FLORIDA FIRST BANCORP INC, DEF 14A, 1996-11-08

FLORIDA FIRST BANCORP INC
DEF 14A, 1996-11-08
SAVINGS INSTITUTION, FEDERALLY CHARTERED

Previous: UOL PUBLISHING INC, S-1/A, 1996-11-08

Next: SOUTHERN PACIFIC SECURED ASSETS CORP, 8-K, 1996-11-08

<PAGE> 1
SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )

Filed by the Registrant /X/

Filed by a Party other than the Registrant / /

Check the appropriate box:

<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
FLORIDA FIRST BANCORP, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.

/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).

/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

(1) Title of each class of securities to which transaction applies:

(2) Aggregate number of securities to which transaction applies:

(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):

(4) Proposed maximum aggregate value of transaction:

(5) Total fee paid:

/X/ Fee paid previously with preliminary materials.

/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

(2) Form, Schedule or Registration Statement No.:

(3) Filing Party:

(4) Date Filed:
<PAGE> 2
[FLORIDA FIRST BANCORP, INC. LETTERHEAD]

Dear Stockholder:

You are cordially invited to attend a Special Meeting of Stockholders
of Florida First Bancorp, Inc. (the "Company") to be held on December 10, 1996
at 4:00 p.m., Central Time, at the Company's home office located at 144
Harrison Avenue, Panama City, Florida. This is a very important meeting
regarding your investment in the Company.

The purpose of the meeting is to consider and vote upon the Agreement
and Plan of Reorganization, dated as of May 29, 1996, by and between the
Company and Regions Financial Corporation, a Delaware corporation ("Regions")
and the form of the related Plan of Merger (the "Plan of Merger") between the
Company and Regions Merger Subsidiary, Inc., a Florida corporation and a wholly
owned, newly formed subsidiary of Regions ("Merger Subsidiary"). Pursuant to
the Agreement and Plan of Reorganization, Merger Subsidiary shall be merged
with and into the Company, with the Company as the surviving corporation (the
"Merger"). Each stockholder of the Company will be entitled to receive $11.65
in cash ("Merger Consideration"), subject to certain adjustments (which may
increase or decrease the Merger Consideration by a maximum of $.29 per share as
described in the enclosed Proxy Statement), in consideration for each share of
common stock of the Company owned by such stockholder upon consummation of the
Merger. Your Board of Directors recommends that you vote in favor of the
Merger, which the Board believes is in the best interests of the Company's
stockholders.

Enclosed is a Notice of Special Meeting of Stockholders, a Proxy
Statement containing a discussion of the Merger, a proxy card, our 1995 Annual
Report to Stockholders and Quarterly Report on Form 10-QSB for the quarter
ended June 30, 1996. Please complete, sign and date the enclosed proxy card
and return it as soon as possible in the envelope provided. If you decide to
attend the meeting, you may vote your shares in person whether or not you have
previously submitted a proxy. The Merger must be approved by the holders of a
majority of the issued and outstanding shares of common stock of the Company.
On behalf of your Board of Directors, thank you for your attention to this
important matter.

Very truly yours,

Andrew W. Stein
President and Chief Executive Officer
<PAGE> 3

FLORIDA FIRST BANCORP, INC.
144 HARRISON AVENUE
PANAMA CITY, FLORIDA 32401
(904) 872-7000

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON DECEMBER 10, 1996

NOTICE IS HEREBY GIVEN that a Special Meeting of Stockholders of
Florida First Bancorp, Inc. (the "Company") will be held at the Company's home
office located at 144 Harrison Avenue, Panama City, Florida, on December 10,
1996 at 4:00 p.m., Central Time, for the following purposes, all of which are
more completely set forth in the accompanying Proxy Statement:

(1) To consider and vote upon the Agreement and Plan of
Reorganization, dated as of May 29, 1996 ("Agreement"), by and between the
Company and Regions Financial Corporation ("Regions") and the related Plan of
Merger ("Plan of Merger") by and between the Company and Regions Merger
Subsidiary, Inc., a Florida corporation and wholly owned, newly formed
subsidiary of Regions ("Merger Subsidiary"), pursuant to which, among other
things, (i) Merger Subsidiary will be merged with and into the Company, with
the Company becoming a wholly owned subsidiary of Regions (the "Merger"); and
(ii) each stockholder of the Company will be entitled to receive $11.65 in cash
("Merger Consideration"), subject to certain adjustments which may increase or
decrease the Merger Consideration by a maximum of $.29 per share as described
in the accompanying Proxy Statement, in consideration for each share of common
stock of the Company owned by such stockholder;

(2) To adjourn the Special Meeting if necessary to solicit
additional proxies; and

(3) To transact such other business as may properly come before
the Special Meeting or any adjournment thereof. Except with respect to
procedural matters incident to the conduct of the meeting, the Board of
Directors is not aware of any other business which may come before the meeting.

Stockholders of record at the close of business on October 31, 1996
are entitled to notice of and to vote at the Special Meeting. Stockholders do
not have a right to dissent from the Merger and obtain payment of the fair
value of their shares.

BY ORDER OF THE BOARD OF DIRECTORS

Gary L. Smith
Secretary
Panama City, Florida
November 7, 1996

YOU ARE CORDIALLY INVITED TO ATTEND THE SPECIAL MEETING. IT IS IMPORTANT
THAT YOUR SHARES BE REPRESENTED REGARDLESS OF THE NUMBER YOU OWN. EVEN IF
YOU PLAN TO BE PRESENT, YOU ARE URGED TO COMPLETE, SIGN, DATE AND RETURN
THE ENCLOSED PROXY PROMPTLY IN THE ENVELOPE PROVIDED. IF YOU ATTEND THIS
MEETING, YOU MAY VOTE EITHER IN PERSON OR BY YOUR PROXY. ANY PROXY GIVEN
MAY BE REVOKED BY YOU IN WRITING OR IN PERSON AT ANY TIME PRIOR TO THE
EXERCISE THEREOF.
<PAGE> 4

FLORIDA FIRST BANCORP, INC.
PROXY STATEMENT
TABLE OF CONTENTS

<TABLE>
<S> <C>
SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ii
SELECTED FINANCIAL AND OTHER DATA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vi
MARKET PRICE AND DIVIDEND DATA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vii
INTRODUCTORY STATEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Proposals Presented . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Voting Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Beneficial Ownership of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Proxies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
THE MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Background of and Reasons for the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Opinion of Financial Advisor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Effects of the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Receipt of Cash and Options by the Company's
Stockholders and Optionees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Conditions to the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Regulatory Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Business Pending the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Effective Time of the Merger; Waiver, Amendment and
Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Interests of Certain Persons in the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Employee Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Certain Federal Income Tax Consequences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Accounting Treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Dissenters' Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Expenses of the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Stockholder Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
ADJOURNMENT OF SPECIAL MEETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
INDEPENDENT AUDITORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
STOCKHOLDER PROPOSALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
ANNUAL REPORTS AND FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
INCORPORATION BY REFERENCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
OTHER MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
</TABLE>

<TABLE>
<S> <C> <C>
APPENDIX A: Agreement and Plan of Reorganization, dated as of
May 29, 1996, by and between Florida First Bancorp,
Inc. and Regions Financial Corporation* . . . . . . . . . . . . . . . . . . A-1
APPENDIX B: Form of Plan of Merger by and between Florida First
Bancorp, Inc. and Regions Merger Subsidiary, Inc . . . . . . . . . . . . . . B-1
APPENDIX C: Form of Stockholder Agreement by and between Regions
Financial Corporation and certain stockholders of
Florida First Bancorp, Inc. . . . . . . . . . . . . . . . . . . . . . . . . C-1
APPENDIX D: Opinion of Robert W. Baird & Company, Inc. . . . . . . . . . . . . . . . . . D-1
</TABLE>

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

* Excluding exhibits, appendices and schedules originally attached
thereto other than the Plan of Merger and the Form of Stockholder
Agreement, which are attached hereto as Appendices B and C,
respectively.

i
<PAGE> 5

SUMMARY

The following is a summary of information contained elsewhere in this
Proxy Statement and is not intended to be a complete statement of the matters
described herein. Reference is made to, and this summary is qualified in its
entirety by, the more detailed information contained elsewhere in this Proxy
Statement and in the appendices attached hereto, including the Agreement and
the Plan of Merger, copies of which are attached hereto as Appendices A and B,
respectively.

THE SPECIAL MEETING

The Special Meeting of Stockholders of the Company ("Special Meeting")
will be held at the Company's home office located at 144 Harrison Avenue,
Panama City, Florida, on December 10, 1996 at 4:00 p.m., Central Time. At the
Special Meeting, the Company's stockholders will be asked to (a) consider and
act upon the Agreement and the Plan of Merger pursuant to which (i) Merger
Subsidiary will be merged with and into the Company (the "Merger"), with the
Company becoming a wholly owned subsidiary of Regions; (ii) each stockholder of
the Company immediately prior to the Effective Time (as hereinafter defined)
will be entitled to receive $11.65 in cash ("Merger Consideration"), subject to
certain adjustments (which may increase or decrease the Merger Consideration by
a maximum of $.29 per share as described herein under "The Merger - Receipt of
Cash and Options by the Company's Stockholders and Optionees"), in
consideration for each share of common stock of the Company, par value $.01 per
share ("Common Stock"), owned by such stockholder; and (iii) each outstanding
option to acquire Common Stock outstanding as of the Effective Time shall be
converted into and become an option to receive shares of Regions common stock
in accordance with certain terms of the Company's Key Employee Stock
Compensation Program (the "Stock Plan") and subject to an option exchange ratio
described herein under "The Merger - Receipt of Cash and Options by the
Company's Stockholders and Optionees"; (b) adjourn the Special Meeting if
necessary to solicit additional proxies; and (c) transact such other business
as may properly come before the Special Meeting.

The voting record date for the Special Meeting is October 31, 1996
("Voting Record Date"), and there were 3,396,015 shares of Common Stock issued
and outstanding on such date. Approval of the Agreement will require the
affirmative vote of the holders of a majority of the issued and outstanding
shares of Common Stock. In addition, the holders of a majority of the Common
Stock represented in person or by proxy at the Special Meeting will be required
to approve a motion to adjourn the Special Meeting.

As of the Voting Record Date, directors and officers of the Company as
a group (ten persons) beneficially owned 12.8% of the issued and outstanding
shares of Common Stock (exclusive of presently exercisable stock options), all
of which are expected to be voted in favor of the Agreement and the other
proposals to be considered at the Special Meeting.
<PAGE> 6

iii

THE PARTIES TO THE MERGER

THE COMPANY. The Company is a Florida-chartered unitary savings and
loan holding company located in Panama City, Florida, and its operations
consist almost entirely of being a holding company for Florida FirstBank, its
wholly owned subsidiary (the "Bank"). The Bank is a federally chartered stock
savings bank which currently conducts business through its nine full-service
offices located in Bay County in the Panhandle region of northwest Florida and
in Hernando and Citrus counties in the central west coast of Florida. The
deposits of the Bank are insured to the maximum extent provided by law by the
Savings Association Insurance Fund ("SAIF"), which is administered by the
Federal Deposit Insurance Corporation ("FDIC"). The principal business of the
Bank consists of attracting deposits from the general public and investing such
deposits, together with other funds, to originate loans secured by residential
real estate and, to a lesser extent, multi-family, commercial real estate and
consumer loans as well as into various types of mortgage-backed and other
investment securities. The Company's home office is located at 144 Harrison
Avenue, Panama City, Florida 32401 and its telephone number is (904) 872-7000.
At June 30, 1996, the Company had total assets of $302.7 million, total
liabilities of $281.3 million and stockholders' equity of $21.3 million.

REGIONS. Regions is a Delaware corporation and a multi-bank holding
company registered under the Bank Holding Company Act of 1956, as amended. As
of June 30, 1996, Regions had 11 banking subsidiaries with approximately 357
offices in Alabama, Florida, Georgia, Louisiana and Tennessee. Regions'
headquarters are located in Birmingham, Alabama and its telephone number is
(205) 326-7100. At June 30, 1996, Regions had total assets of $17.9 billion,
total deposits of $14.6 billion and stockholders' equity of $1.4 billion.

MERGER SUBSIDIARY. Merger Subsidiary will be a Florida corporation
created by Regions solely to facilitate the proposed acquisition of the Company
by Regions. The only activity to be conducted by Merger Subsidiary will be to
merge with and into the Company. Except for activities related to the
Agreement, Merger Subsidiary will not engage in any operations. Upon
consummation of the merger of Merger Subsidiary with and into the Company, the
Company will become a wholly owned subsidiary of Regions, and the separate
corporate existence of Merger Subsidiary will cease.

All information contained in this Proxy Statement relating to Regions
and Merger Subsidiary has been provided by Regions, and all information
contained herein relating to the Company and the Bank has been provided by the
Company.

TERMS OF THE MERGER

In accordance with the terms of the Agreement, Merger Subsidiary, a
newly formed, wholly owned subsidiary of Regions, will be merged with and into
the Company, with the Company becoming a wholly owned subsidiary of Regions.

Pursuant to the terms of the Agreement, each stockholder of the
Company will be entitled to receive $11.65 in cash, subject to certain
adjustments (which may increase or decrease the Merger Consideration by a
maximum of $.29 per share as described herein under "The Merger - Receipt of
Cash and Options by the Company's Stockholders and Optionees"), in
consideration for each share of Common Stock owned by such stockholder. As of
the date hereof, no adjustment of the Merger Consideration may be required. In
addition, each option to acquire Common Stock outstanding as of the Effective
Time shall be converted into and become an option with respect to Regions
common stock, subject to certain terms of the Company's Stock Plan and adjusted
by an option exchange ratio described herein under "The Merger - Receipt of
Cash and Options by the Company's Stockholders and Optionees."

On May 28, 1996, the last business day preceding the public
announcement of the proposed Merger, the last reported sales price for the
Common Stock was $9.63 per share. On October 30, 1996, the last reported sales
price of the Common Stock was $11.25. See "Market Price and Dividend Data."
<PAGE> 7

FAIRNESS OPINION

The Board of Directors of the Company has received a written opinion
from Robert W. Baird & Co. Incorporated ("Baird"), dated as of November 7,
1996, to the effect that, based on the factors stated therein, the
consideration to be received by the Company's stockholders pursuant to the
Agreement is fair from a financial point of view to the stockholders of the
Company. A copy of the fairness opinion of Baird is attached hereto as Appendix
D and should be read in its entirety.

RECOMMENDATION OF THE BOARD OF DIRECTORS OF THE COMPANY

The Board of Directors of the Company has determined that the Merger
is in the best interests of its stockholders and, accordingly, has approved the
Merger.

THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE
AGREEMENT. In reaching its decision, the Board of Directors considered the
economic terms of the proposed Merger and the advantages which it affords the
Company's stockholders. Among other factors considered were the Company's
historical operations and earnings, the Company's financial and management
resources, the historical market value of the Common Stock and its dividend
record, and the Company's ability to compete in the changing financial
environment. See "The Merger - Background of and Reasons for the Merger." The
directors of the Company have an interest in the Merger as described under "The
Merger - Interests of Certain Persons in the Merger."

STOCKHOLDER AGREEMENTS

In conjunction with the Agreement, Regions has entered into
stockholder agreements with each of the directors of the Company ("Stockholder
Agreements"). Pursuant to such Stockholder Agreements, a form of which is
attached to this Proxy Statement as Appendix C hereto, each of the directors of
the Company have agreed, among other things, not to sell, pledge, transfer or
otherwise dispose of his shares of Common Stock and to vote such shares of
Common Stock in favor of the Agreement. See "The Merger - Stockholder
Agreements."

EFFECTIVE TIME OF THE MERGER

The Merger shall become effective on the date and at the time the
Articles of Merger shall become effective with the Department of State of the
State of Florida ("Florida Department of State") (the "Effective Time"). Such
filing will occur only after the receipt of all requisite regulatory approvals,
approval of the Agreement by the requisite vote of the Company's stockholders
and the satisfaction or waiver of all other conditions to the Merger. See "The
Merger - Effective Time of the Merger; Waiver, Amendment and Termination."

CONDITIONS TO THE MERGER; WAIVER, AMENDMENT AND TERMINATION

Consummation of the Merger is subject to various conditions,
including, without limitation, obtaining the requisite approval of the
Agreement by the stockholders of the Company; receipt of all necessary
regulatory approvals pertaining to the Merger, including that of the Board of
Governors of the Federal Reserve System ("FRB"), and certain other closing
conditions. An Application with respect to the Merger has been filed by
Regions with the foregoing governmental agency and is currently pending.
However, there can be no assurance that all requisite regulatory approvals will
be obtained, and such approvals may not be obtained for a substantial period of
time following the date of the Special Meeting. If the Merger is not
consummated by April 30, 1997, either Regions or the Company may terminate the
Agreement provided that the party seeking to terminate the Agreement is not in
breach of its obligation to consummate the Merger by such date. See "The
Merger - Conditions to the Merger" and "The Merger - Regulatory Approvals."
Substantially all of the conditions to consummation of the Merger (except for
required stockholder and regulatory approvals) may be waived at
<PAGE> 8

any time by the party for whose benefit they were created, and the Agreement
may be amended at any time by written agreement of the parties upon the
approval of the Boards of Directors of the parties, provided that no waiver or
amendment occurring after approval of the Agreement by the Company's
stockholders shall reduce the amount or change the nature of the consideration
which the Company's stockholders are entitled to receive in the Merger or
otherwise violate the Florida Business Corporation Act ("FBCA"). See "The
Merger - Effective Time of the Merger; Waiver, Amendment and Termination."

DISSENTERS' RIGHTS

Under the provisions of the FBCA, stockholders of the Company do not
have the right to dissent from the Merger. See "The Merger - Dissenters'
Rights."

CERTAIN FEDERAL INCOME TAX CONSEQUENCES

The payment of cash for the Common Stock pursuant to the terms of the
Agreement will be a taxable transaction to the stockholders of the Company for
federal income tax purposes and may also be a taxable transaction under state,
local and other tax laws. The stockholders of the Company are urged to consult
their personal tax advisors regarding the tax consequences of the proposed
transaction as it may relate to them. See "The Merger - Certain Federal Income
Tax Consequences."

