HAMILTON BANCORP INC, S-1, 1997-01-27

HAMILTON BANCORP INC
S-1, 1997-01-27
SAVINGS INSTITUTION, FEDERALLY CHARTERED

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<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 24, 1997

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

SECURITIES AND EXCHANGE COMMISSION

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

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. / /
------------------------

CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED PRICE(1)(2) REGISTRATION FEE
<S> <C> <C>
Common Stock, $.01 par value (1)........................................................ $36,800,000 $11,151.52
</TABLE>

(1) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(c) under the Securities Act of 1933.

(2) Includes 300,000 shares of Common Stock which may be purchased by the
Underwriters pursuant to an over-allotment option.
------------------------

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 JANUARY 24, 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 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 $ and
$ per share. See "Underwriting" for information relating to the factors to be
considered in determining the initial public offering price.

Application has been made for quotation of the Company's Common Stock on The
Nasdaq National Market System ("Nasdaq") under the symbol "HBCP."

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.

<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>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK AT
A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
TRANSACTIONS MAY BE EFFECTED IN THE OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

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

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 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, each such statement being qualified
in all respects by such reference. 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.

2
<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 TO BE 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 188,844 SHARES OF COMMON STOCK (POST-STOCK SPLIT),
AND (B) THE ISSUANCE OF AN AGGREGATE OF 1,396,759 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"). CONSUMMATION
OF THE REORGANIZATION WILL BE SUBJECT ONLY TO REGULATORY APPROVAL OF A PENDING
CHANGE IN CONTROL APPLICATION AND WILL BE COMPLETED PRIOR TO THE EFFECTIVE DATE
OF THE OFFERING. 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 multinational financial institutions and, therefore, customers in
such markets do not receive a similar level of service from such institutions as
those 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 for pre- and post-export
financing, such as refinancing of letters of credit and discounted acceptances.
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 many transactions, by often
obtaining security interests in goods being financed and by the short-term,
self-liquidating nature of trade transactions. At September 30, 1996, 87.62% of
the Company's loan portfolio consisted of short-term trade related loans with an
average

3
<PAGE>
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 five branches in Florida as
well as deposits received from correspondent banks, corporate customers and
private banking customers within the Region. The Company is opening two
additional branches in West Palm Beach and Sarasota, 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,
1995, average total loans increased from $190.4 million to $370.6 million, and
net income increased from $4.4 million to $8.0 million. Average loans increased
from $361.4 million to $463.8 million and net income increased from $6.9 million
to $7.3 million for the nine months ended September 30, 1995 and 1996,
respectively. For the year ended December 31, 1995 and for the nine months ended
September 30, 1996, return on average assets was 1.50% and 1.48%, respectively,
and return on average total equity was 24.73% and 25.02%, respectively. Along
with its growth, the Company has maintained strong credit quality. Net loan
chargeoffs as a percentage of average outstanding loans was 0.58% for the year
ended December 31, 1995 and 0.33% (on an annualized basis) for the nine months
ended September 30, 1996. At September 30, 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 generate
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 September 30, 1996, the Company had
total assets of approximately $763.6 million, total deposits of approximately
$644.4 million and stockholders' equity of approximately $41.6 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................ 9,067,925 shares(1)
Use of proceeds............................................. Contribution to the capital of
the Bank to support future
growth in its trade finance
business and for general
corporate purposes.
Proposed NASDAQ symbol...................................... "HBCP"
</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. See "Management--Company Stock Option Plan."

5
<PAGE>
SUMMARY CONSOLIDATED FINANCIAL DATA

(Dollars in thousands, except per share data)

<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
----------------------------------------------------- --------------------
1991 1992 1993 1994 1995 1995 1996
--------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net interest income........................ $6,392 $9,712 $13,209 $17,201 $24,143 $17,709 $21,052
Provision for credit losses................ 1,187 1,477 2,550 2,875 2,450 1,275 2,440
--------- --------- --------- --------- --------- --------- ---------
Net interest income after provision for
credit losses............................ 5,205 8,235 10,659 14,326 21,693 16,434 18,612
Trade finance fees and commissions......... 3,728 5,535 6,572 7,422 8,173 5,759 5,529
Capital market fees, net................... 932 1,036 1,634 1,410 318 236 120
Customer services fees..................... 721 927 943 1,044 1,267 946 865
Net gain (loss) on sale of securities
available for sale....................... 57 167 11 (168) 3 3 0
Other income............................... 389 219 403 322 569 468 428
--------- --------- --------- --------- --------- --------- ---------
Total non-interest income.................. 5,827 7,884 9,563 10,030 10,330 7,412 6,942
--------- --------- --------- --------- --------- --------- ---------
Operating expenses......................... 7,768 10,795 13,014 14,946 18,849 12,560 13,729
--------- --------- --------- --------- --------- --------- ---------
Income before provision for income taxes... 3,264 5,324 7,208 9,410 13,174 11,286 11,825
Provision for income taxes................. 1,190 1,950 2,761 3,721 5,171 4,392 4,505
--------- --------- --------- --------- --------- --------- ---------
Net income................................. $2,074 $3,374 $4,447 $5,689 $8,003 $6,894 $7,320
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
PER COMMON SHARE DATA:
Net income per common share(1)............. $0.30 $0.49 $0.65 $0.78 $1.10 $0.95 $1.00
Book value per common share(1)............. $1.34 $1.83 $2.47 $3.77 $4.77 $4.53 $5.70
Average weighted shares.................... 6,826,764 6,826,764 6,826,764 7,292,925 7,292,925 7,292,925 7,292,925
</TABLE>

<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
------------------------------------------ --------------------
1992 1993 1994 1995 1995 1996
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
AVERAGE BALANCE SHEET DATA:
Total assets............................... $ 225,881 $ 276,285 $ 391,606 $ 534,726 $ 521,731 $ 662,137
Total loans................................ 131,306 190,364 270,798 370,568 361,378 463,829
Total deposits............................. 166,389 222,397 317,176 444,332 436,411 550,209
Stockholders' equity....................... 11,496 15,267 22,195 32,358 31,398 39,003
</TABLE>

<TABLE>
<CAPTION>
SEPTEMBER 30, 1996
-------------------------
ACTUAL AS ADJUSTED(2)
--------- --------------
<S> <C> <C>
BALANCE SHEET DATA:
Total assets............................................................................ $ 763,591 $
Loans--net.............................................................................. 525,347
Total cash and cash equivalents......................................................... 42,275
Interest-earning deposits with other banks.............................................. 69,889
Securities available for sale........................................................... 34,417
Due from customers on bankers' acceptances and on deferred payment letters of credit.... 73,752
Deposits................................................................................ 644,355
Bankers' acceptances and deferred payment letters of credit outstanding................. 73,752
Total stockholders' equity.............................................................. 41,592
</TABLE>

6
<PAGE>
SELECTED FINANCIAL RATIOS:

<TABLE>
<CAPTION>
AT AND FOR THE NINE
MONTHS ENDED
AT AND FOR THE YEARS ENDED DECEMBER 31, SEPTEMBER 30,
----------------------------------------------------- --------------------
1991 1992 1993 1994 1995 1995 1996
--------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
PERFORMANCE RATIOS:
Net interest spread........................ 4.51% 4.76% 4.33% 4.20% 4.28% 4.00%
Net interest margin........................ 5.40% 5.48% 5.05% 4.94% 4.95%(3) 4.65%(3)
Return on average equity................... 29.35% 29.13% 25.63% 24.73% 29.28%(3) 25.02%(3)
Return on average assets................... 1.49% 1.61% 1.45% 1.50% 1.76%(3) 1.48%(3)
Efficiency ratio(4)........................ 61.35% 57.15% 54.89% 54.68% 50.00% 49.04%

ASSET QUALITY RATIOS:
Allowance for credit losses as a percentage
of total loans........................... 1.05% 1.66% 1.31% 1.05% 1.13% 1.08%
Non-performing assets as a percentage of
total loans.............................. 0.20% 1.33% 0.59% 1.07% 1.25% 0.91%
Allowance for credit losses as a percentage
of non-performing assets................. 520.87% 125.00% 221.13% 98.60% 89.24% 118.46%
Net loan charge-offs as a percentage of
average outstanding loans................ 0.66% 0.50% 0.74% 0.58% 0.44%(3) 0.33%(3)

CAPITAL RATIOS:
Leverage capital ratio..................... 5.28% 5.21% 5.48% 5.68% 6.38% 5.46%
Tier 1 capital............................. 9.71% 9.35% 10.30% 9.98% 10.29% 10.06%
Total capital.............................. 10.96% 10.60% 11.47% 10.92% 11.36% 11.31%
Average equity to average assets........... 5.09% 5.53% 5.67% 6.05% 6.02% 5.89%
</TABLE>

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

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

(3) Represents annualized ratio.

(4) Amount reflects operating expense 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, 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 UNDER 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, many 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 the Company's allowance for credit
losses may be either greater or less than actual losses incurred. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."

CONCENTRATION OF CROSS-BORDER LENDING ACTIVITIES. At September 30, 1996,
approximately 70.0% in principal amount of the Company's total loans were
outstanding to borrowers in over 25 countries outside the United States,
including Guatemala (11.2%), Brazil (8.6%), Panama (8.0%) and Argentina (6.8%).
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 the first nine months of 1996, the Company's net
loans, including discounted acceptances, increased approximately 34.3% and 26.3%
in the aggregate, respectively, to approximately $416.0 million and $525.3
million, and deposits increased by approximately 35.3% and 27.6% in the
aggregate, respectively, to approximately $505.1 million and $644.4 million, in
each case, when compared to the prior comparable period. 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. 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.

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

9
<PAGE>
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."

SEASONALITY AND VARIABILITY OF QUARTERLY RESULTS. The Company, as well as
the trade financing industry, has historically experienced and expects to
continue to experience seasonal fluctuations in its trade financing, which
generally has been most active from July to December. A principal reason for the
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
factors 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 71.0% of its annual letter of credit and acceptance fees in each
of 1994 and 1995 during the second half of the fiscal year. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations."

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
in or relating to 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."

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

10
<PAGE>
the Comptroller of the Currency (the "OCC"), and secondarily, of the FDIC.
Federal laws and regulations govern numerous matters ranging from the regulation
of certain debt obligations, 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."

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 its direct
and indirect subsidiaries. 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 $ per share ($ per share if
the over-allotment option granted to the Underwriters is exercised in full) in
the net tangible book value of their shares. 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 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 and for
general corporate purposes. 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 9,067,925 shares of Common Stock outstanding (9,367,925 if the
over-allotment option granted to the Underwriters is exercised in full). Of
these shares, 5,553,180 shares (5,853,180 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 3,514,745 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

11
<PAGE>
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,
will have been issued under the 1993 Plan. 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 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
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% of the Company's equity
securities will hold approximately 30.5% of the total voting power of the
Company's outstanding voting stock upon the consummation of this Offering, or
29.6% if the 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 $ per share and after deducting the underwriting discount and estimated
offering expenses, are estimated to be approximately $ million ($
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 and for general corporate purposes.

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

12
<PAGE>
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 its direct and indirect subsidiaries. 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 net tangible book value of the Company's Common Stock as of September
30, 1996 was $39.4 million or approximately $5.40 per share. Net tangible book
value per share is determined by dividing net tangible book value (tangible
assets less liabilities) of the Company by 7,292,925 shares of Common Stock
outstanding (including common stock equivalents).

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 $ 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 September 30, 1996 would have been $ or $ per
share. This would represent an immediate increase in net tangible book value of
$ per share to the existing shareholders and an immediate dilution in
net tangible book value of $ per share to purchasers of Common Stock in
the Offering at the assumed initial public offering price of $ per
share, as illustrated in the following table.

<TABLE>
<S> <C> <C>
Assumed initial public offering price per share of Common Stock(1)...... $
Net tangible book value per share as of September 30, 1996............ $
Increase per share attributable to new investors......................
Pro forma net tangible book value per share after the Offering(2).......
---------
Net tangible book value dilution per share to new investors(2)(3)....... $
---------
---------
</TABLE>

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

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

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

(3) Does not give 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. If exercised, these options would result in additional
dilution to new investors of $ per share. Pursuant to their terms,
none of such outstanding options may be exercised until February 1998. See
"Management--Company Stock Option Plan."

The following table sets forth as of September 30, 1996 the difference
between the existing shareholders and the purchasers of shares in the Offering
with respect to the number of shares purchased from the

13
<PAGE>
Company, the total consideration paid and the average price per share paid at
the assumed initial offering price of $ per share:

<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION AVERAGE
----------------------- ----------------------- PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
---------- ----------- ---------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Existing shareholders.................................. 7,067,925 77.9% $ % $
New investors.......................................... 2,000,000 22.1
---------- ----- ---------- ----- ------------
Total................................................ 9,067,925 100.0% $ %
---------- ----- ---------- ----- ------------
---------- ----- ---------- ----- ------------
</TABLE>

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

(1) If the Underwriters exercise their over-allotment option in full, the
Company's existing shareholders will own 78.7% 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
September 30, 1996, giving effect to the Reorganization and the stock split 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 $ per share) and the application of the estimated
net proceeds therefrom. See "Use of Proceeds."

<TABLE>
<CAPTION>
SEPTEMBER 30, 1996
----------------------
ACTUAL AS ADJUSTED
--------- -----------
(IN THOUSANDS)
<S> <C> <C>
Deposits............................................................... $ 644,355 $
--------- -----------
--------- -----------
Stockholders' equity:
Common stock, $.01 par value; 75,000,000 shares authorized; 7,067,925
shares issued and outstanding; 9,067,925 shares issued and
outstanding, as adjusted(1)........................................ 71
Capital surplus...................................................... 17,300
Retained earnings.................................................... 24,219
Net unrealized gain on securities available for sale, net of taxes... 2
--------- -----------
Total stockholders' equity......................................... $ 41,592
--------- -----------
Total capitalization............................................... $ 685,947 $
--------- -----------
--------- -----------
Ratios:
Tier 1 Risk-Based Capital Ratio........................................ 10.06% (2)
Total Risk-Based Capital Ratio......................................... 11.31% (2)
Leverage Ratio......................................................... 5.46% (2)
</TABLE>

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

(1) Does not include an aggregate of 877,500 shares of Common Stock reserved for
issuance upon exercise of stock options granted 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."

(2) Assumes that the net proceeds are invested in assets with an average risk
weighting of %.

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

The selected consolidated financial data set forth below for income
statement data has been derived from the consolidated financial statements of
the Company contained elsewhere herein. The consolidated financial statements as
of and for the years ended December 31, 1991, 1992, 1993, 1994 and 1995 have
been audited by Deloitte & Touche LLP, independent auditors. The income
statement data for the nine months ended September 30, 1995 and 1996 and the
balance sheet data as of September 30, 1996 have been derived from unaudited
interim consolidated financial statements contained elsewhere herein, which in
the opinion of management, include all adjustments (consisting of only normal
recurring adjustments) necessary for a fair presentation of the information set
forth therein. The data set forth below should be read in conjunction with the
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>
NINE MONTHS ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
----------------------------------------------------- --------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1991 1992 1993 1994 1995 1995 1996
--------- --------- --------- --------- --------- --------- ---------
INCOME STATEMENT DATA:
Net interest income.................. $6,392 $9,712 $13,209 $17,201 $24,143 $17,709 $21,052
Provision for credit losses.......... 1,187 1,477 2,550 2,875 2,450 1,275 2,440
--------- --------- --------- --------- --------- --------- ---------
Net interest income after
provision for credit losses........ 5,205 8,235 10,659 14,326 21,693 16,434 18,612
Trade finance fees and commissions... 3,728 5,535 6,572 7,422 8,173 5,759 5,529
Capital market fees, net............. 932 1,036 1,634 1,410 318 236 120
Customer services fees............... 721 927 943 1,044 1,267 946 865
Net gain (loss) on sale of securities
available for sale................. 57 167 11 (168) 3 3 0
Other income......................... 389 219 403 322 569 468 428
--------- --------- --------- --------- --------- --------- ---------
Total non-interest income............ 5,827 7,884 9,563 10,030 10,330 7,412 6,942
--------- --------- --------- --------- --------- --------- ---------
Operating expenses................... 7,768 10,795 13,014 14,946 18,849 12,560 13,729
--------- --------- --------- --------- --------- --------- ---------
Income before provision for income
taxes.............................. 3,264 5,324 7,208 9,410 13,174 11,286 11,825
Provision for income taxes........... 1,190 1,950 2,761 3,721 5,171 4,392 4,505
--------- --------- --------- --------- --------- --------- ---------
Net income........................... $2,074 $3,374 $4,447 $5,689 $8,003 $6,894 $7,320
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
PER COMMON SHARE DATA:
Net income per common share(1)....... $0.30 $0.49 $0.65 $0.78 $1.10 $0.95 $1.00
Book value per common share(1)....... $1.34 $1.83 $2.47 $3.77 $4.77 $4.53 $5.70
Average weighted shares.............. 6,826,764 6,826,764 6,826,764 7,292,925 7,292,925 7,292,925 7,292,925
</TABLE>

16
<PAGE>

SELECTED FINANCIAL RATIOS:

<TABLE>
<CAPTION>
AT AND FOR THE
NINE MONTHS ENDED
AT AND FOR THE YEARS ENDED DECEMBER 31, SEPTEMBER 30,
----------------------------------------------------- --------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1991 1992 1993 1994 1995 1995 1996
--------- --------- --------- --------- --------- --------- ---------
PERFORMANCE RATIOS:
Net interest spread.............. 4.51% 4.76% 4.33% 4.20% 4.28% 4.00%
Net interest margin.............. 5.40% 5.48% 5.05% 4.94% 4.95%(3) 4.65%(3)
Return on average equity......... 29.35% 29.13% 25.63% 24.73% 29.28%(3) 25.02%(3)
Return on average assets......... 1.49% 1.61% 1.45% 1.50% 1.76%(3) 1.48%(3)
Efficiency ratio(4).............. 61.35% 57.15% 54.89% 54.68% 50.00% 49.04%

ASSET QUALITY RATIOS:
Allowance for credit losses as a
percentage of total loans...... 1.05% 1.66% 1.31% 1.05% 1.13% 1.08%
Non-performing assets as a
percentage of total loans...... 0.20% 1.33% 0.59% 1.07% 1.25% 0.91%
Allowance for credit losses as a
percentage of non-performing
assets......................... 520.87% 125.00% 221.13% 98.60% 89.24% 118.46%
Net loan charge-offs as a
percentage of average
outstanding loans.............. 0.66% 0.50% 0.74% 0.58% 0.44%(3) 0.33%(3)

CAPITAL RATIOS:
Leverage capital ratio........... 5.28% 5.21% 5.48% 5.68% 6.38% 5.46%
Tier 1 capital................... 9.71% 9.35% 10.30% 9.98% 10.29% 10.06%
Total capital.................... 10.96% 10.60% 11.47% 10.92% 11.36% 11.31%
Average equity to average
assets......................... 5.09% 5.53% 5.67% 6.05% 6.02% 5.89%
</TABLE>

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

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

(3) Represents annualized ratio.

