conduct a review of the customer and will consider the economic and political
condition and trends in the customer's home country and other relevant criteria.
Although the Company's loans are generally secured or otherwise guaranteed, the
coverage ratio, which is the ratio of the value of the collateral to the amount
of the loan, varies depending upon, among other factors, the customer's
financial condition, the economic conditions in the customer's home country and
the value and type of collateral, including cash and deposits with the Company,
bills of lading, warehouse receipts and other documents of title, as well as
proceeds, receivables and trade acceptances. In certain circumstances, based
upon its review of these factors, the Company may determine that the loan need
not be collateralized.

The following table sets forth the term to maturity of the Company's loans
at December 31, 1996. Consistent with the self-liquidating nature of the
Company's predominant business, international trade finance, most of the
Company's loans and extensions of credit mature within one year.

LOAN MATURITIES
<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1996(1)
------------------------------------------------
<S> <C> <C> <C> <C>
MATURE
MATURE AFTER ONE BUT MATURE
WITHIN WITHIN AFTER FIVE
ONE YEAR FIVE YEARS YEARS TOTAL
--------- ------------- ----------- ---------

<CAPTION>
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Domestic loans:
Commercial..................................................... $ 74,803 $ 33,728 $ 1,791 $ 110,322
Acceptances discounted......................................... 23,314 0 0 23,314

Foreign loans:
Commercial..................................................... 277,419 32,090 441 309,950
Acceptances discounted......................................... 80,632 303 0 80,935
--------- ------------- ----------- ---------
Total............................................................ $ 456,168 $ 66,121 $ 2,232 $ 524,521
--------- ------------- ----------- ---------
--------- ------------- ----------- ---------

Fixed............................................................ $ 317,333 $ 21,633 $ 480 $ 339,446
Adjustable....................................................... 138,835 44,488 1,752 185,075
--------- ------------- ----------- ---------
Total fixed & adjustable......................................... $ 456,168 $ 66,121 $ 2,232 $ 524,521
--------- ------------- ----------- ---------
--------- ------------- ----------- ---------
</TABLE>

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

(1) Does not include mortgage loans and installment loans in the aggregate
amount of $11,038.

44
<PAGE>
LOANS BY COUNTRY

The following table sets forth the distribution of the Company's loans by
country of the borrower at the dates indicated.

LOANS BY COUNTRY

<TABLE>
<CAPTION>
AT DECEMBER 31,
-------------------------------------------------------------------
1994 1995 1996
--------------------- --------------------- ---------------------
% OF % OF % OF
TOTAL TOTAL TOTAL
AMOUNT LOANS AMOUNT LOANS AMOUNT LOANS
---------- --------- ---------- --------- ---------- ---------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
United States................................ $ 120,561 38.21% $ 141,278 33.40% $ 144,674 27.01%
Argentina.................................... 30,390 9.63 23,607 5.58 35,241 6.58
Bolivia...................................... 6,263 1.98 15,932 3.77 15,815 2.95
Brazil....................................... 22,271 7.06 24,335 5.75 27,255 5.09
British West Indies.......................... 5,254 1.67 -- -- 14,740 2.75
Dominican Republic........................... 9,385 2.97 -- -- 9,450 1.76
Ecuador...................................... 18,591 5.89 23,415 5.54 29,799 5.56
El Salvador.................................. 9,207 2.92 17,493 4.14 28,472 5.32
Guatemala.................................... 31,452 9.97 40,303 9.53 79,483 14.84
Honduras..................................... 13,245 4.20 17,307 4.09 24,277 4.53
Jamaica...................................... 4,700 1.49 6,377 1.51 10,971 2.05
Panama....................................... 17,743 5.62 23,566 5.57 50,553 9.44
Peru......................................... 12,687 4.02 29,480 6.97 26,658 4.98
Venezuela.................................... 5,298 1.68 15,853 3.75 10,245 1.91
Other(1)..................................... 8,486 2.69 44,034 10.40 27,926 5.23
---------- --------- ---------- --------- ---------- ---------
Total.................................... $ 315,533 100.00% $ 422,980 100.00% $ 535,559 100.00%
---------- --------- ---------- --------- ---------- ---------
---------- --------- ---------- --------- ---------- ---------
</TABLE>

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

(1) Other consists of loans to borrowers in countries in which loans did not
exceed 1% of total assets.

At December 31, 1996, approximately 46.8% in principal amount of the
Company's loans were outstanding to borrowers in six countries other than the
United States: Guatemala (14.8%), Panama (9.4%), Argentina (6.6%), Ecuador
(5.6%), El Salvador (5.3%) and Brazil (5.1%).

45
<PAGE>
LOANS BY TYPE

Almost all of the Company's loans are made to importers, exporters or
correspondent banks. The following table sets forth the amounts of the Company's
loans by type at the dates indicated.

LOANS BY TYPE

<TABLE>
<CAPTION>
AT DECEMBER 31,
---------------------------------------------------------
Domestic: 1992 1993 1994 1995 1996
--------- --------- --------- --------- -------------
<S> <C> <C> <C> <C> <C>
(IN THOUSANDS)
Commercial(1)....................... $ 55,449 $ 60,195 $ 66,413 $ 96,511 $ 110,322
Acceptances discounted.............. 39,089 48,420 42,764 33,059 23,314
Residential mortgages............... 7,537 8,943 11,050 11,363 10,610
Installment......................... 644 551 334 345 428
--------- --------- --------- --------- -------------
Total domestic.................... $ 102,719 $ 118,109 $ 120,561 $ 141,278 $ 144,674
--------- --------- --------- --------- -------------
--------- --------- --------- --------- -------------
Foreign:
Government and official
institutions...................... $ 0 $ 550 $ 550 $ 750 $ 750
Banks and other financial
institutions...................... 0 46,013 96,563 136,681 129,376
Commercial and industrial(1)........ 56,466 31,949 77,897 81,433 179,824
Acceptances discounted.............. 0 720 19,962 62,838 80,935
--------- --------- --------- --------- -------------
Total foreign..................... $ 56,466 $ 79,232 $ 194,972 $ 281,702 $ 390,885
--------- --------- --------- --------- -------------
--------- --------- --------- --------- -------------
Total loans..................... $ 159,185 $ 197,341 $ 315,533 $ 422,980 $ 535,559
--------- --------- --------- --------- -------------
--------- --------- --------- --------- -------------
</TABLE>

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

(1) Includes pre-export financing, warehouse receipts and refinancing of letters
of credit.

As indicated in the above table, the Company's growth has been evidenced by
continued growth in its existing products and services, which are primarily
trade finance products and services.

COMMUNITY LENDING

The Company also engages in certain local lending activities which make up a
small percentage of its business. For example, the Company participates in a
program sponsored by the United States Department of Transportation ("DOT")
through which the Company provides a line of credit to contractors waiting to be
paid for their services. The line accrues interest at a prime rate and fees are
paid to the Company by the DOT on both the committed and funded amounts. DOT
assumes 75% of the risk under these lines. The Company also provides mortgages
pursuant to Dade County, Florida and Florida Housing Finance Agency low-income
housing programs. Loans are under $100,000 and are with respect to properties
for which the government agency provides a large second mortgage. The Company
also participates in a Small Business Administration program financing
warehouses and smaller companies. The Company's community lending activities
aggregated $18.8 million, $24.8 million and $18.7 million at December 31, 1994,
1995 and 1996, respectively, the largest portion of which (approximately $10.6
million at December 31, 1996) represented mortgage loans made in connection with
the Dade County low-income housing program. The Company participates in some
local minority programs under various United States or Florida laws in which the
Company is considered to be a minority bank.

46
<PAGE>
TOTAL OUTSTANDINGS BY COUNTRY

The following table sets forth, at the dates indicated, the aggregate amount
of the Company's cross-border outstandings by primary credit risk (including
cash and demand deposits with other banks, interest-earning deposits with other
banks, investment securities, due from customers on bankers acceptances, due
from customers on deferred payment letters of credit and loans-net)
(collectively "Cross-Border Outstandings"), as well as the percentage of such
Cross-Border Outstandings to the Company's total assets for the three years
ended December 31, 1996.

TOTAL CROSS-BORDER OUTSTANDINGS BY COUNTRY
<TABLE>
<CAPTION>
AT DECEMBER 31,
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
% OF % OF % OF
TOTAL TOTAL TOTAL
1994 ASSETS 1995 ASSETS 1996 ASSETS
--------- ----------- --------- ----------- --------- -----------

<CAPTION>
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C>
Argentina................................................... $ 56 12.2% $ 28 4.6% $ 58 7.7%
Bolivia..................................................... 13 2.8 25 4.1 27 3.6
Brazil...................................................... 25 5.5 51 8.3 36 4.7
British West Indies......................................... -- -- -- -- 11 1.5
Colombia.................................................... -- -- -- -- 6 0.8
Dominican Republic.......................................... 12 2.6 6 1.0 6 0.8
Ecuador..................................................... 19 4.1 31 5.0 35 4.6
El Salvador................................................. 8 1.8 20 3.3 32 4.2
Guatemala................................................... 42 9.2 60 9.8 96 12.7
Guyana...................................................... -- -- 5 0.8 -- --
Honduras.................................................... 11 2.4 15 2.4 33 4.4
Jamaica..................................................... 4 0.9 7 1.1 22 2.9
Panama...................................................... 14 3.1 19 3.1 41 5.4
Paraguay.................................................... 4 0.9 -- -- -- --
Peru........................................................ 16 3.5 40 6.5 26 3.4
Venezuela................................................... -- -- 8 1.3 10 1.3
Other(1).................................................... 8 1.7 15 2.4 17 2.3
--------- --- --------- --- --------- ---
Total................................................... $ 232 50.7% $ 330 53.7% $ 456 60.3%
--------- --- --------- --- --------- ---
--------- --- --------- --- --------- ---
</TABLE>

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

(1) Other consists of Cross-Border Outstandings to countries in which such
Cross-Border Outstandings did not exceed 0.75% of the Company's total assets
at any of the dates shown.

The following table sets forth, at the dates indicated, the aggregate amount
of the Company's Cross-Border Outstandings by type.

TOTAL CROSS-BORDER OUTSTANDINGS BY TYPE

<TABLE>
<CAPTION>
AT DECEMBER 31,
-------------------------------
1994 1995 1996
--------- --------- ---------
<S> <C> <C> <C>
(IN MILLIONS)
Government and official institutions.......................................... $ 0.5 $ 0.8 $ 0.8
Banks and other financial institutions........................................ 115.1 161.1 161.8
Commercial and industrial..................................................... 96.4 105.3 213.3
Acceptances discounted........................................................ 20.0 62.8 81.1
--------- --------- ---------
Total..................................................................... $ 232.0 $ 330.0 $ 456.0
--------- --------- ---------
--------- --------- ---------
</TABLE>

47
<PAGE>
CONTINGENCIES

The following table sets forth the total volume and average monthly volume
of the Company's issuance of export and import letters of credit for each of the
periods indicated.

CONTINGENCIES--COMMERCIAL LETTERS OF CREDIT

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------------------------------------
1994 1995 1996
--------------------- --------------------- ---------------------
AVERAGE AVERAGE AVERAGE
TOTAL MONTHLY TOTAL MONTHLY TOTAL MONTHLY
VOLUME VOLUME VOLUME VOLUME VOLUME VOLUME
---------- --------- ---------- --------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
(IN THOUSANDS)
Export Letters of Credit(1).......................... $ 322,937 $ 26,911 $ 375,717 $ 31,310 $ 369,367 $ 30,781
Import Letters of Credit(1).......................... 222,674 18,556 282,788 23,566 312,964 26,080
---------- --------- ---------- --------- ---------- ---------
Total............................................ $ 545,611 $ 45,467 $ 658,505 $ 54,876 $ 682,331 $ 56,861
---------- --------- ---------- --------- ---------- ---------
---------- --------- ---------- --------- ---------- ---------
</TABLE>

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

(1) Represents certain contingent liabilities not reflected on the Company's
balance sheet.

The following table sets forth the distribution of the Company's contingent
liabilities by country of the applicant or in the case of confirmations, the
issuing bank, at the dates indicated.

CONTINGENT LIABILITIES(1)

<TABLE>
<CAPTION>
AT DECEMBER 31,
----------------------------------
1994 1995 1996
---------- ---------- ----------
<S> <C> <C> <C>
(IN THOUSANDS)
Argentina.................................................................... $ 3,684 $ 1,916 $ 7,095
Bolivia...................................................................... 4,066 4,221 4,401
Brazil....................................................................... 3,725 5,876 4,770
Dominican Republic........................................................... 7,063 4,791 2,719
Ecuador...................................................................... 10,515 2,079 1,858
El Salvador.................................................................. 5,278 3,877 5,616
Guatemala.................................................................... 6,116 13,377 13,981
Honduras..................................................................... 1,843 5,923 8,315
Jamaica...................................................................... 1,177 1,508 1,556
Nicaragua.................................................................... -- -- 1,414
Panama....................................................................... 6,119 5,369 9,803
Paraguay..................................................................... 7,573 10,269 5,105
Peru......................................................................... 9,376 5,346 5,864
United States................................................................ 62,698 57,564 55,991
Venezuela.................................................................... -- 1,400 --
Other(2)..................................................................... 3,387 2,258 3,224
---------- ---------- ----------
Total.................................................................... $ 132,620 $ 125,774 $ 131,712
---------- ---------- ----------
---------- ---------- ----------
</TABLE>

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

(1) Includes export and import letters of credit, standby letters of credit and
letters of indemnity.

(2) Other includes those countries in which contingencies represented less than
1% of the Company's total contingencies at all of the above dates.

48
<PAGE>
CAPITAL MARKETS

The Company's Capital Markets Department from time to time acts as an agent
for the placement of debt instruments and certificates of deposit issued by
correspondent banks having a term generally ranging from 150-180 days. These
instruments are offered on a best-efforts basis to United States financial
institutions, foreign banks, Edge Act banks and United States branches and
agencies of foreign banks, most of which have offices in South Florida. The
Capital Markets Department has also acted as an agent for the placement of
similar facilities for central banks of certain Latin American countries.
Placements have ranged from $5.0 million to $50.0 million. The Company generally
receives a fee based upon a percentage of the total amount of the placement and
usually itself purchases an interest in the placement. These placements allow
the Company to assist certain of its correspondent banks, generally in smaller
countries in the Region, to obtain funding that the Company could not provide by
itself. The Company's ability to complete these placements is also driven by
market needs. In 1994, 1995 and 1996, the Company arranged the placement of
approximately $100.0 million, $10.0 million and $25.0 million, respectively, of
debt instruments and certificates of deposit.

The Capital Markets Department is assisting in the establishment of a
Bermuda closed-end investment fund to invest in equities of banks in the Region,
with an emphasis on midsized institutions located in smaller countries in the
Region. The Inter-American Investment Corporation, an affiliate of the Inter-
American Development Bank, is expected to participate as a sponsor of and
investor in the fund and to have a representative on the Board of Directors of
the investment fund. This entity will also play a role in selecting fund
investments. Pursuant to this arrangement, a subsidiary of the Bank, Hamilton
Investment Advisory Services, Inc., the incorporation and activities of which
have been approved by the OCC, would act as an investment advisor to the fund,
including locating banks in the Region seeking investors. The Company would be
compensated on a fee basis for its services. In this effort, the Company seeks
to capitalize on its knowledge and experience in the Region and particularly
with respect to banks within the Region.

STRATEGIC ALLIANCES

The Company has minority investments within United States regulatory
limitations in three correspondent banks located in Haiti, Guyana and El
Salvador and a trust company in Guyana. The Company believes that these
investments have resulted in significant business for the Company. During 1995
and 1996, the bank located in Guyana had letter of credit volume with the
Company of $1.1 million and $3.4 million, respectively. In addition, total
aggregate loans extended by the Company to such bank were $10.8 million and
$13.5, respectively, during such periods. Additionally, during 1995 and 1996,
the bank in El Salvador had letter of credit volume with the Company of $10.6
million and $8.5 million, respectively. Loans extended by the Company to such
bank were $2.4 million and $6.6 million during 1995 and 1996, respectively. The
Company has only recently invested in the Haitian bank and Guyana trust company
and accordingly, no significant trade financings have occurred with such
institutions to date. The Company may make further minority investments in
correspondent banks within regulatory limitations, although none are currently
planned. National banks are allowed to invest up to 10% of their capital and
unimpaired surplus in shares of foreign banks.

INVESTMENT SECURITIES

The Company's investment securities primarily consist of United States
Government and agency securities having maturities of 90 days and less. At
December 31, 1996, the Company's only other investment securities were foreign
debt securities with a face value and market value of $150,000, representing
0.02% of total Company assets, as well as approximately $355,000 of Federal
Reserve Bank stock and $1.1 million of foreign bank stock (including primarily
banks with which the Company has strategic alliances), representing .05% and
.14% of total Company assets, respectively.

49
<PAGE>
The following table presents the composition of the Company's investment
securities:

INVESTMENT SECURITIES

<TABLE>
<CAPTION>
DECEMBER 31, 1994
------------------------------------------------
AMORTIZED GROSS UNREALIZED FAIR
COST GAINS LOSSES VALUE
----------- ----------- ----------- ---------
<S> <C> <C> <C> <C>
(IN THOUSANDS)
HELD TO MATURITY:
United States Government and agency securities......................... $ 15,889 $ 10 $ 18 $ 15,881
Foreign debt securities................................................ 741 28 -- 769
----------- --- --- ---------
Total.................................................................. $ 16,630 $ 38 $ 18 $ 16,650
----------- --- --- ---------
----------- --- --- ---------

AVAILABLE FOR SALE:
United States Government and agency securities......................... $ 4,703 -- $ 19 $ 4,684
United States corporate securities..................................... 977 -- -- 977
Mortgage-backed securities............................................. 548 -- 4 544
Federal reserve bank stock............................................. 212 -- -- 212
Foreign bank stocks.................................................... 313 -- -- 313
Other securities....................................................... 60 -- -- 60
----------- --- --- ---------
Total.................................................................. $ 6,813 -- $ 23 $ 6,790
----------- --- --- ---------
----------- --- --- ---------
</TABLE>

<TABLE>
<CAPTION>
DECEMBER 31, 1995
------------------------------------------------
AMORTIZED GROSS UNREALIZED FAIR
COST GAINS LOSSES VALUE
----------- ----------- ----------- ---------
<S> <C> <C> <C> <C>
(IN THOUSANDS)
HELD TO MATURITY:
United States Government and agency securities......................... $ 20,706 $ 28 -- $ 20,734
----------- --- --- ---------
----------- --- --- ---------
AVAILABLE FOR SALE:
United States Government and agency securities......................... $ 3,968 $ 2 -- $ 3,970
Mortgage-backed securities............................................. 125 1 -- 126
Foreign debt securities................................................ 3,444 -- -- 3,444
Federal reserve bank stock............................................. 355 -- -- 355
Foreign bank stocks.................................................... 313 -- -- 313
----------- --- --- ---------
Total.................................................................. $ 8,205 $ 3 -- $ 8,208
----------- --- --- ---------
----------- --- --- ---------
</TABLE>

<TABLE>
<CAPTION>
DECEMBER 31, 1996
------------------------------------------------
AMORTIZED GROSS UNREALIZED FAIR
COST GAINS LOSSES VALUE
----------- ----------- ----------- ---------
<S> <C> <C> <C> <C>
(IN THOUSANDS)
AVAILABLE FOR SALE:
United States Government and agency securities......................... $ 27,469 $ 3 $ 27,466
Foreign debt securities................................................ 150 -- -- 150
Federal reserve bank stock............................................. 355 -- -- 355
Foreign bank stocks.................................................... 1,049 -- -- 1,049
----------- --- --- ---------
Total.................................................................. $ 29,023 $ 3 $ 29,020
----------- --- --- ---------
----------- --- --- ---------
</TABLE>

50
<PAGE>
The following table sets forth information regarding the maturity of and
average rate of interest on the Company's investment securities as of December
31, 1996:

INVESTMENT SECURITIES MATURITIES AND AVERAGE RATES
<TABLE>
<CAPTION>
AVAILABLE FOR SALE
-------------------------------------
<S> <C> <C> <C>
WEIGHTED
AMORTIZED AVERAGE
COST FAIR VALUE RATE
----------- ----------- -----------

<CAPTION>
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Within one year..................................................................... $ 26,474 $ 26,472 5.26%
One to five years................................................................... 995 994 5.13
Over five years..................................................................... 150(1) 150(1) --
Total........................................................................... 27,619 27,616 --
----------- -----------
Federal reserve bank stock.......................................................... 355 355 --
Foreign bank stocks................................................................. 1,049 1,049 --
----------- -----------
Total securities................................................................ $ 29,023 $ 29,020 --
----------- -----------
----------- -----------
</TABLE>

- ------------------------
(1) Represents funds invested in a bond fund located in Venezuela backed by
United States treasury bills.

In May 1993, the Financial Accounting Standards Board issued Statement 115,
"Accounting for Investments in Certain Debt and Equity Securities." Statement
115 requires classification of investments into three categories. Debt
securities that the Company has the positive intent and ability to hold to
maturity must be reported at amortized cost and are classified as "securities
held to maturity." Debt and equity securities that are bought and held
principally for the purpose of selling them in the near term must be reported at
fair value, with unrealized gains and losses included in earnings and are
classified as "trading account securities." All other debt and equity securities
must be considered "securities available for sale" and reported at fair value,
with unrealized gains and losses excluded from earnings and reported as a
separate component of shareholders' equity, net of tax effects. The Company
implemented Statement 115 as of January 1, 1994. Implementation of the Statement
did not have a material impact upon the Company's statements. Effective January
1, 1994, the Board of the Bank reviewed each of the securities held by the Bank
on that date and classified such securities as required by Statement 115.

51
<PAGE>
INTEREST-EARNING DEPOSITS WITH OTHER BANKS

As part of its overall liquidity management process, the Company places
funds with foreign correspondent banks. These placements are typically
short-term, rarely exceeding 180 days. The purpose of these placements is to
obtain an enhanced return on high quality short-term instruments and to solidify
existing relationships with correspondent banks. The banks with which placements
are made and the amount placed are currently approved by the Bank's Asset
Liability Committee. In addition, this Committee reviews adherence with internal
interbank liability policies and procedures. At December 31, 1996, none of the
deposit placements with any correspondent bank exceeded $10.0 million. As
indicated in the following table, these interest-earning deposits with other
banks are well-diversified throughout the Region and in other countries.

INTEREST-EARNING DEPOSITS WITH OTHER BANKS

<TABLE>
<CAPTION>
INTEREST-EARNING
DEPOSITS WITH
OTHER BANKS AT
COUNTRY DECEMBER 31, 1996
- -------------------------------------------------------------------------- ------------------
<S> <C>
(IN THOUSANDS)
Argentina................................................................. $ 13,500
Jamaica................................................................... 12,000
Bolivia................................................................... 11,000
Honduras.................................................................. 10,000
El Salvador............................................................... 6,090
Panama.................................................................... 5,750
Ecuador................................................................... 5,675
United States............................................................. 3,900
The Bahamas(1)............................................................ 3,600
Peru ..................................................................... 3,000
Costa Rica................................................................ 2,000
Other Latin America and Caribbean countries............................... 2,000
Brazil.................................................................... 1,962
-------
Total................................................................. $ 80,477
-------
-------
</TABLE>

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

(1) Consists of placements in the Bahamas branch of a multinational financial
institution.

FUNDING SOURCES

The Company's principal sources of funds have been deposits, both domestic
and foreign. While these sources together with sales of bankers' acceptances and
loan participations, and the proceeds of this Offering, are expected to continue
to provide most of the funds needed by the Company in the future, their mix, as
well as possible use of other sources, will depend upon future economic and
market conditions. The Company's largest source of funds is domestic time
deposits. At December 31, 1994, 1995 and 1996, these deposits accounted for
59.3%, 54.5% and 63.0%, respectively, of total liabilities. Foreign interbank
time deposits make up the second biggest component of the Company's funding. At
December 31, 1994, 1995 and 1996, this accounted for 10.3%, 14.6% and 11.0%,
respectively, of total liabilities. Other foreign time and savings deposits,
domestic savings deposits and other foreign demand deposits make up the next
largest components of the Company's funding sources. The high concentration of
deposits from foreign banks is consistent with the Company's international
correspondent banking activities and the services provided by the Company.
Foreign banks maintain both demand deposits and time deposits with the Company.
Foreign banks maintain demand deposits with the Company in order to maintain the
liquidity level required to satisfy obligations and meet maturities of such
bank's typical

52
<PAGE>
international transactions. Time deposits are kept at the Company by foreign
banks in order to invest excess dollar liquidity and maximize investment return.

The following table provides an analysis of the Company's average deposits
for the periods indicated.

DEPOSITS

<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
----------------------------------
1994 1995 1996
---------- ---------- ----------
<S> <C> <C> <C>
(IN THOUSANDS)
Non-interest bearing demand deposits......................................... $ 43,827 $ 46,583 $ 49,052
NOW and money market accounts................................................ 36,093 48,608 60,306
Savings deposits............................................................. 6,749 8,750 8,636
Time deposits................................................................ 182,517 271,464 362,724
International Banking Facility (IBF) deposits................................ 47,990 68,927 93,670
---------- ---------- ----------
Total deposits........................................................... $ 317,176 $ 444,332 $ 574,388
---------- ---------- ----------
---------- ---------- ----------
</TABLE>

Total deposits were $638.6 million at December 31, 1996 with $448.7 million
from domestic depositors and $189.9 million from foreign depositors. The five
largest countries of domicile in the Region of foreign depositors in domestic
offices of the Company plus deposits in the IBF at December 31, 1996 were Panama
($34.9 million), Honduras ($30.6 million), Guatemala ($30.1 million), Suriname
($19.3 million) and Venezuela ($12.3 million).

The primary sources of Company's domestic time deposits are its Bank
branches located in Florida. The Company has three Bank branches in Miami,
Florida, one in Tampa, Florida, one in Winter Haven, Florida and one in
Sarasota, Florida. A new branch is expected to open shortly in West Palm Beach,
Florida, which has been approved by the OCC. The Company is also reviewing other
potential branch sites in Florida, as well as possibly outside of Florida.
Branch sites are chosen based upon the Company's perception of the potential
deposit base, and are often located near a concentration of senior citizens.
Branches are also located in areas with significant international trade and
where the Company believes that it can intermediate into the trade flow. In
pricing its deposits, the Company analyzes the market carefully, attempting to
price its deposits competitively with the larger financial institutions in the
area.

The following table indicates the maturities and amounts of certificates of
deposit and other time deposits issued in denominations of $100,000 or more as
of December 31 1996:

MATURITIES OF AND AMOUNTS OF CERTIFICATES OF DEPOSIT
AND OTHER TIME DEPOSITS OVER $100,000

<TABLE>
<CAPTION>
CERTIFICATES OTHER TIME
OF DEPOSIT DEPOSITS
$100,000 OR $100,000 OR
MORE MORE TOTAL
------------- --------------- ---------
(IN THOUSANDS)
<S> <C> <C> <C>
Three months
or less.............................................. $ 71,731 $ 75,538 $ 147,269
Over 3 through 6 months................................ 32,362 0 32,362
Over 6 through 12 months............................... 53,076 2,655 55,731
Over 12 months......................................... 6,040 0 6,040
------------- ------- ---------
Total................................................ $ 163,209 $ 78,193 $ 241,402
------------- ------- ---------
------------- ------- ---------
</TABLE>

The Company also offers private banking services to its larger depositors,
primarily international corporate customers and correspondent banks and their
shareholders, owners and operators. Private banking customers receive
personalized service and access to additional products besides the Company's
customary products and services, such as the purchase of bankers' acceptances,
specialized accounts, bill payment, foreign exchange services, safe deposit
boxes, credit cards, ATM access and holdmail.

53
<PAGE>
ECONOMIC CONDITIONS IN THE REGION

Following the economic crises of the 1980s, many of the countries in the
Region undertook market-based economic reforms in an effort to provide a basis
for sustainable, non-inflationary economic growth. These reforms have included
restructuring of public sector operations and privatization of state-owned
companies in order to reduce public sector deficits; liberalization of foreign
trade and investment regulations and other steps to encourage capital inflow;
termination of price controls; relaxation or elimination of foreign currency
exchange controls; and participation in foreign debt restructurings. The
elimination or substantial liberalization of exchange controls throughout the
Region has been particularly important. This has allowed profitable businesses
in the Region which engage in international trade to rely on their own balance
sheets, rather than their countries', in obtaining credit from abroad, and to
acquire foreign exchange from any source within or outside the Region that they
deem appropriate in order to repay that credit. The elimination of foreign
investment restrictions in countries throughout the Region and the wave of
privatizations (often involving foreign investors), both of which have occurred
over the past seven years, have also been extremely important. These measures
have contributed to a significant overall improvement in economic conditions in
countries of the Region during the late 1980s and in the 1990s, and have also
contributed to the expansion in foreign trade by giving businesses in the Region
a broader international perspective.

The following table sets forth the real GDP growth rates by country in the
Region from 1985 through 1995.

REAL GDP GROWTH RATES (%)
<TABLE>
<CAPTION>
COUNTRY 1985 1986 1987 1988 1989 1990 1991 1992
- ------------------------------------ --------- --------- --------- --------- --------- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Argentina........................... N/A N/A N/A N/A N/A 0.1 8.9 8.7
Bolivia............................. (1.0) (2.5) 2.6 3.0 3.6 4.3 5.0 1.8
Brazil.............................. 7.9 7.5 3.5 (0.1) 3.3 (4.4) 0.2 (0.8)
Dominican Republic.................. (2.1) 3.5 10.1 1.9 4.6 (5.5) 1.0 8.0
Ecuador............................. 4.4 3.0 (6.0) 10.5 0.3 3.0 5.0 3.6
El Salvador......................... 0.6 0.2 2.5 1.9 1.0 4.8 3.6 7.5
Guatemala........................... (0.6) 0.1 3.5 3.9 4.0 3.1 3.7 4.8
Honduras............................ 4.2 0.7 6.0 4.6 4.3 0.1 3.3 5.6
Jamaica............................. (4.7) 1.9 6.0 1.5 4.5 5.5 0.8 1.5
Panama.............................. 5.1 4.5 3.0 (13.1) (0.8) 7.4 7.9 7.2
Paraguay............................ 4.0 0.0 4.3 6.4 5.8 3.1 2.5 1.8
Peru................................ 2.3 9.2 8.5 (8.3) (11.6) (5.4) 2.8 (2.4)
Venezuela........................... N/A N/A N/A N/A N/A 6.9 9.7 6.1

<CAPTION>
COUNTRY 1993 1994 1995
- ------------------------------------ ----- ----- -----
<S> <C> <C> <C>
Argentina........................... 6.0 7.4 NA
Bolivia............................. 4.0 4.2 3.8
Brazil.............................. 4.1 5.7 NA
Dominican Republic.................. 3.0 4.3 4.7
Ecuador............................. 2.1 3.9 2.3
El Salvador......................... 7.4 6.0 6.1
Guatemala........................... 3.9 4.0 4.9
Honduras............................ 6.1 (1.4) 3.6
Jamaica............................. 1.3 0.9 0.5
Panama.............................. 4.1 3.7 1.9
Paraguay............................ 4.1 3.1 4.2
Peru................................ 6.5 12.9 6.9
Venezuela........................... 0.3 (2.8) 2.2
</TABLE>

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

Source: United States Agency for International Development, Bureau for Latin
America and the Caribbean, except for Argentina and Venezuela, for which the
source is IMF Department of Trade Statistics.

The formation in March of 1991 of the Mercado Comun del Sur ("Mercosur")
(consisting initially of Brazil, Argentina, Uruguay and Paraguay, subsequently
joined by Chile and Bolivia), the elimination of trade restrictions within the
Andean Pact (Venezuela, Colombia, Ecuador, Peru, and Bolivia), the recent
renewed activity of the Central American Common Market, and a series of
bilateral agreements between nations of the Region, have been and are expected
to continue to have a positive effect on intraregional trade. In early 1995, the
North American Free Trade Agreement ("NAFTA") between Mexico, the United States
and Canada entered into effect. NAFTA is expected to eliminate certain trade
barriers and open up certain economic sectors to competition. The Clinton
Administration has publicly announced its intention to seek accession by Chile
to NAFTA in 1997. Presently, this is expected to be followed by other countries
in the Region, based on the plan agreed to by the Presidents of 37 nations in
the Western Hemisphere at the Presidential Summit of the Americas held in Miami,
Florida in December 1994, to create a Hemispheric free trade area by 2005. In
1995, the United States Congress also ratified the new worldwide General
Agreement on Tariffs and Trade, popularly referred to as the Uruguay Round,
thereby further

54
<PAGE>
liberalizing trade between the United States and many countries with respect to
a variety of goods and services. The Company believes that all of these are
highly positive developments for the Region's trade and for continued demand for
trade finance such as the Company provides. As a result of these and other
developments, the Region's trade with the entire world rose from approximately
$165.4 billion United States dollars in 1990 to approximately $319.8 billion
United States dollars in 1995.

The table below sets forth certain information regarding total exports and
imports of certain countries of the Region for the periods indicated:

EXPORTS AND IMPORTS OF THE REGION(1)
<TABLE>
<CAPTION>
1993 1994 1995
-------------------- -------------------- --------------------
<S> <C> <C> <C> <C> <C> <C>
COUNTRY EXPORTS IMPORTS EXPORTS IMPORTS EXPORTS IMPORTS
- ------------------------------------------------ --------- --------- --------- --------- --------- ---------

<CAPTION>
(IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C>
Argentina....................................... $ 13,118 $ 14,694 $ 15,659 $ 19,661 $ 20,967 $ 17,982
Bolivia......................................... 710 1,206 985 1,209 1,063 1,420
Brazil.......................................... 39,630 25,301 44,102 33,241 46,506 49,663
Dominican Republic.............................. 511 2,118 644 2,563 743 2,800
Ecuador......................................... 3,062 2,474 3,844 3,282 4,362 4,095
El Salvador..................................... 732 1,912 819 2,252 1,005 2,854
Guatemala....................................... 1,363 2,599 1,500 2,789 1,989 3,281
Honduras........................................ 873 1,320 939 1,481 1,190 1,665
Jamaica......................................... 1,075 2,180 1,220 2,168 1,429 2,774
Panama(2)....................................... 557 1,992 586 2,172 620 2,337
Paraguay........................................ 1,500 2,711 1,780 3,498 1,996 3,667
Peru............................................ 3,523 4,123 4,574 5,545 5,576 7,687
Venezuela....................................... 14,686 11,271 16,089 8,277 18,457 10,782
</TABLE>

- ------------------------
(1) Source: United States Agency for International Development, Bureau for
Latin America and the Caribbean, except for Argentina and Venezuela, for
which the source is IMF Department of Trade Statistics, Exports f.o.b.

(2) Does not include imports and exports from the Colon Free Zone which were
$4.1 billion and $5.1 billion in 1993, respectively, $4.6 billion and $5.3
billion in 1994, respectively, and $4.9 billion and $5.3 billion in 1995,
respectively. Source: Colon Free Zone.

Most countries in the Region have experienced substantial and, in some
periods, extremely high and volatile, rates of inflation in past years. However,
the average rise in prices for the Region, weighted by gross national product
("GNP"), fell from 1176% in 1990 to 16% in 1996. High rates of inflation and
rapid fluctuation in inflation rates in the Region have had, and in the future
may again have, significant negative effects on the economies of the countries
of the Region. Although the Company conducts its business almost exclusively in
United States dollars and therefore fluctuations in the value of the currencies
of the countries in the Region do not pose a direct risk to the Company, to the
extent that inflation has a negative effect on the economies of the Region, or
on the local currency, thereby making it more expensive for businesses in the
country to obtain dollars, this may adversely affect the Company's business.

To the extent that market-based economic reforms, debt-reduction programs,
increased capital inflows and other changes result in increased economic
activity and increased trade within and among the countries of the Region, they
may result in new or expanded opportunities for the Company to engage in trade
financing.

55
<PAGE>
COMPETITION

International trade financing is a highly competitive industry that is
dominated by large, multinational financial institutions such as Citibank, N.A.,
Swiss Bank Corporation and Barclays, among others. With respect to trade finance
in or relating to larger countries in the Region, primarily in South America,
these larger institutions are the Company's primary competition. The Company has
less competition from these multinational financial institutions providing trade
finance services with or in smaller countries in the Region, primarily in
Central America and the Caribbean, because the volume of trade financing in such
smaller countries has not been as attractive to these larger institutions. With
respect to Central American and Caribbean countries, as well as United States
domestic customers, the Company also competes with regional United States and
smaller local financial institutions engaged in trade finance. Many of the
Company's competitors, particularly multinational financial institutions, have
substantially greater financial and other resources than the Company. In
general, the Company competes on the basis of the range of services offered,
convenience and speed of service, correspondent banking relationships and on the
basis of the rates of fees and commissions charged. Management believes that
none of the Company's significant United States competitors have the focus on
trade finance and offer the range of services that the Company offers.
Management further believes that the Company's strong trade culture, range of
services offered, liquid portfolio, management experience, reputation, and
prompt decision-making and processing capabilities provide it with a competitive
advantage that allows it to compete favorably with its competitors for the trade
finance business in the Region. The Company also has adjusted to its competition
by often participating in transactions with certain of its competitors,
particularly the larger, multinational financial institutions.

Although to date the Company has competed successfully, on a limited basis,
in those countries in the Region which have high trade volumes, such as Brazil
and Argentina, there can be no assurance that the Company will be able to
continue competing successfully in those countries with either large,
multinational financial institutions or regional United States or local
financial institutions. Any significant decrease in the Company's trade volume
in such large- volume countries could adversely affect the Company's results of
operations. Although the Company faces less competition from multinational
financial institutions in those countries in the Region, particularly countries
in Central America and the Caribbean, where the trading volume has not been
large enough to be meaningful for multinational financial institutions, there
can be no assurance that such financial institutions will not seek to finance
greater volumes of trade in those countries or that the Company would be able to
successful compete with such financial institutions in the event of increased
competition. In addition, there is no assurance that the Company will be able to
continue to compete successfully in smaller countries with the regional United
States financial institutions and smaller local financial institutions engaged
in trade finance in such countries. Continued political stability and
improvement in economic conditions in such countries are likely to result in
increased competition.