INTERESTS OF CERTAIN PERSONS IN THE MERGER

The Agreement contains provisions which affect the employment
agreements of certain executive officers of the Company and require Regions to
indemnify for a period of six years after the Effective Time the Company's
directors, officers, employees and agents for acts or omissions occurring at or
prior to the Effective Time to the full extent as would have been permitted by
the Company if such claim had been presented prior to the Effective Time. See
"The Merger - Interests of Certain Persons in the Merger."
<PAGE> 9
vi

SELECTED FINANCIAL AND OTHER DATA

The following table sets forth certain information regarding the Company at
the dates and for the periods indicated.
<TABLE>
<CAPTION>
At or For the Six Months
Ended
June 30, At or For the Year Ended December 31,
------------------------ -----------------------------------------------------------------

1996 1995 1995 1994 1993 1992 1991
---------- ----------- ---------- ---------- ---------- ---------- ----------

(Dollars in thousands, except per share data)
BALANCE SHEET DATA:

<S> <C> <C> <C> <C> <C> <C> <C>
Total assets $302,388 $292,409 $303,329 $278,029 $272,510 $268,792 $265,705
Loans receivable, net 170,295 170,473 171,379 168,684 165,223 168,229 177,551
Loans held for sale 3,263 3,157 3,304 1,398 6,781 6,824 2,914
Investments held to maturity -- 64,257 68,848 56,162 68,913 52,449 41,643
Investments available for sale 86,430 19,847 32,543 23,868 -- -- --
Cash and cash equivalents 29,124 21,476 14,437 12,766 15,182 19,597 15,395
Deposits 245,652 240,944 250,041 225,678 210,079 213,062 203,022
Borrowings 32,521 28,857 30,721 32,593 46,164 42,100 52,600
Stockholders' equity 21,048 19,204 20,574 17,564 14,047 11,515 8,154

OPERATIONS DATA:
Interest income $ 11,266 $ 10,448 $ 21,589 $ 18,544 $ 18,387 $ 19,946 $ 22,269
Interest expense 6,430 6,200 12,898 10,793 11,186 13,534 17,827
------ ------- -------- ------- -------- -------- -------
Net interest income 4,836 4,248 8,691 7,751 7,201 6,412 4,442
Provision for loan losses -- 10 10 408 846 1,556 921
------ ------ ------- ------- ------- ------- --------
Net interest income after
provision for loan losses 4,836 4,238 8,681 7,343 6,355 4,856 3,521
Other income 1,169 1,108 2,235 1,278 2,857 2,410 1,928
Operating expenses 3,746 3,615 7,059 6,595 7,416 6,229 7,596
------ ------ ------- ------- ------- ------- -------
Income before income taxes
and extraordinary items 2,259 1,731 3,857 2,026 1,796 1,037 (2,147)
Income tax expense (benefit) 852 617 1,446 (608) (801) 448 --
------ ------ ------- ------- ------- ------- -------
Income (loss) before
extraordinary items 1,407 1,114 2,411 2,634 2,597 589 (2,147)
Extraordinary item -
utilization of net operating
loss carry forward -- -- -- -- -- 402 --
Extraordinary item -
prepayment penalties -- -- -- 74 80 15 12
-------- -------- -------- -------- -------- -------- --------
Net income (loss) $ 1,407 $ 1,114 $ 2,411 $ 2,560 $ 2,517 $ 976 $ (2,159)
======== ======== ======== ======== ======== ======== ========
Earnings (loss) per share:
Primary income (loss) per
share $ .42 $ .33 $ .72 $ .83 $ .84 $ .48 $ (1.16)
======== ======== ======== ======== ======== ======== ========
Fully diluted income (loss)
per share $ .42 $ .33 $ .72 $ .83 $ .82 $ .48 $ (1.16)
======== ======== ======== ======== ======== ======== ========

Dividends per common
share $ .12 $ -- $ .06 $ -- $ -- $ -- $ --
======== ======== ======== ======== ======== ======== ========

OTHER SELECTED DATA:(1)
Return on average assets .93% .79% .82% .94% .95% .37% (.82)%
Return on average equity 13.53 12.20 12.70 16.95 20.47 11.36 (21.72)
Equity-to-assets ratio 7.05 6.57 6.78 6.32 5.16 4.28 3.07
Interest rate spread 3.16 2.90 2.83 2.97 3.01 2.86 2.34
Net interest margin 3.37 3.13 3.06 3.01 2.92 2.66 1.89
Nonperforming assets-to-
total assets .57 1.38 .92 2.15 2.78 6.04 9.81
Number of full-service
offices at end of period 9 9 9 8 8 8 9
</TABLE>

(1) Annualized as appropriate for the six months ended June 30, 1995 and
1996.
<PAGE> 10

vii

MARKET PRICE AND DIVIDEND DATA

The Common Stock is traded in the over-the-counter market and is
quoted on the Nasdaq National Market System under the symbol "FFPC". As of the
Voting Record Date, there were 3,396,015 shares of Common Stock outstanding
owned of record by approximately 624 stockholders. The following table sets
forth the high, low and closing sales prices, as reported by Nasdaq, for the
Company's Common Stock and the amount of dividends paid on the Common Stock for
the periods indicated.

<TABLE>
<CAPTION>
SALES
----------------------
CASH DIVIDENDS
QUARTER ENDED: HIGH LOW CLOSING PAID PER SHARE
- ---------------------------- ------ ------ ------- --------------
<S> <C> <C> <C> <C>
December 31, 1994 $5.250 $4.500 $4.750 $ --
March 31, 1995 5.750 5.000 5.500 --
June 30, 1995 6.000 5.375 5.500 --
September 30, 1995 8.000 7.250 7.875 --
December 31, 1995 7.750 7.000 7.375 0.06
March 31, 1996 8.375 7.625 8.000 0.06
June 30, 1996 11.500 11.000 11.125 0.06
September 30, 1996 11.500 11.000 11.125 0.06
December 31, 1996 11.625 11.125 11.250 --
(through October 30, 1996)
</TABLE>

Such over-the-counter market quotations may reflect inter-dealer prices,
without retail markup, markdown or commission and may not necessarily represent
actual transactions. On May 28, 1996, the business day prior to public
announcement of the proposed Merger, the last reported sales price for shares
of Common Stock was $9.63 per share. On October 30, 1996 (the latest
practicable date prior to the mailing of this Proxy Statement), the last
reported sales price of the Common Stock was $11.25. Dividends are declared by
the Company's Board of Directors based upon, among other things, the results of
operations and financial condition of the Company, economic conditions at the
time and provisions of the FBCA. The Agreement imposes certain restrictions on
the Company's ability to grant dividends in the future. See "The Merger -
Business Pending the Merger."
<PAGE> 11

FLORIDA FIRST BANCORP, INC.

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

PROXY STATEMENT

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

SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON DECEMBER 10, 1996

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

INTRODUCTORY STATEMENT

This Proxy Statement is furnished to the holders of Common Stock of
the Company in connection with the solicitation of proxies on behalf of the
Board of Directors, to be used at a Special Meeting of Stockholders to be held
at the Company's home office located at 144 Harrison Avenue, Panama City,
Florida, on December 10, 1996 at 4:00 p.m., Central Time, and at any
adjournment thereof for the purposes set forth in the Notice of Special Meeting
accompanying this Proxy Statement. This Proxy Statement is expected to be
mailed to stockholders on or about November 7, 1996.

PROPOSALS PRESENTED

At the Special Meeting, stockholders of the Company will be asked to
consider and vote upon the Agreement by and between the Company and Regions, a
Delaware corporation and a registered bank holding company, pursuant to which
(1) Merger Subsidiary, a newly formed, wholly owned subsidiary of Regions, will
be merged with and into the Company, with the Company becoming a wholly owned
subsidiary of Regions; (2) each stockholder of the Company immediately prior to
the Effective Time will be entitled to receive $11.65 in cash ("Merger
Consideration"), subject to certain adjustments (which may increase or decrease
the Merger Consideration by a maximum of $.29 per share as described herein
under "The Merger - Receipt of Cash and Options by the Company's Stockholders
and Optionees"), in consideration for each share of Common Stock owned by such
stockholder and each option to purchase Common Stock shall be converted into
and become an option to receive shares of Regions common stock in accordance
with certain terms of the Company's Stock Plan and subject to an option
exchange ratio described herein under "The Merger - Receipt of Cash and Options
by the Company's Stockholders and Optionees." At the Special Meeting,
stockholders will also be asked to adjourn the Special Meeting if necessary to
solicit additional proxies.

In addition to the proposals discussed above, any additional business
that properly comes before the Special Meeting will be voted upon, and the
persons named in the proxies and acting thereunder will have discretion to vote
on such matters in accordance with their best judgment. Except with respect to
procedural matters incident to the conduct of the meeting as set forth under
"Other Matters," the management of the Company currently does not know of any
additional matters that may properly come before the Special Meeting.

VOTING RIGHTS

Only holders of record of shares of Common Stock at the close of
business on October 31, 1996 (the "Voting Record Date") will be entitled to
notice of and to vote at the Special Meeting. At the close of business on such
date, there were 3,396,015 shares of Common Stock issued and outstanding.
Stockholders of record on the Voting Record Date are entitled to one vote per
share on each matter to be presented at the Special Meeting. The presence,
either in person or by proxy, of the holders of a majority of the shares of
Common Stock issued and outstanding as of the Voting Record Date is necessary
to constitute a quorum at the Special Meeting.

Approval of the Agreement will require the affirmative vote, either in
person or by proxy, of the holders of at least a majority of the issued and
outstanding shares of Common Stock. As of the Voting Record Date, directors
and officers of the Company as a group (ten persons) beneficially owned 12.8%
of the issued and outstanding shares of Common Stock (exclusive of presently
exercisable stock options), all of which are expected to be voted in favor of
the Agreement and the other proposals to be considered at the Special Meeting.
<PAGE> 12
2

Under rules of the New York Stock Exchange, the proposal to adopt the
Agreement is considered a "non-discretionary item" whereby brokerage firms may
not vote in their discretion on behalf of their clients if such clients have
not furnished voting instructions. Abstentions and such broker "non-votes"
will be considered in determining the presence of a quorum at the Special
Meeting but will not be counted as a vote cast for a proposal. Because the
proposal to adopt the Agreement is required to be approved by the holders of a
majority of the outstanding shares of Common Stock, abstentions and broker
"non-votes" will have the same effect as a vote against this proposal.

BENEFICIAL OWNERSHIP OF THE COMPANY

The following table sets forth information as to the Common Stock
beneficially owned, as of October 31, 1996, by the only persons or entities
known to the Company to be the beneficial owners of more than 5% of the Common
Stock, each individual director of the Company and by all directors and
officers of the Company as a group.

<TABLE>
<CAPTION>
Amount and Nature of
Name and Address of Beneficial Owner Beneficial Ownership(1) Percent of Class
----------------------------------------------- -------------------------------- ----------------------

Directors(2):
<S> <C> <C>
William H. Carr 191,857(3) 5.6%

G. Bayne Collins 27,373(4) *

Tommy M. Cooley 59,311(5) 1.8%

C. L. Jinks, Jr. 47,509(6) 1.4%

James E. McIntyre 5,654 *

John Robert Middlemas 32,706(7) 1.0%

Joseph K. Tannehill 100 *

Andrew W. Stein 74,230(8) 2.2%

Directors and executive officers 469,692(9) 13.7%
as a group (10 persons)

Principal Stockholders:

Stephen A. Bodzin, Trustee 181,500(10) 5.3%
1156 Fifteenth Street, N.W., Suite 329
Washington, D.C. 20005

Jerry N. Carr 191,857(3) 5.6%
Jennings Road at I-77
Statesville, NC 28677

William H. Carr 191,857(3) 5.6%
1117 Highway 84 Bypass
Enterprise, AL 36330

Joseph F. Chapman, III 181,000(11) 5.3%
1002 W. 23rd Street, Suite 400
Panama City, FL 32405
</TABLE>
(Table continued on following page)
<PAGE> 13
3

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

* Represents less than 1% of the issued and outstanding Common Stock.

(1) Pursuant to rules promulgated by the Securities and Exchange Commission
("SEC") under the Securities Exchange Act of 1934, as amended
("Exchange Act"), a person or entity is considered to beneficially own
shares of Common Stock if the person or entity has or shares (i) voting
power, which includes the power to vote or to direct the voting of the
shares, or (ii) investment power, which includes the power to dispose
or direct the disposition of the shares. Unless otherwise indicated, a
person or entity has sole voting and sole investment power with respect
to the indicated shares. Shares which are subject to stock options and
which may be exercised within 60 days of the Voting Record Date are
deemed to be outstanding for the purpose of computing the percentage of
Common Stock beneficially owned by such person.

(2) Except as otherwise noted, the mailing address for each such person is
144 Harrison Avenue, Panama City, Florida 32401.

(3) Messrs. Jerry N. Carr, William H. Carr and Talmadge E. Lee filed with
the Office of Thrift Supervision ("OTS") a Notice of Change in Control
pursuant to 12 C.F.R. Section 574.3(b) on June 27, 1994, as amended on
August 5, 1994, with respect to their ownership of the Company Common
Stock. By letter dated September 21, 1994, the OTS stated that it did
not intend to disapprove the proposed acquisition of up to 23.99% of
the outstanding common stock of the Company, in accordance with the
terms and representations in the Notice. In accordance with such
Notice, Messrs. Jerry N. Carr, William H. Carr and Talmadge E. Lee
exercised warrants covering an aggregate of 100,945 shares of Common
Stock. A portion of the shares reflected in the above table as being
beneficially owned by Messrs. Jerry N. Carr, William H. Carr and
Talmadge E. Lee are held in a voting trust agreement for the benefit
of such persons.

(4) Includes 27,273 shares of Common Stock held by three different trusts
for benefit of minor children of which Mr. Collins is trustee.

(5) Includes 3,500 shares owned by Mr. Cooley's wife. Also includes 4,200
shares of Common Stock held by two different trusts for benefit of
minor children of which Mr. Cooley is trustee.

(6) Includes 27,300 shares of Common Stock owned jointly with Mr. Jinks'
wife, 6,459 shares of Common Stock owned by Mr. Jinks' wife and 1,750
shares of Common Stock owned by Mr. Jinks' grandchildren (held in
trust by Mrs. Jinks), as to which Mr. Jinks disclaims beneficial
ownership.

(7) Includes 28,660 shares of Common Stock owned by the insurance agency
of which Mr. Middlemas is a partner.

(8) Includes 38,480 shares of Common Stock owned jointly with Mr. Stein's
wife. Also includes 300 shares Mr. Stein's wife owns jointly with her
mother as to which shares Mr. Stein disclaims beneficial ownership.
Includes 23,000 shares of Common Stock which Mr. Stein has the right
to acquire beneficial ownership through the exercise of stock options,
which stock options are currently exercisable.

(Footnotes continued on following page)
<PAGE> 14
4

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

(9) Includes 35,000 shares with respect to which certain officers, one of
whom is also a director, have the right to acquire beneficial
ownership through the exercise of stock options issued pursuant to the
Company's Key Employee Stock Compensation Program, which stock options
are currently exercisable. Does not include shares beneficially owned
by Messrs. Jerry N. Carr and Talmadge E. Lee.

(10) Consists of 59,500 shares held by Mr. Bodzin, Trustee, U/A FBO Steven
M. Reich, 1976 Trust; 1,000 shares held by Mr. Bodzin, Trustee, Bodzin
and Haynes, P.C. Profit Sharing Trust; and 121,000 shares held by Mr.
Bodzin, Trustee, U/A FBO Anne S. Reich 1977 Securities Trust #1.

(11) Includes 51,200 shares with respect to which Mr. Chapman shares voting
and dispositive power.

PROXIES

Each proxy solicited hereby, if properly signed and returned to the
Company and not revoked prior to its use, will be voted at the Special Meeting,
or any adjournment or adjournments thereof, in accordance with the instructions
contained therein. IF NO CONTRARY INSTRUCTIONS ARE GIVEN, EACH PROXY RECEIVED
WILL BE VOTED IN FAVOR OF (1) THE APPROVAL OF THE AGREEMENT, (2) THE
ADJOURNMENT OF THE SPECIAL MEETING IF NECESSARY TO SOLICIT ADDITIONAL PROXIES,
AND (3) UPON THE TRANSACTION OF SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE
THE SPECIAL MEETING, IN ACCORDANCE WITH THE BEST JUDGMENT OF THE PERSONS
APPOINTED AS PROXIES.

Any stockholder giving a proxy has the power to revoke it at any time
before it is exercised by (i) filing with the Secretary of the Company written
notice thereof (Gary L. Smith, Florida First Bancorp, Inc., 144 Harrison
Avenue, Panama City, Florida 32401), (ii) submitting a duly executed proxy
bearing a later date, or (iii) by appearing at the Special Meeting and giving
the Secretary notice of his or her intention to vote in person. The mere
presence (without notifying the secretary) of a stockholder at the Special
Meeting will not constitute revocation of a given proxy. Proxies solicited
hereby may be exercised only at the Special Meeting and any adjournment thereof
and will not be used for any other meeting.

THE MERGER

The following description of the material terms of the Merger does not
purport to be complete and is qualified in its entirety by reference to the
Agreement, a copy of which is attached to this Proxy Statement as Appendix A.
All stockholders are urged to read this document carefully.

GENERAL

The Board of Directors of the Company has determined that the
acquisition of the Company by Regions is desirable and in the best interests of
the Company's stockholders and has approved the Merger. The Merger will be
accomplished through the Merger of Merger Subsidiary, a newly formed, wholly
owned subsidiary of Regions, with and into the Company pursuant to the
Agreement, with the Company being the resulting entity and becoming a wholly
owned subsidiary of Regions. THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS
A VOTE FOR THE APPROVAL OF THE AGREEMENT. Upon consummation of the Merger, each
share of Common Stock outstanding at the Effective Time will be converted into
the right to receive $11.65 in cash, subject to certain adjustments (which may
increase or decrease the Merger Consideration by a maximum of $.29 per share as
described herein under "- Receipt of Cash and Options by the Company's
Stockholders and Optionees"). The directors of the Company have an interest in
the Merger as described under "- Interests of Certain Persons in the Merger."