(4) Amount reflects operating expense 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 nine months ended
September 30, 1995 and 1996 and for the fiscal years ended and as of December
31, 1993, 1994 and 1995 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 trade finance with and between countries in 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 nine months ended September 30, 1996 and for 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 Bank receives on interest-bearing
loans and investments and the interest expense it pays on interest-bearing
liabilities such as deposits and borrowings), (ii) increased trade finance fees
and commissions resulting primarily from a larger volume of transactions through
1995, and (iii) the results of improved operating efficiencies. More recently,
and due to economic growth and stabilization in the Region, as well as the
Bank'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 23
through 26.

NINE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30,
1995

NET INTEREST INCOME. Net interest income constitutes the Company's
principal source of income. Net interest income increased from approximately
$17.7 million for the nine months ended September 30, 1995, to $21.1 million for
the comparable period in 1996, a 19.2% increase. The primary factor resulting in
increased net interest income was an increase in average earning assets offset,
to some extent, by a decrease in net interest margin. Average earning assets
increased from $441.6 million for the nine months ended September 30, 1995 to
$571.8 million for the comparable period in 1996, a 29.5% increase. The

18
<PAGE>
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 $361.4 million for the nine months ended September 30, 1995 to $463.8
million for the nine months ended September 30, 1996, a 28.3% increase, while
average interest earning deposits with other banks increased from $37.9 million
for the nine months ended September 30, 1995 to $60.4 million for the nine
months ended September 30, 1996, a 59.4% increase. Net interest margin decreased
from 4.95% for the nine months ended September 30, 1995 to 4.65% for the nine
months ended September 30, 1996, a 6.1% 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 are
more stable relative to other deposits, continued to grow.

Interest income increased from $35.0 million for the nine months ended
September 30, 1995 to $42.1 million for the nine months ended September 30,
1996, a 20.3% 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 $17.3
million for the nine months ended September 30, 1995 to $21.0 million for the
nine months ended September 30, 1996, a 21.4% increase, reflecting growth in
deposits to fund asset growth. Average interest-bearing deposits increased from
$390.7 million for the nine months ended September 30, 1995 to $504.0 million
for the nine months ended September 30, 1996, a 29.0% increase. The growth in
deposits was primarily a result of the Bank seeking new deposits of such types
to fund asset growth.

PROVISION FOR CREDIT LOSSES. The Company's provision for credit losses
increased from $1.3 million for the nine months ended September 30, 1995 to $2.4
million for the nine months ended September 30, 1996, an 84.6% increase. Net
loan chargeoffs during the nine months ended September 30, 1995 amounted to $1.2
million compared to net loan chargeoffs of $1.1 million for the same period in
1996. The allowance for credit losses was increased from $4.2 million for the
nine months ended September 30, 1995 to $5.7 million for the nine months ended
September 30, 1996, a 35.7% increase. This increase was primarily due to an
increase in the size of the Bank's loan portfolio. The ratio of the allowance
for credit losses to total loans decreased slightly from approximately 1.1% at
September 30, 1995 to approximately 1.0% at September 30, 1996, reflecting an
improvement in the credit quality of the portfolio. 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 $7.4
million for the nine months ended September 30, 1995 to $6.9 million for the
same period in 1996, a 6.8% decrease. Trade finance fees and commissions
decreased by $230,000 due largely to lower fees earned on letters of credit
resulting from perceived economic stability in the Region. Capital market fees
decreased by $116,000 as a result of fewer capital market transactions. Customer
service fees decreased by $81,000 as a result of lower overdrafts experienced in
the period. Net gains (losses) 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 $12.6 million for the
nine months ended September 30, 1995 to $13.7 million for the nine months ended
September 30, 1996, an 8.7% increase. Employee compensation and benefits
increased from $6.4 million for the nine months ended September 30, 1995, to
$7.2 million for the nine months ended September 30, 1996, a 12.5% increase.
This increase was primarily due to an increase in the number of employees from
203 at September 30, 1995 to 214 at September 30, 1996, as well as raises for
existing personnel. Occupancy expenses increased from $2.0 million for the nine
months ended September 30, 1995 to $2.1 million for the same period in 1996, a
5.0% increase, primarily due to expenses related to the occupancy and
maintenance of additional space on

19
<PAGE>
an existing floor 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
increased slightly from $3.1 million for the nine months ended September 30,
1995 to $3.5 million for the same period in 1996, an 11.0% increase. Other
expenses for the nine months ended September 30, 1996 included a $300,000
non-recurring expense related to a proposed acquisition, which acquisition was
not consummated. FDIC assessments decreased from $425,000 for the nine months
ended September 30, 1995 to $118,000 for the comparable 1996 period, a 72.2%
decrease, due to a one-time decrease in assessments by the FDIC. Management
continues to monitor operating expenses closely. The Company's efficiency ratio
is below the industry average at 49.0% for the nine months ended September 30,
1996, a slight improvement from 50.0% reported for the same period in the prior
year. For a more detailed analysis of the Company's non-interest expense, see
"--Non-Interest Expense."

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 5.05% for 1994 to 4.94% for
1995, a 2.2% 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. Deposits from these branches were utilized to decrease
deposits obtained through the interbank certificate of deposit network to $3.0
million at December 31, 1995 from $41.0 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

20
<PAGE>
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 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 34.1% 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."

YEAR ENDED DECEMBER 31, 1994 COMPARED TO YEAR ENDED DECEMBER 31, 1993

NET INTEREST INCOME. Net interest income increased from $13.2 million for
1993 to $17.2 million for 1994, a 30.3% increase. The primary factor resulting
in increased net interest income was an increase in average earning assets
offset, to some extent, by a decrease in net interest margin. Average earning
assets increased from $229.7 million for 1993 to $328.9 million for 1994, a
43.2% 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 to
the Company's growth, which allowed it to provide more trade financing. Average
loans and acceptances discounted increased from $190.4 million for 1993 to
$270.8 million for 1994, a 42.2% increase, while average interest-earning
deposits with other banks increased from $18.0 million in 1993 to $29.5 million
in 1994, a 63.9% increase. Net interest margin decreased from 5.48% for 1993 to
5.05% for 1994, a 7.8% decrease. The primary reason for this decrease was
continued growth in more stable certificates of deposit which are among the
Company's highest cost source of funds.

Interest income increased from $20.1 million for 1993 to $29.2 million for
1994, a 45.3% increase. Interest expense increased from $6.9 million for 1993 to
$12.0 million for 1994, a 73.9% increase. Average interest-bearing deposits
(both certificates of deposit and time deposits from banks) increased from
$185.6 million at December 31, 1993 to $274.9 million at December 31, 1994, a
48.1% increase.

PROVISION FOR CREDIT LOSSES. The Company's provision for credit losses
increased from $2.5 million for 1993 to $2.9 million for 1994, a 16.0% increase.
Net loan chargeoffs during 1993 amounted to $952,000 compared to net loan
chargeoffs of $2.0 million for 1994, a 110% increase. The allowance for credit
losses increased from $3.3 million for 1993 to $4.1 million for 1994, a 24.2%
increase. This increase was primarily

21
<PAGE>
due to an increase in the Company's loan portfolio, as well as a chargeoff of
one loan in the amount of $1.6 million. The ratio of the allowance for credit
losses to total loans decreased from approximately 1.66% at December 31, 1993 to
approximately 1.31% at December 31, 1994, primarily due to the Company's
servicing of larger customers with stronger credit. See "--Financial Condition"
for a more detailed discussion on the provision and allowance for credit losses.

NON-INTEREST INCOME. Non-interest income for 1993 increased from $9.6
million for 1993 to $10.0 million for 1994, a 4.2% increase. This increase was
primarily attributable to an increase in trade finance fees and commissions from
$6.6 million for 1993 to $7.4 million for 1994, a 12.1% increase, offset by a
decrease in capital market fees from $1.6 million at December 31, 1993 to $1.4
million at December 31, 1994. Net gains (losses) 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 $13.0 million for
1993 to $14.9 million for 1994, a 14.6% increase. Employee compensation and
benefits increased from $6.7 million for 1993 to $7.8 million for 1994, a 16.4%
increase. This increase was primarily due to an increase in the number of
employees from 139 at December 31, 1993 to 178 at December 31, 1994. Occupancy
expenses decreased slightly from $2.4 million for 1993 to $2.3 million for 1994,
a 4.2% decrease. Occupancy expenses for 1993 include expenses of approximately
$400,000 related to the early termination of a lease for a branch which had been
closed. Other operating expenses increased from $2.8 million for 1993 to $3.5
million for 1994, a 27.5% increase, as a result of, among other things, an
increase of $223,000 in travel expenses related to additional business
development in the Region. Additionally, FDIC insurance increased from $472,000
at December 31, 1993 to $647,000 at December 31, 1994 in connection with deposit
growth. For a more detailed analysis of the Company's operating expenses, see
"--Operating Expenses."

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. All yield and rate information for
interim periods is calculated on an annualized basis. 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.

22
<PAGE>
YIELDS EARNED AND RATES PAID
<TABLE>
<CAPTION>
FOR THE YEARS ENDED
-------------------------------------------------------------------------------------------
DECEMBER 31, 1993 DECEMBER 31, 1994 DECEMBER 31, 1995
----------------------------- ----------------------------- -----------------------------
AVERAGE AVERAGE AVERAGE AVERAGE AVERAGE AVERAGE
BALANCE INTEREST(1) YIELD/RATE BALANCE INTEREST(1) YIELD/RATE BALANCE INTEREST(1) YIELD/RATE
-------- --------- -------- -------- --------- -------- -------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS)
Total earning assets
Loans:
Commercial loans....... $126,819 $10,580 8.34% $197,569 $17,253 8.73% $272,046 $27,953 10.28%
Acceptances
discounted........... 48,622 4,475 9.20% 56,604 5,201 9.19% 80,592 8,540 10.60%
Residential mortgage
loans................ 8,900 766 8.61% 10,449 874 8.36% 11,059 941 8.51%
Installment loans...... 600 52 8.67% 459 42 9.15% 348 33 9.48%
Other.................. 5,423 957 17.65% 5,717 1,009 17.65% 6,523 1,151 17.65%
-------- --------- -------- -------- --------- -------- -------- --------- --------
Total Loans.............. $190,364 $16,830 8.84% $270,798 $24,379 9.00% $370,568 $38,618 10.42%
Investment securities.... 14,135 808 5.72% 20,094 1,040 5.18% 26,277 1,652 6.29%
Federal funds sold....... 7,268 223 3.07% 8,538 428 5.01% 17,899 1,144 6.39%
Interest earning deposits
with other banks....... 17,950 1,594 8.88% 29,473 2,789 9.46% 39,480 4,550 11.52%
-------- --------- -------- -------- --------- -------- -------- --------- --------
Total investment
securities and
interest earning
deposits with other
banks................ 39,353 2,625 6.67% 58,105 4,257 7.33% 83,656 7,346 8.78%
Total interest earning
assets................. $229,717 $19,455 8.47% $328,903 $28,636 8.71% $454,224 $45,964 10.12%
--------- -------- --------- -------- --------- --------
Total non-interest
earning assets......... $ 46,568 $ 62,703 $ 80,502
-------- -------- --------
Total assets............. $276,285 $391,606 $534,726
-------- -------- --------
-------- -------- --------

<CAPTION>
FOR THE NINE MONTHS ENDED
------------------------------------------------------------

SEPTEMBER 30, 1995 SEPTEMBER 30, 1996
----------------------------- -----------------------------
AVERAGE AVERAGE
AVERAGE YIELD/RATE AVERAGE YIELD/RATE
BALANCE INTEREST(1) ANNUALIZED BALANCE INTEREST(1) ANNUALIZED
-------- --------- -------- -------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS)
Total earning assets
Loans:
Commercial loans....... $269,713 $20,915 10.23% $354,253 $26,062 9.67%
Acceptances
discounted........... 74,009 5,894 10.50% 91,941 6,981 9.98%
Residential mortgage
loans................ 10,977 700 8.41% 11,161 709 8.35%
Installment loans...... 333 24 9.50% 383 28 9.61%
Other.................. 6,346 850 17.65% 6,091 818 17.65%
-------- --------- -------- -------- --------- --------
Total Loans.............. $361,378 $28,383 10.36% $463,829 $34,598 9.80%
Investment securities.... 23,265 1,175 6.66% 26,452 1,525 6.23%
Federal funds sold....... 19,093 925 6.39% 21,152 863 5.57%
Interest earning deposits
with other banks....... 37,904 3,386 11.78% 60,354 4,279 9.32%
-------- --------- -------- -------- --------- --------
Total investment
securities and
interest earning
deposits with other
banks................ 80,262 5,486 9.01% 107,958 6,667 8.11%
Total interest earning
assets................. $441,640 $33,869 10.11% $571,787 $41,265 9.48%
--------- -------- --------- --------
Total non-interest
earning assets......... $ 80,091 $ 90,350
-------- --------
Total assets............. $521,731 $662,137
-------- --------
-------- --------
</TABLE>

23
<PAGE>
YIELDS EARNED AND RATES PAID
<TABLE>
<CAPTION>
FOR THE YEARS ENDED
-------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
DECEMBER 31, 1993 DECEMBER 31, 1994 DECEMBER 31, 1995
----------------------------- ----------------------------- -----------------------------

<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......... $ 6,866 $ 156 2.27% $ 9,813 $ 226 2.30% $ 16,232 $ 465 2.86%
Money market........... 19,357 653 3.37% 22,385 881 3.94% 29,236 1,637 5.60%
Presidential market.... 6,559 200 3.05% 3,895 119 3.06% 3,140 125 3.98%
SuperSavings,
savings.............. 4,839 127 2.62% 6,749 170 2.52% 8,750 280 3.20%
Certificate of deposits
(including IRA)...... 115,084 4,736 4.12% 177,779 8,151 4.58% 274,916 17,028 6.19%
Time deposits from
banks................ 30,006 936 3.12% 51,648 2,373 4.59% 65,354 4,006 6.13%
Collateral accounts.... 2,232 51 2.28% 1,080 27 2.50% 121 4 3.31%
-------- --------- -------- -------- --------- -------- -------- --------- --------
Total deposits........... $184,943 $6,859 3.71% $273,349 $11,947 4.37% $397,749 $23,545 5.92%
Federal funds
purchased.............. 645 21 3.26% 1,042 38 3.65% 0 0 0.00%
Other borrowings......... 0 0 0.00% 460 33 7.17% 0 0 0.00%
-------- --------- -------- -------- --------- -------- -------- --------- --------
Total interest-bearing
liabilities............ $185,588 $6,880 3.71% $274,851 $12,018 4.37% $397,749 $23,545 5.92%
-------- --------- -------- -------- --------- -------- -------- --------- --------
Non-interest bearing
liabilities
Demand deposits........ 37,454 43,827 46,583
Other liabilities...... 37,976 50,733 58,036
-------- -------- --------
Total non-interest
bearing liabilities.... $ 75,430 $ 94,560 $104,619
Stockholders' equity..... 15,267 22,195 32,358
-------- -------- --------
Total liabilities and
stockholders' equity... $276,285 $391,606 $534,726
-------- -------- --------
-------- -------- --------
Net interest income/net
interest spread........ $12,575 4.76% $16,618 4.33% $22,419 4.20%
--------- -------- --------- -------- --------- --------
--------- -------- --------- -------- --------- --------
Margin:
Interest income/interest
earning assets......... 8.47% 8.71% 10.12%
Interest expense/interest
earning assets......... 2.99% 3.65% 5.18%
Net interest
margin........... 5.48% 5.05% 4.94%
-------- -------- --------
-------- -------- --------