REGULATION

BANCORP REGULATION

As a result of its ownership of the Bank, Bancorp is registered as a bank
holding company, and is regulated and subject to periodic examination by the FRB
under the BHC Act.

Pursuant to the BHC Act and the FRB's regulations, Bancorp is limited to the
business of owning, managing or controlling banks and engaging in certain other
financial-related activities, including those activities that the FRB determines
from time to time to be so closely related to the business of banking as to be a
proper incident thereto.

The BHC Act requires, among other things, the prior approval of the FRB in
any case where a bank holding company proposes to (i) acquire all or
substantially all of the assets of a bank, (ii) acquire direct or

56
<PAGE>
indirect ownership or control of more than 5% of the outstanding voting stock of
any bank (unless it already owns a majority of such bank's voting shares) or
(iii) merge or consolidate with any other bank holding company.

Bancorp is required by the FRB to act as a source of financial strength and
to take measures to preserve and protect the Bank. As a result, Bancorp may be
required to inject capital in the Bank if the Bank at any time lacks such
capital and requires it. The FRB may charge a bank holding company such as
Bancorp with unsafe and unsound practices for failure to commit resources to a
subsidiary bank when required. Any loans from Bancorp to the Bank which would
count as capital of the Bank must be on terms subordinate in right of payment to
deposits and to most other indebtedness of the Bank.

The FRB, the OCC and the FDIC collectively have extensive enforcement
authority over bank holding companies and national banks in the United States.
This enforcement authority, initiated generally for violations of law and unsafe
or unsound practices, includes, among other things, the ability to assess civil
money penalties, to initiate injunctive actions and to terminate deposit
insurance in extreme cases.

The FRB's, the OCC's and the FDIC's enforcement authority was enhanced
substantially by the Financial Institutions Reform, Recovery and Enforcement Act
of 1989 ("FIRREA") and the Federal Deposit Insurance Corporation Improvement Act
of 1991 ("FDICIA"). FIRREA significantly increased the amount and the grounds
for civil money penalties. Also, under FIRREA, should a failure of the Bank
cause a loss to the FDIC, any other FDIC-insured subsidiaries of Bancorp could
be required to compensate the FDIC for the estimated amount of the loss (Bancorp
does not currently have any such subsidiaries). Additionally, pursuant to
FDICIA, Bancorp in the future could have the potential obligation to guarantee
the capital restoration plans of any undercapitalized FDIC-insured depository
institution subsidiaries it may control.

CAPITAL ADEQUACY

The federal bank regulatory authorities have adopted risk-based capital
guidelines to which Bancorp and the Bank are each subject. The guidelines
establish a systematic analytical framework that makes regulatory capital
requirements more sensitive to differences in risk profile among banking
organizations, takes off-balance sheet exposures into explicit account in
assessing capital adequacy and minimizes disincentives to holding liquid,
low-risk assets. These risk-based capital ratios are determined by allocating
assets and specified off-balance sheet financial instruments into four weighting
categories, with higher levels of capital being required for the categories
perceived as representing greater risk.

Under these guidelines a banking organization's capital is divided into two
tiers. The first tier (Tier 1) includes common equity, perpetual preferred stock
(excluding auction rate issues) and minority interests that are held by others
in a consolidated subsidiary, less goodwill and any disallowed intangibles.
Supplementary (Tier 2) capital includes, among other items, cumulative and
limited-life preferred stock, mandatory convertible securities, subordinated
debt and the allowance for loan and lease losses, subject to certain limitations
and less required deductions as provided by regulation.

Banking organizations are required to maintain a risk-based capital ratio of
total capital (Tier 1 plus Tier 2) to risk-weighted assets of 8% of which at
least 4% must be Tier 1 capital. The federal bank regulatory authorities may,
however, set higher capital requirements when a banking organization's
particular circumstances warrant. As a general matter, banking organizations are
expected to maintain capital ratios well above the regulatory minimums. The
risk-based capital ratios of Bancorp and the Bank as of December 31, 1995 and
1996 are set forth under "Management's Discussion and Analysis of Financial
Condition and Results of Operations--Liquidity and Capital Resources."

In addition, the federal bank regulatory authorities have established
guidelines for a minimum leverage ratio (Tier 1 capital to average total
assets). These guidelines provide for a minimum leverage

57
<PAGE>
ratio of 3% for banking organizations that meet certain specified criteria,
including excellent asset quality, high liquidity, low interest rate exposure
and the highest regulatory rating. Banking organizations not meeting these
criteria or which are experiencing or anticipating significant growth are
required to maintain a leverage ratio which exceeds the 3% minimum by at least
100 to 200 basis points. The leverage ratios of Bancorp and the Bank as of
December 31, 1995 and 1996 are set forth under "Management's Discussion and
Analysis of Financial Condition and Results of Operations--Liquidity and Capital
Resources."

Failure to meet applicable capital guidelines could subject a bank or bank
holding company to a variety of enforcement remedies available to the federal
bank regulatory authorities, including limitation on the ability to pay
dividends, the issuance of a capital directive to increase capital and, in the
case of a bank, the termination of deposit insurance by the FDIC or (in severe
cases) the appointment of a conservator or receiver.

INTERSTATE BANKING

As of September 29, 1995, the Riegle-Neal Interstate Banking and Branching
Efficiency Act of 1994 (the "RNA") permitted adequately capitalized and managed
bank holding companies to acquire control of banks in any state. Additionally,
beginning on June 1, 1997, the RNA provides for banks to branch across state
lines, although individual states may authorize interstate branches earlier or
elect to opt-out entirely. Florida has allowed bank holding companies from the
Southeastern United States to acquire banks in Florida since 1984, and in 1994
this was expanded to include bank holding companies from other parts of the
United States as well. In 1996 Florida enacted legislation which will allow
out-of-state banks as of June 1, 1997 to enter Florida by merger with an
existing Florida-based bank, and thereafter to branch throughout the state. This
may further increase competition for the Bank by allowing large banks from other
parts of the United States to operate directly in Florida.

REGULATION OF THE BANK

General

The Bank, as an FDIC-insured national bank, is subject to regulation
primarily by the OCC, and secondarily by the FDIC. Also, as a national bank, the
Bank is a member of the Federal Reserve System, and its operations are therefore
also subject to certain FRB regulations. Various other federal and state
consumer laws and regulations also affect the operations of the Bank.

As a national bank, the Bank may be able to engage in certain activities
approved by the OCC which the FRB would not necessarily approve for Bancorp or
its non-national bank subsidiaries. The OCC has been particularly aggressive in
recent years in allowing national banks to undertake an ever-increasing range of
securities and insurance activities. Along these lines, pursuant to certain
revisions to the OCC's regulations pertaining to national bank activities
effective on December 31, 1996, national banks, among other things, will be
permitted on a case-by-case basis to operate subsidiaries that may engage in
activities some of which are not permissible for the bank itself. Although the
revised regulations do not authorize any new activities per se, it is expected
that national banks, if eligible and if they obtain the approval of the OCC,
will use them to expand further into the businesses of insurance and securities
underwriting.

The revised OCC regulations contain "fire walls" intended to protect a
national bank from the risks taken by its subsidiary, including a 10% cap on the
amount of bank capital that may be invested in the new subsidiary, as well as
requirements that extensions of credit to the operating subsidiary be
fully-collateralized and that transactions between the bank and the subsidiary
be conducted at arm's-length. Also, other safeguards are that the parent
national bank's exposure to any losses the subsidiary may incur be limited to
the bank's equity investment in the subsidiary, and that the parent national
bank be well-capitalized both before and after the investment is made.

58
<PAGE>
Since OCC approval is required on a case-by-case basis for an eligible bank
to be permitted to engage in activities not permissible for the bank to conduct
directly, it is unclear at this time what the effect of these revised
regulations on the operations of national banks will be. Further, it is expected
that Congress will consider new banking legislation next year which may address
these revisions.

As a national bank, the Bank may not ordinarily lend more than 15% of its
capital unsecured to any one borrower, and may lend up to an additional 10% of
its capital to that same borrower on a fully secured basis involving readily
marketable collateral having a market value, as determined by reliable and
continuously available price quotations, equal at least to the amount borrowed.
In addition, there are various other circumstances in which the Bank may lend in
excess of such limits, including authority to lend up to 35% of capital and
surplus when the loan is secured by documents of title to readily marketable
staples and certain other exceptions relevant to international trade finance.

Federal law also imposes additional restrictions on the Bank with respect to
loans and extensions of credit to certain related parties and purchases from and
other transactions with Bancorp's principal shareholders, officers, directors
and affiliates. Extensions of credit (i) must be made on substantially the same
terms (including interest rates and collateral) as, and follow credit
underwriting procedures that are not less stringent than, those prevailing at
the time for comparable transactions with members of the general public, and
(ii) must not involve more than the normal risk of repayment or present other
unfavorable features. In addition, extensions of credit to each such person
beyond certain limits set by applicable law must be approved by the Bank's Board
of Directors, with the individual who is applying for the credit abstaining from
participation in the decision. The Bank also is subject to certain lending
limits and restrictions on overdrafts to such persons. A violation of these
restrictions may result in the assessment of substantial civil monetary
penalties against the Bank or any officer, director, employee, agent or other
person participating in the conduct of the affairs of the Bank or the imposition
by the FRB of a cease and desist order.

Dividends

The Bank is subject to legal limitations on the frequency and amount of
dividends that can be paid to Bancorp. The OCC, in general, also has the ability
to prohibit dividends by the Bank which would otherwise be permitted under
applicable regulations if the OCC determines that such distribution would
constitute an unsafe or unsound practice.

For the Bank, the approval of the OCC is required for the payment of
dividends in any calendar year if the total of all dividends declared by the
Bank in that year exceeds the current year's net income combined with the
retained net income of the two preceding years. "Retained net income" means the
net income of a specified period less any common or preferred stock dividends
declared for that period. Moreover, no dividends may be paid by a national bank
in excess of its undivided profits account.

In addition, the FRB and the FDIC have issued policy statements which
provide that, as a general matter, insured banks and bank holding companies may
pay dividends only out of current operating earnings.

In accordance with the above regulatory restrictions, the Bank currently has
the ability to pay dividends, and on December 31, 1996 an aggregate of $22.2
million was available for the payment of dividends to Bancorp without prior
regulatory approval.

There are also statutory limits on other transfer of funds to Bancorp and
any other future non-banking subsidiaries of Bancorp by the Bank, whether in the
form of loans or other extensions of credit, investments or asset purchases.
Such transfers by the Bank generally are limited in amount to 10% of the Bank's
capital and surplus, to Bancorp or any such future Bancorp subsidiary, or 20% in
the aggregate to Bancorp and all such subsidiaries. Furthermore, such loans and
extensions of credit are required to be fully collateralized in specified
amounts depending on the nature of the collateral involved.

59
<PAGE>
FDICIA

FDICIA was enacted on December 19, 1991. It substantially revised the bank
regulatory and funding provisions of the Federal Deposit Insurance Act and made
significant revisions to other federal banking statutes. FDICIA provided for,
among other things, (i) a recapitalization of the Bank Insurance Fund of the
FDIC (the "BIF") by increasing the FDIC's borrowing authority and providing for
adjustments in its assessment rates; (ii) annual on-site examinations of
federally-insured depository institutions by banking regulators; (iii) publicly
available annual financial condition and management reports for financial
institutions, including audits by independent accountants; (iv) the
establishment of uniform accounting standards by federal banking agencies; (v)
the establishment of a "prompt corrective action" system of regulatory
supervision and intervention, based on capitalization levels, with more scrutiny
and restrictions placed on depository institutions with lower levels of capital;
(vi) additional grounds for the appointment of a conservator or receiver; (vii)
a requirement that the FDIC use the least-cost method of resolving cases of
troubled institutions in order to keep the costs to insurance funds at a
minimum; (viii) more comprehensive regulation and examination of foreign banks;
(ix) consumer protection provisions, including a Truth-in-Savings Act; (x) a
requirement that the FDIC establish a risk-based deposit insurance assessment
system; (xi) restrictions or prohibitions on accepting brokered deposits, except
for institutions which significantly exceed minimum capital requirements; and
(xii) certain additional limits on deposit insurance coverage.

A central feature of FDICIA is the requirement that the federal banking
agencies take "prompt corrective action" with respect to depository institutions
that do not meet minimum capital requirements. Pursuant to FDICIA, the federal
bank regulatory authorities have adopted regulations setting forth a five-tiered
system for measuring the capital adequacy of the depository institutions they
supervise. Under these regulations, a depository institution is classified in
one of the following capital categories: "well capitalized," "adequately
capitalized," "undercapitalized," "significantly undercapitalized," and
"critically undercapitalized." Based on the current regulatory capital position
of the Bank, Bancorp believes that the Bank is in the highest classification of
"well capitalized."

FDICIA generally prohibits the Bank from making any capital distribution
(including payment of a cash dividend) or paying any management fees to Bancorp
if the Bank would thereafter be undercapitalized. Undercapitalized depository
institutions are subject to growth limitations and are required to submit
capital restoration plans acceptable to the federal banking agencies. If a
depository institution fails to submit an acceptable plan, it is treated as if
it is "significantly undercapitalized."

Significantly undercapitalized depository institutions may be subject to a
number of other requirements and restrictions, including orders to sell
sufficient voting stock to become adequately capitalized, and requirements to
reduce total assets and to stop accepting deposits from correspondent banks.
Critically undercapitalized institutions are subject to the appointment of a
receiver or conservator, generally within 90 days of the date such institution
is determined to be critically undercapitalized.

FDICIA also provided for increased funding of the FDIC insurance funds.
Under the FDIC's risk-based insurance premium assessment system, each bank whose
deposits are insured by the BIF is assigned one of the nine risk classifications
based upon certain capital and supervisory measures and, depending upon its
classification, is assessed premiums. On November 14, 1995, the FDIC board of
directors voted to lower the BIF premium range to zero from .27% effective
January 1996. The rate schedule is subject to future adjustments by the FDIC. In
addition, the FDIC has authority to impose special assessments from time to
time. As a result of the enactment of the Federal Deposit Insurance Funds Act of
1996 on September 30, 1996, commercial banks are now required to pay part of the
interest on the Financing Corporation's ("FICO") bonds issued to deal with the
savings and loan crisis of the late 1980s. As a result, commercial bank deposits
are now also subject to assessment by FICO upon the approval by the FDIC Board
("FICO Assessment") of such assessment. Beginning in 1997 and until the earlier
of December 31, 1999 or the date on which the last saving association ceases to
exist, the assessment rate FICO imposes on

60
<PAGE>
a commercial bank must be at a rate equal to one-fifth the assessment rate
applicable to deposits assessable by the Savings Association Insurance Fund. The
Bank believes that its FICO Assessment for 1997 will be at least $750,000.

Reserve Requirements

The Bank is required to maintain reserves against its transaction accounts.
The reserves must be maintained in an interest-free account at the Federal
Reserve Bank of Atlanta. Reserve requirements and the amount of required
reserves is subject to adjustment by the FRB from time to time. The current rate
for reserves is 3% of a depository institution's transaction accounts (less
certain permissible deductions) up to $52 million, plus 10% of the amount over
$52 million.

LEGAL PROCEEDINGS

Neither Bancorp nor the Bank is involved in any legal proceedings except for
routine litigation incidental to the business of banking, none of which is
expected to have a material adverse effect on the Company.

EMPLOYEES

At December 31, 1996 the Company had 220 full-time employees. The Company's
employees are not represented by a collective bargaining group, and the
Company's considers its relations with its employees to be good.

PROPERTIES

The Company's operations are currently managed from their corporate
headquarters located in Miami, Florida, where a branch office is also located.
The Bank's other branch offices are located in Tampa, Winter Haven, Sarasota and
Miami, Florida, and the Bank has received OCC approval for a branch office in
West Palm Beach, Florida. Two of the facilities are owned by the Company and
four are leased (including the Company's headquarters).

The table below summarizes the Company's owned and leased facilities.

<TABLE>
<CAPTION>
TYPE OF APPROXIMATE LEASED
LOCATION FACILITY SQUARE FEET EXPIRATION DATE OR OWNED RENT
- ---------------------------- --------------- ------------- ------------------ ----------- ----------------------------
<S> <C> <C> <C> <C> <C>
Miami, Florida.............. Corporate 72,512 December 2006 Leased $76,227 per month(1) plus an
headquarters annual cost-of- living
and branch increase capped at 5%
Miami, Florida.............. Branch 3,050 January 2001 Leased $5,565 per month plus an
annual cost-of-living
increase capped at 5%
Tampa, Florida.............. Branch 2,975 October 2001 Leased $4,460 per month
Winter Haven, Florida....... Branch 4,500(2) -- Owned --
Miami, Florida.............. Branch 3,400 -- Owned --
Sarasota, Florida........... Branch 1,600 December 2006 Leased $4,000 per month + 3% annual
increase
West Palm Beach, Florida(3) Branch 5,040 March 2007 Leased $6,300 per month + 4% annual
increase
</TABLE>

- ------------------------
(1) Increasing to $91,664 per month in March 1997 and then $111,789 in January
1998, subject to adjustment as set forth above. The Bank sublets
approximately 4,150 square feet of its corporate headquarters for in excess
of $6,800 per month.
(2) Also includes one acre of land.

(3) Although this branch has not yet opened, a lease has been executed.

<PAGE>
MANAGEMENT

EXECUTIVE OFFICERS AND DIRECTORS

The executive officers and directors of the Company are as follows:

<TABLE>
<CAPTION>
NAME AGE POSITION WITH THE COMPANY
- -------------------------------------------- --- --------------------------------------------------------------
<S> <C> <C>

Eduardo A. Masferrer........................ 47 Chairman of the Board, President, Chief Executive Officer and
Director

Maura A. Acosta............................. 47 Executive Vice President and Director

J. Carlos Bernace........................... 36 Executive Vice President

J. Reid Bingham............................. 51 General Counsel and Secretary

Adolfo Martinez............................. 46 Senior Vice President--Capital Markets

Marquis H. Gilmore.......................... 60 Senior Vice President--Banking Relations

Maria Ferrer-Diaz........................... 33 Senior Vice President--Finance and Controller

John F. Stumpff............................. 49 Senior Vice President--Administration

Sergio Sotolongo............................ 44 Senior Vice President--International Banking Services

Rolando Ochoa............................... 53 Senior Vice President--Community Banking

William Alexander........................... 73 Director

Virgilo E. Sosa, Jr......................... 40 Director

Juan Miguel Capurro......................... 67 Director Nominee

William Bickford............................ 54 Director Nominee

Thomas F. Gaffney........................... 64 Director Nominee
</TABLE>

EDUARDO MASFERRER has served as the Company's Chairman of the Board since
1988 and as its President and Chief Executive Officer since 1990. Mr. Masferrer
has also served as a director of the Bank since his election in 1988. Prior to
joining the Company, Mr. Masferrer founded and from 1984 to 1988 served as the
General Manager of Banco del Istmo S.A., Panama, a full service commercial bank.
From 1976 to 1979, Mr. Masferrer served as the Deputy General Manager for Libra
Bank Limited, a merchant bank conducting lending and other credit activities in
Latin America, and from 1979 to 1984 as the President of Libra International
Bank, S.A., a subsidiary of Libra Bank Limited. Mr. Masferrer served as a Vice
President of Irving Trust Co., New York from 1973 to 1976. From 1970 to 1973,
Mr. Masferrer was the Regional Officer for Central America, Panama and the
Andean Pact for Bank of America International, New York. Mr. Masferrer is the
husband of Maura A. Acosta.

MAURA A. ACOSTA has served as an Executive Vice President of the Company
since 1993 and was a Senior Vice President of the Company from 1988 to 1993.
From 1984 to 1988, Ms. Acosta served as a Senior Vice President of the
International Division of Banco del Istmo S.A., Panama, a full service
commercial bank. From 1976 to 1984, Ms. Acosta was the head of the international
department for the Panamanian affiliate of Vereins-Und Westbank A.G., Panama.
During the period 1968 to 1976, Ms. Acosta held various positions with Citibank,
N.A., Panama, including Assistant Manager of Operations. Ms. Acosta is the wife
of Eduardo A. Masferrer.

J. CARLOS BERNACE has served as an Executive Vice President and Senior
Lending Officer of the Company since December 1996 and as Senior Vice
President-Manager of Corporate Trade Finance from

62
<PAGE>
1993 to 1996. In addition to the foregoing, during the period from 1989 through
1993, Mr. Bernace held various positions with the Company, including that of
Vice President. From 1987 through 1989, Mr. Bernace served as a corporate
banking officer for Intercontinental Bank, Miami. From 1986 to 1987, Mr. Bernace
served as the head of Credit Administration of The Bank of Boston in Panama.
From 1985 to 1986, Mr. Bernace served as the Deputy Manager--Colon Free Zone
Branch of Banco Continental in Panama.

J. REID BINGHAM has served as General Counsel and Secretary of the Company
since October 1996. Prior to joining the Company, Mr. Bingham was a partner in
the law firm of Concepcion, Sexton, Bingham & Urdaneta from 1994 to 1996,
Kirkpatrick & Lockhart from 1989 to 1994, Hughes Hubbard & Reed from 1987 to
1989 and Sage Gray Todd & Sims from 1976 to 1987, where he specialized in
international banking and corporate finance. Since 1991, Mr. Bingham has served
as a director of Johnson Industries, Inc., a publicly-held company engaged in
the manufacture of textile products.

ADOLFO MARTINEZ has served as Senior Vice President--Capital Markets of the
Company since 1991. From 1982 to 1991 Mr. Martinez served as a Vice President
and Head of Corporate Finance with the First National Bank of Chicago's, Mexico
City representative office. From 1973 to 1982, Mr. Martinez held various
positions with First Pennsylvania Bank, including Vice President and Head of
Correspondent Banking and Corporate Finance for Latin America.

MARQUIS H. GILMORE has served as Senior Vice President--Banking
Relationships of the Company since 1991. From 1986 to 1990 Mr. Gilmore served as
a Senior Vice President and Division Head, Latin America (South) for The Bank of
New York, as well as the General Manager and director of The Bank of New York,
S.A. (Argentina). From 1984 to 1986, Mr. Gilmore served as Senior Vice President
and Division Head, Latin America (South) for Irving Trust Company. During the
period 1963 to 1984, Mr. Gilmore held positions in various financial
institutions, including Senior Vice President and New York Agent for Banco
Internacional SNC, Vice President and Latin American Division Head for First
Pennsylvania Bank, N.A. and Assistant Vice President for Citibank N.A.

MARIA FERRER-DIAZ has served as Senior Vice President--Finance of the
Company since 1993. From 1992 to 1993 Ms. Diaz served as an accounting manager
at Motorola Nortel Communications, a telecommunications joint venture. Following
Ms. Diaz's service as a financial audit manager with Citibank Federal Savings
Bank from 1989 to 1992, Ms. Diaz was a partner in the firm of Cordero & Diaz
CPA. From 1986 to 1989, Ms. Diaz held several positions with Touche Ross & Co.,
including that of senior auditor.

JOHN F. STUMPFF has served as Senior Vice President--Administration of the
Company since 1993. From 1965 to 1992 Mr. Stumpff served in the United States
Coast Guard, attaining the rank of Captain.

SERGIO SOTOLONGO has served as Senior Vice President--International Banking
of the Company since March 1996. From 1993 to 1996 Mr. Sotolongo served as a
Senior Vice President and Deputy Manager of the international division of
Popular Bank of South Florida. From 1989 to 1993, Mr. Sotolongo served as a Vice
President and manager of private correspondent banking of Banco Internacional de
Costa Rica's Miami agency. Mr Sotolongo served as the Vice President of Latin
America and Caribbean correspondent banking for Citizens Southern International
Bank in Miami. From 1977 to 1985, Mr. Sotolongo held various positions with
Republic National Bank of New York and Citizens Southern National Bank.

ROLANDO OCHOA has served as Senior Vice President--Community Banking of the
Company since March 1996. From 1984 to 1996, Mr. Ochoa served in various
positions with Republic National Bank of Miami, including that of Senior Vice
President and Regional Manager. From 1980 to 1984, Mr. Ochoa served as a Vice
President and Branch Manager of Sun Bank/South Florida N.A. Prior to joining Sun
Bank/South Florida N.A., from 1976 to 1979, Mr. Ochoa served in various
capacities with Southeast Banking Corp. (now First Union) including that of
Systems Manager from 1978 to 1979 and Assistant Branch Manager from 1977 to
1978. In his role as Systems Manager, Mr. Ochoa was responsible for

63
<PAGE>
coordinating the operating systems of all branches located in Broward, Palm
Beach and Martin counties, Florida.

WILLIAM ALEXANDER has served as a Director of the Company since January
1997. In addition, Mr. Alexander has served as a director of the Bank since his
election in 1988. Mr. Alexander currently serves as a consultant to various
international air freight companies. From 1966 to 1990, Mr. Alexander was
employed as a pilot with Eastern Airlines, Inc. During his employment with
Eastern Airlines, Inc., Mr. Alexander served as a Special Advisor for Latin
American Affairs and was responsible for establishing new air routes in Latin
America and for expanding Eastern Airlines' western hemisphere network.

VIRGILO E. SOSA, JR. has served as a Director of the Company since January
1997. Mr. Sosa is an architect and since 1983 has served as the President of
Master Builder, Inc., a Panamanian construction company, and since 1993 as the
President of IDG, Inc., a Panamanian real estate holding company.

WILLIAM BICKFORD has been nominated and has agreed to become a Director of
the Company upon consummation of the Offering. Mr. Bickford is a civil engineer.
Since 1970, Mr. Bickford has served as the President of Consulta, a construction
and engineering firm located in Guatemela. In addition, since 1974 Mr. Bickford
has served as the President of Tritech, a distributor of industrial products in
Central America and Mexico. Additionally, since 1975 Mr. Bickford has served as
the President of Precon, a construction and engineering firm located in
Guatemala.

JUAN MIGUEL CAPURRO has been nominated and has agreed to become a Director
of the Company upon consummation of the Offering. Mr. Capurro has been actively
involved in the real estate development and construction industries since 1967
and currently serves as the President of, among other entities, various
companies engaged in real estate development and construction in Panama,
Venezuela and Ecuador. Mr. Capurro currently serves as a director of Banco
Banex, a Peruvian bank.

THOMAS F. GAFFNEY has been nominated and has agreed to become a Director of
the Company upon consummation of the Offering. Mr. Gaffney currently serves as a
director of various non-United States corporations and investment funds. From
1992 to 1995, Mr. Gaffney served as the London general manager of
Bankgesellshaft, Berlin and Landesbank, Berlin. From 1988 to 1991, Mr. Gaffney
served as Chief Executive and Managing Director of WestLB UK Limited, the
London-based investment banking division of Westdeutche Landesbank Girozentrale
of Germany. Prior to 1988, Mr. Gaffney held various positions with Chase
Manhattan Bank and/or its affiliates. Mr. Gaffney has been involved in
international banking for over 40 years.

Set forth below are descriptions of each of the directors of the Bank not
described above:

FAUSTO DIAZ-OLIVER has served as a director of the Bank since his election
in 1991. Since 1991 Mr. Diaz-Oliver has served as the Chief Operating Officer of
American International Container, Inc., a distributer and exporter of glass and
plastic containers. Mr. Diaz Oliver has been involved in the plastic and glass
container business for over twenty-five years.

RONALD E. FRAZIER has served as a director of the Bank since his election in
1988. Mr. Frazier is the founder and since its establishment in 1973 has served
as the President of Ronald E. Frazier & Associates, P.A., a consulting firm
specializing in architecture and urban design and planning.

RONALD A. LACAYO has served as a director of the Bank since his election in
1988. Since 1996, Mr. Lacayo has served as the President and Chief Executive
Officer of Crugerwets Capital Partners, Ltd., a financial consulting firm. Mr.
Lacayo is also the founder and since its establishment in 1985 has served as the
President and Chief Executive Officer of Rymel Corporation, a sportswear
manufacturer. In addition, since 1986, Mr. Lacayo has served as the Executive
Vice President of Matexpo Corporation, an industrial equipment and supplies
export trading firm. Since 1987, Mr. Lacayo has served as the President of The
Record Companies Group, a company organized under the laws of El Salvador.

64
<PAGE>
GEORGE A. LYALL has served as a director of the Bank since his election in
1988. Mr. Lyall has been involved in the aviation industry for over 30 years.
Since 1991, Mr. Lyall has served as the Chairman of the Board of Miami Air
International, a charter air carrier. From 1964 until 1991, Mr. Lyall was
employed by Eastern Airlines, serving from 1985 as Vice President-International
Operations responsible for operations in Central and South America and the
Caribbean.

LILLIAM S. MARTINEZ has served as a director of the Bank since her election
in 1990. Since 1996, Ms. Martinez has served as the President and Chief
Executive Officer of SM International Trade, Inc., a food industry consultant.
From 1987 to 1995, Ms. Martinez served as the President and Chief Executive
Officer of Molinera Foods, Inc. and Spanish Foods, Inc., an importer and
wholesaler of food products.

EDMUND MCCARTHY has served as a director of the Bank since his election in
1993. Since 1996, Mr. McCarthy has served as the President and Chief Executive
Officer of Financial Risk Management Advisors Co., a risk management consulting
firm to banks and bank holding companies. From 1991 to 1993, Mr. McCarthy served
as the Senior Vice President, Risk Management for Cullen/Frost Bankers, Inc.
where he was responsible for the development and implementation of comprehensive
risk management for a multi-bank holding company. From 1987 to 1991, Mr.
McCarthy served as a Vice President and Senior Credit Officer of Citicorp North
America, where he was responsible for the supervision of credit and marketing to
major bank holding companies throughout the United States.

DIRECTORS' COMPENSATION

To date, members of the Board of Directors of Bancorp have not received
compensation for their services as directors. Following the consummation of this
Offering, members of Bancorp's Board of Directors other than executive officers
will receive a quarterly retainer of $4,000 and a fee of $1,000 for each meeting
of the Board or committee attended in excess of regular quarterly meetings of
the Board and one meeting of each committee per year. The Company will continue
to reimburse all directors of Bancorp for all travel-related expenses incurred
in connection with their activities as directors. Directors of Bancorp are also
eligible to receive options under the 1993 Plan.

To date, the Bank's Board of Directors has been actively involved in the
Bank's business. As a result, historically, each member of the Bank's Board of
Directors has received a monthly retainer of $6,000 and a fee of $1,500 for each
meeting of the Board of Directors attended by such director. Among other things,
the Board of Directors meets at least once a month to review credit transactions
and the credit risk of the Bank's portfolio. In this regard, pursuant to the
Bank's credit policies and procedures, any extension of credit by the Bank in an
amount equal to or exceeding $500,000 to any corporate customer and $2 million
to any bank must be approved by the Board of Directors. In addition to the
monthly retainer and meeting fee, each Bank director who is a member of a
committee of the Board of Directors has received a fee of $1,000 for each
meeting of such committee attended by the director. Committees of the Board of
Directors include the Senior Loan Committee, the Loan Review Committee and the
Asset/Liability Management Committee, among others. The Bank also reimburses
directors for all travel-related expenses incurred in connection with their
activities as directors. For the year ended December 31, 1995 and 1996, the Bank
paid an aggregate of $812,000 and $999,000, respectively, in fees to its
directors. Directors of the Bank other than Eduardo A. Masferrer will continue
to receive retainers and fees for meetings of the Board of Directors and
committees thereof.

Each director of the Bank has received options to purchase 48,750 shares of
Common Stock under the 1993 Plan at $9.23 per share, other than Mr. McCarthy,
who has received options to purchase 45,000 shares at the same price.

COMMITTEES OF THE BOARD OF DIRECTORS

In connection with the Offering, the Company is forming two new committees
of the Board, the Audit Committee and the Compensation Committee. The members of
the Company's Audit Committee will

65
<PAGE>
initially be Messrs. Capurro, Bickford, Gaffney and Sosa. The Audit Committee's
functions will include recommending to the Board of Directors the engagement of
the Company's independent certified public accountants, reviewing with such
accountants the plan and results of their audit of the Company's financial
statements and determining the independence of such accountants. The members of
the Company's Compensation Committee will initially be Messrs. Capurro,
Bickford, Gaffney and Sosa. The Compensation Committee will review and make
recommendations with respect to compensation of officers and key employees,
including the grant of options under the 1993 Plan.

EXECUTIVE COMPENSATION

The following table sets forth the compensation paid by the Company, for
services rendered during the past year to the five most highly compensated
executive officers (the "Named Officers") of Bancorp and/or the Bank.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
ANNUAL COMPENSATION -------------
----------------------------------- SECURITIES
OTHER ANNUAL UNDERLYING ALL OTHER
NAME AND SALARY BONUS COMPENSATION OPTIONS(1) COMPENSATION
PRINCIPAL POSITION YEAR ($) ($) ($) # ($)
- ----------------------------------------------- --------- --------- --------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>

Eduardo A. Masferrer........................... 1996 550,000 891,410 100,400(1) 48,750 2,375(2)
Chairman of the Board, President and Chief
Executive Officer

Maura Acosta................................... 1996 160,000 46,000 --(3) 48,750 2,375(2)
Executive Vice President

J. Carlos Bernace.............................. 1996 125,000 46,000 --(3) 48,750 2,375(2)
Executive Vice President

Maria Ferrer-Diaz.............................. 1996 94,500 40,000 --(3) 9,750 2,020(2)
Senior Vice President of the Bank

Marquis H. Gilmore............................. 1996 123,000 5,000 --(3) 3,250 953(2)
Senior Vice President of the Bank
</TABLE>

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

(1) Represents Bank director fees paid to Mr. Masferrer during 1996.

(2) Represents matching and additional contributions made by the Company under
its 401(k) plan.

(3) The aggregate amount of perquisites and other personal benefits provided to
such Named Officer is less than 10% of the total annual salary and bonus of
such officer.

COMPANY BONUS POLICY

Historically, the Company has distributed an aggregate of 11% of the
Company's pre-tax net income, after the deduction of loan loss provisions
("Available Pre-Tax Net Income"), to its executive officers and other employees
as bonuses. Five percent of the Available Pre-Tax Net Income has historically
been distributed to Eduardo A. Masferrer, the Company's Chairman of the Board,
President and Chief Executive Officer. The remaining 6% of the Available Pre-Tax
Net Income has historically been distributed to other employees based upon and
in accordance with the following criteria: (i) each employee whose job
performance was satisfactory or better, as determined by an appropriate
department head, has received a bonus equal to two weeks' salary and (ii) each
employee whose quarterly job performance is significantly above average, as
determined by an appropriate department head, has received an additional bonus
equal to one week's salary for each quarter in which such a review is received.
Any remaining Available Pre-Tax

66
<PAGE>
Net Income has been distributed to those employees who have made superior
contributions to the Company during the year as determined by the Company's
Personnel Management Committee. During the year ended December 31, 1996, $1.57
million of Available Pre-Tax Net Income was distributed pursuant to the
Company's bonus plan.

Following the consummation of the Offering, the bonus pool, if any, will be
determined on a yearly basis. Although the Company presently intends to maintain
its existing bonus policy, the Company intends to reduce the bonus pool to 9% of
the Company's Available Pre-Tax Net Income, thereby reducing the bonus to be
paid to Eduardo A. Masferrer, the Company's Chairman of the Board, President and
Chief Executive Officer, to 3% of the Company's Available Pre-Tax Net Income for
1997.

COMPANY STOCK OPTION PLAN

In December, 1993, the Company adopted the 1993 Stock Option Plan (the "1993
Plan"), pursuant to which 877,500 shares of Common Stock are currently reserved
for issuance upon exercise of options. The 1993 Plan is designed as a means to
retain and motivate key employees and directors. The Company's Compensation
Committee, or in the absence thereof, the Board of Directors, administers and
interprets the 1993 Plan and is authorized to grant options thereunder to all
eligible employees of the Company, including executive officers and directors
(whether or not they are employees) of the Company or affiliated companies.
Options granted under the 1993 Plan are on such terms and at such prices as
determined by the Compensation Committee, except that the per share exercise
price of incentive stock options cannot be less than the fair market value of
the Common Stock on the date of grant. Each option is exercisable after the
period or periods specified in the option agreement, but no option may be
exercisable after the expiration of ten years from the date of grant. The 1993
Plan will terminate on December 3, 2003, unless sooner terminated by the
Company's Board of Directors. Options granted to an individual who owns (or is
deemed to own) at least 10% of the total combined voting power of all classes of
stock of the Company or its subsidiary must have an exercise price of at least
110% of the fair market value of the Common Stock on the date of grant, and a
term of no more than five years. The 1993 Plan also authorizes the Company to
make or guarantee loans to optionees to enable them to exercise their options.
Such loans must (i) provide for recourse to the optionee, (ii) bear interest at
a rate not less than the prime rate of interest, and (iii) be secured by the
shares of Common Stock purchased. The Board of Directors has the authority to
amend or terminate the 1993 Plan, provided that no such amendment may impair the
rights of the holder of any outstanding option without the written consent of
such holder, and provided further that certain amendments of the 1993 Plan are
subject to shareholder approval. In this regard, the Company is amending the
1993 Plan for the purpose of bringing the plan within compliance with certain
rules and regulations promulgated under the Act. At the date of consummation of
this Offering, the Company will have outstanding under the 1993 Plan options to
purchase an aggregate of 585,000 shares at $9.23 per share, all of which were
issued in November 1996 and none of which will be exercisable until February
1998. The exercise price of all options granted under the 1993 Plan were at
least equal to the fair market value of the Common Stock on the date of grant as
determined by the Company's Board of Directors. At the date of consummation of
this Offering, 292,500 shares of Common Stock will be available for future
grants under the 1993 Plan.