BACKGROUND OF AND REASONS FOR THE MERGER

BACKGROUND OF THE MERGER. One of the primary goals of the Board of
Directors of the Company is to maximize stockholder wealth. In that regard,
the Board reviewed various means of accomplishing such objective. At a
planning retreat held in June 1994 of the full Board of Directors and
management of the Company, the Board and management reviewed its various
strategic business alternatives, including the possible acquisition of
<PAGE> 15

the Company. In February and March 1995, the Board of Directors reviewed the
terms of recent mergers as well as emerging technology enhancements discussed
in various business and trade publications and determined that the acquisition
of the Company might be the most effective manner of maximizing stockholder
value. The Board engaged two outside consultants to analyze the future of
community banking during separate planning sessions with the Board of Directors
in April and May 1995.

The Board engaged Baird in October 1995 to represent the Company in
seeking potential acquirers. In January 1996, Baird contacted 19 potential
acquirers, including Regions, to determine their possible interest in engaging
in a business combination with the Company. Of that group, nine executed
confidentiality agreements with the Company and received an information
memorandum. Five of the parties, including Regions, expressed interest in the
possible acquisition of the Company and were invited to meet with the Finance
Committee of the Board. Subsequent to those meetings, initial non-binding
indications of interest were requested by Baird of the five interested parties.
Three of such parties submitted proposals to the Company. Based on these
initial proposals, at the March 1996 meeting of the Board of Directors, Regions
and one other potential acquirer were invited to perform due diligence on the
Company with the intent of negotiating a definitive acquisition agreement. Due
diligence was performed in April 1996. At a meeting of the Finance Committee
on May 2, 1996 it was decided that Regions' indication of interest provided the
best value to stockholders. Based on the terms of Region's indication of
interest, the Board of Directors at a special meeting on May 8, 1996,
authorized Mr. Andrew W. Stein, President and Chief Executive Officer, to
negotiate the terms of a definitive agreement with Regions.

The Finance Committee met on May 24, 1996 to review a draft of the
Agreement and the full Board of Directors, with Baird and the Company's special
counsel in attendance, met in special session on May 29, 1996 to review the
recommendation of the Finance Committee and the terms of the Agreement,
including the exhibits thereto. Baird reviewed the terms of the Merger and
discussed its fairness from a financial point of view of the Company's
stockholders. Baird delivered its oral opinion that as of such date, the
Merger Consideration was fair from a financial point of view to the
stockholders of the Company. The Board then voted to approve the Agreement.
On that same day a press release announcing the execution of the Agreement was
issued.

REASONS FOR THE MERGER. Based on the reasons set forth below, it is
the view of the Board of Directors that the best interests of the Company and
its stockholders would be served by a sale of the Company. In the course of
reaching its decision to approve the Merger, the Board of Directors consulted
with its legal and financial advisors as well as the management of the Company
and considered a number of factors, including without limitation, the
following: the Company's business, operations, financial condition and
earnings; the Company's prospects, especially in light of the consolidation
currently under way in the banking industry, the need of financial institutions
to diversify revenue sources and the difficulties faced by the Company in
attempting to achieve such diversification as a stand alone entity; the current
and prospective economic, regulatory and competitive environment facing
financial institutions, including the Company; the financial resources of
Regions and the likelihood of receiving the requisite regulatory approvals in a
timely manner and the terms of the Agreement. In reaching its decision to
approve the Merger, the Board of Directors of the Company also considered
various alternatives designed to maximize stockholder value, including
remaining independent. In this connection, the Board considered the risks of
remaining independent, including, among other things, concerns regarding the
Company's potential to engage in acquisitions which could further enhance
stockholder value and the costs and operational risks associated with upgrading
the Company's operational systems and acquiring and instituting new technology
in order to enhance its ability to compete in the rapidly changing financial
marketplace. The Board considered the increasingly competitive banking
environment that the Company operated in, and in this regard, the consolidation
that was taking place both in Florida as well as nationally, the increased
competition that was arising from non-banking entities, in both the deposit and
lending areas, and the presence of significantly larger financial institutions
operating in the Company's market area and in Florida that were looking to
expand through acquisitions, which raised questions regarding the Company's
ability to grow through such means. In deciding to approve the Merger, the
Board of Directors of the Company also considered the Company's earnings per
share and the premium over market value and book value being offered to the
Company's stockholders by Regions. The Board of Directors also considered the
ability of the combined entity to provide continued services to the communities
presently served by the Bank. The Board of Directors also considered the
advice rendered by Baird, the Company's financial advisor (see Appendix D for
the fairness opinion of Baird), analyses of factors, including, but not limited
to, market price, earnings and book value per share, and analyses of the
premiums paid in the acquisitions of other companies similar to the
<PAGE> 16

Company. After considering the factors described above, the Board of Directors
determined that the Merger and the consideration to be paid to the Company's
stockholders in connection with the Merger was fair and, consequently, approved
the Merger Agreement as being in the best interests of the Company and its
stockholders. ACCORDINGLY, THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS
VOTE FOR APPROVAL OF THE MERGER AGREEMENT.

OPINION OF FINANCIAL ADVISOR

The Company has requested Baird's opinion as to the fairness, from a
financial point of view, to the stockholders of the Company of the Merger
Consideration to be received by them under the terms of the Agreement between
the Company and Regions. Upon consummation of the Merger, each outstanding
share of the Common Stock of Company will be converted into the right to
receive a cash payment of $11.65 subject to possible adjustment in accordance
with the terms of the Agreement. The foregoing summary of the Merger is
qualified in its entirety by reference to the Agreement.

Baird, as part of its investment banking business, is engaged in the
evaluation of businesses and their securities in connection with mergers and
acquisitions, negotiated underwriting, competitive bidding, secondary
distributions of listed and unlisted securities, private placements, and
valuations for estate, corporate and other purposes. In the ordinary course of
Baird's business, Baird actively trades the Company Common Stock for its own
account and for the accounts of its customers. Also, Baird has provided
investment banking services to the Company in the past for which Baird has
received customary fees. Baird has been retained to represent the Company in
an investment capacity and assisted in negotiating the Agreement for which
Baird will receive compensation equal to 1.0% of the Merger Consideration and
will be indemnified against certain liabilities, including liabilities arising
under the securities laws.

In reaching its opinion, Baird studied and analyzed the financial
position, both current and historical, of the Company. Baird met with the
senior management of the Company to review its business history, current
operations, and future prospects. In performing the investigation, Baird
reviewed and analyzed, among other things, the following: (i) the Agreement;
(ii) the Proxy Statement; (iii) audited consolidated financial statements of
the Company and Regions for each of the five years ending December 31, 1995,
and unaudited consolidated financial statements for the six-month period ended
June 30, 1996; (iv) Annual Reports to Stockholders and Annual Reports on Form
10-KSB or Form 10-K (as the case may be) of the Company and Regions for each of
the five years ended December 31, 1995; and the Quarterly Reports to
Stockholders and Quarterly Reports on Form 10-QSB or Form 10-Q (as the case may
be) for the three and six month periods ended June 30, 1996 of the Company and
Regions; (v) various management reports, financial records, regulatory filings,
and such other documents as were furnished to Baird by the management of the
Company and Regions; (vi) market price, trading data, and dividend history of
the Company Common Stock; (vii) market prices, trading data, and dividend
histories of the publicly-traded securities of other thrift institutions Baird
deemed comparable; and (viii) the financial terms and characteristics of recent
mergers and acquisitions with respect to other thrift institutions Baird found
relevant to its inquiry. In rendering its opinion, Baird analyzed certain
financial and other information relating to other institutions Baird deemed
comparable to the Company and conducted such other studies, analyses and
inquiries as Baird considered appropriate. Baird's investigation into the
affairs of Regions was necessarily limited to an analysis of its financial
condition and capability to make the cash payments provided for under the
Agreement.

In performing its review, Baird relied upon and assumed without
independent verification the accuracy and completeness of all information
publicly available or otherwise provided to or received by it. Baird has not
performed, been provided with or considered any independent evaluation or
appraisal of the assets or liabilities (contingent or otherwise) of the
Company. With respect to financial forecasts and other information and data
provided to or otherwise reviewed by or discussed with Baird, Baird has been
advised by the management of the Company that such forecasts and other
information and data were prepared on bases reflecting reasonable estimates and
judgments as to the expected future financial performance of the Company. Baird
has not been asked to consider, and its opinion does not address, the relative
merits of the Merger as compared to any alternative business strategy that
might exist for the Company or the effect of any other transaction in which the
Company might engage. Baird's opinion expressed herein is necessarily based on
market, economic, and other relevant considerations as they exist and can be
evaluated as of the date of the opinion and Baird assumed that
<PAGE> 17

Regions will receive regulatory approvals without undue delay. Baird has not
undertaken to reaffirm or revise its opinion or otherwise comment on any events
occurring after the date of its opinion.

Based upon and subject to the foregoing, Baird's experience as
investment bankers and such other factors as Baird deemed relevant, it is
Baird's opinion that, as of the date of its opinion, the Merger consideration
provided for in the Agreement is fair, from a financial point of view, to the
stockholders of the Company.

The full text of Baird's opinion is attached as Appendix D to this
Proxy Statement and is incorporated herein by reference thereto. The
description of the opinion set forth herein is qualified in its entirety by
reference to Appendix D. The Company's stockholders are urged to read the
opinion in its entirety for a description of the procedures followed,
assumptions made, matters considered, and qualifications and limitations on the
review undertaken, by Baird in connection therewith.

THE OPINION OF BAIRD IS DIRECTED TO THE COMPANY'S BOARD IN ITS
CONSIDERATION OF THE MERGER CONSIDERATION AS DESCRIBED IN THE AGREEMENT, AND
DOES NOT CONSTITUTE A RECOMMENDATION TO ANY STOCKHOLDER OF THE COMPANY AS TO
ANY ACTION THAT SUCH STOCKHOLDER SHOULD TAKE IN CONNECTION WITH THE AGREEMENT,
OR OTHERWISE. IT IS FURTHER UNDERSTOOD THAT THE OPINION OF BAIRD IS BASED ON
MARKET CONDITIONS AND OTHER CIRCUMSTANCES EXISTING ON NOVEMBER 7, 1996 AND THE
DATE HEREOF.

Set forth below is a brief summary of selected analyses presented by
Baird to the Company's Board of Directors in connection with its fairness
opinion:

Comparative Company Analysis

To assess the Company relative to its peers Baird looked at the
following group of fifteen publicly traded thrifts in the southeastern United
States: BankUnited Financial Corp., Cooperative Bankshares, Inc., Eagle
Bancshares, Fidelity Financial Bankshares, FLAG Financial Corp., Fed One
Bancorp, First Southeast Financial Corp., First Savings Bancorp, Inc., United
Federal Savings Bank, Newnan Savings Bank, FSB, Independence Federal Savings,
Meritrust Federal SB, FFLC Bancorp, Inc., First Liberty Financial Corp. and
First Palm Beach Bancorp, Inc. In so doing, Baird analyzed market price,
trading data, earning performance, growth rates, capital adequacy, loan
portfolio composition, asset quality and liquidity for the Company and the
selected peer group. Selected summary statistics from the analyses are as
follows. The Company had total assets of $302.0 million compared to the median
of $287.0 million for the peer group and a ratio of equity to assets of 7.05%
compared to a median for the peer group of 9.21%. Return on average assets for
the Company was .90% compared to a median of .94% for the peer group while
return on average equity was 13.27% for the Company compared to a median of
9.35% for the peer group. The Company had an asset growth rate of 3.52%
compared to the median peer group rate of 3.10%. The Company's ratio of
reserves for loan losses to loans was 2.09% compared to a peer group median of
.64% and its ratio of non-performing assets to assets was .76% compared to .66%
for the median of the peer group. The Company's liquid assets to total assets
ratio was 39.25% compared to 25.12% for the median of the peer group.

Comparative Transaction Analysis

Baird reviewed thrift acquisition data for 55 transactions that took
place in the United States between December 15, 1993 and August 22, 1996 for
thrifts with between $200 and $400 million in assets. Additionally, 22
transactions in the Southeast occurring during this same time period were
analyzed. Baird also analyzed 33 transactions for thrift institutions in the
State of Florida occurring between October 7, 1992 and July 25, 1996. Finally,
Baird looked at acquisitions of thrifts with between $200 and $400 million in
assets with ratios of equity to assets between 6% and 8%. As set forth below
Baird calculated both the median and mean Price to Book, Price to Tangible
Book, Price to Earnings and Premium to Core Deposit ratios for each transaction
group. Within each transaction group the median pricing terms were applied to
the Company's June 30, 1996 unaudited financial statements to calculate a per
share valuation range for the Company Common Stock.
<PAGE> 18
8

<TABLE>
<CAPTION>
THRIFT ACQUISITION COMPARATIVE GROUP - SELLERS WITH $200 TO $400 MILLION IN ASSETS
- ----------------------------------------------------------------------------------
Premium/Core
Price/Book Price/Tang. Book Price/Earnings Deposits
------------------ ------------------- -------------------- ------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Median 128.7% Median 137.6% Median 19.3x Median 6.2%

Mean 142.4% Mean 145.1% Mean 22.9x Mean 6.8%
Florida First Bancorp, Inc.
($11.65 per share) 186.4% 186.4% 14.9x 7.6%

Median applied to the Company $8.04 $8.60 $15.07 $10.61
-----------------------------
</TABLE>

<TABLE>
<CAPTION>
THRIFT ACQUISITION COMPARATIVE GROUP - SOUTHEASTERN SELLERS WITH $200 TO $400 MILLION IN ASSETS
- ------------------------------------------------------------------------------------------------------------------------------------

Premium/Core
Price/Book Price/Tang. Book Price/Earnings Deposits
------------------ ------------------- -------------------- ------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Median 145.0% Median 145.0% Median 17.8x Median 7.5%

Mean 153.7% Mean 154.6% Mean 21.7x Mean 8.4%
Florida First Bancorp, Inc.
($11.65 per share) 186.4% 186.4% 14.9x 7.6%

Median applied to the Company $9.06 $9.06 $13.91 $11.54
-----------------------------
</TABLE>

<TABLE>
<CAPTION>
THRIFT ACQUISITION COMPARATIVE GROUP - FLORIDA TRANSACTIONS
- ------------------------------------------------------------------------------------------------------------------------------------

Mean 154.7% Mean 165.1% Mean 16.1x Mean 6.0%

Florida First Bancorp, Inc.
($11.65 per share) 186.4% 186.4% 14.9x 7.6%

Median applied to the Company $9.51 $10.32 $11.72 $10.32
-----------------------------
</TABLE>

<TABLE>
<CAPTION>
THRIFT ACQUISITION COMPARATIVE GROUP - SELLERS WITH $200 TO $400 MILLION IN ASSETS AND 6% TO 8% EQUITY
- ------------------------------------------------------------------------------------------------------------------------------------

Florida First Bancorp, Inc.
($11.65 per share) 186.4% 186.4% 14.9x 7.6%

Median applied to the Company $10.65 $10.65 $11.92 $11.12
-----------------------------

</TABLE>
<PAGE> 19

Discounted Cash Flow Analysis

Baird calculated the Company's value based upon a discounted cash flow
analysis at discount rates ranging from 11.5% to 13.5%. The analysis was based
on the Company's earnings of $2.7 million for the last twelve months and an
income growth rate of 6.0% annually. Terminal values were calculated based
upon mean and median price to earnings ratios of 15x to 16x applied to the
projected terminal year nine earnings. This analysis yields per share values of
between $11.40 and $13.44 for the Common Stock.

Trading History

To evaluate the current market price of the Company, Baird has
examined the trading history of the Company and an index composed of all
eighteen publicly traded Florida thrift institutions ("Florida Thrift Index")
during the twelve-month period prior to the announcement of the merger and the
twelve-month period ended August 30, 1996. For the twelve-month period ended
May 29, 1996, the date the Merger was announced, the Common Stock appreciated
71% closing at $9.63. Since the Merger announcement the Common Stock has
traded as expected, at a slight discount to the per share acquisition price of
$11.65. For the twelve-month period ended May 29, 1996, the Florida Thrift
Index gained 32%. Since May 29, 1996 the Florida Thrift Index has lost 4% of
its value. For information regarding the trading history of the Company's
Common Stock, see "Market Price and Dividend Data."

No company or transaction used in the above analysis as a comparison
is identical to the Company, Regions or the contemplated transaction.
Accordingly, an analysis of the results of the foregoing is not mathematical;
rather, it involves complex considerations and judgments concerning differences
in financial and operating characteristics of the companies and other factors
that could affect the public trading value of the companies to which they are
being compared.

The preparation of a fairness opinion is not necessarily susceptible
to partial analysis or summary description. Baird believes that its analyses
and the summary set forth above must be considered as a whole and that
selecting portions of its analyses, without considering all analyses, or
selecting part or all of the above summary, without considering all factors and
analyses, would create an incomplete view of the processes underlying the
analyses set forth in the Baird opinion. In addition, while Baird gave the
various analyses approximately similar weight it may have used them for
different purposes, and may have deemed various assumptions more or less
probable than other assumptions, so that the ranges of valuation resulting from
any particular analysis described above should not be taken to be Baird's view
of the actual value of the Company. The fact that any specific analysis has
been referred to in the summary above is not meant to indicate that any
specific analysis was given more weight than any other analyses.

In performing its analyses, Baird made numerous assumptions with
respect to industry performance, general business and economic conditions and
other matters, many of which are beyond the control of the Company or Regions.
The analyses performed by Baird are not necessarily indicative of actual values
or actual future results, which may be significantly more or less favorable
than suggested by such analyses. Such analyses were prepared solely as part of
Baird's analysis of the fairness of the consideration to be received by the
Company stockholders. The analyses do not purport to be appraisals or to
reflect the prices at which a company might actually be sold or the prices at
which any securities may trade at the present time or at any time in the
future. In addition, Baird's opinion is just one of many factors taken into
consideration by the Company's Board of Directors.

EFFECTS OF THE MERGER

EFFECT ON THE COMPANY'S STOCKHOLDERS. Upon consummation of the
proposed Merger, the stockholders of the Company shall be entitled to receive
$11.65 in cash, subject to certain adjustments which may be made as described
herein under "- Receipt of Cash and Options by the Company's Stockholders and
Optionees," in consideration for each share of Common Stock held and thereupon
shall cease to be stockholders of the Company.