<CAPTION>
FOR THE NINE MONTHS ENDED
------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
SEPTEMBER 30, 1995 SEPTEMBER 30, 1996
----------------------------- -----------------------------
AVERAGE AVERAGE
AVERAGE YIELD/RATE AVERAGE YIELD/RATE
BALANCE INTEREST(1) ANNUALIZED BALANCE INTEREST(1) ANNUALIZED
-------- --------- -------- -------- --------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Interest-bearing
liabilities
Deposits:
Super NOW, NOW......... $ 15,767 $ 334 2.79% $ 16,176 $ 402 3.27%
Money market........... 27,941 1,192 5.63% 40,342 1,505 4.90%
Presidential market.... 3,121 92 3.89% 3,443 100 3.82%
SuperSavings,
savings.............. 9,032 217 3.17% 9,127 222 3.20%
Certificate of deposits
(including IRA)...... 273,081 12,607 6.09% 339,198 14,950 5.79%
Time deposits from
banks................ 61,631 2,843 6.08% 95,196 3,817 5.27%
Collateral accounts.... 132 3 3.00% 0 0 0.00%
-------- --------- -------- -------- --------- --------
Total deposits........... $390,705 $17,288 5.83% $503,482 $20,996 5.48%
Federal funds
purchased.............. 0 0 0.00% 321 14 5.73%
Other borrowings......... 0 0 0.00% 219 10 6.00%
-------- --------- -------- -------- --------- --------
Total interest-bearing
liabilities............ $390,705 $17,288 5.83% $504,022 $21,020 5.48%
-------- --------- -------- -------- --------- --------
Non-interest bearing
liabilities
Demand deposits........ 45,706 46,727
Other liabilities...... 53,922 72,385
-------- --------
Total non-interest
bearing liabilities.... $ 99,628 $119,112
Stockholders' equity..... 31,398 39,003
-------- --------
Total liabilities and
stockholders' equity... $521,731 $662,137
-------- --------
-------- --------
Net interest income/net
interest spread........ $16,581 4.28% $20,245 4.00%
--------- -------- --------- --------
--------- -------- --------- --------
Margin:
Interest income/interest
earning assets......... 10.11% 9.48%
Interest expense/interest
earning assets......... 5.16% 4.83%
Net interest
margin........... 4.95% 4.65%
-------- --------
-------- --------
</TABLE>

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

(1) Interest on loans excludes uncollected overdraft fees and other loan fees of
approximately $634,000, $583,000, $1.7 million, $1.1 million and $807,000
for the years ended December 31, 1993, 1994 and 1995 and the nine months
ended September 30, 1995 and 1996, respectively.

24
<PAGE>
YIELDS EARNED -- DOMESTIC AND FOREIGN EARNING ASSETS
<TABLE>
<CAPTION>
FOR THE YEARS ENDED
-------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
DECEMBER 31, 1993 DECEMBER 31, 1994 DECEMBER 31, 1995
----------------------------- ----------------------------- -----------------------------

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

(1) Interest on loans excludes uncollected overdraft fees of approximately
$634,000, $583,000, $1.7 million, $1.1 million and $807,000 for the years
ended December 31, 1993, 1994 and 1995 and the nine months ended September
30, 1995 and 1996, respectively.

25
<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 table sets 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>
NINE MONTHS ENDED
YEAR ENDED DECEMBER 31, 1994 YEAR ENDED DECEMBER 31, 1995 SEPTEMBER 30, 1996
COMPARED TO YEAR ENDED COMPARED TO YEAR ENDED COMPARED TO NINE MONTHS
DECEMBER 31, 1993 DECEMBER 31, 1994 ENDED SEPTEMBER 30, 1995
--------------------------------- ------------------------------- -------------------------------
CHANGES DUE TO: CHANGES DUE TO: CHANGES DUE TO:
--------------------------------- ------------------------------- -------------------------------
VOLUME RATE TOTAL VOLUME RATE TOTAL VOLUME RATE TOTAL
----------- --------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
(IN THOUSANDS)

Increase (decrease) in net
interest income due to:
Loans:
Commercial loans.......... $ 5,901 $ 772 $ 6,673 $ 6,502 $ 4,198 $ 10,700 $ 6,484 $ (1,337) $ 5,147
Residential mortgage
loans................... 133 (25) 108 51 16 67 12 (3) 9
Acceptances discounted.... 734 (8) 726 2,204 1,135 3,339 1,412 (325) 1,087
Installment loans......... (12) 2 (10) (10) 1 (9) 4 0 4
Other (Overdrafts)........ 52 0 52 142 0 142 (34) 2 (32)
Investments:
Investment securities..... 341 (109) 232 320 292 612 159 191 350
Federal funds sold........ 39 166 205 469 247 716 99 (161) (62)
Interest earning deposits
with other banks........ 1,023 172 1,195 947 814 1,761 1,983 (1,090) 893
----------- --------- --------- --------- --------- --------- --------- --------- ---------
Total earning assets.... $ 8,211 $ 970 $ 9,181 $ 10,625 $ 6,703 $ 17,328 $ 10,119 $ (2,723) $ 7,396
----------- --------- --------- --------- --------- --------- --------- --------- ---------
Deposits:
Super NOW, NOW............ 67 3 70 148 91 239 9 59 68
Money market.............. 102 126 228 270 486 756 524 (211) 313
Presidential market....... (81) 0 (81) (23) 29 6 9 (1) 8
Super Savings, Savings.... 50 (7) 43 50 60 110 2 3 5
Certificates of
deposits................ 2,583 832 3,415 4,449 4,428 8,877 3,020 (677) 2,343
Interest earning deposits
from banks.............. 675 762 1,437 629 1,004 1,633 1,531 (557) 974
Collateral accounts....... (26) 2 (24) (24) 1 (23) (3) 0 (3)
Federal funds purchased..... 13 4 17 (38) 0 (38) 0 14 14
Other borrowings............ 0 33 33 (33) 0 (33) 0 10 10
----------- --------- --------- --------- --------- --------- --------- --------- ---------
Total interest-bearing
liabilities............... $ 3,383 $ 1,755 $ 5,138 $ 5,428 $ 6,099 $ 11,527 $ 5,092 $ (1,360) $ 3,732
----------- --------- --------- --------- --------- --------- --------- --------- ---------
Change in interest income... $ 4,828 $ (785) $ 4,043 $ 5,197 $ 604 $ 5,801 $ 5,027 $ (1,363) $ 3,664
</TABLE>

26
<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 NINE MONTHS
ENDED
FOR THE YEARS ENDED DECEMBER 31, SEPTEMBER 30,
------------------------------------------------------------ ------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1994 TO
1993 TO 1994 1995 1995 TO 1996
PERCENTAGE PERCENTAGE PERCENTAGE
1993 CHANGE 1994 CHANGE 1995 1995 CHANGE
--------- ------------ --------- ------------- --------- --------- -------------

<CAPTION>
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
Trade finance fees and
commissions..................... $ 6,572 12.9% $ 7,422 10.1% $ 8,173 $ 5,759 (4.0)%
Capital market fees, net.......... 1,634 (13.7) 1,410 (77.4) 318 236 (49.2)
Customer service fees............. 943 10.7 1,044 21.4 1,267 946 (8.6)
Net gain (loss) on sale of
securities available for sale... 11 (1,627.3) (168) 101.8 3 3 (100.0)
Other............................. 403 (20.1) 322 76.7 569 468 (8.5)
--------- ------------ --------- ----- --------- --------- ------
Total non-interest income......... $ 9,563 4.9% $ 10,030 3.0% $ 10,330 $ 7,412 (6.3)%
--------- ------------ --------- ----- --------- --------- ------
--------- ------------ --------- ----- --------- --------- ------

<S> <C>

1996
---------

<S> <C>
Trade finance fees and
commissions..................... $ 5,529
Capital market fees, net.......... 120
Customer service fees............. 865
Net gain (loss) on sale of
securities available for sale... --
Other............................. 428
---------
Total non-interest income......... $ 6,942
---------
---------
</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 NINE MONTHS
ENDED
FOR THE YEARS ENDED DECEMBER 31, SEPTEMBER 30,
--------------------------------------------------------------- ------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1994 TO 1995 TO
1993 TO 1994 1995 1996
PERCENTAGE PERCENTAGE PERCENTAGE
1993 CHANGE 1994 CHANGE 1995 1995 CHANGE
--------- --------------- --------- ------------- --------- --------- -------------

<CAPTION>
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
Employee compensation and
benefits.......................... $ 6,728 15.9% $ 7,796 28.1% $ 9,990 $ 6,436 11.7%
Occupancy and equipment............. 2,434 (5.2) 2,308 22.3 2,822 1,968 8.8
Other operating expenses............ 2,769 27.5 3,531 34.2 4,738 3,117 11.0
Directors' fees..................... 611 8.7 664 22.3 812 614 34.0
Insurance (FDIC and OCC)............ 472 37.1 647 (24.7) 487 425 (72.2)
--------- --- --------- ----- --------- --------- -----
Total operating expenses............ $ 13,014 14.8% $ 14,946 26.1% $ 18,849 $ 12,560 9.3%
--------- --- --------- ----- --------- --------- -----
--------- --- --------- ----- --------- --------- -----

<S> <C>

1996
---------

<S> <C>
Employee compensation and
benefits.......................... $ 7,187
Occupancy and equipment............. 2,142
Other operating expenses............ 3,459
Directors' fees..................... 823
Insurance (FDIC and OCC)............ 118
---------
Total operating expenses............ $ 13,729
---------
---------
</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 rate for the years ended December 31, 1993, 1994
and 1995 and for the nine months ended September 30, 1996 were 38.0%, 39.0%,
39.0% and 39.0%, 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
$398,333, $521,004, $608,877

27
<PAGE>
and $622,062 for the years ended December 31, 1993, 1994 and 1995 and for the
nine months ended September 30, 1996, respectively.

FINANCIAL CONDITION

The Company's total assets increased from $314.2 million at December 31,
1993, to $458.0 million at December 31, 1994, to $615.1 million at December 31,
1995, to $763.6 million at September 30, 1996. This continued increase in total
assets generally reflects increases in loans-net, due from customers on bankers'
acceptances, securities and 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 in the process of being converted into Common
Stock, 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 will soon be opening two new Bank branch offices that
should 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 the 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 $17.2 million at December 31, 1993 compared to
$25.1 million at December 31, 1994, $46.6 million at December 31, 1995 and $42.3
million at September 30, 1996.

INVESTMENT SECURITIES AND INTEREST-EARNING DEPOSITS WITH OTHER BANKS

Investment securities increased from $18.7 million at December 31, 1993 to
$23.4 million at December 31, 1994, $28.9 million at December 31, 1995 and $34.4
million at September 30, 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 $24.2 million at December 31, 1993 to $33.6 million at December 31, 1994,
$38.4 million at December 31, 1995 and $69.9 million at September 30, 1996. The
level of such deposits has grown as the overall assets of the Company have
increased. 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 $196.3 million
(62.5% of total assets) at December 31, 1993 compared to total loans, net of
unearned income of $314.0 million (68.6% of total assets) at December 31, 1994,
$420.4 million (68.4% of total assets) at December 31, 1995 and $531.1 million
(69.6% of total assets) at September 30, 1996. The allowance for loan losses was
$3.3 million at December 31, 1993 compared to $4.1 million at December 31, 1994,
$4.5 million at December 31, 1995 and $5.7 million at September 30, 1996. Total
non-accruing loans at December 31, 1993, December 31, 1994, December 31, 1995
and September 30, 1996 were $458,000, $1.9 million, $3.6 million and $4.6
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

28
<PAGE>
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
that country. See "Risk Factors."

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 September 30, 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 losses and chargeoff and
recovery activity for the periods shown.

CREDIT LOSS EXPERIENCE

<TABLE>
<CAPTION>
NINE MONTHS
YEAR ENDED DECEMBER 31, ENDED
---------------------------------------------------------- SEPTEMBER 30,
1991 1992 1993 1994 1995 1996
---------- ---------- ---------- ---------- ---------- -------------
<S> <C> <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) (617)
Acceptances................ 0 0 0 0 0
Residential................ (5) (13) 0 0 0
Installment................ (13) 0 0 (3) (4)
Foreign........................ 0 (534) (1,686)(1) (1,044)(1) (543)
---------- ---------- ---------- ---------- -------------
Total charge-offs............ (897) (1,021) (2,038) (2,144) (1,164)
---------- ---------- ---------- ---------- -------------
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) (1,146)
Provision for credit losses.... 1,477 2,550 2,875 2,450 2,440
---------- ---------- ---------- ---------- -------------
Balance at end of year......... $ 1,672 $ 3,270 $ 4,133 $ 4,450 $ 5,744
---------- ---------- ---------- ---------- -------------
---------- ---------- ---------- ---------- -------------
Average loans.................. $ 131,306 $ 190,364 $ 270,798 $ 370,568 $ 463,829
Total loans.................... $ 159,185 $ 197,341 $ 315,533 $ 422,980 $ 533,387
Net charge-offs to average
loans...................... 0.66% 0.50% 0.74% 0.58% 0.33%
Allowance to total loans....... 1.05% 1.66% 1.31% 1.05% 1.08%
</TABLE>

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

(1) Includes charge-offs of $1.7 million and $1.1 million in 1994 and 1995,
respectively, related to extensions of credit to a domestic-based business
operated by a company organized under the laws of a foreign country.

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

<TABLE>
<CAPTION>
NINE MONTHS
ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
----------------------------------------------------- -------------
1991 1992 1993 1994 1995 1996
--------- --------- --------- --------- --------- -------------
<S> <C> <C> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS)
Balance, beginning of year........................ $ 213 $ 337 $ 910 $ 2,062 $ 3,380
Provision for credit losses....................... 124 1,107 2,838 2,362 294
Net charge-offs................................... 0 (534) (1,686)(1) (1,044)(1) (543)
--------- --------- --------- --------- ------
Balance, end of year.............................. $ 337 $ 910 $ 2,062 $ 3,380 $ 3,131
--------- --------- --------- --------- ------
--------- --------- --------- --------- ------
</TABLE>

The following table sets forth the allocation of the allowance for credit
losses by category of 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>
NINE MONTHS
ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
----------------------------------------------------- -------------
1991 1992 1993 1994 1995 1996
--------- --------- --------- --------- --------- -------------
<S> <C> <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 $ 2,292
Acceptances................................... 195 373 299 333 198
Residential................................... 30 45 55 57 54
Installment................................... 20 7 4 4 6
Overdraft..................................... 11 101 19 37 63
Foreign........................................... 337 910 2,062 3,380 3,131
--------- --------- --------- --------- ------
Total............................................. $ 1,672 $ 3,270 $ 4,133 $ 4,450 $ 5,744
--------- --------- --------- --------- ------
--------- --------- --------- --------- ------
</TABLE>

<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Percent of loans in each category
to total loans:
Domestic:
Commercial..................... 34.8% 25.8% 20.6% 21.9% 20.4%
Acceptances.................... 24.6% 24.5% 13.6% 7.8% 5.3%
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% 0.1%
Foreign............................ 35.5% 40.2% 61.7% 66.7% 72.1%
--------- --------- --------- --------- -----------
--------- --------- --------- --------- -----------
Total.............................. 100.0% 100.0% 100.0% 100.0% 100.0%
--------- --------- --------- --------- -----------
--------- --------- --------- --------- -----------
</TABLE>

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

30
<PAGE>
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. 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.