The following table sets forth certain information with respect to options
to purchase shares of Common Stock granted under the Company's 1993 Plan to the
Named Officers during the year ended December 31, 1996, and represents all
options granted by the Company to such Named Officers for the period. In
accordance with rules of the Securities and Exchange Commission, the table also
describes the hypothetical gains that would exist for the respective options
granted based on assumed rates of annual compounded stock appreciation of 5% and
10% from the date of grant to the end of the option term. These hypothetical
gains are based on assumed rates of appreciation and, therefore, the actual
gains, if any, on stock option exercises are dependent on the future performance
of the Common Stock, overall stock market conditions, and the Named Officer's
continued employment with the Company. As a result, the amounts reflected in
this table may not necessarily be achieved.

67
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR

<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF STOCK
PRICE APPRECIATION FOR
INDIVIDUAL GRANTS OPTION TERM
- ------------------------------------------------------------------------------------------------- ----------------------
<S> <C> <C> <C> <C> <C> <C>
NUMBER OF
SECURITIES % OF TOTAL
UNDERLYING OPTIONS GRANTED EXERCISE
OPTION TO EMPLOYEES IN PRICE EXPIRATION
NAME GRANTED(#) FISCAL YEAR ($/SH) DATE 5% 10%
- ----------------------------------- ------------- ------------------- ----------- ----------- ---------- ----------

Eduardo A. Masferrer............... 48,750 8.3% $ 9.23 11/8/06 $ 282,750 $ 717,113

Maura Acosta....................... 48,750 8.3% $ 9.23 11/8/06 $ 282,750 $ 717,113

J. Carlos Bernace.................. 48,750 8.3% $ 9.23 11/8/06 $ 282,750 $ 717,113

Maria Ferrer-Diaz.................. 9,750 1.7% $ 9.23 11/8/06 $ 56,550 $ 143,423

Marquis H. Gilmore................. 3,250 0.6% $ 9.23 11/8/06 $ 18,850 $ 47,808
</TABLE>

401(K) PLAN

The Company maintains a 401(k) plan for its executive officers and other
employees. Under the terms of the 401(k) plan, for each dollar contributed by an
employee, the Company intends to contribute a discretionary amount on behalf of
the participant (the "Matching Contribution"). In addition, at the end of the
plan year, the Company may make an additional contribution (the "Additional
Contribution") on behalf of participants. Additional Contributions are allocated
in the same proportion that the Matching Contribution made on the participant's
behalf bears to the Matching Contribution made on behalf of all participants
during the year. The amount that the Company contributes to the 401(k) plan has
historically varied from year to year. During the year ended December 31, 1996,
the Company made a $.25 Matching Contribution on behalf of each participant in
the aggregate amount of $52,362.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Historically, compensation of the Bank's executive officers has been
established at the Bank level by the Compensation Committee of the Bank's Board
of Directors. Eduardo A. Masferrer, the Chairman of the Board of Directors of
the Bank, participated in deliberations concerning compensation of the executive
officers during 1996. Mr. Masferrer's compensation has historically been
determined by the Compensation Committee of the Bank's Board of Directors. The
Company's Compensation Committee will determine the compensation of executive
officers of the Company on a going-forward basis.

CERTAIN TRANSACTIONS

From time to time, the Bank makes loans and extends credit to certain of the
Company's and/or the Bank's officers and directors and to certain companies
affiliated with such persons. In the opinion of the Company, all of such loans
and extensions of credit were made in the ordinary course of business, on
substantially the same terms, including interest rates and collateral, as those
prevailing at the time for comparable transactions with other third parties. At
December 31, 1994, 1995 and 1996, an aggregate of $10.8 million, $6.3 million
and $5.8 million, respectively, of loans and extensions of credit were
outstanding to certain officers and directors of the Company (including director
nominees) and/or the Bank and to certain companies affiliated with such persons.

68
<PAGE>
PRINCIPAL SHAREHOLDERS

The following table sets forth information concerning the beneficial
ownership of the Common Stock immediately prior to this Offering after giving
effect to the Reorganization and the Stock Split, and as adjusted to reflect the
issuance by the Company of the shares offered in the Offering (assuming no
exercise of the Underwriters' over-allotment option) by (i) each director or
nominee for director, (ii) each person known to the Company to be the beneficial
owner of more than 5% of its outstanding Common Stock, (iii) each of the Named
Officers, and (iv) all directors and executive officers of the Company as a
group.

<TABLE>
<CAPTION>
PERCENTAGE OF OUTSTANDING SHARES
OWNED
AMOUNT AND NATURE OF ----------------------------------
NAME OF BENEFICIAL OWNER (1) BENEFICIAL OWNERSHIP BEFORE OFFERING AFTER OFFERING
- ------------------------------------------------------- -------------------- ----------------- ---------------
<S> <C> <C> <C>
Eduardo A. Masferrer................................... 1,072,878(2) 15.2% 11.8%
Maura A. Acosta........................................ 17,687(3) * *
J. Carlos Bernace...................................... --(4) -- --
Maria Ferrer-Diaz...................................... --(5) -- --
Marquis H. Gilmore..................................... --(6) -- --
William Alexander...................................... 4,329(7) * *
Virgilo E. Sosa, Jr.................................... 257,518(8) 3.6% 2.8%
William Bickford....................................... 324,019(9) 4.6% 3.6%
Juan Miguel Capurro.................................... 397,866(10) 5.6% 4.4%
Thomas F. Gaffney...................................... -- -- --
Intercredit Finance Group Inc.......................... 488,411 6.9% 5.4%
Ricardo Chiari......................................... 432,837(11) 6.1% 4.8%
Urraca Investment Corporation.......................... 372,002 5.3% 4.1%
Groupo Dayan de Panama(12)............................. 377,248(13) 5.3% 4.2%
All Directors (including Director nominees) and
executive officers of the Company as a group,
including those listed above (15 persons)............ 2,056,610(14) 29.1% 22.7%
</TABLE>

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

* Less than 1%

(1) Unless otherwise indicated, the address of each of the beneficial owners
identified is 3750 N.W. 87th Avenue, Miami, Florida 33178.

(2) Includes 17,687 shares of Common Stock held by Mr. Masferrer and his wife,
Maura A. Acosta, as joint tenants with rights of survivorship. Does not
include 48,750 shares of Common Stock issuable upon the exercise of options
granted to Mr. Masferrer under the 1993 Plan, which options are not
currently exercisable.

(3) Represents shares of Common Stock held by Ms. Acosta and her husband,
Eduardo A. Masferrer, as joint tenants with rights of survivorship. Does not
include 1,055,191 shares of Common Stock held by Eduardo A. Masferrer. Also
does not include 48,750 shares of Common Stock issuable upon the exercise of
options granted to Ms. Acosta under the 1993 Plan, which options are not
currently exercisable.

(4) Does not include 48,750 shares of Common Stock issuable upon the exercise of
options granted to Mr. Bernace under the 1993 Plan, which options are not
currently exercisable.

(5) Does not include 9,750 shares of Common Stock issuable upon the exercise of
options granted to Ms. Ferrer-Diaz under the 1993 Plan, which options are
not currently exercisable.

(6) Does not include 3,250 shares of Common Stock issuable upon the exercise of
options granted to Mr. Gilmore under the 1993 Plan, which options are not
currently exercisable.

(7) Does not include 48,750 shares of Common Stock issuable upon the exercise of
options granted to Mr. Alexander under the 1993 Plan, which options are not
currently exercisable.

(8) Includes 144,509 shares of Common Stock held by VES Ventures Inc., a
Panamanian corporation, of which Mr. Sosa is principal shareholder.

69
<PAGE>
(9) Represents 324,019 shares of Common Stock held by Iberoamerican Financial
Corporation, a Panamanian corporation, of which Mr. Bickford is a
significant shareholder.

(10) Includes (i) 18,421 shares of Common Stock held by Mr. Capurro's wife and
(ii) 378,580 shares of Common Stock held by Jotaeme Holding Ltd., a Turks &
Caicos Islands corporation, of which Mr. Capurro is a principal shareholder.

(11) Represents (i) 328,628 shares of Common Stock held by Valores Eastern,
S.A., a Panamanian corporation, and (ii) 104,209 shares of Common Stock held
by Balkam, S.A., a Panamanian corporation, of each of which Ricardo Chiari
is principal shareholder.

(12) Such shares are owned by a group of corporations controlled by David Dayan,
Raymond Dayan and/or Alberto R. Dayan.

(13) Represents (i) 233,078 shares of Common Stock held by Excellent Investment
Co., S.A., a Panamanian corporation, of which Raymond Dayan and Alberto R.
Dayan are principal shareholders, (ii) 116,532 shares of Common Stock held
by Davisac Investments, S.A., a Panamanian corporation of which David Dayan
is a principal shareholder and (iii) 27,638 shares of Common Stock held by
Lindaray, S.A., a Panamanian corporation of which Raymond Dayan is a
principal shareholder.

(14) Does not include an aggregate of 253,500 shares of Common Stock issuable
upon the exercise of options granted under the 1993 Plan which are not
currently exercisable. See footnotes (2)-(10) above.

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<PAGE>
DESCRIPTION OF CAPITAL STOCK

The Company's authorized capital stock consist of 75,000,000 shares of
Common Stock, $.01 par value, and 10,000,000 shares of Preferred Stock, par
value $.01 per share. After giving effect to a 6.5-for-one stock split, an
aggregate of 7,067,949 shares of Common Stock are outstanding. See "Principal
Shareholders." As a result of the completion of the Reorganization, no shares of
Preferred Stock are issued and outstanding. The following brief description of
the Company capital stock does not purport to be complete and is subject in all
respects to applicable Florida law and the provisions of the Company's Articles
of Incorporation (the "Articles") and Bylaws, copies of which have been filed as
exhibits to the Registration Statement of which this Prospectus is a part.

COMMON STOCK

Holders of Common Stock are entitled to one vote per share on all matters
submitted to a vote of shareholders, including the election of directors. The
Common Stock does not have cumulative voting rights, which means that the
holders of a majority of the shares voting for election of directors can elect
all members of the Board of Directors. A majority of the shares voting is also
required for other actions that require the vote of shareholders except where
otherwise required by law. For example, certain corporate actions such as
mergers require the approval of a majority of the shares outstanding. Dividends
may be paid to holders of Common Stock when and if declared by the Board of
Directors out of funds legally available therefor. See "Dividend Policy." Upon
liquidation or dissolution of the Company, holders of Common Stock will be
entitled to share ratably in the assets of the Company legally available for
distribution to shareholders.

The holders of Common Stock have no preemptive or conversion rights and are
not subject to further calls or assessments by the Company.

PREFERRED STOCK

Although the Company has no present plans to issue shares of Preferred
Stock, Preferred Stock may be issued from time to time in one or more classes or
series with such designations, powers, preferences, rights, qualifications,
limitations and restrictions as may be fixed by the Company's Board of
Directors. The Board of Directors, without obtaining shareholder approval, could
issue the Preferred Stock with voting and/or conversion rights and thereby
dilute the voting power and equity of the holders of Common Stock and adversely
effect the market price of such stock. The issuance of Preferred Stock could
also be used as an antitakeover measure by the Company without any further
action by the shareholders.

In 1994, the Company issued an aggregate of 60,206.5 shares of Series B and
41,000 shares of Series C Fixed Rate Non-Voting, Non-Cumulative, Perpetual
Preferred Stock (collectively, the "Preferred Stock"). The Preferred Stock has a
stated value of $50.00 per share (the "Stated Value") and entitles each holder
thereof to receive quarterly dividends at an annual rate of 14% of such Stated
Value. Pursuant to the applicable Certificates of Designation respecting the
Preferred Stock, the Company has the right, commencing five years from the date
of issuance, to call and redeem all or part of the outstanding shares of
Preferred Stock at 125% of the Stated Value. The Certificates of Designation
also authorize the holders thereof to convert all or some of their shares of
Preferred Stock or require the Company to convert all of the shares of Preferred
Stock into shares of the Company's Common Stock upon the occurrence of certain
events. Pursuant to these rights and obligations, the Preferred Stock would be
converted into a number of shares of Common Stock determined by dividing (a) the
aggregate Stated Value of the Preferred Stock held by each shareholder by (b)
the product of (1) 1.85 and (2) the adjusted per share equity value of the
Common Stock. The holders of the Preferred Stock consented to a provision in the
Certificates of Designation authorizing the Company to redeem their shares of
Preferred Stock upon five days notice at the Company's discretion. In connection
with the Reorganization, in March 1997 the Company converted the Preferred Stock
into shares of Common Stock.

71
<PAGE>
ANTI-TAKEOVER EFFECTS OF CERTAIN PROVISIONS OF FLORIDA LAW, FEDERAL BANKING LAW
AND THE COMPANY'S ARTICLES OF INCORPORATION AND BYLAWS

The Company is subject to (i) the Florida Control Share Act, which generally
provides that shares acquired in excess of certain specified thresholds will not
possess any voting rights unless such voting rights are approved by a majority
vote of the corporation's disinterested shareholders, and (ii) the Florida Fair
Price Act, which generally requires supermajority approval by disinterested
directors or shareholders of certain specified transactions between a
corporation and holders of more than 10% of the outstanding shares of the
corporation (or their affiliates).

In addition, certain provisions of the Company's Articles of Incorporation
summarized in the following paragraphs may be deemed to have an anti-takeover
effect and may delay, defer or prevent a tender offer or takeover attempt that a
shareholder might consider in its best interest, including those attempts that
might result in a premium over the market price for the shares held by
shareholders.

BOARD OF DIRECTORS. The Articles authorize a majority of the Board of
Directors or the holders of a majority of the shares of Common Stock to fill
vacant directorships or increase the size of the Board. This provision may deter
a shareholder from removing incumbent directors and simultaneously gaining
control of the Board of Directors by filling the vacancies created by such
removal with its own nominees.

SPECIAL MEETINGS. The Articles and Bylaws provide that special meetings of
shareholders may be called only by the Board of Directors or upon the written
demand of the holders of not less than 30% of the votes entitled to be cast at a
special meeting.

ACTION OF SHAREHOLDERS. The Articles and Bylaws provide that any required
vote of shareholders of the Company must be taken at a meeting duly called and
held, and may not be taken by written consent in lieu of a meeting.

AUTHORIZED BUT UNISSUED SHARES. The authorized but unissued shares of
Common Stock and Preferred Stock are available for future issuance without
shareholder approval (subject to certain limitations under the rules of NASDAQ).
If issued, these additional shares may be utilized for a variety of corporate
purposes, including future public offerings to raise additional capital,
corporate acquisitions and employee benefit plans. The existence of authorized
but unissued and unreserved Common Stock and Preferred Stock may enable the
Board of Directors to issue shares to persons friendly to current management
which could render more difficult or discourage an attempt to obtain control of
the Company by means of a proxy contest, tender offer, merger or otherwise, and
thereby protect the continuity of the Company's management.

ANTI-TAKEOVER EFFECT OF CERTAIN PROVISIONS OF FEDERAL BANKING LAW. Because
Bancorp is a bank holding company, any person or entity which acquires 10% or
more of any class of its voting stock (5% in the case of a person which is
itself a bank holding company) will need prior approval from the FRB under the
Federal Change in Bank Control Act. Furthermore, any entity which acquires 25%
or more of any class of Bancorp's voting stock will likely itself become a bank
holding company, subject to the restrictions of, and to regulation by, the FRB
under the BHC Act. These provisions may restrict the number of shares of Bancorp
that any investor may seek to acquire.

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar of the Common Stock will be Chase/Mellon
Shareholder Services L.L.C.

72
<PAGE>
SHARES ELIGIBLE FOR FUTURE SALE

Upon consummation of this Offering, the Company will have 9,067,949 shares
of Common Stock outstanding (9,367,949 shares if the over-allotment option is
exercised in full). Of those shares, the 2,000,000 shares sold in this Offering
(2,300,000 shares if the over-allotment option is exercised in full) will be
freely transferable without restriction or registration under the Act, unless
purchased by persons deemed to be "affiliates" of the Company (as that term is
defined under the Act). The remaining 7,067,949 shares of Common Stock
outstanding immediately following the Offering ("restricted shares") may only be
sold in the public market if such shares are registered under the Act or sold in
accordance with Rule 144 promulgated under the Act.

In general, under Rule 144, as recently amended, commencing on April 29,
1997, a person (or persons whose shares are aggregated) including an affiliate,
who has beneficially owned his shares for one year, may sell in the open market
within any three-month period a number of shares that does not exceed the
greater of (i) 1% of the then outstanding shares of the Company's Common Stock
(approximately 90,679 shares immediately after this Offering, 93,679 if the
over-allotment option is exercised in full) or (ii) the average weekly trading
volume in the Common Stock in the over-the-counter market during the four
calendar weeks preceding such sale. Sales under Rule 144 are also subject to
certain limitations on the manner of sale, notice requirements and availability
of current public information about the Company. Pursuant to the amendment, a
person (or persons whose shares are aggregated) who is deemed not to have been
an "affiliate" of the Company at any time during the 90 days preceding a sale by
such person and who has beneficially owned his shares for at least two years,
will be able to sell such shares in the public market under Rule 144(k) without
regard to the volume limitations, manner of sale provisions, notice requirements
or availability of current information referred to above. Restricted shares
properly sold in reliance upon Rule 144 are thereafter freely tradeable without
restrictions or registration under the Act, unless thereafter held by an
"affiliate" of the Company.

The Company has reserved an aggregate of 877,500 shares of Common Stock for
issuance pursuant to the 1993 Plan. Options to purchase 585,000 shares of Common
Stock, which are not exercisable until February 1998, have been issued under the
1993 Plan at an exercise price of $9.23 per share, the fair market value on the
date of grant as determined by the Company's Board of Directors. The Company
intends to register eligible shares of Common Stock issuable upon the exercise
of options under the 1993 Plan on Form S-8 following this Offering. Subject to
restrictions imposed pursuant to the 1993 Plan, such eligible shares of Common
Stock issued pursuant to the 1993 Plan after the effective date of any
Registration Statement on Form S-8 will be available for sale in the public
market without restriction to the extent they are held by persons who are not
affiliates of the Company, and by affiliates pursuant to Rule 144. See
"Management--Stock Option Plan."

Prior to this Offering, there has been no trading market for the Common
Stock. No prediction can be made as to the effect, if any, that future sales of
shares pursuant to Rule 144 or otherwise will have on the market price
prevailing from time to time. Sales of substantial amounts of the Common Stock
in the public market following this Offering could adversely affect the then
prevailing market price. Substantially all of the Company's existing
shareholders have agreed that they will not sell or otherwise transfer any
shares of Common Stock to the public for 180 days after this Offering without
the prior written consent of Oppenheimer & Co., Inc. See "Underwriting."

73
<PAGE>
UNDERWRITING

Subject to the terms and conditions of the Underwriting Agreement between
the Company and the Underwriters named below (the "Underwriting Agreement"), for
whom Oppenheimer & Co., Inc. and NatWest Securities Limited are acting as
representatives (the "Representatives"), the Underwriters have severally agreed
to purchase from the Company, and the Company has agreed to sell to the
Underwriters, the number of shares of Common Stock set forth opposite their
respective names:

<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITER SHARES
- ------------------------------------------------------------------------------------------- ----------
<S> <C>
Oppenheimer & Co., Inc.....................................................................
NatWest Securities Limited.................................................................

----------
Total...................................................................................... 2,000,000
----------
----------
</TABLE>

The Underwriters will be obligated to purchase all of the shares of Common
Stock offered (other than the shares covered by the over-allotment option
described below) if any are purchased.

The Underwriters propose to offer the shares of Common Stock directly to the
public at the public offering price set forth on the cover page of this
Prospectus, and at such price less a concession not in excess of $ per
share. The Underwriters may allow, and such dealers may reallow, concessions not
in excess of $ per share on sales to other brokers or dealers. After the
initial public offering, the public offering price, concession and reallowance
to brokers or dealers may be changed by the Representatives.

In order to facilitate the Offering, the Underwriters may engage in
transactions that stabilize, maintain or otherwise affect the price of the
Common Stock. Specifically, the Underwriters may over-allot in connection with
the Offering, creating a short position in the Common Stock for their own
account. In addition, to cover over-allotments or to stabilize the price of the
Common Stock, the Underwriters may bid for and purchase, shares of Common Stock
in the open market. Finally, the underwriting syndicate may reclaim selling
concessions allowed to an underwriter or a dealer for distributing the Common
Stock in the Offering, if the syndicate repurchases previously distributed
Common Stock in transactions to cover syndicate short positions, in
stabilization transactions or otherwise. Any of these activities may stabilize
or maintain the market price of the Common Stock above independent market
levels. The Underwriters are not required to engage in these activities, and may
end any of these activities at any time.

The Underwriters have been granted a 30-day over-allotment option to
purchase from the Company up to an aggregate of 300,000 additional shares of
Common Stock exercisable from time to time at the public offering price less the
underwriting discount. If the Underwriters exercise such over-allotment option,
then each of the Underwriters will be obligated, subject to certain conditions,
to purchase the same proportion thereof as the number of shares of Common Stock
to be purchased by it as shown in the above table bears to the shares of Common
Stock offered hereby. The Underwriters may exercise such option only to cover
over-allotments made in connection with the sale of Common Stock offered hereby.

The Company has agreed to indemnify the Underwriters against certain
liabilities, losses and expenses, including liabilities under the Act, and to
contribute to payments that the Underwriters may be required to make in respect
thereof.

74
<PAGE>
NatWest Securities Limited, a United Kingdom broker-dealer and a member of
the Securities and Futures Authority Limited, has agreed that, as part of the
distribution of the Common Stock offered hereby and subject to certain
exceptions, it will not offer or sell any Common Stock within the United States,
its territories or possessions, or to persons who are citizens thereof or
residents therein. The Underwriting Agreement does not limit sale of the Common
Stock offered hereby outside of the United States.

NatWest Securities Limited has represented and agreed that (i) it has not
offered or sold and will not offer or sell any shares of Common Stock to persons
in the United Kingdom except to persons whose ordinary activities involve them
in acquiring, holding, managing or disposing of investments (as principal or
agent) for the purpose of their businesses or otherwise in circumstances which
have not resulted and will not result in an offer to the public in the United
Kingdom within the meaning of the Public Offers of Securities Regulations 1995
or the Financial Services Act 1986 (the "FSA Act"), (ii) it has complied and
will comply with all applicable provisions of the FSA Act with respect to
anything done by it in relation to the shares of Common Stock in, from or
otherwise involving the United Kingdom, and (iii) it has only issued or passed
on, and will only issue or pass on, in the United Kingdom any document received
by it in connection with the issue of the shares of Common Stock, other than any
document which consists of or any part of listing particulars, supplementary
listing particulars, or any other document required or permitted to be published
by listing rules under Part IV of the FSA Act, to a person who is of a kind
described in Article 11(3) of the Financial Services Act 1986 (Investment
Advertisements) (Exemptions) Order 1995 or is a person to whom the document may
otherwise lawfully be issued or passed on.

The Company and the officers and directors of the Company and the Bank and
certain shareholders have agreed that they will not sell, offer to sell,
contract to sell, distribute, transfer, grant any option for the sale of or
otherwise dispose of, directly or indirectly, any shares of Common Stock, any
securities convertible into, exercisable for or exchangeable for Common Stock or
any rights to purchase or acquire Common Stock for a period of 180 days after
the date of this Prospectus without the prior written consent of Oppenheimer &
Co., Inc., except for the shares offered hereby and the issuance of shares upon
exercise of options granted under the Company's stock option plan. See "Shares
Eligible for Future Sale."

Prior to this Offering, there has been no public market for the Common
Stock. The initial public offering price of the Common Stock offered hereby has
been determined by negotiation between the Company and the Representatives. The
matters considered in determining the initial public offering price include the
history of and prospects for the industry in which the Company and the Bank
compete, the ability of the Company's management, the past and present
operations of the Company and the Bank, the historical results of operations of
the Company, the prospects for further earnings of the Company, the general
condition of the securities markets at the time of the offering and the prices
of similar securities of generally comparable companies. There can be no
assurance that an active or orderly trading market will develop for Common Stock
or that the Common Stock will trade in the public market subsequent to the
offering at or above the initial public trading price. The Common Stock has been
approved for quotation on the Nasdaq National Market System under the symbol
"HABK."

The Underwriters do not intend to confirm sales to accounts over which they
exercise discretionary authority.

CERTAIN UNITED STATES TAX CONSEQUENCES TO NON-UNITED STATES HOLDERS

The following is a general discussion of the Company's understanding after
consultation with counsel of certain United States federal income and estate tax
consequences of the ownership and disposition of Common Stock by a "Non-U.S.
Holder" and is included in this Prospectus because a substantial number of
"Non-U.S. Holders" hold and are expected to continue to hold Common Stock. For
this purpose, a "Non-U.S. Holder" is any person who is, for United States
federal income tax purposes, a foreign corporation, a non-resident alien
individual, a foreign partnership or a foreign estate or trust. United States
citizens

75
<PAGE>

should not rely on this discussion. This discussion does not address all aspects
of United States federal income and estate taxes and does not deal with foreign,
state and local consequences that may be relevant to such Non-U.S. Holders in
light of their personal circumstances. This discussion also does not address tax
consequences to United States citizens or residents, which consequences are no
different than those associated with the purchase of Common Stock in any United
States corporation. Furthermore, this discussion is based on provisions of the
Internal Revenue Code of 1986, as amended (the "Code"), existing and proposed
regulations promulgated thereunder and administrative and judicial
interpretations thereof, as of the date hereof, all of which are subject to
change. Each prospective purchaser of Common Stock is advised to consult a tax
advisor with respect to current and possible future tax consequences of
acquiring, holding and disposing of Common Stock as well as any tax consequences
that may arise under the laws of any state, municipality or other taxing
jurisdiction of the United States.

DIVIDENDS

The Company does not currently pay cash dividends on its Common Stock and
does not anticipate paying cash dividends on its Common Stock in the foreseeable
future. See "Dividend Policy." Dividends paid to a Non-U.S. Holder of Common
Stock generally will be subject to withholding of United States federal income
tax at a 30% rate or such lower rate as may be specified by an applicable income
tax treaty. However, dividends that are effectively connected with the conduct
of a trade or business by the Non-U.S. Holder within the United States are not
subject to the withholding tax, but instead are subject to United States federal
income tax on a net income basis at applicable graduated individual or corporate
rates. Any such effectively connected dividends received by a foreign
corporation may, under certain circumstances, be subject to an additional
"branch profits tax" at a 30% rate or such lower rate as may be specified by an
applicable income tax treaty.

Under current law, dividends paid to an address outside the United States
are presumed to be paid to a resident of such country (unless the payor has
knowledge to the contrary) for purposes of the withholding tax discussed above
and, under the current interpretation of United States Treasury regulations, for
purposes of determining the applicability of a tax treaty rate. A Non-U.S.
Holder of Common Stock eligible for a reduced rate of United States withholding
tax pursuant to an income tax treaty may obtain the benefit of the reduced rate
by providing a properly executed copy of IRS Form 1001 to the person remitting
the dividend to it or may obtain a refund of any excess amounts withheld by
filing an appropriate claim for refund with the United States Internal Revenue
Service (the "IRS"). Under proposed United States Treasury regulations not
currently in effect, a Non-U.S. Holder of Common Stock who wishes to claim the
benefit of an applicable treaty rate (and avoid back-up withholding as discussed
below) would be required to satisfy applicable certification and other
requirements. Currently, certain certification and disclosure requirements must
be complied with in order to be exempt from withholding under the effectively
connected income exemption discussed above.

GAIN ON DISPOSITION OF COMMON STOCK

A Non-U.S. Holder generally will not be subject to United States federal
income tax with respect to gain recognized on a sale or other disposition of
Common stock unless (i) the gain is effectively connected with a trade or
business of the Non-U.S. Holder in the United States, (ii) in the case of a
Non-U.S. Holder who is an individual and holds the Common Stock as a capital
asset, such holder is present in the United States for 183 or more days in the
taxable year of the sale or other disposition and certain other conditions are
met, or (iii) the Company is or has been a "U.S. real property holding
corporation" for United States federal income tax purposes.

An individual Non-U.S. Holder described in clause (i) above will be subject
to tax on the net gain derived from the sale under regular graduated United
States federal income tax rates. An individual Non-U.S. Holder described in
clause (ii) above will be subject to a flat 30% tax on the gain derived from the
sale, which may be offset by United States source capital losses (even though
the individual is not

76
<PAGE>
considered a resident of the United States). If a Non-U.S. Holder that is a
foreign corporation falls under clause (i) above, it will be subject to tax on
its gain under regular graduated United States federal income tax rates and, in
addition, such gain may, under certain circumstances, be subject to an
additional "branch profits tax" at a 30% rate or such lower rate as may be
specified by an applicable income tax treaty.

The Company is not currently and does not anticipate becoming a "U.S. real
property holding corporation" for United States federal income tax purposes.

FEDERAL ESTATE TAX

Common Stock held by an individual Non-U.S. Holder at the time of death will
be included in such holder's gross estate for United States federal estate tax
purposes, unless an applicable estate tax treaty provides otherwise.

INFORMATION REPORTING AND BACKUP WITHHOLDING

The Company must report annually to the IRS and to each Non-U.S. Holder the
amount of dividends paid to such holder and the tax withheld with respect to
such dividends, regardless of whether withholding was required. Copies of the
information returns reporting such dividends and withholding may also be made
available to the tax authorities in the country in which the Non-U.S. Holder
resides under the provisions of an applicable income tax treaty or information
exchange agreement.

Under current law, backup withholding at the rate of 31% generally will not
apply to dividends paid to a Non-U.S. Holder at an address outside the United
States (unless the payer has knowledge that the payee is a United States
person). Under proposed United States Treasury regulations not currently in
effect, however, a Non-U.S. Holder will be subject to back-up withholding unless
applicable certification requirements are met.

Payment of the proceeds of a sale of Common Stock by or through a United
States office of a broker is subject to both backup withholding and information
reporting unless the beneficial owner certifies under penalties of perjury that
it is a Non-U.S. Holder or otherwise establishes an exemption. In general,
backup withholding and information reporting will not apply to a payment of the
proceeds of a sale of Common Stock by or through a foreign office of a broker.
If, however, such broker is, for United States federal income tax purposes a
United States person, a controlled foreign corporation, or a foreign person that
derives 50% or more of its gross income for a certain period from the conduct of
a trade or business in the United States, such payments will be subject to
information reporting, but not backup withholding, unless (i) such broker has
documentary evidence in its records that the beneficial owner is a Non-U.S.
Holder and certain other conditions are met, or (ii) the beneficial owner
otherwise establishes an exemption.

Any amounts withheld under the backup withholding rules may be allowed as a
refund or a credit against such holder's United States federal income tax
liability provided the required information is furnished to the IRS.

LEGAL MATTERS

The legality of the shares of Common Stock offered hereby will be passed
upon for the Company by Greenberg, Traurig, Hoffman, Lipoff, Rosen & Quentel,
P.A., Miami, Florida. Certain legal matters for the Underwriters will be passed
upon by Simpson Thacher & Bartlett (a partnership which includes professional
corporations), New York, New York.

EXPERTS

The consolidated financial statements included in this Prospectus have been
audited by Deloitte & Touche LLP, independent auditors, as stated in their
report appearing herein in the Registration Statement, and are included in
reliance upon the report of such firm given upon their authority as experts in
accounting and auditing.

77
<PAGE>
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
THE COMPANY'S CONSOLIDATED FINANCIAL STATEMENTS
Independent Auditors' Report............................................................................... F-2
Consolidated Statements of Condition as of December 31, 1995 and 1996 ..................................... F-3
Consolidated Statements of Income for the Years Ended December 31, 1994, 1995 and 1996..................... F-4
Consolidated Statements of Stockholders' Equity for the Years Ended December 31, 1994, 1995 and 1996....... F-5
Consolidated Statements of Cash Flows for the Years Ended December 31, 1994, 1995 and 1996................. F-6
Notes to Consolidated Financial Statements................................................................. F-7
</TABLE>

F-1
<PAGE>
INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders
of Hamilton Bancorp Inc.:

We have audited the accompanying consolidated statements of condition of
Hamilton Bancorp Inc. and its subsidiary, Hamilton Bank, N.A., as of December
31, 1995 and 1996, and the related consolidated statements of income,
stockholders' equity, and cash flows for each of the three years ended December
31, 1996. These consolidated financial statements are the responsibility of
management. Our responsibility is to express an opinion on these consolidated
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 consolidated financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the consolidated 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, such consolidated financial statements present fairly, in
all material respects, the consolidated financial condition of Hamilton Bancorp
Inc. and its subsidiary, Hamilton Bank, N.A., at December 31, 1995 and 1996, and
the results of their operations and their cash flows for each of the three years
ended December 31, 1996 in conformity with generally accepted accounting
principles.

As discussed in Note 1 to the consolidated financial statements, Hamilton
Bank, N.A. changed its method of accounting for impaired loans effective January
1, 1995 to conform with statements of financial accounting standards No. 114 and
No. 118.

Deloitte & Touche LLP
Miami, Florida

January 31, 1997
(March 17, 1997 as to the
completion of the Reorganization
described in Note 15)

F-2
<PAGE>
HAMILTON BANCORP INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CONDITION

<TABLE>
<CAPTION>
PRO FORMA
DECEMBER 31, DECEMBER 31,
------------------------ ------------
<S> <C> <C> <C>
1995 1996 1996
----------- ----------- ------------

<CAPTION>
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
CASH AND DEMAND DEPOSITS WITH OTHER BANKS............................... $22,588,534 $14,806,058 $14,806,058
FEDERAL FUNDS SOLD...................................................... 24,000,000 18,300,000 18,300,000
----------- ----------- ------------
Total cash and cash equivalents................................... 46,588,534 33,106,058 33,106,058
INTEREST-EARNING DEPOSITS WITH OTHER BANKS.............................. 38,418,130 80,476,576 80,476,576
SECURITIES HELD TO MATURITY
(approximate fair value: $20,733,527 in 1995)......................... 20,705,855
SECURITIES AVAILABLE FOR SALE
(amortized cost: $8,205,211 in 1995 and $29,023,369 in 1996).......... 8,208,090 29,019,699 29,019,699
LOANS--NET.............................................................. 415,962,259 527,279,242 527,279,242
DUE FROM CUSTOMERS ON BANKERS ACCEPTANCES............................... 64,588,358 60,760,690 60,760,690
DUE FROM CUSTOMERS ON DEFERRED PAYMENT LETTERS OF CREDIT................ 6,419,129 7,343,466 7,343,466
PROPERTY AND EQUIPMENT--NET............................................. 3,718,083 3,459,457 3,459,457
ACCRUED INTEREST RECEIVABLE............................................. 4,753,326 6,471,379 6,471,379
GOODWILL--NET........................................................... 2,358,331 2,183,283 2,183,283
OTHER ASSETS............................................................ 3,386,831 5,470,117 5,470,117
----------- ----------- ------------
TOTAL................................................................... $615,106,926 $755,569,967 7$55,569,967
----------- ----------- ------------
----------- ----------- ------------

LIABILITIES AND STOCKHOLDERS' EQUITY
DEPOSITS................................................................ $505,065,587 $638,641,051 6$38,641,051
BANKERS ACCEPTANCES OUTSTANDING......................................... 64,588,358 60,760,690 60,760,690
DEFERRED PAYMENT LETTERS OF CREDIT OUTSTANDING.......................... 6,419,129 7,343,466 7,343,466
OTHER LIABILITIES....................................................... 4,230,755 5,024,658 5,024,658
----------- ----------- ------------
Total liabilities................................................... 580,303,829 711,769,865 711,769,865
----------- ----------- ------------
COMMITMENTS AND CONTINGENCIES (Note 12)

STOCKHOLDERS' EQUITY:
Preferred stock, non-voting, non-cumulative, 14% maximum dividend
rate, par value $.01 per share, 2,000,000 shares authorized, 101,207
shares issued and outstanding....................................... 1,012 1,012
Common stock, $.01 par value, 75,000,000 shares authorized, 4,731,804
shares issued and outstanding at December 31, 1995, 5,205,030 shares
issued and outstanding at December 31, 1996 and 7,067,949 pro forma
shares issued and outstanding at December 31, 1996.................. 47,318 52,050 70,679
Capital surplus....................................................... 14,410,015 17,317,483 17,299,866
Retained earnings..................................................... 20,342,965 26,431,832 26,431,832
Net unrealized gain (loss) on securities available for sale, net of
taxes............................................................... 1,787 (2,275) (2,275)
----------- ----------- ------------
Total stockholders' equity........................................ 34,803,097 43,800,102 43,800,102
----------- ----------- ------------
TOTAL................................................................... $615,106,926 $755,569,967 7$55,569,967
----------- ----------- ------------
----------- ----------- ------------
</TABLE>

See accompanying notes to consolidated financial statements.