EFFECT ON THE COMPANY, REGIONS AND MERGER SUBSIDIARY. Upon
consummation of the proposed Merger, Merger Subsidiary will merge with and into
the Company, the separate corporate existence of Merger Subsidiary
<PAGE> 20

will cease following consummation of the Merger and the Company will become a
wholly owned subsidiary of Regions. The Company shall succeed to all the
rights and property of Merger Subsidiary. Regions will treat the Merger as a
purchase for accounting purposes. Upon consummation of the proposed Merger,
the Bank will be a second tier subsidiary of Regions held underneath the
Company. Regions may elect in the future to merge or consolidate the Bank with
other financial institutions owned by it.

RECEIPT OF CASH AND OPTIONS BY THE COMPANY'S STOCKHOLDERS AND OPTIONEES

Pursuant to the terms of the Agreement, each outstanding share of
Common Stock will be automatically converted as of the Effective Time of the
Merger into the right to receive $11.65 in cash, subject to certain adjustments
(which may increase or decrease the Merger Consideration by a maximum of $.29
per share as described below). In addition, each option outstanding at the
Effective Time to acquire Common Stock shall be converted into and become an
option to acquire shares of Regions common stock in accordance with certain
terms of the Company's Stock Plan and subject to an option exchange ratio
described below.

The aggregate merger consideration to be paid to holders of the
Company's Common Stock upon consummation of the Merger will be approximately
$39.5 million. Regions expects to finance the Merger Consideration through
internally generated operating funds.

Pursuant to the Agreement, the aggregate Merger Consideration
described above may be adjusted upward or downward based on the results of a
sale of certain specified securities by the Company (the "Securities") prior to
consummation of the Merger. The adjustment will be equal to the quotient
obtained by dividing (i) the aggregate (positive or negative) difference
between (A) the principal amount of the Securities held by the Company which
are required to be sold prior to consummation of the Merger as of the date of
sale and (B) the gross proceeds obtained by the Company on the sale of the
Securities by (ii) 3,469,770; provided however, that the maximum adjustment
shall not exceed $.29 per share and shall be rounded down to the nearest whole
cent. As of November 1, 1996, the Company had disposed of all $21.0 million of
Securities. As a result, based upon the aggregate sale proceeds received upon
the disposition of all of the Securities (as compared to the aggregate
principal balance of the Securities), it appears that no adjustment in the
Merger Consideration will be required. However, the analysis of such matter
has not been finalized.

In addition, each outstanding option to acquire the Common Stock of
the Company ("Company Options") shall be converted into and become an option
with respect to Regions common stock, and Regions shall assume each Company
Option in accordance with the terms of the Company's Stock Plan and the Stock
Option Agreement by which each Company Option is evidenced, except that from
and after the Effective Time of the Merger, (i) Regions and its Compensation
Committee shall be substituted for the Company and the Committee of the
Company's Board of Directors (including, if applicable, the entire Board of
Directors of the Company) administering such Stock Plan, (ii) each Company
Option assumed by Regions may be exercised solely for shares of Regions common
stock, (iii) the number of Regions common stock subject to such Company Option
shall be equal to the number of shares of Company Common Stock subject to such
Company Option immediately prior to the Effective Time of the Merger multiplied
by an option exchange ratio ("Option Exchange Ratio"), and (iv) the per share
exercise price under each such Company Option shall be adjusted by dividing the
per share price under each such Company Option by the Option Exchange Ratio and
rounding up to the nearest cent. Any fractional share amount of Regions common
stock upon exercise of Company Options shall represent a right to receive a
cash payment equal to the difference between the closing price of one share of
Regions common stock on the Nasdaq National Market System on the last trading
day prior to the Effective Time and the per share exercise price of the Company
Option. The Option Exchange Rate shall be equal to Merger Consideration
divided by the average closing price of Regions common stock as reported on the
Nasdaq National Market System for five consecutive full trading days in which
such shares are traded ending on the last trading day prior to the Effective
Time of the Merger.
<PAGE> 21

At or prior to the Effective Time, Regions shall deposit with a bank
or trust company selected by Regions (which may be an affiliate of Regions)
("Exchange Agent") an amount of cash sufficient to fund the payments to be made
pursuant to the Agreement upon the exchange of shares of Common Stock. Promptly
after the Effective Time of the Merger, the Exchange Agent shall send a form
letter of transmittal and instructions to each holder of certificate(s) which
immediately prior to the Effective Time of the Merger represented Common Stock,
advising the holders of the terms of the exchange and the procedure for
surrendering such certificate(s) for cash. Upon receipt of the certificate(s)
and properly completed letters of transmittal, the Exchange Agent will make the
appropriate cash payment. No interest will be paid or accrued on the amounts
payable upon exchange of certificates. As of the Effective Time of the Merger,
the stock record books of the Company shall be closed.

CONDITIONS TO THE MERGER

The Agreement provides that consummation of the proposed transaction
is subject to the satisfaction of certain conditions, or the waiver of such
conditions by the party entitled to do so, at or before the Effective Time.
Each of the party's obligations under the Agreement and the Plan of Merger is
subject to the following conditions: (i) the receipt of the approval of the
Agreement by the stockholders of the Company as required by the FBCA; (ii) the
receipt of certain regulatory approvals required for consummation of the
Merger; (iii) the receipt of all consents required for consummation of the
Merger or for the preventing of any default under any contract or permit which,
if not obtained or made, is reasonably likely to have, individually or in the
aggregate, a material adverse effect; and (iv) the absence of any law or order
or any action taken by any court, governmental, or regulatory authority
prohibiting, restricting, or making illegal the consummation of the Merger.
See "- Regulatory Approvals," and "- Effective Time of the Merger; Waiver,
Amendment and Termination."

Regions' obligations under the Agreement are further conditioned upon
(i) the accuracy, as of the date of the Agreement and as of the Effective Time,
of the representations and warranties of the Company as set forth in the
Agreement; (ii) the performance of all agreements and the compliance with all
covenants of the Company as set forth in the Agreement; (iii) the receipt of a
letter from each director and officer of the Company regarding the absence of
any claims for indemnification against the Company; (iv) the receipt of
customary legal opinions from the Company's special counsel; and (v) the sale
of all of the Securities by the Company.

The Company's obligation under the Agreement are further conditioned
upon (i) the accuracy, as of the date of the Agreement and as of the Effective
Time, of the representations and warranties of Regions as set forth in the
Agreement; (ii) the performance of all agreements and the compliance with all
covenants of Regions as set forth in the Agreement; (iii) the receipt of
customary legal opinions from Regions' counsel; and (iv) the receipt of an
opinion from Baird regarding the fairness, from a financial point of view, of
the Merger Consideration to stockholders.

REGULATORY APPROVALS

Consummation of the Merger is subject to, among other things, prior
receipt of all necessary regulatory approvals. In order to consummate the
Merger, Regions must obtain the prior consent, approval or non-objection, as
the case may be (collectively, the "approval") of the FRB. Such consent,
approval or non-objection may not be conditioned or restricted in a manner
which in the reasonable judgment of Regions would so adversely impact the
economic or business benefits of the transactions contemplated by the Agreement
that had such condition or restriction been known, Regions would not, in its
reasonable judgment, have entered into the Agreement. An Application has been
filed with such regulatory authority for approval of the Merger and is
currently pending as of the date hereof.

Although as of the date hereof neither Regions nor the Company is
aware of any basis for disapproving the Merger, there can be no assurance that
all requisite approvals or non-objections will be obtained, that such approvals
or non-objections will be received on a timely basis or that such approvals or
non-objections, if obtained, will not be conditioned or restricted in a manner
which, in the reasonable good faith judgment of Regions, would so materially
adversely affect the economic or business benefits of the transactions
contemplated by the Agreement.
<PAGE> 22

BUSINESS PENDING THE MERGER

Pursuant to the Agreement, the Company has agreed that unless the
prior written consent of Regions has been obtained, and except as otherwise
expressly contemplated in the Agreement, the Company will (i) operate its
business only in the usual, regular, and ordinary course, (ii) preserve intact
in all material respects its business organization and assets and maintain its
rights and franchises, and (iii) take no action which would (a) adversely
affect the ability of any party to obtain any consents required for the
transactions contemplated by the Agreement without imposition of a condition or
restriction of the type referred to in the Agreement or (b) adversely affect
the ability of any party to perform its covenants and agreements under the
Agreement.

In addition, the Company has agreed that, prior to the earlier of the
Effective Time or termination of the Agreement, the Company will not, except
with the prior written consent of a duly authorized officer of Regions, agree
or commit to do, or permit any of its subsidiaries to agree or commit to do,
any of the following: (i) amend the Articles of Incorporation, Bylaws, or
other governing instruments of the Company and its subsidiaries; (ii) incur any
additional debt obligation or other obligation for borrowed money (other than
indebtedness of a Company subsidiary to another Company subsidiary) in excess
of an aggregate of $200,000 (for the Company and its subsidiaries on a
consolidated basis) except in the ordinary course of business of the Company or
its subsidiaries consistent with past practices (which shall include, for the
Bank, the creation of deposit liabilities, purchases of federal funds, advances
from the Federal Home Loan Bank of Atlanta or the Federal Reserve Bank, and
entry into repurchase agreements fully secured by U.S. government or agency
securities), or impose, or suffer the imposition, on any asset of the Company
or its subsidiaries any lien or permit any such lien to exist (other than in
connection with deposits, repurchase agreements, Federal Home Loan Bank
advances, bankers acceptances, "treasury tax and loan" accounts established in
the ordinary course of business, the satisfaction of legal requirements in the
exercise of trust powers, liens to secure debt obligations or other obligations
for borrowed money permitted under the Agreement and liens in effect as of the
date of the Agreement that were previously disclosed to Regions by the
Company).

The Company further has agreed that, prior to the earlier of the
Effective Time or termination of the Agreement, the Company will not, except
with the prior written consent mentioned above, agree or commit to: (i)
repurchase, redeem, or otherwise acquire or exchange (other than exchanges in
the ordinary course under employee benefit plans), directly or indirectly, any
shares, or any securities convertible into any shares, of the capital stock of
the Company or its subsidiaries, or declare or pay any dividend or make any
other distribution in respect of the Company's capital stock, provided that the
Company may (to the extent legally and contractually permitted to do so), but
shall not be obligated to, declare and pay regular quarterly cash dividends on
the shares of the Company Common Stock at a rate not in excess of $.06 per
share with usual and regular record and payment dates in accordance with past
practice; provided further, that, with respect to the calendar quarter in which
the Effective Time occurs, the Company may declare and pay a quarterly dividend
at a rate not in excess of $.06 per share multiplied by the fraction of the
quarter closed before the Effective Time; (ii) except pursuant to the Agreement
or pursuant to the exercise of stock options outstanding as of the date of the
Agreement, issue, sell, pledge, encumber, authorize the issuance of, enter into
any contract to issue, sell, pledge, encumber, or authorize the issuance of, or
otherwise permit to become outstanding, any additional shares of Company Common
Stock, or any other capital stock of the Company or of any subsidiary of the
Company, or other right to acquire any such stock; (iii) adjust, split,
combine, or reclassify any capital stock of the Company or its subsidiaries or
issue or authorize the issuance of any other securities in respect of or in
substitution for shares of Company Common Stock or sell, lease, mortgage, or
otherwise dispose of or otherwise encumber any shares of capital stock of any
Company subsidiary (unless any such shares of stock are sold or otherwise
transferred to another Company subsidiary) or any assets having a book value in
excess of $100,000 other than in the ordinary course of business for reasonable
and adequate consideration and other disposition in the ordinary course of
business; (iv) except for purchases of U.S. Treasury securities, U.S.
Government agency securities and mortgage-backed balloon loans, which in each
case have maturities of five years or less, purchase any securities, including
mortgage-backed securities, or make any material investment, either by purchase
of stock or securities, contributions to capital, asset transfers, or purchase
of any assets, in any person other than a wholly-owned Company subsidiary, or
otherwise acquire direct or indirect control over any person, other than in
connection with (a) foreclosures in the ordinary course of business, or (b)
acquisitions of control by a depository institution subsidiary in its fiduciary
capacity; (v) grant any increase in compensation or benefits to the employees
or officers of the Company or its subsidiaries except in accordance with past
practice or previously approved by the Board of Directors of the Company;
except as previously disclosed to Regions by the Company, pay any severance or
<PAGE> 23

termination or any bonus other than pursuant to written policies or written
contracts in effect on the date of the Agreement, and previously disclosed to
Regions by the Company; enter into or amend any severance agreements with
officers of the Company or its subsidiaries; grant any increase in fees or
other increases in compensation or other benefits to directors of the Company
or its subsidiaries except in accordance with past practice as previously
disclosed to Regions by the Company; or voluntarily accelerate the vesting of
any stock options or other stock-based compensation or employee benefits; (vi)
enter into or amend any employment contract between the Company or its
subsidiaries and any person (unless such amendment is required by law) that the
Company or any such subsidiary does not have an unconditional right to
terminate without liability (other than liability for services already
rendered) at any time on or after the Effective Time of the Merger; (vii) adopt
any new employee benefit plan of the Company or its subsidiaries or make any
material change in or to any existing employee benefit plans of the Company or
its subsidiaries other than any such change that is required by law or that, in
the opinion of counsel, is necessary or advisable to maintain the tax qualified
status of any such plan; (viii) make any significant change in any tax or
accounting methods or systems of internal accounting controls, except as may be
appropriate to conform to changes in tax laws or regulatory accounting
requirements or generally accepted accounting principles; (ix) commence any
material litigation other than in accordance with past practice or settle any
litigation involving any liability of the Company or its subsidiaries for
material money damages or material restrictions upon the operations of the
Company or its subsidiaries; or (x) modify, amend, or terminate any material
contract (including any loan contract the modification, amendment or
termination of which does not result in the Company or any of its subsidiaries
recognizing a loss exceeding $50,000) or waive, release, compromise, or assign
any material rights or claims other than in connection with a permitted
modification, amendment or termination of a loan contract.

The Agreement also provides that from the date of the Agreement until
the earlier of the Effective Time or the termination of the Agreement, Regions
covenants and agrees that it will take no action which would (i) materially
adversely affect the ability of any party to obtain any consents required for
the transactions contemplated by the Agreement without imposition of a
condition or restriction of the type referred to in the Agreement or (ii) with
certain limitations, materially adversely affects the ability of any party to
perform its covenants and agreements under the Agreement.

EFFECTIVE TIME OF THE MERGER; WAIVER, AMENDMENT AND TERMINATION

The Merger shall become effective on the date and at the time the
Articles of Merger become effective with the Florida Department of State. Such
filing will occur only after the receipt of all requisite regulatory approvals,
approval of the Agreement by the requisite vote of the Company's stockholders
and the satisfaction or waiver of all other conditions to the Merger.

The Closing Date shall take place as soon as practicable following
satisfaction or waiver of all the conditions to consummation of the Merger.

Prior to the Effective Time, any provision of the Agreement may be
waived or, subject to applicable law, amended or modified by an agreement in
writing approved by the Boards of Directors of the Company and Regions,
provided that, after the vote of the stockholders of the Company, the Agreement
may not be amended, without further approval of such stockholders, to reduce
the amount or change the form of the consideration to be received by the
Company's stockholders or holders of options to acquire Common Stock or in any
way that would violate the FBCA.

The Agreement may be terminated and the Merger abandoned at any time
prior to the Effective Time (i) by the mutual consent of the Boards of
Directors of Regions and the Company; and (ii) by the Board of Directors of
either party (a) in the event of any inaccuracy of any representation or
warranty of the other party contained in the Agreement which cannot be or has
not been cured within 30 days after giving written notice to the breaching
party of such inaccuracy and which inaccuracy would provide the terminating
party the ability to refuse to consummate the Merger under the applicable
standards set forth in the Agreement, (b) in the event of a material breach by
the other party of any covenant or agreement contained in the Agreement which
cannot be or has not been cured within 30 days after the giving of written
notice to the breaching party of such breach, (c) if the Merger is not
consummated by April 30, 1997, provided that the failure to consummate is not
due to the breach by the party electing to terminate, (d) if (1) any approval
of any regulatory authority required for consummation of the Merger and the
other transactions contemplated by the Agreement has been denied by final
<PAGE> 24

nonappealable action, or if any action taken by such authority is not appealed
within the time limit for appeal or (2) the stockholders of the Company fail to
vote their approval of the matters submitted for the approval by such
stockholders at the Special Meeting, or (e) if any of the conditions precedent
to the obligations of either party to consummate the Merger have not been
satisfied, fulfilled, or waived by the appropriate party by April 30, 1997.

If the Merger is terminated as described above, the Agreement will
become void and have no effect, except that certain provisions of the
Agreement, including those relating to the obligations to maintain the
confidentiality of certain information obtained. In addition, termination of
the Agreement will not relieve any breaching party from liability for any
uncured willful breach of a representation, warranty, covenant, or agreement
giving rise to such termination. Finally, the Agreement provides that each
party will pay its own expenses in connection with the Merger.

INTERESTS OF CERTAIN PERSON IN THE MERGER

In addition, effective upon consummation of the Merger, the Bank has
agreed to terminate (i) the employment agreement between the Bank and Mr. Stein
and (ii) the severance agreement between the Bank and Barbara L. Haag, Senior
Vice President and Chief Financial Officer. Upon such terminations, the Bank,
in satisfaction of its obligations thereunder, has agreed to pay Mr. Stein and
Ms. Haag the amounts they would be entitled under the provisions of such
agreements in the event that their employment had been terminated following or
in connection with a "change of control," as defined in the agreements, of the
Company. The total aggregate severance to be paid to Mr. Stein and Ms. Haag
under their respective agreements is estimated to amount to approximately
$510,000 and $83,000, respectively. However, the termination of such
agreements will not restrict the ability of Regions to offer to employ Mr.
Stein and/or Ms. Haag as of and subsequent to the Effective Time under such
terms and conditions as are acceptable to them. Regions has agreed to continue
Mr. Stein's employment as President and Chief Executive Officer of the Company.
In the event Mr. Stein voluntarily terminates his employment with Regions or a
company owned or controlled by Regions, he has agreed not to serve for a period
of four years from the effective date of the Merger, without the prior written
consent of Regions, as a management official of any financial institution in
the counties in Florida in which the Company operated a branch office as of May
29, 1996. Reference is made to Appendix C hereto.