NONPERFORMING LOANS

<TABLE>
<CAPTION>
AT DECEMBER 31, AT
----------------------------------------------------- SEPTEMBER 30,
1991 1992 1993 1994 1995 1996
--------- --------- --------- --------- --------- -------------
<S> <C> <C> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS)
Domestic:
Non accrual............................................. $ 316 $ 458 $ 584 $ 1,345 $ 2,928
Past due over 90 days and accruing...................... 5 2,158 0 582 122
--------- --------- --------- --------- ------
Total domestic nonperforming loans.................... $ 321 $ 2,616 $ 584 $ 1,927 $ 3,050
--------- --------- --------- --------- ------
--------- --------- --------- --------- ------
Foreign
Non accrual............................................. $ 0 $ 0 $ 1,285 $ 2,287 $ 1,655
Past due over 90 days and accruing...................... 0 0 0 301 144
--------- --------- --------- --------- ------
--------- --------- --------- --------- ------
Total foreign nonperforming loans..................... $ 0 $ 0 $ 1,285 $ 2,588 $ 1,799
--------- --------- --------- --------- ------
--------- --------- --------- --------- ------
Total nonperforming loans(1)............................ $ 321 $ 2,616 $ 1,869 $ 4,515 $ 4,849
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, 1995, 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 $84,600 and $126,100,
respectively.

31
<PAGE>
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 September 30, 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 $47.1 million and $5.3 million, respectively, at December 31, 1993
compared to $43.6 million and $9.1 million, respectively, at December 31, 1994,
$64.6 million and $6.4 million, respectively, at December 31, 1995 and $66.8
million and $6.9 million, respectively, at September 30, 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 $242.9 million at December 31, 1993 compared to $373.4
million at December 31, 1994, $505.1 million at December 31, 1995 and $644.4
million at September 30, 1996. Deposits have grown in order to fund asset
growth. See "Business--Funding Sources."

STOCKHOLDERS' EQUITY

The Company's stockholders' equity at December 31, 1993 was $16.8 million
compared to $27.5 million at December 31, 1994, $34.8 million at December 31,
1995 and $41.6 million at September 30, 1996. Stockholders' equity has increased
by approximately 30.0% each year since 1992 and by approximately 19.5% during
the first nine months of 1996. 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 $5.0 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 funding sources based upon the
contractual maturities or adjustment dates at September 30, 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>
SEPTEMBER 30, 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......................... $ 111,456 $ 185,770 $ 141,648 $ 42,893 $ 41,383 $ 10,237 $ 533,387
Federal funds sold............ 22,000 0 0 0 0 0 22,000
Investment securities......... 19,707 5,940 7,829 0 0 941 34,417
Interest-earning deposits with
other banks................. 20,482 18,400 29,600 1,407 0 0 69,889
-
---------- ---------- ---------- ----------- --------- --------- ----------
Total........................... $ 173,645 $ 210,110 $ 179,077 $ 44,300 $ 41,383 $ 11,178 $ 659,693
-
-
---------- ---------- ---------- ----------- --------- --------- ----------
---------- ---------- ---------- ----------- --------- --------- ----------
Funding Sources:
Savings and transaction
deposits.................... $ 16,597 $ 51,758 $ 0 $ 0 $ 0 $ 0 $ 68,355
Time deposits of $100 or
more........................ 35,131 24,610 48,806 50,358 6,885 0 165,790
Time deposits under $100...... 26,879 53,999 77,016 97,847 10,597 79 266,417
Other time deposits........... 51,786 2,315 1,000 1,750 0 0 56,851
Funds overnight............... 37,735 0 0 0 0 0 37,735
-
---------- ---------- ---------- ----------- --------- --------- ----------
Total........................... $ 168,128 $ 132,682 $ 126,822 $ 149,955 $ 17,482 $ 79 $ 595,148
-
-
---------- ---------- ---------- ----------- --------- --------- ----------
---------- ---------- ---------- ----------- --------- --------- ----------
Interest sensitivity gap........ $ 5,517 $ 77,428 $ 52,255 $ (105,655) $ 23,901 $ 11,099 $ 64,545
-
-
---------- ---------- ---------- ----------- --------- --------- ----------
---------- ---------- ---------- ----------- --------- --------- ----------
Cumulative gap.................. $ 5,517 $ 82,945 $ 135,200 $ 29,545 $ 53,446 $ 64,545 --
-
-
---------- ---------- ---------- ----------- --------- --------- ----------
---------- ---------- ---------- ----------- --------- --------- ----------
Cumulative gap as a percentage
of total earning assets....... 0.72% 10.86% 17.71% 3.87% 7.0% 8.45% --
-
-
---------- ---------- ---------- ----------- --------- --------- ----------
---------- ---------- ---------- ----------- --------- --------- ----------
</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 Bank 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 $222.4 million for 1993, to $317.2 million for 1994, $444.3
million for 1995 and $550.2 million for the nine months ended September 30,
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
September 30, 1996, loans and interest-earning deposits with other banks
maturing within six months were $507.4 million, representing 76.8% of total
earning assets, and loans and interest-earning deposits with other banks
maturing within one year were $551.7 million, representing 83.5% 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 September 30, 1996 were
$140.2 million, 18.5% of total assets, and consisted of cash and cash
equivalents, due from banks-time and United States treasury bills. At September
30, 1996, the Company had been advised of $65.4 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 Bank's financial statements. The regulations
require the Company and the Bank to meet specific capital adequacy guidelines
that involve quantitative measures of the Bank's 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, SEPTEMBER 30,
1995 1996
-------------------------------
--------------------
<S> <C> <C> <C> <C>
(DOLLARS IN
THOUSANDS)
Tier 1 risk-weighted capital:
Actual............................................................ $ 32,445 10.0% $ 39,485 10.1%
Minimum........................................................... $ 13,004 4.0% $ 15,704 4.0%
Total risk-weighted capital:
Actual............................................................ $ 35,505 10.9% $ 44,403 11.3%
Minimum........................................................... $ 26,008 8.0% $ 31,408 8.0%
Leverage:
Actual............................................................ $ 32,445 5.7% $ 39,485 5.5%
Minimum........................................................... $ 17,076 3.0% $ 21,538 3.0%
</TABLE>

BANK CAPITAL RATIOS

<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1995 1996
-------------------------------
--------------------
<S> <C> <C> <C> <C>
(DOLLARS IN
THOUSANDS)
Tier 1 risk-weighted capital:
Actual............................................................ $ 32,156 9.9% $ 39,472 10.1%
Minimum to be well capitalized.................................... $ 19,506 6.0% $ 23,556 6.0%
Minimum to be adequately capitalized.............................. $ 13,004 4.0% $ 15,704 4.0%
Total risk-weighted capital:
Actual............................................................ $ 35,206 10.8% $ 44,403 11.3%
Minimum to be well capitalized.................................... $ 32,510 10.0% $ 39,260 10.0%
Minimum to be adequately capitalized.............................. $ 26,008 8.0% $ 31,408 8.0%
Leverage:
Actual............................................................ $ 32,156 5.7% $ 39,472 5.5%
Minimum to be well capitalized.................................... $ 27,976 5.0% $ 36,187 5.0%
Minimum to be adequately capitalized.............................. $ 22,831 4.0% $ 28,950 4.0%
</TABLE>

SEASONALITY

In general, the market for the Company's services and products has
historically been most active from July to December. A principal reason for the
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
factors, 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 71.0% of its annual letter of credit and acceptance fees
in each of 1994 and 1995 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 its subsidiary, Hamilton Bank, N.A. (the "Bank"), is
engaged in providing 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 the larger, multinational financial institutions and, therefore,
customers in such markets do not receive a similar level of service from such
institutions as those 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 five branches in Florida as well as deposits
received from correspondent banks, corporate customers and private banking
customers within the Region. The Company is opening two additional branches in
West Palm Beach and Sarasota, 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>
$463.8 million and net income increased from $6.9 million to $7.3 million for
the nine months ended September 30, 1995 and 1996, respectively. For the year
ended December 31, 1995 and for the nine months ended September 30, 1996, return
on average assets was 1.50% and 1.48%, respectively, and return on average total
equity was 24.73% and 25.02%, respectively. Along with its growth, the Company
has maintained strong credit quality. Net loan chargeoffs as a percentage of
average outstanding loans was 0.58% for the year ended December 31, 1995 and
0.33% (on an annualized basis) for the nine months ended September 30, 1996. At
September 30, 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 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, 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 high percentage of the Company's trade financing business now
involves such larger countries. Notwithstanding, the Company does not 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 the 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. See "--
Regulation."

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 is 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

38
<PAGE>
existing customers in accordance with and subject to its 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.

- EXPAND BANK'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, which 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.

- CONTINUE TO EXPAND DOMESTIC BRANCH SYSTEM. The Company presently has five
Bank branches located in Florida and is in the process of adding two new
branches. 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 deposits from 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 Bank'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,
in areas with significant trade activity and in areas where 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 proposed branch offices at West Palm Beach and Sarasota,
Florida, the Company intends to establish other Bank branches, including
possibly in states other than Florida and at locations with significant
trade activity, in order to continue to develop a stronger deposit base.
Management believes that this 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 strategy and
meeting its goals.

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 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, if not all, 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:

39
<PAGE>
- 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 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 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

40
<PAGE>
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 and 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 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.

41
<PAGE>
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 Bank
also makes direct loans to finance international trade. In addition, when
payment is made by the Bank under some of the above instruments, a third party's
reliance on the Bank's credit converts to a loan or advance by the Bank to its
customer. Virtually all of the Bank's loans are short-term. At September 30,
1996, the Bank'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 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

42
<PAGE>
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 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, 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."

43
<PAGE>
LOAN PORTFOLIO

Approximately 33% of the Company's portfolio consists of loans to domestic
borrowers and 67% of the Company's portfolio consists 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 87.6% of loans at September 30, 1996
were short-term trade finance loans with average original maturities of 180
days.

The following table sets forth the term to maturity of the Company's loans
at December 31, 1995. 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, 1995(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................................................... $ 62,853 $ 31,352 $ 2,305 $ 96,510
Acceptances discounted....................................... 32,859 200 0 33,059

Foreign loans:
Commercial................................................... 192,819 25,159 887 218,865
Acceptances discounted....................................... 61,506 1,332 0 62,838
---------- ------------- ----------- ----------
Total.......................................................... $ 350,037 $ 58,043 $ 3,192 $ 411,272
---------- ------------- ----------- ----------
---------- ------------- ----------- ----------

Fixed.......................................................... $ 242,064 $ 8,464 $ 795 $ 251,323
Adjustable..................................................... 107,973 49,579 2,397 159,949
---------- ------------- ----------- ----------
Total fixed & adjustable....................................... $ 350,037 $ 58,043 $ 3,192 $ 411,272
---------- ------------- ----------- ----------
---------- ------------- ----------- ----------
</TABLE>

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

(1) Does not include mortgage loans and installment loans in the aggregate
amount of $11,708.

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, AT SEPTEMBER 30,
------------------------------------------------------------------- ---------------------
1993 1994 1995 1996
--------------------- --------------------- --------------------- ---------------------
% OF % OF % OF % OF
TOTAL TOTAL TOTAL TOTAL
AMOUNT LOANS AMOUNT LOANS AMOUNT LOANS AMOUNT LOANS
---------- --------- ---------- --------- ---------- --------- ---------- ---------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
United States................ $ 98,937 50.14% $ 116,158 36.81% $ 152,864 36.14% $ 159,592 29.92%
Argentina.................... 20,953 10.62 30,390 9.63 23,607 5.58 36,150 6.78
Bolivia...................... 6,700 3.40 6,263 1.98 15,932 3.77 10,909 2.05
Brazil....................... 3,538 1.79 22,271 7.06 24,335 5.75 45,723 8.57
British West Indies.......... 4,485 2.27 5,254 1.67 -- -- 10,925 2.05
Dominican Republic........... 4,229 2.14 9,385 2.97 -- -- -- --
Ecuador...................... 9,000 4.56 18,591 5.89 23,415 5.54 34,820 6.53
El Salvador.................. 5,461 2.77 9,207 2.92 17,493 4.14 29,441 5.52
Guatemala.................... 14,444 7.32 31,452 9.97 40,303 9.53 59,472 11.15
Honduras..................... -- -- 13,245 4.20 17,307 4.09 15,492 2.90
Jamaica...................... -- -- 4,700 1.49 6,377 1.51 12,263 2.30
Panama....................... 7,586 3.84 17,743 5.62 23,566 5.57 42,810 8.03
Peru......................... 6,265 3.17 12,687 4.02 29,480 6.97 31,676 5.94
Venezuela.................... -- -- 5,298 1.68 15,853 3.75 11,949 2.24
Other(1)..................... 15,743 7.98 12,889 4.09 32,448 7.66 32,165 6.02
---------- --------- ---------- --------- ---------- --------- ---------- ---------
Total.................... $ 197,341 100.00% $ 315,533 100.00% $ 422,980 100.00% $ 533,387 100.00%
---------- --------- ---------- --------- ---------- --------- ---------- ---------
---------- --------- ---------- --------- ---------- --------- ---------- ---------
</TABLE>

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

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

At September 30, 1996, approximately 47.0% in principal amount of the
Company's loans were outstanding to borrowers in six countries other than the
United States: Guatemala (11.2%), Brazil (8.6%), Panama (8.0%), Argentina
(6.8%), Ecuador (6.5%) and Peru (5.9%).

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>
(IN THOUSANDS)
---------------------------------------------------------
AT SEPTEMBER
30,
Domestic: 1992 1993 1994 1995 1996
--------- --------- --------- --------- -------------
<S> <C> <C> <C> <C> <C>
Commercial(1)....................... $ 55,449 $ 60,195 $ 66,413 $ 96,049 $ 109,548
Acceptances discounted.............. 39,089 48,420 42,764 33,059 28,254
Residential mortgages............... 7,537 8,943 11,050 11,363 10,749
Installment......................... 644 551 334 345 417
--------- --------- --------- --------- -------------
Total domestic.................... $ 102,719 $ 118,109 $ 120,561 $ 140,816 $ 148,968
--------- --------- --------- --------- -------------
--------- --------- --------- --------- -------------
Foreign:
Government and official
institutions...................... $ 0 $ 550 $ 550 $ 750 $ 750
Banks and other financial
institutions...................... 0 46,013 96,563 137,143 196,132
Commercial and Industrial(1)........ 56,466 31,949 77,897 81,433 121,074
Acceptances Discounted.............. 0 720 19,962 62,838 66,463
--------- --------- --------- --------- -------------
Total foreign..................... $ 56,466 $ 79,232 $ 194,972 $ 282,164 $ 384,419
--------- --------- --------- --------- -------------
--------- --------- --------- --------- -------------
Total loans..................... $ 159,185 $ 197,341 $ 315,533 $ 422,980 $ 533,387
--------- --------- --------- --------- -------------
--------- --------- --------- --------- -------------
</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 by the DOT. 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 a Dade County, Florida low-income housing
program. Loans are under $100,000 and are with respect to properties for which
Dade County provides a large downpayment and takes a 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, $23.9 million and $23.3 million in 1994, 1995 and for
the first nine months of 1996, respectively, the largest portion of which
(approximately $10.7 million at September 30, 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 Bank's total assets for the past three fiscal
years and for the nine months ended September 30, 1996.

