HAMILTON BANCORP INC, S-1/A, 1997-03-04

HAMILTON BANCORP INC
S-1/A, 1997-03-04
SAVINGS INSTITUTION, FEDERALLY CHARTERED

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<PAGE>

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 4, 1997

REGISTRATION NO. 333-20435

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

SECURITIES AND EXCHANGE COMMISSION

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

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

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

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

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

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

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

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

WITH COPIES TO:

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

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

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

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

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

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

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

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

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

SUBJECT TO COMPLETION, DATED MARCH 4, 1997

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

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

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

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

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

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

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

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

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

OPPENHEIMER & CO., INC. NATWEST SECURITIES LIMITED

The date of this Prospectus is , 1997
<PAGE>

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

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

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

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 IS 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 larger, multinational financial institutions and, therefore,
customers in such markets do not receive a similar level of service from such
institutions as that provided by the Company. To enhance its position in certain
markets, the Company has made minority investments in indigenous financial
institutions in Guyana, Haiti and El Salvador. The Company has also strengthened
its relationships with correspondent financial institutions in the Region by
acting as placement agent, from time to time, for debt instruments or
certificates of deposit issued by many of such institutions. As the Company has
grown, it has begun to expand its activities in larger markets in the Region,
such as Argentina and Brazil.

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

3
<PAGE>

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 December 31, 1996, 80.6% of the Company's loan
portfolio consisted of short-term trade related loans with an average original
maturity of approximately 180 days. Credit is generally extended under specific
credit lines for each customer and country. These credit lines are reviewed at
least annually.

Lending activities are funded primarily through domestic consumer and
commercial deposits gathered through a network of five branches in Florida as
well as deposits received from correspondent banks, corporate customers and
private banking customers within the Region. The Company is currently in the
process of opening 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,
1996, average total loans increased from $270.8 million to $485.8 million, and
net income increased from $5.7 million to $9.7 million. For the years ended
December 31, 1995 and 1996, return on average assets was 1.50% and 1.41%,
respectively, and return on average total equity was 24.73% and 24.29%,
respectively. Along with its growth, the Company has maintained strong credit
quality. Net loan chargeoffs as a percentage of average outstanding loans were
0.58% and 0.36% for 1995 and 1996. At December 31, 1996, non-performing assets
represented 0.91% of total loans.

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

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

4
<PAGE>
THE OFFERING

<TABLE>
<S> <C>
Common Stock offered by the Company................ 2,000,000 shares
Common Stock outstanding after this Offering....... 9,067,925 shares(1)(2)
Use of proceeds.................................... Contribution to the capital of the Bank
to support future growth in its trade
finance business.
NASDAQ symbol...................................... "HABK"
Risk Factors....................................... The Common Stock offered hereby
involves a high degree of risk. Risks
that should be considered by
prospective purchasers include Regional
economic conditions, potential
political instability, credit risks and
risks related to collateral, the
concentration of cross-border lending
activities, potential impact of changes
in interest rates, the concentration of
deposits, the ability of the Company to
continue its growth strategy,
dependence on management and key
personnel, competition and supervision
and regulation. See "Risk Factors."
Dividend Policy.................................... The Company intends to retain all
future earnings for the operation and
expansion of its business and does not
anticipate paying cash dividends on its
Common Stock in the forseeable future.
See "Dividend Policy."
</TABLE>

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

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

(2) Upon consummation of the Offering, approximately 22.9% of the issued and
outstanding shares of Common Stock of the Company will be held by the
Company's officers, directors and beneficial owners of more than 5% of the
issued and outstanding shares of Common Stock (assuming no exercise of the
over-allotment option).

5
<PAGE>
SUMMARY CONSOLIDATED FINANCIAL DATA

(Dollars in thousands, except per share data)

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------------------------
1992 1993 1994 1995 1996
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net interest income........................................ $9,712 $13,209 $17,201 $24,143 $28,375
Provision for credit losses................................ 1,477 2,550 2,875 2,450 3,040
--------- --------- --------- --------- ---------
Net interest income after provision for credit losses...... 8,235 10,659 14,326 21,693 25,335
Trade finance fees and commissions......................... 5,535 6,572 7,422 8,173 7,590
Capital market fees, net................................... 1,036 1,634 1,410 318 112
Customer services fees..................................... 927 943 1,044 1,267 1,136
Net gain (loss) on sale of securities available for sale... 167 11 (168) 3 0
Other income............................................... 219 403 322 569 996
--------- --------- --------- --------- ---------
Total non-interest income.................................. 7,884 9,563 10,030 10,330 9,834
--------- --------- --------- --------- ---------
Operating expenses......................................... 10,795 13,014 14,946 18,849 19,604
--------- --------- --------- --------- ---------
Income before provision for income taxes................... 5,324 7,208 9,410 13,174 15,565
Provision for income taxes................................. 1,950 2,761 3,721 5,171 5,855
--------- --------- --------- --------- ---------
Net income................................................. $3,374 $4,447 $5,689 $8,003 $9,710
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
PER COMMON SHARE DATA:
Net income per common share(1)............................. $0.62 $0.82 $1.05 $1.47 $1.79
Book value per common share(1)............................. $2.30 $3.10 $5.06 $6.41 $8.07
Average weighted shares.................................... 5,430,005 5,430,005 5,430,005 5,430,005 5,430,005

PRO FORMA PER COMMON SHARE DATA (2):
Net income per common share................................ $1.33
Book value per common share................................ $6.01
Average weighted shares.................................... 7,292,925
</TABLE>

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

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

6
<PAGE>
SELECTED FINANCIAL RATIOS:

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

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

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

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

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

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

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

7
<PAGE>
RISK FACTORS

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

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

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

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

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

8
<PAGE>

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

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

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

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

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

9
<PAGE>

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

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

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

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

10
<PAGE>

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

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

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

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

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

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

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

SHARES ELIGIBLE FOR FUTURE SALE. Upon consummation of this Offering,
Bancorp will have 9,067,925 shares of Common Stock outstanding (9,367,925 if the
over-allotment option granted to the Underwriters is exercised in full). Of
these shares, 6,281,866 shares (6,581,866 shares if the over-allotment option
granted to the Underwriters is exercised in full) will be freely tradeable
without restriction or registration under the Act, unless purchased by persons
deemed to be "affiliates" of the Company (as that term is defined under the
Act). All of the remaining 2,786,059 shares of Common Stock held by the current
shareholders of Bancorp will be "restricted securities" as that term is defined
in Rule 144 promulgated under the Act. Substantially all of the current
shareholders are agreeing not to sell any shares of Common Stock for 180 days
from the date of this Prospectus without the prior written consent of
Oppenheimer & Co., Inc. See "Underwriting." Additionally, upon consummation of
this Offering, 877,500 shares of Common Stock will have been reserved for
issuance under the Company's 1993 Plan and options to purchase 585,000 shares of
Common Stock, which are not exercisable until February 1998, have been issued
under the 1993 Plan at an exercise price of $9.23 per share, the fair market
value on the date of grant as determined by the Company's Board of Directors.
The Company intends to register under the Act all eligible shares reserved for
issuance under the 1993 Plan. Shares covered by such registration will be
eligible for resale in the public market, subject to Rule 144 limitations
applicable to affiliates. See "Management--Company Stock Option Plan." Future
sales of substantial amounts of Common Stock in the public market, or the
availability of such shares for future sale, could impair the Company's ability
to raise capital through an offering of securities and may adversely affect the
then-prevailing market prices. See "Shares Eligible for Future Sale."

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

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

12
<PAGE>

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

USE OF PROCEEDS

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

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

DIVIDEND POLICY

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

DILUTION

The pro forma net tangible book value of the Company's Common Stock as of
December 31, 1996 (after giving effect to the Reorganization) was $41.6 million
or approximately $5.70 per pro forma share. Pro forma net tangible book value
per share is determined by dividing pro forma net tangible book value (tangible
assets less liabilities) of the Company by 7,292,925 pro forma shares of Common
Stock outstanding (including common stock equivalents).

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

13
<PAGE>

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

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

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

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

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

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

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

<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION AVERAGE
----------------------- -------------------------- PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
---------- ----------- ------------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Existing shareholders............................ 7,067,925 77.9%(1) $ 23,560,000 44.0% $ 3.33
New investors.................................... 2,000,000 22.1 30,000,000 56.0 15.00
---------- ----- ------------- -----
Total.......................................... 9,067,925 100.0% $ 53,560,000 100.0%
---------- ----- ------------- -----
---------- ----- ------------- -----
</TABLE>

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

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

14
<PAGE>
CAPITALIZATION

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

<TABLE>
<CAPTION>
DECEMBER 31, 1996
-----------------------------------
PRO FORMA
ACTUAL (3) AS ADJUSTED
--------- ----------- -----------
(IN THOUSANDS)
<S> <C> <C> <C>
Deposits.................................................. $ 638,641 $ 638,641 $ 638,641
--------- ----------- -----------
--------- ----------- -----------
Stockholders' equity:
Preferred stock, non-voting, non-cumulative, 14% maximum
dividend rate, par value $.01 per share, 2,000,000
shares authorized, 101,207 shares issued and
outstanding; no shares issued and outstanding pro
forma and as adjusted................................. $ 1 $ -- $ --
Common stock, $.01 par value; 75,000,000 shares
authorized; 5,205,006 shares issued and outstanding;
7,067,925 pro forma shares issued and outstanding(1);
9,067,925 shares issued and outstanding, as
adjusted(2)........................................... 52 71 91
Capital surplus......................................... 17,318 17,300 44,280
Retained earnings....................................... 26,431 26,431 26,431
Net unrealized loss on securities available for sale,
net of taxes.......................................... (2) (2 ) (2 )
--------- ----------- -----------
Total stockholders' equity............................ $ 43,800 $ 43,800 $ 70,800
--------- ----------- -----------
Total capitalization.................................. $ 682,441 $ 682,441 $ 709,441
--------- ----------- -----------
--------- ----------- -----------
Ratios:
Tier 1 Capital Ratio...................................... 10.20% 10.20% 16.13%(3)
Total Capital Ratio....................................... 11.50% 11.50% 16.82%(3)
Leverage Ratio............................................ 5.80% 5.80% 9.00%(3)
</TABLE>

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

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

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

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

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

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

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------------------------
<S> <C> <C> <C> <C> <C>
1992 1993 1994 1995 1996
--------- --------- --------- --------- ---------
INCOME STATEMENT DATA:
Net interest income........................................ $9,712 $13,209 $17,201 $24,143 $28,375
Provision for credit losses................................ 1,477 2,550 2,875 2,450 3,040
--------- --------- --------- --------- ---------
Net interest income after
provision for credit losses.............................. 8,235 10,659 14,326 21,693 25,335
Trade finance fees and commissions......................... 5,535 6,572 7,422 8,173 7,590
Capital market fees, net................................... 1,036 1,634 1,410 318 112
Customer services fees..................................... 927 943 1,044 1,267 1,136
Net gain (loss) on sale of securities available for sale... 167 11 (168) 3
Other income............................................... 219 403 322 569 996
--------- --------- --------- --------- ---------
Total non-interest income.................................. 7,884 9,563 10,030 10,330 9,834
--------- --------- --------- --------- ---------
Operating expenses......................................... 10,795 13,014 14,946 18,849 19,604
--------- --------- --------- --------- ---------
Income before provision for income taxes................... 5,324 7,208 9,410 13,174 15,565
Provision for income taxes................................. 1,950 2,761 3,721 5,171 5,855
--------- --------- --------- --------- ---------
Net income................................................. $3,374 $4,447 $5,689 $8,003 9,710
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
PER COMMON SHARE DATA:
Net income per common share(1)............................. $0.62 $0.82 $1.05 $1.47 $1.79
Book value per common share(1)............................. $2.30 $3.10 $5.06 $6.41 8.07
Average weighted shares.................................... 5,430,005 5,430,005 5,430,005 5,430,005 5,430,005

PRO FORMA PER COMMON SHARE DATA:(2)
Net income per common share................................ $1.33
Book value per common share................................ $6.01
Average weighted shares.................................... 7,292,925
</TABLE>

16
<PAGE>

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

SELECTED FINANCIAL RATIOS:

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

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

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

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

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

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

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

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

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

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

RESULTS OF OPERATIONS

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

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

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

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

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

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

18
<PAGE>

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

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

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

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

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

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

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

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

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

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

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

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

YIELDS EARNED AND RATES PAID

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

21
<PAGE>
YIELDS EARNED AND RATES PAID

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

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

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

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

22
<PAGE>
YIELDS EARNED AND RATES PAID

<TABLE>
<CAPTION>
FOR THE YEARS ENDED
-------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
DECEMBER 31, 1994 DECEMBER 31, 1995 DECEMBER 31, 1996
----------------------------- ----------------------------- -----------------------------

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

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

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

23
<PAGE>
YIELDS EARNED -- DOMESTIC AND FOREIGN EARNING ASSETS

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

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

AVERAGE % OF TOTAL AVERAGE AVERAGE % OF TOTAL

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

</TABLE>

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

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

24
<PAGE>
RATE/VOLUME ANALYSIS

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

RATE/VOLUME ANALYSIS

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

RATE/VOLUME ANALYSIS--DOMESTIC AND FOREIGN

25
<PAGE>
NON-INTEREST INCOME

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

NON-INTEREST INCOME

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

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

OPERATING EXPENSES

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

OPERATING EXPENSES

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

INCOME TAXES

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

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

FINANCIAL CONDITION

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

26
<PAGE>

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

CASH, DEMAND DEPOSITS WITH OTHER BANKS AND FEDERAL FUNDS SOLD

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

INVESTMENT SECURITIES AND INTEREST-EARNING DEPOSITS WITH OTHER BANKS

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

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

LOANS--NET

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

ALLOWANCE FOR CREDIT LOSSES

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

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

27
<PAGE>

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

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

CREDIT LOSS EXPERIENCE

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

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

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

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

28
<PAGE>

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

ALLOCATION OF ALLOWANCE FOR CREDIT LOSSES

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

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

29
<PAGE>

ANALYSIS OF ALLOWANCE FOR CREDIT LOSSES ALLOCATED TO FOREIGN LOANS

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

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

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

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

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

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

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

30
<PAGE>
NONPERFORMING LOANS

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

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

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

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

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

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

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

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

DEPOSITS

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

31
<PAGE>
STOCKHOLDERS' EQUITY

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

ASSET/LIABILITY MANAGEMENT

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

32
<PAGE>
INTEREST RATE SENSITIVITY

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

INTEREST RATE SENSITIVITY

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

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

33
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES

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

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

Most of the Company's deposits are short-term and closely match the
short-term nature of the Company's assets. See "--Interest Rate Sensitivity." At
December 31, 1996, loans and interest-earning deposits with other banks maturing
within six months were $498.0 million, representing 75.1% of total earning
assets, and loans and interest-earning deposits with other banks maturing within
one year were $558.9 million, representing 80.6% of total earning assets. The
short-term nature of the loan portfolio and the fact that a portion of the loan
portfolio consists of bankers' acceptances provides additional liquidity to the
Company. Liquid assets at December 31, 1996 were $141.1 million, 18.7% of total
assets, and consisted of cash and cash equivalents, due from banks-time and
United States treasury bills. At December 31, 1996, the Company had been advised
of $67.7 million in available interbank funding.

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

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

34
<PAGE>
COMPANY CAPITAL RATIOS

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

BANK CAPITAL RATIOS

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

SEASONALITY

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

IMPACT OF INFLATION

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

35
<PAGE>
BUSINESS

GENERAL

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

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

Lending activities are funded primarily through domestic consumer deposits
gathered through a network of 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>

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

BACKGROUND OF THE COMPANY

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

MARKET FOR COMPANY SERVICES

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

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<PAGE>

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

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

STRATEGY

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

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

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

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

38
<PAGE>

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

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

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

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

CREDIT ACTIVITIES AND POLICIES

TRADE FINANCE SERVICES AND PRODUCTS

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

39
<PAGE>

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

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

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

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

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

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

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

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

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

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

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

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

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

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

CREDIT POLICIES AND PROCEDURES

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

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

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

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

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

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

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

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<PAGE>
LOAN PORTFOLIO

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

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

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

LOAN MATURITIES

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

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

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

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

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

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

44
<PAGE>
LOANS BY COUNTRY

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

LOANS BY COUNTRY

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

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

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

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

45
<PAGE>
LOANS BY TYPE

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

LOANS BY TYPE

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

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

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

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

COMMUNITY LENDING

The Company also engages in certain local lending activities which make up a
small percentage of its business. For example, the Company participates in a
program sponsored by the United States Department of Transportation ("DOT")
through which the Company provides a line of credit to contractors waiting to be
paid for their services. The line accrues interest at a prime rate and fees are
paid to the Company by the DOT on both the committed and funded amounts. DOT
assumes 75% of the risk under these lines. The Company also provides mortgages
pursuant to Dade County, Florida and Florida Housing Finance Agency low-income
housing programs. Loans are under $100,000 and are with respect to properties
for which the government agency provides a large second mortgage. The Company
also participates in a Small Business Administration program financing
warehouses and smaller companies. The Company's community lending activities
aggregated $18.8 million, $23.9 million and $18.7 million at December 31, 1994,
1995 and 1996, respectively, the largest portion of which (approximately $10.6
million at December 31, 1996) represented mortgage loans made in connection with
the Dade County low-income housing program. The Company participates in some
local minority programs under various United States or Florida laws in which the
Company is considered to be a minority bank.

46
<PAGE>
TOTAL OUTSTANDINGS BY COUNTRY

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

TOTAL CROSS-BORDER OUTSTANDINGS BY COUNTRY

<TABLE>
<CAPTION>
AT DECEMBER 31,
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
% OF % OF % OF
TOTAL TOTAL TOTAL
1994 ASSETS 1995 ASSETS 1996 ASSETS
--------- ----------- --------- ----------- --------- -----------

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

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

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

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

TOTAL CROSS-BORDER OUTSTANDINGS BY TYPE

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

47
<PAGE>
CONTINGENCIES

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

CONTINGENCIES--COMMERCIAL LETTERS OF CREDIT

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

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

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

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

CONTINGENT LIABILITIES(1)

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

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

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

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

48
<PAGE>
CAPITAL MARKETS

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

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

STRATEGIC ALLIANCES

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

INVESTMENT SECURITIES

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

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

INVESTMENT SECURITIES

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

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

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

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

50
<PAGE>

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

INVESTMENT SECURITIES MATURITIES AND AVERAGE RATES

<TABLE>
<CAPTION>
AVAILABLE FOR SALE
-------------------------------------
<S> <C> <C> <C>
WEIGHTED
AMORTIZED AVERAGE
COST FAIR VALUE RATE
----------- ----------- -----------

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

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

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

51
<PAGE>
INTEREST-EARNING DEPOSITS WITH OTHER BANKS

As part of its overall liquidity management process, the Company places
funds with foreign correspondent banks. These placements are typically
short-term, rarely exceeding 180 days. The purpose of these placements is to
obtain an enhanced return on high quality short-term instruments and to solidify
existing relationships with correspondent banks. The banks with which placements
are made and the amount placed are currently approved by the Bank's Asset
Liability Committee. In addition, this Committee reviews adherence with internal
interbank liability policies and procedures. At December 31, 1996, none of the
deposit placements with any correspondent bank exceeded $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 DECEMBER 31, 1996
- -------------------------------------------------------------------------- ------------------
<S> <C>
(IN THOUSANDS)
Argentina................................................................. $ 13,500
Jamaica................................................................... 12,000
Bolivia................................................................... 11,000
Honduras.................................................................. 10,000
El Salvador............................................................... 6,090
Panama.................................................................... 5,750
Ecuador................................................................... 5,675
United States............................................................. 3,900
The Bahamas(1)............................................................ 3,600
Peru ..................................................................... 3,000
Costa Rica................................................................ 2,000
Other Latin America and Caribbean countries............................... 2,000
Brazil.................................................................... 1,962
-------
Total................................................................. $ 80,477
-------
-------
</TABLE>

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

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

FUNDING SOURCES

The Company's principal sources of funds have been deposits, both domestic
and foreign. While these sources together with sales of bankers' acceptances and
loan participations, and the proceeds of this Offering, are expected to continue
to provide most of the funds needed by the Company in the future, their mix, as
well as possible use of other sources, will depend upon future economic and
market conditions. The Company's largest source of funds is domestic time
deposits. At December 31, 1994, 1995 and 1996, these deposits accounted for
58.9%, 60.4% and 63.0%, respectively, of total liabilities. Foreign interbank
deposits (consisting of both time and savings deposits) make up the second
biggest component of the Company's funding. At December 31, 1994, 1995 and 1996,
this accounted for 13.1%, 13.9% and 13.1%, 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

52
<PAGE>
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.

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

DEPOSITS

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

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

The primary sources of Company's domestic time deposits are its Bank
branches located in Florida. The Company has three Bank branches in Miami,
Florida, one in Tampa, Florida 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 and other time deposits issued in denominations of $100,000 or more as
of December 31 1996:

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

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

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

53
<PAGE>
ECONOMIC CONDITIONS IN THE REGION

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

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

REAL GDP GROWTH RATES (%)

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

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

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

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

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

54
<PAGE>

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

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

EXPORTS AND IMPORTS OF THE REGION(1)

<TABLE>
<CAPTION>
1993 1994 1995
-------------------- -------------------- --------------------
<S> <C> <C> <C> <C> <C> <C>
COUNTRY EXPORTS IMPORTS EXPORTS IMPORTS EXPORTS IMPORTS
- ------------------------------------------------ --------- --------- --------- --------- --------- ---------

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

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

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

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

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

55
<PAGE>
COMPETITION

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

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

REGULATION

BANCORP REGULATION

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

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

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

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

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

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

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

CAPITAL ADEQUACY

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

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

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

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

57
<PAGE>

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

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

INTERSTATE BANKING

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

REGULATION OF THE BANK

General

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

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

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

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

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

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

Dividends

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

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

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

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

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

59
<PAGE>
FDICIA

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

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

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

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

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

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

Reserve Requirements

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

LEGAL PROCEEDINGS

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

EMPLOYEES

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

PROPERTIES

The Company's operations are currently managed from their corporate
headquarters located in Miami, Florida, where a branch office is also located.
The Bank's other branch offices are located in Tampa, Winter Haven 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
West Palm Beach, Florida(3) Branch 5,040 March 2007 Leased $6,300 per month + 4% annual
increase
</TABLE>

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

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

(2) Also includes one acre of land.