F-3
<PAGE>
HAMILTON BANCORP INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------------------
<S> <C> <C> <C>
1994 1995 1996
------------ ------------ ------------
INTEREST INCOME:
Loans, including fees................................................. $ 24,961,664 $ 40,342,331 $ 49,215,587
Deposits with other banks............................................. 2,788,921 4,549,460 5,751,196
Securities............................................................ 1,040,826 1,652,179 1,550,770
Federal funds sold.................................................... 428,030 1,144,143 1,274,131
------------ ------------ ------------
Total............................................................... 29,219,441 47,688,113 57,791,684
------------ ------------ ------------
INTEREST EXPENSE:
Deposits.............................................................. 11,945,963 23,544,990 29,392,397
Federal funds purchased............................................... 72,117 23,943
------------ ------------ ------------
Total............................................................... 12,018,080 23,544,990 29,416,340
------------ ------------ ------------
NET INTEREST INCOME..................................................... 17,201,361 24,143,123 28,375,344
PROVISION FOR CREDIT LOSSES............................................. 2,875,000 2,450,000 3,040,000
------------ ------------ ------------
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES................... 14,326,361 21,693,123 25,335,344
------------ ------------ ------------
NON-INTEREST INCOME:
Trade finance fees and commissions.................................... 7,422,068 8,172,456 7,590,378
Capital market fees, net.............................................. 1,410,229 318,414 111,887
Customer service fees................................................. 1,043,616 1,266,979 1,135,553
Net (loss) gain on sale of securities available for sale.............. (168,101) 3,229
Other................................................................. 321,972 569,495 995,390
------------ ------------ ------------
Total............................................................... 10,029,784 10,330,573 9,833,208
------------ ------------ ------------
OPERATING EXPENSES:
Employee compensation and benefits.................................... 7,795,815 9,990,099 10,908,665
Occupancy and equipment............................................... 2,307,354 2,821,811 2,857,943
Directors' fees....................................................... 664,400 811,900 998,500
Federal deposit and regulatory insurance.............................. 646,961 487,411 173,143
Other................................................................. 3,531,856 4,737,671 4,665,981
------------ ------------ ------------
Total............................................................... 14,946,386 18,848,892 19,604,232
------------ ------------ ------------
INCOME BEFORE PROVISION FOR INCOME TAXES................................ 9,409,759 13,174,804 15,564,320
PROVISION FOR INCOME TAXES.............................................. 3,720,579 5,171,443 5,854,809
------------ ------------ ------------
NET INCOME.............................................................. $ 5,689,180 $ 8,003,361 $ 9,709,511
------------ ------------ ------------
------------ ------------ ------------
NET INCOME PER COMMON AND COMMON EQUIVALENT SHARE....................... $ 1.05 $ 1.47 $ 1.79
------------ ------------ ------------
------------ ------------ ------------
AVERAGE SHARES OUTSTANDING.............................................. 5,430,030 5,430,030 5,430,030
------------ ------------ ------------
------------ ------------ ------------
PRO FORMA NET INCOME PER COMMON AND COMMON EQUIVALENT SHARE............. $ 1.33
------------
------------
PRO FORMA AVERAGE SHARES OUTSTANDING.................................... 7,292,949
------------
------------
</TABLE>

See accompanying notes to consolidated financial statements.

F-4
<PAGE>
HAMILTON BANCORP INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
NET UNREALIZED
(LOSS)
GAIN ON
SECURITIES
PREFERRED STOCK COMMON STOCK AVAILABLE FOR
---------------------- ---------------------- CAPITAL RETAINED SALE,
SHARES AMOUNT SHARES AMOUNT SURPLUS EARNINGS NET OF TAXES
--------- ----------- ----------- --------- ------------ ------------ -----------------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE, DECEMBER 31, 1993....... 4,731,804 $ 47,318 $ 9,350,702 $ 7,442,385
Issuance of preferred stock
series B and C............... 101,207 $ 1,012 5,059,313
Net unrealized loss on
securities transferred from
securities available for sale
to securities held to
maturity, net of taxes....... $ (12,868)
Net change in unrealized loss
on securities available for
sale, net of taxes........... (14,470)
Cash dividends on preferred
stock, net of witholding
taxes........................ (98,694)
Net income..................... 5,689,180
--------- ----------- ----------- --------- ------------ ------------ --------
BALANCE, DECEMBER 31, 1994....... 101,207 1,012 4,731,804 47,318 14,410,015 13,032,871 (27,338)
Net change in unrealized loss
on securities available for
sale, net of taxes........... 29,125
Cash dividends on preferred
stock, net of witholding
taxes........................ (693,267)
Net income..................... 8,003,361
--------- ----------- ----------- --------- ------------ ------------ --------
BALANCE, DECEMBER 31, 1995....... 101,207 1,012 4,731,804 47,318 14,410,015 20,342,965 1,787
Net change in unrealized gain
on securities available for
sale, net of taxes........... (4,062)
Cash dividends on preferred
stock, net of witholding
taxes........................ (708,444)
Stock dividend (10%)........... 473,226 4,732 2,907,468 (2,912,200)
Net income..................... 9,709,511
--------- ----------- ----------- --------- ------------ ------------ --------
BALANCE, DECEMBER 31, 1996....... 101,207 $ 1,012 5,205,030 $ 52,050 $ 17,317,483 $ 26,431,832 $ (2,275)
--------- ----------- ----------- --------- ------------ ------------ --------
--------- ----------- ----------- --------- ------------ ------------ --------

TOTAL
STOCKHOLDERS'
EQUITY
------------
<S> <C>
BALANCE, DECEMBER 31, 1993....... $16,840,405
Issuance of preferred stock
series B and C............... 5,060,325
Net unrealized loss on
securities transferred from
securities available for sale
to securities held to
maturity, net of taxes....... (12,868)
Net change in unrealized loss
on securities available for
sale, net of taxes........... (14,470)
Cash dividends on preferred
stock, net of witholding
taxes........................ (98,694)
Net income..................... 5,689,180
------------
BALANCE, DECEMBER 31, 1994....... 27,463,878
Net change in unrealized loss
on securities available for
sale, net of taxes........... 29,125
Cash dividends on preferred
stock, net of witholding
taxes........................ (693,267)
Net income..................... 8,003,361
------------
BALANCE, DECEMBER 31, 1995....... 34,803,097
Net change in unrealized gain
on securities available for
sale, net of taxes........... (4,062)
Cash dividends on preferred
stock, net of witholding
taxes........................ (708,444)
Stock dividend (10%)...........
Net income..................... 9,709,511
------------
BALANCE, DECEMBER 31, 1996....... $43,800,102
------------
------------
</TABLE>

See accompanying notes to consolidated financial statements.

F-5
<PAGE>
HAMILTON BANCORP INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------------------------
<S> <C> <C> <C>
1994 1995 1996
-------------- -------------- --------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income.................................................... $ 5,689,180 $ 8,003,361 $ 9,709,511
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization............................. 785,703 1,070,040 1,073,882
Provision for credit losses............................... 2,875,000 2,450,000 3,040,000
Deferred tax (benefit) provision.......................... (62,935) (110,995) 72,795
Net loss (gain) on sale of securities available for sale.. 168,101 (3,229)
Net gain on sale of other real estate owned............... (8,041)
Proceeds from the sale of bankers acceptances and loan
participations, net of loan participations purchased.... 79,214,997 104,944,752 102,353,546
Increase in accrued interest receivable and other
assets.................................................. (2,568,827) (218,598) (3,922,884)
Increase (decrease) in other liabilities.................. 2,404,273 (265,837) 793,903
-------------- -------------- --------------
Net cash provided by operating activities............... 88,505,492 115,869,494 113,112,712
-------------- -------------- --------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Increase in interest-earning deposits with other banks........ (9,343,378) (4,867,295) (42,058,446)
Purchase of securities held to maturity....................... (16,713,993) (58,874,233)
Purchase of securities available for sale..................... (3,228,121) (17,440,898) (59,430,529)
Proceeds from maturities of securities held to maturity....... 9,301,611 54,725,879 20,946,175
Proceeds from sales and maturities of securities available for
sale........................................................ 5,694,316 16,138,394 38,374,930
Increase in loans--net........................................ (198,910,686) (213,566,338) (216,710,529)
Payment for purchase of branches, net of cash deposits
assumed..................................................... (1,980,300)
Cash deposits assumed in purchase of branches................. 13,633,703
Purchases of property and equipment--net...................... (928,629) (1,498,830) (640,208)
Proceeds from sales of other real estate owned................ 68,986 56,399
-------------- -------------- --------------
Net cash used in investing activities................... (202,406,491) (225,383,321) (259,462,208)
-------------- -------------- --------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in deposits--net..................................... 116,838,640 131,716,915 133,575,464
Proceeds from issuance of preferred stock..................... 5,060,325
Cash dividends on preferred stock............................. (98,694) (693,267) (708,444)
-------------- -------------- --------------
Net cash provided by financing activities............... 121,800,271 131,023,648 132,867,020
-------------- -------------- --------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS............ 7,899,272 21,509,821 (13,482,476)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR.................. 17,179,441 25,078,713 46,588,534
-------------- -------------- --------------
CASH AND CASH EQUIVALENTS AT END OF YEAR........................ $ 25,078,713 $ 46,588,534 $ 33,106,058
-------------- -------------- --------------
-------------- -------------- --------------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid during the year................................. $ 11,556,255 $ 22,815,743 $ 29,550,600
-------------- -------------- --------------
-------------- -------------- --------------
Income taxes paid during the year............................. $ 4,052,000 $ 4,520,000 $ 5,540,000
-------------- -------------- --------------
-------------- -------------- --------------
SUPPLEMENTAL DISCLOSURE OF NONCASH ACTIVITIES:
Other real estate owned acquired through foreclosure............ $ 48,358
--------------
--------------
</TABLE>

See accompanying notes to consolidated financial statements.

F-6
<PAGE>
HAMILTON BANCORP INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Hamilton Bancorp Inc. (the "Company") is a holding company formed in 1988
primarily to acquire ownership in Hamilton Bank, N.A. (the "Bank"), a national
Federal Reserve member bank which commenced operations in February 1983. As of
December 31, 1996, the Company owned 99.66% of the outstanding common stock of
the Bank. The Bank's business is focused primarily on foreign trade and
providing innovative services for its financial correspondents and
exporting/importing firms. The Bank offers these services through its main
office and three branches in Miami, Florida, a branch in Tampa, Florida and a
branch in Winter Haven, Florida.

The accounting and reporting policies of the Company conform to generally
accepted accounting principles and to general practices within the banking
industry. The following summarizes the more significant of these policies:

PRINCIPLES OF CONSOLIDATION--The accompanying consolidated financial
statements include the accounts of the Company and the Bank. All significant
intercompany amounts have been eliminated in consolidation.

USE OF 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 income and expenses during the reporting
period. Actual results could differ from those estimates.

CASH AND CASH EQUIVALENTS--For purposes of the consolidated statements of
cash flows, the Company considers cash, demand deposits with other banks, and
federal funds sold as cash and cash equivalents. Generally, federal funds are
sold for one-day periods.

The Federal Reserve requires banks to maintain certain average reserve
balances, in the form of vault cash or funds on deposit with the Federal
Reserve, based upon the total of a bank's net transaction accounts. At December
31, 1996, the Bank met its average reserve requirement.

INVESTMENT SECURITIES--Investment securities are accounted for under
Statement of Financial Accounting Standards ("SFAS") No. 115, ACCOUNTING FOR
CERTAIN INVESTMENTS IN DEBT AND EQUITY SECURITIES, which became effective for
the Bank on January 1, 1994. The cumulative effect of the adoption of SFAS No.
115 was not material and is included in the net change in unrealized loss on
securities available for sale in the accompanying consolidated statement of
stockholders' equity for the year ended December 31, 1994. Under SFAS No. 115,
investment securities must be classified and accounted for under the following
conditions:

TRADING ACCOUNT SECURITIES--Trading account securities are held in
anticipation of short-term sales or market movements. Trading account
securities are stated at fair value. Gains or losses on the sale of trading
account securities, as well as unrealized fair value adjustments, are
included in operating income. At December 31, 1995 and 1996, the Company
held no trading account securities.

SECURITIES AVAILABLE FOR SALE--Securities to be held for unspecified
periods of time including securities that management intends to use as part
of its asset/liability strategy, or that may be sold in response to changes
in interest rates, changes in prepayment risk, or other similar factors are
classified as available for sale and are carried at fair value. Unrealized
gains or losses are reported as a net amount in a separate component of
stockholders' equity until realized. Gains and losses are recognized using
the specific identification method upon realization.

F-7
<PAGE>
HAMILTON BANCORP INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
SECURITIES HELD TO MATURITY--Securities that management has a positive
intent and the ability to hold to maturity are carried at cost, adjusted for
amortization of premiums and accretions of discounts over the life of the
securities using a method which approximates the level-yield method. At
December 31, 1996, the Company held no securities classified as securities
held to maturity.

ALLOWANCE FOR CREDIT LOSSES--The allowance for credit losses is established
through a provision for credit losses charged to expense based on management's
evaluation of the potential losses in its loan portfolio. Such evaluation, which
includes a review of all loans for which full collectibility may not be
reasonably assured, considers, among other matters, historical loss experience,
net realizable value of collateral, current economic conditions and trends,
geographical considerations and such other factors as in management's judgment
deserve recognition. Many of these factors involve a significant degree of
estimation and are beyond management's control or are subject to changes which
may be unforeseen. Although management believes the allowance is adequate to
absorb losses on existing loans that may become uncollectible, the ultimate
losses may vary significantly from the current estimates.

On January 1, 1995, the Bank adopted SFAS No. 114, ACCOUNTING BY CREDITORS
FOR IMPAIRMENT OF A LOAN, and SFAS No. 118, ACCOUNTING BY CREDITORS FOR
IMPAIRMENT OF A LOAN--RECOGNITION AND DISCLOSURES, an amendment of SFAS No. 114.
These standards address the accounting for impairment of certain loans when it
is probable that all amounts due pursuant to the contractual terms of the loan
will not be collected. Adoption of these standards entailed the identification
of commercial loans which are considered impaired under the provisions of SFAS
No. 114. Groups of smaller-balance homogeneous loans (generally residential
mortgage and installment loans) are collectively evaluated for impairment.

Under the provision of these standards, individually identified impaired
loans are measured based on the present value of payments expected to be
received, using the historical effective loan rate as the discount rate.
Alternatively, measurement may also be based on observable market prices or for
loans that are solely dependent on the collateral for repayment, measurement may
be based on the fair value of the collateral. Loans that are to be foreclosed
are measured based on the fair value of the collateral. If the recorded
investment in the impaired loan exceeds that measure of fair value, a valuation
allowance is required as a component of the allowance for credit losses. Changes
to the valuation allowance are recorded as a component of the provision for
credit losses.

Commercial loans where reasonable doubt exists as to timely collection,
including loans that are individually identified as being impaired under SFAS
No. 114, are generally classified as nonperforming loans unless based on the
evaluation of management the loan is well secured and in the process of
collection.

Interest collections on nonperforming loans, including impaired loans, for
which the ultimate collectibility of principal and interest is uncertain are
applied as reductions in book value. Otherwise, such collections are credited to
income when received.

At December 31, 1995 and 1996, the recorded investment in loans that are
considered impaired under SFAS No. 114 was approximately $615,000 and
$4,617,000, respectively. These impaired loans required a SFAS No. 114 allowance
for credit losses of approximately $233,000 and $2,810,000, respectively. The
average recorded investment in impaired loans during the years ended December
31, 1995 and 1996, were approximately $644,000 and $2,616,000, respectively. For
the years ended December 31, 1995 and 1996, the Bank recognized interest income
on these impaired loans of approximately $17,000 and $207,000, respectively.

F-8
<PAGE>
HAMILTON BANCORP INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
PROPERTY AND EQUIPMENT--Property and equipment are stated at cost less
accumulated depreciation and amortization. Depreciation is computed by the
straight-line method over the estimated useful lives of the related assets.
Leasehold improvements are amortized by the straight-line method over the
remaining term of the applicable leases or their useful lives, whichever is
shorter. The useful lives used are as follows:

<TABLE>
<S> <C>
Building....................................................... 30 years
Leasehold improvements......................................... 5--10 years
Furniture and equipment........................................ 5--7 years
</TABLE>

GOODWILL--Goodwill of approximately $861,000 arising from the acquisition of
the Bank during 1988 and of approximately $1,980,000 arising from the Bank's
branch purchase and assumption of deposits during 1994 (see Note 5) are being
amortized on a straight-line basis over a period of twenty and twelve years,
respectively. The Company reviews goodwill periodically for events or changes in
circumstances that may indicate that the carrying amount is not recoverable on
an undiscounted cash flow basis.

FEDERAL FUNDS PURCHASED--Federal funds purchased generally mature within one
to four days from the transaction date. At December 31, 1995 and 1996, there
were no federal funds purchased outstanding.

INCOME RECOGNITION--Interest income on loans is recognized based upon the
principal amounts outstanding. Loans over 90 days past due may not be placed on
nonaccrual if they are in the process of collection and are either secured by
property having a realizable value at least equal to the outstanding debt and
accrued interest or are fully guaranteed by a financially responsible party whom
the Company believes is willing and able to discharge the debt, including
accrued interest. Loans are placed on a nonaccruing status when management
believes that interest on such loans may not be collected in the normal course
of business.

Trade finance fees and commissions include fees for letters of credit and
acceptances. Nonrefundable fees on letters of credit and acceptances are
recognized at execution date.

Capital markets fees are earned in connection with the purchase,
participation and placement, without recourse or future obligation, of trade
finance obligations and for arranging financing for domestic and foreign
customers. Nonrefundable fees earned for such transactions are fully recognized
in income at the time the transaction is consummated. Costs associated with
these transactions, amounting to approximately $359,000, $100,000, and $26,000,
during the years ended December 31, 1994, 1995 and 1996 respectively, are offset
against the fees earned. Such costs include legal fees, participation fees, and
performance incentives to officers.

INCOME TAXES--The provision for income taxes is the tax payable or
refundable for the period plus or minus the change during the period in deferred
tax assets and liabilities. The consolidated group provides for deferred taxes
under the liability method. Under such method, deferred taxes are adjusted for
tax rate changes as they occur. Deferred income tax assets and liabilities are
computed annually for differences between the financial statements and tax bases
of assets and liabilities that will result in taxable or deductible amounts in
the future based on enacted tax laws and rates applicable to the periods in
which the differences are expected to affect taxable income. Valuation
allowances are established when necessary to reduce deferred tax assets to the
amount expected to be realized.

STOCK DIVIDEND--All references to per share amounts in the consolidated
financial statements have been adjusted to reflect the stock dividend on a
retroactive basis.

F-9
<PAGE>
HAMILTON BANCORP INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
STOCK SPLIT--On January 21, 1997, the Company's Board of Directors (the
"Board") approved a 6.5 for 1 common stock split (see Note 15). Retroactive
restatement has been made to all share amounts to reflect the stock split.

PRO FORMA STOCKHOLDERS' EQUITY--Upon consummation of the reorganization of
the capital structure of the Company as discussed in Note 15, all of the
outstanding preferred stock and warrants (see Note 8), are being converted into
common stock. The unaudited pro forma presentation of the consolidated balance
sheet has been prepared assuming the conversion of the preferred stock and
warrants into common stock as of December 31, 1996.

NET INCOME PER COMMON AND COMMON EQUIVALENT SHARE--Net income per common and
common equivalent share amounts are based on the average number of common shares
outstanding for each period, after giving effect to the stock dividend and stock
split. The pro forma net income per common and common equivalent share amount
for 1996 is based on the average number of common shares outstanding, after
giving affect to the reorganization of the capital structure of the Company as
discussed in Note 15. In accordance with Securities and Exchange Commission
requirements, common stock equivalent shares issued during the twelve-month
period prior to the proposed initial public offering have been included in the
calculation as if they were outstanding for all periods, using the treasury
stock method.

STOCK-BASED COMPENSATION--SFAS No. 123. ACCOUNTING FOR STOCK-BASED
COMPENSATION, encourages, but does not require companies to record compensation
cost for stock-based employee and non-employee members of the Board compensation
plans at fair value. The Company has chosen to continue to account for
stock-based compensation to employees and non-employee members of the Board
using the intrinsic value method as prescribed by Accounting Principles Board
Opinion ("APB") No. 25, ACCOUNTING FOR STOCK ISSUED TO EMPLOYEES, and related
interpretations. Accordingly, compensation cost for stock options issued to
employees and non-employee members of the Board are measured as the excess, if
any, of the fair value of the Company's stock at the date of grant over the
amount an employee or non-employee member of the Board must pay for the stock.

NEW ACCOUNTING PRONOUNCEMENTS--In June 1996, the Financial Accounting
Standards Board ("FASB") issued SFAS No. 125, ACCOUNTING FOR TRANSFERS AND
SERVICING OF FINANCIAL ASSETS AND EXTINGUISHMENTS OF LIABILITIES. SFAS No. 125
provides accounting and reporting standards for transfers and servicing of
financial assets and extinguishments of liabilities. These standards are based
on consistent application of a FINANCIAL-COMPONENTS APPROACH that focuses on
control. Under that approach, after a transfer of financial assets, an entity
recognizes the financial and servicing assets it controls and the liabilities it
has incurred, derecognized financial assets when control has been surrendered,
and derecognizes liabilities when extinguished. SFAS No. 125 also provides
consistent standards for distinguishing transfers of financial assets that are
sales from transfers that are secured borrowings. SFAS No. 125 is effective for
transfers and servicing of financial assets and extinguishments of liabilities
occurring after December 31, 1996, and is to be applied prospectively. The
Company is in the process of evaluating the impact of SFAS No. 125.

F-10
<PAGE>
HAMILTON BANCORP INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2. INVESTMENT SECURITIES

A comparison of the amortized cost and fair value of investment securities
is as follows at:

<TABLE>
<CAPTION>
DECEMBER 31, 1995
---------------------------------------------------
<S> <C> <C> <C> <C>
GROSS UNREALIZED
AMORTIZED --------------------- FAIR
COST GAINS LOSSES VALUE
------------- --------- ---------- -------------
HELD TO MATURITY:
U.S. Government and agency securities..................... $ 20,705,855 $ 27,672 $ 20,733,527
------------- --------- -------------
------------- --------- -------------
AVAILABLE FOR SALE:
U.S. Government and agency securities..................... $ 3,968,328 $ 2,156 $ 3,970,484
Mortgage-backed securities................................ 124,651 723 125,374
Foreign debt securities................................... 3,443,947 3,443,947
Federal reserve bank stock................................ 354,850 354,850
Foreign bank stocks....................................... 313,435 313,435
------------- --------- -------------
Total....................................................... $ 8,205,211 $ 2,879 $ 8,208,090
------------- --------- -------------
------------- --------- -------------
</TABLE>

<TABLE>
<CAPTION>
DECEMBER 31, 1996
---------------------------------------------------
<S> <C> <C> <C> <C>
GROSS UNREALIZED
AMORTIZED --------------------- FAIR
COST GAINS LOSSES VALUE
------------- --------- ---------- -------------
AVAILABLE FOR SALE:
U.S. Government and agency securities..................... $ 27,468,916 $ 3,670 $ 27,465,246
Foreign debt securities................................... 150,024 150,024
Federal reserve bank stock................................ 354,850 354,850
Foreign bank stocks....................................... 1,049,579 1,049,579
------------- ---------- -------------
Total....................................................... $ 29,023,369 $ 3,670 $ 29,019,699
------------- ---------- -------------
------------- ---------- -------------
</TABLE>

Mortgage-backed securities at December 31, 1995 consist of a FNMA
collaterized mortgage obligation.

Gross realized gains and gross realized losses on sales of securities
available for sale for the years ended December 31, 1994, and 1995 were
approximately:

<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31, GAINS LOSSES
- ----------------------------------------------------------------------- --------- ----------
<S> <C> <C>
1994................................................................... $ 168,000
----------
----------
1995................................................................... $ 7,000 $ 4,000
--------- ----------
--------- ----------
</TABLE>

There were no sales of securities available for sale during the year ended
December 31, 1996.

Investment securities with an amotized cost and fair value of approximately
$18,808,000 and $18,807,000, respectively, at December 31, 1996, were pledged as
collateral for public deposits.

F-11
<PAGE>
HAMILTON BANCORP INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2. INVESTMENT SECURITIES (CONTINUED)
The following table shows the amortized cost and the fair value by maturity
distribution of the securities portfolio at December 31, 1996:

<TABLE>
<CAPTION>
AVAILABLE FOR SALE
----------------------------
AMORTIZED
COST FAIR VALUE
------------- -------------
<S> <C> <C>
Within one year.................................................................... $ 26,473,666 $ 26,471,496
One to five years.................................................................. 995,250 993,750
Over five years.................................................................... 150,024 150,024
------------- -------------
Total.............................................................................. 27,618,940 27,615,270
Federal reserve bank stock......................................................... 354,850 354,850
Foreign bank stocks................................................................ 1,049,579 1,049,579
------------- -------------
Total securities................................................................... $ 29,023,369 $ 29,019,699
------------- -------------
------------- -------------
</TABLE>

3. LOANS

Loans consist of the following at:

<TABLE>
<CAPTION>
DECEMBER 31,
------------------------------
1995 1996
-------------- --------------
<S> <C> <C>
Commercial (primarily trade related):
Domestic....................................................................... $ 96,510,615 $ 110,322,486
Foreign........................................................................ 218,863,905 309,950,041
Acceptances discounted--trade related:
Domestic....................................................................... 33,059,035 23,313,663
Foreign........................................................................ 62,838,200 80,934,508
Residential mortgages............................................................ 11,362,695 10,609,936
Installment...................................................................... 345,390 428,492
-------------- --------------
Total............................................................................ 422,979,840 535,559,126
Less:
Unearned income:
Acceptances discounted....................................................... 2,332,945 2,318,378
Other........................................................................ 234,182 236,543
Allowance for credit losses.................................................... 4,450,454 5,724,963
-------------- --------------
Loans--net..................................................................... $ 415,962,259 $ 527,279,242
-------------- --------------
-------------- --------------
</TABLE>

The Bank's business activity is mostly with customers and correspondent
banks located in South Florida, Central America, South America and the
Caribbean. The majority of the credits are for the finance of imports and
exports and have maturities of up to 180 days. These credits are secured either
by banks, factored receivables, cash, or the underlying goods. In addition, the
Bank is engaged in arranging trade finance transactions which are guaranteed by
agencies of the U.S. Government (i.e., Eximbank). Management closely monitors
its credit concentrations by industry, geographic locations, and type of
collateral as well as individual customers.

F-12
<PAGE>
HAMILTON BANCORP INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

3. LOANS (CONTINUED)
A summary of the activity in the allowance for credit losses is as follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------
<S> <C> <C> <C>
1994 1995 1996
------------ ------------ ------------
Balance at the beginning of year........................................ $ 3,270,150 $ 4,133,012 $ 4,450,454
Provision charged to operations......................................... 2,875,000 2,450,000 3,040,000
Loan charge-offs, net of recoveries..................................... (2,012,138) (2,132,558) (1,765,491)
------------ ------------ ------------
Balance at the end of year.............................................. $ 4,133,012 $ 4,450,454 $ 5,724,963
------------ ------------ ------------
------------ ------------ ------------
</TABLE>

The Bank had nonaccruing loans of approximately $3,631,000 and $4,741,000 at
December 31, 1995 and 1996 respectively.

4. PROPERTY AND EQUIPMENT

The following is a summary of property and equipment at:

<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------
1995 1996
------------ ------------
<S> <C> <C>
Land.................................................................................. $ 575,000 $ 575,000
Building and improvements............................................................. 1,126,711 1,141,171
Leasehold improvements................................................................ 1,533,521 1,618,448
Furniture and equipment............................................................... 3,824,024 4,338,679
------------ ------------
Total................................................................................. 7,059,256 7,673,298
Less accumulated depreciation and amortization........................................ 3,341,173 4,213,841
------------ ------------
Property and equipment--net........................................................... $ 3,718,083 $ 3,459,457
------------ ------------
------------ ------------
</TABLE>

Depreciation and amortization expense related to property and equipment for
the years ended December 31, 1994, 1995 and 1996 was approximately $719,000,
$895,000, and $899,000, respectively.

The Bank owns the land and the building for its Seventh Street and Winter
Haven branches and leases its main facilities, three branches and certain
equipment under noncancelable agreements (accounted for as operating leases).
The leases have renewal periods of five to ten years, available to the Bank
under the same terms and conditions as the initial leases and one subject to
annual rent adjustments based upon the Consumer Price Index.

F-13
<PAGE>
HAMILTON BANCORP INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

4. PROPERTY AND EQUIPMENT (CONTINUED)
The approximate future minimum payments, by year and in the aggregate, on
these leases at December 31, 1996 are as follows:

<TABLE>
<CAPTION>
YEAR ENDING
DECEMBER 31 AMOUNT
------------- -------------
<S> <C>
1997........................................................................... $ 1,612,000
1998........................................................................... 1,803,000
1999........................................................................... 1,767,000
2000........................................................................... 1,739,000
2001........................................................................... 1,638,000
Thereafter..................................................................... 7,781,000
-------------
Total minimum lease payments................................................... $ 16,340,000
-------------
-------------
</TABLE>

Rent expense was approximately $837,000, $1,015,000, and $1,006,000 for the
years ended December 31, 1994, 1995, and 1996, respectively.

5. BRANCH PURCHASE AND ASSUMPTION OF DEPOSITS

During 1994, the Bank entered into an agreement with the Resolution Trust
Corporation to purchase and assume approximately $13,600,000 in deposits in
Central Florida. The excess of the fair value of the deposit liabilities assumed
over the fair value of assets received was recorded as goodwill. Amortization of
the goodwill was approximately $23,000, $132,000, and $132,000 for the years
ended December 31, 1994, 1995 and 1996, respectively, and is included in other
operating expenses in the accompanying consolidated statements of income. At
December 31, 1995 and 1996 the unamortized balance of the goodwill was
approximately $1,825,000 and $1,693,000, respectively.

6. DEPOSITS

Deposits consist of the following at:

<TABLE>
<CAPTION>
DECEMBER 31,
------------------------------
1995 1996
-------------- --------------
<S> <C> <C>
Noninterest-bearing.............................................................. $ 55,703,004 $ 58,273,217
-------------- --------------
Interest-bearing:
NOW, money market and savings.................................................. 63,763,169 67,634,768
Time, under $100,000........................................................... 178,770,285 271,330,961
Time, $100,000 and over........................................................ 206,829,129 241,402,105
-------------- --------------
Total interest-bearing........................................................... 449,362,583 580,367,834
-------------- --------------
Total............................................................................ $ 505,065,587 $ 638,641,051
-------------- --------------
-------------- --------------
</TABLE>

F-14
<PAGE>
HAMILTON BANCORP INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

6. DEPOSITS (CONTINUED)
Time deposits in amounts of $100,000 and over at December 31, 1996 mature as
follows:

<TABLE>
<CAPTION>
AMOUNT
--------------
<S> <C>
Three months or less.......................................................... $ 147,269,000
Three months to trwelve months................................................ 88,013,000
One year to five years........................................................ 6,016,000
Over five years............................................................... 104,000
--------------
Total......................................................................... $ 241,402,000
--------------
--------------
</TABLE>

7. INCOME TAXES

The components of the provision for income taxes are as follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------
1994 1995 1996
------------ ------------ ------------
<S> <C> <C> <C>
Current income taxes:
Federal.............................................................. $ 2,982,355 $3,991,026 $ 4,628,539
State................................................................ 501,159 770,317 263,189
Foreign.............................................................. 300,000 521,095 890,286
------------ ------------ ------------
3,783,514 5,282,438 5,782,014
------------ ------------ ------------
Deferred income taxes:
Federal.............................................................. (53,736) (95,342) 69,450
State................................................................ (9,199) (15,653) 3,345
------------ ------------ ------------
(62,935) (110,995) 72,795
------------ ------------ ------------
Total................................................................ $ 3,720,579 $5,171,443 $ 5,854,809
------------ ------------ ------------
------------ ------------ ------------
</TABLE>

The provision for income taxes differs from the amount computed by applying
the statutory federal income tax rate to pretax income for the following
reasons:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------
<S> <C> <C> <C>
1994 1995 1996
--------- --------- ---------
Federal statutory rate................................................................ 35.0% 35.0% 35.0%
Increase (decrease) in taxes:
State income tax, net of federal income tax benefit................................. 3.2 3.7 1.7
Other, net.......................................................................... 0.8 0.3 0.8
--- --- ---
Effective income tax rate............................................................. 39.0% 39.0% 37.5%
--- --- ---
--- --- ---
</TABLE>

Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for tax purposes.

F-15
<PAGE>
HAMILTON BANCORP INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

7. INCOME TAXES (CONTINUED)
The tax effects of significant items comprising the Company's net deferred tax
asset as of December 31, 1995 and 1996 are as follows:

<TABLE>
<CAPTION>
1995 1996
------------ ------------
<S> <C> <C>
Deferred tax liabilities:
Difference between book and tax basis of property................................... $ 268,482
Other............................................................................... 199,602
------------
Total deferred tax liabilities........................................................ $ 468,084
------------
Deferred tax assets:
Difference between book and tax basis of allowance for credit losses................ $ 1,103,786 $ 1,653,406
Difference between book and tax basis of property................................... 118,013
Other............................................................................... 80,959 44,641
------------ ------------
Total deferred tax assets............................................................. $ 1,302,758 $ 1,698,047
Net deferred tax assets............................................................... $ 1,302,758 $ 1,229,963
------------ ------------
------------ ------------
</TABLE>

Recognition of deferred tax assets is based on management's belief that it
is more likely than not that the tax benefit associated with certain temporary
differences and tax credits will be realized. A valuation allowance is recorded
for those deferred tax items for which it is more likely than not that
realization will not occur. No valuation allowances have been recorded at
December 31, 1995 and 1996.

8. STOCKHOLDERS' EQUITY

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

Quantitative measures established by regulation to ensure capital adequacy
require the Bank to maintain minimum amounts and ratios (set forth in the table
below) of total and Tier I capital (as defined in the regulations) to
risk-weighted assets (as defined), and of Tier I capital (as defined) to average
assets (as defined). Management believes, as of December 31, 1996, that the Bank
meets all capital adequacy requirements to which its is subject.

As of December 31, 1996, the most recent notification from the Office of the
Comptroller of the Currency categorized the Bank as well capitalized under the
regulatory framework for prompt corrective action. To be categorized as well
capitalized the Bank must maintain minimum total risk-based, Tier I risk-based,
and Tier I leverage 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.

F-16
<PAGE>
HAMILTON BANCORP INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

8. STOCKHOLDERS' EQUITY (CONTINUED)

The Company's consolidated and the Bank's actual capital amounts and ratios
are also presented in the table.

<TABLE>
<CAPTION>
TO BE WELL
CAPITALIZED UNDER
FOR CAPITAL PROMPT CORRECTIVE
ACTUAL ADEQUACY PURPOSES ACTION PROVISIONS
-------------------------- -------------------------- ------------------------
AMOUNT RATIO AMOUNT RATIO AMOUNT RATIO
------------- ----- ------------- ----- ------------- ---------

<S> <C> <C> <C> <C> <C> <C>
AS OF DECEMBER 31, 1995:
COMPANY
Total Capital (to Risk Weighted Assets)...... $ 35,505,000 10.9% $ 26,008,000 8.0%
------------- ----- ------------- -----
Tier I Capital (to Risk Weighted Assets)..... $ 32,445,000 10.0% $ 13,004,000 4.0%
------------- ----- ------------- -----
Tier I Capital (to Average Assets)........... $ 32,445,000 5.7% $ 17,076,000 3.0%
------------- ----- ------------- -----
BANK
Total Capital (to Risk Weighted Assets)...... $ 35,206,000 10.8% $ 26,008,000 8.0% $ 32,510,000 10.0%
------------- ----- ------------- ----- ------------- ---------
Tier I Capital (to Risk Weighted Assets)..... $ 32,156,000 9.9% $ 13,004,000 4.0% $ 19,506,000 6.0%
------------- ----- ------------- ----- ------------- ---------
Tier I Capital (to Average Assets)........... $ 32,156,000 5.7% $ 22,831,000 4.0% $ 27,976,000 5.0%
------------- ----- ------------- ----- ------------- ---------

AS OF DECEMBER 31, 1996:
COMPANY
Total Capital (to Risk Weighted Assets)...... $ 46,744,000 11.5% $ 32,657,000 8.0%
------------- ----- ------------- -----
Tier I Capital (to Risk Weighted Assets)..... $ 41,634,000 10.2% $ 16,329,000 4.0%
------------- ----- ------------- -----
Tier I Capital (to Average Assets)........... $ 41,634,000 5.8% $ 21,713,000 3.0%
------------- ----- ------------- -----
BANK
Total Capital (to Risk Weighted Assets)...... $ 46,470,000 11.4% $ 32,712,000 8.0% $ 40,890,000 10.0%
------------- ----- ------------- ----- ------------- ---------
Tier I Capital (to Risk Weighted Assets)..... $ 41,351,000 10.1% $ 16,356,000 4.0% $ 24,534,000 6.0%
------------- ----- ------------- ----- ------------- ---------
Tier I Capital (to Average Assets)........... $ 41,351,000 5.7% $ 29,009,000 4.0% $ 36,261,000 5.0%
------------- ----- ------------- ----- ------------- ---------
</TABLE>

The Bank is subject to certain restrictions on the amount of dividends that
it may declare without prior regulatory approval. At December 31, 1996,
approximately $22,202,000 of retained earnings were available for dividend
declaration without prior regulatory approval. During 1995 and 1996,
approximately $675,000 and $713,000 of dividends were paid, respectively, which
are within the amounts allowed by regulations.

F-17
<PAGE>
HAMILTON BANCORP INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

8. STOCKHOLDERS' EQUITY (CONTINUED)
PREFERRED STOCK--During June 1994, the Company's Board amended and restated
the Company's articles of incorporation providing for the issuance of shares of
Series B and Series C ("Preferred Shares"), 14% fixed rate, non-cumulative,
non-voting, perpetual preferred stock.

The Preferred Shares are callable and redeemable at the Company's option
after five years form the issuance date for 125% of the stated value of such
shares. In addition, the Preferred Shares are convertible, at the sole
discretion of the holder into common stock at 1.85 times the most recent
calendar (quarter) end book value per common share assuming the prior exercise
of the existing warrants, if the Company accepts an offer for the purchase of
greater than 25% but less than 50% of its then-outstanding shares of common
stock. The Preferred Shares are mandatory convertible, under the same terms
described above, if the Company accepts an offer for the purchase of 50% or more
of it's outstanding shares of common stock or if the Company accepts an offer
from any third party for the purchase of all or substantially all its assets.