TOTAL OUTSTANDINGS BY COUNTRY
<TABLE>
<CAPTION>
AT
SEPTEMBER
AT DECEMBER 31, 30,
---------------------------------------------------------------------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
% OF % OF % OF
TOTAL TOTAL TOTAL
1993 ASSETS 1994 ASSETS 1995 ASSETS 1996
--------- ----------- --------- ----------- --------- ----------- ---------

<CAPTION>
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C> <C>
Argentina.................................. $ 42 13.4% $ 56 12.2% $ 28 4.6% $ 63
Bolivia.................................... 4 1.3 13 2.8 25 4.1 21
Brazil..................................... 5 1.6 25 5.5 51 8.3 63
British West Indies........................ -- -- -- -- -- -- 15
Dominican Republic......................... -- -- 12 2.6 -- -- 8
Ecuador.................................... 8 2.5 19 4.1 31 5.0 46
El Salvador................................ 5 1.6 8 1.8 20 3.3 37
Guatemala.................................. 11 3.5 42 9.2 60 9.8 74
Honduras................................... -- -- 11 2.4 15 2.4 15
Jamaica.................................... -- -- -- -- 7 1.1 13
Panama..................................... 9 2.9 14 3.1 19 3.1 40
Peru....................................... 8 2.5 16 3.5 40 6.5 33
Venezuela.................................. -- -- -- -- 8 1.3 12
Other(1)................................... 14 4.5 16 3.5 26 4.2 20
--------- --- --------- --- --------- --- ---------
Total.................................. $ 106 33.8% $ 232 50.7% $ 330 53.7% $ 460
--------- --- --------- --- --------- --- ---------
--------- --- --------- --- --------- --- ---------

<S> <C>
% OF
TOTAL
ASSETS
-----------

<S> <C>
Argentina.................................. 8.2%
Bolivia.................................... 2.8
Brazil..................................... 8.3
British West Indies........................ 2.0
Dominican Republic......................... 1.1
Ecuador.................................... 6.0
El Salvador................................ 4.9
Guatemala.................................. 9.7
Honduras................................... 2.0
Jamaica.................................... 1.7
Panama..................................... 5.3
Peru....................................... 4.3
Venezuela.................................. 1.6
Other(1)................................... 2.6
---
Total.................................. 60.5%
---
---
</TABLE>

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

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

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,
-------------------------------------------------------------------
NINE MONTHS ENDED
1993 1994 1995 SEPTEMBER 30, 1996
--------------------- --------------------- --------------------- ---------------------
AVERAGE AVERAGE AVERAGE AVERAGE
TOTAL MONTHLY TOTAL MONTHLY TOTAL MONTHLY TOTAL MONTHLY
VOLUME VOLUME VOLUME VOLUME VOLUME VOLUME VOLUME VOLUME
---------- --------- ---------- --------- ---------- --------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
(IN THOUSANDS)
Export Letters of Credit(1)..... $ 250,213 $ 20,851 $ 322,937 $ 26,911 $ 375,717 $ 31,310 $ 285,283 $ 31,698
Import Letters of Credit(1)..... 212,810 17,734 222,674 18,556 282,788 23,566 218,129 24,237
---------- --------- ---------- --------- ---------- --------- ---------- ---------
Total....................... $ 463,023 $ 38,585 $ 545,611 $ 45,467 $ 658,505 $ 54,876 $ 503,412 $ 55,935
---------- --------- ---------- --------- ---------- --------- ---------- ---------
---------- --------- ---------- --------- ---------- --------- ---------- ---------
</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
AT DECEMBER 31, SEPTEMBER
---------------------------------- 30,
1993 1994 1995 1996
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
(IN THOUSANDS)
Argentina........................................................ $ 5,728 $ 3,684 $ 1,916 $ 6,751
Bolivia.......................................................... 4,105 4,066 4,221 5,798
Brazil........................................................... 8,873 3,725 5,876 3,443
Colombia......................................................... 1,492 -- -- --
Dominican Republic............................................... 2,480 7,063 4,791 4,839
Ecuador.......................................................... 6,195 10,515 2,079 2,657
El Salvador...................................................... 2,762 5,278 3,877 2,074
Guatemala........................................................ 6,390 6,116 13,377 17,381
Honduras......................................................... 2,178 1,843 5,923 4,415
Jamaica.......................................................... -- 1,177 1,508 1,942
Nicaragua........................................................ 1,505 -- -- --
Panama........................................................... 5,513 6,119 5,369 12,012
Paraguay......................................................... 1,680 7,573 10,269 6,909
Peru............................................................. 4,818 9,376 5,346 6,867
United States.................................................... 46,454 62,698 57,564 65,820
Venezuela........................................................ 1,305 -- 1,400 --
Other(2)......................................................... 2,027 1,948 2,259 5,039
---------- ---------- ---------- ----------
Total........................................................ $ 103,505 $ 131,181 $ 125,775 $ 145,947
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
</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 Bank'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 1993, 1994, 1995 and for the first nine months of 1996, the
Company arranged the placement of approximately $100.0 million, $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
standards in three correspondent banks located in Haiti, Guyana and El Salvador.
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 accordingly, no significant trade financings have occurred with
such bank to date. The Company may make further minority investments in
correspondent banks within regulatory guidelines, 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, but only with the prior approval
of the OCC and the FRB.

INVESTMENT SECURITIES

The Company's investment securities primarily consist of United States
Government and agency securities having maturities of 90 days and less. At
September 30, 1996, the Company's only other investment securities were foreign
debt securities with a face value and market value of $3.1 million, representing
0.4% of total Company assets, as well as approximately $355,000 of Federal
Reserve Bank stock and $313,435 of foreign bank stock, each representing 0.04%
of total Company assets.

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

INVESTMENT SECURITIES

<TABLE>
<CAPTION>
DECEMBER 31, 1993
----------------------------------------------
AMORTIZED GROSS UNREALIZED FAIR
COST GAINS LOSSES VALUE
----------- --------- ----------- ---------
<S> <C> <C> <C> <C>
(IN THOUSANDS)
HELD TO MATURITY:
Foreign securities..................................................... $ 3,170 $ 118 -- $ 3,288
Federal reserve bank stock............................................. 212 -- -- 212
Other securities....................................................... 60 -- -- 60
----------- --------- ----- ---------
Total.................................................................... $ 3,442 $ 118 -- $ 3,560
----------- --------- ----- ---------
----------- --------- ----- ---------

AVAILABLE FOR SALE:
United States Government and agency securities......................... $ 15,186 $ 65 $ 58 $ 15,193
United States corporate securities..................................... 51 -- -- 51
----------- --------- ----- ---------
Total.................................................................... $ 15,237 $ 65 $ 58 $ 15,244
----------- --------- ----- ---------
----------- --------- ----- ---------
</TABLE>

<TABLE>
<CAPTION>
DECEMBER 31, 1994
------------------------------------------------
GROSS UNREALIZED
AMORTIZED 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>

50
<PAGE>

<TABLE>
<CAPTION>
DECEMBER 31, 1995
------------------------------------------------
GROSS UNREALIZED
AMORTIZED 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>
SEPTEMBER 30, 1996
------------------------------------------------
GROSS UNREALIZED
AMORTIZED FAIR
COST GAINS LOSSES VALUE
----------- ----------- ----------- ---------
<S> <C> <C> <C> <C>
(IN THOUSANDS)
AVAILABLE FOR SALE:
United States Government and agency securities........................... $ 30,620 $ 4 -- $ 30,624
Foreign debt securities.................................................. 3,125 -- -- 3,125
Federal reserve bank stock............................................... 355 -- -- 355
Foreign bank stocks...................................................... 313 -- -- 313
-- --
----------- ---------
Total.................................................................... $ 34,413 $ 4 -- $ 34,417
-- --
-- --
----------- ---------
----------- ---------
</TABLE>

51
<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, 1995:

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

<CAPTION>
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Within one year.................................. $ 20,706 $ 20,734 5.46% $ 6,261 $ 6,264 7.49%
One to five years................................ -- -- -- 1,001 1,000 5.52
Over five years.................................. -- -- -- 150(1) 150 --
------- ----------- --- ----------- ----------- ---
Total........................................ 20,706 20,734 -- 7,412 7,414 --
------- ----------- --- ----------- ----------- ---
Mortgage-backed securities....................... -- -- -- 125 126 8.70
Federal reserve bank stock....................... -- -- -- 355 355 --
Foreign bank stocks.............................. -- -- -- 313 313 --
------- ----------- --- ----------- ----------- ---
Total securities............................. $ 20,706 $ 20,734 -- $ 8,205 $ 8,208 --
------- ----------- --- ----------- ----------- ---
------- ----------- --- ----------- ----------- ---
</TABLE>

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

Prior to 1994, the Company classified its securities as either "available
for sale" or "held to maturity." Securities "available for sale" consisted of
those which were to be held for indefinite periods of time and not intended to
be held to maturity or on a long-term basis. Securities that management intended
to use as a part of its asset/liability strategy, or that may be sold in
response to changes in interest rates, changes in prepayment risk, the need to
increase regulatory capital, or other similar factors were classified as
"available for sale." Securities acquired with the intent and ability to hold on
a long-term basis or until maturity were classified as "held to maturity."

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.

52
<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 September 30, 1996, none of the
deposit placements with any correspondent bank exceeded $7.0 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 SEPTEMBER 30, 1996
- ------------------------------------------------------------------------- -------------------
<S> <C>
(IN THOUSANDS)
Argentina................................................................ $ 17,000
Bolivia.................................................................. 13,000
Ecuador.................................................................. 9,300
Brazil................................................................... 8,991
The Bahamas(1)........................................................... 7,000
Panama................................................................... 4,711
El Salvador.............................................................. 2,000
Jamaica.................................................................. 2,000
Peru..................................................................... 2,000
Venezuela................................................................ 1,000
Other Latin America & Caribbean countries................................ 2,887
-------
Total................................................................ $ 69,889
-------
-------
</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, 1993, 1994 and 1995 and September 30, 1996, these
deposits accounted for 65.9%, 58.9%, 60.4% and 58.1%, respectively, of total
liabilities. Foreign interbank fund deposits (consisting of both time and
savings deposits) make up the second biggest component of the Company's funding.
At December 31, 1993, 1994 and 1995 and September 30, 1996, this accounted for
16.6%, 13.1%, 13.9% and 12.9%, 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 international transactions. Time
deposits are kept at the Company by foreign banks in order to invest excess
dollar liquidity and maximize investment return.

53
<PAGE>
The following table provides an analysis of the Company's average deposits
for the periods indicated.

DEPOSITS

<TABLE>
<CAPTION>
FOR THE NINE
FOR THE YEARS ENDED DECEMBER 31, MONTHS ENDED
---------------------------------- SEPTEMBER 30,
1993 1994 1995 1996
---------- ---------- ---------- -------------
<S> <C> <C> <C> <C>
(IN THOUSANDS)
Non-interest bearing demand deposits........................... $ 37,454 $ 43,827 $ 46,583 $ 46,727
NOW and money market accounts.................................. 32,782 36,093 48,608 59,961
Savings deposits............................................... 4,839 6,749 8,750 9,127
Time deposits.................................................. 133,328 182,517 271,464 339,331
International Banking Facility (IBF) deposits.................. $ 13,994 $ 47,990 $ 68,927 $ 95,063
---------- ---------- ---------- -------------
Total deposits............................................. $ 222,397 $ 317,176 $ 444,332 $ 550,209
---------- ---------- ---------- -------------
---------- ---------- ---------- -------------
</TABLE>

Total domestic deposits of $447.2 million at September 30, 1996, included
$198.2 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 September 30, 1996 were Honduras ($49.5 million),
Guatemala ($32.4 million), Panama ($28.8 million), Suriname ($15.5 million) and
Venezuela ($11.5 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 and one in Winter Haven, Florida. New branches
are expected to open shortly in Sarasota and West Palm Beach, Florida, both of
which have 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 issued in denominations of $100,000 or more as of December 31 1995 and
September 30, 1996:

MATURITIES OF AND AMOUNTS OF
CERTIFICATES OF DEPOSIT OVER $100,000

<TABLE>
<CAPTION>
DECEMBER 31, 1995 SEPTEMBER 30, 1996
----------------------------------------- -----------------------------------------
CERTIFICATES OTHER-TIME CERTIFICATES OTHER-TIME
OF DEPOSIT DEPOSITS-DOMESTIC OF DEPOSIT DEPOSITS-DOMESTIC
$100,000 OR $100,000 OR $100,000 OR $100,000 OR
MORE MORE TOTAL MORE MORE TOTAL
------------- --------------- --------- ------------- --------------- ---------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Three months
or less.......... $ 49,114 $ 74,628 $ 123,742 $ 69,240 $ 91,771 $ 161,011
Over 3 through 6
months........... 28,683 2,100 30,783 49,232 1,000 50,232
Over 6 through 12
months........... 38,290 8,000 46,290 50,033 1,750 51,783
Over 12 months..... 6,014 0 6,014 6,885 0 6,885
------------- ------- --------- ------------- ------- ---------
Total............ $ 122,101 $ 84,728 $ 206,829 $ 175,390 $ 94,521 $ 269,911
------------- ------- --------- ------------- ------- ---------
------------- ------- --------- ------------- ------- ---------
</TABLE>

The Bank 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 Bank's
customary

54
<PAGE>
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.

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 3.5 3.9 4.0 3.1 3.7 4.8
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......................... 3.9 4.0 4.9
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, Exports f.o.b.

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 intentions 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

55
<PAGE>
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 liberalizing trade
between the United States and many countries with respect to a variety of goods
and services. All of these are highly positive developments for the Region's
trade and for continued demand for trade finance such as the Bank provides. As a
result of these and other developments, the Region's trade with the entire world
rose from approximately US$165.4 billion in 1990 to approximately US$319.8 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 4,095 4,362
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 Bank 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 Bank, 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 Bank'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 Bank to engage in trade
financing.

56
<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 in or relating
to 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 indirect
ownership or control of more than 5% of the outstanding voting stock of any bank
(unless it

57
<PAGE>
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 would 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, national banks and other commercial banks
in the United States, respectively. 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

Federal regulations require Bancorp and the Bank, respectively, to meet two
capital-to-assets ratios. The first such ratio, referred to as the "risk-based"
capital test, assigns a weight (or percentage) to assets by categories of risk
established by the federal regulators. Under this test, Bancorp's and the Bank's
"tier one capital" (consisting of their common stockholders' equity, perpetual
preferred stock and minority interests, if applicable) is required to equal at
least 4% of their risk-weighted assets. Also as part of the "risk-based" capital
test, all of Bancorp's and the Bank's capital (tier one or otherwise) must equal
or exceed 8% of aggregate risk-weighted assets.

The second ratio is referred to as the "leverage" test. Under this test each
of Bancorp and the Bank must maintain tier one capital equal to or exceeding 3%
of total assets, or such higher level as may be imposed by federal regulators.
The regulators have publicly indicated that a bank should, in practice, maintain
a leveraged capital-to-assets ratio of at least 1% to 2% above the 3% minimum.
For Bancorp's regulatory capital ratios see "Management's Discussion and
Analysis of Financial Condition and Results of Operations -- Liquidity and
Capital Resources."

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.
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

58
<PAGE>
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.

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

59
<PAGE>
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 September 30, 1996 an aggregate of $21.0
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.

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

60
<PAGE>
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 "well-capitalized" institution, the Bank currently has been paying a
quarterly fee of $500. 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 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 September 30, 1996 the Company had 206 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.

61
<PAGE>
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 and Miami,
Florida, and the Bank has received OCC approval for branch offices in West Palm
Beach and Sarasota, 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(3)........ Branch 1,600 December 2006 Leased $4,000 per month + 3% 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. No lease
has yet been executed with respect to the proposed West Palm Beach branch.

62
<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

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

63
<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 International
South in Miami, Florida. 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 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 Novotel 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

64
<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.

65
<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 1985 until 1991, Mr. Lyall served as
Vice President-International Operations for Eastern Airlines, where he was
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 the nine
months ended September 30, 1996, the Bank paid an aggregate of $811,500 and
$823,000, 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

The members of the Company's Audit Committee will initially be Messrs.
Capurro, Bickford, Gaffney and Sosa. The Audit Committee's functions will
include recommending to the Board of Directors the

66
<PAGE>
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
makes 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) 7,500 2,375(2)
Chairman of the Board, President and Chief
Executive Officer

Maura Acosta................................... 1996 160,000 46,000 --(3) 7,500 2,375(2)
Executive Vice President

J. Carlos Bernace.............................. 1996 125,000 46,000 --(3) 7,500 2,375(2)
Executive Vice President

Maria Ferrer-Diaz.............................. 1996 94,500 40,000 --(3) 1,500 2,020(2)
Senior Vice President of the Bank

Marquis H. Gilmore............................. 1996 123,000 5,000 --(3) 500 953(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

67
<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.

68
<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, 1995,
the Company made a $.25 Matching Contribution and a $.25 Additional Contribution
on behalf of each participant for an aggregate of $48,357 and $46,161 in
contributions, respectively.

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 1995. 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, $15.6 million
and $4.1 million, respectively, of loans and extensions of credit were
outstanding to certain officers and directors of the Company and/or the Bank and
to certain companies affiliated with such persons.

69
<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
sale of the shares offered by this Prospectus 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 ----------------------------------
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.................................... 257,517(8) 3.6% 2.8%
William Bickford....................................... 333,164(9) 4.7% 3.7%
Juan-Miguel Capurro.................................... 411,704(10) 5.8% 4.5%
Thomas F. Gaffney...................................... -- -- --
Intercredit Finance Group Inc.......................... 488,410(11) 6.9% 5.4%
Ernest Urcuyo.......................................... 496,815(12) 7.0% 5.5%
Ricardo Chiari......................................... 442,806(13) 6.3% 4.9%
Urraca Investment Corporation.......................... 378,918 5.4% 4.2%
All Directors (including Director nominees) and
executive officers of the Company as a group,
including those listed above (15 persons)............ 2,079,592(14) 29.4% 22.9%
</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 17,686 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 1,072,877 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.

70
<PAGE>
(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 144,508 shares of Common Stock held by VES Ventures Inc., a
Panamanian corporation, of which Mr. Sosa is principal shareholder.

(9) Represents 333,164 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) 392,418 shares of Common Stock held by Jotaeme Holding Ltd., a Turks &
Caicos Islands corporation, of which Mr. Capurro is a principal shareholder.

(11) Such shares of Common Stock are indirectly held by Ernesto Urcuyo, the
principal shareholder of Intercredit Finance Group, Inc., a Panamanian
corporation ("Intercredit Finance Group").