(3) Although these branches have not yet opened, a lease has been executed for
each.

61
<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

62
<PAGE>

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

64
<PAGE>

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

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

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

DIRECTORS' COMPENSATION

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

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

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

COMMITTEES OF THE BOARD OF DIRECTORS

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

65
<PAGE>

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

EXECUTIVE COMPENSATION

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

SUMMARY COMPENSATION TABLE

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

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

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

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

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

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

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

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

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

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

COMPANY BONUS POLICY

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

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

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

COMPANY STOCK OPTION PLAN

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

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

67
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR

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

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

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

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

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

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

401(K) PLAN

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

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

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

CERTAIN TRANSACTIONS

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

68
<PAGE>
PRINCIPAL SHAREHOLDERS

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

<TABLE>
<CAPTION>
PERCENTAGE OF OUTSTANDING SHARES
OWNED
AMOUNT AND NATURE OF ----------------------------------
NAME OF BENEFICIAL OWNER (1) BENEFICIAL OWNERSHIP BEFORE OFFERING AFTER OFFERING
- ------------------------------------------------------- -------------------- ----------------- ---------------
<S> <C> <C> <C>
Eduardo A. Masferrer................................... 1,072,878(2) 15.2% 11.8%
Maura A. Acosta........................................ 17,687(3) * *
J. Carlos Bernace...................................... --(4) -- --
Maria Ferrer-Diaz...................................... --(5) -- --
Marquis H. Gilmore..................................... --(6) -- --
William Alexander...................................... 4,329(7) * *
Virgilo E. Sosa, Jr.................................... 257,517(8) 3.6% 2.8%
William Bickford....................................... 324,019(9) 4.6% 3.6%
Juan Miguel Capurro.................................... 397,866(10) 5.6% 4.4%
Thomas F. Gaffney...................................... -- -- --
Intercredit Finance Group Inc.......................... 488,410 6.9% 5.4%
Ricardo Chiari......................................... 433,518(11) 6.1% 4.8%
Urraca Investment Corporation.......................... 372,002 5.3% 4.1%
All Directors (including Director nominees) and
executive officers of the Company as a group,
including those listed above (15 persons)............ 2,056,609(12) 29.1% 22.7%
</TABLE>

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

* Less than 1%

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

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

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

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

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

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

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

(8) Includes 144,508 shares of Common Stock held by VES Ventures Inc., a
Panamanian corporation, of which Mr. Sosa is principal shareholder.

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

69
<PAGE>

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

(11) Represents (i) 328,627 shares of Common Stock held by Valores Eastern,
S.A., a Panamanian corporation, (ii) 104,208 shares of Common Stock held by
Balkam, S.A., a Panamanian corporation, and (iii) 683 shares of Common Stock
held by Sociedad General de Valores, of each of which Ricardo Chiari is
principal shareholder.

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

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<PAGE>
DESCRIPTION OF CAPITAL STOCK

The Company's authorized capital stock 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." After completion of the Reorganization and the
Offering no shares of Preferred Stock will be issued and outstanding. The
following brief description of the Company capital stock does not purport to be
complete and is subject in all respects to applicable Florida law and the
provisions of the Company's Articles of Incorporation (the "Articles") and
Bylaws, copies of which have been filed as exhibits to the Registration
Statement of which this Prospectus is a part.

COMMON STOCK

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

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

PREFERRED STOCK

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

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

71
<PAGE>

In connection with the Reorganization, the Company determined to convert the
Preferred Stock into shares of Common Stock. The Company has issued notice to
the holders of the Preferred Stock of its determination to convert such shares
to Common Stock in accordance with the above formula, subject only to regulatory
approval of a pending change in control application.

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

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

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

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

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

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

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

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

72
<PAGE>
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 one year, may
sell in the open market within any three-month period a number of shares that
does not exceed the greater of (i) 1% of the then outstanding shares of the
Company's Common Stock (approximately 90,679 shares immediately after this
Offering, 93,679 if the over-allotment option is exercised in full) or (ii) the
average weekly trading volume in the Common Stock in the over-the-counter market
during the four calendar weeks preceding such sale. Sales under Rule 144 are
also subject to certain limitations on the manner of sale, notice requirements
and availability of current public information about the Company. A person (or
persons whose shares are aggregated) who is deemed not to have been an
"affiliate" of the Company at any time during the 90 days preceding a sale by
such person and who has beneficially owned his shares for at least two years,
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. Options to purchase 585,000 shares of Common
Stock, which are not exercisable until February 1998, have been issued under the
1993 Plan at an exercise price of $9.23 per share, the fair market value on the
date of grant as determined by the Company's Board of Directors. The Company
intends to register eligible shares of Common Stock issuable upon the exercise
of options under the 1993 Plan on Form S-8 following this Offering. Subject to
restrictions imposed pursuant to the 1993 Plan, such eligible shares of Common
Stock issued pursuant to the 1993 Plan after the effective date of any
Registration Statement on Form S-8 will be available for sale in the public
market without restriction to the extent they are held by persons who are not
affiliates of the Company, and by affiliates pursuant to Rule 144. See
"Management--Stock Option Plan."

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

73
<PAGE>
UNDERWRITING

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

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

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

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

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

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

74
<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. The Common Stock has been
approved for quotation on the Nasdaq National Market System under the symbol
"HABK."

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

CERTAIN UNITED STATES TAX CONSEQUENCES TO NON-UNITED STATES HOLDERS

The following is a general discussion of 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.

75
<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. A Non-U.S.
Holder of Common Stock eligible for a reduced rate of United States withholding
tax pursuant to an income tax treaty may obtain the benefit of the reduced rate
by providing a properly executed copy of IRS Form 1001 to the person remitting
the dividend to it or may obtain a refund of any excess amounts withheld by
filing an appropriate claim for refund with the United States Internal Revenue
Service (the "IRS"). Under proposed United States Treasury regulations not
currently in effect, a Non-U.S. Holder of Common Stock who wishes to claim the
benefit of an applicable treaty rate (and avoid back-up withholding as discussed
below) would be required to satisfy applicable certification and other
requirements. Currently, certain certification and disclosure requirements must
be complied with in order to be exempt from withholding under the effectively
connected income exemption discussed above.

GAIN ON DISPOSITION OF COMMON STOCK

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

An individual Non-U.S. Holder described in clause (i) above will be subject
to tax on the net gain derived from the sale under regular graduated United
States federal income tax rates. An individual Non-U.S. Holder described in
clause (ii) above will be subject to a flat 30% tax on the gain derived from the
sale, which may be offset by United States source capital losses (even though
the individual is not considered a resident of the United States). If a Non-U.S.
Holder that is a foreign corporation falls under clause (i) above, it will be
subject to tax on its gain under regular graduated United States federal income
tax rates and, in addition, such gain may, under certain circumstances, be
subject to an additional "branch profits tax" at a 30% rate or such lower rate
as may be specified by an applicable income tax treaty.

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

FEDERAL ESTATE TAX

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

76
<PAGE>
INFORMATION REPORTING AND BACKUP WITHHOLDING

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

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

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

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

LEGAL MATTERS

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

EXPERTS

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

77
<PAGE>
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

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

F-1
<PAGE>
INDEPENDENT AUDITORS' REPORT

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

We have audited the accompanying consolidated statements of condition of
Hamilton Bancorp Inc. and its subsidiary, Hamilton Bank, N.A., as of December
31, 1995 and 1996, and the related consolidated statements of income,
stockholders' equity, and cash flows for each of the three years ended December
31, 1996. These consolidated financial statements are the responsibility of
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.

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

In our opinion, such consolidated financial statements present fairly, in
all material respects, the consolidated financial condition of Hamilton Bancorp
Inc. and its subsidiary, Hamilton Bank, N.A., at December 31, 1995 and 1996, and
the results of their operations and their cash flows for each of the three years
ended December 31, 1996 in conformity with generally accepted accounting
principles.

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

Deloitte & Touche LLP
Miami, Florida

January 31, 1997

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

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

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

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

STOCKHOLDERS' EQUITY:
Preferred stock, non-voting, non-cumulative, 14% maximum dividend
rate, par value $.01 per share, 2,000,000 shares authorized, 101,207
shares issued and outstanding....................................... 1,012 1,012
Common stock, $.01 par value, 75,000,000 shares authorized, 4,731,825
shares issued and outstanding at December 31, 1995, 5,205,006 shares
issued and outstanding at December 31, 1996 and 7,067,925 pro forma
shares issued and outstanding at December 31, 1996.................. 47,318 52,050 70,679
Capital surplus....................................................... 14,410,015 17,317,483 17,299,866
Retained earnings..................................................... 20,342,965 26,431,832 26,431,832
Net unrealized gain (loss) on securities available for sale, net of
taxes............................................................... 1,787 (2,275) (2,275)
----------- ----------- ------------
Total stockholders' equity........................................ 34,803,097 43,800,102 43,800,102
----------- ----------- ------------
TOTAL................................................................... $615,106,926 $755,569,967 7$55,569,967
----------- ----------- ------------
----------- ----------- ------------
</TABLE>

See accompanying notes to consolidated financial statements.

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

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------------------
<S> <C> <C> <C>
1994 1995 1996
------------ ------------ ------------
INTEREST INCOME:
Loans, including fees................................................. $ 24,961,664 $ 40,342,331 $ 49,215,587
Deposits with other banks............................................. 2,788,921 4,549,460 5,751,196
Securities............................................................ 1,040,826 1,652,179 1,550,770
Federal funds sold.................................................... 428,030 1,144,143 1,274,131
------------ ------------ ------------
Total............................................................... 29,219,441 47,688,113 57,791,684
------------ ------------ ------------
INTEREST EXPENSE:
Deposits.............................................................. 11,945,963 23,544,990 29,392,397
Federal funds purchased............................................... 72,117 23,943
------------ ------------ ------------
Total............................................................... 12,018,080 23,544,990 29,416,340
------------ ------------ ------------
NET INTEREST INCOME..................................................... 17,201,361 24,143,123 28,375,344
PROVISION FOR CREDIT LOSSES............................................. 2,875,000 2,450,000 3,040,000
------------ ------------ ------------
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES................... 14,326,361 21,693,123 25,335,344
------------ ------------ ------------
NON-INTEREST INCOME:
Trade finance fees and commissions.................................... 7,422,068 8,172,456 7,590,378
Capital market fees, net.............................................. 1,410,229 318,414 111,887
Customer service fees................................................. 1,043,616 1,266,979 1,135,553
Net (loss) gain on sale of securities available for sale.............. (168,101) 3,229
Other................................................................. 321,972 569,495 995,390
------------ ------------ ------------
Total............................................................... 10,029,784 10,330,573 9,833,208
------------ ------------ ------------
OPERATING EXPENSES:
Employee compensation and benefits.................................... 7,795,815 9,990,099 10,908,665
Occupancy and equipment............................................... 2,307,354 2,821,811 2,857,943
Directors' fees....................................................... 664,400 811,900 998,500
Federal deposit and regulatory insurance.............................. 646,961 487,411 173,143
Other................................................................. 3,531,856 4,737,671 4,665,981
------------ ------------ ------------
Total............................................................... 14,946,386 18,848,892 19,604,232
------------ ------------ ------------
INCOME BEFORE PROVISION FOR INCOME TAXES................................ 9,409,759 13,174,804 15,564,320
PROVISION FOR INCOME TAXES.............................................. 3,720,579 5,171,443 5,854,809
------------ ------------ ------------
NET INCOME.............................................................. $ 5,689,180 $ 8,003,361 $ 9,709,511
------------ ------------ ------------
------------ ------------ ------------
NET INCOME PER COMMON AND COMMON EQUIVALENT SHARE....................... $ 1.05 $ 1.47 $ 1.79
------------ ------------ ------------
------------ ------------ ------------
AVERAGE SHARES OUTSTANDING.............................................. 5,430,005 5,430,005 5,430,005
------------ ------------ ------------
------------ ------------ ------------
PRO FORMA NET INCOME PER COMMON AND COMMON EQUIVALENT SHARE............. $ 1.33
------------
------------
PRO FORMA AVERAGE SHARES OUTSTANDING.................................... 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)
GAIN ON
SECURITIES
PREFERRED STOCK COMMON STOCK AVAILABLE FOR
---------------------- ---------------------- CAPITAL RETAINED SALE,
SHARES AMOUNT SHARES AMOUNT SURPLUS EARNINGS NET OF TAXES
--------- ----------- ----------- --------- ------------ ------------ -----------------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE, DECEMBER 31, 1993....... 4,731,825 $ 47,318 $ 9,350,702 $ 7,442,385
Issuance of preferred stock
series B and C............... 101,207 $ 1,012 5,059,313
Net unrealized loss on
securities transferred from
securities available for sale
to securities held to
maturity, net of taxes....... $ (12,868)
Net change in unrealized loss
on securities available for
sale, net of taxes........... (14,470)
Cash dividends on preferred
stock, net of witholding
taxes........................ (98,694)
Net income..................... 5,689,180
--------- ----------- ----------- --------- ------------ ------------ --------
BALANCE, DECEMBER 31, 1994....... 101,207 1,012 4,731,825 47,318 14,410,015 13,032,871 (27,338)
Net change in unrealized loss
on securities available for
sale, net of taxes........... 29,125
Cash dividends on preferred
stock, net of witholding
taxes........................ (693,267)
Net income..................... 8,003,361
--------- ----------- ----------- --------- ------------ ------------ --------
BALANCE, DECEMBER 31, 1995....... 101,207 1,012 4,731,825 47,318 14,410,015 20,342,965 1,787
Net change in unrealized gain
on securities available for
sale, net of taxes........... (4,062)
Cash dividends on preferred
stock, net of witholding
taxes........................ (708,444)
Stock dividend (10%)........... 473,181 4,732 2,907,468 (2,912,200)
Net income..................... 9,709,511
--------- ----------- ----------- --------- ------------ ------------ --------
BALANCE, DECEMBER 31, 1996....... 101,207 $ 1,012 5,205,006 $ 52,050 $ 17,317,483 $ 26,431,832 $ (2,275)
--------- ----------- ----------- --------- ------------ ------------ --------
--------- ----------- ----------- --------- ------------ ------------ --------

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

See accompanying notes to consolidated financial statements.

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

CONSOLIDATED STATEMENTS OF CASH FLOWS

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

See accompanying notes to consolidated financial statements.

F-6

<PAGE>
HAMILTON BANCORP INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

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

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

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

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

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

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

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

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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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

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

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

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

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

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

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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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

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

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

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

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

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

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

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

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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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

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

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

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

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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2. INVESTMENT SECURITIES

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

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

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

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

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

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

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

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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2. INVESTMENT SECURITIES (CONTINUED)

The following table shows the amortized cost and the fair value by maturity
distribution of the securities portfolio at December 31, 1996:

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

3. LOANS

Loans consist of the following at:

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

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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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

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

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

4. PROPERTY AND EQUIPMENT

The following is a summary of property and equipment at:

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

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

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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

4. PROPERTY AND EQUIPMENT (CONTINUED)

The approximate future minimum payments, by year and in the aggregate, on
these leases at December 31, 1996 are as follows:

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

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

5. BRANCH PURCHASE AND ASSUMPTION OF DEPOSITS

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

6. DEPOSITS

Deposits consist of the following at:

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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

6. DEPOSITS (CONTINUED)

Time deposits in amounts of $100,000 and over at December 31, 1996 mature as
follows:

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

7. INCOME TAXES

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

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

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

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

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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

7. INCOME TAXES (CONTINUED)

The tax effects of significant items comprising the Company's net deferred tax
asset as of December 31, 1995 and 1996 are as follows:

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

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

8. STOCKHOLDERS' EQUITY

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

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

As of December 31, 1996, the most recent notification from the Office of the
Comptroller of the Currency categorized the Bank as well capitalized under the
regulatory framework for prompt corrective action. To be categorized as well
capitalized the Bank must maintain minimum total risk-based, Tier I risk-based,
and Tier I leverage ratios as set forth in the table. There are no conditions or
events since that notification that management believes have changed the
institution's category.

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

8. STOCKHOLDERS' EQUITY (CONTINUED)

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

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

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

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

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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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

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

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

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

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

9. STOCK OPTION PLAN

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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

9. STOCK OPTION PLAN (CONTINUED)

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

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

10. 401(k) PLAN

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

11. RELATED PARTY TRANSACTIONS

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

12. OFF-BALANCE SHEET RISK, COMMITMENTS AND CONTINGENCIES

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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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

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

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

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

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

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

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

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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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

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

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

13. FAIR VALUE OF FINANCIAL INSTRUMENTS

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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

13. FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)

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

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

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

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

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

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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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

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

14. FOREIGN ACTIVITIES

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

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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

15. SUBSEQUENT EVENTS

The Company's Board has authorized the filing of a registration statement
relating to an initial public offering of 2,000,000 shares of common stock. In
connection with the initial public offering, the Board amended and restated the
articles of incorporation of the Company authorizing 75,000,000 shares of common
stock and 10,000,000 shares of "blank check" preferred stock. In addition, the
Board approved a 6.5 for 1 common stock split (see Note 1) and reorganization
(the "Reorganization") of the capital structure of the Company consisting of (i)
the conversion of all outstanding shares of the Company's Preferred Shares
(Series B and C) into 466,160 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. The unaudited pro forma information
presented in the consolidated financial statements assumes the conversion of the
preferred stock and warrants into common stock.

16. PARENT COMPANY FINANCIAL INFORMATION

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

STATEMENTS OF FINANCIAL CONDITION

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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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

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

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

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

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

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

TABLE OF CONTENTS
------------------------

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

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

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

2,000,000 SHARES

[LOGO]

HAMILTON BANCORP INC.

COMMON STOCK

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

PROSPECTUS

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

OPPENHEIMER & CO., INC.

NATWEST SECURITIES
LIMITED

, 1997

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

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

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

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

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

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

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

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

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

At present, there is no pending litigation or proceeding involving a
director or officer of the Registrant as to which indemnification is being
sought from the Registrant, nor is the Registrant aware of any

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 **

4.1 Form of Common Stock certificate **

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

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

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

21.1 Subsidiaries of the Registrant *

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

23.2 Consent of Deloitte & Touche LLP*

23.3 Consent of Juan Miguel Capurro(1)

23.4 Consent of William Bickford(1)

23.5 Consent of Thomas Gaffney(1)

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

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

(1) Previously filed.

* Filed herewith.

** To be filed by amendment.

(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.

II-3
<PAGE>
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.

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

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

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

II-4
<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this Amendment No. 1 to Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of Miami,
State of Florida, on March 4, 1997.

HAMILTON BANCORP INC.

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

Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------ ------------------------------------------------ -------------------
<C> <S> <C>

/s/ EDUARDO A. MASFERRER Chairman of the Board, President and Chief
---------------------------- Executive Officer (principal executive officer) March 4, 1997
Eduardo A. Masferrer

/s/ MARIA FERRER-DIAZ Senior Vice President, Finance and Controller
---------------------------- (principal accounting officer) March 4, 1997
Maria Ferrer-Diaz

/s/ MAURA A. ACOSTA*
---------------------------- Executive Vice President and Director March 4, 1997
Maura A. Acosta

/s/ WILLIAM ALEXANDER*
---------------------------- Director March 4, 1997
William Alexander

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

<TABLE>
<S> <C> <C>
*By: /s/ EDUARDO A. MASFERRER March 4, 1997
----------------------------
Eduardo A. Masferrer
Attorney-in-fact
</TABLE>

II-5

<PAGE>

EXHIBIT 3.1

AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
HAMILTON BANCORP INC.

The original Articles of Incorporation were filed with the Secretary of
State on April 1, 1988.

ARTICLE I
NAME

The name of the corporation is HAMILTON BANCORP INC. (hereinafter called
the "Corporation").

ARTICLE II
PURPOSE

The purposes of the Corporation shall be to engage in any activities or
business permitted under the laws of the United States of America and the State
of Florida.

ARTICLE III
PRINCIPAL OFFICE

` The address of the principal office and the mailing address of the
Corporation is 3750 N.W. 87th Avenue, Miami, Florida 33178.

ARTICLE IV
CAPITAL STOCK

The maximum number of shares of all classes of capital stock which the
Corporation is authorized to issue is Eighty-Five Million (85,000,000) shares,
consisting of (i) Seventy-Five Million (75,000,000) shares of common stock, par
value $0.01 per share (the "Common Stock"), and (ii) Ten Million (10,000,000)
shares of preferred stock, par value $0.01 per share (the Preferred Stock").

Except as may be provided by the resolutions of the Board of Directors
authorizing the issuance of any class or series of Preferred Stock, cumulative
voting by any shareholder is hereby expressly denied.

No shareholder of the Corporation shall have, by reason of holding shares
of any class or series of stock of the Corporation, any preemptive or
preferential rights to purchase or subscribe for any other shares of any class
or series of the Corporation now or hereafter authorized, any other

<PAGE>

equity securities of the Corporation or any notes, debentures, warrants, bonds
or other securities convertible into, or carrying options or warrants to
purchase shares of, any class stock of the Corporation, now or hereafter
authorized, whether or not the issuance of any such shares, or such notes,
debentures, bonds or other securities, would adversely affect the dividend or
voting rights of such shareholder.

ARTICLE V
COMMON STOCK

Except as otherwise required by law or as may be provided by the
resolutions of the Board of Directors authorizing the issuance of any class or
series of Preferred Stock, all rights to vote and all voting power shall be
vested exclusively in the holders of the Common Stock. The holders of the
Common Stock shall be entitled to one vote per share on all matters submitted to
a vote of shareholders, including, without limitation, the election of
directors.

Subject to the rights of the holders of the Preferred Stock, the holders of
the Common Stock shall be entitled to receive when, as and if declared by the
Board of Directors, out of funds legally available therefor, dividends payable
in cash, stock or otherwise.

Upon any liquidation, dissolution or winding-up of the Corporation, whether
voluntary or involuntary, and after the holders of the Preferred Stock shall
have been paid in full the amounts to which they shall be entitled, if any, or a
sum sufficient for such payment in full shall have been set aside, the remaining
net assets of the Corporation shall be distributed pro rata to the holders of
the Common Stock in accordance with their respective rights and interests to the
exclusion of the holders of the Preferred Stock.