The Company on June 30, 1994, issued an aggregate of 60,207 shares of Series
B Preferred Shares at $50 per share and on December 31, 1994 issued 41,000
shares of Series C Preferred Shares at $50 per share.

In connection with the proposed initial public offering and reorganization
as discussed in Note 15, the Preferred Shares are being converted into common
stock.

WARRANTS--In connection with the stock purchase and sale agreement dated
March 21, 1988, stock warrants were issued which granted an option to acquire
additional common shares of the Bank in an amount equal to twenty percent of the
outstanding common shares of the Bank at the time of exercise, at $.01 per
share. The option is for a period of ten years that commenced on May 28, 1988.
No options have been exercised as of December 31, 1996. In connection with the
proposed initial public offering and reorganization as discussed in Note 15,
these warrants are being converted into common stock.

9. STOCK OPTION PLAN

In December 1993, the Company adopted the 1993 Stock Option Plan (the "1993
Plan"), pursuant to which 135,000 shares of Common Stock were reserved for
issuance upon exercise of options. The 1993 Plan is designed as a means to
retain and motivate key employees and directors. The Company's Compensation
Committee, or in the absence thereof, the Board, administers and interprets the
1993 Plan and is authorized to grant options thereunder to all eligible
employees of the Company, including executive officers and directors (whether or
not they are employees) of the Company or affiliated companies. Options granted
under the 1993 Plan are on such terms and at such prices as determined by the
Compensation Committee, except that the per share exercise price of incentive
stock options cannot be less than the fair market value of the Common Stock on
the date of grant. Each option is exercisable after the period or periods
specified in the option agreement, but no option may be exercisable after the
expiration of ten years from the date of grant. The 1993 Plan will terminate on
December 3, 2003, unless sooner terminated by the Company's Board. The 1993 Plan
also authorizes the Company to make or guarantee loans to opitonees to enable
them to exercise their options. Such loans must (i) provide for recourse to the
optionee, (ii) bear interest at a rate not less than the prime rate of interest,
and (iii) be secured by the shares of Common Stock purchased. The Board has the
authority to amend or terminate the 1993 Plan, provided that no such amendment
may impair the rights of the holder or any outstanding option without the
written consent of such holder, and provided further that certain amendments of
the 1993 Plan are subject to shareholder approval. In this regard, the Company
is amending the 1993 Plan for

F-18
<PAGE>
HAMILTON BANCORP INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

9. STOCK OPTION PLAN (CONTINUED)
the purpose of bringing the plan within compliance with certain rules and
regulations. During November 1996, the Company granted 90,000 options to key
employees and directors at an exercise price of $60.00 per share. There were no
options granted or outstanding during the years ended December 31, 1994 and
1995. Following the 6.5 for 1 stock split, (see Note 1) which is to be effected
prior to the effective date of the initial public offering as discussed in Note
15, 877,500 shares of common stock will be reserved for issuance pursuant to the
1993 Plan and an aggregate of 585,000 options at an exercise price of $9.23
(post-stock split) per share will be outstanding, none of which are exercisable
until February 1998.

The Company applies APB No. 25 and related interpretations in accounting for
its stock option plan to employees and non-employee members of the Board as
described in Note 1. Accordingly, no compensation expense has been recognized in
the year ended December 31, 1996 related to this plan. Compensation costs would
have been increased by approximately $347,000 in 1996 had the fair value of
stock options granted been recognized as compensation expense as prescribed by
SFAS No. 123. The fair value of the stock options at the date of grant was
estimated using the minimum value method prescribed by SFAS No. 123.

10. 401(k) PLAN

The Company maintains a 401(k) plan, which was initiated in 1993, for its
executive officers and other employees. Under the terms of the 401(k) plan, for
each dollar contributed by an employee, the Company intends to contribute a
discretionary amount on behalf of participants (the "Matching Contribution"). In
addition, at the end of the plan year, the Company may make an additional
contribution (the "Additional Contribution") on behalf of participants.
Additional Contributions are allocated in the same proportion that the Matching
Contribution made on the participant's behalf bears to the Matching Contribution
made on behalf of all participants during the year. The amount that the Company
contributes to the 401(k) plan has historically varied from year to year. During
the years ended December 31, 1994, 1995 and 1996, the Company's matching and
additional contributions amounted to approximately $59,000, $105,000, and
$52,000, respectively.

11. RELATED PARTY TRANSACTIONS

Directors, officers and their related entities have borrower and depositor
relationships with the Bank in the ordinary course of business. Loan balances to
these individuals and their related entities approximated $6,333,000, and
$4,912,000 at December 31, 1995 and 1996, respectively, and the balance of
deposit accounts approximated $17,464,000 and $5,896,000 at December 31, 1995
and 1996, respectively. Outstanding commercial and standby letters of credit
transactions with these individuals and their related entities approximated
$7,455,000 and $678,000 at December 31, 1995 and 1996, respectively.

12. OFF-BALANCE SHEET RISK, COMMITMENTS AND CONTINGENCIES

In the normal course of business, the Bank utilizes various financial
instruments with off-balance sheet risk to meet the financing needs of its
customers, including commitments to extend credit, commercial letters of credit,
shipping guarantees, standby letters of credit and forward foreign exchange
contracts. These financial instruments involve, to varying degrees, elements of
credit risk. The credit risk associated with these financial instruments, as
further discussed herein, is not recorded in the statement of condition. The
contractual or notional amounts of such instruments reflect the extent of
involvement the Bank has in

F-19
<PAGE>
HAMILTON BANCORP INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

12. OFF-BALANCE SHEET RISK, COMMITMENTS AND CONTINGENCIES (CONTINUED)
particular classes of financial instruments. The credit risks associated with
financial instruments are generally managed in conjunction with the Bank's
statements of condition activities and are subject to normal credit policies,
financial controls, and risk limiting and monitoring procedures.

Credit losses are incurred when one of the parties fails to perform in
accordance with the terms of the contract. The Bank's exposure to credit loss is
represented by the contractual or notional amount of the commercial letters of
credit, shipping guarantees and standby letters of credit. This is the maximum
potential loss of principal in the event the commitment is drawn upon and the
counterparty defaults.

A summary of the Bank's contractual or notional amounts for financial
instruments with off-balance sheet risk as of December 31, 1995 and 1996, along
with a further discussion of these instruments, follows:

<TABLE>
<CAPTION>
CONTRACTUAL OR
NOTIONAL AMOUNT
------------------------------
1995 1996
-------------- --------------
<S> <C> <C>
Commercial letters of credit................................. $ 107,421,000 $ 119,170,000
Standby letters of credit.................................... 17,999,000 12,140,000
Shipping guarantees (indemnity letters)...................... 354,000 402,000
Commitments to purchase foreign currency..................... 3,093,000 6,234,000
Commitments to sell foreign currency......................... 1,952,000 6,537,000
Commitments to extend credit................................. 21,243,000 35,137,000
</TABLE>

A commercial letter of credit is an instrument containing the commitment of
the Bank that the Bank will honor drawings under and in full compliance with the
terms of the letter of credit. The letters of credit are usually drawn on the
presentation of certain required documents, such as bills of lading.
Essentially, letters of credit facilitate the purchase of merchandise by the
Bank's customers by substituting the credit standing of the Bank for that of the
Bank's customer. Commercial letter of credit contracts are generally for a short
commitment period and are collateralized by merchandise.

Standby letters of credit are commitments issued to guarantee the
performance of a customer to a third party. The Bank issues standby letters of
credit to ensure contract performance or assure payment by its customers. The
guarantees extend for periods up to 12 months. The risk involved in issuing
standby letters of credit is the same as the credit risk involved in extending
loan facilities to customers and they are subject to the same credit approvals
and monitoring procedures. The Bank holds certificates of deposit and guarantees
from other banks as collateral supporting those commitments for which collateral
is deemed necessary. The extent of collateral held for standby letters of credit
commitments at December 31, 1996 varies from zero percent to 100 percent.

Shipping guarantees (also known as indemnity letters) are letters of
guarantee issued by the Bank on behalf of its customer in favor of shipping
agents. Normally, such facility is extended in instances where goods purchased
under letters of credit have arrived at the port of destination and the shipping
documents necessary for the release of the goods have not been received by the
Bank. The purpose of the shipping guarantee is to indemnify the transportation
company for any loss that might arise from the release of goods to the Bank's
customer in the absence of the shipping documents.

The Bank enters into forward foreign exchange contracts with its customers
for the delayed exchange of foreign currency for U.S. dollars on behalf of such
customers. These contracts provide a vehicle for the Bank's customers to hedge
their future obligations in foreign currency. Upon entering such contracts with

F-20
<PAGE>
HAMILTON BANCORP INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

12. OFF-BALANCE SHEET RISK, COMMITMENTS AND CONTINGENCIES (CONTINUED)
its customers, the Bank meets these foreign currency commitments by entering
into equivalent contracts with other banks to purchase or sell equal amounts of
the foreign currency to be delivered or received. Risks arise from the possible
inability of the Bank's counterparties to meet the terms of their contracts and
from movements in foreign currency exchange rates. However, the full notional
amount of the contract is not at risk, as the Bank has the ability to settle
these contracts in the foreign exchange market.

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 many of the commitments are expected to expire
without being drawn upon, the total commitment amounts do not necessarily
represent future cash requirements. The Bank evaluates each customer's
creditworthiness on a case-by-case basis. The amount of collateral obtained, if
deemed necessary by the Bank, upon extension of credit is based on management's
credit evaluation of the counterparty.

From time to time, the Company is engaged in litigation incidental to its
operations. The Company, after considering the advice of legal counsel, believes
that any such litigation will not have a material adverse effect on its
financial condition.

13. FAIR VALUE OF FINANCIAL INSTRUMENTS

The following disclosure of the estimated fair value of financial
instruments is made in accordance with the requirements of SFAS No. 107,
DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS. The estimated fair value
amounts have been determined by the Company using available market information
and appropriate valuation methodologies. However, considerable judgment is
necessarily required to interpret market data to develop the estimates of fair
value. Accordingly, the estimates presented herein are not necessarily
indicative of the amounts the Company could realize in a current market
exchange. The use of different market assumptions and/or estimation
methodologies may have a material effect on the estimated fair value amounts.
Although management is not aware of any factors that would significantly affect
the estimated fair value amounts, such amounts have not been comprehensively
revalued for purposes of these financial statements since December 31, 1996 and,
therefore, current estimates of fair value may differ significantly from the
amounts presented herein.

F-21
<PAGE>
HAMILTON BANCORP INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

13. FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)

<TABLE>
<CAPTION>
DECEMBER 31, 1995 DECEMBER 31, 1996
------------------------------ ------------------------------
CARRYING FAIR CARRYING FAIR
AMOUNT VALUE AMOUNT VALUE
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Assets:
Cash and cash equivalents.......................... $ 46,589,000 $ 46,589,000 $ 33,106,000 $ 33,106,000
Interest-earning deposits with other banks......... 38,418,000 38,418,000 80,477,000 80,477,000
Securities available for sale...................... 8,208,000 8,208,000 29,020,000 29,020,000
Securities held to maturity........................ 20,706,000 20,734,000
Loans, net......................................... 415,962,000 414,700,000 527,279,000 525,737,000
Liabilities:
Demand deposits.................................... 119,467,000 119,467,000 125,908,000 125,908,000
Time deposits...................................... 385,599,000 384,931,000 512,733,000 512,507,000
Contingent assets and liabilities:
Bankers acceptances................................ 64,588,000 323,000 60,761,000 304,000
Deferred payment letters of credit................. 6,419,000 23,000 7,343,000 26,000
Off-balance sheet instrument-- unrealized gains
(losses):
Commitments to extend credit....................... 130,000 144,000
Commercial letters of credit....................... 258,000 266,000
Standby letters of credit.......................... 24,000 181,000
Indemnity letters of credit........................ 1,000
Commitments to purchase foreign currency........... 19,000 62,000
Commitments to sell foreign currency............... (24,000) (59,000)
</TABLE>

CASH AND CASH EQUIVALENTS--The carrying amount of cash on hand, demand
deposits with other banks, and federal funds sold is a reasonable estimate of
fair value.

INTEREST-EARNING DEPOSITS WITH OTHER BANKS--The fair value of time deposits
with other banks (several of which are foreign) is estimated using the rates
currently offered for deposits of similar remaining maturities and taking into
account the creditworthiness of the other bank.

SECURITIES--For securities available for sale, fair values are based on
quoted market prices or dealer quotes. For securities held to maturity, fair
value equals quoted market price, if available. If a quoted market price is not
available, fair value is estimated using quoted market prices for similar
securities.

LOANS--The interest rates for commercial loans and acceptances discounted
are based on the prime lending rate. The Bank updates these interest rates on a
monthly basis. Thus, the carrying amount of commercial loans and acceptances
discounted is a reasonable estimate of fair value. The fair value of other types
of loans is estimated by discounting the future cash flows using the current
rates at which similar loans would be made to borrowers with similar credit
ratings and for the same remaining maturities.

DEMAND DEPOSITS AND TIME DEPOSITS--The fair value of demand deposits,
savings accounts, and certain money market deposits is the amount payable on
demand at the reporting date. The fair value of fixed-maturity certificates of
deposit is estimated using the rates currently offered for deposits of similar
remaining maturities.

F-22
<PAGE>
HAMILTON BANCORP INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

13. FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)
CONTINGENT ASSETS AND LIABILITIES--The fair values of these assets and
corresponding liabilities are estimated using the fees currently charged to
enter into similar agreements, taking into account the remaining terms of the
agreements and the present creditworthiness of the counterparties.

OFF-BALANCE SHEET INSTRUMENTS--The fair value of commitments is estimated
using the fees currently charged to enter into similar agreements, taking into
account the remaining terms of the agreements and the present creditworthiness
of the counterparties. For fixed-rate loan commitments, fair value also
considers the difference between current levels of interest rates and the
committed rates. The fair value of letters of credit is based on fees currently
charged for similar agreements, or on the estimated cost to terminate them or
otherwise settle the obligations with the counterparties at the reporting date.
The fair values of commitments to purchase and sell foreign currency are based
on quoted market prices or dealer quotes.

14. FOREIGN ACTIVITIES

The Company's foreign activities primarily consist of providing global trade
finance, with particular emphasis on trade finance, with and between South
America, Central America, the Caribbean (the "Region") and the United States or
otherwise involving the Region. The Company considers assets and revenues as
associated with foreign activities on the basis of the country of domicile of
the customer. The nature of the Company's operations make it difficult to
determine precisely foreign activities profitability since it involves the use
of certain judgmental allocations. Rates used to determine charges or credits
for funds used or generated by foreign activities are based on actual costs
during the period for selected interest-bearing sources of funds. Other
operating income and expenses are determined based upon internal allocations
appropriate to the individual activities. A summary of the Company's domestic
and foreign activities as of and for the years ended December 31, 1994, 1995 and
1996 is as follows:

<TABLE>
<CAPTION>
INCOME BEFORE
OPERATING PROVISION FOR NET TOTAL
INCOME INCOME TAXES INCOME ASSETS
------------- ------------- ------------ --------------
<S> <C> <C> <C> <C>
1994
Domestic.................................. $ 16,218,000 $ 7,447,000 $ 4,503,000 $ 229,418,000
Foreign................................... 11,013,000 1,963,000 1,186,000 228,618,000
------------- ------------- ------------ --------------
Total..................................... $ 27,231,000 $ 9,410,000 $ 5,689,000 $ 458,036,000
------------- ------------- ------------ --------------
------------- ------------- ------------ --------------
1995
Domestic.................................. $ 19,451,000 $ 8,348,000 $ 5,072,000 $ 288,299,000
Foreign................................... 15,023,000 4,827,000 2,931,000 326,808,000
------------- ------------- ------------ --------------
Total..................................... $ 34,474,000 $13,175,000 $ 8,003,000 $ 615,107,000
------------- ------------- ------------ --------------
------------- ------------- ------------ --------------
1996
Domestic.................................. $ 18,865,000 $10,110,000 $ 6,878,000 $ 279,283,000
Foreign................................... 19,344,000 5,454,000 2,832,000 476,287,000
------------- ------------- ------------ --------------
Total..................................... $ 38,209,000 $15,564,000 $ 9,710,000 $ 755,570,000
------------- ------------- ------------ --------------
------------- ------------- ------------ --------------
</TABLE>

F-23
<PAGE>
HAMILTON BANCORP INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

15. SUBSEQUENT EVENTS

The Company's Board has authorized the filing of a registration statement
relating to an initial public offering of 2,000,000 shares of common stock. In
connection with the initial public offering, the Board amended and restated the
articles of incorporation of the Company authorizing 75,000,000 shares of common
stock and 10,000,000 shares of "blank check" preferred stock. In addition, the
Board approved a 6.5 for 1 common stock split (see Note 1) and reorganization
(the "Reorganization") of the capital structure of the Company consisting of (i)
the conversion of all outstanding shares of the Company's Preferred Shares
(Series B and C) into 466,168 shares (post-stock split) of common stock and (ii)
the issuance of an aggregate of 1,396,761 shares (post-stock split) of common
stock for all outstanding warrants to purchase shares of common stock of the
Bank. The Reorganization was consummated in March 1997. The unaudited pro forma
information presented in the consolidated financial statements reflect the
conversion of the preferred stock and warrants into common stock.

16. PARENT COMPANY FINANCIAL INFORMATION

Condensed financial information for Hamilton Bancorp, Inc. (Parent Company
only) is as follows:

STATEMENTS OF FINANCIAL CONDITION

<TABLE>
<CAPTION>
DECEMBER 31
----------------------------
1995 1996
------------- -------------
<S> <C> <C>
ASSETS
Demand deposits with subsidiary.................................................... $ 392,192 $ 155,551
Securities available for sale...................................................... 248,226
Goodwill........................................................................... 533,677 490,453
Investment in subsidiary........................................................... 29,132,810 38,161,310
Investment in subsidiary's preferred stock......................................... 4,750,000 4,750,000
------------- -------------
Total.............................................................................. $ 34,808,679 $ 43,805,540
------------- -------------
------------- -------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Other liabilities.................................................................. $ 5,582 $ 5,438
Stockholders' equity............................................................... 34,803,097 43,800,102
------------- -------------
Total.............................................................................. $ 34,808,679 $ 43,805,540
------------- -------------
------------- -------------
</TABLE>

F-24
<PAGE>
HAMILTON BANCORP INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

16. PARENT COMPANY FINANCIAL INFORMATION (CONTINUED)
STATEMENTS OF INCOME

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------------------
1994 1995 1996
------------ ------------ ------------
<S> <C> <C> <C>
Interest income......................................................... $ 6,282 $ 3,199 $ 7,538
Dividend from subsidiary and other income............................... 107,934 674,691 712,500
------------ ------------ ------------
Total income........................................................ 114,216 677,890 720,038
Operating expenses...................................................... 130,737 62,482 43,065
------------ ------------ ------------
Income (loss) before equity in undistributed income of subsidiary....... (16,521) 615,408 676,973
Equity in undistributed income of subsidiary............................ 5,705,701 7,387,953 9,032,538
------------ ------------ ------------
Net income.............................................................. $ 5,689,180 $ 8,003,361 $ 9,709,511
------------ ------------ ------------
------------ ------------ ------------
</TABLE>

F-25
<PAGE>
HAMILTON BANCORP INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONCLUDED)

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------------------
Statements of Cash Flows 1994 1995 1996
------------ ------------ ------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income............................................................ $ 5,689,180 $ 8,003,361 $ 9,709,511
Adjustments to reconcile net income to net cash (used in) provided by
operations:
Equity in undistributed income of subsidiary........................ (5,705,701) (7,387,953) (9,032,538)
Amortization of goodwill............................................ 43,224 43,224 43,224
Gain on sale of securities available for sale....................... (13,866)
Other............................................................... (16,523) 142 (172)
------------ ------------ ------------
Net cash (used in) provided by operating activities..................... (3,686) 658,774 720,025
------------ ------------ ------------
Cash flows from investing activities:
Purchase of securities available for sale............................. (299,075) (248,222)
Proceeds from sales and maturities of securities available for sale... 313,435 60,000
Purchase of subsidiary's preferred stock.............................. (4,750,000)
------------ ------------ ------------
Net cash (used in) provided by investing activities..................... (4,735,640) 60,000 (248,222)
------------ ------------ ------------
Cash flows from financing activities:
Proceeds from issuance of preferred stock............................. 5,060,325
Cash dividends on preferred stock..................................... (98,694) (693,267) (708,444)
------------ ------------ ------------
Net cash provided by (used in) financing activities:.................... 4,961,631 (693,267) (708,444)
------------ ------------ ------------
Net increase (decrease) in cash......................................... 222,305 25,507 (236,641)
Cash at beginning of year............................................... 144,380 366,685 392,192
------------ ------------ ------------
Cash at end of year..................................................... $ 366,685 $ 392,192 $ 155,551
------------ ------------ ------------
------------ ------------ ------------
</TABLE>

F-26
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE INFORMATION
OR TO MAKE ANY REPRESENTATION IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE
CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY
OR BY THE UNDERWRITERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR
A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OFFERED HEREBY BY ANYONE IN ANY
JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH
THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO
ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY
CIRCUMSTANCES CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.

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

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary........................................................ 3
Risk Factors.............................................................. 8
Use of Proceeds........................................................... 13
Dividend Policy........................................................... 13
Dilution.................................................................. 13
Capitalization............................................................ 15
Selected Consolidated Financial Data...................................... 16
Management's Discussion and Analysis of Financial Condition and Results of
Operations.............................................................. 18
Business.................................................................. 36
Management................................................................ 62
Certain Transactions...................................................... 68
Principal Shareholders.................................................... 69
Description of Capital Stock.............................................. 71
Shares Eligible for Future Sale........................................... 73
Underwriting.............................................................. 74
Certain United States Tax Consequences to Non-United States Holders....... 75
Legal Matters............................................................. 77
Experts................................................................... 77
Index to Financial Statements............................................. F-1
</TABLE>

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

UNTIL , 1997 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL
DEALERS EFFECTING TRANSACTIONS IN THE REGISTERED SECURITIES, WHETHER OR NOT
PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
THIS IS IN ADDITION TO THE OBLIGATIONS OF DEALERS TO DELIVER A PROSPECTUS WHEN
ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR
SUBSCRIPTIONS.

2,000,000 SHARES

[LOGO]

HAMILTON BANCORP INC.

COMMON STOCK

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

PROSPECTUS

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

OPPENHEIMER & CO., INC.

NATWEST SECURITIES
LIMITED

, 1997

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The Registrant estimates that expenses payable by the Registrant in
connection with the Offering described in this registration statement (other
than underwriting discounts and commissions) will be as follows:

<TABLE>
<S> <C>
Securities and Exchange Commission registration fee............ $11,151.52
NASD filing fee................................................ 4,180.00
Nasdaq National Market listing fee............................. 47,500.00
Printing and engraving expenses................................ 75,000.00
Accounting fees and expenses................................... 150,000.00
Legal fees and expenses........................................ 300,000.00
Fees and expenses (including legal fees) for qualifications
under state securities laws.................................. 10,000.00
Registrar and Transfer Agent's fees and expenses............... 20,000.00
Miscellaneous.................................................. 282,168.48
----------
Total...................................................... $900,000.00
----------
----------
</TABLE>

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

All amounts except the Securities and Exchange Commission registration fee,
the NASD filing fee and the Nasdaq listing fee are estimated.

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

The Registrant has authority under the Florida Business Corporation Act to
indemnify its directors and officers to the extent provided in such statute. The
Registrant's Articles of Incorporation provide that the Registrant shall
indemnify its executive officers and directors to the fullest extent permitted
by law either now or hereafter. In general, Florida law permits a Florida
corporation to indemnify its directors, officers, employees and agents, and
persons serving at the corporation's request in such capacities for another
enterprise against liabilities arising from conduct that such persons reasonably
believed to be in, or not opposed to, the best interests of the corporation and,
with respect to any criminal action or proceeding, had no reasonable cause to
believe their conduct was unlawful.

The provisions of the Florida Business Corporation Act that authorize
indemnification do not eliminate the duty of care of a director and, in
appropriate circumstances, equitable remedies such as injunctive or other forms
of nonmonetary relief will remain available under Florida law. In addition, each
director will continue to be subject to liability for (a) violations of the
criminal law, unless the director had reasonable cause to believe his conduct
was lawful or had no reasonable cause to believe his conduct was unlawful, (b)
deriving an improper personal benefit from a transaction, (c) voting for or
assenting to an unlawful distribution, and (d) willful misconduct or a conscious
disregard for the best interests of the Registrant in a proceeding by or in the
right of the Registrant to procure a judgment in its favor or in a proceeding by
or in the right of a shareholder. The statute does not affect a director's
responsibilities under any other law, such as the federal securities laws or
state or federal environmental laws.

At present, there is no pending litigation or proceeding involving a
director or officer of the Registrant as to which indemnification is being
sought from the Registrant, nor is the Registrant aware of any threatened
litigation that may result in claims for indemnification from the Registrant by
any officer or director.

II-1
<PAGE>
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

On June 30, 1994, the Company issued an aggregate of 60,206.5 shares of its
Series B 14% Fixed Rate Non-Voting, Non-Cumulative, Perpetual Preferred Stock
(the "Series B Preferred Stock") as follows:

<TABLE>
<CAPTION>
SHARES OF
SERIES B
PREFERRED PRICE PER
SHAREHOLDER STOCK SHARE
- -------------------------------------------------------------------------------------------- --------- -----------
<S> <C> <C>
Maura A. Acosta and Eduardo A. Masferrer.................................................... 3,840 $ 50.00
Coco Plum Investments....................................................................... 500 $ 50.00
Fausto and Remedios Diaz-Oliver............................................................. 1,000 $ 50.00
Bertilda Garcia............................................................................. 200 $ 50.00
General Investments Ltd..................................................................... 7,000 $ 50.00
Guapan Holdings, Inc........................................................................ 37,646.5 $ 50.00
Intercredit Finance Group, Inc.............................................................. 5,000 $ 50.00
Edmund McCarthy............................................................................. 20 $ 50.00
Maria H. Protzel............................................................................ 4,000 $ 50.00
Simar Corp.................................................................................. 1,000 $ 50.00
</TABLE>

On December 31, 1994, the Company issued an aggregate of 41,000 shares of
its Series C 14% Fixed Rate Non-Voting, Non-Cumulative Perpetual Preferred Stock
(the "Series C Preferred Stock") as follows:

<TABLE>
<CAPTION>
SHARES OF
SERIES C
PREFERRED PRICE PER
SHAREHOLDER STOCK SHARE
- -------------------------------------------------------------------------------------------- ----------- -----------
<S> <C> <C>
Blue Diamond Services Corp.................................................................. 1,000 $ 50.00
Jose Rodolfo Chiari......................................................................... 4,000 $ 50.00
Guapan Holdings, Inc........................................................................ 16,000 $ 50.00
Iberoamerican Financial Corp................................................................ 4,000 $ 50.00
Intercredit Finance Group, Inc.............................................................. 3,000 $ 50.00
Industria Pesquera Jambeli.................................................................. 1,000 $ 50.00
John C. Kelsick............................................................................. 1,000 $ 50.00
Max N. Nitzberg, as Trustee................................................................. 4,000 $ 50.00
Rafoss Homes, Inc........................................................................... 5,000 $ 50.00
Lilliam Sanchez-Martinez.................................................................... 1,000 $ 50.00
Osmundo Sanchez............................................................................. 1,000 $ 50.00
</TABLE>

The aggregate offering price for the shares of (i) Series B Preferred Stock
was $3,010,325 and (ii) Series C Preferred Stock was $2,050,000. The
aforementioned issuances and sales were made in reliance upon the exemption from
the registration provisions of the Act afforded by Section 4(2) thereof, as
transactions by an issuer not involving a public offering.

In January 1997, the Company took action to reorganize its capital structure
(the "Reorganization"), subject only to regulatory approval of the
Change-in-Control application filed by Eduardo A. Masferrer, the Company's
Chairman of the Board, President and Chief Executive Officer (the "Regulatory
Approval Condition"), by entering into definitive agreements with the 15 holders
of warrants to purchase shares of common stock of the Bank (the "Warrants"), to
cancel all the outstanding warrants and issue in lieu thereof an aggregate of
1,396,761 shares of Common Stock (post-Stock Split). The Reorganization was
consummated in March 1997. Such shares of Common Stock were issued in accordance
with the exemption provided by Section 4(2) of the Act, in a transaction not
involving a public offering.

In connection with the Reorganization, the Company issued an aggregate of
277,316 shares (post-Stock Split) and 188,852 shares (post-Stock Split) of
Common Stock upon conversion of outstanding

II-2
<PAGE>

shares of the Company's Series B Preferred Stock and Series C Preferred Stock,
respectively. These shares were issued in accordance with the exemption provided
by Section 3(a)(9) of the Act, as an exchange transaction with the Company's
existing security holders where no commission or other remuneration was paid or
given directly or indirectly for soliciting such exchange.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) Exhibits:

<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
- ----------- ---------------------------------------------------------------------------------------------------------
<C> <S>

1.1 Proposed form of Underwriting Agreement *

3.1 Registrant's Amended and Restated Articles of Incorporation(1)

3.2 Registrant's Amended and Restated Bylaws *

4.1 Form of Common Stock certificate *

5.1 Opinion of Greenberg, Traurig, Hoffman, Lipoff, Rosen & Quentel, P.A. as to the validity of the Common
Stock being registered *

10.1 Registrant's 1993 Stock Option Plan, as amended *

10.2 Lease Agreement, dated December 20, 1996, by and between Hamilton Bank, N.A. and System Realty Twelve,
Inc. regarding the Registrant's corporate headquarters(1)

21.1 Subsidiaries of the Registrant(1)

23.1 Consent of Greenberg, Traurig, Hoffman, Lipoff, Rosen & Quentel, P.A. (to be included in its opinion to
be filed as Exhibit 5.1) *

23.2 Consent of Deloitte & Touche LLP*

23.3 Consent of Juan Miguel Capurro(1)

23.4 Consent of William Bickford(1)

23.5 Consent of Thomas Gaffney(1)

24.1 Reference is made to the Signatures section of this Registration Statement for the Power of Attorney(1)
</TABLE>

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

(1) Previously filed.

* Filed herewith.

(b) Financial Statement Schedules:

All schedules for which provision is made in the applicable accounting
regulations of the Commission are not required under the related instructions or
are not applicable, and therefore have been omitted.

ITEM 17. UNDERTAKINGS

(a) The undersigned registrant hereby undertakes to provide to the
underwriters at the closing specified in the underwriting agreement,
certificates in such denominations and registered in such names as required by
the underwriter to permit prompt delivery to each purchaser.

II-3
<PAGE>
(b) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registration of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.

(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of a registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4)
or 497(h) under the Securities Act shall be deemed to be part of the
registration statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.

II-4
<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this Amendment No. 2 to Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of Miami,
State of Florida, on March 17, 1997.

HAMILTON BANCORP INC.

By: /s/ EDUARDO A. MASFERRER
-----------------------------------------
Eduardo A. Masferrer
Chairman of the Board,
President and Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 2 to Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------ ------------------------------------------------ -------------------
<C> <S> <C>
/s/ EDUARDO A. MASFERRER Chairman of the Board, President and Chief
---------------------------- Executive Officer (principal executive officer) March 17, 1997
Eduardo A. Masferrer
/s/ MARIA FERRER-DIAZ* Senior Vice President, Finance and Controller
---------------------------- (principal accounting officer) March 17, 1997
Maria Ferrer-Diaz
/s/ MAURA A. ACOSTA*
---------------------------- Executive Vice President and Director March 17, 1997
Maura A. Acosta
/s/ WILLIAM ALEXANDER*
---------------------------- Director March 17, 1997
William Alexander
---------------------------- Director
Virgilo E. Sosa, Jr.
</TABLE>

<TABLE>
<S> <C> <C>
*By: /s/ EDUARDO A. MASFERRER March 17, 1997
----------------------------
Eduardo A. Masferrer
Attorney-in-fact
</TABLE>

II-5
<PAGE>

INDEX TO EXHIBITS

<TABLE>
<CAPTION>
SEQUENTIAL PAGE
EXHIBIT DESCRIPTION NUMBER
- ----------- ---------------------------------------------------------------------------------------- -------------------
<C> <S> <C>

1.1 Proposed form of Underwriting Agreement *

3.1 Registrant's Amended and Restated Articles of Incorporation(1)

3.2 Registrant's Amended and Restated Bylaws *

4.1 Form of Common Stock certificate *

5.1 Opinion of Greenberg, Traurig, Hoffman, Lipoff, Rosen & Quentel, P.A. as to the validity
of the Common Stock being registered *

10.1 Registrant's 1993 Stock Option Plan, as amended *

10.2 Lease Agreement, dated December 20, 1996, by and between Hamilton Bank, N.A. and System
Realty Twelve, Inc. regarding the Registrant's corporate headquarters(1)

21.1 Subsidiaries of the Registrant(1)

23.1 Consent of Greenberg, Traurig, Hoffman, Lipoff, Rosen & Quentel, P.A. (to be included in
its opinion to be filed as Exhibit 5.1) *

23.2 Consent of Deloitte & Touche LLP*

23.3 Consent of Juan Miguel Capurro(1)

23.4 Consent of William Bickford(1)

23.5 Consent of Thomas Gaffney(1)

24.1 Reference is made to the Signatures section of this Registration Statement for the Power
of Attorney(1)
</TABLE>

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

(1) Previously filed.

* Filed herewith.

<PAGE>

Exhibit 1.1

2,000,000 Shares

Hamilton Bancorp Inc.

Common Stock

UNDERWRITING AGREEMENT
----------------------

___________, 1997

OPPENHEIMER & CO., INC.
NATWEST SECURITIES LIMITED
c/o Oppenheimer & Co., Inc.
Oppenheimer Tower
World Financial Center
New York, New York 10281

As Representatives of the
Underwriters named on
Schedule I attached hereto.

Ladies and Gentlemen:

Hamilton Bancorp Inc., a Florida corporation (the "Company"),
proposes to sell to you and the other underwriters named on Schedule I to this
Agreement (the "Underwriters"), for whom you are acting as Representatives, an
aggregate of 2,000,000 shares (the "Firm Shares") of the Company's Common Stock,
$0.01 par value (the "Common Stock"). In addition, the Company proposes to
grant to the Underwriters an option to purchase up to an additional 300,000
shares (the "Option Shares") of Common Stock from it for the purpose of covering
over-allotments in connection with the sale of the Firm Shares. The Firm Shares
and the Option Shares are together called the "Shares."

1. SALE AND PURCHASE OF THE SHARES. On the basis of the
representations, warranties and agreements contained in, and subject to the
terms and conditions of, this Agreement:

(a) The Company agrees to sell to each of the Underwriters, and
each of the Underwriters agrees, severally and not jointly, to purchase
from the Company, at $_______ per share (the "Initial Price"), the number
of Firm Shares set forth opposite the name of such Underwriter on Schedule
I to this Agreement.

<PAGE>

(b) The Company grants to the several Underwriters an option to
purchase, severally and not jointly, all or any part of the Option Shares
at the Initial Price. The number of Option Shares to be purchased by each
Underwriter shall be the same percentage (adjusted by the Representatives
to eliminate fractions) of the total number of Option Shares to be
purchased by the Underwriters as such Underwriter is purchasing of the Firm
Shares. Such option may be exercised only to cover over-allotments in the
sales of the Firm Shares by the Underwriters and may be exercised in whole
or in part at any time and from time to time on or before 12:00 noon, New
York City time, on the business day before the Firm Shares Closing Date (as
defined below), and from time to time thereafter within 30 days after the
date of this Agreement, in each case upon written or telegraphic notice, or
oral or telephonic notice confirmed by written or telegraphic notice, by
the Representatives to the Company no later than 12:00 noon, New York City
time, on the business day before the Firm Shares Closing Date or at least
two business days before each Option Shares Closing Date (as defined
below), as the case may be, setting forth the number of Option Shares to be
purchased and the time and date (if other than the Firm Shares Closing
Date) of such purchase.

2. DELIVERY AND PAYMENT. Delivery by the Company of the Firm
Shares to the Representatives for the respective accounts of the Underwriters,
and payment of the purchase price by certified or official bank check or checks
payable in New York Clearing House (next day) funds to the Company, shall take
place at the offices of Simpson Thacher & Bartlett, 425 Lexington Avenue, New
York, New York 10017, at 10:00 a.m., New York City time, on the third (fourth,
if pricing occurs after 4:30 p.m., New York City time) business day following
the date of this Agreement, or at such time on such other date, not later than
10 business days after the date of this Agreement, as shall be agreed upon by
the Company and the Representatives (such time and date of delivery and payment
are called the "Firm Shares Closing Date").

In the event the option with respect to the Option Shares is
exercised, delivery by the Company of the Option Shares to the Representatives
for the respective accounts of the Underwriters and payment of the purchase
price by certified or official bank check or checks payable in New York Clearing
House (next day) funds to the Company shall take place at the offices of Simpson
Thacher & Bartlett specified above at the time and on the date (which may be the
same date as, but in no event shall be earlier than, the Firm Shares Closing
Date) specified in the notice referred to in Section l(b) (such time and date of
delivery and payment are called an "Option Shares Closing Date"). The Firm
Shares Closing Date and each Option Shares Closing Date are called,
individually, a "Closing Date" and, together, the "Closing Dates."

Certificates evidencing the Shares shall be registered in such
names and shall be in such denominations as the Representatives shall request at
least two full business days before the Firm Shares Closing Date or, in the case
of Option Shares, on the day of notice of exercise of the option as described in
Section l(b) and shall be made available to the Representatives for checking and
packaging, at such place as is designated by the Representatives, one full
business day before the Firm Shares Closing Date (or the Option Shares Closing
Date in the case of the Option Shares).