(12) Represents (i) 488,410 shares of Common Stock held by Intercredit Finance
Group and (ii) 8,405 shares of Common Stock held by Proaga S.A., a
Panamanian corporation, of each of which Mr. Urcuyo is principal
shareholder.

(13) Represents (i) 337,968 shares of Common Stock held by Valores Eastern,
S.A., a Panamanian corporation, (ii) 104,156 shares of Common Stock held by
Balkam, S.A., a Panamanian corporation, and (iii) 682 shares of Common Stock
held by Sociedad General de Valores, of each of which Ricardo Chiari is
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.

71
<PAGE>
DESCRIPTION OF CAPITAL STOCK

The Company's authorized capital stock will 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 to be
effected by the Company prior to the effective date of this Offering, an
aggregate of 7,067,925 shares of Common Stock will be outstanding. See
"Principal Shareholders." Although the Company has in the past designated and
issued shares of Preferred Stock, as of the date hereof 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 vote is also sufficient for
other actions that require the vote of shareholders. 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.

Upon completion of this Offering, the Company's existing shareholders will
beneficially own approximately 77.9% of the outstanding shares of Common Stock
(approximately 75.4% if the Underwriters' over-allotment option is exercised in
full) and will therefore be able to elect the entire Board of Directors and
control all matters submitted to shareholders for a vote.

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.

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

72
<PAGE>
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. 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 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.

SHARES ELIGIBLE FOR FUTURE SALE

Upon consummation of this Offering, the Company will have 9,067,925 shares
of Common Stock outstanding (9,367,925 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 7,067,925 shares of Common Stock to be
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 a person (or persons whose shares are aggregated)
including an affiliate, who has beneficially owned his shares for two years, 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

73
<PAGE>
are also subject to certain limitations on the manner of sale, notice
requirements and availability of current public information about the Company. 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 three years,
may 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, and the Company intends to register eligible
shares of Common Stock issuable upon the exercise of options 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."

74
<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.

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.

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

75
<PAGE>
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. Application has been made
for quotation of the Common Stock on the Nasdaq National Market System under the
symbol "HBCP."

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 certain United States federal
income and estate tax consequences of the ownership and disposition of Common
Stock by a "Non-U.S. Holder". 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. 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. 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.

76
<PAGE>
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. 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.

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 a refund of
any excess amounts withheld by filing an appropriate claim for refund with the
United States Internal Revenue Service (the "IRS").

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 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, may be subject to the branch profits tax equal to
30% of its effectively connected earnings and profits within the meaning of the
Code for the taxable year, as adjusted for certain items, unless it qualifies
for a lower rate under 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.

77
<PAGE>
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.

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 as of December 31, 1994 and 1995 and
for each of the three years in the period ended December 31, 1995 included in
this Prospectus have been audited by Deloitte & Touche LLP, independent
auditors, as stated in their report appearing herein and elsewhere in the
Registration Statement, and have been so included in reliance upon the report of
such firm given upon the authority of that firm as experts in accounting and
auditing.

78
<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, 1994 and 1995 and September 30, 1996 (unaudited)... F-3
Consolidated Statements of Income for the Years Ended December 31, 1993, 1994 and 1995 and for the nine
months ended September 30, 1995 and 1996 (unaudited)..................................................... F-4
Consolidated Statements of Stockholders' Equity for the Years Ended December 31, 1993, 1994 and 1995 and
for the nine months ended September 30, 1996 (unaudited)................................................. F-5
Consolidated Statements of Cash Flows for the Years Ended December 31, 1993, 1994 and 1995 and for the nine
months ended September 30, 1995 and 1996 (unaudited)..................................................... 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, 1994 and 1995, and the related consolidated statements of income,
stockholders' equity, and cash flows for each of the three years ended December
31, 1995. 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, 1994 and 1995, and
the results of their operations and their cash flows for each of the three years
ended December 31, 1995 in conformity with generally accepted accounting
principles.

Deloitte & Touche LLP
Miami, Florida

February 16, 1996 (January 21, 1997 as to Note 15)

The accompanying consolidated financial statements reflect the 6.5-for-one
stock split of common stock and the reorganization of the capital structure (the
"Reorganization") of the Company to consist of the conversion of all outstanding
shares of the Company's Preferred Shares (series B and C) and warrants into
shares of common stock, which are to be effected immediately prior to the
effective date of the offering contemplated by this Prospectus. The above
opinion is in the form which will be signed by Deloitte & Touche LLP upon
consummation of the 6.5-for-one stock split and Reorganization, as described in
Note 15 to the consolidated financial statements assuming that from January 21,
1997, to the date of such split and Reorganization, no other events shall have
occurred that would affect the accompany consolidated financial statements and
notes thereto.

Deloitte & Touche LLP
Miami, Florida

January 21, 1997

F-2
<PAGE>
HAMILTON BANCORP INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CONDITION
<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
------------------------------ --------------
<S> <C> <C> <C>
1994 1995 1996
-------------- -------------- --------------

<CAPTION>
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
CASH AND DEMAND DEPOSITS WITH OTHER BANKS....................... $ 15,078,713 $ 22,588,534 $ 20,274,586
FEDERAL FUNDS SOLD.............................................. 10,000,000 24,000,000 22,000,000
-------------- -------------- --------------
Total cash and cash equivalents........................... 25,078,713 46,588,534 42,274,586
INTEREST-EARNING DEPOSITS WITH OTHER BANKS...................... 33,550,835 38,418,130 69,889,439
SECURITIES HELD TO MATURITY
(approximate fair value: $16,650,059 in 1994,
$20,733,527 in 1995)........................................ 16,629,664 20,705,855
SECURITIES AVAILABLE FOR SALE
(amortized cost: $6,814,452 in 1994,
$8,205,211 in 1995 and $34,294,317 in 1996)................. 6,791,108 8,208,090 34,416,851
LOANS--NET...................................................... 309,839,031 415,962,259 525,347,096
DUE FROM CUSTOMERS ON BANKERS ACCEPTANCES....................... 43,597,140 64,588,358 66,815,885
DUE FROM CUSTOMERS ON DEFERRED PAYMENT LETTERS OF CREDIT........ 9,129,603 6,419,129 6,936,270
PROPERTY AND EQUIPMENT--NET..................................... 3,114,245 3,718,083 3,456,581
ACCRUED INTEREST RECEIVABLE..................................... 4,205,114 4,753,326 6,689,510
GOODWILL........................................................ 2,533,379 2,358,331 2,227,045
OTHER ASSETS.................................................... 3,567,053 3,386,831 5,537,939
-------------- -------------- --------------
TOTAL........................................................... $ 458,035,885 $ 615,106,926 $ 763,591,202
-------------- -------------- --------------
-------------- -------------- --------------

LIABILITIES AND STOCKHOLDERS' EQUITY
DEPOSITS........................................................ $ 373,348,672 $ 505,065,587 $ 644,354,962
BANKERS ACCEPTANCES OUTSTANDING................................. 43,597,140 64,588,358 66,815,885
DEFERRED PAYMENT LETTERS OF CREDIT OUTSTANDING.................. 9,129,603 6,419,129 6,936,270
OTHER LIABILITIES............................................... 4,496,592 4,230,755 3,891,836
-------------- -------------- --------------
Total liabilities........................................... 430,572,007 580,303,829 721,998,953
-------------- -------------- --------------
COMMITMENTS AND CONTINGENCIES (Note 12)

STOCKHOLDERS' EQUITY:
Common stock, $.01 par value, 75,000,000 shares authorized,
6,594,744 shares issued and outstanding at December 31, 1994
and 1995 and 7,067,925 shares issued and outstanding at
September 30, 1996.......................................... 69,951 69,951 70,679
Capital surplus............................................... 14,388,394 14,388,394 17,299,866
Retained earnings............................................. 13,032,871 20,342,965 24,219,187
Net unrealized (loss) gain on securities available for sale,
net of taxes................................................ (27,338) 1,787 2,517
-------------- -------------- --------------
Total stockholders' equity................................ 27,463,878 34,803,097 41,592,249
-------------- -------------- --------------
TOTAL........................................................... $ 458,035,885 $ 615,106,926 $ 763,591,202
-------------- -------------- --------------
-------------- -------------- --------------
</TABLE>

See accompanying notes to consolidated financial statements.

F-3
<PAGE>
HAMILTON BANCORP INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEARS ENDED DECEMBER 31, SEPTEMBER 30,
---------------------------------------- --------------------------
<S> <C> <C> <C> <C> <C>
1993 1994 1995 1995 1996
------------ ------------ ------------ ------------ ------------

<CAPTION>
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
INTEREST INCOME:
Loans, including fees.................... $ 17,464,005 $ 24,961,664 $ 40,342,331 $ 29,511,006 $ 35,404,851
Deposits with other banks................ 1,594,231 2,788,921 4,549,460 3,386,457 4,279,474
Securities............................... 807,987 1,040,826 1,652,179 1,174,770 1,524,699
Federal funds sold....................... 222,756 428,030 1,144,143 925,214 863,135
------------ ------------ ------------ ------------ ------------
Total.................................. 20,088,979 29,219,441 47,688,113 34,997,447 42,072,159
------------ ------------ ------------ ------------ ------------
INTEREST EXPENSE:
Deposits................................. 6,859,399 11,945,963 23,544,990 17,288,008 20,996,361
Federal funds purchased.................. 20,317 72,117 23,943
------------ ------------ ------------ ------------ ------------
Total.................................. 6,879,716 12,018,080 23,544,990 17,288,008 21,020,304
------------ ------------ ------------ ------------ ------------
NET INTEREST INCOME........................ 13,209,263 17,201,361 24,143,123 17,709,439 21,051,855
PROVISION FOR CREDIT LOSSES................ 2,550,000 2,875,000 2,450,000 1,275,000 2,440,000
------------ ------------ ------------ ------------ ------------
NET INTEREST INCOME AFTER PROVISION FOR
CREDIT LOSSES............................ 10,659,263 14,326,361 21,693,123 16,434,439 18,611,855
------------ ------------ ------------ ------------ ------------
NON-INTEREST INCOME:
Trade finance fees and commissions....... 6,571,756 7,422,068 8,172,456 5,759,148 5,529,113
Capital market fees, net................. 1,633,854 1,410,229 318,414 236,133 119,742
Customer service fees.................... 943,342 1,043,616 1,266,979 946,036 865,471
Net gain (loss) on sale of securities
available for sale..................... 11,046 (168,101) 3,229 3,229
Other.................................... 402,490 321,972 569,495 467,869 428,340
------------ ------------ ------------ ------------ ------------
Total.................................. 9,562,488 10,029,784 10,330,573 7,412,415 6,942,666
------------ ------------ ------------ ------------ ------------
OPERATING EXPENSES:
Employee compensation and benefits....... 6,727,842 7,795,815 9,990,099 6,435,597 7,187,446
Occupancy and equipment.................. 2,434,632 2,307,354 2,821,811 1,968,244 2,141,615
Directors' fees.......................... 610,867 664,400 811,900 613,700 998,500
Federal deposit and regulatory
insurance.............................. 472,607 646,961 487,411 425,249 118,503
Other.................................... 2,768,206 3,531,856 4,737,671 3,118,269 3,283,398
------------ ------------ ------------ ------------ ------------
Total.................................. 13,014,154 14,946,386 18,848,892 12,561,059 13,729,462
------------ ------------ ------------ ------------ ------------
INCOME BEFORE PROVISION FOR INCOME TAXES... 7,207,597 9,409,759 13,174,804 11,285,795 11,825,059
PROVISION FOR INCOME TAXES................. 2,760,980 3,720,579 5,171,443 4,391,508 4,505,348
------------ ------------ ------------ ------------ ------------
NET INCOME................................. $ 4,446,617 $ 5,689,180 $ 8,003,361 $ 6,894,287 $ 7,319,711
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
NET INCOME PER COMMON AND COMMON EQUIVALENT
SHARE:................................... $ 0.65 $ 0.78 $ 1.10 $ 0.95 $ 1.00
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
AVERAGE SHARES OUTSTANDING:................ 6,826,764 7,292,925 7,292,925 7,292,925 7,292,925
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
</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)
COMMON STOCK GAIN ON SECURITIES
---------------------- CAPITAL RETAINED AVAILABLE FOR SALE,
SHARES AMOUNT SURPLUS EARNINGS NET OF TAXES
----------- --------- ------------ ------------ --------------------
<S> <C> <C> <C> <C> <C>
BALANCE, DECEMBER 31, 1992....................... 5,306,768 $ 67,674 $ 5,537,356 $ 6,785,758 $ (40,229)
Net change in unrealized loss on securities.... 40,229
Stock dividend (10%) prior to reorganization
(see Note 15)................................ 391,001 602 1,804,018 (1,804,620)
Issuance of common stock....................... 650 1 2,999
Stock dividend (10%) prior to reorganization
(see Note 15)................................ 430,164 662 1,984,708 (1,985,370)
Net income..................................... 4,446,617
----------- --------- ------------ ------------ --------
BALANCE, DECEMBER 31, 1993....................... 6,128,583 68,939 9,329,081 7,442,385
Issuance of preferred stock series B and C to
be converted into common shares in connection
with initial public offering (see Note 15)... 466,161 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....................... 6,594,744 69,951 14,388,394 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....................... 6,594,744 69,951 14,388,394 20,342,965 1,787
Net change in unrealized gain on securities
available for sale, net of taxes............. 730
Cash dividends on preferred stock, net of
witholding taxes............................. (531,289)
Stock dividend (10%) prior to reorganization
(see Note 15)................................ 473,181 728 2,911,472 (2,912,200)
Net income..................................... 7,319,711
----------- --------- ------------ ------------ --------
BALANCE, SEPTEMBER 30, 1996 (Unaudited)........ 7,067,925 $ 70,679 $ 17,299,866 $ 24,219,187 $ 2,517
----------- --------- ------------ ------------ --------
----------- --------- ------------ ------------ --------

TOTAL
STOCKHOLDERS'
EQUITY
------------
<S> <C>
BALANCE, DECEMBER 31, 1992....................... $12,350,559
Net change in unrealized loss on securities.... 40,229
Stock dividend (10%) prior to reorganization
(see Note 15)................................
Issuance of common stock....................... 3,000
Stock dividend (10%) prior to reorganization
(see Note 15)................................
Net income..................................... 4,446,617
------------
BALANCE, DECEMBER 31, 1993....................... 16,840,405
Issuance of preferred stock series B and C to
be converted into common shares in connection
with initial public offering (see Note 15)... 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............. 730
Cash dividends on preferred stock, net of
witholding taxes............................. (531,289)
Stock dividend (10%) prior to reorganization
(see Note 15)................................
Net income..................................... 7,319,711
------------
BALANCE, SEPTEMBER 30, 1996 (Unaudited)........ $41,592,249
------------
------------
</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 NINE MONTHS ENDED
DECEMBER 31, SEPTEMBER 30,
------------------------------------------ ---------------------------
<S> <C> <C> <C> <C> <C>
1993 1994 1995 1995 1996
------------ ------------- ------------- ------------ -------------

<CAPTION>
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income......................................... $ 4,446,617 $ 5,689,180 $ 8,003,361 $ 6,894,287 $ 7,319,711
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization.................. 738,248 785,703 1,070,040 802,530 810,145
Provision for credit losses.................... 2,550,000 2,875,000 2,450,000 1,275,000 2,440,000
Deferred tax benefit........................... (1,017,700) (62,935) (110,995)
Net (gain) loss on sale of securities available
for sale..................................... (11,046) 168,101 (3,229) (3,229)
Net gain on sale of other real estate owned.... (17,563) (9,142)
Increase in accrued interest receivable and
other assets................................. (1,239,183) (2,568,827) (218,598) (2,661,917) (4,138,963)
Increase (decrease) in other liabilities....... 735,521 2,404,273 (265,837) 2,533,639 (338,919)
------------ ------------- ------------- ------------ -------------
Net cash provided by operating activities.... 6,184,894 9,290,495 10,924,742 8,840,310 6,082,832
------------ ------------- ------------- ------------ -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Increase interest-earning deposits................. (6,215,202) (9,343,378) (4,867,295) (11,478,163) (31,471,309)
Purchase of securities held to maturity............ (6,698,620) (16,713,993) (58,874,233) (47,180,405)
Purchase of securities available for sale.......... (6,638,680) (3,228,121) (17,440,898) (11,246,239) (42,938,323)
Proceeds from maturities of securities held to
maturity......................................... 3,452,348 9,301,611 54,725,879 44,248,541 20,946,175
Proceeds from sales and maturities of securities
available for sale............................... 6,602,471 5,694,316 16,138,394 13,107,109 16,493,285
Increase in loans--net............................. (39,386,870) (119,695,689) (108,621,586) (57,600,386) (111,824,837)
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........... (920,005) (928,629) (1,498,830) (1,305,994) (417,357)
Proceeds from sales of other real estate owned..... 479,768 68,986 57,500
------------ ------------- ------------- ------------ -------------
Net cash used in investing activities........ (49,324,790) (123,191,494) (120,438,569) (71,455,537) (149,154,866)
------------ ------------- ------------- ------------ -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in deposits--net.......................... 41,930,708 116,838,640 131,716,915 63,042,772 139,289,375
Proceeds from issuance of preferred stock.......... 5,060,325
Cash dividends on preferred stock.................. (98,694) (693,267) (490,106) (531,289)
Proceeds from issuance of common stock............. 3,000
------------ ------------- ------------- ------------ -------------
Net cash provided by financing activities.... 41,933,708 121,800,271 131,023,648 62,552,666 138,758,086
------------ ------------- ------------- ------------ -------------
NET (DECREASE) INCREASE IN CASH AND CASH
EQUIVALENTS........................................ (1,206,188) 7,899,272 21,509,821 (62,561) (4,313,948)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD..... 18,385,629 17,179,441 25,078,713 25,078,713 46,588,534
------------ ------------- ------------- ------------ -------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD........... $ 17,179,441 $ 25,078,713 $ 46,588,534 $ 25,016,152 $ 42,274,586
------------ ------------- ------------- ------------ -------------
------------ ------------- ------------- ------------ -------------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid during the year...................... $ 6,695,893 $ 11,556,255 $ 22,815,743 $ 16,672,453 $ 21,191,856
------------ ------------- ------------- ------------ -------------
------------ ------------- ------------- ------------ -------------
Income taxes paid during the year.................. $ 3,657,064 $ 4,052,000 $ 4,520,000 $ 3,390,000 $ 4,160,000
------------ ------------- ------------- ------------ -------------
------------ ------------- ------------- ------------ -------------
SUPPLEMENTAL DISCLOSURE OF NONCASH ACTIVITIES:
Other real estate owned acquired through
foreclosure........................................ $ 462,205 $ 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, 1995, 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.