ARTICLE VI
PREFERRED STOCK

The Preferred Stock may be issued from time to time in one or more classes
or series, the shares of each class or series to have such designations and
powers, preferences and rights and qualifications, limitations and restrictions
as are stated and expressed herein and in the resolution or resolutions
providing for the issue of such class or series adopted by the Board of
Directors.

Authority is hereby expressly granted to and vested in the Board of
Directors to authorize the issuance of the Preferred Stock from time to time in
one or more classes or series, to determine and take necessary proceedings fully
to effect the issuance and redemption of any such Preferred Stock and with
respect to each class or series of the Preferred Stock, to fix and state by the
resolution or resolutions providing for the issuance thereof the following:

(i) whether or not the class or series is to have voting rights, full
or limited, or is to be without voting rights;

<PAGE>

(ii) the number of shares to constitute the class or series and the
designations thereof,

(iii) the preferences and relative, participating, optional or other
special rights, if any, and the qualifications, limitations or
restrictions thereof, if any, with respect to any class or series;

(iv) whether or not the shares of any class or series shall be
redeemable and, if redeemable, the redemption price or prices and
the time or times at which, and the terms and conditions upon
which, such shares shall be redeemable and the manner of
redemption;

(v) whether or not the shares of a class or series shall be subject to
the operation of retirement or sinking funds to be applied to the
purchase or redemption of such shares for retirement and, if such
retirement or sinking fund or funds are established, the annual
amount thereof and the terms and provisions relative to the
operation thereof,

(vi) the dividend rate, if any, whether dividends are payable in cash,
stock of the Corporation or other property, the conditions upon
which and the times when such dividends are payable, the preference
to or the relation to the payment of dividends payable on any other
class or classes or series of stock, whether or not such dividend
shall be cumulative or noncumulative and, if cumulative, the date
or dates from which such dividends shall accumulate;

(vii) the preferences, if any, and the amounts thereof which the holders
of any class or series thereof shall be entitled to receive upon
the voluntary or involuntary dissolution of, or upon any
distribution of the assets of, the Corporation;

(viii) whether or not the shares of any class or series shall be
convertible into, or exchangeable for, the shares of any other
class or classes or of any other series of the same or any other
class or classes of stock of the Corporation and the conversion
price or prices, the ratio or ratios or the rate or rates at which
such conversion or exchange may be made, with such adjustments, if
any, as shall be stated, expressed or provided for in such
resolution or resolutions; and

(ix) such other special rights and protective provisions with respect to
any class or series as the Board of Directors may deem advisable.

The shares of each class or series of the Preferred Stock may vary from the
shares of any other series thereof in any or all of the foregoing respects. The
Board of Directors may increase the number of shares of the Preferred Stock
designated for any existing class or series by a resolution adding to such class
or series authorized and unissued shares of the Preferred Stock not designated
for any other class or series. The Board of Directors may decrease the number
of shares of the Preferred Stock designated for any existing class or series by
a resolution, subtracting from such

<PAGE>

series unissued shares of the Preferred Stock designated for such class or
series, and the shares so subtracted shall become authorized, unissued and
undesignated shares of the Preferred Stock.

ARTICLE VII
BOARD OF DIRECTORS

The Board of Directors of the Corporation shall consist of not less than
one nor more than twenty-one directors with the exact number to be fixed from
time to time by the affirmative vote of a majority of directors then in office
or the affirmative vote of the holders of a majority of the shares entitled to
vote on the matter. Whenever any vacancy on the Board shall occur for any
reason, a majority of directors then in office, although less than a quorum of
the entire Board, or the holders of a majority of the shares entitled to vote on
the matter, may fill the vacancy or vacancies for the balance of the unexpired
term or terms, at which time a successor or successors shall be duly elected by
the shareholders and qualified.

ARTICLE VIII
MEETINGS OF SHAREHOLDERS

Any required action or vote of shareholders of the Corporation must be
taken at a meeting duly called and held, and may not be taken by written consent
in lieu of a meeting.

Except as otherwise required by law, the Corporation shall not be required
to hold a special meeting of shareholders of the Corporation unless, in addition
to any other requirements of law, (i) the holders of not less than thirty
percent (30%) of all the votes entitled to be cast on any issue proposed to be
considered at the proposed special meeting sign, date and deliver to the
Corporation's secretary one or more written demands for the meeting describing
the purpose or purposes for which it is to be held or (ii) the meeting is called
by the Board pursuant to a resolution approved by a majority of the entire
Board. Only business within the purpose or purposes described in the special
meeting notice required by the Florida Business Corporation Act may be conducted
at a special shareholders' meeting.

ARTICLE IX
BYLAWS

Unless otherwise provided by law, the Bylaws of the Corporation may be
altered, amended or repealed, in whole or in part, or new Bylaws may be adopted,
by the affirmative vote of a majority of the directors in office or the
affirmative vote of holders of a majority of the shares entitled to vote on the
matter.

ARTICLE X
INDEMNITY

The Corporation shall indemnify, and shall advance expenses on behalf of,
its officers and

<PAGE>

directors to the fullest extent not prohibited by any law in existence either
now or hereafter.

ARTICLE XI
REGISTERED OFFICE AND AGENT

The street address of the Corporation's registered office shall be 3750
N.W. 87th Avenue, Miami, Florida 33178 and the registered agent for the
Corporation at such address shall be J. Reid Bingham.

ARTICLE XII
AMENDMENT

Except as provided herein, these Amended and Restated Articles of
Incorporation may be altered, amended or repealed by the shareholders of the
Corporation in accordance with the applicable laws of the State of Florida.

IN WITNESS WHEREOF, the Corporation has caused these Amended and Restated
Articles of Incorporation to be executed by its Chairman of the Board this 23rd
day of January, 1997.

HAMILTON BANCORP INC.

By: /S/ Eduardo A. Masferrer
Eduardo A. Masferrer
Chairman of the Board

<PAGE>

ACCEPTANCE OF REGISTERED AGENT

Having been named as registered agent and to accept service of process for
Hamilton Bancorp Inc. at the place designated in the Amended and Restated
Articles of Incorporation, I hereby accept the appointment as registered Agent
and agree to act in this capacity. I further agree to comply with the
provisions of all statutes relating to the proper and complete performance of my
duties, and I am familiar with and accept the obligations of my position as
registered agent.

Dated: January 23, 1997

/s/ J. Reid Bingham
J. Reid Bingham

<PAGE>

EXHIBIT 10.2

LEASE AGREEMENT
---------------

by and between

SYSTEM REALTY TWELVE, INC.
--------------------------
("LANDLORD")

and

HAMILTON BANK, N.A.
-------------------
("TENANT")

DORAL CORPORATE PLAZA II
3750 N.W. 87th Avenue
Miami, FL 33178

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TABLE OF CONTENTS

PAGE

1. TERM........................................................................2
2. USE AND POSSESSION..........................................................2
3. GROSS RENT..................................................................2
4. BASE RENT ESCALATION........................................................2
5. COMMENCEMENT................................................................4
6. EXISTING LEASE OBLIGATION...................................................4
7. ADDITIONAL RENT.............................................................5
8. SECURITY DEPOSIT............................................................7
9. CAPTIONS, DEFINITIONS AND SEVERABILITY......................................7
10. NOTICES...................................................................11
11. ORDINANCES AND REGULATIONS................................................12
12. SIGNS.....................................................................12
13. SERVICES..................................................................12
14. TENANT IMPROVEMENTS.......................................................14
15. QUIET ENJOYMENT...........................................................16
16. LANDLORD'S RIGHT TO INSPECT AND DISPLAY...................................16
17. DESTRUCTION OF PREMISES...................................................17
18. CONDEMNATION..............................................................18
19. ASSIGNMENT AND SUBLETTING.................................................19
20. HOLDOVER..................................................................20
21. INDEMNIFICATION...........................................................21
22. CONSTRUCTION OF LANGUAGE..................................................21
23. DEFAULT...................................................................21
24. SUCCESSORS AND ASSIGNS....................................................23
25. NON-WAIVER................................................................23
26. RIGHTS RESERVED BY LANDLORD...............................................23
27. ASBESTOS AND OTHER HAZARDOUS MATERIALS....................................25
28. ESTOPPEL CERTIFICATE......................................................26
29. CHANGES TO THE BUILDING...................................................26
30. LANDLORD'S REPRESENTATION.................................................26
31. INSURANCE.................................................................26
32. COVENANTS AGAINST LIENS...................................................27
33. INTENTIONALLY DELETED.....................................................28
34. LANDLORD'S EXCULPATION....................................................28
35. BROKERAGE.................................................................28
36. FULL SERVICE LEASE; SEPARATE METERING.....................................29
37. BUILDING DIRECTORY........................................................29
38. OPTION TO RENEW...........................................................29
39. EXPANSION OPTION; RIGHT OF FIRST REFUSAL..................................30
40. INTENTIONALLY DELETED.....................................................31
41. THIRD PARTY RE-LOCATION...................................................31
42. DORAL CORPORATE PLAZA I (Citibank Building)...............................31
43. CANCELLATION OPTION.......................................................31
44. EXCLUSIVE USE AND COMPATIBILITY...........................................32
45. RESTRICTIONS IMPOSED BY LANDLORD'S LEASE WITH CITIBANK, N.A. .............32
46. PARKING...................................................................32
47. EMERGENCY GENERATOR.......................................................32
48. FIBER OPTIC TELECOMMUNICATION CAPABILITIES................................33
49. STORAGE...................................................................33
50. SUBORDINATION; NON-DISTURBANCE............................................33
51. MISCELLANEOUS.............................................................33
52. WAIVER OF JURY TRIAL......................................................34

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Exhibit A-1 Floor Plans
Exhibit A-2 Site Plan
Exhibit B Rules and Regulations
Exhibit C Citibank Letter
Exhibit D Subordination, Nondisturbance and Attornment Agreement
Exhibit E Cleaning Specifications
Exhibit F Legal Description
Schedule I Rent Schedule

<PAGE>

LEASE AGREEMENT

This LEASE AGREEMENT (this "Lease"), dated December 20, 1996, by and
between SYSTEM REALTY TWELVE, INC., with its principal offices at c/o J.P.
Morgan Investment Management Inc., 522 5th Avenue, New York, New York 10036,
hereafter called the "Landlord", and HAMILTON BANK, N.A., with its principal
office at 3750 N.W. 87th Avenue, Miami, Florida 33178, hereinafter called the
"Tenant".

WITNESSETH:

Landlord hereby leases to Tenant and Tenant hereby leases from
Landlord, the following described property, located in the building known as
Doral Corporate Plaza II at 3750 N.W. 87th Avenue, Miami, Florida 33178 (the
"Building"):

PREMISES: The premises (the "Premises") shall consist of a total
of 74,993 rentable square feet as follows: (a) approximately 51,538
rentable square feet (the "Phase I Premises") as of January 1, 1997,
made up of (i) 2,093 rentable square feet on floor one; (ii) 4,161
rentable square feet on floor one, currently occupied by Business
Travel Advisors, Inc. (the "Subtenant"); (iii) 23,316 rentable square
feet on floor six (constituting all of floor six); (iv) 21,868
rentable square feet on floor seven (constituting all of floor seven);
and (v) 100 rentable square feet located near the southeast corner of
the Building and contiguous to the space currently occupied by the
Subtenant. The location of the space on floor one and of the 100
rentable square feet located near the southeast corner of the Building
are identified on EXHIBIT A-1 attached hereto; (b) approximately
10,000 rentable square feet on floor five (the "Phase II Premises") as
of the date Blue Cross Blue Shield vacates the Phase II Premises, but
no earlier than January 1, 1997. Landlord and Tenant shall agree in
writing as to the location of the Phase II Premises on or before March
1, 1997. Landlord and Tenant shall execute an amendment to this Lease
memorializing the exact location of such space on or before March 1,
1997; (c) the remaining approximately 13,455 rentable square feet of
space on floor five (the "Phase III Premises") as of January 1, 1997,
less approximately 2,500 rentable square feet currently occupied by
ICF Kaiser (the "Relocation Premises"); and (d) the Relocation
Premises as of the date ICF Kaiser vacates such Relocation Premises.

DINING FACILITY: If Tenant elects to construct a dining facility
on the patio area adjacent to the executive offices on floor seven as
more particularly set forth in Paragraph 14, the area of the patio
shall not be included in calculating the rentable square feet of the
Premises for purposes of payment of Gross Rent or Tenant's Prorata
Share of Taxes and Operating Expenses, but for all other purposes
herein shall be deemed a portion of the Premises.

ADDITION OF OTHER AVAILABLE SPACE: If any other additional space
is available in the Building prior to the Commencement Date, Tenant
may, at its option, by providing written notice to Landlord, elect to
include such additional

<PAGE>

space in the Premises, and Landlord and Tenant shall enter into an
amendment to this Lease incorporating such additional space as part of
the Premises.

MISCELLANEOUS: All space to be included within the Premises
shall be measured in accordance with BOMA standards of measurement by
Landlord's architect and verified by Tenant's architect. The common
area loss factor in the Premises is fifteen percent (15%). Except to
the extent otherwise expressly set forth in this Lease, each addition
to the Premises as outlined above shall be leased "as is" under the
same terms and conditions of this Lease with respect to the Premises.

1. TERM

Tenant shall have and hold the above described Premises for a term
(the "Term") of one hundred twenty (120) months commencing on January 1,
1997, except as otherwise set forth in Paragraph 5 herein, and terminating on
December 31, 2006, on the terms and conditions as set forth herein.

2. USE AND POSSESSION

It is understood that the Premises are to be used for general office
purposes, including, but not limited to, Tenant's business of banking, to
include provisions for a computer room, vault, deposit box, executive kitchen,
dining room, employee's kitchen and cafeteria, employee and guest entertainment
room and the necessary infrastructure thereto subject to Dade County regulatory
approvals. No other use of the Premises without written consent of Landlord
shall be permitted, which shall not be unreasonably withheld or delayed. Tenant
shall not operate its business at the Premises for any unlawful purpose or so as
to constitute a nuisance. The permitted use of the Premises by Tenant is
further subject to the terms and conditions of the consent letter executed by
Citibank, F.S.B., a copy of which is attached hereto as EXHIBIT C. Tenant
agrees to accept possession of the Premises upon the Commencement Date. Taking
possession of the Premises by Tenant shall be conclusive evidence as against
Tenant that the premises were in good and satisfactory condition when possession
was so taken. Tenant, at the expiration of the term, shall deliver up the
Premises in good repair and condition, ordinary wear and tear excepted.

3. GROSS RENT

Tenant hereby covenants and agrees to pay to Landlord, together with
any and all sales and use taxes levied upon the use and occupancy of the
Premises, the annual gross rent of $18.50 per rentable square foot, plus
applicable sales tax ("Gross Rent"), in equal monthly installments payable in
advance, without demand, or any offset, defense or deduction, except to the
extent expressly permitted by the terms of this Lease, beginning (a) with
respect to the Phase I Premises, January 1, 1997, (b) with respect to the
Phase II Premises, that date that is two (2) months after the current tenant
vacates the Phase II Premises (if such date occurs on a date that is other
than the first day of the month, then the Gross Rent for such month shall be
pro-rated), but not earlier than March 1, 1997, (c) with respect to the Phase
III Premises, January 1, 1998 and (d) with

<PAGE>

respect to the Relocation Premises, January 1, 1998, and on the first day of
each month thereafter. All rental payments shall be made at Landlord's address
or as elsewhere designated from time to time by Landlord's written notice to
Tenant. Attached hereto as Schedule I is a schedule of the initial annual and
monthly Gross Rent during the term. The foregoing rent shall be adjusted to
reflect any additional portion of the Building added to the Premises prior or
subsequent to the Commencement Date. Base Rent (as defined in paragraph 4 of
this Lease), as a component of Gross Rent, shall be increased as set forth in
paragraph 4 of this Lease. Accordingly, Gross Rent shall be adjusted to reflect
adjustment of the Base Rent.

4. BASE RENT ESCALATION

The term "Base Rent" as used herein shall mean the Gross Rent payable
pursuant to Paragraph 3 above, minus Tenant's Pro Rata Share of Taxes and
Operating Expenses for the respective Base Years, as such terms are defined in
Paragraph 9 hereof.

(a) Commencing with the first anniversary of the "Adjustment Date" (as
hereinafter defined) and each year thereafter during the Term of this Lease (and
any extensions or renewals thereof), the annual Base Rent shall be adjusted in
accordance with changes in the "Price Index" (as hereinafter defined). The
Adjustment Date shall mean the first day of the month in which the Commencement
Date occurs. The Price Index shall mean the Consumer Price Index for all Urban
Consumer, U.S. City Average (1982-1984 equaling 100) All Items, Bureau of Labor
Statistics of the United States Department of Labor. The annual Base Rent shall
be adjusted in accordance with the following provisions.

(i) The Price Index as of the month in which the Adjustment Date
occurs shall be designated as the Base Price Index;

(ii) The Price Index as of the month in which the anniversary of
the Adjustment Date occurs in the second and subsequent lease years shall be
designated as the Comparison Price Index;

(iii) Promptly after the end of the twelve (12) month period
following the Adjustment Date and at the end of each year thereafter, the
current annual Base Rent shall be adjusted by adding to the current annual Base
Rent the amount computed by multiplying the then current annual Base Rent by the
fraction which has a numerator of the most recent Comparison Price Index minus
the most recent previous Base Price Index, and has a denominator of the Base
Price Index. Written as an equation, this computation is as follows:

Current
Annual Base Rent x MOST RECENT COMPARISON PRICE INDEX-MOST RECENT PREVIOUS BASE
PRICE INDEX
Base Price Index

(iv) The annual Base Rent as thus adjusted shall be deemed the new
annual Base Rent hereunder. No such adjustment shall reduce the annual Base
Rent below such rent for the prior lease year.

<PAGE>

(v) Notwithstanding the foregoing provisions, the maximum increase
in the adjusted Base Rent for any year as a result of adjustments in the
Consumer Price Index over the previous year shall be five (5%) percent.

If Landlord claims to be entitled to an adjustment of the annual Base Rent
in accordance with the above provisions, Landlord shall send notice to Tenant
setting forth the new annual Base Rent claimed to be payable. Such notices
shall be sent within three (3) months after publication of the applicable Price
Index. In the event of an adjustment in the annual Base Rent, Tenant shall pay
to Landlord, within thirty (30) days of receiving such notice, the additional
Base Rent owed for the months which have elapsed in the then current lease year
and the adjusted amount shall be paid monthly thereafter.

In the event the area of the Premises is expanded by subsequent written
agreement between Landlord and Tenant and/or the amount of the Base Rent is
increased for any portion of the Premises in connection with such expansion, the
above formula, regardless of the date on which such subsequent agreement is
entered into, shall be applied to the aggregate new Base Rent and shall be
applied as set forth above.

In the event that the Price Index hereinabove referred to ceases to
incorporate a significant number of the items currently set forth therein, or if
a substantial change is made in the method of establishing such Price Index,
then the Price Index shall be adjusted to the figure that would have resulted
had no change occurred in the manner of computing such Price Index. In the
event that such Price Index (or a successor of substitute index) is not
available, a reliable governmental or other nonpartisan publication evaluating
the information theretofore used in determining the Price Index shall be used in
lieu of such Price Index.

(b) In addition to Gross Rent, Tenant shall and hereby agrees to pay to
Landlord each month a sum equal to any sales tax, tax on rentals, and any other
governmental charges, taxes and/or impositions now in existence or hereafter
imposed based upon the amount of Gross Rent (as defined in Paragraph 3 above)
collected therefor. Nothing herein shall, however, be taken to require Tenant
to pay any part of any Federal and State Taxes on income imposed upon Landlord.

(c) Tenant shall be required to pay Landlord interest at the Default Rate
on any Rent due that remains unpaid for ten (10) days after receipt of written
notice of such non-payment from Landlord to Tenant. For all purposes of this
Lease the term "Rent" shall include all Gross Rent, charges or impositions
thereon, additional rent (as hereinafter defined), adjustments to Rent and any
and all other payments due or which may become due from Tenant to Landlord
hereunder. Said interest will be deemed to accrue from the first day of the
applicable lease month; provided, however, this provision shall not be construed
as requiring Landlord to accept any late payment of Rent or as a waiver of any
of Landlord's rights or remedies by virtue of Tenant's not making timely payment
of Rent hereunder, and Landlord's acceptance of late Rent and such interest
shall be not be construed as constituting a waiver by Landlord of any rights or
remedies available to it in the future if Rent is not timely paid by Tenant on
any one or more future occasions, including Landlord's right to declare Tenant
in default under this Lease and pursue all remedies available to Landlord
arising from such default.

<PAGE>

5. COMMENCEMENT

The Commencement Date shall be January 1, 1997. Notwithstanding the
foregoing, the Commencement Date as to the Phase II Premises and of the
Relocation Premises, as applicable, shall be delayed on a day-to-day basis for
each day after January 1, 1997, until Landlord is able to deliver possession of
Phase II Premises and of the Relocation Premises, as applicable, to Tenant.
Landlord shall deliver the Phase II Premises and the Relocation Premises vacated
by the current tenants thereof broom clean and free of all equipment and trade
fixtures of the current tenants thereof.

Landlord represents to and agrees with Tenant that the current tenant of
the Phase II Premises is obligated to vacate such Phase II Premises on or prior
to December 31, 1996, and that the current tenant of the Relocation Premises is
obligated to vacate such Relocation Premises on or about February 28, 1997
(depending on when Landlord completes the build-out on such tenant's relocation
premises). Landlord shall institute and diligently pursue eviction proceedings
if such tenants do not vacate their premises by January 1, 1997 with respect to
the Phase II Premises and on or prior to thirty (30) days after completion (as
evidenced by a certificate of occupancy) of the relocation space with respect to
the Relocation Premises.

6. EXISTING LEASE OBLIGATION

Tenant's Lease dated October 4, 1990, by and between Doral Corporate Plaza
Associates Limited Partnership, A Florida Limited Partnership, as landlord, and
Hamilton Bank, N.A., as tenant, shall terminate upon the Commencement Date. In
addition, Landlord shall terminate the Lease by and between Doral Corporate
Plaza Associates Limited Partnership, a Florida Limited Partnership as landlord,
and Business Traveler Advisor, Inc. (the "Subtenant"), as tenant, dated July 15,
1991, effective on the Commencement Date. Landlord acknowledges that Tenant
intends to enter into a sublease with the Subtenant with respect to the space
currently occupied by the Subtenant, and Landlord hereby approves such subtenant
and such sublease, subject to the provisions of Paragraph 19 herein.