<PAGE>

3. REGISTRATION STATEMENT AND PROSPECTUS, PUBLIC OFFERING. The
Company has prepared in conformity with the requirements of the Securities Act
of 1933, as amended (the "Securities Act"), and the published rules and
regulations thereunder (the "Rules") adopted by the Securities and Exchange
Commission (the "Commission"), a registration statement on Form S-1 (No.
333-20435), including a preliminary prospectus relating to the Shares, and has
filed with the Commission the Registration Statement (as hereinafter defined)
and such amendments thereof as may have been required to the date of this
Agreement and the Registration Statement has become effective under the
Securities Act. Copies of such Registration Statement (including all amendments
thereof) and of the related preliminary prospectus have heretofore been
delivered by the Company to you. The term "preliminary prospectus" means any
preliminary prospectus (as described in Rule 430 of the Rules) included at any
time as a part of the Registration Statement. The Registration Statement as
amended at the time and on the date it became effective (the "Effective Date"),
including all exhibits and information, if any, deemed to be part of the
Registration Statement pursuant to Rule 424(b) and Rule 430A of the Rules, is
called the "Registration Statement." The term "Prospectus" means the prospectus
in the form first used to confirm sales of the Shares (whether such prospectus
was included in the Registration Statement at the time of effectiveness or was
subsequently filed with the Commission pursuant to Rule 424(b) of the Rules).

The Company understands that the Underwriters propose to make a
public offering of the Shares, as set forth in and pursuant to the Prospectus,
as soon after the Effective Date and the date of this Agreement as the
Representatives deem advisable. The Company hereby confirms that the
Underwriters and dealers have been authorized to distribute or cause to be
distributed each preliminary prospectus (except for the preliminary prospectus
included in the initial filing of the Registration Statement on January 27,
1997) and are authorized to distribute the Prospectus (as from time to time
amended or supplemented if the Company furnishes amendments or supplements
thereto to the Underwriters).

4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
hereby represents and warrants to each Underwriter as follows:

(a) On the Effective Date the Registration Statement complied,
and on the date of the Prospectus, on the date any post-effective amendment
to the Registration Statement shall become effective, on the date any
supplement or amendment to the Prospectus is filed with the Commission and
on each Closing Date, the Registration Statement and the Prospectus (and
any amendment thereof or supplement thereto) will comply, in all material
respects, with the applicable provisions of the Securities Act and the
Rules and the Securities Exchange Act of 1934, as amended, and the rules
and regulations of the Commission thereunder (the "Exchange Act"); the
Registration Statement did not, as of the Effective Date, contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein not misleading; and on the other dates referred to above neither
the Registration Statement nor the Prospectus, nor any amendment thereof or
supplement thereto, will contain any untrue statement of a material fact or
will omit to state any material fact required to be stated therein or
necessary in order to make the statements therein not misleading. When any
related preliminary prospectus was first filed with the Commission

<PAGE>

(whether filed as part of the Registration Statement or any amendment
thereto or pursuant to Rule 424(a) of the Rules) and when any amendment
thereof or supplement thereto was first filed with the Commission, such
preliminary prospectus as amended or supplemented complied in all material
respects with the applicable provisions of the Securities Act and the Rules
and did not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order
to make the statements therein not misleading. Notwithstanding the
foregoing, the Company makes no representation or warranty as to the
paragraph with respect to stabilization on the inside front cover page of
the Prospectus and the statements contained under the caption
"Underwriting" in the Prospectus. The Company acknowledges that the
statements referred to in the previous sentence constitute the only
information furnished in writing by the Representatives on behalf of the
several Underwriters specifically for inclusion in the Registration
Statement, any preliminary prospectus or the Prospectus.

(b) The financial statements of the Company (including the notes
thereto) included in the Registration Statement and Prospectus present
fairly the consolidated financial position, the results of operations and
cash flows and the stockholders' equity purported to be shown therein of
the Company and its subsidiaries at the respective dates and for the
respective periods to which they apply; and such financial statements have
been prepared in conformity with generally accepted accounting principles,
consistently applied throughout the periods involved, except as otherwise
stated therein.

(c) Deloitte & Touche LLP, whose report is filed with the
Commission as a part of the Registration Statement, are and, during the
periods covered by their report, were independent public accountants as
required by the Securities Act and the Rules.

(d) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Florida, and its subsidiary, Hamilton Bank, N.A., a national banking
association (the "Bank") has been duly organized and is validly existing as
a national banking association under the laws of the United States. The
Bank is the only subsidiary, direct or indirect, of the Company. The
Company does not control, directly or indirectly, any corporation (other
than the Bank), partnership, joint venture, association or other business
organization. The Company and the Bank are duly qualified and in good
standing as foreign corporations in each jurisdiction in which the
character or location of its assets or properties (owned, leased or
licensed) or the nature of its business makes such qualification necessary
except for such jurisdictions where the failure to so qualify would not
have a material adverse effect on the assets or properties, business,
results of operations, prospects or financial condition of the Company and
the Bank, taken as a whole. Each of the Company and the Bank has all
requisite corporate power and authority, and all necessary authorizations,
approvals, consents, orders, licenses, certificates and permits
(collectively, the "Authorizations") and has made all requisite
declarations, registrations and filings (collectively, the "Filings"), of,
from and with all governmental or regulatory bodies or any other person or
entity, to own, lease and license its assets and properties and conduct its
businesses as now being conducted and as described in the Registration
Statement and the Prospectus except for such Authorizations and Filings,
the failure to so obtain or make would not have a

<PAGE>

material adverse effect upon the assets or properties, business, results of
operations, prospects or financial condition of the Company and the Bank,
taken as a whole; no such authorization, approval, consent, order, license,
certificate or permit contains a materially burdensome restriction other
than as disclosed in the Registration Statement and the Prospectus; and the
Company has all such corporate power and authority, and such
authorizations, approvals, consents, orders, licenses, certificates and
permits to enter into, deliver and perform this Agreement and to issue and
sell the Shares (except as may be required under applicable state and
foreign Blue Sky laws and as may have been obtained under the Securities
Act).

(e) Each of the Company and the Bank is in compliance in all
material respects with all applicable laws administered by and regulations
of the Board of Governors of the Federal Reserve System (the "Board"), the
Office of the Comptroller of the Currency (the "OCC"), the Federal Deposit
Insurance Corporation (the "FDIC") and any state bank regulatory authority
with jurisdiction over the Company or the Bank, as the case may be ("Bank
Regulatory Authorities"), the failure to comply with which would have a
material adverse effect upon the assets or properties, business, results of
operations, prospects or financial condition of the Company and the Bank,
taken as a whole. Neither the Company nor the Bank is a party to any
written agreement or memorandum of understanding with, or a party to any
commitment letter or similar undertaking to, or is subject to any order or
directive by, or is a recipient of any extraordinary supervisory letter
from, or has adopted any board resolutions at the request of, any Bank
Regulatory Authority which restricts materially the conduct of its
business, or in any manner relates to its capital adequacy, its credit
policies or its management, nor have any of them been advised by any Bank
Regulatory Authority that it is contemplating issuing or requesting (or is
considering the appropriateness of issuing or requesting) any such order,
decree, agreement, memorandum of understanding, extraordinary supervisory
letter, commitment letter or similar submission, or any such board
resolutions.

(f) Except as disclosed in the Registration Statement and
Prospectus, the Company and the Bank each owns or possesses adequate and
enforceable rights, either as owner or licensee, to use all trademarks,
trademark applications, trade names, service marks, copyrights, copyright
applications, licenses, know-how and other similar rights and proprietary
knowledge (collectively, "Intangibles") necessary for the conduct of its
business in all material respects as described in the Registration
Statement and the Prospectus. The Company has not received any notice of,
or to its best knowledge is not aware of, any infringement of or conflict
with asserted rights of others with respect to any Intangibles which,
singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would have a material adverse effect upon the assets or
properties, business, results of operations, prospects or financial
condition of the Company and the Bank, taken as a whole.

(g) The Company and the Bank have good title to each of the
items of personal property which are reflected in the financial statements
referred to in Section 4(c) or are referred to in the Registration
Statement and the Prospectus as being owned by them and valid and
enforceable leasehold interests in each of the items of real and

<PAGE>

personal property which are referred to in the Registration Statement and
the Prospectus as being leased by them, in each case free and clear of all
liens, encumbrances, claims, security interests and defects, other than
those described in the Registration Statement and the Prospectus and those
which do not and will not have a material adverse effect upon the assets or
properties, business, results of operations, prospects or financial
condition of the Company and the Bank, taken as a whole.

(h) There is no litigation or governmental or other proceeding
or investigation before any court or before or by any public body or board
pending or, to the Company's best knowledge, threatened against, or
involving the assets, properties or business of, the Company or the Bank or
any of their respective directors or officers which, to the best of the
Company's present knowledge and belief, would materially adversely affect
any such assets or properties or the business, results of operations,
prospects or financial condition of the Company and the Bank, taken as a
whole, or which is otherwise material in the context of the offering of the
Shares contemplated hereby.

(i) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus, except as
described therein, (i) there has not been any material adverse change in
the assets or properties, business, results of operations, prospects or
financial condition of the Company, whether or not arising from
transactions in the ordinary course of business; (ii) the Company has not
sustained any material loss or interference with its assets, businesses or
properties (whether owned or leased) from fire, explosion, earthquake,
flood or other calamity, whether or not covered by insurance, or from any
labor dispute or any court or legislative or other governmental action,
order or decree; and (iii) and since the date of the latest balance sheet
included in the Registration Statement and the Prospectus, except as
reflected therein, the Company has not (a) issued any securities (except
for securities issued in connection with the Reorganization as described in
the Registration Statement and the Prospectus) or incurred any liability or
obligation, direct or contingent, for borrowed money, except such
liabilities or obligations as may be incurred in the ordinary course of
business consistent with past practice, (b) entered into any transaction
not in the ordinary course of business consistent with past practice or (c)
declared or paid any dividend or made any distribution on any shares of its
stock or redeemed, purchased or otherwise acquired or agreed to redeem,
purchase or otherwise acquire any shares of its stock.

(j) There is no document or contract of a character required to
be described in the Registration Statement or Prospectus or to be filed as
an exhibit to the Registration Statement which is not described or filed as
so required by the Securities Act or the Rules. Neither the Company, the
Bank, nor to the best of the Company's knowledge, any other party is in
default in the observance or performance of any term or obligation to be
performed by it under any agreement filed as an exhibit to the Registration
Statement, and no event has occurred which with notice or lapse of time or
both would constitute such a default, in any such case where such default
or event would have a material adverse effect on the assets or properties,
business, results of operations, prospects or financial condition of the
Company and the Bank, taken as a whole. No default exists, and no event
has occurred which with notice or lapse of time or both would constitute a
default,

<PAGE>

in the due performance and observance of any term, covenant or condition,
by the Company or the Bank of any other agreement or instrument to which
the Company or the Bank is a party or by which it or its properties or
business may be bound or affected which default or event would have a
material adverse effect on the assets or properties, business, results of
operations, prospects or financial condition of the Company and the Bank,
taken as a whole.

(k) Neither the Company nor the Bank is in violation of any term
or provision of, in the case of the Company, its Amended and Restated
Articles of Incorporation (as amended, the "Company's Articles") and in the
case of the Bank, its Amended Articles of Association (as amended "Bank
Articles" and, together with the Company's Articles, the "Articles") or its
bylaws (the Company's and the Bank's bylaws together the "Bylaws") or of
any franchise, license, permit, judgment, ruling, decree, order, statute,
rule or regulation, where the consequences of such violation would have a
material adverse effect on the assets or properties, business, results of
operations, prospects or financial condition of the Company and the Bank,
taken as a whole.

(l) Neither the execution, delivery and performance of this
Agreement by the Company nor the consummation of any of the transactions
contemplated hereby (including, without limitation, the issuance and sale
by the Company of the Shares) will (i) violate any provision of the
Articles or the Bylaws of the Company or the Bank or (ii) give rise to a
right to terminate or accelerate the due date of any payment due under, or
conflict with or result in the breach of any term or provision of, or
constitute a default (or an event which with notice or lapse of time or
both would constitute a default) under, or require any consent or waiver
under, or result in the execution or imposition of any lien, charge or
encumbrance upon any properties or assets of the Company or the Bank
pursuant to the terms of, any indenture, mortgage, deed of trust or other
agreement or instrument to which the Company or the Bank is a party or by
which the Company or the Bank or any of their properties or businesses are
bound, or any franchise, license, permit, judgment, ruling, decree, order,
statute, rule or regulation applicable to the Company, except in the case
of this clause (ii) for any such termination, acceleration, conflict,
breach, default, lien, charge or encumbrance which would not, individually
or in the aggregate, have a material adverse affect on the assets or
properties, business, results of operations, prospects or financial
condition of the Company and the Bank, taken as a whole, and except for
such consents or waivers which have already been obtained and are in full
force and effect.

(m) The Company has an authorized and outstanding capital stock
as set forth under the caption "Description of Capital Stock" in the
Prospectus as of the date indicated therein. All of the outstanding shares
of Common Stock have been duly and validly issued and are fully paid and
nonassessable and none of them were issued in violation of any preemptive
or other similar right. The Shares have been duly authorized and, when
issued and sold pursuant to this Agreement, will be duly and validly
issued, fully paid and nonassessable and none of them will be issued in
violation of any preemptive or other similar right. Except as disclosed in
the Registration Statement and the Prospectus, there is no outstanding
option, warrant or other right (including, without limitation, preemptive

<PAGE>

rights) calling for the issuance of, and there is no commitment, plan or
arrangement to issue, any share of stock of the Company or any security
convertible into, or exercisable or exchangeable for, such stock or other
equity interest in the Company. The Common Stock and the Shares conform in
all material respects to all statements in relation thereto contained in
the Registration Statement and the Prospectus.

(n) No holder of any security of the Company has the right to
have any security owned by such holder included in the Registration
Statement or to demand registration of any security owned by such holder
during the period ending 180 days after the date of this Agreement.

(o) All necessary corporate action has been duly and validly
taken by the Company to authorize the execution, delivery and performance
of this Agreement and the issuance and sale of the Shares by the Company.
This Agreement has been duly and validly authorized, executed and delivered
by the Company and constitutes a legal, valid and binding obligation of the
Company enforceable against the Company in accordance with its terms,
except (i) as the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally and by general equitable
principles and (ii) to the extent that rights to indemnity or contribution
under this Agreement may be limited by Federal and state securities laws or
the public policy underlying such laws.

(p) Neither the Company nor the Bank is involved in any labor
dispute nor, to the knowledge of the Company, is any such dispute
threatened, which dispute would have a material adverse effect on the
assets or properties, business, results of operations, prospects or
financial condition of the Company and the Bank, taken as a whole.

(q) No transaction has occurred between or among the Company or
any of its affiliates, officers or directors or any affiliate or affiliates
of any such officer or director that is required to be described in and is
not described in the Registration Statement and the Prospectus.

(r) The Company has not taken, nor will it take, directly or
indirectly, any action designed to or which might reasonably be expected to
cause or result in, or which has constituted or which might reasonably be
expected to constitute, the stabilization or manipulation of the price of
the Common Stock to facilitate the sale or resale of any of the Shares.

(s) The Company and the Bank have filed all Federal, state,
local and foreign tax returns which are required to be filed by them,
either on an individual or consolidated basis, through the date hereof, or
has received extensions thereof; all taxes shown on such returns and all
assessments received by them have been paid, to the extent that the same
have become due, except where the failure to so file or pay could not have
a material adverse effect on the assets or properties, business, results of
operations, prospects or financial condition of the Company and the Bank,
taken as a whole.

<PAGE>

(t) The Shares have been duly authorized for quotation on the
National Association of Securities Dealers Automated Quotation ("NASDAQ")
National Market System, subject to official notice of issuance, and a
registration statement has been filed on Form 8-A pursuant to Section 12 of
the Exchange Act for the Shares, which registration statement complies in
all material respects with the Exchange Act.

(u) The Company will comply with all of the requirements and
file the required forms as specified in Florida Statutes Section 517.075 if
qualification of the Shares becomes necessary.

(v) The Company is not an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in the
Investment Company Act of 1940, as amended.

5. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. The obligations
of the Underwriters under this Agreement are several and not joint. The
respective obligations of the Underwriters to purchase the Shares are subject to
each of the following terms and conditions:

(a) The Prospectus shall have been timely filed with the
Commission in accordance with Section 6(A)(a) of this Agreement.

(b) No order preventing or suspending the use of any preliminary
prospectus or the Prospectus shall have been or shall be in effect and no
order suspending the effectiveness of the Registration Statement shall be
in effect and no proceedings for such purpose shall be pending before or
threatened by the Commission, and any requests for additional information
on the part of the Commission (to be included in the Registration Statement
or the Prospectus or otherwise) shall have been complied with to the
satisfaction of the Representatives.

(c) The representations and warranties of the Company contained
in this Agreement and in the certificates delivered pursuant to Section
5(d) shall be true and correct when made and on and as of each Closing Date
as if made on such date and the Company shall have performed all covenants
and agreements and satisfied all the conditions contained in this Agreement
required to be performed or satisfied by it at or before such Closing Date.

(d) The Representatives shall have received on each Closing Date
a certificate, addressed to the Representatives and dated such Closing
Date, of the chief executive officer and the chief financial officer or
chief accounting officer of the Company, acting solely in their capacities
as executive officers of the Company, to the effect that the signers of
such certificate have carefully examined the Registration Statement, the
Prospectus and this Agreement and that, to the best of their knowledge
after due inquiry, the representations and warranties of the Company in
this Agreement are true and correct on and as of such Closing Date with the
same effect as if made on such Closing Date and the Company has performed
all covenants and agreements and satisfied all conditions

<PAGE>

contained in this Agreement required to be performed or satisfied by it at
or prior to such Closing Date.

(e) The Representatives shall have received at the time this
Agreement is executed and on each Closing Date a signed letter from
Deloitte & Touche LLP addressed to the Representatives and dated,
respectively, the date of this Agreement and each such Closing Date, in
form and substance reasonably satisfactory to the Representatives,
confirming that they are independent accountants within the meaning of the
Securities Act and the Rules, that the response to Item 10 of the
Registration Statement is correct insofar as it relates to them and stating
in effect that:

(i) in their opinion the audited financial statements
included in the Registration Statement and the Prospectus and
reported on by them comply as to form in all material respects with
the applicable accounting requirements of the Securities Act and
the Rules;

(ii) on the basis of a reading of the amounts included in
the Registration Statement and the Prospectus under the headings
"Summary Consolidated Financial Data" and "Selected Consolidated
Financial Data," carrying out certain procedures (but not an
examination in accordance with generally accepted auditing
standards) which would not necessarily reveal matters of
significance with respect to the comments set forth in such letter,
a reading of the minutes of the meetings of the shareholders and
directors of the Company, and inquiries of certain officials of the
Company who have responsibility for financial and accounting
matters of the Company as to transactions and events subsequent to
the date of the latest audited financial statements, except as
disclosed in the Registration Statement and the Prospectus, nothing
came to their attention which caused them to believe that:

(A) the amounts in "Summary Consolidated Financial
Data," and "Selected Consolidated Financial Data" included
in the Registration Statement and the Prospectus do not
agree with the corresponding amounts in the audited or
unaudited financial statements from which such amounts were
derived; or

(B) with respect to the Company, there were, at a
specified date not more than five business days prior to the
date of the letter, any increases in the long-term
liabilities of the Company or any decreases in net income or
the stockholders' equity in the Company, as compared with
the amounts shown on the Company's audited balance sheet for
the fiscal year ended December 31, 1996 or for the
comparable period in the prior year, as the case may be; and

(iii) they have performed certain other procedures as a
result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from

<PAGE>

the general accounting records of the Company) set forth in the
Registration Statement and the Prospectus and reasonably specified
by the Representatives agrees with the accounting records of the
Company.

References to the Registration Statement and the Prospectus in this
paragraph (e) are to such documents as amended and supplemented at
the date of the letter.

(f) The Representatives shall have received on each Closing Date
from Greenberg, Traurig, Hoffman, Lipoff, Rosen & Quentel, P.A., counsel
for the Company, an opinion, addressed to the Representatives and dated
such Closing Date, and stating in effect that:

(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of Florida and its subsidiary, the Bank, has been duly
organized and is validly existing as a national banking association
under the laws of the United States. The Company and the Bank are
duly qualified and in good standing as foreign corporations in each
jurisdiction in which the character or location of their respective
assets or properties (owned, leased or licensed) or the nature of
their respective businesses makes such qualification necessary,
except for such jurisdictions where the failure to so qualify would
not have a material adverse effect on the assets or properties,
business, results of operations or financial condition of the
Company and the Bank, taken as a whole.

(ii) The Company and the Bank each have all requisite
corporate power and authority to own, lease and license their
assets and properties and conduct their businesses as now being
conducted and as described in the Registration Statement and the
Prospectus; and the Company has all requisite corporate power and
authority and all necessary authorizations, approvals, consents,
orders, licenses, certificates and permits to enter into, deliver
and perform this Agreement and to issue and sell the Shares (other
than those required under the Securities Act, which have been
obtained, and state or foreign Blue Sky laws or as may be required
by the NASD in connection with the offering of the Shares by the
Underwriters, as to which no opinion need be expressed).

(iii) The Company has an authorized and issued capital stock
as set forth under the caption "Capitalization" in the Registration
Statement and the Prospectus as of the date indicated therein; the
certificates evidencing the Shares are in due and proper legal form
and have been duly authorized for issuance by the Company; all of
the outstanding shares of Common Stock of the Company have been
duly and validly authorized and issued and are fully paid and
nonassessable and, to such counsel's knowledge, none of them was
issued in violation of any preemptive or other similar right. The
Shares have been duly authorized and, when issued and sold pursuant
to this Agreement, will be duly and validly issued, fully paid and
nonassessable and, to such counsel's knowledge, none of them will
have been issued in violation of any preemptive or other similar
right contained

<PAGE>

in the Company's Articles or Bylaws or in any other agreement or
instrument known to such counsel. To such counsel's knowledge,
except as disclosed in the Registration Statement and the
Prospectus, there is no outstanding option, warrant or other right
calling for the issuance of, and no commitment, plan or arrangement
to issue, any share of stock of the Company or any security
convertible into, exercisable for, or exchangeable for stock of the
Company. The Common Stock and the Shares conform in all material
respects to the descriptions thereof contained in the Registration
Statement and the Prospectus.

(iv) All necessary corporate action has been duly and
validly taken by the Company to authorize the execution, delivery
and performance of this Agreement and the issuance and sale of the
Shares. This Agreement has been duly and validly authorized,
executed and delivered by the Company. Neither the execution,
delivery and performance of this Agreement by the Company nor the
consummation of any of the transactions contemplated hereby
(including, without limitation, the issuance and sale by the
Company of the Shares) will violate any provision of the Articles
or the Bylaws of the Company or the Bank.

(v) No consent, approval, authorization or order of any
court or governmental agency or body is required for the
performance of this Agreement by the Company or the consummation of
the transactions contemplated hereby, except such as have been
obtained under the Securities Act and the Exchange Act and such as
may be required under state securities or Blue Sky laws in
connection with the purchase and distribution of the Shares by the
several Underwriters and the clearance of the offering with the
NASD.

(vi) The statements in the Prospectus under the captions
"Description of Capital Stock," "Business--Regulation" and "Certain
United States Tax Consequences to Non-United States Holders," to
the extent that such statements constitute a summary of documents
referred to therein or matters of law or legal conclusions, are
fair summaries in all material respects and accurately present the
information called for with respect to such documents and matters.
To such counsel's knowledge, there are no contracts or other
documents required to be filed as exhibits to, or described or
referred to in, the Registration Statement which have not been so
filed with the Commission or which are not fairly described or
referred to in the Registration Statement.

(vii) The Registration Statement and the Prospectus and each
amendment or supplement thereto (except for the financial
statements and other financial and statistical data included
therein, as to which such counsel expresses no opinion) comply as
to form in all material respects with the requirements of the
Securities Act and the Rules.

(viii) The Registration Statement has become effective under
the Securities Act, and to the best knowledge of such counsel no
stop order suspending the effectiveness of the Registration
Statement has been issued and no

<PAGE>

proceedings for that purpose have been instituted or are
threatened, pending or contemplated.

(ix) The Company is not an "investment company" or an
entity "controlled" by an "investment company" as such terms are
defined in the Investment Company Act of 1940, as amended.

To the extent deemed advisable by such counsel, they may rely as to
matters of fact on certificates of responsible officers of the Company, the
Bank and public officials and on the opinions of other counsel satisfactory
to the Representatives as to matters which are governed by laws other than
the laws of the State of Florida and the Federal laws of the United States;
PROVIDED that such counsel shall state that in their opinion the
Underwriters and they are justified in relying on such other opinions.
Copies of such certificates and other opinions shall be furnished to the
Representatives and counsel for the Underwriters.

In addition, such counsel shall state that such counsel has
participated in conferences with officers and other representatives of the
Company, representatives of the Representatives, including Underwriters'
counsel, and representatives of the independent certified public
accountants of the Company, at which conferences the contents of the
Registration Statement and the Prospectus and related matters were
discussed and, although such counsel is not passing upon and does not
assume any responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement and the Prospectus
(relying as to materiality to a large extent upon the opinions and
representations of officers and other representatives of the Company), on
the basis of the foregoing, no facts have come to the attention of such
counsel which lead such counsel to believe that the Registration Statement
at the time the Registration Statement became effective (except with
respect to the financial statements and notes thereto and other financial
and statistical data contained therein, as to which such counsel need
express no opinion or belief) contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, or that the
Prospectus as amended or supplemented (except with respect to the financial
statements and notes thereto and other financial and statistical data
contained therein, as to which such counsel need make no statement or
express any opinion or belief) on the date thereof and on such Closing Date
contained any untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
Notwithstanding the preceding sentence, the opinions expressed in (iii) and
(vi) above remain in effect and shall in no way be limited by the
foregoing.

(g) The Representatives shall have received on each Closing Date
from J. Reid Bingham, Esq., general counsel of the Company, an opinion,
addressed to the Representatives and dated such Closing Date, and stating
in effect that:

(i) Neither the execution, delivery and performance of
this Agreement by the Company nor the consummation of any of the
transactions contemplated

<PAGE>

hereby (including, without limitation, the issuance and sale by the
Company of the Shares) will give rise to a right to terminate or
accelerate the due date of any payment due under, or conflict with
or result in the breach of any term or provision of, or constitute
a default (or any event which with notice or lapse of time, or
both, would constitute a default) under, or require consent or
waiver under, or result in the execution or imposition of any lien,
charge or encumbrance upon any properties or assets of the Company
or the Bank pursuant to the terms of, any indenture, mortgage, deed
of trust, note or other agreement or instrument of which such
counsel is aware and to which the Company or the Bank is a party or
by which the Company or the Bank or any of their properties or
businesses is bound, or any statute, rule or regulation or, to such
counsel's knowledge, any franchise, license, permit, judgment,
ruling, decree or order applicable to the Company, except for any
such termination, acceleration, conflict, breach, default, lien,
charge or encumbrance which would not, individually or in the
aggregate, have a material adverse effect on the assets or
properties, business, results of operations or financial condition
of the Company and the Bank, taken as a whole, and except for such
consents or waivers which have already been obtained and are in
full force and effect.

(ii) To such counsel's knowledge, no default exists, and no
event has occurred which with notice or lapse of time, or both,
would constitute a default, in the due performance and observance
of any term, covenant or condition by the Company or the Bank of
any indenture, mortgage, deed of trust, note or any other agreement
or instrument to which the Company or the Bank is a party or by
which it or any of their assets or properties or businesses may be
bound or affected, where the consequences of such default would
have a material and adverse effect on the assets, properties,
businesses, results of operations or financial condition of the
Company and the Bank, taken as a whole.

(iii) To such counsel's knowledge, neither the Company nor
the Bank is in violation of any term or provision of its Articles
or Bylaws or any franchise, license, permit, judgment, ruling,
decree, order, statute, rule or regulation, where the consequences
of such violation would have a material and adverse effect on the
assets, properties, businesses, results of operations or financial
condition of the Company and the Bank, taken as a whole.

(iv) Except as disclosed in the Registration Statement, to
such counsel's knowledge, there is no litigation or governmental or
other proceeding or investigation, before any court or before or by
any public body or board pending or which is required to be
disclosed in the Registration Statement or Prospectus by the Act
and the Rules, other than those described therein.

(v) To such counsel's knowledge, the Company and the Bank
are in compliance in all material respects with all laws
administered by and regulations of each Bank Regulatory Authority
with jurisdiction over the Company or the Bank, the failure to
comply with which would have a material adverse effect upon

<PAGE>

the assets or properties, business, results of operations or
financial condition of the Company and the Bank, taken as a whole.

In addition, such counsel shall state that such counsel has
participated in conferences with other officers and other representatives
of the Company, representatives of the Representatives, including
Underwriters' counsel, and representatives of the independent certified
public accountants of the Company, at which conferences the contents of the
Registration Statement and the Prospectus and related matters were
discussed and, although such counsel is not passing upon and does not
assume any responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement and the Prospectus, on
the basis of the foregoing, no facts have come to the attention of such
counsel which lead such counsel to believe that the Registration Statement
at the time the Registration Statement became effective (except with
respect to the financial statements and notes thereto and other financial
and statistical data contained therein, as to which such counsel need
express no opinion or belief) contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, or that the
Prospectus as amended or supplemented (except with respect to the financial
statements and notes thereto and other financial and statistical data
contained therein, as to which such counsel need make no statement or
express any opinion or belief) on the date thereof and on such Closing Date
contained any untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.

(h) The Representatives shall have received from each person who is
a director or officer of the Company or the Bank and each shareholder
(except those named in Schedule II hereto) an agreement, or each such
person shall be subject to an agreement, to the effect that such person
will not offer for sale, sell, contract to sell, distribute, transfer,
grant any option for the sale of, or otherwise dispose of, directly or
indirectly any equity securities (or any rights to purchase or acquire
equity securities) of the Company (or securities convertible into,
exercisable for, or exchangeable for equity securities of the Company)
owned by them for a period of 180 days after the date of the Prospectus,
without the prior written consent of Oppenheimer & Co., Inc.

(i) All proceedings taken in connection with the sale of the Firm
Shares and the Option Shares as herein contemplated shall be reasonably
satisfactory in form and substance to the Representatives and their counsel
and the Underwriters shall have received from Simpson Thacher & Bartlett a
favorable opinion, addressed to the Underwriters and dated such Closing
Date, with respect to the Shares, the Registration Statement and the
Prospectus, and such other related matters as the Representatives may
reasonably request, and the Company shall have furnished to Simpson Thacher
& Bartlett such documents as they may reasonably request for the purpose of
enabling them to pass upon such matters.

(j) If the Shares have been qualified for sale in Florida, the
Representatives shall have received on each Closing Date certificates,
addressed to the Representatives,

<PAGE>

and dated such Closing Date, of an executive officer of the Company, acting
solely in his capacity as an executive officer of the Company, to the
effect that the signer of such certificate has reviewed and understands the
provisions of Section 517.075 of the Florida Statutes, and represents that,
to his knowledge after due inquiry, the Company has complied, and at all
times will comply, with all provisions of Section 517.075 and further, that
as of such Closing Date, neither the Company nor any of its affiliates does
business with the government of Cuba or with any person or affiliate
located in Cuba.

6. COVENANTS OF THE COMPANY. The Company covenants and agrees
as follows:

(a) The Company shall prepare the Prospectus in a form approved by
the Representatives and file such Prospectus pursuant to Rule 424(b) under
the Securities Act not later than the Commission's close of business on the
second business day following the execution and delivery of this Agreement
and shall promptly advise the Representatives (i) when the Registration
Statement and any amendment thereto shall have become effective, (ii) of
any request by the Commission for any amendment of the Registration
Statement or the Prospectus or for any additional information, (iii) of the
prevention or suspension of the use of any preliminary prospectus or the
Prospectus or of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the
institution or threatening of any proceeding for that purpose and (iv) of
the receipt by the Company of any notification with respect to the
suspension of the qualification of the Shares for sale in any jurisdiction
or the initiation or threatening of any proceeding for such purpose. The
Company shall not file any amendment of the Registration Statement or
supplement to the Prospectus unless the Company has furnished the
Representatives a copy for their review prior to filing and shall not file
any such proposed amendment or supplement to which the Representatives
reasonably object. The Company shall use its best efforts to prevent the
issuance of any such stop order and, if issued, to obtain as soon as
possible the withdrawal thereof.

(b) If, at any time when a prospectus relating to the Shares is
required to be delivered under the Securities Act and the Rules, any event
occurs as a result of which the Prospectus as then amended or supplemented
would include any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein in the light of the
circumstances under which they were made not misleading, or if it shall be
necessary to amend or supplement the Prospectus to comply with the
Securities Act or the Rules, the Company promptly shall prepare and file
with the Commission, subject to the second sentence of paragraph (a) of
this Section 6(A), an amendment or supplement which shall correct such
statement or omission or an amendment which shall effect such compliance.

(c) The Company shall make generally available to its security
holders and to the Representatives as soon as practicable, but not later
than 45 days after the end of the 12-month period beginning at the end of
the fiscal quarter of the Company during which the Effective Date occurs
(or 90 days if such 12-month period coincides with the Company's fiscal
year), an earnings statement (which need not be audited) of the

<PAGE>

Company, covering such 12-month period, which shall satisfy the provisions
of Section 11(a) of the Securities Act and Rule 158 of the Rules.

(d) The Company shall furnish to the Representatives and counsel
for the Underwriters, without charge, signed copies of the Registration
Statement (including all exhibits thereto and amendments thereof) as
originally filed and to each other Underwriter a conformed copy of the
Registration Statement (without exhibits thereto) and all amendments
thereof and, so long as delivery of a prospectus by an Underwriter or
dealer may be required by the Securities Act or the Rules, as many copies
of any preliminary prospectus and the Prospectus and any amendments thereof
and supplements thereto as the Representatives may reasonably request.

(e) In the event it becomes necessary to qualify the Shares for
sale in various jurisdictions, the Company shall cooperate with the
Representatives and their counsel in endeavoring to qualify the Shares for
offer and sale under the laws of such jurisdictions as the Representatives
may designate, and shall maintain such qualifications in effect so long as
required for the distribution of the Shares; PROVIDED, HOWEVER, that the
Company shall not be required in connection therewith, as a condition
thereof, to qualify as a foreign corporation or to execute a general
consent to service of process in any jurisdiction or subject itself to
taxation as doing business in any jurisdiction in which it is not now so
qualified or subject.

(f) For a period of five years after the date of this Agreement,
the Company shall supply to the Representatives, and to each other
Underwriter who may so request in writing, copies of such financial
statements and other periodic and special reports as the Company may from
time to time distribute generally to the holders of any class of its
capital stock and to furnish to the Representatives a copy of each annual
or other report it shall be required to file with the Commission (including
the Report on Form SR required by Rule 463 of the Rules).

(g) Without the prior written consent of Oppenheimer & Co., Inc.,
for a period of 180 days after the date of this Agreement, the Company and
each of its individual directors and officers shall not offer for sale,
sell, contract to sell, distribute, transfer, grant any option for the sale
of, or otherwise dispose of, directly or indirectly (other than on Form S-8
or on any successor form), or exercise any registration rights with respect
to, any equity securities of the Company (or any securities convertible
into, exercisable for or exchangeable for equity securities of the
Company), except for the issuance of the Shares pursuant to the
Registration Statement and the issuance of options pursuant to the
Company's Stock Option Plan as described in the Registration Statement and
the Prospectus. In the event that during this period, (i) any options are
issued pursuant to the Company's Stock Option Plan that are exercisable
during such 180-day period or (ii) any registration is effected on Form S-8
or on any successor form relating to options that are exercisable during
such 180-day period, the Company shall obtain the written agreement of such
grantee or holder of such registered securities that, for a period of 180
days after the date of this Agreement, such person will not, without the
prior written consent of Oppenheimer & Co., Inc., offer for sale, sell,
distribute, grant any option for the sale of,

<PAGE>

or otherwise dispose of, directly or indirectly, or exercise any
registration rights with respect to, any shares of Common Stock (or any
securities convertible into, exercisable for, or exchangeable for any
shares of Common Stock) owned by such person.

(h) On or before completion of this offering, the Company shall
make all filings required under applicable securities laws and by the
NASDAQ National Market System (including any required registration under
the Exchange Act).

(B) The Company agrees to pay, or reimburse if paid by the
Representatives, whether or not the transactions contemplated hereby are
consummated or this Agreement is terminated, all costs and expenses incident to
the public offering of the Shares and the performance of the obligations of the
Company under this Agreement including those relating to: (i) the preparation,
printing, filing and distribution of the Registration Statement including all
exhibits thereto, each preliminary prospectus, the Prospectus, all amendments
and supplements to the Registration Statement and the Prospectus, and the filing
and distribution of this Agreement; (ii) the preparation and delivery of
certificates for the Shares to the Underwriters; (iii) the registration or
qualification of the Shares for offer and sale under the securities or Blue Sky
laws of the various jurisdictions referred to in Section 6(A)(e), including the
reasonable fees and disbursements of counsel for the Underwriters in connection
therewith (in the event such registration and qualification become necessary)
and the preparation, printing, distribution and shipment of preliminary and
supplementary Blue Sky memoranda; (iv) the furnishing (including costs of
shipping and mailing) to the Representatives and to the Underwriters of copies
of each preliminary prospectus, the Prospectus and all amendments or supplements
to the Prospectus, and of the several documents required by this Section to be
so furnished, as may be reasonably requested for use in connection with the
offering and sale of the Shares by the Underwriters or by dealers to whom Shares
may be sold; (v) the filing fees of the National Association of Securities
Dealers, Inc. in connection with its review of the terms of the public offering;
(vi) the furnishing (including costs of shipping and mailing) to the
Representatives and to the Underwriters of copies of all reports and information
required by Section 6(A)(f); (vii) inclusion of the Shares for quotation on the
NASDAQ National Market System; and (viii) all transfer taxes, if any, with
respect to the sale and delivery of the Shares by the Company to the
Underwriters. Subject to the provisions of Section 9, the Underwriters agree to
pay, whether or not the transactions contemplated hereby are consummated or this
Agreement is terminated, all costs and expenses incident to the performance of
the obligations of the Underwriters under this Agreement not payable by the
Company pursuant to the preceding sentence, including, without limitation, the
fees and disbursements of counsel for the Underwriters.