UNAUDITED INTERIM FINANCIAL INFORMATION--The unaudited consolidated
financial statements as of September 30, 1996 and for the nine months ended
September 30, 1995 and 1996 have been prepared on the same basis as the audited
consolidated financial statements included herein. In the opinion of management,
such unaudited consolidated financial statements include all adjustments
(consisting only of normal recurring adjustments) necessary to present fairly
the results for such period. The operating results for the nine months ended
September 30, 1995 and 1996 are not necessarily indicative of the operating
results to be expected for the full fiscal year or for any future period.

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 September
30, 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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
income. At December 31, 1995 and 1994 and September 30, 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.

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.

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 Financial Accounting Standards Board
Statement of Financial Accounting Standards ("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
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.

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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 September 30, 1996, the recorded investment in
loans that are considered impaired under SFAS No. 114 was approximately $615,000
and 1,992,000, respectively. These impaired loans required a SFAS No. 114
allowance for loan losses of approximately $233,000 and $900,000, respectively.
The average recorded investment in impaired loans during the year ended December
31, 1995 and the nine months ended September 30, 1996 were approximately
$644,000 and $1,303,250, respectively. For the year ended December 31, 1995 and
the nine months ended September 30, 1996, the Bank recognized interest income on
these impaired loans of approximately $17,000 and $95,094, respectively.

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, which ever 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 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, 1994 and 1995 and at
September 30, 1996, there were no federal funds purchased outstanding.

INCOME RECOGNITION--Interest income on loans is recognized based upon the
principal amounts outstanding. 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 $409,000, $359,000, $100,000, and
$103,000 during the years ended December 31, 1993, 1994 and 1995 and the nine
months ended September 30, 1995, respectively, are offset against the fees
earned. There were no such costs during the nine months ended September 30,
1996. 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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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 DIVIDENDS--All references to per share amounts in the consolidated
financial statements have been adjusted to reflect the stock dividends on a
retroactive basis.

NET INCOME PER COMMON AND COMMON EQUIVALENT SHARE--Net income per share
amounts are based on the average number of common shares outstanding for each
period, after giving effect to the stock split and 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.

NEW ACCOUNTING PRONOUNCEMENTS--In October 1995, the Financial Accounting
Standards Board ("FASB") issued SFAS No. 123, ACCOUNTING FOR STOCK-BASED
COMPENSATION. This Statement defines a fair value based method of accounting for
employee stock options. This statement also permits a company to continue to
measure compensation costs for their stock option plan using the intrinsic value
based method of accounting prescribed by Accounting Principles Board ("APB")
Opinion No. 25, ACCOUNTING FOR STOCK ISSUED TO EMPLOYEES. SFAS No. 123 requires
disclosure of the pro forma net income and earnings per share that would be
recorded if the fair value method was utilized. The Company plans to continue to
utilize the provisions of APB No. 25 to account for such compensation costs, and
will provide the pro forma disclosures required by SFAS No. 123 in the fiscal
year 1996 financial statements.

In June 1996, the 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, 1994
---------------------------------------------------
<S> <C> <C> <C> <C>
GROSS UNREALIZED
AMORTIZED --------------------- FAIR
COST GAINS LOSSES VALUE
------------- --------- ---------- -------------
HELD TO MATURITY:
U.S. Government and agency securities..................... $ 15,888,845 $ 10,455 $ 17,640 $ 15,881,660
Foreign debt securities................................... 740,819 27,580 768,399
------------- --------- ---------- -------------
Total....................................................... $ 16,629,664 $ 38,035 $ 17,640 $ 16,650,059
------------- --------- ---------- -------------
------------- --------- ---------- -------------
AVAILABLE FOR SALE:
U.S. Government and agency securities..................... $ 4,703,344 $ 19,297 $ 4,684,047
U.S. corporate securities................................. 977,172 977,172
Mortgage-backed securities................................ 548,151 4,047 544,104
Federal reserve bank stock................................ 212,350 212,350
Foreign bank stocks....................................... 313,435 313,435
Other securities.......................................... 60,000 60,000
------------- ---------- -------------
Total....................................................... $ 6,814,452 $ 23,344 $ 6,791,108
------------- ---------- -------------
------------- ---------- -------------
</TABLE>

<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>
SEPTEMBER 30, 1996 (UNAUDITED)
---------------------------------------------------
<S> <C> <C> <C> <C>
GROSS UNREALIZED
AMORTIZED --------------------- FAIR
COST GAINS LOSSES VALUE
------------- --------- ---------- -------------
AVAILABLE FOR SALE:
U.S. Government and agency securities..................... $ 30,501,415 $ 4,043 $ 30,505,458
Foreign debt securities................................... 3,124,617 3,124,617
Federal reserve bank stock................................ 354,850 354,850
Foreign bank stocks....................................... 313,435 313,435
------------- --------- -------------
Total....................................................... $ 34,294,317 $ 4,043 $ 34,416,851
------------- --------- -------------
------------- --------- -------------
</TABLE>

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2. INVESTMENT SECURITIES (CONTINUED)
Gross realized gains and gross realized losses on sales of securities
available for sale for the years ended December 31, 1993, 1994 and 1995 were
approximately:

<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31, GAINS LOSSES
- ----------------------------------------------------------------------- --------- ----------
<S> <C> <C>
1993................................................................... $ 70,000 $ 59,000
--------- ----------
--------- ----------
1994................................................................... $ 168,000
----------
----------
1995................................................................... $ 7,000 $ 4,000
--------- ----------
--------- ----------
</TABLE>

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

Investment securities with an amotized cost and fair value of approximately
$24,763,000 and $24,793,000, respectively, at December 31, 1995, were pledged as
collateral for public deposits.

The following table shows the amortized cost and the fair value by maturity
distribution of the securities portfolio at December 31, 1995:

<TABLE>
<CAPTION>
HELD TO MATURITY AVAILABLE FOR SALE
---------------------------- --------------------------
AMORTIZED AMORTIZED
COST FAIR VALUE COST FAIR VALUE
------------- ------------- ------------ ------------
<S> <C> <C> <C> <C>
Within one year........................................ $ 20,705,855 $ 20,733,527 $ 6,261,302 $ 6,264,847
One to five years...................................... 1,000,949 999,560
Over five years........................................ 150,024 150,024
------------- ------------- ------------ ------------
Total.................................................. 20,705,855 20,733,527 7,412,275 7,412,275
Mortgage-backed securities............................. 313,435 313,435
Federal reserve bank stock............................. 354,850 354,850
Foreign bank stocks.................................... 313,435 313,435
------------- ------------- ------------ ------------
Total securities....................................... $ 20,705,855 $ 20,733,527 $ 8,205,211 $ 8,208,090
------------- ------------- ------------ ------------
------------- ------------- ------------ ------------
</TABLE>

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

3. LOANS

Loans consist of the following at:

<TABLE>
<CAPTION>
DECEMBER 31,
------------------------------ SEPTEMBER 30,
1994 1995 1996
-------------- -------------- --------------
<S> <C> <C> <C>
(UNAUDITED)
Commercial (primarily trade related):
Domestic...................................................... $ 66,413,413 $ 96,510,615 $ 112,385,310
Foreign....................................................... 175,009,387 218,863,905 315,118,914
Acceptances discounted--trade related:
Domestic...................................................... 42,763,836 33,059,035 28,253,702
Foreign....................................................... 19,962,478 62,838,200 66,462,659
Residential mortgages........................................... 11,049,532 11,362,695 10,749,284
Installment..................................................... 333,894 345,390 416,807
-------------- -------------- --------------
Total........................................................... 315,532,540 422,979,840 533,386,676
Less:
Unearned income:
Acceptances discounted...................................... 1,430,648 2,332,945 2,052,839
Other....................................................... 129,849 234,182 242,546
Allowance for credit losses................................. 4,133,012 4,450,454 5,744,195
-------------- -------------- --------------
Loans--net.................................................... $ 309,839,031 $ 415,962,259 $ 525,347,096
-------------- -------------- --------------
-------------- -------------- --------------
</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.

A summary of the activity in the allowance for credit losses is as follows:
<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
---------------------------------------- --------------------------
<S> <C> <C> <C> <C> <C>
1993 1994 1995 1995 1996
------------ ------------ ------------ ------------ ------------

<CAPTION>
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Balance at the beginning of period......... $ 1,672,067 $ 3,270,150 $ 4,133,012 $ 4,133,012 $ 4,450,454
Provision charged to operations............ 2,550,000 2,875,000 2,450,000 1,275,000 2,440,000
Loan charge-offs, net of recoveries........ (951,917) (2,012,138) (2,132,558) (1,182,104) (1,146,259)
------------ ------------ ------------ ------------ ------------
Balance at the end of period............... $ 3,270,150 $ 4,133,012 $ 4,450,454 $ 4,225,908 $ 5,744,195
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
</TABLE>

The Bank had nonaccruing loans of approximately $1,869,000, $3,632,000 and
$4,583,000 at December 31, 1994 and 1995 and September 30, 1996, respectively.

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

4. PROPERTY AND EQUIPMENT

The following is a summary of property and equipment at:

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------------- SEPTEMBER 30,
1994 1995 1996
------------ ------------ -------------
<S> <C> <C> <C>
(UNAUDITED)
Land................................................................... $ 575,000 $ 575,000 $ 575,000
Building............................................................... 669,488 1,126,711 1,142,029
Leasehold improvements................................................. 1,475,073 1,533,521 1,601,299
Furniture and equipment................................................ 2,943,704 3,824,024 4,137,482
------------ ------------ -------------
Total.................................................................. 5,663,265 7,059,256 7,455,810
Less accumulated depreciation and amortization......................... 2,549,020 3,341,173 3,999,229
------------ ------------ -------------
Property and equipment--net............................................ $ 3,114,245 $ 3,718,083 $ 3,456,581
------------ ------------ -------------
------------ ------------ -------------
</TABLE>

Depreciation and amortization expense related to property and equipment for
the years ended December 31, 1993, 1994 and 1995 and for the nine months ended
September 30, 1995 and 1996 was approximately $695,000, $719,000, $895,000,
$671,000, and $679,000, 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.

The approximate future minimum payments, by year and in the aggregate, on
these leases at December 31, 1995 are as follows:

<TABLE>
<CAPTION>
YEAR ENDING
DECEMBER 31 AMOUNT
------------- ------------
<S> <C>
1996............................................................................ $ 1,194,000
1997............................................................................ 780,000
1998............................................................................ 226,000
1999............................................................................ 198,000
2000............................................................................ 154,000
Thereafter...................................................................... 86,000
------------
Total minimum lease payments.................................................... $ 2,638,000
------------
------------
</TABLE>

Rent expense was approximately $805,000, $837,000, $1,015,000, $722,000, and
$758,000 for the years ended December 31, 1993, 1994, and 1995 and for the nine
months ended September 30, 1995 and 1996 respectively.

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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, which is being
amortized using the straight-line method over a period of twelve years.
Amortization of the goodwill was approximately $23,000, $132,000, $99,000, and
$99,000 for the years ended December 31, 1994 and 1995 and for the nine months
ended September 30, 1995 and 1996 respectively, and is included in operating
expenses in the accompanying statements of income. At December 31, 1994 and 1995
and at September 30, 1996, the unamortized balance of the goodwill was
approximately $1,957,000, $1,825,000 and $1,726,000, respectively, and is
included in other assets in the accompanying statements of condition.

6. DEPOSITS

Deposits consist of the following at:

<TABLE>
<CAPTION>
DECEMBER 31,
------------------------------ SEPTEMBER 30,
1994 1995 1996
-------------- -------------- --------------
<S> <C> <C> <C>
(UNAUDITED)
Noninterest-bearing............................................. $ 43,387,729 $ 55,703,004 $ 49,207,269
-------------- -------------- --------------
Interest-bearing:
NOW, money market and savings................................. 56,757,028 63,763,169 68,355,401
Time, under $100,000.......................................... 143,494,964 178,770,285 256,881,080
Time, $100,000 and over....................................... 129,708,951 206,829,129 269,911,212
-------------- -------------- --------------
Total interest-bearing.......................................... 329,960,943 449,362,583 595,147,693
-------------- -------------- --------------
Total........................................................... $ 373,348,672 $ 505,065,587 $ 644,354,962
-------------- -------------- --------------
-------------- -------------- --------------
</TABLE>

Time deposits in amounts of $100,000 and over at December 31, 1995 mature as
follows:

<TABLE>
<CAPTION>
AMOUNT
--------------
<S> <C>
Three months or less.......................................................... $ 90,548,000
Three months to trwelve months................................................ 85,740,000
One year to five years........................................................ 29,190,000
Over five years............................................................... 1,351,000
--------------
Total......................................................................... $ 206,829,000
--------------
--------------
</TABLE>

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

7. INCOME TAXES

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

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------
1993 1994 1995
------------ ------------ ------------
<S> <C> <C> <C>
Current income taxes:
Federal.............................................................. $ 2,796,065 $2,982,355 $ 3,991,026
State................................................................ 584,282 501,159 770,317
Foreign.............................................................. 398,333 300,000 521,095
------------ ------------ ------------
3,778,680 3,783,514 5,282,438
------------ ------------ ------------
Deferred income taxes:
Federal.............................................................. (868,953) (53,736) (95,342)
State................................................................ (148,747) (9,199) (15,653)
------------ ------------ ------------
(1,017,700) (62,935) (110,995)
------------ ------------ ------------
Total................................................................ $ 2,760,980 $3,720,579 $ 5,171,443
------------ ------------ ------------
------------ ------------ ------------
</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>
1993 1994 1995
--------- --------- ---------
Federal statutory rate................................................................ 35.0% 35.0% 35.0%
Increase (decrease) in taxes:
State income tax, net of federal income tax benefit................................. 3.2 3.2 3.7
Other, net.......................................................................... (0.2) 0.8 0.3
--- --- ---
Effective income tax rate............................................................. 38.0% 39.0% 39.0%
--- --- ---
--- --- ---
</TABLE>

The provision for income taxes for the nine months ended September 30, 1995
and 1996 were calculated based upon the estimated tax rate of 39% for the full
fiscal year ending December 31, 1995 and 1996.

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-16
<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 are as follows:

<TABLE>
<CAPTION>
1994 1995
------------ ------------
<S> <C> <C>
Deferred tax liability: change in accounting method for tax purposes.................. $ 631,714
------------
------------
Deferred tax assets:
Difference between book and tax basis of allowance for credit losses................ $ 883,474 $ 1,735,500
Difference between book and tax basis of property................................... 120,600 118,013
Accrual for branch closing.......................................................... 79,023
Other............................................................................... 108,666 80,959
------------ ------------
Total deferred tax assets....................................................... 1,191,763 1,934,472
------------ ------------
Net deferred tax assets............................................................... $ 1,191,763 $ 1,302,758
------------ ------------
------------ ------------
</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, 1994 and 1995.