7. ADDITIONAL RENT

(a) Tenant shall pay Landlord an amount equal to Tenant's Pro Rata Share
of Taxes in excess of the amount of Taxes paid by Landlord during the calendar
year 1996 or 1997, whichever is higher (the "Base Tax Year").

(b) Tenant shall pay Landlord an amount equal to Tenant's Pro Rata Share
of Operating Expenses in excess of the amount of Operating Expenses paid by
Landlord during the calendar year 1997 (the "Base Expense Year").

(c) Tenant's Pro Rata Share of Taxes and Operating Expenses in excess of
the respective Base Years shall be paid in the following manner:

(i) Landlord may reasonably estimate in advance the amounts Tenant
shall owe for Taxes and Operating Expenses in excess of the respective Base
Years for any full or partial calendar year of the Term (or any extension or
renewal). In such event, Tenant shall pay

<PAGE>

such estimated amounts, on a monthly basis, on or before the first day of each
calendar month, together with Tenant's payment of Gross Rent. Such estimate may
be reasonably adjusted from time to time by Landlord.

(ii) Within 120 days after the end of each calendar year, or as
soon thereafter as practicable, Landlord shall provide a statement (the
"Statement") to Tenant showing: (a) the amount of actual Taxes and Operating
Expenses for such calendar year, with a listing of amounts for major categories
of Operating Expenses, and such amounts for the Base Years, (b) any amount paid
by Tenant toward Taxes and Operating Expenses during such calendar year on an
estimated basis, and (c) any revised estimate of Tenant's obligations for Taxes
and Operating Expenses for the current calendar year.

(iii) If the Statement shows that Tenant's estimated payments were
less than Tenant's actual obligations for Taxes and Operating Expenses for such
year, Tenant shall pay the difference. If the Statement shows an increase in
Tenant's estimated payments for the current calendar year, Tenant shall pay the
difference between the new and former estimates, for the period from January 1
of the current calendar year through the month in which the Statement is sent.
Tenant shall make such payments within 60 days after Landlord sends the
Statement.

(iv) If the Statement shows that Tenant's estimated payments
exceeded Tenant's actual obligations for Taxes and Operating Expenses, Tenant
shall receive a refund for the difference, within 60 days after Landlord sends
the Statement.

(v) Notwithstanding the foregoing, Landlord agrees that Tenant's
Pro Rata Share of Operating Expenses shall not be increased more than five
percent (5%) per annum, non-cumulative, for controllable expenses. The five
percent (5%) cap shall not apply to non-controllable expenses. Non-controllable
expenses are third party expenses which are not within the Landlord's control,
and include, but are not limited to, utilities and insurance. Landlord agrees
to notify Tenant in writing when and as other types of non-controllable
expenses, if any, arise.

(d) If the Term commences as to any portion of the Premises other than on
January 1, or ends other than on December 31, Tenant's obligation to pay
estimated and actual amounts towards Taxes and Operating Expenses for such first
or final calendar years for such portion of the Premises shall be prorated to
reflect the portion of such years included in the term. Such proration shall be
made by multiplying the total estimated or actual (as the case may be) Taxes and
Operating Expenses, for such calendar years, as well as the Base Year amounts,
by a fraction, the numerator of which shall be the number of days of the term
for such portion of the Premises during such calendar year, and the denominator
of which shall be 365.

(e) Landlord shall maintain records respecting Taxes and Operating
Expenses and determine the same in accordance with sound accounting and
management practices, consistently applied. Although this Lease contemplates
the computation of Taxes and Operating Expenses on a cash basis, Landlord
shall make reasonable and appropriate accrual adjustments to ensure that each
calendar year, including the Base Years, includes substantially the same
recurring items. Landlord reserves the right to change to a full accrual
system of accounting so long as the same is consistently applied and Tenant's
obligations are not materially adversely affected. Tenant shall

<PAGE>

have the one time right to examine such records for the Base Tax Year and the
Base Expense Year, and otherwise, with respect to the most current Statement
only, upon reasonable prior notice specifying such records Tenant desires to
examine, during normal business hours at the place or places in Miami, Florida,
where such records are normally kept by sending such notice no later than 60
days following the furnishing of the Statement. Tenant may take exception to
matters included in Taxes or Operating Expenses, or Landlord's computation of
Tenant's Pro Rata Share of either, by sending notice specifying such exception
and the reasons therefor to Landlord no later than 30 days after Landlord makes
such records available for examination. Tenant acknowledges that Landlord's
ability to budget and incur expenses depends on the finality of such Statement,
and accordingly agrees that time is of the essence of this paragraph. If Tenant
takes exception to any matter contained in the Statement as provided herein,
Landlord and Tenant shall refer the matter to an independent certified public
accountant, whose certification as to the proper amount shall be final and
conclusive as between Landlord and Tenant. Tenant shall promptly pay the cost
of such certification unless such certification determines that Tenant was
over-billed by more than 5% of the entire amount of the Statement, in which case
the costs of certification shall be borne by Landlord, and Landlord shall credit
the overpayment to Tenant's next rental payment. Pending resolution of any such
exceptions in the foregoing manner, Tenant shall continue paying Tenant's Pro
Rata Share of Taxes and Operating Expenses in the amounts determined by
Landlord, subject to adjustment after any such exceptions are so resolved.

(f) Notwithstanding that Gross Rent payments on the Phase III Premises and
on the Relocation Premises do not commence until the dates set forth in
Paragraph 3 hereof, if Tenant occupies such space for the purposes of conducting
any business (as opposed to building-out or otherwise improving such space, or
using such space for storage) prior to the respective rent commencement dates,
Tenant agrees to pay to Landlord, as additional rent, Tenant's Pro Rata Share of
Operating Expenses and Taxes (estimated to be $7.50 per rentable square foot)
for such additional space effective as of the date of Tenant's occupancy of such
additional space. Any such payments shall be prorated for time and adjusted as
to area.

(g) Tenant agrees to pay to Landlord, as additional rent, on the
Commencement Date for the Phase I Premises the amount of $37,015.54 owed by the
Subtenant to Landlord. Such payment maybe made in the manner described in
Paragraph 14 of this Lease.

8. SECURITY DEPOSIT

No security deposit will be required. Landlord shall return Tenant's
$79,388.40 security deposit to Tenant and the Subtenant's $6,241.50 security
deposit to the Subtenant upon the Commencement Date.

9. DEFINITIONS

Definitions of certain terms used in this Lease are as follows:

(a) "Building" shall mean the structure identified in the introduction of
this Lease.

<PAGE>

(b) "Default Rate" shall mean the Morgan Guaranty Trust Company of New
York prime rate plus 6% per annum.

(c) "Holder" shall mean the holder of any Mortgage at the time in
question, and where such Mortgage is a ground lease, such term shall refer to
the ground lessor.

(d) "Holidays" shall mean all federally observed holidays (i.e., when
banks in the federal reserve system are closed), including without limitation
New Year's Day, President's Day, Memorial Day, Independence Day, Labor Day,
Veterans' Day, Thanksgiving Day, and Christmas Day.

(e) "Landlord" and "Tenant" shall be applicable to one or more Persons as
the case may be, and the singular shall include the plural, and the neuter shall
include the masculine and feminine; and if there be more than one, the
obligations thereof shall be joint and several. For purposes of any provisions
indemnifying or limiting the liability of Landlord, the term "Landlord" shall
include Landlord's present and future partners, beneficiaries, trustees,
officers, directors, employees, shareholders, principals, agents, advisors,
affiliates, successors and assigns.

(f) "Law" shall mean all federal, state, county and local governmental and
municipal laws, statutes, ordinances, rules, regulations, codes, decrees, orders
and other such requirements, applicable equitable remedies and decisions by
courts in cases where such decisions are considered binding precedents in the
state in which the Property is located, and decisions of federal courts applying
the Laws of such state.

(g) "Mortgage" shall mean all mortgages, deeds of trust, ground leases and
other such encumbrances now or hereafter placed upon the Property or Building,
or any part thereof, and all renewals, modifications, consolidations,
replacements or extensions thereof, and all indebtedness now or hereafter
secured thereby and all interest thereon.

(h) "Operating Expenses" shall mean all expenses, costs and amounts (other
than Taxes) which Landlord shall pay during the calendar year, any portion of
which occurs during the Term, in direct connection with ownership, management,
repair, maintenance, and operation of the Property, including without
limitation, any amounts paid for: (a) utilities for the Property, including but
not limited to electricity, power, gas, steam, oil or other fuel, water, sewer,
lighting, heating, air conditioning and ventilating, (b) permits, licenses and
certificates necessary to operate, manage and lease the Property, (c) insurance
applicable to the Property, not limited to the amount of coverage Landlord is
required to provide under this Lease, (d) supplies, tools, equipment and
materials used in the direct operation, repair and maintenance of the Property,
(e) accounting, legal, inspection, consulting, concierge and other services, (f)
any equipment rental (or installment equipment purchase or equipment financing
agreements), or management agreements (including the cost of any reasonable and
customary management fee) actually paid thereunder and the fair rental value of
any office space provided thereunder, up to customary and reasonable amounts,
(g) wages, salaries and other compensation and benefits (including the fair
value of any parking privileges provided) for all persons directly engaged in
the operation, maintenance or security of the Property, and employer's Social
Security taxes, unemployment taxes or insurance, and any other taxes which may
be levied on such wages, salaries, compensation and benefits, (h) payments under
any easement, operating agreement, declaration,

<PAGE>

restrictive covenant, or instrument pertaining to the sharing of costs in any
planned development, and (i) operation, repair, and maintenance of all
systems and equipment and components there of (including replacement of
components), janitorial service, alarm and security service, window cleaning,
trash removal, elevator maintenance, cleaning of walks, parking facilities
and Building walls, removal of ice and snow, replacement of wall and floor
coverings, ceiling tiles and fixtures in lobbies, corridors, restrooms and
other common or public areas or facilities, maintenance and replacement of
shrubs, trees, grass, sod and other landscaped items, irrigation systems,
drainage facilities, fences, curbs, and walkways, re-paving and re-striping
of parking facilities, and roof repairs. Tenant shall pay its Pro-Rata Share
of Operating Expenses in excess of the Base Expense Year , and as it relates
to Taxes, Base Tax Year, based upon actual increases in Operating Expenses
and Taxes. The Operating Expenses for the Operating Expense Base Year and
each year thereafter, but not fixed costs, shall be grossed up to reflect 95%
occupancy. Notwithstanding the foregoing, Operating Expenses shall not
include:

(i) Depreciation, interest and amortization on Mortgages, and
other debt costs or ground lease payments, if any; legal fees in connection with
leasing, tenant disputes or enforcement of leases; real estate brokers' leasing
commissions; improvements or alterations to tenant spaces including tenant
improvements made pursuant to a lease for any new tenant; the cost of providing
any service directly to and paid directly by, any tenant; any costs expressly
excluded from Operating Expenses elsewhere in this Lease; costs of any items to
the extent Landlord receives reimbursement from insurance proceeds or from a
third party (such proceeds to be deducted from Operating Expenses in the year in
which received);

(i) Capital expenditures, except those: (a) made to reduce
Operating Expenses (taking into account reasonable financing charges on such
expenditures), or (b) for replacements (as opposed to additions or new
improvements) to replace existing items which are worn out; provided, all such
permitted capital expenditures (together with reasonable financing charges)
shall be passed through to the extent of the lesser of (i) actual savings or
(ii) the annual amortized amount of such improvements over the shorter of: (x)
their useful lives, or (y) the period during which the reasonably estimated
savings in Operating Expenses equals the expenditures;

(iii) Costs of decorating, redecorating or special cleaning or other
services not provided on a regular basis to the tenants of the Building;

(iv) Wages, salaries, fees and fringe benefits paid to executive
personnel or officers or partners of Landlord;

(v) Any charge for depreciation of the Building or equipment and
any interest or other financing charge;

(vi) Any charge for Landlord's income taxes, excess profit taxes,
franchise taxes or similar taxes on Landlord's business, provided that Tenant
shall be responsible for payment of all sales taxes on Gross Rent imposed in
connection with this Lease;

(vii) All costs relating to activities for the solicitation and
execution of leases of space in the Building;

<PAGE>

(viii) All costs for which Tenant or any other tenant in the Building
is being charged which is not included within the definition in this
subparagraph (h) of Operating Expenses, the cost of correcting defects in the
construction of the Building or in the Building equipment, except that
conditions (not occasioned by construction defects) resulting from ordinary wear
and tear will not be deemed defects for the purpose of this category;

(ix) The cost of any repair made by Landlord because of the total
or partial destruction of the Building or the condemnation of a portion of the
Building;

(x) Any increase in insurance premiums to the extent that such
increase is caused or attributable to the use, occupancy or act of another
tenant;

(xi) The cost of any items for which Landlord is reimbursed by
insurance or otherwise compensated by parties other than tenants of the
Building;

(xii) Any Operating Expenses representing an amount paid to a
related corporation, entity or person which is in excess of the amount which
would otherwise be paid in the absence of such relationship;

(xiii) The cost of work or service performed for or facilities
furnished to any tenant of the Building to a greater extent or in a manner more
favorable to such tenant than that performed for or furnished to Tenant;

(xiv) The cost of alterations of space in the Building leased to
other tenants;

(xv) The cost of overtime or other expense to Landlord in curing
Landlord's default or performing work expressly provided in this Lease to be
borne at Landlord's expense;

(xvi) Ground rent or similar payments to a ground lessor; and

(xvii) The cost of removal, abatement or treatment of asbestos or any
other hazardous substance located in the Building, unless such asbestos or
hazardous substance was placed in the Building by or at the direction of Tenant.

In no event will the total amount collected from all tenants of the Building
with regard to Operating Expenses exceed one hundred percent (100%) of the
actual Operating Expenses incurred by the Landlord. Landlord's Operating
Expenses shall be reasonable, in accordance with standard GAAP policies,
directly related to the Property and comparable to that of other first class
office buildings in the Miami Airport/West Dade office market. Landlord will
utilize reasonable efforts to minimize Operating Expenses and Taxes. All
Operating Expenses shall be directly related to the Building's operation. In
the calculation of Tenant's Pro Rata Share of Taxes and Operating Expenses, only
those Operating Expenses and Taxes attributable to the Property, the Building,
the common area of the Building and the garage and parking lot shall be included
in the computation of same. Any Operating Expenses attributable to any retail,
food service entity, or private club shall not be included in determining
Tenant's Pro Rata Share of Operating Expenses and Taxes, unless the retail, food
service entity or private club is operated within Tenant's Premises.

<PAGE>

(i) "Person" shall mean an individual, trust, partnership, joint venture,
association, corporation, and any other entity.

(j) "Property" shall mean the property legally described on Exhibit "F"
attached hereto, which includes the Building, and any common or public areas or
facilities, easements, corridors, lobbies, sidewalks, loading areas, driveways,
landscaped areas, on-site parking areas, and any and all other structures or
facilities operated or maintained in connection with or for the benefit of the
Building, and all parcels or tracts of land on which all or any portion of the
Building or any of the other foregoing items are located, and any fixtures,
machinery, equipment, apparatus, systems and equipment, furniture and other
personal property located thereon or therein and used in connection therewith,
whether title is held by Landlord or its affiliates. Possession of areas
necessary for utilities, services, safety and operation of the Property,
including the systems and equipment, fire stairways, perimeter walls, space
between the finished ceiling of the Premises and the slab of the floor or roof
of the Property above, and the use thereof together with the right to install,
maintain, operate, repair and replace the systems and equipment, including any
of the same in, through, under or above the Premises in locations that will not
materially interfere with Tenant's use of the Premises, are hereby excepted and
reserved by Landlord, and not demised to Tenant.

(k) "Rent" shall mean the payments due from Tenant described in Articles
3, 4 and 7, together with such other payments that may be referred to herein as
"rent" or "additional rent" payable by Tenant.

(l) "Taxes" shall mean all federal, state, county, or local governmental
or municipal taxes, fees, charges or other impositions of every kind and nature,
whether general, special, ordinary or extraordinary (including without
limitation, real estate taxes, general and special assessments, transit taxes,
water and sewer rents, taxes based upon the receipt of rent including gross
receipts or sales taxes applicable to the receipt of rent or service or value
added taxes (unless required to be paid by Tenant), personal property taxes
imposed upon the fixtures, machinery, equipment, apparatus, systems and
equipment, appurtenances, furniture and other personal property used in
connection with the Property which Landlord pays during any calendar year, any
portion of which occurs during the Term (without regard to any different fiscal
year used by such government or municipal authority) because of or in direct
connection with the ownership, leasing and operation of the Property.
Notwithstanding the foregoing, Taxes shall not include (i) inheritance taxes,
(ii) gift taxes, (iii) transfer taxes, (iv) franchises taxes, (v) excise taxes,
(vi) net income taxes, (vii) profit taxes, (viii) capital levies, (ix) late
payment charges and penalties, and (x) special assessments levied against any
property other than the real estate constituting a portion of the Property. If
any assessments are levied against the real estate which may be paid in
installments, Landlord may elect to pay such assessments in a lump sum or in as
many installments as Landlord desires and is permitted by the taxing authority
to do. If Landlord elects to pay any assessment in installments, Tenant shall
be entitled to reimburse Landlord for Tenant's portion of such assessments in
installments on a schedule similar to the installment payment schedule elected
by Landlord. If Landlord does not elect to pay in installments, then the
portion passed through to Tenant shall be a proportionate share of the
assessment based on the number of months left in the Term , so that in no event
shall Tenant pay any portion of an assessment allocable to any period beyond the
date of termination of this Lease.

<PAGE>

(m) "Tenant's Pro Rata Share" of Taxes and Operating Expenses shall be
agreed to be .5455 or 54.55%, based upon the Building containing 137,474
rentable square feet and the Premises containing 74,993 rentable square feet.
Tenant's Pro Rata Share of Taxes and Operating Expenses shall be revised, if the
Premises at any time in the future contains more or less than 74,993 rentable
square feet, to a percentage equal to the actual rentable square feet of the
Premises divided by the actual rentable square feet contained in the Building.
Landlord represents to Tenant that the initial Premises shall contain at least
74,993 rentable square feet, and that the Building contains 137,474 rentable
square feet.

10. NOTICES

For the purpose of notice or demand, the respective parties shall be served
by written notice in the manner and to the addresses set forth below.
Specifically, notices may be given by (i) delivery in person, (ii) guaranteed
overnight courier service or (iii) by facsimile, provided that a supplemental
notice is provided within one day thereafter by one of the methods specified in
(i) or (ii), to the following addresses:

For Tenant

- Senior Vice President - Administration
Hamilton Bank, N.A.
3750 N.W. 87th Avenue
Miami, FL
Telephone: (305) 717-5500
Fax No. : (305) 717-5560

- Kirkpatrick & Lockhart
201 South Biscayne Boulevard
Miami, FL 33131
Attn: Laura A. Gangemi, Esquire
Telephone: (305) 539-2300
Fax No. : (305) 358-7095

For Landlord

- System Realty Twelve, Inc.
c/o J.P. Morgan Investment Management Inc.
James E. Rosasco, Vice President
522 Fifth Avenue
New York, NY 10036
Telephone: (212) 837-1246
Fax No. : (212) 944-5743

- Hirschler, Fleischer, Weinberg, Cox & Allen
701 East Byrd Street (23219)

<PAGE>

Post Office Box 500
Richmond, VA 23218-0500
Attn: Paul H. Davenport, Esquire
Telephone: (804) 771-9553
Fax No. : (804) 644-0957

- Property Management Company
KB Commercial Real Estate Group, Inc.
1401 Brickell Avenue, Suite 350,
Miami, FL 33131
Attn: Michael Katz or Bill Biondi
Telephone: (305) 358-1401
Fax No. : (305) 358-1093

Notice shall be deemed to have been given upon receipt or upon refusal of a
party to accept receipt. Any party may change its address for notices by
delivering notice in any of the manners set forth above to the other party.

11. ORDINANCES AND REGULATIONS

Tenant hereby covenants and agrees to comply with all the rules, ordinances
and regulations of the city, county or state having jurisdiction over the
Premises, and with all ordinances and regulations of governmental authorities
wherein the Premises are located, and all applicable Federal rules, ordinances
and regulations, including all requirements that are set forth by the Americans
with Disabilities Act ("ADA"), at Tenant's sole cost and expense, but only
insofar as any of such rules, ordinances and regulations pertain to the manner
in which Tenant shall use the Premises. The obligation to comply in every other
case, and also all cases where such rules, regulations and ordinances including
all requirements set forth by the ADA require repairs, alterations, changes or
additions to the Building or Building equipment, or any part thereof, are
expressly assumed by Landlord, and Landlord covenants and agrees promptly and
duly to comply with all such rules, regulations and ordinances with which Tenant
has not herein expressly agreed to comply. Landlord represents that to the best
of Landlord's present knowledge, the Property, the Building and the Premises are
in compliance with all local, state and federal laws and regulations, except
that the Building is not in full compliance with the ADA. Landlord represents
that to the best of Landlord's present knowledge, no officer or director of
Landlord has received any notice of any violation of the ADA by the Property,
the Building or the Premises, except as set forth in a certain accessibility
conformance audit dated July 30, 1993, prepared by James Deen, AIA, a copy of
which audit has been provided to Tenant.

12. SIGNS

During the initial Term or any renewal Term of this Lease, as long as the
Premises leased hereunder contain no less than 50,000 rentable square feet,
Tenant shall have the right to the maximum amount of roof top exterior building
signage that is permitted or rights which may be obtained pursuant to applicable
governmental ordinances as is requested by Tenant and at Tenant's sole cost and
expense. Tenant shall be entitled to all signage rights previously held by

<PAGE>

Blue Cross Blue Shield. Tenant at its sole cost and expense and as is requested
by Tenant shall have prominent signage in the elevator lobby of each of its
designated floors, at the individual entrances to each of Tenant's individual
departments and business units, as well as prominent signage in the elevator
lobby area of the first floor. Landlord reserves the right to place a monument
sign in the exterior plaza area of the Building at Landlord's sole discretion.
All signage shall be subject to Landlord's written approval, which approval
shall not be unreasonably withheld. At Tenant's option, Tenant may use a
portion of the Tenant Improvement Allowance to pay for signage and installation
of signage, by providing written notice thereof to Landlord.