The Agreement also provides that for a period of six years after the
Effective Time, Regions shall indemnify the directors, officers, employees and
agents of the Company or any of its subsidiaries for acts or omissions
occurring at or prior to the Effective Time to the full extent as would have
been permitted if such claim had been presented prior to the Effective Time.

In addition, directors and executive officers of the Company have an
interest in the Merger to the extent that ownership of the Common Stock and
outstanding options to purchase such stock might be deemed to constitute such
an interest. However, all of the outstanding options to purchase shares of
Common Stock (none of which are held by non- officer directors) were fully
vested prior to the execution of the Agreement. For the number of shares of
Common Stock and the number of stock options held by the directors and
executive officers of the Company as a group, see "Introductory Statement -
Beneficial Ownership of the Company."

EMPLOYEE MATTERS

The Agreement provides that Regions will generally provide all
eligible employees who continue as employees of the Company and the Bank or of
Regions or any subsidiary of Regions after the Effective Time ("Continuing
Employees") with employee welfare and pension benefits which are substantially
similar to the benefits provided to employees of Regions' similarly situated
officers and employees. To the extent that Continuing Employees participate in
the employee benefit plans of Regions, such employees will receive credit for
past service to the Bank only for purposes of eligibility, participation and
vesting, but not for purposes of benefit accrual with respect to such plans.

CERTAIN FEDERAL INCOME TAX CONSEQUENCES

The exchange of the Company's Common Stock for cash pursuant to the
terms of the Agreement will be a taxable transaction for federal income tax
purposes under the Internal Revenue Code of 1986, as amended
<PAGE> 25

("Code"), and may also be a taxable transaction under state, local and other
tax laws. A stockholder of the Company will recognize gain or loss equal to
the difference between the amount of cash received by the stockholder pursuant
to the Merger and the tax basis in the Common Stock exchanged by such
stockholder pursuant to the Merger. Gain or loss must be determined separately
for each block of Common Stock (i.e., shares of Common Stock acquired by the
stockholder at the same time and price) exchanged pursuant to the Merger.

Gain or loss recognized by the stockholder exchanging his or her
Common Stock pursuant to the Merger will be capital gain or loss if such Common
Stock is a capital asset in the hands of the stockholder. If the Common Stock
has been held for more than one year, the gain or loss will be long-term.
Capital gains recognized by an exchanging individual stockholder generally will
be subject to tax at the top marginal rate applicable to the stockholder (up to
a current maximum of 39.6% for short-term capital gains and 28% for long-term
capital gains), and capital gains recognized by an exchanging corporate
stockholder generally will be subject to tax at a current maximum rate of 35%.

THE FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS BASED UPON
CURRENT LAW AND IS INTENDED FOR GENERAL INFORMATION ONLY. EACH OF THE
COMPANY'S STOCKHOLDERS AND OPTIONEES IS URGED TO CONSULT HIS OR HER TAX ADVISOR
CONCERNING THE SPECIFIC TAX CONSEQUENCES OF THE MERGER TO SUCH STOCKHOLDER OR
OPTIONEE, INCLUDING THE APPLICABILITY AND EFFECT OF STATE, LOCAL OR OTHER TAX
LAWS AND OF ANY PROPOSED CHANGES IN THE CODE.

ACCOUNTING TREATMENT

The Merger will be accounted for by Regions as a purchase.
Accordingly, the assets acquired and the liabilities assumed will be recorded
by Regions at their estimated fair values as of the Effective Time. Any excess
of the value of the consideration paid by Regions over the fair value of the
Company's identifiable net assets acquired, less liabilities assumed, will be
recorded as an intangible asset.

DISSENTERS' RIGHTS

Under Section 607.1302 of the FBCA, the right of a stockholder to
dissent and demand payment of the fair value of his or her shares in cash
pursuant to the procedures set forth on the FBCA shall not apply to shares
which, as of the record date fixed to determine stockholders entitled to vote
on a plan of merger, are designated as a National Market System security by the
National Association of Securities Dealers, Inc. The Common Stock of the
Company is quoted on the National Market System under the symbol "FFPC" and
will continue to be so quoted on the Voting Record Date. As a consequence, the
stockholders of the Company will not have any dissenters' rights with respect
to the Merger pursuant to Section 607.1302 of the FBCA.

EXPENSES OF THE MERGER

The Agreement generally provides that Regions and the Company shall
each bear and pay all costs and expenses incurred by it in connection with the
transactions contemplated in the Agreements except that all filing fees and
printing costs incurred in connection with this Proxy Statement shall be paid
by Regions.

STOCKHOLDER AGREEMENTS

In conjunction with the Agreement, Regions has also entered into
Stockholder Agreements with each of the directors of the Company. Pursuant to
such Stockholder Agreements, a form of which is set forth as Appendix B hereto,
each of the directors of the Company has agreed, among other things, not to
sell, pledge, transfer or otherwise dispose of his shares of Common Stock and
to vote such shares of Common Stock in favor of the Agreement. In addition,
each of the directors has agreed, subject to certain exceptions, not to serve
for a period of four years after the Effective Time as a management official of
any financial institution having a branch office in the counties in Florida in
which the Bank operated branch offices as of May 29, 1996.

ADJOURNMENT OF SPECIAL MEETING

Each proxy solicited hereby requests authority to vote for an
adjournment of the Special Meeting, if an adjournment is deemed to be
necessary. The Company may seek an adjournment of the Special Meeting for
<PAGE> 26

not more than 29 days in order to enable the Company to solicit additional
votes in favor of the Agreement and the Plan of Merger in the event that such
proposal has not received the requisite vote of stockholders at the Special
Meeting and has not received the negative votes of the holders of a majority of
the Company's Common Stock. If the Company desires to adjourn the meeting with
respect to the foregoing proposal, it will request a motion that the meeting be
adjourned for up to 29 days with respect to such proposal (and solely with
respect to such proposal, provided that a quorum is present at the Special
Meeting), and no vote will be taken on such proposal at the originally
scheduled Special Meeting. Each proxy solicited hereby, if properly signed and
returned to the Company and not revoked prior to its use, will be voted on any
motion for adjournment in accordance with the instructions contained therein.
If no contrary instructions are given, each proxy received will be voted in
favor of any motion to adjourn the meeting. Unless revoked prior to its use,
any proxy solicited for the Special Meeting will continue to be valid for any
adjourned meeting, and will be voted in accordance with instructions contained
therein, and if no contrary instructions are given, for the proposal in
question.

Any adjournment will permit the Company to solicit additional proxies
and will permit a greater expression of the stockholders' views with respect to
such proposal. Such an adjournment would be disadvantageous to stockholders
who are against the Agreement, because an adjournment will give the Company
additional time to solicit favorable votes and thus increase the chances of
passing such proposal.

If a quorum is not present at the Special Meeting, no proposal will be
acted upon and the Board of Directors of the Company will adjourn the Special
Meeting to a later date in order to solicit additional proxies on each of the
proposals being submitted to stockholders.

An adjournment for up to 29 days will not require either the setting
of a new record date or notice of the adjourned meeting as in the case of an
original meeting. The Company has no reason to believe that an adjournment of
the Special Meeting will be necessary at this time.

BECAUSE THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR
THE PROPOSED AGREEMENT AND THE PLAN OF MERGER, AS DISCUSSED ABOVE, THE BOARD OF
DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE POSSIBLE ADJOURNMENT OF THE
SPECIAL MEETING ON SUCH PROPOSAL. THE HOLDERS OF A MAJORITY OF THE COMPANY'S
COMMON STOCK REPRESENTED IN PERSON OR BY PROXY AT THE SPECIAL MEETING WILL BE
REQUIRED TO APPROVE A MOTION TO ADJOURN THE SPECIAL MEETING ON SUCH PROPOSAL.

INDEPENDENT AUDITORS

The Board of Directors of the Company selected and, at the Annual
Meeting of Stockholders held on April 25, 1996, the Company's stockholders
ratified the appointment of Deloitte & Touche LLP, independent certified public
accountants, as the Company's independent auditors for the year ending December
31, 1996. Representatives of Deloitte & Touche LLP are not expected to be
present at the Special Meeting.

STOCKHOLDER PROPOSALS

If the Merger is not consummated, any proposal which a stockholder
wishes to have presented at the next annual meeting of the Company, which is
expected to be held in April 1997, must be received no later than November 21,
1996 at the main office of the Company, 144 Harrison Avenue, Panama City,
Florida 32401, Attention: Secretary. If such proposal is in compliance with
all of the requirements of Rule 14a-8 under the Exchange Act, it will be
included in the proxy statement and set forth on the form of proxy issued for
such annual meeting of stockholders. It is urged that any such proposals be
sent by certified mail, return receipt requested. If the Merger is
consummated, the Company will become a wholly owned subsidiary of Regions.

ANNUAL REPORTS AND FINANCIAL STATEMENTS

Copies of the Company's Annual Report to Stockholders for the year
ended December 31, 1995 and its Quarterly Report on Form 10-QSB/A for the
quarter ended June 30, 1996 accompany this Proxy Statement. Additional copies
of the Company's Annual Report to Stockholders and Quarterly Report may be
obtained by written request to the Company. Except as otherwise provided
herein, the Annual Report and the Quarterly Report are not part of the proxy
solicitation materials.
<PAGE> 27

INCORPORATION BY REFERENCE

The following documents, filed with the SEC by the Company (File No.
0-25930) pursuant to the Exchange Act, are incorporated herein by reference:

(1) The Company's Annual Report on Form 10-KSB for the year ended
December 31, 1995;

(2) The Company's Quarterly Report on Form 10-QSB/A for the
quarter ended June 30, 1996; and

(3) The Company's Current Report on Form 8-K dated as of May 29,
1996.

All documents filed by the Company pursuant to Sections 13(a), 13(c),
14, or 15(d) of the Exchange Act after the date of this Proxy Statement and
before the Special Meeting are hereby incorporated by reference, and such
documents are deemed to be part hereof from the date of filing of such
documents. Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be modified or superseded for the
purposes of this Proxy Statement to the extent that a statement contained
herein or in any other subsequently filed document which is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
such statement so modified or superseded shall not, except as so modified or
superseded, constitute a part of this Proxy Statement.

This Proxy Statement incorporates documents by reference which are not
presented herein or delivered herewith. Copies of these documents, other than
exhibits to such documents, are available without charge on written or oral
request of any person, including any beneficial owner, to whom this Proxy
Statement is delivered. Documents incorporated by reference are available from
Barbara L. Haag, Senior Vice President, Florida First Bancorp, Inc., 144
Harrison Avenue, Panama City, Florida 32401.

OTHER MATTERS

Each proxy solicited hereby also confers discretionary authority on
the Board of Directors of the Company to vote the proxy with respect to the
approval of the minutes of the last meeting of stockholders, matters incident
to the conduct of the Special Meeting, and upon such other matters as may
properly come before the Special Meeting. Management is not aware of any
business that may properly come before the Special Meeting other than those
matters described above in this Proxy Statement. However, if any other matters
should properly come before the Special Meeting, it is intended that the
proxies solicited hereby will be voted with respect to those other matters in
accordance with the judgment of the persons voting the proxies.

The cost of the solicitation of proxies will be borne by the Company.
The Company will reimburse brokerage firms and other custodians, nominees and
fiduciaries for reasonable expenses incurred by them in sending proxy materials
to the beneficial owners of the Company's Common Stock. In addition to
solicitations by mail, directors, officers and employees of the Company may
solicit proxies personally or by telephone without additional compensation.

BY ORDER OF THE BOARD OF DIRECTORS

Gary L. Smith
Secretary

November 7, 1996
<PAGE> 28

APPENDIX A

<PAGE> 29

AGREEMENT AND PLAN OF REORGANIZATION

BY AND BETWEEN

FLORIDA FIRST BANCORP, INC.

AND

REGIONS FINANCIAL CORPORATION

DATED AS OF MAY 29, 1996

<PAGE> 30

TABLE OF CONTENTS
Page
----

Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Preamble . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

ARTICLE 1 - TRANSACTIONS AND TERMS OF MERGER

1.1 Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Time and Place of Closing. . . . . . . . . . . . . . . . . . . 2
1.3 Effective Time . . . . . . . . . . . . . . . . . . . . . . . . 2

ARTICLE 2 - TERMS OF MERGER

2.1 Articles of Incorporation. . . . . . . . . . . . . . . . . . . 2
2.2 Bylaws . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.3 Directors and Officers . . . . . . . . . . . . . . . . . . . . 2

ARTICLE 3 - MANNER OF CONVERTING SHARES

3.1 Conversion of Shares . . . . . . . . . . . . . . . . . . . . . 3
3.2 Anti-Dilution Provisions . . . . . . . . . . . . . . . . . . . 3
3.3 Shares Held by FFB or Regions. . . . . . . . . . . . . . . . . 3
3.5 Conversion of Stock Rights . . . . . . . . . . . . . . . . . . 3

ARTICLE 4 - EXCHANGE OF SHARES

4.1 Exchange Procedures. . . . . . . . . . . . . . . . . . . . . . 5
4.2 Rights of Former FFB Stockholders. . . . . . . . . . . . . . . 5
4.3 Regions to Make Cash Available . . . . . . . . . . . . . . . . 5

ARTICLE 5 - REPRESENTATIONS AND WARRANTIES OF FFB

5.1 Organization, Standing, and Power. . . . . . . . . . . . . . . 6
5.2 Authority; No Breach By Agreement. . . . . . . . . . . . . . . 6
5.3 Capital Stock. . . . . . . . . . . . . . . . . . . . . . . . . 7
5.4 FFB Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . 7
5.5 Financial Statements . . . . . . . . . . . . . . . . . . . . . 8
5.6 Absence of Undisclosed Liabilities . . . . . . . . . . . . . . 8
5.7 Absence of Certain Changes or Events . . . . . . . . . . . . . 8
5.8 Tax Matters. . . . . . . . . . . . . . . . . . . . . . . . . . 8
5.9 Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.10 Allowance for Possible Loan Losses . . . . . . . . . . . . . . 10
5.11 Intellectual Property. . . . . . . . . . . . . . . . . . . . . 11
5.12 Environmental Matters. . . . . . . . . . . . . . . . . . . . . 11
5.13 Compliance With Laws . . . . . . . . . . . . . . . . . . . . . 12
5.14 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . 12
5.15 Material Contracts . . . . . . . . . . . . . . . . . . . . . . 14
5.16 Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . . 15
5.17 Statements True and Correct. . . . . . . . . . . . . . . . . . 15
5.18 Regulatory Matters . . . . . . . . . . . . . . . . . . . . . . 16
5.19 State Takeover Laws. . . . . . . . . . . . . . . . . . . . . . 16
5.20 Directors' Agreements. . . . . . . . . . . . . . . . . . . . . 16

<PAGE> 31
5.21 Charter Provisions . . . . . . . . . . . . . . . . . . . . . . 16
5.22 Derivatives Contracts. . . . . . . . . . . . . . . . . . . . . 16

ARTICLE 6 - REPRESENTATIONS AND WARRANTIES OF REGIONS

6.1 Organization, Standing, and Power. . . . . . . . . . . . . . . 16
6.2 Authority; No Breach By Agreement. . . . . . . . . . . . . . . 17
6.3 Absence of Certain Changes or Events . . . . . . . . . . . . . 17
6.4 Compliance With Laws . . . . . . . . . . . . . . . . . . . . . 17
6.5 Statements True and Correct. . . . . . . . . . . . . . . . . . 18
6.6 Regulatory Matters . . . . . . . . . . . . . . . . . . . . . . 19
6.7 Matters Relating to Regions Merger Subsidiary. . . . . . . . . 19
6.8 Financing. . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.9 Ownership of FFB Common Stock; Affiliates and Associates . . . 19
6.10 Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . . 20

ARTICLE 7 - CONDUCT OF BUSINESS PENDING CONSUMMATION

7.1 Affirmative Covenants of FFB . . . . . . . . . . . . . . . . . 20
7.2 Negative Covenants of FFB. . . . . . . . . . . . . . . . . . . 20
7.3 Covenants of Regions . . . . . . . . . . . . . . . . . . . . . 22
7.4 Adverse Changes in Condition . . . . . . . . . . . . . . . . . 23
7.5 Reports. . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE 8 - ADDITIONAL AGREEMENTS

8.1 Proxy Statement; Stockholder Approval. . . . . . . . . . . . . 23
8.2 Applications . . . . . . . . . . . . . . . . . . . . . . . . . 24
8.3 Filings with State Offices . . . . . . . . . . . . . . . . . . 24
8.4 Agreement as to Efforts to Consummate. . . . . . . . . . . . . 24
8.5 Investigation and Confidentiality. . . . . . . . . . . . . . . 24
8.6 Press Releases . . . . . . . . . . . . . . . . . . . . . . . . 25
8.7 Certain Actions. . . . . . . . . . . . . . . . . . . . . . . . 25
8.8 State Takeover Laws. . . . . . . . . . . . . . . . . . . . . . 25
8.9 Charter Provisions . . . . . . . . . . . . . . . . . . . . . . 25
8.10 Employee Benefits and Contracts. . . . . . . . . . . . . . . . 26
8.11 Indemnification. . . . . . . . . . . . . . . . . . . . . . . . 26
8.12 Regions Merger Subsidiary Organization . . . . . . . . . . . . 27
8.13 Sale of Securities . . . . . . . . . . . . . . . . . . . . . . 27

ARTICLE 9 - CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE

9.1 Conditions to Obligations of Each Party. . . . . . . . . . . . 27
9.2 Conditions to Obligations of Regions . . . . . . . . . . . . . 28
9.3 Conditions to Obligations of FFB . . . . . . . . . . . . . . . 29

ARTICLE 10 - TERMINATION

10.1 Termination. . . . . . . . . . . . . . . . . . . . . . . . . . 30
10.2 Effect of Termination. . . . . . . . . . . . . . . . . . . . . 31
10.3 Non-Survival of Representations and Covenants. . . . . . . . . 31

ARTICLE 11 - MISCELLANEOUS

11.1 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . 32

ii
<PAGE> 32
11.2 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
11.3 Brokers and Finders. . . . . . . . . . . . . . . . . . . . . . 40
11.4 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . 40
11.5 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . 40
11.6 Waivers. . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
11.7 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . 41
11.8 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
11.9 Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . 42
11.10 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . 42
11.11 Captions . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
11.12 Interpretations. . . . . . . . . . . . . . . . . . . . . . . . 42
11.13 Enforcement of Agreement . . . . . . . . . . . . . . . . . . . 42
11.14 Severability . . . . . . . . . . . . . . . . . . . . . . . . . 42

Signatures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

iii
<PAGE> 33

LIST OF EXHIBITS

EXHIBIT NUMBER DESCRIPTION
- -------------- -----------

1. Plan of Merger. (Sections 1.1, 11.1).

2. Form of Directors' Agreement. (Section 5.19).

3. Matters as to which Elias, Matz, Tiernan & Herrick, L.L.P
will opine.(Section 9.2(d)).

4. Form of Claims Letter. (Section 9.2(e)).

5. Matters as to which Lange, Simpson, Robinson & Somerville
will opine. (Section 9.3(d)).

6. List of Securities. (Sections 8.13, 11.1).

<PAGE> 34

AGREEMENT AND PLAN OF REORGANIZATION

THIS AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement") is made and
entered into as of May 29, 1996, by and between FLORIDA FIRST BANCORP, INC.
("FFB"), a corporation organized and existing under the laws of the State of
Florida, with its principal office located in Panama City, Florida, and REGIONS
FINANCIAL CORPORATION ("Regions"), a corporation organized and existing under
the laws of the State of Delaware, with its principal office located in
Birmingham, Alabama.