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 September 30, 1996, that the
Bank meets all capital adequacy requirements to which its is subject.

As of December 31, 1995, the most recent notification from the Office of the
Comptroller of the Currency categorized the Bank as well as 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-17
<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, 1994:
COMPANY
Total Capital (to Risk Weighted Assets)...... $ 27,675,000 11.5% $ 19,308,000 8.0%
------------- ----- ------------- -----
Tier I Capital (to Risk Weighted Assets)..... $ 24,930,000 10.3% $ 9,654,000 4.0%
------------- ----- ------------- -----
Tier I Capital (to Average Assets)........... $ 24,930,000 5.5% $ 13,649,000 3.0%
------------- ----- ------------- -----
BANK
Total Capital (to Risk Weighted Assets)...... $ 27,355,000 11.5% $ 19,108,000 8.0% $ 23,885,000 10.0%
------------- ----- ------------- ----- ------------- ---------
Tier I Capital (to Risk Weighted Assets)..... $ 24,610,000 10.3% $ 9,554,000 4.0% $ 14,331,000 6.0%
------------- ----- ------------- ----- ------------- ---------
Tier I Capital (to Average Assets)........... $ 24,610,000 5.4% $ 18,173,000 4.0% $ 22,716,000 5.0%
------------- ----- ------------- ----- ------------- ---------

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 SEPTEMBER 30, 1996 (UNAUDITED):
COMPANY
Total Capital (to Risk Weighted Assets)...... $ 44,403,000 11.3% $ 31,408,000 8.0%
------------- ----- ------------- -----
Tier I Capital (to Risk Weighted Assets)..... $ 39,485,000 10.1% $ 15,704,000 4.0%
------------- ----- ------------- -----
Tier I Capital (to Average Assets)........... $ 39,485,000 5.5% $ 21,538,000 3.0%
------------- ----- ------------- -----
BANK
Total Capital (to Risk Weighted Assets)...... $ 44,403,000 11.3% $ 31,408,000 8.0% $ 39,260,000 10.0%
------------- ----- ------------- ----- ------------- ---------
Tier I Capital (to Risk Weighted Assets)..... $ 39,472,000 10.1% $ 15,704,000 4.0% $ 23,556,000 6.0%
------------- ----- ------------- ----- ------------- ---------
Tier I Capital (to Average Assets)........... $ 39,472,000 5.5% $ 28,950,000 4.0% $ 36,187,000 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, 1995,
approximately $17,642,000 of retained earnings were available for dividend
declaration without prior regulatory approval. During 1994 and 1995,
approximately $94,000 and $675,000 of dividends were paid, respectively, which
are within the amounts allowed by regulations.

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

8. STOCKHOLDERS' EQUITY (CONTINUED)
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, 1995. In connection with the
proposed initial public offering and reorganization as discussed in Note 15,
there warrants are being converted into common stock.

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 if 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, Preferred Shares 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 (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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

9. STOCK OPTION PLAN (CONTINUED)
approval. In this regard, the Company is amending the 1993 Plan for the purpose
of brining 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, 1993, 1994 and 1995 and during
the nine months ended September 30, 1996. Following the 6.5-to-one stock split,
which is to be effected immediately 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 per share will be outstanding none of
which are exercisable until February 1998.

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 and 1995 and for the nine months ended
September 30, 1995 and 1996, the Company's matching and additional contributions
amounted to approximately $59,000, $105,000, $40,000 and $37,000, respectively.
There were no contributions made during the year ended December 31, 1993.

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 $8,849,000,
$8,185,000, and $5,398,000 at December 31, 1994 and 1995, and at September 30,
1996, respectively, and the balance of deposit accounts approximated $9,425,000,
$17,464,000 and $11,710,000 at December 31, 1994 and 1995, and at September 30,
1996, respectively. Outstanding commercial and standby letters of credit
transactions with these individuals and their related entities approximated
$1,942,000, $7,455,000 and $523,000 at December 31, 1994 and 1995, and at
September 30, 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 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.

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

12. OFF-BALANCE SHEET RISK, COMMITMENTS AND CONTINGENCIES (CONTINUED)
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, 1994 and 1995, along
with a further discussion of these instruments, follows:

<TABLE>
<CAPTION>
CONTRACTUAL OR
NOTIONAL AMOUNT
------------------------------
1994 1995
-------------- --------------
<S> <C> <C>
Commercial letters of credit................................. $ 116,327,000 $ 107,421,000
Standby letters of credit.................................... 15,055,000 17,999,000
Shipping guarantees (indemnity letters)...................... 1,238,000 354,000
Commitments to purchase foreign currency..................... 2,694,000 3,093,000
Commitments to sell foreign currency......................... 2,670,000 1,952,000
Commitments to extend credit................................. 22,251,000 21,243,000
</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, 1995 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
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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

12. OFF-BALANCE SHEET RISK, COMMITMENTS AND CONTINGENCIES (CONTINUED)
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 Bank 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 Bank 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, 1995 and, therefore, current
estimates of fair value may differ significantly from the amounts presented
herein.

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

13. FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)

<TABLE>
<CAPTION>
DECEMBER 31, 1994 DECEMBER 31, 1995
------------------------------ ------------------------------
CARRYING FAIR CARRYING FAIR
AMOUNT VALUE AMOUNT VALUE
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Assets:
Cash and cash equivalents.......................... $ 25,079,000 $ 25,079,000 $ 46,589,000 $ 46,589,000
Interest-earning deposits with other banks......... 33,551,000 33,551,000 38,418,000 38,418,000
Securities available for sale...................... 6,791,000 6,791,000 8,208,000 8,208,000
Securities held to maturity........................ 16,630,000 16,650,000 20,706,000 20,734,000
Loans, net......................................... 309,839,000 309,084,000 415,962,000 414,700,000
Liabilities:
Demand deposits.................................... 100,145,000 100,145,000 119,467,000 119,467,000
Time deposits...................................... 273,204,000 272,353,000 385,599,000 384,931,000
Contingent assets and liabilities:
Bankers acceptances................................ 43,597,000 218,000 64,588,000 323,000
Deferred payment letters of credit................. 9,130,000 33,000 6,419,000 23,000
Off-balance sheet instrument-- unrealized gains
(losses):
Commitments to extend credit....................... 119,000 130,000
Commercial letters of credit....................... 275,000 258,000
Standby letters of credit.......................... 184,000 24,000
Indemnity letters of credit........................ 3,000
Commitments to purchase foreign currency........... 19,000 19,000
Commitments to sell foreign currency............... (22,000) (24,000)
</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-23
<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, 1993, 1994 and
1995 is as follows:

<TABLE>
<CAPTION>
INCOME BEFORE
OPERATING PROVISION FOR NET TOTAL
INCOME INCOME TAXES INCOME ASSETS
------------- ------------- ------------ --------------
<S> <C> <C> <C> <C>
1993
Domestic.................................. $ 14,952,000 $ 5,967,000 $ 3,681,000 $ 206,099,000
Foreign................................... 7,819,000 1,240,000 766,000 108,055,000
------------- ------------- ------------ --------------
Total..................................... $ 22,771,000 $ 7,207,000 $ 4,447,000 $ 314,154,000
------------- ------------- ------------ --------------
------------- ------------- ------------ --------------
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
------------- ------------- ------------ --------------
------------- ------------- ------------ --------------
</TABLE>

F-24
<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 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 466,160 shares (post-stock split) of common stock and (ii) the
issuance of an aggregate of 1,396,759 shares (post-stock split) of common stock
for all outstanding warrants to purchase shares of common stock of the Bank.
Consummation of the Reorganization is subject only to regulatory approval of a
pending change in control application. Retroactive restatement has been made to
all share and per share amounts to reflect the stock split and Reorganization,
which are expected to occur prior to the effective date of the registration
statement.

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 SEPTEMBER 30,
---------------------------- 1996
1994 1995 (UNAUDITED)
------------- ------------- -------------
<S> <C> <C> <C>
ASSETS
Demand deposits with subsidiary..................................... $ 366,685 $ 392,192 $ 151,472
Securities available for sale....................................... 60,000 248,283
Goodwill............................................................ 576,549 533,677 501,215
Investment in subsidiary............................................ 21,715,731 29,132,810 35,944,185
Investment in subsidiary's preferred stock.......................... 4,750,000 4,750,000 4,750,000
Other assets........................................................ 176 2,507
------------- ------------- -------------
Total............................................................... $ 27,468,965 $ 34,808,679 $ 41,597,662
------------- ------------- -------------
------------- ------------- -------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Other liabilities................................................... $ 5,087 $ 5,582 $ 5,413
Stockholders' equity................................................ 27,463,878 34,803,097 41,592,249
------------- ------------- -------------
Total............................................................... $ 27,468,965 $ 34,808,679 $ 41,597,662
------------- ------------- -------------
------------- ------------- -------------
</TABLE>

F-25
<PAGE>
HAMILTON BANCORP INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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

<TABLE>
<CAPTION>
NINE MONTHS
ENDED
YEARS ENDED DECEMBER 31, SEPTEMBER 30,
---------------------------------------- --------------------------
1993 1994 1995 1995 1996
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
(UNAUDITED)
Interest income............................ $ 10,767 $ 6,282 $ 3,199 $ 3,199 $ 4,474
Dividend from Bank subsidiary and other
income................................... 11,952 107,934 674,691 496,566 534,375
------------ ------------ ------------ ------------ ------------
Total income........................... 22,719 114,216 677,890 499,765 538,849
Operating expenses......................... 63,776 130,737 62,482 51,355 32,300
------------ ------------ ------------ ------------ ------------
Income loss before equity in undistributed
income of subsidiary..................... (41,057) (16,521) 615,408 448,410 506,549
Equity in undistributed income of
subsidiary............................... 4,487,694 5,705,701 7,387,953 6,445,927 6,813,162
------------ ------------ ------------ ------------ ------------
Net income................................. $ 4,446,617 $ 5,689,180 $ 8,003,361 $ 6,894,337 $ 7,319,711
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
</TABLE>

F-26
<PAGE>
HAMILTON BANCORP INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONCLUDED)

<TABLE>
<CAPTION>
NINE MONTHS
ENDED
YEARS ENDED DECEMBER 31, SEPTEMBER 30,
---------------------------------------- --------------------------
STATEMENT OF CASH FLOWS 1993 1994 1995 1995 1996
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
(UNAUDITED)
Cash flows from operating activities:
Net income............................... $ 4,446,617 $ 5,689,180 $ 8,003,361 $ 6,894,337 $ 7,319,711
Adjustments to reconcile net income to
net cash provided by operations:
Equity in undistributed income of
subsidiary........................... (4,487,674) (5,705,701) (7,387,953) (6,445,927) (6,813,162)
Amortization of goodwill............... 42,872 42,872 42,872 32,462 32,462
Gain on sale of securities available
for sale............................. (13,866)
Decrease (increase) in other assets.... 29,846
(Decrease) increase in other (2,507)
liabilities.......................... (84,369) (16,171) 494 (26,226) (169)
------------ ------------ ------------ ------------ ------------
Net cash (used in) provided by operating
activities............................... (52,708) (3,686) 658,774 454,646 536,335
------------ ------------ ------------ ------------ ------------
Cash flows from investing activities:
Purchase of securities available for
sale................................... (313,000) (299,075) (245,766)
Proceeds from sales and maturities of
securities available for sale.......... 330,500 313,435 60,000 60,000
Purchase of subsidiary's preferred
stock.................................. (4,750,000)
------------ ------------ ------------ ------------ ------------
Net cash provided by (used in) investing
activities............................... 17,500 (4,735,640) 60,000 60,000 (245,766)
------------ ------------ ------------ ------------ ------------
Cash flows from financing activities:
Proceeds from issuance of preferred
stock.................................. 5,060,325
Cash dividends on preferred stock........ (98,694) (693,267) (490,106) (531,289)
Proceeds from issuance of common stock... 3,000
------------ ------------ ------------ ------------ ------------
Net cash provided by (used in) financing
activities:.............................. 3,000 4,961,631 (693,267) (490,106) (531,289)
------------ ------------ ------------ ------------ ------------
Net (decrease) increase in cash............ (32,208) 222,305 25,507 24,540 (240,720)
Cash at beginning of period................ 176,988 144,380 366,685 366,685 392,192
------------ ------------ ------------ ------------ ------------
Cash at end of period...................... $ 144,380 $ 366,685 $ 392,192 $ 391,225 $ 151,472
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
</TABLE>

F-27
<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........................................................... 12
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................................................................ 63
Certain Transactions...................................................... 69
Principal Shareholders.................................................... 70
Description of Capital Stock.............................................. 72
Shares Eligible for Future Sale........................................... 73
Underwriting.............................................................. 75
Certain United States Tax Consequences to Non-United States Holders....... 76
Legal Matters............................................................. 78
Experts................................................................... 78
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................................. *
Accounting fees and expenses.................................... *
Legal fees and expenses......................................... *
Fees and expenses (including legal fees) for qualifications
under state securities laws................................... *
Registrar and Transfer Agent's fees and expenses................ *
Miscellaneous................................................... *
---------
Total....................................................... $ *
---------
---------
</TABLE>

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

* To be provided by amendment.

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

II-1
<PAGE>
threatened litigation that may result in claims for indemnification from the
Registrant by any officer or director.

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, dated January 21,
1997, 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 1,396,759 shares of Common Stock (post-Stock Split).

II-2
<PAGE>
Such shares of Common Stock will be issued in accordance with the exemption
provided by Section 4(2) of the Act, in a transaction not involving a public
offering.

The Company will issue an aggregate of 277,316 shares (post-Stock Split) and
188,844 shares (post-Stock Split) of Common Stock upon conversion of outstanding
shares of the Company's Series B Preferred Stock and Series C Preferred Stock,
respectively. The Company has given notice of conversion of such shares of
Preferred Stock, subject only to the Regulatory Approval Condition, in
connection with the Reorganization and 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 *

3.2 Registrant's Amended and Restated Bylaws *

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 *

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**

23.4 Consent of William Bickford**

23.5 Consent of Thomas Gaffney**

24.1 Reference is made to the Signatures section of this Registration Statement for the Power of Attorney
contained therein **
</TABLE>

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

* To be filed by amendment.

** 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 registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Miami, State of Florida,
on January 24, 1997.

HAMILTON BANCORP INC.

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

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below hereby constitutes and appoints Eduardo A. Masferrer and J. Reid Bingham,
his true and lawful attorneys-in-fact, each acting alone, with full powers of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any or all amendments, including any
post-effective amendments, to this registration statement, and to file the same,
with exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
said attorneys-in-fact or their substitutes, each acting alone, may lawfully do
or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this
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) January 24, 1997
Eduardo A. Masferrer

/s/ MARIA FERRER-DIAZ Senior Vice President, Finance and Controller
---------------------------- (principal accounting officer) January 24, 1997
Maria Ferrer-Diaz

/s/ MAURA A. ACOSTA
---------------------------- Executive Vice President and Director January 24, 1997
Maura A. Acosta

/s/ WILLIAM ALEXANDER
---------------------------- Director January 24, 1997
William Alexander

---------------------------- Director
Virgilo E. Sosa, Jr.
</TABLE>

II-5

<PAGE>
EXHIBIT 23.2

INDEPENDENT AUDITORS' CONSENT

We consent to the use in this Registration Statement of Hamilton Bancorp Inc.,
on Form S-1 of our report dated February 16, 1996 (January 21, 1997 as to Note
15), appearing in the Prospectus, which is part of this Registration Statement.

We also consent to the reference to us under the headings "Selected Consolidated
Financial Data" and "Experts" in such Prospectus.

DELOITTE & TOUCHE LLP
Miami, Florida
January 24, 1997

<PAGE>
EXHIBIT 23.3

CONSENT OF JUAN MIGUEL CAPURRO

The undersigned, a nominee for director of Hamilton Bancorp Inc., a Florida
bank holding company (the "Company"), hereby (i) consents to being nominated for
the position of director of the Company and agrees to serve as such if elected,
and (ii) consents to being named as a prospective director and/or director
nominee in the Company's Registration Statement on Form S-1 relating to the
Company's initial public offering of its common stock, and in the Prospectus
contained therein proposed to be circulated in connection with such offering,
and all amendments thereto.

Executed this 20th day of January, 1997.

/s/ Juan Miguel Capurro

--------------------------------------
Juan Miguel Capurro

<PAGE>
EXHIBIT 23.4

CONSENT OF WILLIAM BICKFORD

Executed this 21st day of January, 1997.

/s/ William Bickford

--------------------------------------
William Bickford

<PAGE>
EXHIBIT 23.5

CONSENT OF THOMAS F. GAFFNEY

Executed this 17th day of January, 1997.

/s/ Thomas F. Gaffney

--------------------------------------
Thomas F. Gaffney