13. SERVICES

(a) Landlord covenants and agrees to furnish the Premises with:

(i) HVAC service from 7:00 AM to 7:00 PM Monday through Friday and
from 8:00 AM to 1:00 PM on Saturday, suitable for the intended use as general
office space, and heating and air conditioning for the comfortable use and
occupancy of the Premises;

(ii) Electric service 24 hours per day, 7 days per week, to be
provided by Florida Power and Light Company;

(iii) Janitorial service on weekdays, at a level deemed to be normal
and usual in a first-class office building, except that shampooing and
replacement of carpet as required by Tenant shall be at Tenant's expense. The
cleaning specifications are set forth on EXHIBIT E attached hereto;

(iv) Trash removal from the Premises;

(v) Furnishing, supplying and maintaining Building common areas
and rest room facilities, including water and sewage disposal, in the Building
in which the Premises are located;

(vi) Elevator service, 24 hours per day, 7 days per week; and

(vii) Security services to be provided through a third party
contract, at a level commensurate with other first class office buildings in the
Miami Airport/West Dade office market, but subject to Landlord's obligation to
minimize Operating Expenses.

All of the foregoing services shall be at Landlord's expense, unless
otherwise agreed to in this Lease (including without limitation, Tenant's
obligation to pay its Pro Rata Share of increases in Operating Expenses, but
subject to Tenant's ability as provided in Paragraph 36(b) hereof to pay for
certain Operating Expenses on a direct basis).

The foregoing services shall be provided as long as Tenant is not in
default under the terms of this Lease beyond any applicable cure or grace
periods provided herein, and shall be provided subject to interruption by
strikes, lockouts, labor controversies, inability to obtain fuel or power,
accidents, breakdowns, catastrophes, national or local emergencies, actions or

<PAGE>

requirements by any governmental agency or official (unless resulting from
Landlord's negligence or willful misconduct, or Landlord's failure to maintain
the Building in compliance with applicable codes or ordinances), acts of God and
conditions and causes beyond the control of Landlord, and upon such happening,
no claim for damages or abatement of rent for failure to furnish any such
services shall be made by Tenant or allowed by Landlord nor shall any such
happening be construed as a constructive eviction of Tenant. The foregoing
events are referred to herein as "Force Majeure" events.

Notwithstanding the foregoing, if "critical services", which shall include
the provision of HVAC service, electricity, water and sewer service, and
elevator service, are interrupted by a Force Majeure event and not restored
within one hundred fifty (150) days of such interruption, Tenant may, at its
option, cancel this Lease in its entirety by written notice to Landlord, and
neither Tenant nor Landlord shall have any further obligation to each other for
any matters arising on or after the date of termination. Landlord agrees to use
its best efforts to effect a restoration of "critical services" as soon as
possible. If Landlord's insurance coverage required to be carried pursuant to
this Lease includes rent interruption insurance, and provided that a failure to
provide critical services to Tenant as a result of a Force Majeure event is an
insurable event under such insurance coverage, then Rent shall be equitably
abated during such period as critical services have been interrupted by a Force
Majeure event. If such insurance coverage does not provide that the
interruption of critical services is an insurable event, then Rent shall not be
abated.

If any critical services are interrupted due to matters within the
reasonable control of Landlord, and Tenant has provided written notice of such
interruption to Landlord, Landlord shall take such actions as are necessary to
restore the critical services as promptly as possible. If the critical services
have not been restored within ten (10) days of their interruption, Tenant shall
be entitled to an equitable abatement of Rent for the period during which the
critical services have been interrupted. In addition, if the critical services
have not been restored within ten (10) days of their interruption, Landlord
shall provide written notice to Tenant within such ten (10) day period of the
steps Landlord proposes to take in order to restore the critical services, and
the time which Landlord estimates will be necessary in order to complete the
restoration of the critical services. Landlord agrees to use its best efforts
to effect a restoration of "critical services" as soon as possible. If Landlord
fails to restore the critical services by the latter of thirty (30) days after
the initial interruption of critical services, or the time period which Landlord
has estimated is reasonably necessary in order to restore the critical services
(but not longer than sixty (60) days after the initial interruption of critical
services), Tenant may, at its option, terminate this Lease by written notice to
Landlord, and neither party shall thereafter have any further obligation under
this Lease for any events arising on or after such termination date.

(b) An additional supplemental air conditioning unit of approximately two
(2) tons, intended for use with respect to Tenant's computer room and another
designated room, have been installed at the Premises. Tenant may continue to
utilize such supplemental unit, at Tenant's sole cost and expense. In addition,
Tenant shall be allowed to install, at Tenant's cost, an additional supplemental
air conditioning unit or units. Any and all additional costs for said units
will be paid for by Tenant, and Tenant may utilize such units at Tenant's sole
cost and expense. Tenant shall submit plans and specifications for any
additional units to Landlord for Landlord's approval, which approval shall not
be unreasonably withheld or delayed.

<PAGE>

Additional after hours HVAC shall be provided to Tenant at a rate that is
based upon Landlord's present hourly charge of $25.00 per hour per floor, which
charge is subject to change if Florida Power and Light Company changes its rates
for the electricity consumed by the HVAC operation. In the event one or more of
the tenants in the Building are receiving after hours HVAC at the same time as
Tenant, Landlord shall pro-rate Tenant's cost of said HVAC, in the event that
Tenant's costs are redundant with that of another Tenant.

Prior to execution of this Lease Landlord provided Tenant with the
electrical specifications of the Building. Tenant acknowledges that the
Building can provide Tenant with the electrical service to accommodate normal
office use for Tenant's use. Prior to the Commencement Date, Landlord shall
provide Tenant with specifications regarding the Building's HVAC system, and
Tenant will satisfy itself that the Building can achieve the appropriate indoor
temperature reading required by Tenant. Landlord shall guarantee that
throughout the Term and any extension or renewal that the fresh air norm
established in ASHRAE standard 62-1989 will be maintained.

If Tenant shall require electrical current or install electrical equipment
including but not limited to electrical heating, refrigeration equipment
(excluding a standard refrigerator in the employee lounge), electronic data
processing machines, punch card machines, or machines or equipment using current
which will in any way increase the amount of the electricity usually furnished
for use in general office space, Tenant will obtain prior written approval from
Landlord which consent shall not be unreasonably withheld or delayed, and Tenant
shall pay periodically for the additional direct expense involved.

(c) Landlord will maintain in good repair and working order and make all
repairs, replacements and restorations to the Building in all parts of the
Building which are required in the normal maintenance, operation and use of the
Building, including without limitation, structural elements, mechanical,
plumbing and electrical systems, walkways, paths, landscaping, exterior walls
and roof, and interior walls, floors and ceilings (excluding all of the
Premises).

14. TENANT IMPROVEMENTS

(a) Tenant, by occupancy hereunder, accepts the Premises as being in good
repair and condition. Tenant shall maintain the Premises and every part thereof
in good repair and condition, damages by causes beyond the control of Tenant,
reasonable use, ordinary wear and tear excepted. Tenant shall not make or
suffer to be made any alterations, additions or improvements to or of the
Premises or any part thereof without prior written consent of Landlord, which
consent Landlord covenants and agrees shall not be unreasonably withheld. If
Landlord requires that any alteration made by Tenant is to be removed from the
Premises at the Tenant's cost upon expiration or other termination of this
Lease, or any renewal thereof, Landlord must notify Tenant accordingly when it
provides Tenant its consent to such alteration. In the event Landlord consents
to the proposed alterations, additions, or improvements, any such alterations,
additions or improvements shall be made at such times and in such manner as not
to unreasonably interfere with the occupation, use and enjoyment of the
remainder of the Building by the other tenants thereof. Landlord may require
Tenant to use contractors reasonably acceptable to Landlord. Tenant shall
reimburse Landlord for all outside third party expenses (such as expenses of
outside

<PAGE>

architects or engineers) incurred by Landlord in reviewing any request for
alterations. All additions, fixtures, alterations or other improvements made by
Tenant which Landlord has not required Tenant to remove upon the expiration or
termination of this Lease shall be and remain a part of the Premises at the
expiration or termination of this Lease. Notwithstanding the foregoing, Tenant
shall be allowed to return the Premises to Landlord upon termination of this
Lease, with all improvements made during Tenant's initial fit out of the
Premises, except for any cafeteria proposed to be built on the fifth floor.

(b) Notwithstanding the foregoing, Tenant shall be permitted to renovate
the entire first, fifth, sixth and seventh floor spaces. Landlord shall provide
Tenant with a Tenant improvement allowance equal to $15.00 per rentable square
foot for the entire Premises (the "Tenant Improvement Allowance"). At Tenant's
option, the Tenant Improvement Allowance may be used for the following purposes:

(i) Payment of any leasing or brokerage commission payable by
Tenant in connection with this Lease;

(ii) Payment of the amount of $37,015.54 owed by the Subtenant to
Landlord;

(iii) For payment of any tenant improvements made to any portion of
the Premises pursuant to plans and specifications reviewed and approved by
Landlord as set forth in this Lease;

(iv) For payment of expenses of signage and installation of
signage; and

(v) For payment of Rent hereunder during the first twelve (12)
months of the Term.

(c) Payments from the Tenant Improvement Allowance will be made by
Landlord to Tenant on a monthly basis. Leasing or brokerage commissions payable
by Tenant as set forth in subparagraph (b)(i) above shall be paid to Tenant or
at Tenant's direction within five (5) days after Tenant has delivered an
applicable invoice or invoices to Landlord. With regard to payment for expenses
incurred by Tenant as set forth in subparagraphs (b)(iii) and (iv) above,
Landlord shall fund any such costs included within Tenant's draw request,
accompanied by copies of paid invoices, submitted by the 25th day of the month
by the 10th day of the following month. The expenses to be paid by Tenant as
set forth in subparagraph (b)(ii) above shall be credited against the Tenant
Improvement Allowance contemporaneously with the Commencement Date for the Phase
I Premises.

(d) A running account of disbursements of the Tenant Improvement Allowance
shall be maintained from the execution of this Lease. To the extent that in any
month during the first year of the Term, the total amount disbursed by Landlord
to Tenant under the Tenant Improvement Allowance from the date of this Lease is
less than the total amount of Rent paid by Tenant to Landlord from the date
hereof, the Tenant shall be entitled pursuant to subparagraph (b)(v) above, to
have the next monthly disbursement of the Tenant Improvement Allowance applied
against the greater of (i) such month's Rent payment or (ii) any other payments
which are

<PAGE>

authorized to be paid out of the Tenant Improvement Allowance as set forth in
subparagraph (b) above.

(e) Tenant shall submit its plans for renovation of the Premises to
Landlord for Landlord's approval, which approval shall not be unreasonably
withheld or delayed. Landlord shall approve or disapprove Tenant's renovation
plans within ten (10) business days from Landlord's receipt of such plans.
Landlord may require that Tenant use contractors reasonably acceptable to
Landlord. All work performed within the Premises by Tenant shall be performed in
a good and workmanlike manner, and completed free of any mechanics' or
materialmen's liens. All work shall also be completed in compliance with all
applicable governmental requirements. Landlord will provide all reasonable
services, including use of elevators, air conditioning during normal working
hours, electricity and delivery docks for Tenant's renovation. Tenant shall be
permitted to purchase Landlord's work letter materials or stock, if any, at
Landlord's cost. Landlord will provide at its sole cost and expense copies of
mechanical, electrical and plumbing plans available from Landlord's files for
the Premises.

(f) Tenant shall have the right to construct a dining facility on the
patio area adjacent to the seventh floor executive offices, subject to approval
of the plans and specifications by Landlord, which approval shall not be
unreasonably withheld or delayed. Landlord shall approve or disapprove Tenant's
plans for construction of the dining facility within ten (10) business days of
receipt of such plans. The improvements, if elected by Tenant, are referred to
herein as the "Dining Facility". Expenses for constructing the Dining Facility
may be paid out of the Tenant Improvement Allowance. Otherwise, the cost of the
Dining Facility shall be paid by Tenant.

(g) Tenant shall have the right to bid the renovation of the Premises and
the Dining Facility, select the contractor (subject to Landlord's reasonable
approval) and supervise construction. All contractors and sub-contractors doing
work within the Premises, must be licensed to do business in Dade County and
must provide certificates of insurance satisfactory to Landlord, which approval
will not be unreasonably withheld. Landlord shall not receive any construction
or administration fees of any kind during planning or renovation. In addition,
Tenant shall provide Landlord with evidence of builder's risk insurance
reasonably satisfactory to Landlord naming Landlord as additional insured.

15. QUIET ENJOYMENT

Landlord covenants and agrees that Tenant, on paying said monthly rent and
performing the covenants herein, shall and may peaceably and quietly hold and
enjoy the said Premises, free of claims of prior rights by parties claiming by
or through Landlord.

16. LANDLORD'S RIGHT TO INSPECT AND DISPLAY

Landlord shall have the right, at reasonable times during the term of this
Lease, to enter the Premises for the purpose of examining or inspecting same
and of making such repairs or alterations or other modifications as Landlord
shall deem necessary. Landlord shall also have the right to enter the Premises
at all reasonable hours for the purpose of displaying said Premises to
prospective Tenants within 180 days prior to the termination of this Lease.
Except in cases of

<PAGE>

emergency, Landlord will limit its right to inspect to Tenant's normal business
hours. Landlord will provide Tenant with reasonable prior notice of its intent
to enter the Premises, except in the event of an emergency, in which case no
notice shall be required. Landlord will use all reasonable efforts to minimize
any interference with Tenant's business operations in the Premises in exercising
Landlord's right of entry.

17. DESTRUCTION OF PREMISES

(a) If (i) the Premises are totally destroyed by fire or other casualty,
(ii) fifty percent (50%) or more of the Building is destroyed by fire or other
casualty, or (iii) if Tenant's access to the Premises is destroyed by fire or
other casualty to the extent that such destruction would constitute an insurable
event under Landlord's rent loss insurance coverage, and in the case of (iii)
such damage cannot be repaired so as to permit Tenant's access to the Premises
within one hundred fifty (150) days after the fire or other casualty, Tenant
shall have the option of terminating this Lease upon giving written notice at
any time within sixty (60) days from the date of such destruction, and if the
Lease be so terminated, all Rent shall cease as of the date of such destruction
and any prepaid Rent shall be refunded by Landlord. The events set forth in
(i), (ii) and (iii) above are referred to herein as a "Major Casualty". If
Tenant does not elect to terminate this Lease upon the occurrence of a Major
Casualty, Landlord shall use due diligence to repair or restore the Building and
the Premises to a condition and quality substantially similar to that
immediately prior to such Major Casualty. If such restoration, rebuilding or
repair is not accomplished within 150 days after Tenant's notice to Landlord of
Tenant's election not to cancel this Lease, and such failure does not result
from causes beyond the control of Landlord, Tenant shall have the right to
terminate this Lease by written notice to Landlord within thirty (30) days after
expiration of said 150 days. All Rent and other payments due from Tenant to
Landlord hereunder shall be equitably abated from the date of the Major Casualty
through the date on which Tenant is given possession of the restored Premises,
with access to the Premises. Notwithstanding the foregoing, Landlord shall be
entitled to terminate this Lease in the event of a Major Casualty if the Major
Casualty occurs within the last twelve (12) months of the then current Term of
the Lease. If the Major Casualty occurs within the last twelve (12) months of
the initial Term, and Tenant has not elected to terminate this Lease, Landlord
shall not be entitled to terminate this Lease if Tenant exercises its option to
renew the Lease pursuant to the terms of this Lease. Such notice must be given
by Tenant within sixty (60) days after receipt by Tenant of Landlord's notice
advising Tenant that Landlord intends to terminate the Lease. If Tenant
exercises its option to extend the Term pursuant to the terms of this Lease, the
initial Term of the Lease shall be extended, on a day-to-day basis, for the
period of time from the date of the Major Casualty through the date of
substantial completion of the restoration of the Premises and such portions of
the Building as are necessary to provide access to the Premises and the services
required to be provided by Landlord hereunder, and the extension Term shall be a
full five (5) year Term beginning on the expiration of the initial Term. If
Landlord exercises its option to terminate this Lease, it may only do so if it
terminates every other lease in the Building, similarly affected, to the extent
that Landlord has the right to terminate such other leases. Upon termination of
this Lease by either Landlord or Tenant, all claims that either Landlord or
Tenant may have against the other shall survive termination of the Lease.

<PAGE>

(b) Any damage or destruction by fire or other casualty to the Premises,
the Building or Tenant's access to the Premises which does not constitute a
Major Casualty shall be referred to herein as a "Minor Casualty". Landlord
agrees, at Landlord's sole cost and expense, to restore the Premises and the
Building after Minor Casualty to a kind and quality substantially similar to
that immediately prior to such Minor Casualty, and to use due diligence in
effecting such restoration as soon as possible. Landlord will provide written
notice to Tenant within sixty (60) days after the occurrence of the Minor
Casualty of the estimated time required for the repair or restoration of the
Premises or portion of the Building necessary for Tenant's occupancy. If the
estimated time is in excess of one hundred fifty (150) days after the Minor
Casualty (a "Category 2 Minor Casualty"), Tenant may elect, within sixty (60)
days after Landlord's notice of estimated time required to repair or restore to
terminate this Lease by written notice to Landlord, which termination shall be
effective on the date of Tenant's notice to Landlord of its intention to
terminate this Lease. All Rent and other payments by Tenant to Landlord under
this Lease shall be equitably abated during the period of any Minor Casualty.
Said restoration shall be commenced within a reasonable time and completed
without delay on the part of Landlord and in any event shall be accomplished for
Minor Casualties that are not Category 2 Minor Casualties (a "Category I Minor
Casualty") within 150 days from the date of the fire or other casualty, and for
Category 2 Minor Casualties, within the time frame set forth in Landlord's
notice to Tenant of the estimated repair time (subject to delays with respect to
Category II Minor Casualties due to causes beyond the control of Landlord). If
Landlord does not complete such restoration, rebuilding or repair within such
150 days or time period set forth in Landlord's notice, as applicable, then
Tenant may elect, within sixty (60) days after the expiration of such 150 days
or time period set forth in Landlord's notice, as applicable, to terminate this
Lease by written notice to Landlord, which termination shall be effective on the
date of Tenant's notice to Landlord of its intention to terminate this Lease.
In such case, all Rent paid in advance shall be prorated as of the date of
damage or destruction and all Rent thereafter accruing shall be equitably and
proportionately adjusted according to the nature and extent of the destruction
or damage, pending completion of rebuilding, restoration or repair, except that
in the event the destruction or damage is so extensive as to make it unfeasible
for Tenant to conduct its business on the Premises, the Rent shall be completely
abated until the Premises are restored by Landlord or until Tenant resumes use
and occupancy of the Premises, whichever shall first occur. Landlord shall not
be liable for any inconvenience or interruption of business of Tenant occasioned
by fire or other casualty.

(c) Landlord shall not be liable for any casualty damage to any personal
property which may now or hereafter be located on the Premises, and Landlord
shall not be required to carry fire, casualty or extended damage insurance on
the personal property of Tenant or any personal property which may now or
hereafter be placed in the Premises.

(d) For purposes hereof, a "casualty" shall be deemed to include, without
limitation, damage resulting from bursting water pipes, actions of Landlord
and/or its employees, agents and contractors and any other damage whether caused
by acts of God or otherwise.

18. CONDEMNATION

If, during the term of this Lease or any renewal thereof, (i) the whole of
the Premises, or such portion thereof as will make the Premises unusable for the
purposes set forth in this Lease, or (ii) twenty percent (20%) of the total
parking spaces located on the Property (unless substitute

<PAGE>

parking either on site, contiguous to the Property, or within a reasonable
walking distance of the Property, is provided in substitution for the lost
visitors' parking spaces and parking spaces lost in the critical parking areas
outlined in red on the site plan attached hereto as Exhibit A-2 are not
repositioned by Landlord in the area outlined in green on such site plan), be
condemned by public authority for public use, or conveyed by deed in lieu
thereof, then, in either event, this Lease shall terminate as of the date of the
vesting of title in such public authority, or when possession is given to such
public authority, whichever event last occurs. Upon such occurrence Rent shall
be prorated as of such date and any prepaid Rent shall be returned to Tenant.
Landlord shall be entitled to Landlord's award for such taking, and Tenant shall
be entitled to pursue a separate award for its damages. If a portion of the
Premises is taken or condemned by public authority for public use so as not to
make the remaining portion of the Premises unusable for the purposes set forth
in this Lease, this Lease will not be terminated but shall continue. In such
case, Rent shall be equitably and fairly reduced or abated for the remainder of
the Term in proportion to the amount of the Premises taken. In no event shall
Landlord be liable to Tenant for any business interruption, diminution in use or
for the value of any unexpired Term of this Lease. Nothing contained herein
shall prohibit Tenant from applying in Tenant's name for any entitlement or
separate award from the condemning authority.

19. ASSIGNMENT AND SUBLETTING

(a) Tenant shall not, without the prior written consent of Landlord, which
consent shall not be unreasonably withheld, as further described below: (i)
assign, mortgage, pledge, hypothecate, encumber, or permit any lien to attach
to, or otherwise transfer, this Lease or any interest hereunder, by operation of
law or otherwise, (ii) sublet the Premises or any part thereof, or (iii) permit
the use of the Premises by any Persons other than Tenant, its employees and its
invitees (all of the foregoing are hereinafter sometimes referred to
collectively as "Transfers" and any Person to whom any Transfer is made or
sought to be made is hereinafter sometimes referred to as a "Transferee"). If
Tenant shall desire Landlord's consent to any Transfer, Tenant shall notify
Landlord in writing, which notice shall include: (a) the proposed effective date
(which shall not be less than thirty (30) nor more than 180 days after Tenant's
notice), (b) the portion of the Premises to be Transferred (herein called the
"Subject Space"), (c) the terms of the proposed Transfer and the consideration
therefor, the name and address of the proposed Transferee, and a copy of all
documentation pertaining to the proposed Transfer, and (d) current financial
statements of the proposed Transferee certified by an officer, partner or owner
thereof, and any other information to enable Landlord to determine the financial
responsibility, character, and reputation of the proposed Transferee, nature of
such Transferee's business and proposed use of the Subject Space, and such other
information as Landlord may reasonably require. Tenant's request to Landlord's
consent to a proposed assignment or sublease will be conclusively presumed
denied if Landlord fails to respond within ten (10) days after Landlord's
receipt of Tenant's proposal. Any Transfer made without complying with this
paragraph shall, at Landlord's option, be null, void and of no effect, or shall
constitute a Default under this Lease. Whether or not Landlord shall grant
consent, Tenant shall pay $300.00 towards Landlord's review and processing
expenses, as well as any reasonable legal fees incurred by Landlord, within
thirty (30) days after written request by Landlord. Tenant shall remain liable
to Landlord for all of its obligations hereunder, notwithstanding Landlord's
consent to any assignment of this Lease or subletting of

<PAGE>

any portion of the Premises, except to the extent that Landlord expressly agrees
in writing that Tenant shall be released from its obligations hereunder.