PREAMBLE

The Boards of Directors of FFB and Regions are of the opinion that the
transactions described herein are in the best interests of the parties and their
respective stockholders. This Agreement provides for the acquisition of FFB by
Regions pursuant to the merger of newly formed, wholly owned subsidiary of
Regions to be organized under the laws of the State of Florida ("Regions Merger
Subsidiary") into and with FFB. At the effective time of the Merger, as
hereinafter defined, the outstanding shares of the capital stock of FFB shall be
converted into the right to receive a cash payment amount (except as provided
herein). As a result, FFB shall continue to conduct its business and operations
as a wholly owned subsidiary of Regions. The transactions described in this
Agreement are subject to the approvals of the stockholders of FFB, the Board of
Governors of the Federal Reserve System, the Office of Thrift Supervision, and
the appropriate state regulatory authorities and the satisfaction of certain
other conditions described in this Agreement.

Certain terms used in this Agreement are defined in Section 11.1 of this
Agreement.

NOW, THEREFORE, in consideration of the above and the mutual warranties,
representations, covenants, and agreements set forth herein, the parties agree
as follows:

ARTICLE 1
TRANSACTIONS AND TERMS OF MERGER

1.1 MERGER. Subject to the terms and conditions of this Agreement, at the
Effective Time, Regions Merger Subsidiary shall be merged into and with FFB in
accordance with the provisions of Sections 607.1101, 607.1102, and 607.1105 of
the FBCA (the "Merger") and with the effect provided for in Section 607.1106 of
the FBCA. FFB shall be the Surviving Corporation of the Merger and shall
continue to be governed by the Laws of the State of Florida. The Merger shall
be consummated pursuant to the terms of this Agreement, which has been approved
and adopted by the Boards of Directors of FFB and Regions, and the Plan of
Merger, in substantially the form of Exhibit 1, which will be approved and
adopted by the Boards of Directors of FFB and Regions Merger Subsidiary upon the
organization of Regions Merger Subsidiary.

<PAGE> 35

1.2 TIME AND PLACE OF CLOSING. The Closing will take place at 9:00 A.M.
Central Time on the date that the Effective Time occurs (or the immediately
preceding day if the Effective Time is earlier than 9:00 A.M. Central Time), or
at such other time as the Parties, acting through their duly authorized
officers, may mutually agree. The place of Closing shall be at the offices of
Regions, in Birmingham, Alabama, or such other place as may be mutually agreed
upon by the Parties.

1.3 EFFECTIVE TIME. The Merger and other transactions contemplated by
this Agreement shall become effective on the date and at the time the Florida
Certificate of Merger reflecting the Merger shall become effective with the
Secretary of State of the State of Florida (the "Effective Time"). Subject to
the terms and conditions hereof, unless otherwise mutually agreed upon in
writing by the duly authorized officers of each Party, the Parties shall use
their reasonable efforts to cause the Effective Time to occur on the last
business day of the month in which occurs the last to occur of (i) the effective
date (including expiration of any applicable statutory waiting period) of the
last required Consent of any Regulatory Authority having authority over and
approving or exempting the Merger, and (ii) the date on which the stockholders
of FFB approve this Agreement and the Plan of Merger to the extent such approval
is required by applicable Law; or such later date within 30 days thereof as may
be specified by Regions.

ARTICLE 2
TERMS OF MERGER

2.1 ARTICLES OF INCORPORATION. The Articles of Incorporation of FFB in
effect immediately prior to the Effective Time shall be the Articles of
Incorporation of the Surviving Corporation after the Effective Time until
otherwise amended or repealed.

2.2 BYLAWS. The Bylaws of FFB in effect immediately prior to the
Effective Time shall be the Bylaws of the Surviving Corporation after the
Effective Time until otherwise amended or repealed.

2.3 DIRECTORS AND OFFICERS. The directors of FFB in office immediately
prior to the Effective Time, together with such additional persons as may
thereafter be elected, shall serve as the directors of the Surviving Corporation
from and after the Effective Time in accordance with the Bylaws of the Surviving
Corporation. The officers of FFB in office immediately prior to the Effective
Time, together with such additional persons as may thereafter be elected, shall
serve as the officers of the Surviving Corporation from and after the Effective
Time in accordance with the Bylaws of the Surviving Corporation.

<PAGE> 36
ARTICLE 3
MANNER OF CONVERTING SHARES

3.1 CONVERSION OF SHARES. Subject to the provisions of this Article, at
the Effective Time, by virtue of the Merger and without any action on the part
of the holders thereof, the shares of the constituent corporations shall be
converted as follows:

(a) Each share of Regions Common Stock issued and outstanding
immediately prior to the Effective Time shall remain issued and
outstanding from and after the Effective Time.

(b) Each share of Regions Merger Subsidiary Common Stock
issued and outstanding at the Effective Time shall be converted into
and exchanged for one share of FFB Common Stock.

(c) Each share of FFB Common Stock (excluding shares held by
FFB or any of its Subsidiaries or by Regions or any of its
Subsidiaries, in each case other than in a fiduciary capacity or as
a result of debts previously contracted) issued and outstanding at
the Effective Time shall be cancelled and converted into the right
to receive in consideration thereof a cash payment from Regions in
the amount of the Cash Payment Amount.

3.2 ANTI-DILUTION PROVISIONS. In the event FFB changes the number of
shares of FFB Common Stock issued and outstanding prior to the Effective Time as
a result of a stock split, stock dividend, or similar recapitalization with
respect to such stock, the Cash Payment Amount shall be proportionately
adjusted.

3.3 SHARES HELD BY FFB OR REGIONS. Each of the shares of FFB Common Stock
held by any FFB Company or by any Regions Company, in each case other than in a
fiduciary capacity or as a result of debts previously contracted, shall be
canceled and retired at the Effective Time and no consideration shall be issued
in exchange therefor.

3.4 CONVERSION OF STOCK OPTIONS.

<PAGE> 37

Option shall be equal to the number of shares of FFB Common Stock subject to
such FFB Option immediately prior to the Effective Time multiplied by the
Option Exchange Ratio, and (iv) the per share exercise price under each such
FFB Option shall be adjusted by dividing the per share exercise price under
each such FFB Option by the Option Exchange Ratio and rounding up to the
nearest cent. Notwithstanding the provisions of clause (iii) of the preceding
sentence, Regions shall not be obligated to issue any fraction of a share of
Regions Common Stock upon exercise of FFB Options and any fraction of a share
of Regions Common Stock that otherwise would be subject to a converted FFB
Option shall represent the right to receive a cash payment equal to the product
of such fraction and the difference between the market value of one share of
Regions Common Stock and the per share exercise price of such Option. The
market value of one share of Regions Common Stock shall be the closing price of
such common stock on the Nasdaq National Market System (as reported by THE WALL
STREET JOURNAL or, if not reported thereby, any other authoritative source
selected by Regions) on the last trading day preceding the Effective Time. In
addition, notwithstanding the provisions of clauses (iii) and (iv) of the first
sentence of this Section 3.4, each FFB Option which is an "incentive stock
option" shall be adjusted as required by Section 424 of the Internal Revenue
Code, and the regulations promulgated thereunder, so as not to constitute a
modification, extension, or renewal of the option, within the meaning of
Section 424(h) of the Internal Revenue Code. Regions agrees to take all
necessary steps to effectuate the foregoing provisions of this Section 3.4.

(b) As soon as reasonably practicable after the Effective Time,
Regions shall deliver to the participants in each FFB Stock Plan an appropriate
notice setting forth such participant's rights pursuant thereto and the grants
pursuant to such FFB Stock Plan shall continue in effect on the same terms and
conditions (subject to the adjustments required by Section 3.4(a) after giving
effect to the Merger), and Regions shall comply with the terms of each FFB Stock
Plan to ensure, to the extent required by, and subject to the provisions of,
such FFB Stock Plan, that FFB Options which qualified as incentive stock options
prior to the Effective Time continue to qualify as incentive stock options after
the Effective Time. At or prior to the Effective Time, Regions shall take all
corporate action necessary to reserve for issuance sufficient shares of Regions
Common Stock for delivery upon exercise of FFB Options assumed by it in
accordance with this Section 3.4. As soon as reasonably practicable after the
Effective Time, Regions shall file a registration statement on Form S-3 or Form
S-8, as the case may be (or any successor or other appropriate forms), with
respect to the shares of Regions Common Stock subject to such options and shall
use its reasonable efforts to maintain the effectiveness of such registration
statements (and maintain the current status of the prospectus or prospectuses
contained therein) for so long as such options remain outstanding. With respect
to those individuals who subsequent to the Merger will be subject to the
reporting requirements under Section 16(a) of the Exchange Act, where
applicable, Regions shall administer the FFB Stock Plan assumed pursuant to this
Section 3.4 in a manner that complies with Rule 16b-3 promulgated under the
Exchange Act to the extent the FFB Stock Plan complied with such rule prior to
the Merger.
(c) All restrictions or limitations on transfer with respect to
FFB Common Stock awarded under the FFB Stock Plans or any other plan, program,
or arrangement of any FFB Company, to the extent that such restrictions or
limitations shall not have already lapsed, and except as otherwise expressly
provided in such plan, program, or arrangement, shall remain in full

4
<PAGE> 38

force and effect with respect to shares of Regions Common Stock into
which such restricted stock is converted pursuant to Section 3.1 of this
Agreement.

ARTICLE 4
EXCHANGE OF SHARES

4.1 EXCHANGE PROCEDURES. Promptly after the Effective Time, Regions
and the Surviving Corporation shall cause the exchange agent selected by Regions
(the "Exchange Agent") to mail to the former stockholders of FFB appropriate
transmittal materials (which shall specify that delivery shall be effected, and
risk of loss and title to the certificates theretofore representing shares of
FFB Common Stock shall pass, only upon proper delivery of such certificates to
the Exchange Agent). After the Effective Time, each holder of shares of FFB
Common Stock (other than shares to be canceled pursuant to Section of this
Agreement) promptly upon the surrender of the certificate or certificates
representing such shares to the Exchange Agent, shall receive in exchange
therefor the consideration provided in Section 3.1 of this Agreement, together
with all undelivered dividends and other distributions in respect of such shares
(without interest thereon) pursuant to Section 4.2 of this Agreement. Regions
shall not be obligated to deliver any cash payments to which any former holder
of FFB Common Stock is entitled as a result of the Merger, until such holder
surrenders such holder's certificate or certificates representing the shares of
FFB Common Stock for exchange as provided in this Section or otherwise complies
with the procedures of the Exchange Agent with respect to lost, stolen, or
destroyed certificates. The certificate or certificates of FFB Common Stock so
surrendered shall be duly endorsed as the Exchange Agent may require. Any other
provision of this Agreement notwithstanding, neither Regions, FFB, nor the
Exchange Agent shall be liable to a holder of FFB Common Stock for any amounts
paid or property delivered in good faith to a public official pursuant to any
applicable abandoned property Law.

4.2 RIGHTS OF FORMER FFB STOCKHOLDERS. At the Effective Time, the
stock transfer books of FFB shall be closed as to holders of FFB Common Stock
immediately prior to the Effective Time and no transfer of FFB Common Stock by
any such holder shall thereafter be made or recognized. Until surrendered for
exchange in accordance with the provisions of Section 4.1 of this Agreement,
each certificate theretofore representing shares of FFB Common Stock (other than
shares to be canceled pursuant to Section 3.3 of this Agreement) shall from and
after the Effective Time represent for all purposes only the right to receive
the consideration provided in Section 3.1 of this Agreement in exchange
therefor, subject, however, to the Surviving Corporation's obligation to pay any
dividends or make any other distributions with a record date prior to the
Effective Time which have been declared or made by FFB in respect of such shares
of FFB Common Stock in accordance with the terms of this Agreement and which
remain unpaid at the Effective Time.

4.3 REGIONS TO MAKE CASH AVAILABLE. At or prior to the Effective
Time, Regions shall deposit, or shall cause to be deposited, with the Exchange
Agent, for the benefit of the holders of certificates representing FFB Common
Stock, for exchange in accordance with this Article 4, the requisite aggregate
amount of the Cash Payment Amount to be paid pursuant to Section 3.1(c) in
exchange for outstanding shares of FFB Common Stock.

<PAGE> 39

ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF FFB

FFB hereby represents and warrants to Regions that:

5.1 ORGANIZATION, STANDING, AND POWER. FFB is a corporation duly
organized and validly existing, and in good standing under the Laws of the State
of Florida, and has the corporate power and authority to carry on its business
as now conducted and to own, lease, and operate its material Assets. FFB is
duly qualified or licensed to transact business as a foreign corporation in good
standing in the States of the United States where the character of its Assets or
the nature or conduct of its business requires it to be so qualified or
licensed, except for such jurisdictions in which the failure to be so qualified
or licensed is not reasonably likely to have, individually or in the aggregate,
a Material Adverse Effect on FFB.

5.2 AUTHORITY; NO BREACH BY AGREEMENT.

(a) FFB has the corporate power and authority necessary to
execute, deliver, and perform its obligations under this Agreement and to
consummate the transactions contemplated hereby. The execution, delivery, and
performance of this Agreement and the consummation of the transactions
contemplated herein, including the Merger, have been duly and validly authorized
by all necessary corporate action in respect thereof on the part of FFB, subject
to the approval of this Agreement and the Plan of Merger by the required vote of
the outstanding shares of FFB Common Stock, which is the only stockholder vote
required for approval of this Agreement and consummation of the Merger by FFB.
Subject to such requisite stockholder approval, this Agreement represents a
legal, valid, and binding obligation of FFB, enforceable against FFB in
accordance with its terms (except in all cases as such enforceability may be
limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium, or
similar Laws affecting the enforcement of creditors' rights generally and
creditors of depository institutions and their holding companies and (ii)
application of, and limitations on the application of, equitable principles and
remedies, including limitations on the availability of the equitable remedy of
specific performance or injunctive relief).

(b) Neither the execution and delivery of this Agreement by FFB,
nor the consummation by FFB of the transactions contemplated hereby, nor
compliance by FFB with any of the provisions hereof, will (i) conflict with or
result in a breach of any provision of FFB's Articles of Incorporation or
Bylaws, or (ii) constitute or result in a Default under, or require any
Consent pursuant to, or result in the creation of any Lien on any Asset of any
FFB Company under, any Contract or Permit of any FFB Company, where such
Default or Lien, or any failure to obtain such Consent, is reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on FFB, or
(iii) subject to receipt of the requisite approvals referred to in Section
9.1(b) of this Agreement, violate any Law or Order applicable to any FFB
Company or any of their respective material Assets where such violation would
have, individually or in the aggregate, a Material Adverse Effect on FFB.

<PAGE> 40
(c) Other than in connection or compliance with the provisions of
the Securities Laws, applicable state corporate and securities Laws, and rules
of the NASD, and other than Consents required from Regulatory Authorities, and
other than notices to or filings with the Internal Revenue Service or the
Pension Benefit Guaranty Corporation or both with respect to any employee
benefit plans, or under the HSR Act, and other than Consents, filings, or
notifications which, if not obtained or made, are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on FFB, no notice
to, filing with, or Consent of, any public body or authority is necessary for
the consummation by FFB of the Merger and the other transactions contemplated in
this Agreement.

5.3 CAPITAL STOCK. The authorized capital stock of FFB consists of:
(i) 6,500,000 shares of FFB Common Stock, of which 3,377,645 shares are issued
and outstanding as of the date of this Agreement and not more than 3,469,770
shares will be issued and outstanding at the Effective Time and (ii) 1,000,000
shares of preferred stock, no par value, of which no shares are, or will be,
issued and outstanding as of the date of this Agreement or at the Effective
Time, respectively. FFB has reserved 92,125 shares of FFB Common Stock for
issuance under the FFB Stock Option Plan, pursuant to which options to purchase
not more than 91,925 shares of FFB Common Stock are outstanding. All of the
issued and outstanding shares of capital stock of FFB are duly and validly
issued and outstanding and are fully paid and nonassessable under the FBCA.
None of the outstanding shares of capital stock of FFB has been issued in
violation of any preemptive rights of the current or past stockholders of FFB.
Except as set forth above or as disclosed in Section 5.3 of the FFB Disclosure
Memorandum, there are no shares of capital stock or other equity securities of
FFB outstanding and no outstanding Rights relating to the capital stock of FFB.