7. INDEMNIFICATION.

(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within
the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act against any and all losses, claims, damages and liabilities,
joint or several (including any reasonable investigation, legal and other
expenses incurred in connection with, and any amount paid in settlement of,
any action, suit or proceeding or any claim asserted), to which they, or
any of them, may become subject under the Securities Act, the Exchange Act
or other Federal or state law

<PAGE>

or regulation, at common law or otherwise, insofar as such losses, claims,
damages or liabilities arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in any preliminary
prospectus, the Registration Statement or the Prospectus or any amendment
thereof or supplement thereto, or arise out of or are based upon any
omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not
misleading; PROVIDED, HOWEVER, that such indemnity shall not inure to the
benefit of any Underwriter (or any person controlling such Underwriter) on
account of any losses, claims, damages or liabilities arising from the sale
of the Shares to any person by such Underwriter if such untrue statement or
omission or alleged untrue statement or omission was made in such
preliminary prospectus, the Registration Statement or the Prospectus, or
such amendment or supplement, in reliance upon and in conformity with
information furnished in writing to the Company by the Representatives on
behalf of any Underwriter specifically for use therein; and PROVIDED
FURTHER that as to any preliminary prospectus this indemnity agreement
shall not inure to the benefit of any Underwriter on account of any loss,
claim, damage or liability arising from the sale of Shares to any person by
that Underwriter if that Underwriter failed to send or give a copy of the
Prospectus (as the same may be amended a supplemented) to that person
within the time required by the Securities Act, and the untrue statement or
alleged untrue statement of any material fact or omission or alleged
omission to state a material fact in such preliminary prospectus was
corrected in the Prospectus, unless such failure resulted from
non-compliance by the Company with Section 6(d) of this Agreement. This
indemnity agreement will be in addition to any liability which the Company
may otherwise have.

(b) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, each person, if any, who controls
the Company within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, each director of the Company, and each
officer of the Company who signs the Registration Statement, to the same
extent as the foregoing indemnity from the Company to each Underwriter, but
only insofar as such losses, claims, damages or liabilities arise out of or
are based upon any untrue statement or omission or alleged untrue statement
or omission which was made in any preliminary prospectus, the Registration
Statement or the Prospectus, or any amendment thereof or supplement thereto
with respect to information furnished in writing by or on behalf of such
Underwriter expressly for use in the Registration Statement or Prospectus
or any amendment or supplement thereto. The Company acknowledges that the
statements contained in the last paragraph on the outside front cover and
in the paragraph relating to stabilization on the inside front cover page
of the Prospectus and under the caption "Underwriting" in the Prospectus
constitute the only information furnished in writing by or on behalf of any
Underwriter expressly for use in the Registration Statement or Prospectus
or any amendment or supplement thereto.

(c) Any party that proposes to assert the right to be indemnified
under this Section will, promptly after receipt of notice of commencement
of any action, suit or proceeding against such party in respect of which a
claim is to be made against an indemnifying party or parties under this
Section, notify each such indemnifying party of the commencement of such
action, suit or proceeding, enclosing a copy of all papers

<PAGE>

served. No indemnification provided for in Section 7(a) or 7(b) shall be
available to any party who shall fail to give notice as provided in this
Section 7(c) if the party to whom notice was not given was unaware of the
proceeding to which such notice would have related and was prejudiced by
the failure to give such notice but the omission so to notify such
indemnifying party of any such action, suit or proceeding shall not relieve
it from any liability that it may have to any indemnified party for
contribution or otherwise than under this Section. In case any such
action, suit or proceeding shall be brought against any indemnified party
and it shall notify the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate in, and, to the extent
that it shall wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party, and after notice from the
indemnifying party to such indemnified party of its election so to assume
the defense thereof and the approval by the indemnified party of such
counsel, the indemnifying party shall not be liable to such indemnified
party for any legal or other expenses, except as provided below and except
for the reasonable costs of investigation subsequently incurred by such
indemnified party in connection with the defense thereof. The indemnified
party shall have the right to employ its counsel in any such action, but
the fees and expenses of such counsel shall be at the expense of such
indemnified party unless (i) the employment of counsel by such indemnified
party has been authorized in writing by the indemnifying parties, (ii) the
indemnified party shall have reasonably concluded that there may be a
conflict of interest between the indemnifying parties and the indemnified
party in the conduct of the defense of such action (in which case the
indemnifying parties shall not have the right to direct the defense of such
action on behalf of the indemnified party) or (iii) the indemnifying
parties shall not have employed counsel to assume the defense of such
action within a reasonable time after notice of the commencement thereof,
in each of which cases the fees and expenses of counsel shall be at the
expense of the indemnifying parties. An indemnifying party shall not be
liable for any settlement of any action, suit, proceeding or claim effected
without its written consent which shall not be unreasonably withheld.

8. CONTRIBUTION. In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in
Section 7(a) or 7(b) is due in accordance with its terms but for any reason is
held to be unavailable from the Company, the Company and the Underwriters shall
contribute to the aggregate losses, claims, damages and liabilities (including
any investigation, legal and other expenses reasonably incurred in connection
with, and any amount paid in settlement of, any action, suit or proceeding or
any claims asserted, but after deducting any contribution received by any person
entitled hereunder to contribution from any persons who may be liable for
contribution) to which the Company and one or more of the Underwriters may be
subject in such proportion as is appropriate to reflect the relative benefits
received by the Company on the one hand and the Underwriters on the other from
the offering of the Shares or, if such allocation is not permitted by applicable
law or indemnification is not available as a result of the indemnifying party
not having received notice as provided in Section 7 hereof, in such proportion
as is appropriate to reflect not only the relative benefits referred to above
but also the relative fault of the Company on the one hand and the Underwriters
on the other in connection with the statements or omissions which resulted in
such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable

<PAGE>

considerations. The relative benefits received by the Company and the
Underwriters shall be deemed to be in the same proportion as (x) the total
proceeds from the offering (net of underwriting discounts but before deducting
expenses) received by the Company, as set forth in the table on the cover page
of the Prospectus, bear to (y) the underwriting discounts received by the
Underwriters, as set forth in the table on the cover page of the Prospectus.
The relative fault of the Company or the Underwriters shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact related to information supplied by the Company or by the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The Company
and the Underwriters agree that it would not be just and equitable if
contribution pursuant to this Section 8 were determined by PRO RATA allocation
(even if the Underwriters were treated as one entity for such purpose) or by any
other method of allocation which does not take account of the equitable
considerations referred to above. Notwithstanding the provisions of this
Section 8, in no case shall any Underwriter (except as may be provided in the
agreement among underwriters) be liable or responsible for any amount in excess
of the underwriting discount applicable to the Shares purchased by such
Underwriter hereunder; PROVIDED, HOWEVER, that no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 8, each person, if
any, who controls an Underwriter within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act shall have the same rights to
contribution as such Underwriter, and each person, if any, who controls the
Company within the meaning of the Section 15 of the Securities Act or Section 20
of the Exchange Act, each officer of the Company who shall have signed the
Registration Statement and each director of the Company shall have the same
rights to contribution as the Company, subject in each case to the immediately
preceding sentence of this Section 8. Any party entitled to contribution will,
promptly after receipt of notice of commencement of any action, suit or
proceeding against such party in respect of which a claim for contribution may
be made against another party or parties under this Section, notify such party
or parties from whom contribution may be sought, but the omission so to notify
such party or parties from whom contribution may be sought shall not relieve the
party or parties from whom contribution may be sought from any other obligation
it or they may have hereunder or otherwise than under this Section. No party
shall be liable for contribution with respect to any action, suit, proceeding or
claim settled without its written consent. The Underwriters' obligations to
contribute pursuant to this Section 8 are several in proportion to their
respective underwriting commitments and not joint.

9. TERMINATION. This Agreement may be terminated with respect to
the Shares to be purchased on a Closing Date by the Representatives by notifying
the Company at any time:

(a) in the absolute discretion of the Representatives at or before
any Closing Date: (i) if on or prior to such date, any domestic or
international event or act or occurrence has materially disrupted, or in
the opinion of the Representatives will in the future materially disrupt,
the securities markets; (ii) if there has occurred any new outbreak or
material escalation of hostilities or other calamity or crisis the effect
of which on the financial markets of the United States is such as to make
it, in the judgment of the Representatives, inadvisable to proceed with the
offering; (iii) if there shall be such a material adverse change in general
financial, political or economic conditions or the effect

<PAGE>

of international conditions on the financial markets in the United States
is such as to make it, in the judgment of the Representatives, inadvisable
or impracticable to market the Shares; (iv) if trading in the Shares has
been suspended by the Commission or trading generally on the New York Stock
Exchange, Inc., the American Stock Exchange, Inc. or the NASDAQ National
Market System has been suspended or limited, or minimum or maximum ranges
for prices for securities shall have been fixed, or maximum ranges for
prices for securities have been required, by said exchanges or by order of
the Commission, the National Association of Securities Dealers, Inc., or
any other governmental or regulatory authority; or (v) if a banking
moratorium has been declared by any state or Federal authority, or

(b) at or before any Closing Date, that any of the conditions
specified in Section 5 shall not have been fulfilled when and as required
by this Agreement.

If this Agreement is terminated pursuant to any of its provisions, the
Company shall not be under any liability to any Underwriter, and no Underwriter
shall be under any liability to the Company, except that (x) if this Agreement
is terminated by the Representatives or the Underwriters because of any failure,
refusal or inability on the part of the Company to comply with the terms or to
fulfill any of the conditions of this Agreement or is terminated in accordance
with the provisions of this Section 9, the Company will reimburse the
Underwriters for all out-of-pocket expenses (including the reasonable fees and
disbursements of their counsel) incurred by them in connection with the proposed
purchase and sale of the Shares or in contemplation of performing their
obligations hereunder, (y) no Underwriter who shall have failed or refused to
purchase the Shares agreed to be purchased by it under this Agreement, without
some reason sufficient hereunder to justify cancellation or termination of its
obligations under this Agreement, shall be relieved of liability to the Company
or to the other Underwriters for damages occasioned by its failure or refusal
and (z) the obligations of the parties pursuant to Sections 6(B), 7 and 8 of
this Agreement shall not be affected by the foregoing.

10. SUBSTITUTION OF UNDERWRITERS. If one or more of the
Underwriters shall fail (other than for a reason sufficient to justify the
cancellation or termination of this Agreement under Section 9) to purchase on
any Closing Date the Shares agreed to be purchased on such Closing Date by such
Underwriter or Underwriters, the Representatives may find one or more substitute
underwriters to purchase such Shares or make such other arrangements as the
Representatives may deem advisable or one or more of the remaining Underwriters
may agree to purchase such Shares in such proportions as may be approved by the
Representatives, in each case upon the terms set forth in this Agreement. If no
such arrangements have been made by the close of business on the business day
following such Closing Date,

(a) if the number of Shares to be purchased by the defaulting
Underwriters on such Closing Date shall not exceed 10% of the Shares that
all the Underwriters are obligated to purchase on such Closing Date, then
each of the nondefaulting Underwriters shall be obligated to purchase such
Shares on the terms herein set forth in proportion to their respective
obligations hereunder; PROVIDED, that in no event shall the maximum number
of Shares that any Underwriter has agreed to purchase pursuant to Section 1
be

<PAGE>

increased pursuant to this Section 10 by more than one-ninth of such number
of Shares without the written consent of such Underwriter, or

(b) if the number of Shares to be purchased by the defaulting
Underwriters on such Closing Date shall exceed 10% of the Shares that all
the Underwriters are obligated to purchase on such Closing Date, then the
Company shall be entitled to an additional business day within which it
may, but is not obligated to, find one or more substitute underwriters
reasonably satisfactory to the Representatives to purchase such Shares upon
the terms set forth in this Agreement.

In any such case, either the Representatives or the Company shall have
the right to postpone the applicable Closing Date for a period of not more than
five business days in order that necessary changes and arrangements (including
any necessary amendments or supplements to the Registration Statement or
Prospectus) may be effected by the Representatives and the Company. If the
number of Shares to be purchased on such Closing Date by such defaulting
Underwriter or Underwriters shall exceed 10% of the Shares that all the
Underwriters are obligated to purchase on such Closing Date, and none of the
nondefaulting Underwriters or the Company shall make arrangements pursuant to
this Section within the period stated for the purchase of the Shares that the
defaulting Underwriters agreed to purchase, this Agreement shall terminate with
respect to the Shares to be purchased on such Closing Date without liability on
the part of any nondefaulting Underwriter to the Company and without liability
on the part of the Company, except in both cases as provided in Sections 6(B),
7, 8 and 9. The provisions of this Section shall not in any way affect the
liability of any defaulting Underwriter to the Company or the nondefaulting
Underwriters arising out of such default. A substitute underwriter hereunder
shall become an Underwriter for all purposes of this Agreement.

11. MISCELLANEOUS. The respective agreements, representations,
warranties, indemnities and other statements of the Company or its officers and
of the Underwriters set forth in or made pursuant to this Agreement shall remain
in full force and effect, regardless of any investigation made by or on behalf
of any Underwriter or the Company or any of the officers, directors or
controlling persons referred to in Sections 7 and 8 hereof, and shall survive
delivery of and payment for the Shares. The provisions of Sections 6(B), 7, 8
and 9 shall survive the termination or cancellation of this Agreement.

This Agreement has been and is made for the benefit of the
Underwriters and the Company and their respective successors and assigns, and,
to the extent expressed herein, for the benefit of persons controlling any of
the Underwriters or the Company, and directors and officers of the Company, and
their respective successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. The term "successors and
assigns" shall not include any purchaser of Shares from any Underwriter merely
because of such purchase.

All notices and communications hereunder shall be in writing and
mailed or delivered or by telephone or telegraph if subsequently confirmed in
writing, (a) if to the Representatives, c/o Oppenheimer & Co., Inc., Oppenheimer
Tower, World Financial Center, New York, New York 10281 Attention: Richard D.
White, and (b) if to the Company, to its agent for service as such agent's
address appears on the cover page of the Registration Statement.

<PAGE>

This Agreement shall be governed by and construed in accordance with
the laws of the State of New York without regard to principles of conflict of
laws.

This Agreement may be signed in any number of counterparts, each of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument.

Please confirm that the foregoing correctly sets forth the agreement
among us.

Very truly yours,

HAMILTON BANCORP INC.

By: ______________________________
Name:
Title:

Confirmed:

OPPENHEIMER & CO., INC.
NATWEST SECURITIES LIMITED

Acting severally on behalf of themselves and as representatives of the several
Underwriters named in Schedule I annexed hereto.

OPPENHEIMER & CO., INC.

By: _____________________
Name:
Title:

<PAGE>

NATWEST SECURITIES LIMITED

By: _____________________
Name:
Title:

<PAGE>

SCHEDULE I

Number of
Firm Shares to
Underwriter Be Purchased
----------- ------------

Oppenheimer & Co., Inc.
Natwest Securities Limited
__________________________ _________

Total 2,000,000
=========

<PAGE>

EXHIBIT 3.2

BYLAWS

HAMILTON BANCORP INC.

(A FLORIDA CORPORATION)

(AS IN EFFECT ON MARCH 14, 1997)

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TABLE OF CONTENTS

Article 1. Shareholders. . . . . . . . . . . . . . . . . . . . . . 1
1.1 Annual Meeting. . . . . . . . . . . . . . . . . . . . . 1
1.2 Special Meeting . . . . . . . . . . . . . . . . . . . . 1
1.3 Place of Meeting. . . . . . . . . . . . . . . . . . . . 1
1.4. Action Without a Meeting. . . . . . . . . . . . . . . . 1
1.5 Notice Of Meeting . . . . . . . . . . . . . . . . . . . 1
1.6 Waiver of Notice Meeting. . . . . . . . . . . . . . . . 2
1.7 Fixing of Record Date . . . . . . . . . . . . . . . . . 2
1.8 Voting Record . . . . . . . . . . . . . . . . . . . . . 2
1.9 Voting Per Share. . . . . . . . . . . . . . . . . . . . 3
1.10 Voting of Shares. . . . . . . . . . . . . . . . . . . . 3
1.11 Proxies . . . . . . . . . . . . . . . . . . . . . . . . 3
1.12 Quorum. . . . . . . . . . . . . . . . . . . . . . . . . 4
1.13 Manner of Action. . . . . . . . . . . . . . . . . . . . 4
1.14 Voting for Directors. . . . . . . . . . . . . . . . . . 4
1.15 Inspectors of Election. . . . . . . . . . . . . . . . . 4
1.16 Conduct of Meetings . . . . . . . . . . . . . . . . . . 5

Article 2. Board of Directors. . . . . . . . . . . . . . . . . . . 5
2.1 General Powers. . . . . . . . . . . . . . . . . . . . . 5
2.2 Number, Terms, Classification and Qualification . . . . 5
2.3 Regular Meetings. . . . . . . . . . . . . . . . . . . . 5
2.4 Special Meetings. . . . . . . . . . . . . . . . . . . . 5
2.5 Waiver of Notice of Meeting . . . . . . . . . . . . . . 6
2.6 Quorum. . . . . . . . . . . . . . . . . . . . . . . . . 6
2.7 Manner of Action. . . . . . . . . . . . . . . . . . . . 6
2.8 Presumption of Assent . . . . . . . . . . . . . . . . . 6
2.9 Action Without a Meeting. . . . . . . . . . . . . . . . 6
2.10 Meetings of the Board of Directors by Means of a
Conference Telephone or Similar Communications
Equipment . . . . . . . . . . . . . . . . . . . . . . . 6
2.11 Resignation . . . . . . . . . . . . . . . . . . . . . . 7
2.13 Vacancies . . . . . . . . . . . . . . . . . . . . . . . 7
2.14 Compensation. . . . . . . . . . . . . . . . . . . . . . 7

Article 3. Committees of the Board of Directors. . . . . . . . . . 7

Article 4. Officers. . . . . . . . . . . . . . . . . . . . . . . . 8
4.1 Officers. . . . . . . . . . . . . . . . . . . . . . . . 8
4.2 Appointment and Term of Office. . . . . . . . . . . . . 8
4.3 Resignation . . . . . . . . . . . . . . . . . . . . . . 8

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4.4 Removal . . . . . . . . . . . . . . . . . . . . . . . . 8
4.5 Vacancies . . . . . . . . . . . . . . . . . . . . . . . 8
4.6 Duties of Officers. . . . . . . . . . . . . . . . . . . 8
4.7 Vice Presidents . . . . . . . . . . . . . . . . . . . . 9
4.8 Secretary . . . . . . . . . . . . . . . . . . . . . . . 9
4.9 Treasurer . . . . . . . . . . . . . . . . . . . . . . . 9
4.10 Other Officers, Employees and Agents. . . . . . . . . . 9
4.11 Compensation. . . . . . . . . . . . . . . . . . . . . . 9

Article 5. Certificates of Stock . . . . . . . . . . . . . . . . . 9
5.1 Certificates for Shares . . . . . . . . . . . . . . . . 9
5.2 Transfer of Shares; Ownership of Shares . . . . . . . . 10
5.3 Lost Certificates . . . . . . . . . . . . . . . . . . . 10
5.4 Legends for Preferences and Restrictions on Transfer. . 10
5.5 Registered Shareholders . . . . . . . . . . . . . . . . 10
5.6 Redemption of Control Shares. . . . . . . . . . . . . . 11

Article 6. Actions With Respect to Securities of Other Corporations 11

Article 7. Amendments. . . . . . . . . . . . . . . . . . . . . . . 11

Article 8. Corporate Seal. . . . . . . . . . . . . . . . . . . . . 11

Article 9. Indemnification . . . . . . . . . . . . . . . . . . . . 11

Article 10. Gender. . . . . . . . . . . . . . . . . . . . . . . . . 11

Article 11. Dividends . . . . . . . . . . . . . . . . . . . . . . . 12

Article 12. Reserves. . . . . . . . . . . . . . . . . . . . . . . . 12

Article 13. Checks. . . . . . . . . . . . . . . . . . . . . . . . . 12

Article 14. Fiscal Year . . . . . . . . . . . . . . . . . . . . . . 12

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BYLAWS OF

HAMILTON BANCORP INC.

ARTICLE 1. SHAREHOLDERS

1.1 ANNUAL MEETING. A meeting of shareholders shall be held each year
for the election of directors and for the transaction of any other business that
may come before the meeting. Annual meetings shall be held on such date and at
such time fixed, from time to time, by the Board of Directors.

1.2 SPECIAL MEETING. Special meetings of the shaReholders shall be held
if called in accordance with the procedures set forth in the Corporation's
Articles of Incorporation for the call of a special meeting of shareholders.

1.3 PLACE OF MEETING. The Board of Directors may designate any place,
either within or without the State of Florida, as the place of meeting for any
annual or special meeting of the shareholders. If no designation is made, the
place of meeting shall be the principal office of the Corporation in the State
of Florida.

1.4 ACTION WITHOUT A MEETING. Any required vote of shareholders must be
taken at a meeting duly called and held, and may not be taken by written consent
in lieu of a meeting.

1.5 NOTICE OF MEETING. Except as set forth in the Florida Business
Corporation Act (hereinafter referred to as the "FBCA"), written or printed
notice stating the place, day and hour of the meeting and, in the case of a
special meeting, the purpose or purposes for which the meeting is called, shall
be delivered not less than ten (10) nor more than sixty (60) days before the
date of the meeting, either personally or by first-class mail, by, or at the
direction of, the president or the secretary, or the officer or other persons
calling the meeting, to each-shareholder of record entitled to vote at such
meeting. If the notice is mailed at least thirty (30) days before the date of
the meeting, it may be effected by a class of United States mail other than
first-class. If mailed, such notice shall be effective when mailed, if mailed
postage prepaid and correctly addressed to the shareholder's address shown in
the current record of shareholders the corporation.

When a meeting is adjourned to another time or place, it shall not be
necessary to give any notice of the adjourned meeting if the time and place to
which the meeting is adjourned are announced at the meeting at which the
adjournment is taken, and at the adjourned meeting any business may be
transacted that might have been transacted on the original date of the meeting.
If, however, after the adjournment, the Board of Directors fixes a new record
date for the adjourned meeting, a notice of the adjourned meeting shall be given
as provided in this Section to each shareholder of record on the new record date
entitled to vote at such meeting.

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1.6 WAIVER OF NOTICE MEETING. Whenever any notice is required to be
given to any shareholder, a waiver thereof in writing signed by the person or
persons entitled to such notice, whether signed before, during or after the time
of the meeting stated therein, and delivered to the Corporation for inclusion in
the minutes or filing with the corporate records, shall be equivalent to the
giving of such notice. Attendance of a person at a meeting shall constitute a
waiver of (a) lack of or defective notice of such meeting, unless the person
objects at the beginning of the meeting to the holding of the meeting or the
transacting of any business at the meeting or (b) lack of defective notice of a
particular matter at a meeting that is not within the purpose or purposes
described in the meeting notice, unless the person objects to considering such
matter when it is presented.

1.7 FIXING RECORD DATE. For the purpose of determining shareholders
entitled to notice of or to vote at any meeting of shareholders or any
adjournment thereof, or entitled to receive payment of any dividend, or in order
to make a determination of shareholders for any other proper purposes, the Board
of Directors may fix in advance a date as the record date for any such
determination of shareholders, such date in any case to be not more than seventy
(70) days, and, in case of a meeting of shareholders, not less than ten (10)
days, prior to the date on which the particular action requiring such
determination of shareholders is to be taken. If no record date is fixed for
the determination of shareholders entitled to notice of or to vote at a meeting
of shareholders, or shareholders entitled to receive payment of a dividend, the
date on which the notice of the meeting is mailed or the date on which the
resolutions of the Board of Directors declaring such dividend is adopted, as the
case may be, shall be the record date for such determination of shareholders.
When a determination of shareholders entitled to vote at any meeting of
shareholders has been made as provided in this Section 1.7, such determination
shall apply to any adjournment thereof, except where the Board of Directors
fixes a new record date for the adjourned meeting or as required by law.

1.8 VOTING RECORD. After fixing a record date for a meeting of
shareholders, the Corporation shall prepare an alphabetical list of the names of
all its shareholders who are entitled to notice of the meeting, arranged by
voting group with the address of, and the number and class and series, if any,
of shares held by each. The shareholders' list must be available for inspection
by any shareholder for a period of ten (10) days prior to the meeting or such
shorter time as exists between the record date and the meeting and continuing
through the meeting at the Corporation's principal office, at a place identified
in the meeting notice in the city where the meeting will be held, or at the
office of the Corporation's transfer agent or registrar. Any shareholder of the
Corporation or his agent or attorney is entitled on written demand to inspect
the shareholders' list (subject to the requirements of FBCA Section
607.1602(3)), during regular business hours and at his expense, during the
period it is available for inspection.

The Corporation shall make the shareholders' list available at the meeting
of shareholders, and any shareholder or his agent or attorney is entitled to
inspect the list at any time during the meeting or any adjournment.

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1.9 VOTING PER SHARE. Except as otherwise provided in the Articles of
Incorporation or by FBCA Section 607.0721, each shareholder is entitled to one
(1) vote for each outstanding share held by him on each matter voted at a
shareholders' meeting.

1.10 VOTING OF SHARES. A shareholder may vote at any meeting of
shareholders of the Corporation, either in person or by proxy.

Shares standing the name of another corporation, domestic or foreign, may
be voted by the officer, agent or proxy designated by the bylaws of such
corporate shareholder or, in the absence of any applicable bylaw, by such
person or persons as the Board of Directors of the corporate shareholder may
designate. In the absence of any such designation or, in case of conflicting
designation by the corporate shareholder, the chairman of the board, the
president, any vice president, the secretary and the treasurer of the
corporate shareholder, in that order, shall be presumed to be fully
authorized to vote such shares.

Shares held by an administrator, executor, guardian, personal
representative, or conservator may be voted by him, either in person or by
proxy, without a transfer of such shares into his name. Shares standing in the
name of a trustee may be voted by him, either in person or by proxy, but no
trustee shall be entitled to vote shares held by him without a transfer of such
shares into his name or the name of his nominee.

Shares held by or under the control of a receiver, a trustee in bankruptcy
proceedings, or an assignee for the benefit of creditors may be voted by such
person without the transfer thereof into his name.

If shares stand of record in the names of two or more persons, whether
fiduciaries, members of a partnership, joint tenants, tenants in common, tenants
by the entirety or otherwise, or if two or more persons have the same fiduciary
relationship respecting the same shares, unless the secretary of the Corporation
is given notice to the contrary and is furnished with a copy of the instrument
or order appointing them or creating the relationship wherein it is so provided,
then acts with respect to voting shall have the following effect: (a) if only
one votes, the person or by proxy, his act binds all; (b) if more than one vote,
in person or by proxy, the act of the majority so voting binds all; (c) if more
than one vote, in person or by proxy, but the vote is evenly split on any
particular matter, each faction is entitled to vote the share or shares in
question proportionally; or (d) if the instrument or order so filed shows that
any such tenancy is held in unequal interest, a majority or a vote evenly split
for purposes hereof shall be a majority or a vote evenly split in interest. The
principles of this paragraph shall apply, insofar as possible, to execution of
proxies, waivers, consent, or objections and for the purpose of ascertaining the
presence of a quorum.

1.11 PROXIES. Any shareholder of the Corporation, other person
entitled to vote on behalf of a shareholder pursuant to FBCA Section
607.0721, or attorney-in-fact for such persons may vote the shareholder's
shares in person or by proxy. Any shareholder of the Corporation may appoint
a proxy to vote or otherwise act for him by signing an appointment form
either

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personally or by his attorney-in-fact. An executed telegram or cablegram
appearing to have been transmitted by such person, or a photographic,
photostatic, or equivalent reproduction of an appointment form, shall be deemed
a sufficient appointment form.

An appointment of a proxy is effective when received by the secretary of
the Corporation or such other officer or agent which is authorized to tabulate
votes, and shall be valid for up to 11 months, unless a longer period is
expressly provided in the appointment form.

The death or incapacity of the shareholder appointing a proxy does not
affect the right of the Corporation to accept the proxy's authority unless
notice of the death or incapacity is received by the secretary or other officer
or agent authorized to tabulate votes before the proxy exercises his authority
under the appointment.

An appointment of a proxy is revocable by the shareholder unless the
appointment form conspicuously states that it is irrevocable and the appointment
is coupled with an interest.

1.12 QUORUM. Shares entitled to vote as a separate voting group may take
action on a matter at a meeting only if a quorum of these shares exists with
respect to that matter. Except as otherwise provided in the Articles of
Incorporation or by law, a majority of the shares entitled to vote on the matter
by each voting group, represented in person or by proxy, shall constitute a
quorum at any meeting of shareholders, but in no event shall a quorum consist of
less than one-third (1/3) of the shares of each voting group entitled to vote.
If less than a majority of outstanding shares entitled to vote are represented
at a meeting, a majority of the shares so represented may adjourn the meeting
from time to time without further notice. After a quorum has been established
at any shareholders' meeting, the subsequent withdrawal of shareholders, so as
to reduce the number of shares entitled to vote at the meeting below the number
required for a quorum, shall not affect the validity of any action taken at the
meeting or any adjournment thereof.

Once a share is represented for any purpose at a meeting, it is deemed
present for quorum purposes for the remainder of the meeting and for any
adjournment of that meeting unless a new record date is or must be set for that
adjourned meeting.

1.13 MANNER OF ACTION. If a quorum is present, action on a matter (other
than the election of directors) by a voting group is approved if the votes cast
within the voting group favoring the action exceed the votes cast opposing the
action, unless a greater or lesser number of affirmative votes is required by
the Articles of Incorporation or by law.

1.14 VOTING FOR DIRECTORS. Unless otherwise provided in the Articles of
Incorporation, directors shall be elected by a plurality of the votes cast by
the shares entitled to vote in the election at a meeting at which a quorum is
present.

1.15 INSPECTORS OF ELECTION. Prior to each meeting of shareholders, the
Board of Directors or the president shall appoint one or more Inspectors of
Election. Upon his

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appointment, each such Inspector shall take and sign an oath faithfully to
execute the duties of Inspector at such meeting with strict impartiality and to
the best of his ability. Such Inspectors shall determine the number of shares
outstanding, the number of shares present at the meeting and whether a quorum is
present at such meeting. The Inspectors shall receive votes and ballots and
shall determine all challenges and questions as to the right to vote and shall
thereafter count and tabulate all votes and ballots and determine the result.
Such Inspectors shall do such further acts as are proper to conduct the
elections of directors and the vote on other matters with fairness to all
shareholders. The Inspectors shall make a certificate of the results of the
elections of directors and the vote on other matters. No Inspector shall be a
candidate for election as a director of the Corporation.

1.16 CONDUCT OF MEETINGS. The Chairman of the Board (or in his absence,
the Vice Chairman, the President or such other designee of the Chairman of the
Board) shall preside at the annual and special meetings of shareholders and
shall be given full discretion in establishing the rules and procedures to be
followed in conducting the meetings, except as otherwise provided by law, the
Articles of Incorporation or in these bylaws.

ARTICLE 2. - BOARD OF DIRECTORS

2.1 GENERAL POWERS. Except as provided in the Articles of Incorporation
and by law, all corporate powers shall be exercised by or under the authority
of, and the business and affairs of the Corporation shall be managed under the
direction of, its Board of Directors.

2.2 NUMBER, TERMS, CLASSIFICATION AND QUALIFICATION. The Board of
Directors of the Corporation shall consist of not less than one (1) nor more
than twenty-one (21) directors with the exact number to be fixed from time to
time by the affirmative vote of a majority of directors then in office or the
affirmative vote of the holders of a majority of the shares entitled to vote on
that matter. No decrease in the number of directors shall have the effect of
shortening the term of an incumbent director. A director must be a natural
person of at least eighteen (18) years of age, but need not be a citizen of the
United States of America, a resident of the State of Florida, or a shareholder
of the Corporation. Each director shall hold office until his successor shall
have been elected and qualified or until his earlier resignation, removal from
office or death.

2.3 REGULAR MEETINGS. An annual regular meeting of the Board of
Directors shall be held without notice immediately after, and at the same place
as, the annual meeting of shareholders for the purpose of the election of
officers and the transaction of such other business as may come before the
meeting, and at such other time and place as may be determined by the Board of
Directors. The Board of Directors may, at any time and from time to time,
provide by resolution, the time and place, either within or without the State of
Florida, for the holding of the annual regular meeting or additional regular
meetings of the board of directors without other notice than such resolution.

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2.4 SPECIAL MEETINGS AND NOTICE. Special meetings of the Board of
Directors may be called by the Secretary on the written request of any two
directors. The person or persons authorized to call special meetings of the
Board of Directors may designate any place, either within or without the State
of Florida, as the place for holding any special meeting of the Board of
Directors called by them. If no designation is made, the place of the meeting
shall be the principal office of the Corporation in the State of Florida.
Written notice of special meetings of the Board of Directors shall be given to
each director at least forty-eight (48) hours before the meeting. Except as
required by statute, neither the business to be transacted at, nor the purpose
of, any regular or special meeting of the Board of Directors need be specified
in the notice or waiver of notice of such meeting. Notices to directors shall
either be in writing and delivered personally or mailed to the directors at
their addresses appearing on the books of the Corporation or by oral
communication (whether telephonically or face-to-face). Notice by mail shall be
deemed to be given at the time when the same shall be received. Notice to
directors may also be given by facsimile, telegram, or other form of electronic
communication

2.5 WAIVER OF NOTICE OF MEETING. Notice of a meeting of the Board of
Directors need not be given to any director who signs a written waiver of notice
before, during or after the meeting. Attendance of a director at a meeting
shall constitute a waiver of notice of such meeting and a waiver of any and all
objections to the place of the meeting, the time of the meeting and the manner
in which it has been called or convened, except when a director states, at the
beginning of the meeting or promptly upon arrival at the meeting, any objection
to the transaction of business because the meeting is not lawfully called or
convened.

2.6 QUORUM. A majority of the number of directors fixed by, or in the
manner provided in, these bylaws shall constitute a quorum for the transaction
of business; provided, however, that whenever, for any reason, a vacancy occurs
in the board of directors, a quorum shall consist of a majority of the remaining
directors until the vacancy has been filled.

2.7 MANNER OF ACTION. The act of a majority of the directors present at
a meeting at which a quorum is present when the vote is taken shall be the act
of the Board of Directors.

2.8 PRESUMPTION OF ASSENT. A director of the Corporation who is present
at a meeting of the Board of Directors or a committee of the Board of Directors
when corporate action is taken shall be presumed to have assented to the action
taken, unless he objects at the beginning of the meeting, or promptly upon his
arrival, to holding the meeting or transacting specific business at the meeting,
or he votes against or abstains from the action taken.

2.9 ACTION WITHOUT A MEETING. Any action required or permitted to be
taken at a meeting of the board of directors or a committee thereof may be taken
without a meeting if a consent in writing, setting forth the action so taken,
shall be signed by all the directors. Action taken under this Section is
effective when the last director signs the consent, unless the consent specifies
a different effective date. A consent signed under this Section shall have the
effect of a meeting vote and may be described as such in any document.

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2.10 MEETINGS OF THE BOARD OF DIRECTORS BY MEANS OF A CONFERENCE
TELEPHONE OR SIMILAR COMMUNICATIONS EQUIPMENT. Members of the Board of
Directors may participate in a meeting of the board by means of conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other at the same time.
Participation by such means shall constitute presence in person at a meeting.

2.11 RESIGNATION. Any director may resign at any time by giving written
notice to Corporation, the Board of Directors or its chairman. The resignation
of any director shall take effect when the notice is delivered unless the notice
specifies a later effective date, in which event the board of directors may fill
the pending vacancy before the effective date if they provide that the successor
does not take office until the effective date.

2.12. REMOVAL. Any director, or the entire Board of Directors, may be
removed at any time, with or without cause, by action of the shareholders, and
any director may be removed for cause by the Board of Directors. In the case of
any director which is elected by a voting group of shareholders, only the
shareholders of that voting group may participate in the vote to remove him.
The notice of the meeting at which a vote is taken to remove a director must set
forth that the purpose or one of the purposes of the meeting is the removal of
such director or directors.

2.13 VACANCIES. Any vacancy occurring in the Board of Directors and any
directorship to be filled by reason of an increase in the size of the Board of
Directors shall be filled as provided in the Corporation's Articles of
Incorporation. A director elected to fill a vacancy shall be elected for the
unexpired term of his predecessor in office, or until the next election of one
or more directors by shareholders if the vacancy is caused by an increase in the
number of directors.

2.14 COMPENSATION. Each director may be paid his expenses, if any, of
attendance at each meeting of the Board of Directors and committee thereof, and
may be paid a stated salary as a director or a fixed sum for attendance at each
meeting of the board of directors (or committee thereof) or both, as may from
time to time be determined by action of the Board of Directors. No such payment
shall preclude any director from serving the Corporation in any other capacity
and receiving compensation therefor.

ARTICLE 3. COMMITTEES OF THE BOARD OF DIRECTORS

The Board of Directors, by resolution adopted by a majority of the full
Board of Directors, may designate from among its members an executive committee
and one or more other committees each of which, to the extent provided in such
resolution, shall have and may exercise all the authority of the Board of
Directors, except as prohibited by Section 607.0825(1) of the FBCA.