(b) Landlord will not unreasonably withhold its consent to any proposed
Transfer of the Subject Space to the Transferee on the terms specified in
Tenant's notice. The parties hereby agree that it shall be reasonable under
this Lease and under any applicable Law for Landlord to withhold consent to any
proposed Transfer where one or more of the following applies (without limitation
as to other reasonable grounds for withholding consent): (i) the Transferee is
of a character or reputation or engaged in a business which is not consistent
with the quality of the Property, (ii) the Transferee intends to use the Subject
Space for purposes which are not permitted under this Lease, (iii) the Subject
Space will not be in compliance with all applicable governmental statutes, rules
and regulations, (iv) the Transferee is a government (or agency or
instrumentality thereof) but excluding Tenant's regulatory agency; (v) the
Transferee is a then current occupant of the Building, unless Landlord has first
submitted a proposal to such Transferee for lease of other available space in
the Building, and such Transferee has not accepted Landlord's proposal within
thirty (30) days; and or (vi) Tenant has committed and failed to cure a default
within any applicable grace or cure period.

(c) Notwithstanding the foregoing, Tenant may, upon written notice to
Landlord, without the need for prior approval assign or sublet the Premises in
whole or in part to any affiliate or subsidiary of Tenant, or to any business
organization of which Tenant shall become a part by merger, purchase, or
operation of law.

(d) Landlord shall be entitled to receive fifty percent (50%) of all of
the "Net Profit" (net profit shall be defined as profit minus all reasonable
tenant marketing, legal and construction and all other expenses related to the
sublet of the Premises or any portion thereof) received by Tenant as a result of
the assignment of this Lease or the subletting of all or any portion of the
Premises. No assignment of this Lease or subletting of any portion of the
Premises shall release Tenant from any of its obligations hereunder, unless the
proposed subtenant has been expressly approved by Landlord, and Tenant is
released by an express, written release from Landlord.

20. HOLDOVER

(a) If Tenant, any assignee or subtenant shall continue to occupy the
Premises after the termination of this Lease without prior written consent of
Landlord, such tenancy shall be a tenancy at sufferance. During such holdover
period, the rent due will be double the amount of rent due for the last month of
the lease Term for each month or portion thereof that Tenant, any assignee or
subtenant holds over, plus all damages that Landlord may suffer on account of
the failure to so surrender to Landlord possession of the Premises, and Tenant
will indemnify, defend and save Landlord harmless from and against all claims
made by any succeeding tenant of the Premises against Landlord on account of
delay of Landlord in delivering possession of the Premises to said succeeding
tenant to the extent such delay is occasioned by failure of Tenant, its assignee
or subtenant to surrender the Premises.

(b) Notwithstanding the foregoing, Tenant shall have the unconditional
right to holdover beyond the expiration of the Term or any extension or renewal
for a period of up to six

<PAGE>

months, provided that Tenant is not then in default beyond any applicable grace
or cure period hereunder. The monthly rental to be paid during the holdover,
shall be the rental paid in the last month of the expired Term or renewal or
extension Term. Tenant may vacate the Premises by giving Landlord sixty (60)
day written notice within the holdover period. If Tenant, any assignee or
subtenant shall continue to occupy the Premises after the end of such six month
holdover period, the provisions in subparagraph (a) of this Paragraph 20 shall
apply from that point forward.

(c) No receipt of money by Landlord from Tenant after termination of this
Lease (and the holdover period described in subparagraph (b) above) or the
service of any notice of commencement of any suit or final judgment for
possession shall reinstate, continue or extend the Term of this Lease or affect
any such notice, demand, suit or judgment, or otherwise limit or affect any
other remedies available to Landlord hereunder. No act by Landlord or its
agents during the Term of this Lease shall be deemed an acceptance of a
surrender of the Premises unless it is made in writing by a duly authorized
officer or agent of Landlord.

(d) Tenant agrees to surrender to Landlord, at the end of the Term of this
Lease and/or upon any cancellation of this Lease, subject to the holdover
provisions stated above, the Premises in as good condition as the Premises were
at the Commencement Date, ordinary wear and tear not caused by Tenant's
negligence excepted. Tenant shall be allowed to return the Premises, together
with all improvements that the Lease permits Tenant to make, provided that
Landlord has not required Tenant to remove such alterations or improvements at
the time of giving its consent to the alterations or improvements, as more
particularly set forth in Paragraph 14(a) herein.

21. INDEMNIFICATION

(a) Landlord shall not be liable for any damage or injury to any person or
property whether it be the person or property of Tenant, Tenant's employees,
agents, guests, invitees or otherwise by reason of Tenant's occupancy of the
Premises or because of fire, flood, windstorm, acts of God or for any other
reason, unless caused by the fault or negligence of Landlord or its directors,
officers, shareholders, employees, agents or contractors. Tenant agrees to
indemnify, defend and save harmless Landlord and its officers, directors,
shareholders, employees, advisors and agents (the "Indemnitees") from and
against any and all loss, damage, claim, demand, liability or expense by reason
of damage to person or property which may arise or be claimed to have arisen as
a result of the occupancy or use of the Premises by Tenant or by reason thereof
or in connection therewith, or in any way arising on account of any injury or
damage caused to any person or property on or in the Premises, providing,
however, that Tenant shall not indemnify as to the loss or damage due to fault
or negligence of any Indemnitee. If Tenant's use of the Premises causes
Landlord's insurance premium for the Building to be increased, Tenant agrees to
pay, as additional rent plus any applicable sales or use taxes, the entire cost
of such increase.

(b) Landlord agrees to indemnify, defend and save harmless Tenant and its
officers, directors, shareholders, employees, advisors and agents (the "Tenant
Indemnitees"), but only to the extent permitted by Virginia law, from and
against any and all loss, damage, claim, demand, liability or expense by reason
of damage to person or property which may arise or be claimed to

<PAGE>

have arisen as a result of Landlord's failure to perform its obligations
hereunder with respect to the Property, including the Building and the Premises,
providing, however, that Landlord shall not indemnify as to any loss or damage
due to the fault or negligence of any Tenant Indemnitee. If at any time in the
future, Landlord is permitted by law to indemnify third parties, or if Landlord
shall ever be a party unrelated to the Virginia Retirement System, the
limitation on Landlord's indemnification of the Tenant Indemnitees shall no
longer be applicable.

22. CONSTRUCTION OF LANGUAGE

The terms "lease", "lease agreement" or "agreement" shall be inclusive of
each other, also to include renewals, extensions or modifications of the Lease.
The use of the words "term of this Lease" shall include renewals extensions or
modifications of this Lease where applicable. Words of any gender used in this
Lease shall be held to include any other gender, and words in the singular shall
be held to include the plural and the plural to include the singular, when the
sense requires. The paragraph headings and titles are not a part of this Lease
and shall have no effect upon the construction or interpretation of any part
hereof.

23. DEFAULT

(a) In the event that: (seq level4 \*romani) Tenant shall default in the
payment of Rent or any other sums payable by Tenant herein, and such default
shall continue for a period of ten (10) days after receipt of Landlord's written
notice thereof to Tenant; (seq level4 \*romanii) Tenant shall default in the
performance of any other covenants or agreements to be performed by Tenant under
this Lease, and such default shall continue for thirty (30) days after receipt
of written notice from Landlord, provided, however, that if the default is not
susceptible to cure by Tenant within such thirty (30) day period, and further
provided that if Tenant begins such cure, provides Landlord notice in writing of
the steps it is taking to attempt to cure and the estimated time required for
completion of the cure, and Tenant continuously and diligently prosecutes such
cure to completion, it shall not constitute a Default hereunder; (seq level4
\*romaniii) Tenant shall become bankrupt or insolvent or unable to pay its debts
as they become due, or files any debtor proceedings, or if Tenant shall take or
have taken against it in any court pursuant to any statute either of the United
States or of any state, a petition in bankruptcy or insolvency or for
reorganization or for the appointment of a receiver for Tenant's property,
unless such petition, in the case of an involuntary proceeding, is dismissed
within forty-five (45) days, or if Tenant makes an assignment for the benefit of
creditors, or petitions for or enters into an arrangement for the benefit of
creditors, any of the foregoing events shall be deemed a "Default" hereunder,
and Landlord may, in addition to any other remedies contained in this Lease, and
any other remedies as may be permitted by law, exercise the following rights and
remedies: (a) terminate this Lease and/or Tenant's right to possession
hereunder by notice in writing to Tenant; and/or (b) enforce Landlord's rights
under this Lease by bringing suit in law and/or in equity. Upon any termination
of this Lease, whether by lapse of time or otherwise, Tenant shall immediately
surrender possession and vacate the Premises immediately, and deliver possession
thereof to Landlord. Tenant hereby grants to Landlord full and free license to
enter into and upon the Premises in such event with process of law and to expel
or remove Tenant and any others who may be occupying or within the Premises, and
to remove all property therefrom with process of law, without being deemed in
any manner guilty of trespass, eviction or forcible

<PAGE>

entry or detainer, and without relinquishing Landlord's rights to Rent or any
other right given the Landlord hereunder or by operation of law.

(b) If Tenant abandons the Premises or otherwise entitles Landlord to
elect that Tenant has abandoned the Premises and Tenant fails to pay Rent when
due, subject to the notice and cure provisions herein, and Landlord elects to
terminate Tenant's right to possession only, without terminating the Lease,
Landlord may, at Landlord's option, with process of law, enter into the
Premises, remove Tenant's evidence of tenancy, and take and hold possession of
the Premises without such entry and possession terminating the Lease or
releasing Tenant, in whole or in part, from Tenant's obligation to pay the Rent
hereunder for the full Term. Upon and after entry into possession of the
Premises without termination of the Lease, Landlord shall use reasonable efforts
to relet the Premises or any part thereof, as the agent of Tenant, to any
person, firm or corporation other than Tenant for such Rent, for such time and
upon such terms as Landlord in Landlord's sole discretion shall determine. In
any such case, Landlord may make repairs, alterations and additions in or to the
Premises and redecorate the same to the extent deemed by Landlord necessary or
desirable, and Tenant shall, upon demand, pay the cost thereof, together with
Landlord's expense of the reletting. If the consideration collected by Landlord
upon any such reletting for Tenant's account is not sufficient to pay monthly
the full amount of Rent reserved in the Lease, together with the costs of
repairs, alterations, additions, redecorating and Landlord's expenses, Tenant
shall pay to Landlord the amount of each monthly deficiency upon demand.

(c) Subject to due process of law, Landlord may enter upon the Premises in
the event of Default by Tenant, to remove any and all furniture and personal
property situated upon the Premises. Any and all property which may be removed
from the Premises by Landlord pursuant to the authority of this Lease or of law,
to which Tenant is or may be entitled, may be handled, removed or stored by
Landlord at the risk, cost and expense of Tenant, and Landlord shall in no event
be responsible for the value, preservation or safekeeping thereof. Tenant shall
pay the Landlord, upon demand, all expenses incurred in such removal and all
storage charges against such property so long as the same shall be in Landlord's
possession or under Landlord's control. Landlord may place such property in
storage for the account of, and at the expense of Tenant, and if Tenant fails to
pay the cost of storing such property after it has been stored for a period of
ninety (90) days or more, Landlord may sell any or all of such property in such
manner and at such times and places as Landlord in its sole discretion may deem
proper, upon reasonable prior written notice to Tenant, for the payment of any
part of such charges for the removal of any such property, and shall apply the
proceeds thereof, first, to such sale, including reasonable attorneys' fees;
second, to the payment of the costs and charges of storing such property; third,
to the payment of any other sums of money which may then or thereafter be due to
Landlord from Tenant under this Lease; and fourth, the balance, if any, to
Tenant. The removal and storage of Tenant's property as above provided shall
not constitute a waiver of the Landlord's lien thereon.

(d) If Tenant fails or refuses to comply with and perform any conditions
and covenants of this Lease after the expiration of any applicable grace period,
Landlord may, as Landlord so elects, carry out and perform such conditions and
covenants, at the cost and expense of Tenant, and the said cost and expense
shall be payable upon demand, as additional rent with interest from the date of
expenditure at the Default Rate. This remedy shall be in addition to all other
remedies

<PAGE>

Landlord may have hereunder by reason of breach by Tenant of any of the
covenants and conditions in this Lease.

(e) If Landlord is in default hereunder or fails to make any repairs which
this Lease or any Law requires it to make, Tenant may provide written notice of
such failure to Landlord and to any mortgagee holding a lien on the Property or
the Building, if Landlord has provided written notice to Tenant of the name and
address of any such mortgagee. Tenant shall permit Landlord or such mortgagee
to make any repairs which this Lease or any applicable law requires it to make,
or to cure such default, within thirty (30) days after receipt of the notice
from Tenant, or such lesser time period as is otherwise expressly provided in
this Lease, provided that if no other time period is expressly provided for cure
of Landlord's default, and the default cannot be cured within such thirty (30)
day period, Landlord or its mortgagee shall have such additional time as is
reasonably necessary to cure Landlord's default if the cure is commenced within
the thirty (30) day period and is continuously and promptly continued to
completion. If Landlord and its mortgagee fail to make such repairs or cure
such defaults within the foregoing time periods, Tenant may, but is not required
to, cure such defaults or make such repairs, as the case may be. If Tenant
cures such default or makes such repairs, all amounts paid by Tenant in doing so
and all costs and expenses incurred by Tenant in connection with doing so
(together with interest at the Default Rate) will be payable by Landlord to
Tenant on demand. If Tenant has obtained a final, non-appealable judgment from
a court of competent jurisdiction in favor of Tenant, then the amount of the
judgment plus interest may be offset against Rent by Tenant until such judgment
plus interest is paid in full. Tenant shall provide prompt written notice to
Landlord of Tenant's exercise of its right to offset Rent.

24. SUCCESSORS AND ASSIGNS

This Lease shall bind and inure to the benefit of the successors, assigns,
heirs, executors, administrators and legal representatives of the parties
hereto.

25. NON-WAIVER

Failure of Landlord to declare any Default immediately upon the occurrence
thereof, or delay in taking any action in connection therewith, shall not waive
such Default, but Landlord shall have the right to declare any such Default at
any time and take such action as might be lawful or authorized herein. No
waiver by Landlord of a Default by Tenant shall be implied, and no express
waiver by Landlord shall effect any Default other than the Default specified in
such waiver. No waiver of any term, provision, condition or covenant of this
Lease by Landlord shall be deemed to imply or constitute a further waiver by
Landlord of any other term, provision, condition or covenant of this Lease.

26. RIGHTS RESERVED BY LANDLORD

Except to the extent expressly limited herein, Landlord reserves full
rights to control the Property (which rights may be exercised without subjecting
Landlord to claims for constructive eviction, abatement of Rent, damages or
other claims of any kind), including more particularly, but without limitation,
the following rights:

<PAGE>

(a) To change the name, Doral Corporate Plaza, or street address of the
Property, provided, however, that Tenant shall have the right to preclude
Landlord from naming the Building in such a manner as would have a material
adverse effect on Tenant's use and occupancy of the Premises as provided in this
Lease; install and maintain signs on the exterior and interior of the Property
except as herein provided to the contrary; and have access for Landlord and
other tenants of the Property to any mail chutes located on the Premises
according to the rules of the United States Postal Service.

(b) To enter the Premises at reasonable hours for reasonable purposes,
including inspection and supplying cleaning service or other services to be
provided Tenant hereunder, to show the Premises to current and prospective
mortgage lenders, ground lessors, insurers, and prospective purchasers, Tenants
and brokers, at reasonable business hours. Landlord shall give Tenant
reasonable prior notice of its intent to enter the Premises, except in the event
of an emergency, in which event no prior notice shall be required, and further
provided that no notice shall be required for the daily provision of cleaning
services as set forth in this Lease. Cleaning services shall be provided after
5:00 p.m., eastern time, however, Tenant may request that certain confidential
areas of the Premises be cleaned or inspected during regular business hours,
under the supervision of an employee of Tenant.

(c) To limit or prevent access to the Property, shut down elevator
service, activate elevator emergency controls, or otherwise take such action or
preventative measures deemed necessary by Landlord for the safety of Tenants or
other occupants of the Property or the protection of the Property and other
property located thereon or therein, in case of fire, invasion, insurrection,
riot, civil disorder, public excitement or any other dangerous condition, or
threat thereof.

(d) To decorate and to make alterations, additions and improvements,
structural or otherwise, in or to the Property or any part thereof, and any
adjacent Building, structure, parking facility, land, street or alley (including
without limitation changes and/or reductions in corridors, lobbies, parking
facilities and other public areas and the installation of kiosks, planters,
sculptures, displays, escalators, mezzanines, stairwells, and other structures,
facilities, amenities and features therein, and changes for the purpose of
connection with or entrance into or use of the Property in conjunction with any
adjoining or adjacent building or buildings, now existing or hereafter
constructed). In connection with such matters, or with any other repairs,
maintenance, improvements or alterations, in or about the Property, Landlord may
erect scaffolding and other structures reasonably required, and during such
operations may enter upon the Premises and take into and upon or through the
Premises, all materials required to make such repairs, maintenance, alterations
or improvements, and may close public entry ways, other public areas, restrooms,
stairways or corridors. Landlord will use reasonable efforts to exercise its
right of access at times to cause the least amount of disruption to Tenant's
business, except for access needed for emergency purposes or emergency repairs.
If Tenant requests Landlord to utilize its right of access after hours or on
weekends, and the access is not needed for emergency purposes or emergency
repairs, Landlord will comply with Tenant's request provided that Tenant pays
any overtime pay Landlord incurs as a result of scheduling the right of access
after hours or on weekends. Landlord shall not close off or change the common
area of the Building in such a way as to prohibit Tenant's reasonable access to
the Premises.

<PAGE>

(e) From time to time to make and implement such reasonable rules and
regulations for the protection and welfare of the Building and its tenants and
occupants, as Landlord may deem desirable, and Tenant agrees to abide by all
such rules and regulations provided they are reasonable and uniformly enforced,
including, the rules and regulations set forth on EXHIBIT B attached hereto.
Any modification or addition to the rules and regulations by Landlord shall be:

(i) reasonable and consistent with rules and regulations imposed
in similar properties;

(ii) no more burdensome or costly than the rules and regulations
attached hereto as EXHIBIT B;

(iii) any conflict between such additional rules and regulations and
this Lease shall be governed by the terms of this Lease; and

(iv) uniformly enforced.

27. ASBESTOS AND OTHER HAZARDOUS MATERIALS

(a) Landlord represents and warrants that, to the best of Landlord's
actual knowledge, there is no asbestos or other Hazardous Substances (as defined
in (b) below) on the Premises or in the Building. Landlord shall not generate,
store, manufacture, refine, transport, treat or dispose of on or about the
Building, any Hazardous Substances (except for Hazardous Substances typically
used in operating, cleaning or maintaining business offices, with respect to
which Landlord shall comply with all present or future applicable Federal, state
or local laws, rules or regulations dealing with environmental protection).

(b) Tenant shall not generate, store, manufacture, refine, transport,
treat or dispose of on or about the Building, any Hazardous Substances. As used
herein, Hazardous Substances shall be defined as any "hazardous chemical",
"hazardous substance" or similar term as defined in the Comprehensive
Environmental Responsibility Compensation and Liability Act, as amended (42
U.S.C. 9601 ET SEQ.), any rules or regulations promulgated thereunder, or in any
other present or future applicable Federal, state or local law, rule or
regulation dealing with environmental protection (except for Hazardous
Substances typically used in operating, cleaning or maintaining business
offices, with respect to which Tenant shall comply with all present or future
applicable federal, state or local laws, rules or regulations dealing with
environmental protection). The term "Hazardous Substances" as used herein shall
be deemed to include petroleum products.

(c) Tenant agrees to indemnify, defend and hold Landlord and each
mortgagee of the Premises harmless from and against any and all liabilities,
damages, claims, losses, judgments, causes of action, costs and expenses
(including the reasonable fees and expenses of Landlord's and such mortgagee's
counsel and environmental consultants) which may be incurred by the Landlord or
any mortgagee or threatened against the Landlord or such mortgagee relating to
or arising out of any breach by Tenant of its covenants under this Paragraph
(unless caused by Landlord, its

<PAGE>

employees, agents, contractors or invitees), which indemnification shall survive
the expiration or sooner termination of this Lease.

(d) Landlord agrees to indemnify, defend and hold Tenant harmless from and
against any and all liabilities, damages, claims, losses, judgments, causes of
action, costs and expenses (including the reasonable fees and expenses of
Tenant's counsel and environmental consultants) which may be incurred by the
Tenant or threatened against Tenant relating to or arising out of any
misrepresentation by Landlord under this Paragraph or any breach by Landlord of
its covenants under this paragraph or in the event asbestos or Hazardous
Substances are in the Premises or in the Building (unless caused by Tenant, its
employees, agents, contractors or invitees), but only to the extent permitted by
Virginia law, which indemnification shall survive the expiration or sooner
termination of this Lease. If at any time applicable law permits Tenant to
indemnify third parties, or if Landlord is not related to the Virginia
Retirement System, the limitation on Landlord's indemnity shall no longer apply.

28. ESTOPPEL CERTIFICATE

Tenant shall from time to time, within 10 days of receiving a written
request from Landlord, execute and deliver a written statement to Landlord which
shall certify, among other things, the accuracy of the Lease document,
commencement, termination dates of the Lease, that the Lease is in full force
and effect, whether the Lease has been modified, whether either party is in
default under the Lease, and to other correct terms and facts covered by the
Lease. Failure by Tenant to deliver to Landlord such estoppel certificate
within twenty one (21) days after receipt of a request from Landlord shall
constitute a Default hereunder without any further notice of such Default from
Landlord.