5.4 FFB SUBSIDIARIES. FFB has disclosed in Section 5.4 of the FFB
Disclosure Memorandum all of the FFB Subsidiaries as of the date of this
Agreement. FFB or one of its Subsidiaries owns all of the issued and
outstanding shares of capital stock of each FFB Subsidiary. No equity
securities of any FFB Subsidiary are or may become required to be issued (other
than to another FFB Company) by reason of any Rights, and there are no Contracts
by which any FFB Subsidiary is bound to issue (other than to another FFB
Company) additional shares of its capital stock or Rights or by which any FFB
Company is or may be bound to transfer any shares of the capital stock of any
FFB Subsidiary (other than to another FFB Company). There are no Contracts
relating to the rights of any FFB Company to vote or to dispose of any shares of
the capital stock of any FFB Subsidiary. All of the shares of capital stock of
each FFB Subsidiary held by a FFB Company are fully paid and nonassessable under
the applicable corporation or banking Law of the jurisdiction in which such
Subsidiary is incorporated or organized and are owned by the FFB Company free
and clear of any Lien. Each FFB Subsidiary is either a bank, savings
association, or a corporation, and is duly organized, validly existing, and
(as to corporations) in good standing under the Laws of the jurisdiction in
which it is incorporated or organized, and has the corporate power and authority
necessary for it to own, lease, and operate its Assets and to carry on its
business as now conducted. Each FFB Subsidiary is duly qualified or
licensed to transact business as a foreign corporation in good standing in
the States of the United States where the character of its Assets or
the nature or conduct of its business requires it to be so

<PAGE> 41

qualified or licensed, except for such jurisdictions in which the failure to be
so qualified or licensed is not reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on FFB. Each FFB Subsidiary that is a
depository institution is an "insured institution" as defined in the Federal
Deposit Insurance Act and applicable regulations thereunder, and the deposits in
which are insured by the Bank Insurance Fund or the Savings Association
Insurance Fund (the "SAIF"), as appropriate.

5.5 FINANCIAL STATEMENTS. FFB has included in Section 5.5 of the
FFB Disclosure Memorandum copies of all FFB Financial Statements for periods
ended prior to the date hereof and will deliver to Regions copies of all FFB
Financial Statements prepared subsequent to the date hereof. The FFB Financial
Statements (as of the dates thereof and for the periods covered thereby)
present or will present, as the case may be, fairly the consolidated financial
position of the FFB Companies as of the dates indicated and the consolidated
results of operations, changes in stockholders' equity, and cash flows of the
FFB Companies for the periods indicated, in accordance with GAAP (subject to any
exceptions as to consistency specified therein or as may be indicated in the
notes thereto or, in the case of interim financial statements, to normal
recurring year-end adjustments that are not material in amount or effect and to
the absence from interim financial statements of any footnote disclosures).

5.6 ABSENCE OF UNDISCLOSED LIABILITIES. No FFB Company has any
Liabilities that are reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on FFB, except Liabilities which are
accrued or reserved against in the consolidated balance sheets of FFB as of
March 31, 1996 included in the FFB Financial Statements or reflected in the
notes thereto. No FFB Company has incurred or paid any Liability since March
31, 1996, except for such Liabilities incurred or paid in the ordinary course of
business consistent with past business practice or incurred in connection with
the process leading up to the execution and consummation of this Agreement and
which are not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on FFB.

5.7 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since March 31, 1996,
except as disclosed in the FFB Financial Statements delivered prior to the date
of this Agreement, to the Knowledge of FFB, (i) there have been no events,
changes, or occurrences which have had, or are reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on FFB, and (ii)
the FFB Companies have not taken any action, or failed to take any action,
prior to the date of this Agreement, which action or failure, if taken
after the date of this Agreement, would represent or result in a material breach
or violation of any of the covenants and agreements of FFB provided in
Article 7 of this Agreement, other than conducting the process that has led up
to the execution and consummation of this Agreement.

5.8 TAX MATTERS.

(a) All Tax returns required to be filed by or on behalf of any
of the FFB Companies have been timely filed or requests for extensions have
been timely filed, granted, and have not expired for periods ended on or before
December 31, 1995, and on or before the date of the most recent fiscal year end
immediately preceding the Effective Time, except to the extent that

<PAGE> 42

all such failures to file or untimely filings, individually or in the aggregate,
are not reasonably likely to have a Material Adverse Effect on FFB and all
returns filed are complete and accurate in all material respects to the
Knowledge of FFB. All Taxes shown on filed returns have been paid. There is no
audit examination, deficiency, refund Litigation, or penalties due or owed with
respect to any Taxes that is reasonably likely to result in a determination that
would have a Material Adverse Effect on FFB, except as reserved against in the
FFB Financial Statements delivered prior to the date of this Agreement. All
Taxes and other Liabilities due with respect to completed and settled
examinations or concluded Litigation have been paid.

(b) None of the FFB Companies has executed an extension or waiver
of any statute of limitations on the assessment or collection of any Tax due
(excluding such statutes that relate to years currently under examination by the
Internal Revenue Service or other applicable taxing authorities) that is
currently in effect.

(c) To the Knowledge of FFB, adequate provision for any Taxes due
or to become due for any of the FFB Companies for the period or periods through
and including the date of the respective FFB Financial Statements has been made
and is reflected on such FFB Financial Statements other than Taxes being
contested by FFB or a FFB Company in good faith.

(d) Deferred Taxes of the FFB Companies have been provided for in
accordance with GAAP.

(e) Each of the FFB Companies is in compliance with, and its
records contain the information and documents (including properly completed IRS
Forms W-9) necessary to comply with, in all material respects, applicable
information reporting and Tax withholding requirements under federal, state, and
local Tax Laws, and such records identify the accounts subject to backup
withholding under Section 3406 of the Internal Revenue Code.

(f) None of the FFB Companies has made any payments, is obligated
to make any payments, or is a party to any contract, agreement, or other
arrangement that could obligate it to make any payments that would be disallowed
as a deduction under Section 280G or 162(m) of the Internal Revenue Code.

(g) There are no Liens with respect to Taxes upon any of the
assets of the FFB Companies.

(h) There has not been an ownership change, as defined in
Internal Revenue Code Section 382(g), of the FFB Companies that occurred during
or after any Taxable Period in which the FFB Companies incurred a net operating
loss that carries over to any Taxable Period ending after December 31, 1995.

(i) No FFB Company has filed any consent under Section 341(f) of
the Internal Revenue Code concerning collapsible corporations.

9
<PAGE> 43
(j) All material elections with respect to Taxes affecting the
FFB Companies as of the date of this Agreement have been or will be timely made
as set forth in Section 5.8 of the FFB Disclosure Memorandum. After the date
hereof, no election with respect to Taxes will be made without the prior written
consent of Regions, which consent will not be unreasonably withheld.

(k) No FFB Company has or has had a permanent establishment in
any foreign country, as defined in any applicable tax treaty or convention
between the United States and such foreign country.

(l) Except as set forth in Section 5.8(l) of the FFB Disclosure
Memorandum, none of the FFB Companies is a party to any tax allocation or
sharing agreement and none of the FFB Companies has been a member of an
affiliated group filing a consolidated federal income tax return (other than a
group the common parent of which was FFB) has any Liability for taxes of any
Person (other than FFB and its Subsidiaries) under Treasury Regulation Section
1.1502-6 (or any similar provision of state, local, or foreign law) as a
transferee or successor or by Contract or otherwise.

5.9 ASSETS. Except as reserved against in the FFB Financial
Statements made available prior to the date of this Agreement, the FFB
Companies have good and marketable title, free and clear of all Liens, to all
of their respective owned Assets. All material tangible properties used in the
businesses of the FFB Companies are in good condition, reasonable wear and tear
excepted, and are usable in the ordinary course of business consistent with
FFB's past practices. All Assets which are material to FFB's business on a
consolidated basis, held under leases or subleases by any of the FFB Companies,
are held under valid Contracts enforceable in accordance with their respective
terms (except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, or other Laws affecting the enforcement
of creditors' rights generally and creditors of insured depository institutions
and their holding companies and except that the availability of the
equitable remedy of specific performance or injunctive relief is subject to
the discretion of the court before which any proceedings may be brought),
and each such Contract is in full force and effect. The FFB Companies
currently maintain insurance similar in reasonable amounts, scope, and
coverage against such risks as companies engaged in a similar business would
customarily be insured. As of the date of this Agreement, none of the FFB
Companies has received notice from any insurance carrier that (i) such
insurance will be canceled or that coverage thereunder will be reduced or
eliminated, or (ii) premium costs with respect to such policies of
insurance will be substantially increased. There are presently no claims
pending under such policies of insurance and no notices have been given by
any FFB Company under such policies. The Assets of the FFB Companies include
all Assets required to operate the business of the FFB Companies as presently
conducted.

5.10 ALLOWANCE FOR POSSIBLE LOAN LOSSES. The allowance for possible
loan or credit losses (the "Allowance") shown on the consolidated balance sheets
of FFB included in the most recent FFB Financial Statements dated prior to the
date of this Agreement was, and the Allowance shown on the consolidated balance
sheets of FFB included in the FFB Financial Statements as of dates subsequent to
the execution of this Agreement will be, as of the dates

10
<PAGE> 44

thereof, in the reasonable opinion of management of FFB adequate (within the
meaning of GAAP and applicable regulatory requirements or guidelines) to
provide for all known and reasonably anticipated losses relating to or inherent
in the loan portfolio (including accrued interest receivables) of the FFB
Companies and other extensions of credit (including letters of credit and
commitments to make loans or extend credit) by the FFB Companies as of the
dates thereof.

5.11 INTELLECTUAL PROPERTY. All of the Intellectual Property rights
of the FFB Companies are in full force and effect and constitute legal, valid,
and binding obligations of the respective parties thereto, and there have not
been, and, to the Knowledge of FFB, there currently are not, any Defaults
thereunder by FFB. A FFB Company owns or is the valid licensee of all such
Intellectual Property rights free and clear of all Liens or claims of
infringement. None of the FFB Companies or, to the Knowledge of FFB, their
respective predecessors has misused the Intellectual Property rights of others
and none of the Intellectual Property rights as used in the business conducted
by any such FFB Company infringes upon or otherwise violates the rights of any
Person, nor has any Person asserted a claim of such infringement. No FFB
Company is obligated to pay any royalties to any Person with respect to any such
Intellectual Property. Each FFB Company owns or has the valid right to use all
of the Intellectual Property rights which it is presently using, or in
connection with performance of any material Contract to which it is a party. No
officer, director, or employee of any FFB Company is party to any Contract which
requires such officer, director or employee to assign any interest in any
Intellectual Property or keep confidential any trade secrets, proprietary data,
customer information, or other business information or which restricts or
prohibits such officer, director, or employee from engaging in activities
competitive with any Person, including any FFB Company.

5.12 ENVIRONMENTAL MATTERS.

(a) To the Knowledge of FFB, each FFB Company, its Participation
Facilities, and its Loan Properties are, and have been, in compliance with all
Environmental Laws, except for such instances of non-compliance that are not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on FFB.

(b) To the Knowledge of FFB, there is no Litigation pending or
threatened before any court, governmental agency, or authority or other forum in
which any FFB Company or any of its Loan Properties or Participation Facilities
(or any FFB Company in respect of any such Loan Property or Participation
Facility) has been or, with respect to threatened Litigation, may be named as a
defendant or potentially responsible party (i) for alleged noncompliance
(including by any predecessor) with any Environmental Law or (ii) relating to
the release into the environment of any Hazardous Material, whether or not
occurring at, on, under, or involving a site owned, leased, or operated by any
FFB Company or any of its Loan Properties or Participation Facilities, except
for such Litigation pending or threatened that is not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on FFB, and to the
Knowledge of FFB, there is no reasonable basis for any such Litigation.

11
<PAGE> 45

(c) To the Knowledge of FFB, there have been no releases of
Hazardous Material in, on, under, or affecting any Participation Facility, or
Loan Property, except such as are not reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on FFB.

5.13 COMPLIANCE WITH LAWS. FFB is duly registered as a savings and
loan holding company under the HOLA. Each FFB Company has in effect all Permits
necessary for it to own, lease, or operate its material Assets and to carry on
its business as now conducted, and the absence of which would have a Material
Adverse Effect on FFB, and there has occurred no Default under any such Permit
other than Defaults which are not reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on FFB. None of the FFB Companies:

(a) is in violation of any Laws, Orders, or Permits applicable to
its business or employees conducting its business, except for violations which
are not reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on FFB; and

(b) has received any written notification or communication from

any agency or department of federal, state, or local government or any
Regulatory Authority or the staff thereof (i) asserting that any FFB Company is
not in compliance with any of the Laws or Orders which such governmental
authority or Regulatory Authority enforces, where such noncompliance is
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on FFB, (ii) threatening to revoke any Permits, the revocation of which
is reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on FFB, or (iii) requiring any FFB Company to enter into or
consent to the issuance of a cease and desist order, formal agreement,
directive, commitment, or memorandum of understanding, or to adopt any Board
resolution or similar undertaking, which restricts materially the conduct of
its business, or in any material manner relates to its capital adequacy, its
credit or reserve policies, its management, or the payment of dividends.

5.14 EMPLOYEE BENEFIT PLANS.

(a) FFB has disclosed in Section 5.14(a) of the FFB Disclosure
Memorandum, and has delivered or made available to Regions prior to the
execution of this Agreement, copies in each case of all written pension,
retirement, profit-sharing, deferred compensation, stock option, employee stock
ownership, severance pay, vacation, bonus, or other incentive plan, all other
written employee programs, arrangements, or agreements, all medical, vision,
dental, or other written health plans, all life insurance plans, and all other
written employee benefit plans or fringe benefit plans, including written
"employee benefit plans" as that term is defined in Section 3(3) of ERISA,
currently adopted, maintained by, sponsored in whole or in part by, or
contributed to, by any FFB Company or Affiliate thereof for the benefit of
employees, retirees, dependents, spouses, directors, independent contractors, o
other beneficiaries and under which employees, retirees, dependents, spouses,
directors, independent contractors, or other beneficiaries are eligible to
participate (collectively, the "FFB Benefit Plans"). Any of the FFB Benefit
Plans which is an "employee pension benefit plan," as that term is defined in
Section 3(2) of ERISA, is referred to herein as a "FFB ERISA Plan." Each FFB
ERISA Plan which is also a "defined benefit plan" (as defined in Section 414(j)
of the Internal Revenue Code) is referred to herein as a "FFB Pension

12
<PAGE> 46

Plan." No FFB Pension Plan is or has been a multiemployer plan within the
meaning of Section 3(37) of ERISA.

(b) All FFB Benefit Plans are in compliance in all material
respects with the applicable terms of ERISA, the Internal Revenue Code, and any
other applicable Laws the breach or violation of which are reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on FFB. Each
FFB ERISA Plan which is intended to be qualified under Section 401(a) of the
Internal Revenue Code has received a favorable determination letter from the
Internal Revenue Service, and FFB has no Knowledge of any circumstances likely
to result in revocation of any such favorable determination letter. No FFB
Company has engaged in a transaction with respect to any FFB Benefit Plan that,
assuming the taxable period of such transaction expired as of the date hereof,
would subject any FFB Company to a tax or penalty imposed by either Section 4975
of the Internal Revenue Code or Section 502(i) of ERISA that, individually or in
the aggregate, is reasonably likely to have a Material Adverse Effect on FFB.

(c) No FFB Pension Plan has any "unfunded current liability," as
that term is defined in Section 302(d)(8)(A) of ERISA, and the fair market
value of the assets of any such plan equals or exceeds the plan's "benefit
liabilities," as that term is defined in Section 4001(a)(16) of ERISA, when
determined under actuarial factors that would apply if the plan terminated in
accordance with all applicable legal requirements. Since the date of the most
recent actuarial valuation, there has been (i) no material change in the
financial position of any FFB Pension Plan, (ii) no change in the actuarial
assumptions with respect to any FFB Pension Plan, and (iii) no increase in
benefits under any FFB Pension Plan as a result of plan amendments or changes in
applicable Law which is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on FFB or materially adversely affect the
funding status of any such plan. Neither any FFB Pension Plan nor any "single-
employer plan," within the meaning of Section 4001(a)(15) of ERISA, currently or
formerly maintained by any FFB Company, or the single-employer plan of any
entity which is considered one employer with FFB under Section 4001 of ERISA or
Section 414 of the Internal Revenue Code or Section 302 of ERISA (whether or not
waived) (an "ERISA Affiliate") has an "accumulated funding deficiency" within
the meaning of Section 412 of the Internal Revenue Code or Section 302 of ERISA
No FFB Company has provided, or is required to provide, security to an FFB
Pension Plan or to any single-employer plan of an ERISA Affiliate pursuant to
Section 401(a)(29) of the Code.

(d) No Liability under Subtitle C or D of Title IV of ERISA has
been or is reasonably expected to be incurred by any FFB Company with respect to
any ongoing, frozen, or terminated single-employer plan or the single-employer
plan of any ERISA Affiliate. No FFB Company has incurred any withdrawal
Liability with respect to a multiemployer plan under Subtitle B of Title IV of
ERISA (regardless of whether based on contributions of an ERISA Affiliate). No
notice of a "reportable event," within the meaning of Section 4043 of ERISA for
which the 30-day reporting requirement has not been waived, has been required to
be filed for any FFB Pension Plan or by any ERISA Affiliate within the 12-month
period ending on the date hereof.

13
<PAGE> 47

(e) No FFB Company has any Liability for retiree health and life
benefits under any of the FFB Benefit Plans and, to the Knowledge of FFB, there
are no restrictions on the rights of such FFB Company to amend or terminate any
such Plan without incurring any Liability thereunder.

(f) Except as set forth in Section 5.14(f) of the FFB Disclosure
Memorandum, neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will (i) result in any
payment (including severance, unemployment compensation, golden parachute, or
otherwise) becoming due to any director or any employee of any FFB Company from
any FFB Company under any FFB Benefit Plan or otherwise, (ii) increase any
benefits otherwise payable under any FFB Benefit Plan, or (iii) result in any
acceleration of the time of payment or vesting of any such benefit.

(g) The actuarial present values of all accrued deferred
compensation entitlements (including entitlements under any executive
compensation, supplemental retirement, or employment agreement) of employees and
former employees of any FFB Company and their respective beneficiaries, other
than entitlements accrued pursuant to funded retirement plans subject to the
provisions of Section 412 of the Internal Revenue Code or Section 302 of ERISA,
have been fully reflected on the FFB Financial Statements to the extent
required by and in accordance with GAAP.