Each committee must have two or more members who serve at the pleasure of
the Board of Directors. The Board of Directors, by resolution adopted in
accordance with this article, may designate one or more directors as alternate
members of any committee, who may act in the place and stead of any absent
member or members at any meeting of such committee.

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Vacancies in the membership of a committee shall be filled by the Board of
Directors at a regular or special meeting of the Board of Directors. Each
committee shall keep minutes and other appropriate records of its proceedings
and report the same to the Board of Directors when required. The designation of
any such committee and the delegation thereto of authority shall not operate to
relieve the Board of Directors, or any member thereof, of any responsibility
imposed upon it or him by law.

ARTICLE 4. - OFFICERS

4.1 OFFICERS. The officers of the Corporation shall be a Chairman of
the Board, President, a Secretary and a Treasurer, each of whom shall be elected
by the Board of Directors. The Board of Directors may also appoint one or more
Vice Presidents, one or more Assistant Secretaries and Assistant Treasurers and
such other officers, as the Board of Directors shall deem appropriate. Any two
(2) or more offices may be held by the same person.

4.2 APPOINTMENT AND TERM OF OFFICE. The officers of the Corporation
shall be appointed annually by the Board of Directors at the first meeting of
the Board of Directors held after each annual meeting of the shareholders. If
the appointment of officers shall not occur at such meeting, such appointment
shall occur as soon thereafter as practicable. Each officer shall hold office
until his successor shall have been duly appointed and qualified, or until his
earlier resignation, removal from office or death.

4.3 RESIGNATION. Any officer of the Corporation may resign from his
respective office or position by delivering notice to the Corporation. Such
resignation if effective when delivered unless the notice specifies a later
effective date. If a resignation is made effective at a later date and the
Corporation accepts the future effective date, the Board of Directors may fill
the pending vacancy before the effective date if the board provides that the
successor does not take office until the effective date.

4.4 REMOVAL. Any officer elected or appointed by the Board of Directors
may be removed, with or without cause, by the Board of Directors. Removal shall
be without prejudice to the contract rights, if any, of the person removed.
Election or appointment of any officer shall not itself create contract rights.

4.5 VACANCIES. Any vacancy, however, occurring, in any office may be
filled by the Board of Directors.

4.6 DUTIES OF OFFICERS. The Chairman of the Board of the Corporation,
or if there shall not be a Chairman of the Board, the President, shall preside
at all meetings of the Board of Directors and of the shareholders. The Chairman
of the Board, or if there shall not be a Chairman of the Board, the President,
shall be the chief executive officer of the Corporation. Subject to the
foregoing, the officers of the Corporation shall have such powers and duties as
usually pertain to their respective offices and such additional powers and
duties specifically conferred by law, by the Articles of Incorporation, by these
Bylaws, or as may be assigned to

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them from time to time by the Board of Directors.

4.7 VICE PRESIDENTS. Each vice president shall possess, and may
exercise, such power and authority, and shall perform such duties, as may from
time to time be assigned to him by the Board of Directors.

4.8 SECRETARY. The secretary shall keep the minutes of the proceedings
of the shareholders and of the Board of Directors in one or more books provided
for that purpose, see that all notices are duly given in accordance with the
provisions of these bylaws or as required by law, be custodian of the corporate
records and of the seal of the Corporation and keep a register of the post
office address of each shareholder of the Corporation. In addition, the
secretary shall possess, and may exercise, such power and authority, and shall
perform such duties, as may from time to time be assigned to him by the Board of
Directors and as are incident to the office of secretary.

4.9 TREASURER. The treasurer shall have charge and custody of, and be
responsible for, all funds and securities of the Corporation, receive and give
receipts for monies due and payable to the Corporation from any source
whatsoever and deposit all such moneys in the name of the Corporation in such
banks, trust companies or other depositaries as shall be utilized by the
Corporation. In addition, the treasurer shall possess, and may exercise such
power and authority, and shall perform such duties, as may from time to time be
assigned to him by the Board of Directors and as are incident to the office of
treasurer.

4.10 OTHER OFFICERS, EMPLOYEES AND AGENTS. Each and every other
officer, employee and agent of the Corporation shall possess, and may exercise,
such power and authority, and shall perform such duties, as may from time to
time be assigned to him by the Board of Directors, the officer so appointing him
and such officer or officers who may from time to time be designated by the
Board of Directors to exercise such supervisory authority.

4.11 COMPENSATION. The compensation of the officers of the Corporation
shall be fixed from time to time by either the Board of Directors or an
appropriate committee of the Board of Directors, as the case may be.

ARTICLE 5. - CERTIFICATES OF STOCK

5.1 CERTIFICATES FOR SHARES. The Board of Directors shall determine
whether shares of the Corporation shall be uncertificated or certificated. If
certificated shares are issued, certificates representing shares in the
Corporation shall be signed (either manually or by facsimile) by the president
or vice president and the secretary or an assistant secretary (which may be the
same person) and may be sealed with the seal of the Corporation or a facsimile
thereof. A certificate which has been signed by an officer or officers who
later shall have ceased to be such officer when the certificate is issued shall
nevertheless be valid.

<PAGE>

5.2 TRANSFER OF SHARES; OWNERSHIP OF SHARES. Transfers of shares of
stock of the Corporation shall be made only upon the stock transfer books of the
Corporation, and only after the surrender to the Corporation of the certificates
representing such shares. Except as provided by Section 607.0721 of the FBCA,
the person in whose name shares stand on the books of the Corporation shall be
deemed by the Corporation to be the owner thereof for all purposes and the
Corporation shall not be bound to recognize any equitable or other claim to, or
interest in, such shares on the part of any other person, whether or not is
shall have express or other notice thereof.

5.3 LOST CERTIFICATES. The Corporation shall issue a new stock
certificate in the place of any certificate previously issued if the holder of
record of the certificate: (a) makes proof in affidavit form that the
certificate has been lost, destroyed or wrongfully taken; (b) requests the
issuance of a new certificate before the Corporation has notice that the lost,
destroyed or wrongfully taken certificate has been acquired by a purchaser for
value in good faith and without notice of any adverse claim; (c) at the
discretion of the Board of Directors, gives bond-in such form and amount as the
Corporation may direct, to indemnify the Corporation, the transfer agent and
registrar against any claim that may be made on account of the alleged loss,
destruction, or theft of a certificate; and (d) satisfies any other reasonable
requirements imposed by the Corporation.

5.4 LEGENDS FOR PREFERENCES AND RESTRICTIONS ON TRANSFER. The
designations, relative rights, preferences and limitations applicable to each
class of shares of capital stock and the variations in rights, preferences and
limitations determined for each series within a class (and the authority of the
Board of Directors to determine variations for future series) shall be
summarized on the front or back of each certificate. Alternatively, each
certificate may state conspicuously on its front or back that the Corporation
will furnish the shareholder a full statement of this information on request and
without charge. Every certificate representing shares that are restricted as to
the sale, disposition, or transfer of such shares shall also indicate that such
shares are restricted as to transfer and there shall be set forth or fairly
summarized upon the certificate, or the certificate shall indicate that the
Corporation will furnish to any shareholder upon request and without charge, a
full statement of such restrictions. If the Corporation issues any shares that
are not registered under the Securities Act of 1933, as amended, or registered
or qualified under applicable state securities laws, the transfer of any such
shares shall be restricted substantially in accordance with the following
legend:

"THESE SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR
UNDER ANY APPLICABLE STATE LAW. THEY MAY NOT BE OFFERED FOR SALE, SOLD,
TRANSFERRED OR PLEDGED WITHOUT (1) REGISTRATION UNDER THE SECURITIES ACT OF
1933 AND ANY APPLICABLE STATE LAW, OR (2) AT THE HOLDER'S EXPENSE, AN
OPINION (SATISFACTORY TO THE CORPORATION) OF COUNSEL (SATISFACTORY TO THE
CORPORATION) THAT REGISTRATION IS NOT REQUIRED."

<PAGE>

5.5 REGISTERED SHAREHOLDERS. The Corporation shall be entitled to
recognize the exclusive rights of a person registered on its books as the owner
of shares to receive dividends, and to vote as such owner, and shall not be
bound to recognize any equitable or other claim to or interest in such share or
shares on the part of any other person, whether or not it shall have express or
other notice thereof, except as otherwise provided by the laws of the State of
Florida.

5.6 REDEMPTION OF CONTROL SHARES. As provided by the FBCA, if a
person acquiring control shares of the Corporation does not file an acquiring
person statement with the Corporation, the Corporation may, at the discretion
of the Board of Directors, redeem the control shares at the fair value
thereof at any time during the 60-day period after the last acquisition of
such control shares. If a person acquiring control shares of the Corporation
files an acquiring person statement with the Corporation, the control shares
may be redeemed by the Corporation, at the discretion of the Board of
Directors, only if such shares are not accorded full voting rights by the
shareholders as provided by law.

ARTICLE 6. - ACTIONS WITH RESPECT TO SECURITIES OF OTHER CORPORATIONS

Unless otherwise directed by the Board of Directors, the president or a
designee of the president shall have power to vote and otherwise act on behalf
of the Corporation, in person or by proxy, at any meeting of shareholders of or
with respect to, any action of shareholders of any other corporation in which
the Corporation may hold securities and to otherwise exercise any and all rights
and powers which the Corporation may possess by reason of its ownership of
securities in other corporations.

ARTICLE 7. - AMENDMENTS

Unless otherwise provided by law, these bylaws may be altered, amended or
repeated in whole or in part, or new bylaws may be adopted, as provided in the
Articles of Incorporation.

ARTICLE 8. - CORPORATE SEAL

The board of directors shall provide for a corporate seal which shall be
circular and shall have the name of the Corporation, the year of its
incorporation and the state of incorporation inscribed on it.

ARTICLE 9. - INDEMNIFICATION

The Corporation shall indemnify its officers and directors as provided in
the Articles of Incorporation.

ARTICLE 10. - GENDER

All words used in these bylaws in the masculine gender shall extend to and
shall include the feminine and neuter genders.

<PAGE>

ARTICLE 11. - DIVIDENDS

The Board of Directors may from time to time declare, and the Corporation
may pay, dividends on its outstanding shares of capital stock in cash, property,
or its own shares of capital stock pursuant to law and subject to the provisions
of the Articles of Incorporation.

ARTICLE 12. - RESERVES

The Board of Directors may by resolution create a reserve or reserves out
of earned surplus for any proper purpose or purposes, and may abolish any such
reserve in the same manner.

ARTICLE 13. - CHECKS

All checks or demands for money and notes of the Corporation shall be
signed by such officer or officers or such other person or persons as the Board
of Directors may from time to time designate.

ARTICLE 14. - FISCAL YEAR

The fiscal year of the Corporation shall end on December 31 of each year,
unless otherwise fixed by resolution of the Board of Directors

<PAGE>
Exhibit 4.1

COMMON STOCK
SHARES

HAMILTON BANCORP INC.
INCORPORATED UNDER THE LAWS OF THE STATE OF FLORIDA

SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP ____________

This Certifies that

Is the Registered Holder of

FULLY PAID AND NONASSESSABLE SHARES OF COMMON STOCK, PAR VALUE $.01 PER SHARE

transferable on the books of the Corporation by the holder hereof in person or
by duly authorized attorney upon surrender of this Certificate properly
endorsed. This Certificate is not valid unless countersigned and registered by
the Transfer Agent and Registrar.

WITNESS the facsimile seal of the Corporation and the facsimile signatures
of its duly authorized officers.

Dated:

PRESIDENT SECRETARY
<PAGE>

HAMILTON BANCORP INC.

The Corporation will furnish to any shareholder upon request and without charge
a full statement of: (a) the designations, relative rights, preferences and
limitations applicable to each class of capital stock authorized to be issued;
(b) the variations in rights, preferences and limitations determined for each
series authorized to be issued within each such class; and (c) the authority of
the Board of Directors to determine such variations for subsequent series.

The following abbreviations, when used in the inscription on the face of this
certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM -- as tenants in common
TEN ENT -- as tenants by the entireties
JT TEN -- as joint tenants with right of survivorship and not as tenants in
common

UNIF GIFT MIN ACT -- (Cust) __________________ Custodian (Minor) _______________
under Uniform Gifts to
Minors Act (State) _________________
Additional abbreviations may also be used though not in the above list.

For Value Received _______________________________________ hereby sells, assigns
and transfers unto

PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
- --------------------------------------------------------------------------------
(PLEASE PRINT OR TYPE NAME AND ADDRESS INCLUDING ZIP CODE OF ASSIGNEE)

shares of the capital stock represented by the _________________________________
within Certificate and does hereby irrevocably constitute and appoint
________________________________________________________________________________
Attorney to transfer the said stock on the books of the within-named Corporation
with full power of substitution in the premises.

DATED: SIGNED:

SIGNED:
NOTICE: The signature(s) on this assignment must conform in
all respects with the name as written upon the face of the
certificate.

IMPORTANT: SIGNATURE(S) MUST BE GUARANTEED BY A FIRM THAT IS A MEMBER OF A
REGISTERED NATIONAL STOCK EXCHANGE OR BY A COMMERCIAL BANK OR A TRUST COMPANY.

<PAGE>
Exhibit 5.1

March 19, 1997

Hamilton Bancorp Inc.
3750 N.W. 87th Avenue
Miami, Florida 33178

Re: Hamilton Bancorp Inc. - Initial Public Offering of Common Stock

Gentlemen:

On January 24, 1997, Hamilton Bancorp Inc., a Florida corporation (the
"Company"), filed with the Securities and Exchange Commission a Registration
Statement on Form S-1 (No. 333-20435) (the "Registration Statement") under the
Securities Act of 1933, as amended (the "Act"). Such Registration Statement
relates to the sale by the Company of up to 2,300,000 shares (the "Shares") of
the Company's Common Stock, par value $0.01 per share (the "Common Stock"). We
have acted as counsel to the Company in connection with the preparation and
filing of the Registration Statement.

In connection therewith, we have examined and relied upon copies of (i)
the Company's Amended and Restated Articles of Incorporation and Bylaws, (ii)
resolutions of the Board of Directors of the Company authorizing the offering
and the issuance of the Shares to be sold by the Company and related matters;
(iii) the Registration Statement and all amendments and exhibits thereto; and
(iv) such other documents and instruments as we have deemed necessary for the
expression of opinions herein contained. In making the foregoing examinations,
we have assumed the genuineness of all signatures and the authenticity of all
documents submitted to us as originals, and the conformity to original
<PAGE>

Hamilton Bancorp Inc.
March 19, 1997
Page 2

documents of all documents submitted to us as certified or photostatic copies.
As to various questions of fact material to this opinion, we have relied, to the
extent we deemed reasonably appropriate, upon representations or certificates of
officers or directors of the Company, without independently verifying the
accuracy of such documents, records and instruments.

Based upon the foregoing examination, we are of the opinion that the
Shares have been duly and validly authorized and, when issued and delivered in
accordance with the terms of the Underwriting Agreement filed as Exhibit 1.1 to
the Registration Statement, will be validly issued, fully paid and
nonassessable.

We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to our name under the caption "Legal
Matters" in the prospectus comprising a part of the Registration Statement. In
giving such consent, we do not thereby admit that we are included within the
category of persons whose consent is required under Section 7 of the Act or the
rules and regulations promulgated thereunder.

Sincerely,

GREENBERG, TRAURIG, HOFFMAN,
LIPOFF, ROSEN & QUENTEL, P.A.

By: /s/ Robert L. Grossman
----------------------

<PAGE>

EXHIBIT 10.1

HAMILTON BANCORP INC.

STOCK OPTION PLAN FOR KEY EMPLOYEES AND DIRECTORS
(Adopted by the Shareholders on December 3, 1993
and as in effect with amendments on March 14, 1997)

1. PURPOSE. The purpose of this Plan is to advance the interests of
Hamilton Bancorp Inc. (the "Company") by providing an additional incentive to
attract and retain qualified and competent persons who are key employees or
directors of the Company or its subsidiaries or affiliated entities, and upon
whose efforts and judgment the success of the Company is largely dependent.

2. DEFINITIONS. As used herein, the following terms shall have the
meaning indicated:

(a) "Affiliate" shall mean any corporation other than the Company that is
a member of an affiliated group of corporations, as defined in Section 1504
(determined without regard to Section 1504(b)) of the Internal Revenue Code, of
which the Company is a member.

(b) "Board" shall mean the Board of Directors of the Company.

(c) "Committee" shall mean the compensation committee appointed by the
Board (as described in Section 13 hereof) or, if such a committee does not
exist, the Board.

(d) "Common Stock" shall mean the 1 cent par value Common Stock of the
Company.

(e) "Covered Employee" shall mean any individual who, on the last day of
the taxable year of the Company, is (i) the Chief Executive Officer of the
Company or is acting in such capacity (the "CEO"), (ii) among the four highest
compensated officers of the Company and its Affiliates (other than the CEO), or
(iii) otherwise considered to be a "Covered Employee" within the meaning of
Section 162(m) of the Internal Revenue Code and the regulations promulgated
thereunder.

(f) "Director" shall mean a member of the Board.

(g) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.

(h) "Fair Market Value" of a Share on any date of reference shall be the
"Closing Price" (as defined below) of the Common Stock on the business day
immediately preceding such date, unless the Committee in its sole discretion
shall determine otherwise in a fair and uniform manner. For the purpose of
determining Fair Market Value, the "Closing Price" of the Common Stock on any
business day shall be (i) if the Common Stock is listed or admitted for trading
on any United States national securities exchange, or if actual transactions are
otherwise reported on a consolidated transaction reporting system,

<PAGE>

the last reported sale price of Common Stock on such exchange or reporting
system, as reported in any newspaper of general circulation, (ii) if the Common
Stock is quoted on the National Association of Securities Dealers Automated
Quotations System ("Nasdaq"), or any similar system of automated dissemination
of quotations of securities prices in common use, the last reported sale price
of Common Stock for such day on such system, or (ii) if neither clause (i) or
(ii) is applicable, the mean between the high bid and low asked quotations for
the Common Stock as reported by the National Quotation Bureau, Incorporated if
at least two securities dealers have inserted both bid and asked quotations for
Common Stock on at least five of the ten preceding days. If neither (i), (ii),
or (iii) above is applicable, then Fair Market Value shall be determined in good
faith by the Committee in a fair and uniform manner.

(i) "Incentive Stock Option" shall mean an incentive stock option as
defined in Section 422 of the Internal Revenue Code.

(j) "Internal Revenue Code" shall mean the Internal Revenue Code of 1986,
as amended from time to time.

(k) "Non-Employee Director" shall refer to a Director who is not an
employee of the Company or any Subsidiary.

(l) "Non-Qualified Stock Option" shall mean an Option which is not an
Incentive Stock Option.

(m) "Officer" shall mean the Company's president, principal financial
officer, principal accounting officer and any other person who the Company
identifies as an executive officer.

(n) "Option" shall mean any option granted under this Plan.

(o) "Optionee" shall mean a person to whom an Option is granted under this
Plan or any person who succeeds to the rights of such person under this Plan by
reason of the death of such person;

(p) "Outside Director" shall mean a member of the Board who (i) is not a
current employee of the Company or any Affiliate; (ii) is not a former employee
of the Company or any Affiliate who receives compensation for prior services
(other than benefits under a tax-qualified retirement plan) during the taxable
year; (iii) has not been an officer of the Company or any Affiliate; (iv) does
not receive remuneration either directly or indirectly, in any capacity other
than as a director; and (v) satisfies any other conditions that shall from time
to time be required to qualify as an "outside director" under Section 162(m) of
the Internal Revenue Code and the regulations thereunder and as a "Non-Employee
Director" under Rule 16b-3 promulgated under the Exchange Act. For this
purpose,

<PAGE>

"Remuneration" shall have the meaning afforded that term pursuant to Treasury
Regulations issued under Section 162(m) of the Internal Revenue Code, and shall
exclude any de minimis remuneration excluded under those Treasury Regulations.

(q) "Plan" shall mean this Stock Option Plan.

(r) "Share" shall mean a share of the Common Stock.

(s) "Subsidiary" shall mean any corporation (other than the Company) in
any unbroken chain of corporations beginning with the Company if, at the time of
the granting of the Option, each of the corporations other than the last
corporation in the unbroken chain owns stock possessing 50 percent or more of
the total combined voting power of all classes of stock in one of the other
corporations in such chain.

3. SHARES AND OPTIONS. The Company may grant to Optionees from time to
time Options to purchase an aggregate of up to Eight Hundred Seventy Seven
Thousand Five Hundred (877,500) Shares from Shares held in the Company's
treasury or from authorized and unissued Shares. If any Option granted under
the Plan shall terminate, expire, or be canceled or surrendered as to any
Shares, new Options may thereafter be granted covering such Shares. An Option
granted hereunder shall be either an Incentive Stock Option or a Non-Qualified
Stock Option as determined by the Committee at the time of grant of such Option,
and shall clearly state, whether it is an Incentive Stock Option or Non-
Qualified Stock Option. All Options shall be granted within 10 years from the
effective date of this Plan.

4. DOLLAR LIMITATION. Options otherwise qualifying as Incentive Stock
Options hereunder will not be treated as Incentive Stock Options to the extent
that the aggregate fair market value (determined at the time the Option is
granted) of the Shares, with respect to which Options meeting the requirements
of Internal Revenue Code Section 422(b) are exercisable for the first time by
any individual during any calendar year (under all plans of the Company),
exceeds $100,000.

5. CONDITIONS FOR GRANT OF OPTIONS

(a) Each Option shall be evidenced by an option agreement that may contain
any term deemed necessary or desirable by the Committee, provided such terms are
not inconsistent with this Plan or any applicable law. Optionees shall be those
persons selected by the Committee in its sole discretion. Any person who files
with the Committee, in a form satisfactory to the Committee, a written waiver of
eligibility to receive any Option under this Plan shall not be eligible to
receive any Option under this Plan for the duration of such waiver.

(b) In granting Options, the Committee may take into consideration the
contribution the person has made to the success of the Company and its
subsidiaries and such other

<PAGE>

factors as the Committee shall determine. The Committee shall also have the
authority to consult with and receive recommendations from Officers and other
personnel of the Company with regard to these matters. The Committee may from
time in granting Options under the Plan prescribe such other terms and
conditions concerning such Options as it deems appropriate, including, without
limitation, (i) prescribing the date or dates on which the Option becomes
exercisable, (ii) providing that the Option rights accrue or become exercisable
in installments over a period of years, or upon the attainment of stated goals
or both, or (iii) if applicable, relating an Option to the continued employment
of the Optionee for a specified period of time, provided that such terms and
conditions are not more favorable to an Optionee than those expressly permitted
herein.

(c) If applicable, the Options granted to employees under this Plan shall
be in addition to regular salaries, pension, life insurance or other benefits
related to their employment or other relationship with the Company. Neither the
Plan nor any Option granted under the Plan shall confer upon any person any
right to employment or continuance of employment by the Company.

(d) Notwithstanding any other provision of this Plan, and in addition to
any other requirements of this Plan, the aggregate number of Shares with respect
to which Options may be granted to any one Optionee may not exceed 50% of the
total of all Options issued and issuable under the Plan, subject to adjustment
as provided in Section 10(a) hereof.

(e) Notwithstanding any other provision of this Plan, and in addition to
any other requirements of this plan, Options may not be granted to a Covered
Employee unless the grant of such Option is authorized by, and all of the terms
of such Options are determined by, a Committee that is appointed in accordance
with Section 13 of this Plan and all of whose members are Outside Directors.

(f) Incentive Stock Options may not be granted to any Non-Employee
Directors.

6. EXERCISE PRICE. The exercise price per Share of any Option shall be
any price determined by the Committee but shall not be less than the par value
per Share; provided, however, that in no event shall the exercise price per
Share of any Incentive Stock Option be less than the Fair Market Value of the
Shares underlying such Option on the date such Option is granted.

7. EXERCISE OF OPTIONS.

(a) An Option shall be deemed exercised when (i) the Company has received
written notice of such exercise in accordance with the terms of the Option (ii)
full payment of the aggregate exercise price of the Shares as to which the
Option is exercised has been made

<PAGE>

and (iii) arrangements that are satisfactory to the Committee, in its sole
discretion, have been made for the Optionee's payment to the Company of the
amount that is necessary for the Company employing the Optionee to withhold in
accordance with applicable Federal or state tax withholding requirements.

(b) Unless further limited by the Committee in any Option, the option
price of any Shares purchased shall be paid (i) in cash, (ii) by certified or
official bank check, (iii) by money order, (iv) with Shares owned by the
Optionee that have been owned by the Optionee for more than 6 months on the date
of surrender or such other period as may be required to avoid a charge to the
Company's earnings for financial accounting purposes, (v) by authorization for
the Company to withhold Shares issuable upon exercise of the Option, (vi) by
arrangement with a broker that is acceptable to the Committee where payment of
the Option price is made pursuant to an irrevocable direction to the broker to
deliver all or part of the proceeds from the sale of the Option Shares to the
Company in payment of the Option price, or (vii) any combination of the
foregoing. The Committee in its sole discretion may accept a personal check in
full or partial payment of any Shares. If the Exercise price is paid in whole
or in part with Shares, the value of the Shares surrendered shall be their Fair
Market Value on the date the Option is exercised. The Company in its sole
discretion may, on an individual basis or pursuant to a general program
established in connection with this Plan, and subject to applicable law, lend
money to an Optionee, guarantee a loan to an Optionee, or otherwise assist an
Optionee to obtain the cash necessary to exercise all or a portion of an Option
granted hereunder or to pay any tax liability of the Optionee attributable to
such exercise. If the exercise price is paid in whole or part with Optionee's
promissory note, such note shall (i) provide for full recourse to the maker,
(ii) be collateralized by the pledge of the Shares that the Optionee purchases
upon exercise of such Option, (iii) bear interest at a rate no less than the
prime rate of the Company's principal bank subsidiary and (iv) contain such
other terms as the Board in its sole discretion shall reasonably require.

(c) No Optionee shall be deemed to be a holder of any Shares subject to an
Option unless and until a stock certificate or certificates for such Shares are
issued to such person(s) under the terms of this Plan. No adjustment shall be
made for dividends (ordinary or extraordinary, whether in cash, securities or
other property) or distributions or other rights for which the record date is
prior to the date such stock certificate is issued, except as expressly provided
in Section 10 hereof.

8. EXERCISABILITV OF OPTIONS. Any Option shall become exercisable in
such amounts, at such intervals and upon such terms as the Committee shall
provide in such Option, except as otherwise provided in this Section 8.

(a) The expiration date of an Option shall be determined by the Committee
at the time of grant, but in no event shall an Option be exercisable after the
expiration of 10 years from the date of grant of the Option.

<PAGE>

(b) Unless otherwise provided in any Option, each outstanding Option shall
become immediately fully exercisable:

(i) if there occurs any transaction (which shall include a series of
transactions occurring, within 60 days or occurring pursuant to a plan),
that has the result that stockholders of the Company immediately before
such transaction cease to own at least fifty percent (50%) of the voting
stock of the Company or of any entity that results from the participation
of the Company in a reorganization, consolidation, merger, liquidation or
any other form of corporate transaction;

(ii) if the stockholders of the Company shall approve a plan of merger,
consolidation, reorganization, liquidation or dissolution in which the
Company does not survive (unless the approved merger, consolidation,
reorganization, liquidation or dissolution is subsequently abandoned); or

(iii) if the stockholders of the Company shall approve a plan for the
sale, lease, exchange or other disposition of all or substantially all the
property and assets of the Company (unless such plan is subsequently
abandoned).

(c) The Committee may in its sole discretion accelerate the date on
which any Option may be exercised and may accelerate the vesting of any Shares
subject to any Option or previously acquired by the exercise of any Option.

9. TERMINATION OF OPTION PERIOD.

(a) The unexercised portion of any Option granted to an Optionee shall
automatically and without notice terminate and become null and void at the time
of the earliest to occur of the following:

(i) three months after the date on which the Optionee's employment with
the Company or any Subsidiary, or service as a Director or as a director of
any Subsidiary, is terminated or, in the case of a Non-Qualified Stock
Option and unless the Committee shall otherwise determine in writing in its
sole discretion, the date on which the Optionee's employment with the
Company or any Subsidiary, or service as a Director or as a director of any
Subsidiary, is terminated, in either case for any reason other than by
reason of (a) Cause, which shall mean "Cause" under such Optionee's
employment agreement, if any, and which, solely for purposes of this Plan,
also shall mean the termination of the Optionee's employment or the removal
of the Optionee as a Director or as a director of any Subsidiary by reason
of the Optionee's willful misconduct or gross negligence, (b) the

<PAGE>

Optionee's mental or physical disability (within the meaning of Internal
Revenue Code Section 22(e)) as determined by a medical doctor satisfactory
to the Committee or (c) the Optionee's death;

(ii) immediately upon the termination of the Optionee's employment with
the Company or any Subsidiary, or service as a Director or as a director of
any Subsidiary, for Cause;

(iii) twelve months after the date on which the Optionee's employment
with the Company or any Subsidiary, or service as a Director or as a
director of any Subsidiary is terminated by reason of mental or physical
disability (within the meaning of Internal Revenue Code Section 22(e)) as
determined by a medical doctor satisfactory to the Committee, or

(iv) (a) twelve months after the date of the Optionee's death or (b)
three months after the date of the Optionee's death if such death shall
occur during the twelve month period specified in Subsection 9(a)(iii)
hereof.

(b) The Committee in its sole discretion may by giving written notice
("cancellation notice") cancel, effective upon the date of the consummation of
any corporate transaction described in Subsections 8(b)(ii) or (iii) hereof, any
Option that remains unexercised on such date. Such cancellation notice shall be
given a reasonable period of time prior to the proposed date of such
cancellation and may be given either before or after approval of such corporate
transaction.

10. ADJUSTMENT OF SHARES.

(a) If at any time while the Plan is in effect or unexercised Options are
outstanding, there shall be any increase or decrease in the number of issued and
outstanding Shares through the declaration of a stock dividend or through any
recapitalization resulting in a stock split-up, combination or exchange of
Shares, then and in such event:

(i) appropriate adjustment shall be made in the maximum number of shares
available for grant under the Plan, so that the same percentage of the
Company's issued and outstanding Shares shall continue to be subject to
being so optioned; and

(ii) appropriate adjustment shall be made in the number of Shares and the
exercise price per Share thereof then subject to any outstanding Option, so
that the same percentage of the Company's issued and outstanding Shares
shall remain subject to purchase at the same aggregate exercise price.

(b) Subject to the specific terms of any Option, the Committee may change
the terms

<PAGE>

of Options outstanding under this Plan, with respect to the option price or the
number of Shares subject to the Options, or both, when, in the Committee's sole
discretion, such adjustments become appropriate by reason of a corporate
transaction described in Subsections 8(b)(ii) or (iii) hereof.

(c) Except as otherwise expressly provided herein, the issuance by the
Company of shares of its capital stock of any class, or securities convertible
into shares of capital stock of any class, either in connection with direct sale
or upon the exercise of rights or warrants to subscribe thereof, or upon
conversion of shares or obligations of the Company convertible into such shares
or other securities, shall not affect, and no adjustment by reason thereof shall
be made with respect to the number of or exercise price of Shares then subject
to outstanding Options granted under the Plan.

(d) Without limiting the generality of the foregoing, the existence of
outstanding Options granted under the Plan shall not affect in any manner the
right or power of the Company to make, authorize or consummate (i) any or all
adjustments, recapitalizations, reorganizations or other changes in the
Company's capital structure or its business; (ii) any merger or consolidation of
the Company; (iii) any issue by the Company of debt securities, or preferred or
preference stock that would rank above the Shares subject to outstanding
Options; (iv) the dissolution or liquidation of the Company; (v) any sale,
transfer or assignment of all or any part of the assets or business of the
Company; or (vi) any other corporate act or proceeding, whether of a similar
character or otherwise.

11. TRANSFERABILITY OF OPTIONS AND SHARES..

(a) No Incentive Stock Option, and unless the Committee's prior written
consent is obtained (which consent may be obtained at the time an Option is
granted) and the transaction does not violate the requirements of Rule 16b-3
promulgated under the Exchange Act no Non-Qualified Stock Option, shall be
subject to alienation, assignment, pledge, charge or other transfer other than
by the Optionee by will or the laws of descent and distribution, and any attempt
to make any such prohibited transfer shall be void. Each Option shall be
exercisable during the Optionee's lifetime only by the Optionee, or in the case
of a Non-Qualified Stock Option that has been assigned or otherwise transferred
with the Committee's prior written consent, only by the assignee consented to by
the Committee.

(b) Unless the Committee's prior written consent is obtained (which
consent may be obtained at the time an Option is granted) and the transaction
does not violate the requirements of Rule 16b-3 promulgated under the Exchange
Act, no Shares acquired by an Officer, as that term is defined under Rule 16b-3,
of the Company or Director or a director of any Subsidiary pursuant to the
exercise of an Option may be sold, assigned, pledged or otherwise transferred
prior to the expiration of the six-month period following the date on which the
Option was granted.

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12. ISSUANCE OF SHARES. As a condition of any sale or issuance of Shares
upon exercise of any Option, the Committee may require such agreements or
undertakings, if any, as the Committee may deem necessary or advisable to assure
compliance with any such law or regulation including, but not limited to, the
following:

(i) a representation and warranty by the Optionee to the Company, at the
time any Option is exercised, that he is acquiring the Shares to be issued
to him for investment and not with a view to, or for sale in connection
with, the distribution of any such Shares; and

(ii) a representation, warranty and/or agreement to be bound by any legends
that are, in the opinion of the Committee, necessary or appropriate to
comply with the provisions of any securities law deemed by the Committee to
be applicable to the issuance of the Shares and are endorsed upon the Share
certificates.

13. ADMINISTRATION OF THE PLAN.

(a) The Plan shall be administered by the Committee, which shall consist
of not less than two Directors, each of whom shall be Outside Directors. The
Committee shall have all of the powers of the Board with respect to the Plan.
Any member of the Committee may be removed at any time, with or without cause,
by resolution of the Board and any vacancy occurring in the membership of the
Committee may be filled by appointment of the Board.

(b) The Committee, from time to time, may adopt rules and regulations for
carrying out the purposes of the Plan. The Committee's determinations and its
interpretation and construction of any provision of the Plan shall be final and
conclusive.

(c) Any and all decisions or determinations of the Committee shall be made
either (i) by a majority vote of the members of the Committee at a meeting or
(ii) without a meeting by the unanimous written approval of the members of the
Committee.

(d) The Board may reserve to itself the power to grant Options to
employees or Directors of the Company or any Subsidiary who are not Covered
Employees. If and to the extent that the Board reserves such powers, then all
references herein to the Committee shall refer to the Board with respect to the
Options granted by the Board.

14. INCENTIVE OPTIONS FOR 10% STOCKHOLDERS. Notwithstanding any other
provisions of the Plan to the contrary, an Incentive Stock Option shall not be
granted to any person owning directly or indirectly (through attribution under
Section 424(d) of the Internal Revenue Code) at the date of grant, stock
possessing more than 10% of the total combined voting power of all

<PAGE>

classes of stock of the Company (or of its subsidiary [as defined in Section 424
of the Internal Revenue Code] at the date of grant) unless the option price of
such Option is at least 110% of the Fair Market Value of the Shares subject to
such Option on the date the Option is granted, and such Option by its terms is
not exercisable after the expiration of five years from the date such Option is
granted.

15. INTERPRETATION

(a) The Plan shall be administered and interpreted so that all Incentive
Stock Options granted under the plan will qualified as Incentive Stock Options
under section 422 of the Internal Revenue Code. If any provision of the Plan
should be held invalid for the granting of Incentive Stock Options or illegal
for any reason, such determination shall not affect the remaining provisions
hereof, but instead the Plan shall be construed and enforced as if such
provision had never been included in the Plan.

(b) This Plan shall be governed by the laws of the State of Florida.

(d) Any reference to the masculine, feminine, or neuter gender shall be a
reference to such other gender as is appropriate.

(e) As it is the intent of the Company that the Plan comply in all
respects with Rule 16b-3 promulgated under the Exchange Act ("Rule 16b-3"), any
ambiguities or inconsistencies in construction of the Plan shall be interpreted
to give effect to such intention, and if any provision of the Plan is found not
to be in compliance with Rule 16b-3, such provision shall be deemed null and
void to the extent required to permit the Plan to comply with Rule 16b-3. The
Board and the Committee each may from time to time adopt rules and regulations
under, and amend, the Plan in furtherance of the intent of the foregoing.

16. AMENDMENT AND DISCONTINUATION OF THE PLAN. Either the Board or the
Committee may from time to time amend the Plan or any Option; provided, however,
that, except to the extent provided in Section 10, no such amendment may,
without approval by the stockholders of the Company, (a) materially increase the
benefits accruing to participants under the Plan, (b) materially increase the
number of securities which may be issued under the Plan, or (c) materially
modify the requirements as to eligibility for participation in the Plan; and
provided further, that, except to the extent provided in Section 9, no amendment
or suspension of the Plan or any Option issued hereunder shall substantially
impair any Option previously granted to any Optionee without the consent of such
Optionee.

<PAGE>

17. EFFECTIVE DATE AND TERMINATION DATE. The effective date of the Plan
is the date on which the Board adopts this Plan, and the Plan shall terminate on
the 10th anniversary of the effective date.

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EXHIBIT 23.2

INDEPENDENT AUDITORS' CONSENT

We consent to the use in this Amendment No.1 to Registration Statement No.
333-20435 of Hamilton Bancorp Inc., of our report dated January 31, 1997 (March
17, 1997 as to the completion of the Reorganization described in Note 15),
appearing in the Prospectus, which is part of such Registration Statement, and
to the reference to us under the headings "Selected Consolidated Financial Data"
and "Experts" in such Prospectus.

DELOITTE & TOUCHE LLP
Miami, Florida
March 18, 1997