29. CHANGES TO THE BUILDING

Tenant shall not be required to pay for any costs necessary for the
Building to comply with any laws, orders, or regulations which require
structural changes or improvements relating to the structural components of the
Premises or Building or life safety systems installed in the Building. However,
Tenant shall be solely responsible for the costs of its failure to comply with
any laws or regulations in connection with its Tenant improvements and in
connection with Tenant's use of the Premises.

30. LANDLORD'S REPRESENTATION

Landlord covenants and agrees that Landlord is the owner of the Building
and has the right and the authority to enter into this Lease and that, to the
best of Landlord's actual knowledge, as of the date hereof there are not any
known uncorrected violations of Law applicable to the Building or the use
thereof which would interfere with Tenant's use and enjoyment of the Premises
under the terms of this Lease, and that all necessary approvals, certificates,
licenses, allocations and similar matters with respect to the Premises and the
Building and the use of the Property (except those specifically relating to
Tenant's build-out of its Premises or the operation of its business in the
Premises, as to which Landlord offers no representation) have been obtained.
Landlord shall be solely responsible for the cost of Landlord's failure to

<PAGE>

comply with the covenants and agreements contained herein except to the extent
that they are caused by actions of Tenant.

31. INSURANCE

(a) Tenant agrees to maintain in full force and effect at all times during
the Term and any extensions or renewals thereof, at its own expense, for the
protection of Landlord and Tenant, as their interests may appear, policies of
insurance with terms and coverages and carriers reasonably acceptable to
Landlord, issued by insurers authorized to do business in the state in which the
Building is located, which shall afford the following minimum coverages:

(i) Comprehensive general liability insurance, including coverage
for bodily injury and death, property damage and personal injury, in amounts not
less than $5,000,000 combined single limit.

(ii) Fire and extended coverage in amounts sufficient to cover the
full replacement cost of all of Tenant's fixtures, furniture, furnishings, trade
equipment and all other items of Tenant's property on the Premises.

(iii) Workmen's compensation insurance as required by applicable
law.

(iv) During any time period in which Tenant is performing any
construction or renovation work in the Building permitted by this Lease,
builder's risk insurance in amounts reasonably acceptable to Landlord.

Tenant shall deliver to Landlord prior to exercise of any right of access
to the Premises, and thereafter at least thirty (30) days prior to the
expiration thereof, certificates of insurance evidencing the above coverages,
which certificates shall name Tenant, Landlord, Landlord's agents and any
mortgagee whose name has been furnished to Tenant as additional named insureds.
All certificates shall expressly provide that such insurance coverage may not be
changed, cancelled or not renewed without at least thirty (30) days prior
written notice to Landlord, Tenant and all additional named insureds.

(b) In the event Tenant has not delivered to Landlord the certificate or
certificates evidencing such insurance, within the time periods required above,
and after notice to Tenant and expiration of any applicable cure period
(provided that no cure period shall extend beyond the expiration date of such
insurance policy or policies) Landlord may obtain such insurances on behalf of
Tenant. The cost for such policies shall be paid by Tenant to Landlord as
additional rent upon demand plus an administrative charge as determined by
Landlord.

(c) Landlord will maintain at all times during the Term of this Lease (i)
all risk insurance in an amount not less than the actual replacement cost,
exclusive of foundations and excavations, of the Building as calculated annually
according to the applicable insurance policies, and (ii) personal public
liability and property damage occurring in, on or about the Building and the
Property in an amount of at least $3,000,000 per occurrence for personal public
liability

<PAGE>

coverage and $500,000 for property damage, and Tenant will be named as an
additional insured, as its interest may appear, on the liability policy.

32. COVENANTS AGAINST LIENS

Notwithstanding any other provisions of this Lease, Landlord and Tenant
expressly acknowledge and agree that the interest of Landlord in and to the
Building and the real estate on which it is located, or any part thereof,
including without limitation, the Premises, shall NOT be subject to liens for
any work, labor, services performed or materials supplied, or claimed to have
been performed or supplied, or any other lien cognizable under Chapter 713,
Florida Statutes (collectively herein "Liens"), by Tenant, or Tenant's
contractors, subcontractors, laborers and material suppliers supplying labor
and/or material for the Premises (collectively herein "Contractors"). Upon
the execution of this Lease, Tenant acknowledges that Landlord, at Landlord's
sole option and cost, may then or thereafter record among the Public Records
in the county in which the Building is located, this Lease or short form
thereof, or such other memorandum in form and substance satisfactory to
Landlord, in Landlord's sole discretion, for the purpose of insulating the
interest of Landlord from any and all such contractor's liens, without
affecting any provisions of this Lease. Tenant hereby acknowledges that
Landlord shall further be permitted to do or perform any act necessary or
appropriate, in Landlord's sole discretion, to prevent the filing of any lien
against the Premises or any part thereof. In addition to the foregoing and
not in lieu thereof, Tenant shall do all things necessary to prevent the
filing of any liens against the Premises or the interest of Landlord or the
interest of any mortgagees or holders of any deed of trust covering the
Premises or any ground or underlying lessors therein, if any, by reason of
any work, labor, services, or materials performed or supplied to Tenant, or
anyone holding the Premises, or any part thereof, by, through, or under
Tenant. If any such lien shall at any time be filed, Tenant shall cause the
same to be vacated and cancelled of record within thirty (30) days after the
date that Tenant receives notice of such lien. If any such lien shall be
filed notwithstanding the provisions of this subparagraph, then, in addition
to any other right or remedy of Landlord resulting from Tenant's default,
Landlord may, but shall not be obligated to, contest such lien or vacate or
release the same either by paying the amount claimed to be due or by
procuring the release of such lien by giving security or in such other manner
as may be prescribed by law. Tenant shall repay to Landlord, as additional
rent hereunder on demand, all sums disbursed or deposited by Landlord
pursuant to the foregoing provisions of this Paragraph, including Landlord's
costs and expenses and attorneys' fees incurred in connection therewith.
However, nothing contained herein shall imply a consent or agreement on the
part of Landlord or any mortgagee or holder of a deed of trust or any ground
or underlying lessors, if any, of the Premises to subject their respective
estates or interests to liability under any mechanics' or other lien law,
whether or not the performance or the furnishing of such work, labor,
services, or materials to Tenant or anyone holding the Premises, or any part
thereof, by, through or under Tenant, shall have been consented to by
Landlord and/or any of such parties.

33. INTENTIONALLY DELETED

<PAGE>

34. LANDLORD'S EXCULPATION

The liability of Landlord to Tenant for any default by Landlord under the
terms of this Lease shall be limited to an amount equal to the greater of (i) an
amount that would be realized on an execution sale of the interest of Landlord
in the Building or (ii) the Rent to be paid hereunder during the Term and
renewals of the Term, and neither Landlord, nor any party comprising Landlord,
shall be personally liable for any deficiency. Tenant may, at its option, seek
to satisfy judgments (plus interest) by execution against the Building, or to
offset the amount of the judgment plus interest against the Rent due hereunder,
until such judgment plus interest is satisfied, in the same manner in which
Tenant may offset under Paragraph 23 hereof. This clause shall not be deemed to
limit or deny any remedies which Tenant may have in the event of default by
Landlord hereunder which do not involve the personal liability of Landlord.

35. BROKERAGE

Tenant represents and warrants that it has retained Cushman & Wakefield of
Florida, Inc., as its exclusive broker and that it has dealt with no other
broker, agent or other person in connection with this transaction and that no
other broker, agent or other person brought about this transaction, on behalf of
Tenant. Tenant shall pay all commissions due Cushman & Wakefield of Florida,
Inc. Tenant agrees to indemnify, defend and hold Landlord harmless from and
against any claims by any other broker, agent or other person claiming a
commission or other form of compensation by virtue of having represented Tenant
with regard to this Lease transaction. The provisions of this paragraph shall
survive the termination of this Lease. Landlord agrees to indemnify, defend and
hold Tenant harmless from and against any claims by any other broker, agent or
other person claiming a commission or other form of compensation by virtue of
having represented Landlord with regard to this Lease transaction, to the extent
such indemnity is permitted by Virginia law, which indemnity shall survive the
expiration or termination of this Lease. If at any time in the future Landlord
is permitted by law to indemnify third parties, or if at any time Landlord is
not related to the Virginia Retirement System, the limitation on Landlord's
indemnity obligation shall no longer be in effect.

Landlord represents and warrants that it has retained KB Commercial Real
Estate Group, Inc. as its exclusive broker and that it has not dealt with any
other broker, agent or other person in connection with this transaction and that
no other broker, agent or other person, other than KB Commercial Real Estate
Group, Inc., brought about this transaction on behalf of Landlord. Landlord
shall pay all commissions due KB Commercial Real Estate Group.

36. FULL SERVICE LEASE; SEPARATE METERING

(a) This is a full service Lease. All building services and utilities are
included. In the calculation of Tenant's Pro Rata Share of increases in
Operating Expenses and Taxes, only those Operating Expenses and Taxes
attributable to the Building, Building common area (interior and exterior), and
parking area specifically designated for the use of the Building shall be
included in the computation of same. The Operating Costs and Taxes attributable
to any retail, food service entity, private club, etc. or the common areas
interior or exterior thereto shall not become the obligation of Tenant, unless
the retail food service entity or private club is operated within Tenant's
Premises.

<PAGE>

(b) Tenant may elect by written notice to Landlord to contract and pay for
certain Operating Expenses on a direct basis. These expenses may include
security, electrical usage, and janitorial service. In the event Tenant elects
to pay the utility provider directly for any such services, Tenant shall
separately meter the Premises at Tenant's sole cost and expense. Landlord shall
not include any expenses paid by Tenant in the Operating Expenses.

37. BUILDING DIRECTORY

Tenant shall be provided with its pro-rata share within the existing
building directory space for Tenant. Names of all officers of Tenant shall be
included at no additional charge. Any changes or additions to the list of names
on the directory after the Lease execution date shall be paid for by Tenant.

38. OPTION TO RENEW

Tenant shall have two five-year options to renew its Lease for all or part
of the Premises upon nine (9) months prior written notice and provided that
Tenant is not in default beyond any applicable notice and cure periods when such
notice is given. The rental rate for each renewal term shall be at the then
current fair market rate in the Miami Airport/West Dade office market for the
Premises ("Fair Market Rent"). In determining Fair Market Rent, Landlord shall
consider all then applicable elements affecting the lease transaction,
including, but not limited to, the fact that Tenant may not require an
improvement allowance or rental abatement typical of a new tenant, that Landlord
shall not lose rent because of any marketing or construction time and that the
Fair Market Rent is being projected one year in advance. The recovering of the
floors and recovering or repainting of the walls used in the initial tenant
finishes shall also be considered in determining Fair Market Rent. Landlord and
Tenant shall negotiate the rental rate one (1) year prior to the expiration of
the then current term. If Landlord and Tenant cannot agree upon the rate within
thirty (30) days, then either party may refer the matter for resolution to the
American Arbitration Association, with each party equally sharing the costs
thereof. The American Arbitration Association shall be required to render its
opinion with regard to the then current Fair Market Rent for the Premises,
taking into consideration the factors set forth in this paragraph, within thirty
(30) days of said assignment. Tenant shall have at least fifteen (15) days in
which to exercise said option(s) after the Fair Market Rent has been agreed upon
or otherwise determined. If Tenant does not exercise its option to renew this
Lease as provided in this Paragraph 38, and the rental rate during the extension
term has been determined in accordance with the arbitration procedure set forth
above, Tenant shall be responsible for payment of the entire cost of the
arbitration proceedings.

For each option term, the Operating Expense Base Year and Tax Base Year
will be adjusted to reflect the then current base years that are being offered
to prospective tenants of the Building in the eleventh and sixteenth years,
respectively, of this Lease.

39. EXPANSION OPTION; RIGHT OF FIRST REFUSAL

(a) Tenant shall have a continuous right to lease any unencumbered space
in the Building throughout the Term of this Lease and any renewal thereof. The
rental rate and terms

<PAGE>

and conditions for said space during the first two years of the Lease shall be
at Tenant's then current rental rate and under the same terms and conditions as
this Lease. Beginning on the second anniversary date of the Commencement Date
of this Lease, and thereafter, the rental rate and terms and conditions for said
space shall be at then current market terms. Tenant shall take any expansion
space "as is" (but broom clean and free of all equipment and trade fixtures of
the prior occupant) with the Tenant Improvement Allowance being prorated. For
example, if 9 years are left on this Lease, the Tenant Improvement Allowance for
expansion space would be $13.50. If 8 years are left on the Term, this Lease,
the Tenant Improvement Allowance for expansion space would be $12.00. The
commencement date for the term of any expansion space leased to Tenant pursuant
to this Paragraph 39(a) shall be sixty (60) days after Landlord provides
possession of said space to Tenant. The termination date for all expansion
space shall be coterminous with the termination date under this Lease.

(b) During the Term of this Lease, Tenant shall have the continuous right
of first refusal on all space in the Building. During the Term, Landlord shall,
prior to entering into any lease of space in the Building with any new tenant,
or an expansion of an existing tenant's space, first deliver to Tenant a copy of
the proposed lease, or a term sheet setting forth the relevant business terms
and conditions of the proposed lease or expansion. Tenant shall advise Landlord
in writing within five (5) business days after Tenant's receipt of such notice
whether Tenant desires to exercise its right of first refusal for such space.
If Tenant fails to deliver notice to Landlord exercising its right of first
refusal within the five (5) business day period, Tenant shall be deemed to have
waived its right of first refusal with respect to such space in the Building,
provided, however, that if such space again becomes available (or is not leased
to the offeror in question), Tenant's right of first refusal shall be
reinstated. If Tenant waives its right of first refusal with respect to such
space, or is deemed to have waived such right of first refusal, Landlord may
enter into a lease with the proposed tenant, or an amendment for the expansion
space with any existing tenant, on terms and conditions substantially the same
as in the proposed lease or the term sheet setting forth the relevant business
terms of the proposed lease or expansion. If the effective Base Rent under the
relevant business terms of the proposed lease or expansion, taking into
consideration all other economic factors, such as the tenant improvement
allowance to be provided, rent abatement, assumption of lease obligations, etc.,
changes by ten percent (10%) or more, then the proposed lease shall be deemed a
new proposal for which the right of first refusal shall again apply. The
termination date for all such right of first refusal space shall be co-terminus
with the termination date under this Lease, provided however, Landlord's capital
costs for the proposed transaction would be prorated for the remaining Term of
this Lease.

40. INTENTIONALLY DELETED

41. THIRD PARTY RE-LOCATION

Any third party tenants leasing less than 3,000 square feet in the Building
after execution of this Lease by Landlord and Tenant, will have a right of
relocation clause in their leases by which Landlord, upon six (6) month prior
written notice, will relocate those tenants in order that Tenant may occupy said
space. Landlord shall not be obligated to relocate any such tenants until
Tenant has signed an amendment to this Lease incorporating the space to be
vacated by the other tenant as part of the Premises. Said condition will exist
provided that Tenant has a minimum of

<PAGE>

three (3) years left on the Term of this Lease and provided that Landlord has
comparable space within the Building in which to relocate said tenant. In the
event that Tenant has exercised an option or options to renew this Lease
pursuant to the provisions of Paragraph 38 herein, Landlord shall continue to
include the foregoing right of relocation clause in leases to third party
tenants leasing less than 3,000 square feet in the Building until such time as
Tenant has a minimum of three (3) years left on the extended Term of this Lease,
and provided that Landlord has comparable space in the Building in which to
locate said tenant.

In the event that Landlord relocates an existing tenant in order to
accommodate Tenant's need for additional space, Tenant will lease said space in
an "as is" condition and under the same terms and conditions of this Lease
except that the Rent for such additional space shall be at the greater of (a)
the then current market rental rate, or (b) the rent reserved for such space in
the lease to the tenant which is being relocated. No Tenant Improvement
Allowance will be given for said space.

42. DORAL CORPORATE PLAZA I (CITIBANK BUILDING)

Landlord will provide Tenant with a right of first offer if and when
Citibank vacates the Doral Corporate Plaza I facility located at 8750 N.W. 36th
Street, Miami, Florida, the rental rate, terms and conditions to be negotiated
in good faith at that time based on current market value for said premises.
Tenant will have ninety (90) days from written notification to finalize said
negotiations. Landlord will allow Tenant to cancel this Lease, with no
cancellation penalty paid by Tenant, provided that Tenant signs and delivers to
Landlord a new ten (10) year lease in Doral Corporate Plaza I building, for not
less than 125% of the then current space that Tenant is occupying at the time
Tenant exercises its option, and otherwise under terms and conditions acceptable
to both parties.

43. CANCELLATION OPTION

On the fifth anniversary following the Commencement Date, Tenant shall have
the option to terminate this Lease as to all or a portion of the Premises by
giving Landlord twelve (12) months prior written notice and paying to Landlord a
lease cancellation fee. Said cancellation penalty shall be the unamortized
value of the Tenant Improvement Allowance paid by Landlord to Tenant, prorated
for the actual amount of space being cancelled by Tenant. These costs shall be
amortized based on a 10% interest imputed thereon. Said cancellation fee shall
be paid at the same time that Tenant exercises its option to cancel (twelve (12)
months prior to the fifth anniversary date of this Lease). Tenant's
cancellation of this Lease shall not become effective unless and until Tenant
has paid all Rent due to Landlord and performed all other covenants of Tenant
under this Lease which accrue through the cancellation date, and Tenant's
cancellation shall not become effective unless the cancellation fee is paid and
Tenant's cancellation notice is given within the time frame required above, time
expressly being of the essence.

44. EXCLUSIVE USE AND COMPATIBILITY

Throughout the Lease Term and any renewal thereof, Landlord will not lease
space in the Building to any banking entity that is in direct competition with
Hamilton Bank, N.A. Landlord

<PAGE>

shall only lease space to tenants that are compatible with the tenant mix in
other Class A office buildings in the Miami Airport/West Dade office market.
With regard to the Subtenant, as long as Subtenant occupies the First Floor
Space, no other person or entity engaged in the business of operating a travel
agency may lease, sublease or occupy space in the Building. This shall not
preclude tenants from having their own travel departments, exclusively operated
internally.

45. RESTRICTIONS IMPOSED BY LANDLORD'S LEASE WITH CITIBANK, N.A.

Landlord shall use its reasonable efforts to relieve Tenant from any and
all encumbrances and restrictions that Landlord's lease with Citibank, N.A.
presently imposes upon Tenant, and further warrants that upon either the
termination, cancellation or expiration of said lease with Citibank, N.A.,
Landlord will relieve Tenant of any and all encumbrances and restrictions, and
shall not enter into any agreements with any other tenant that further imposes
any encumbrances or restrictions upon Tenant.

46. PARKING

Landlord shall provide parking availability at a ratio of four (4) spaces
per 1,000 rentable square feet for the Premises as well as any space leased at a
later date. Landlord shall provide fifteen (15) spaces immediately adjacent to
the main entrance of the Building that are designated for specific use by
Tenant's clientele. Landlord, at its sole cost and expense, shall provide to
Tenant and maintain within the existing covered parking area no less than seven
(7) spaces. All parking shall be at no cost to Tenant for the Term of this
Lease or any extension or renewal thereof.

47. EMERGENCY GENERATOR

Landlord will provide an area outside the Building upon which Tenant may
provide an emergency generator and aboveground fuel storage tank on site subject
to Dade County regulatory authorities approval and the approval of any other
applicable governmental authorities. Prior to installing the generator and
aboveground fuel storage tank, Tenant shall supply plans, drawings and other
materials reasonably requested by Landlord depicting the layout for such
equipment, for Landlord's approval, which approval shall not be unreasonably
withheld or delayed. Tenant shall maintain such emergency generator and
aboveground fuel storage tank in accordance with all governmental requirements,
as well as any reasonable rules and regulations imposed by Landlord. The cost
of said emergency generator and aboveground fuel storage tank shall be borne by
Tenant. Upon the expiration or earlier termination of this Lease, unless
otherwise agreed in writing by Landlord and Tenant, Tenant shall remove the
emergency generator and aboveground fuel storage tank, and shall provide
evidence reasonably satisfactory to Landlord that they have been removed in
accordance with all applicable governmental requirements.

<PAGE>

48. FIBER OPTIC TELECOMMUNICATION CAPABILITIES

The Building presently has fiber optic access. Tenant, at Tenant's sole
cost and expense, may access said fiber optic telecommunication service.

49. STORAGE

Landlord will provide a maximum of approximately 2,000 useable square feet
of unsecured storage space at no cost to Tenant as long as there is unoccupied
space in the Building. Landlord shall not be responsible for any theft, loss or
damage to any property stored in the unsecured storage space, and Tenant's use
of the unsecured storage space shall be subject to such reasonable rules and
regulations as Landlord may impose from time to time. Landlord may change the
location of the storage space upon thirty (30) days prior notice to Tenant.
Tenant shall be required to move its property to the newly designated location
at Tenant's sole cost and expense.

50. SUBORDINATION; NON-DISTURBANCE

This Lease is subject and subordinate in all respects to any and all
Mortgages which may now or hereafter be placed on or effect the Property or the
Premises, and also to all renewals, modifications, consolidations and extensions
thereof. Although no instrument or act on the part of Tenant shall be necessary
to effectuate such subordination, Tenant shall, nevertheless, execute and
deliver, within ten (10) days after Landlord's request to Tenant, a
subordination, non-disturbance and attornment agreement in substantially the
form attached hereto as EXHIBIT "D" confirming such subordination as may be
desired by any holder of a Mortgage. If any Mortgage to which this Lease is
subject and subordinate is foreclosed, Tenant shall, on timely request, attorn
to the holder of the reversionary interest or the mortgagee in possession, as
the case may be. Notwithstanding the foregoing, provided the Tenant is not in
default of its obligations under this Lease, Tenant's possession of the Premises
shall not be disturbed by any mortgagee or purchaser at any foreclosure sale,
and any instrument confirming the foregoing subordination executed and delivered
on behalf of Tenant shall contain such a non-disturbance provision.

51. MISCELLANEOUS

(a) In all instances where either Landlord or Tenant is required to pay
any sum or do any act at a particular indicated time or within an indicated
period, it is understood that time is of the essence.

(b) Under no circumstances whatsoever shall Landlord or Tenant ever be
liable hereunder for consequential damages or special damages.

(c) Whenever a period of time is herein prescribed for action to be taken
by a party, such party shall not be liable or responsible for, and there shall
be excluded from the computation for any such period of time, any delays due to
Force Majeure events.

(d) Either Tenant or Landlord may record this Lease or a memorandum
thereof. At the request of either Landlord or Tenant, the other party shall
execute a Memorandum of Lease which may be recorded at the sole cost and expense
of the party requesting the Memorandum of

<PAGE>

Lease. Landlord and Tenant agree to promptly execute and deliver to the other
an instrument in recordable form evidencing the termination of the Memorandum of
Lease promptly after the expiration or earlier termination of this Lease.

(e) In the event that litigation is instituted for any reason under this
Lease, the prevailing party shall be entitled to its reasonable legal fees and
costs, including costs and fees involved in any appellate proceedings.

(f) This Lease contains the entire agreement between the parties with
respect to the matters set forth herein. No additions, changes or
modifications, renewals or extensions hereof, shall be binding unless reduced to
writing and signed by Landlord and Tenant.

(g) The captions of the articles and paragraphs of this Lease are for
convenience of reference only and shall not be considered or referred to in
resolving questions of interpretation. If any term or provision of this Lease
shall be found invalid, void, illegal, or unenforceable with respect to any
particular Person by a court of competent jurisdiction, it shall not affect,
impair or invalidate any other terms or provisions hereof, or its enforceability
with respect to any other Person, the parties hereto agreeing that they would
have entered into the remaining portion of this Lease notwithstanding the
omission of the portion or portions adjudged invalid, void, illegal, or
unenforceable with respect to such Person.

52. WAIVER OF JURY TRIAL

LANDLORD AND TENANT WAIVE THE RIGHT TO A TRIAL BY JURY IN ANY ACTION OR
PROCEEDING BASED UPON, OR RELATED TO, THE SUBJECT MATTER OF THIS LEASE. THIS
WAIVER IS KNOWINGLY, INTENTIONALLY, AND VOLUNTARILY MADE BY TENANT AND LANDLORD,
AND TENANT AND LANDLORD ACKNOWLEDGE THAT NEITHER PARTY NOR ANY PERSON ACTING ON
THEIR BEHALF HAS MADE ANY REPRESENTATION OF FACT TO INDUCE THIS WAIVER OF TRIAL
BY JURY OR IN ANY WAY TO MODIFY OR NULLIFY ITS EFFECT. TENANT AND LANDLORD EACH
ACKNOWLEDGE THAT IT HAS READ AND UNDERSTANDS THE MEANING AND EFFECT OF THIS
WAIVER PROVISION.

IN WITNESS WHEREOF, Tenant and Landlord have caused this instrument to be
executed as of the date first above written, by their respective officers or
parties thereunto duly authorized.

HAMILTON BANK, N.A. ("Tenant")
Witnesses:

/s/ D. G. Campbell By: /s/ John F. Stumpff
--------------------- ------------------------

D. G. Campbell Title: Senior Vice President
--------------------- ------------------------

<PAGE>

CORPORATE SEAL

SYSTEM REALTY TWELVE, INC.
Witnesses: ("Landlord")

/s/ Liany Rodriguez By: /s/ James E. Rosasco, President
-------------------- ---------------------------------

Liany Rodriguez Attest: /s/ (Illegible)
-------------------- -----------------

CORPORATE SEAL

<PAGE>

EXHIBIT "A-1"

(Floor plan(s) showing the first floor of the Premises cross-hatched)

/s/ JFS
----------------------
Tenant (initial)

/s/ JER
-----------------------
Landlord (initial)

Exhibit A-1

<PAGE>

EXHIBIT "A-2"

(Site Plan showing the Building and parking areas)

___________________________
Tenant (initial)

___________________________
Landlord (initial)

Exhibit A-2

<PAGE>

EXHIBIT "B"

RULES & REGULATIONS

1. DEFINITIONS: Wherever in these Rules and Regulations the word
"Tenant" is used, it shall be taken to apply to and include Tenant and its
agents, employees, invitees, licensees, subtenants, and contractors, and is to
be deemed of such number and gender as the circumstances require. The words
"Room" and "Premises" are to be taken to mean and include the space covered by
this Lease. The word "Landlord" shall be taken to include the employees and
agents of Landlord.

2. OPERATIONS: The streets, sidewalks, entrances, halls, passages,
elevators, stairways, and other common area provided by Landlord shall not be
obstructed by Tenant, or used by it for any other purpose than for ingress and
egress.

3. WASHROOMS: Toilet rooms, water closets, and other water apparatus
shall not be used for any purpose other than those for which they were
constructed.

4. INSURANCE REGULATIONS: Tenant shall not do anything in the Premises,
or bring or keep anything therein, which will in any way increase or tend to
increase the risk of fire or the rate of fire insurance, or which will conflict
with the regulations of the Fire Department or the Fire laws, or with the rules
and regulations of any fire insurance rating organization, or equivalent bodies,
or with any insurance policy on the Building or any part thereof, or with any
law, ordinance, rule, or regulation affecting the occupancy and use of the
Premises, now existing or hereafter enacted or promulgated by any public
authority or by any fire insurance rating organization, or any equivalent body.

5. GENERAL PROHIBITIONS: In order to ensure proper use and care of the
Premises, Tenant shall not:

a. Keep animals or birds in the Premises.

b. Use the Premises or any rooms therein as sleeping apartments.

c. Allow any sign, advertisement, or notice to be fixed to the
Building, inside or outside, without Landlord's written consent.

d. Make improper noises or disturbances of any kind; sing, play
or operate any musical instrument, radio or televisions without consent of
Landlord; or otherwise do anything which disturbs other tenants or tends to
injure the reputation of the Building.

e. Mark or defile elevators, water closets, toilet rooms, walls,
windows, doors, or any other part of the Building.

Exhibit B, Page 1

<PAGE>

f. Place anything on the outside of the Building, including roof
setbacks, window ledges, and other projections or drop anything from the
windows, stairways, or parapets, or place trash or other matter in the halls,
stairways, elevators, or light wells of the Building.

g. Cover or obstruct any window, skylight, doors, or transom that
admits light, except with Building standard narrow slot, horizontal venetian
blinds, without the prior written approval of Landlord.

h. Interfere with the heating or cooling apparatus.

i. Allow anyone but Landlord's employees or contractor to clean
the Premises or at Tenant's option, Tenant may employ its own cleaning
contractor subject to Landlord's reasonable rights of approval.

j. Leave the Premises without locking doors, stopping all office
machines, and extinguishing all lights except those required for security.

k. Install any shades, blinds, or awnings, except Building
standard window coverings, without consent of Landlord.

l. Use any electric heating device without consent of Landlord.

m. Install call boxes, or any kind of wire in or on the Premises
or the Building without Landlord's permission and direction.

n. Manufacture any commodity, any foods or beverages, whether by
vending or dispensing machines or otherwise, or alcoholic beverages, tobacco,
drugs, flowers, or other commodities or articles without the written consent of
Landlord except for consumption by Tenant.

o. Secure duplicate keys for Rooms or toilets, except from
Landlord, or change the locks of any doors to or in the Premises. Landlord
shall have access, however, to the Premises during all reasonable times and
emergency situations.

p. Give its employees or other persons permission to go upon the
roof of the Building without the written consent of Landlord.

q. Place door mats in public corridors without the consent of
Landlord.

r. Use passenger elevators for freight during normal business
hours as defined in the Lease.

s. Schedule, nor will Landlord receive, deliver or accept freight
for Tenant other than Monday through Friday, excluding holidays, between the
hours of 9:00 AM to 11:30 AM and 2:00 PM to 4:30 PM.

<PAGE>

t. Use, store, and dispose of toxic or dangerous substances
without proper prior approval of any governing authority and Landlord.

6. PUBLICITY: Landlord shall have the right to prohibit any advertising
by Tenant, which, in its opinion, tends to impair the reputation of the Building
or its desirability as a Building for offices, and upon written notice from
Landlord, Tenant shall refrain from or discontinue such advertising.

7. BUSINESS MACHINES: Business machines and mechanical equipment which
cause vibration, noise, cold or heat that may be transmitted to Building
structure, or to any leased space outside Premises shall be placed and
maintained by Tenant, at its sole cost and expense, in settings of cork, rubber,
or spring type vibration eliminators sufficient to absorb and prevent such
vibration, noise, cold or heat. No business machines or mechanical equipment
which exceed the existing floor load capacity of 80 pounds per square foot or
require unusually high amounts of electricity shall be used or installed in the
Premises without Landlord's prior written consent.

8. MOVEMENT OF EQUIPMENT: Landlord reserves the right to designate the
reasonable time and the method whereby freight, large office equipment,
furniture, safes, and other like articles may be brought into, moved, or removed
from the Building or Premises, and to designate the location for temporary
disposition of such items.

9. PUBLIC ENTRANCE: Landlord reserves the right to exclude the general
public from the Building upon such days and at such hours as in Landlord's
judgment will be for the best interest of the Building and its Tenants. At
Landlord's discretion, persons entering the office portion of the Building after
6:00 PM Monday through Friday, after 1:00 PM on Saturday, and at all times on
Sunday and holidays, and before 8:00 AM Monday through Saturday may be required
to sign the register maintained for that purpose.

10. REGULATION CHANGE: Landlord shall have the right to make such
additional rules and regulations as in the judgment of Landlord may from time to
time be needed for the safety, appearance, care, and cleanliness of the Building
and for the preservation of good order therein. Landlord shall not be
responsible to Tenant for any violation of rules and regulations by other
tenants.

11. CERTAIN RIGHTS RESERVED TO LANDLORD: Landlord reserves the following
rights, subject to the express provisions of the Lease:

a. To name or change the name of the Building and to change the
street address of the Building.

b. To install and maintain a sign or signs on the exterior or
interior of the Building.

c. To designate all sources furnishing ice, drinking water,
toilet supplies, shoe shining, mobile vending service, and like services used in
the Building.

______________________________
Tenant (initial)

______________________________
Landlord (initial)

<PAGE>

EXHIBIT "D"

SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT

This instrument was prepared by
and after recording return to:
Laura A. Gangemi, Esq.
Kirkpatrick & Lockhart LLP
201 S. Biscayne Blvd., 20th Fl.
Miami, Florida 33131

SUBORDINATION, NONDISTURBANCE
AND ATTORNMENT AGREEMENT

THIS SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT (this
"Agreement"), made this __________________, 199__, between [INSERT NAME OF
MORTGAGEE] a _________________________, whose address is [ADDRESS] (together
with its successors, assigns, and transferees "Lender") and HAMILTON BANK, N.A.,
a national banking association, whose address is
__________________________________ (together with its successors and assigns
"Hamilton"):
R E C I T A L S:

1. Lender has made or is about to make a loan to System Realty
Twelve, Inc., a ______________ corporation ("Landlord") secured by a
mortgage, or other financing instrument to be recorded in the Official
Records of Dade County, Florida (the "Mortgage"), encumbering the real estate
known as "Doral Corporate Plaza" and more particularly legally described in
the Mortgage and on Exhibit "A" attached hereto and incorporated herein (the
"Office Complex"); and

2.By Lease dated ___________, 1996, a memorandum of which is
recorded in

Exhibit D, Page 1

<PAGE>

Official Records Books ________, page _______, of the public records of Dade
County, Florida (and as otherwise to be amended from time to time, the "Lease"),
Landlord did lease unto Hamilton, as tenant, those certain premises which
constitute a portion of the Office Complex and are more particularly described
in the Lease (the "Premises"); and

3.Lender and Hamilton desire that the Lease shall not terminate but rather
shall remain in full force and effect in accordance with its terms if the
Mortgage is foreclosed or any transfer of the Premises is made in lieu thereof.

NOW THEREFORE, for valuable consideration the receipt and sufficiency of
which are hereby acknowledged, Lender and Hamilton agree as follows:
Provided Hamilton is not in material default under the terms of the Lease beyond
applicable grace periods, then in the course of or following any exercise of
(a) any right or remedy under the Mortgage, (b) any foreclosure sale of the
Office Complex or any part thereof, or of the Premises or (c) any transfer of
the Office Complex or any part thereof, or of the Premises thereafter or in lieu
of foreclosure ((a)-(c), together with any similar events, a "Foreclosure
Event"):

Hamilton's rights arising out of the Lease, including without limitation,
its right of possession, shall not be affected or disturbed by Lender;
Hamilton shall not be named as a party defendant;
The Lease shall not be terminated or affected by any Foreclosure Event; and
The sale of the Office Complex or any part thereof, or of the Premises,
pursuant to any Foreclosure Event shall be made subject to the Lease and
the rights of Hamilton thereunder.

Following a Foreclosure Event, Hamilton shall attorn to Lender as its new
landlord and

<PAGE>

the Lease shall continue in full force and effect as a direct lease between
Hamilton and Lender. Notwithstanding the foregoing, Lender shall not be:

liable for any act or omission of any prior landlord (including Landlord),
unless such action was taken at the written direction of or with the
approval of Lender; or

subject to any offsets or defenses which Hamilton might have against any
prior landlord (including Landlord) except those which arose out of such
landlord's default under the Lease and provided Lender has received any
notice of default and has an opportunity to cure all as required by and
pursuant to the terms of the Lease; or

bound by any rent Hamilton paid for more than the then current month to any
prior landlord (including Landlord), unless Lender consents in writing to
such repayment; or
bound by any written modification of the Lease made after the date hereof
without Lender's consent.

Following a Foreclosure Event, Lender promptly shall give notice thereof to
Hamilton, stating its current address and providing evidence of Lender's title
to the Premises.

The Lease is subject and subordinate to the lien of the Mortgage as though the
Mortgage had been executed and recorded prior in point of time to the execution
of the Lease. Notwithstanding the foregoing, subordination of the Lease to the
Mortgage should not be construed to constitute Tenant's consent or agreement to
any term, condition, or provision of the Mortgage or any related loan document
which purports to modify, alter or amend the Lease.

The foregoing provisions shall be self-operative and effective without the
execution of any further instrument on the part of either party hereto.

Any notice required or permitted to be given under this Agreement shall be in
writing and either shall be mailed by certified mail, postage prepaid, return
receipt requested, or sent by

<PAGE>

overnight air courier service, or personally delivered to a representative of
the receiving party, or sent by telecopy (provided an identical notice is also
sent simultaneously by mail, overnight courier, or personal delivery as
otherwise provided in this paragraph). All such communications shall be mailed,
sent or delivered, addressed to the party for whom it is intended at its address
set forth below.

If to Tenant:
----------
----------
----------

<PAGE>

With a copy to: Laura A. Gangemi, Esq.
Kirkpatrick & Lockhart LLP
S. Biscayne Boulevard, 20th Floor
Miami, Florida 33131

If to Lender: ________________________
________________________
________________________

With a copy to: ________________________
________________________
________________________

Any communication so addressed and mailed shall be deemed to be given on the
earliest of (a) when actually delivered, (b) on the first business day after
deposit with an overnight air courier service, or (c) on the third business day
after deposit in the United States mail, postage prepaid, in each case to the
address of the intended addressee, and any communication so delivered in person
shall be deemed to be given when receipted for by, or actually received by
Lender or Hamilton, as the case may be. If given by telecopy, a notice shall be
deemed given and received when the telecopy is transmitted to the party's
telecopy number specified above, and confirmation of complete receipt is
received by the transmitting party during normal business hours or on the next
business day if not confirmed during normal business hours, and an identical
notice is also sent simultaneously by mail, overnight courier, or personal
delivery as otherwise provided in this paragraph. Either party may designate a
change of address by written notice to the other by giving at least ten (10)
days' prior written notice of such change of address.

7.This Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors and assigns, and without
limiting such, it is expressly understood that all references herein to Lender
shall be deemed to include also any subsequent

<PAGE>

holder of the Mortgage and/or any other person succeeding in title to the
premises encumbered by the Mortgage, or any part thereof, pursuant to any
Foreclosure Event.

IN WITNESS WHEREOF, Lender and Hamilton have executed this Agreement the
day and year first above written.

Signed, sealed and delivered LENDER:
in the presence of:
__________________________
_____________________________

Print Name:__________________

By:_______________________
_____________________________

Print Name:__________________ __________________________

Its:______________________

Date:_____________________

HAMILTON:

HAMILTON BANK, N.A., a
national banking association

______________________________

Print Name:___________________

______________________________ By:_______________________

Print Name:___________________ __________________________

Its:______________________

Date:_____________________

<PAGE>

STATE OF __________)
)ss:
COUNTY OF ________ )

The foregoing instrument was acknowledged before me this ___ day of
____________, 1996, by ________________________________, as
__________________________ of _________________________, a
______________________________, on behalf of the _________________________
[PLEASE CHECK ONE] _______ who is personally known to me or ______ who has
produced ___________________________________ as identification.

_________________________________________
Printed Name_____________________________
Notary Public, State and County aforesaid
My Commission Expires:___________________
Notary ID No.____________________________
(NOTARY SEAL)

STATE OF __________)
)ss:
COUNTY OF ________ )

The foregoing instrument was acknowledged before me this ___ day of
____________, 1996, by ___________________________, as _____________President of
Hamilton Bank, N.A., a national banking association, on behalf of such Bank
[PLEASE CHECK ONE] ________ who is personally known to me or ___________ who has
produced ___________________________________ as identification.

<PAGE>

EXHIBIT A TO SNDA

LEGAL DESCRIPTION

<PAGE>

EXHIBIT E

JANITORIAL SERVICES

I. GENERAL OFFICE AND COMMON AREA:

A. DAILY

1. Gather all waste paper and place for disposal.

2. Replace liners as needed in wastebaskets if supplied
by building.

3. Empty, wash, and polish all ashtrays.

4. Empty, wash, and polish all cigarette urns and
replace sand or fluff from stock supplied by building
when needed.

5. Dust all office furniture.

6. Keep interior glass partitions free of fingerprints.

7. Dust counters and file cabinet tops.

8. Dust all other edges and flat surfaces within reach.

9. Clean and sanitize telephones.

10. Remove fingerprints from light switches and doors.

11. Clean and polish all drinking fountains.

12. Sweep and/or dust mop, and damp mop hard floor
surfaces.

13. Vacuum clean all carpeted areas after removing all
paper clips, rubber bands and other debris. Traffic
areas nightly, wall to wall weekly or as needed.

14. Properly arrange furniture in offices.

15. Clean office directory.

16. Keep custodial closet clean and orderly.

17. Turn off all lights except for emergency lighting.

18. Check doors and lock upon completion of work.

19. Report any occurrence that may be out of the ordinary.

20. Comply with all security regulations and personnel
logs.

21. Remove trash from building and carry to dumpster daily.

B. WEEKLY

1. High dust all horizontal surfaces to hand height,
including partition glass

Exhibit E - 1

<PAGE>

sills, ledges, moldings, shelves, picture frames and
window sills.

2. Wipe clean and polish all metal and bright work.

3. Damp mop and polish all resilient flooring in public
corridors and elevator lobbies; more often if
necessary.

4. Dust in place all picture frames, charts, graphs, and
similar wall hangings.

5. Spot clean all wall marks.

C. MONTHLY

1. Clean and polish door kickplates and thresholds.

2. Dust all high partitions and ledges.

3. Dust interior of fire extinguisher boxes and fire
alarms.

4. Wash and polish all resilient floors.

D. QUARTERLY

1. Vacuum all ventilating and air conditioning louvers,
high moldings, and other areas not reached in nightly
or weekly cleaning.
II. RESTROOMS

A. DAILY

1. Remove all trash from all trash containers.

2. Clean and polish all stainless steel dispensers.

3. Empty, clean, polish and disinfect all sanitary
disposal receptacles.

4. Fill all dispensers utilizing building stock of toilet
paper, hand towels, hand soap, sanitary napkins,
waxed bags and liners.

5. Clean and sanitize all fixtures and fittings.

6. Clean and polish the mirror.

7. Clean and polish the vanity surface.

8. Clean and sanitize all toilets, toilet seats and
leave the toilet seats in the up position.

9. Clean and sanitize the entire urinal, especially the
underside.

10. Sweep, damp mop and disinfect the floor.

B. NIGHTLY

1. Dust, clean and wash where necessary all partitions,
tile walls, dispensers and receptacles, and enamel
surfaces from trim to floor as required.

<PAGE>

2. Provide materials and fill tissue holders, towel,
sanitary napkin, and soap dispensers.

C. WEEKLY

1. Spot wash walls, partitions and doors.

2. Dust top of partitions, hinges and brackets.

D. MONTHLY

Machine scrub restroom floors; apply floor finishing where
applicable; buff where applicable.

E. QUARTERLY

1. Vacuum clean air vents and returns.

2. Scrub and rinse floors.

III. ELEVATORS

Do not clean in elevators.

IV. GLASS

DAILY

1. Wash and squeegee-clean all entrance door glass.

B. QUARTERLY

1. Wash and squeegee all interior partitions glass.

V. RESILIENT FLOORS

DAILY

1. Dust mop and spot mop and remove gum and other foreign
matter when necessary.

VI. OTHER AREAS OF THE BUILDING

ENTRANCE LOBBY

1. Entrance lobby to be buffed nightly.

VII. MARBLE LOBBY

A. DAILY

1. Dust mop.

<PAGE>

2. Mop with a neutral cleaner.

3. Buff with a high speed machine.

B. QUARTERLY

1. Stone glow entire marble lobby floor.

<PAGE>

VIII. EXTERIOR WINDOWS (SEMI-ANNUALLY)

Wash and squeegee dry interior and exterior surfaces of
building windows.

<PAGE>
EXHIBIT 21.1

Hamilton Bank, N.A. is a 99.7% owned subsidiary of the Company.

<PAGE>
EXHIBIT 23.2

INDEPENDENT AUDITORS' CONSENT

We consent to the use in this Amendment No.1 to Registration Statement No.
333-20435 of Hamilton Bancorp Inc., of our report dated January 31, 1997,
appearing in the Prospectus, which is part of such Registration Statement, and
to the reference to us under the headings "Selected Consolidated Financial Data"
and "Experts" in such Prospectus.

DELOITTE & TOUCHE LLP
Miami, Florida
March 4, 1997