5.15 MATERIAL CONTRACTS. Except as reflected in the FFB Financial
Statements or as set forth in Section 5.15 of the FFB Disclosure Memorandum,
none of the FFB Companies, nor any of their respective Assets, businesses, or
operations, is a party to, or is bound or affected by, or receives benefits
under, (i) any employment, severance, termination, consulting, or retirement
Contract providing for aggregate payments to any Person in any calendar year in
excess of $100,000, (ii) any Contract relating to the borrowing of money by any
FFB Company or the guarantee by any FFB Company of any such obligation (other
than Contracts evidencing deposit liabilities, purchases of federal funds,
fully-secured repurchase agreements, and Federal Home Loan Bank advances of
depository institution Subsidiaries, trade payables, and Contracts relating to
borrowings or guarantees made in the ordinary course of business), and (iii) any
other Contract or amendment thereto that would be required to be filed as an
exhibit to a Form 10-KSB filed by FFB with the SEC as of the date of this
Agreement that has not been filed as an exhibit to FFB's Form 10-KSB filed for
the fiscal year ended December 31, 1995, or in another SEC Document and
identified to Regions (together with all Contracts referred to in Sections 5.8
and 5.13(a) of this Agreement, the "FFB Contracts"). With respect to each FFB
Contract: (i) the Contract is in full force and effect; (ii) no FFB Company is
in Default thereunder, other than Defaults which are not reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on FFB;
(iii) no FFB Company has repudiated or waived any material provision of any such
Contract; and (iv) no other party to any such Contract is, to the Knowledge of
FFB, in Default in any material respect, other than Defaults which are not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on FFB, or has repudiated or waived any material provision thereunder.
Except as disclosed in Section 5.15 of the FFB Disclosure Memorandum, all of the
indebtedness of any FFB Company for money borrowed is prepayable at any time by
such FFB Company without penalty or premium.

14
<PAGE> 48

5.16 LEGAL PROCEEDINGS. There is no Litigation instituted or
pending, or, to the Knowledge of FFB, threatened against any FFB Company, or
against any Asset, interest, or right of any of them, that is reasonably likely
to have, if adversely determined; individually or in the aggregate, a Material
Adverse Effect on FFB, nor are there any Orders of any Regulatory Authorities,
other governmental authorities, or arbitrators outstanding against any FFB
Company that is reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on FFB. Section 5.16 of the FFB Disclosure Memorandum
includes a summary report of all Litigation as of the date of this Agreement to
which any FFB Company is a party as a defendant or cross-defendant.

5.17 STATEMENTS TRUE AND CORRECT. Since January 1, 1993, or the date
of organization if later, each FFB Company has timely filed all reports and
statements, together with any amendments required to be made with respect
thereto, that it was required to file with any Regulatory Authorities (except,
in the case of state securities authorities, failures to file which are not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on FFB). At the time of filing (or if amended or superseded by a filing
prior to the date of this Agreement, then on the date of such filing): (i)
each report and other document, including financial statements, exhibits, and
schedules thereto, filed by an FFB Company with any Regulatory Authority
complied in all material respects with all applicable Laws; and (ii) each such
report and document did not, in all material respects, contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements made therein, in light of
the circumstances under which they were made, not misleading. The statements,
certificates, instruments, or other writings, taken as a whole, furnished or to
be furnished by any FFB Company or any Affiliate thereof to Regions pursuant to
this Agreement or any other document, agreement, or instrument referred to
herein, do not and will not contain any untrue statement of material fact or
omit to state a material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading. None of
the information supplied or to be supplied by any FFB Company or any Affiliate
thereof for inclusion in the Proxy Statement to be mailed to FFB stockholders
in connection with the Stockholders' Meeting, and any other documents to be
filed by an FFB Company or any Affiliate thereof with the SEC or any other
Regulatory Authority in connection with the transactions contemplated hereby,
will, at the respective time such documents are filed, and with respect to the
Proxy Statement, when first mailed to the stockholders of FFB, contain any
misstatement of material fact, or omit to state any material fact required to
be stated thereunder or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, or, in the case
of the Proxy Statement or any amendment thereof or supplement thereto, at the
time of the Stockholders' Meeting, be false or misleading with respect to any
material fact, or omit to state any material fact required to be stated
thereunder or necessary to correct any material statement in any earlier
communication with respect to the solicitation of any proxy for the
Stockholders' Meeting. All documents that any FFB Company or any Affiliate
thereof is responsible for filing with any Regulatory Authority in connection
with the transactions contemplated hereby will comply as to form in all
material respects with the provisions of applicable Law.

15
<PAGE> 49

5.18 REGULATORY MATTERS. Except as specifically contemplated by this
Agreement, no FFB Company or any Affiliate thereof has taken any action, or
agreed to take any action, or has any Knowledge of any fact or circumstance
that is reasonably likely to materially impede or delay receipt of any Consents
of Knowledge of FFB there exists no fact, circumstance, or reason why the
requisite Consents referred to in Section 9.1(b) of this Agreement cannot be
received in a timely manner without imposition of any condition of the type
described in the last sentence of such Section 9.1(b).

5.19 STATE TAKEOVER LAWS. To the extent applicable, each FFB
Company has taken all necessary action to exempt the transactions contemplated
by this Agreement from Section 607 ET. SEQ. of the FBCA and any comparable
provisions of the Articles of Incorporation of FFB.

5.20 DIRECTORS' AGREEMENTS. Each of the directors of FFB has
executed and delivered to Regions an agreement in substantially the form of
Exhibit 2.

5.21 CHARTER PROVISIONS. Each FFB Company has taken all action so
that the entering into of this Agreement and the consummation of the Merger and
the other transactions contemplated by this Agreement do not and will not result
in the grant of any rights to any Person under the Articles of Incorporation,
Bylaws, or other governing instruments of any FFB Company or restrict or impair
the ability of Regions or any of its Subsidiaries to vote, or otherwise to
exercise the rights of a stockholder with respect to, shares of any FFB Company
that may be directly or indirectly acquired or controlled by it.

5.22 DERIVATIVES CONTRACTS. Neither FFB nor any of its Subsidiaries
is a party to or has agreed to enter into an exchange-traded or over-the-counter
swap, forward, future, option, cap, floor, or collar financial contract, or any
other interest rate or foreign currency protection contract not included on its
balance sheet which is a financial derivative contract (including various
combinations thereof) and which might reasonably be expected to have a Material
Adverse Effect on FFB.

<PAGE> 50
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF REGIONS

Regions hereby represents and warrants to FFB as follows:

6.1 ORGANIZATION, STANDING, AND POWER. Regions is a corporation
duly organized, validly existing, and in good standing under the Laws of the
State of Delaware, and has the corporate power and authority to carry on its
business as now conducted and to own, lease, and operate its material Assets.
Regions is duly qualified or licensed to transact business as a foreign
corporation in good standing in the States of the United States and foreign
jurisdictions where the character of its Assets or the nature or conduct of its
business requires it to be so qualified or licensed, except for such
jurisdictions in which the failure to be so qualified or licensed is not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on Regions.

6.2 AUTHORITY; NO BREACH BY AGREEMENT.

(a) Regions has the corporate power and authority necessary to
execute, deliver, and perform its obligations under this Agreement and to
consummate the transactions contemplated hereby. The execution, delivery, and
performance of this Agreement and the consummation of the transactions
contemplated herein, including the Merger, have been duly and validly authorized
by all necessary corporate action in respect thereof on the part
of Regions. This Agreement represents a legal, valid, and binding obligation of
Regions, enforceable against Regions in accordance with its terms (except in all
cases as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, or similar Laws affecting the
enforcement of creditors' rights generally and except that the availability of
the equitable remedy of specific performance or injunctive relief is subject to
the discretion of the court before which any proceeding may be brought).

(b) Neither the execution and delivery of this Agreement by
Regions, nor the consummation by Regions of the transactions contemplated
hereby, nor compliance by Regions with any of the provisions hereof, will
(i) conflict with or result in a breach of any provision of Regions' Certificate
of Incorporation or Bylaws, or (ii) constitute or result in a Default under, or
require any Consent pursuant to, or result in the creation of any Lien on any
Asset of any Regions Company under, any Contract or Permit of any Regions
Company, where such Default or Lien, or any failure to obtain such Consent, is
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on Regions, or (iii) subject to receipt of the requisite approvals
referred to in Section 9.1(b) of this Agreement, violate any Law or Order
applicable to any Regions Company or any of their respective material Assets.

(c) Other than in connection or compliance with the provisions of
the Securities Laws, applicable state corporate and securities Laws, and rules
of the NASD, and other than Consents required from Regulatory Authorities, and
other than notices to or filings with the Internal Revenue Service or the
Pension Benefit Guaranty Corporation, or both, with respect to any employee
benefit plans, or under the HSR Act, and other than Consents, filings, or
notifications which, if not obtained or made, are not reasonably likely to have,
individually or in

<PAGE> 51
the aggregate, a Material Adverse Effect on Regions or Regions Merger
Subsidiary, no notice to, filing with, or Consent of, any public body or
authority is necessary for the consummation by Regions of the Merger and the
other transactions contemplated in this Agreement.

6.3 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since March 31, 1996,
except as disclosed in the Regions Financial Statements delivered prior to the
date of this Agreement, to the Knowledge of Regions there have been no events,
changes, or occurrences which have had, or are reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Regions.

6.4 COMPLIANCE WITH LAWS. Regions is duly registered as a bank
holding company under the BHC Act. Each Regions Company has in effect all
Permits necessary for it to own, lease, or operate its material Assets and to
carry on its business as now conducted, and the absence of which would have a
Material Adverse Effect on Regions, and there has occurred no Default under any
such Permit other than Defaults which are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Regions. No
Regions Company:

(b) has received any written notification or communication from
any agency or department of federal, state, or local government or any
Regulatory Authority or the staff thereof (i) asserting that any Regions Company
is not in compliance with any of the Laws or Orders which such governmental
authority or Regulatory Authority enforces, where such noncompliance is
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on Regions, (ii) threatening to revoke any Permits, the revocation of
which is reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on Regions, or (iii) requiring any Regions Company to enter into
or consent to the issuance of a cease and desist order, formal agreement,
directive, commitment or memorandum of understanding, or to adopt any Board
resolution or similar undertaking, which restricts materially the conduct of its
business, or in any material manner relates to its capital adequacy, its credit
or reserve policies, its management, or the payment of dividends.

6.5 STATEMENTS TRUE AND CORRECT. Since January 1, 1993, or the date
of organization if later, each Regions Company has filed all reports and
statements, together with any amendments required to be made with respect
thereto, that it was required to file with Regulatory Authorities (except, in
the case of state securities authorities, failures to file which are not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on Regions). At the time of filing (or if amended or superseded by a
filing prior to the date of this Agreement, then on the date of such filing):
(i) each report and other document, including financial statements, exhibits,
and schedules thereto, filed by a Regions Company with any Regulatory Authority
complied in all material respects with all applicable Laws, and (ii) each such
report and document did not, in all material respects, contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements made therein, in light of the
circumstances under which they were made, not

<PAGE> 52

misleading. The statements, certificates, instruments, or other writings,
taken as a whole, furnished or to be furnished by any Regions Company or any
Affiliate thereof to FFB pursuant to this Agreement or any other document,
agreement, or instrument referred to herein, do not and will not contain any
untrue statement of material fact or omit to state a material fact necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading. None of the information supplied or to be supplied
by any Regions Company or any Affiliate thereof for inclusion in the Proxy
Statement to be mailed to FFB stockholders in connection with the Stockholders'
Meeting, and any other documents to be filed by any Regions Company or any
Affiliate thereof with the SEC or any other Regulatory Authority in connection
with the transactions contemplated hereby, will, at the respective time such
documents are filed, and with respect to the Proxy Statement, when first mailed
to the stockholders of FFB, contain any misstatement of a material fact or,
omit to state any material fact required to be stated thereunder or necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading, or, in the case of the Proxy Statement, or any
amendment thereof or supplement thereto, at the time of the Stockholders'
Meeting, be false or misleading with respect to any material fact, or omit to
state any material fact required to be stated thereunder or necessary to correct
any statement in any earlier communication with respect to the solicitation of
any proxy for the Stockholders' Meeting. All documents that any Regions Company
or any Affiliate thereof is responsible for filing with any Regulatory Authority
in connection with the transactions contemplated hereby will comply as to form
in all material respects with the provisions of applicable Law.

6.6 REGULATORY MATTERS. Except as specifically contemplated by this
Agreement, no Regions Company or any Affiliate thereof has taken any action, or
agreed to take any action, or has any Knowledge of any fact or circumstance that
is reasonably likely to materially impede or delay receipt of any Consents of
Regulatory Authorities referred to in Section 9.1(b) of this Agreement. To the
Knowledge of Regions, there exists no fact, circumstance, or reason why the
requisite Consents referred to in Section 9.1(b) of this Agreement cannot be
received in a timely manner without imposition of any condition of the type
described in the last sentence of such Section 9.1(b).

6.7 MATTERS RELATING TO REGIONS MERGER SUBSIDIARY. At the Effective
Time, Regions Merger Subsidiary will be a corporation duly organized, validly
existing, and in good standing under the Laws of the State of Florida, and will
have the corporate power and authority to carry on its business as contemplated
by this Agreement and to own, lease, and operate its material Assets. Regions
Merger Subsidiary will have the corporate power and authority necessary to
execute, deliver, and perform its obligations under this Agreement and to
consummate the transactions contemplated hereby. The execution, delivery, and
performance of this Agreement and the consummation of the transactions
contemplated herein, including the Merger, will be duly and validly authorized
by all necessary corporate action in respect thereof on the part of Regions
Merger Subsidiary, subject to the approval of this Agreement by Regions as the
sole shareholder of Regions Merger Subsidiary, which is the only shareholder
vote required for approval of this Agreement, and the consummation of the Merger
by Regions Merger Subsidiary.

<PAGE> 53

6.8 FINANCING. At the Effective Time, Regions will have funds
sufficient to enable it to carry out its obligations under this Agreement.

6.9 OWNERSHIP OF FFB COMMON STOCK; AFFILIATES AND ASSOCIATES.

(a) Neither Regions nor any of its affiliates or associates (as such
terms are defined under the 1934 Act), (i) beneficially own, directly or
indirectly or (ii) is a party to any agreement, arrangement, or understanding
for the purpose of acquiring, holding, voting, or disposing of, in each case,
any shares of capital stock of FFB (other than shares held thereby in trust
accounts, managed accounts and the like or otherwise held in a fiduciary
capacity that are beneficially owned by third parties or shares held thereby in
respect of a debt previously contracted); and

(b) Neither Regions nor any Regions Company is an "affiliate" (as
such term is defined in Section 607.0901 of the FBCA), an "interested
shareholder" (as such term is defined in Section 607.0901 of the FBCA), or an
"associate" as such term is defined in Section 607.0901 of the FBCA) of FFB.

6.10 LEGAL PROCEEDINGS. As of the date of this Agreement, there is
no Litigation instituted or pending or, to the Knowledge of Regions, threatened
against Regions or any Regions Company which, if adversely determined, would
materially adversely affect the ability of Regions to consummate the
transactions contemplated hereby nor are there any Orders of any Regulatory
Authorities, other governmental authorities, or arbitrators outstanding against
any Regions Company that would have, individually or in the aggregate, a
Material Adverse Effect on Regions.

ARTICLE 7
CONDUCT OF BUSINESS PENDING CONSUMMATION

7.1 AFFIRMATIVE COVENANTS OF FFB. Unless the prior written consent
of a duly authorized officer of Regions shall have been obtained, and except as
otherwise expressly contemplated herein, FFB shall and shall cause each of its
Subsidiaries to, from the date of this Agreement until the Effective Time or
termination of this Agreement, (i) operate its business only in the usual,
regular, and ordinary course, (ii) preserve intact in all material respects its
business organization and Assets and maintain its rights and franchises, and
(iii) take no action which would (x) materially adversely affect the ability of
any Party to obtain any Consents required for the transactions contemplated
hereby without imposition of a condition or restriction of the type referred to
in the last sentences of Sections 9.1(b) or 9.1(c) of this Agreement, or
(y) materially adversely affect the ability of any Party to perform its
covenants and agreements under this Agreement.

7.2 NEGATIVE COVENANTS OF FFB. From the date of this Agreement
until the earlier of the Effective Time or the termination of this Agreement,
FFB covenants and agrees that it will not do or agree or commit to do,

<PAGE> 54

or permit any of its Subsidiaries to do or agree or commit to do, any of the
following without the prior written consent of a duly authorized officer
of Regions, which consent shall not be unreasonably withheld:

(a) amend the Articles of Incorporation, Bylaws, or other
governing instruments of any FFB Company; or

(b) incur any additional debt obligation or other obligation for
borrowed money (other than indebtedness of an FFB Company to another FFB
Company) in excess of an aggregate amount outstanding at any time of $200,000
(for the FFB Companies on a consolidated basis) except in the ordinary course of
the business of FFB, or such Subsidiary, consistent with past practices (which
shall include, for FFB, creation of deposit liabilities, purchases of federal
funds, advances from the Federal Reserve Bank or Federal Home Loan
Bank, whether or not FFB has previously received any such advances, overnight
borrowings to meet temporary liquidity needs, and entry into repurchase
agreements fully secured by U.S. Government or agency securities), or impose, or
suffer the imposition on any Asset of any FFB Company of any Lien or permit any
such Lien to exist (other than in connection with deposits, repurchase
agreements, bankers acceptances, "treasury tax and loan" accounts established in
the ordinary course of business, the satisfaction of legal requirements in the
exercise of trust powers, Liens to secure debt obligations or other obligations
for borrowed money permitted under this paragraph (b), and Liens in effect as of
the date hereof that are disclosed in the FFB Disclosure Memorandum); or

(c) repurchase, redeem, or otherwise acquire or exchange (other
than exchanges in the ordinary course under employee benefit plans), directly or
indirectly, any shares, or any securities convertible into any shares, of the
capital stock of any FFB Company, or declare or pay any dividend or make any
other distribution in respect of FFB's capital stock, PROVIDED that FFB may (to
the extent legally and contractually permitted to do so), but shall not be
obligated to, declare and pay quarterly cash dividends on the shares of FFB
Common Stock at a rate not in excess of $0.06 per share with record and payment
dates consistent with past practice as disclosed in Section 7.2(c) of the FFB
Disclosure Memorandum and, PROVIDED FURTHER, that with respect to the calendar
quarter in which the Effective Time occurs, the Board of Directors of FFB may
declare and pay a quarterly cash dividend on the shares of FFB Common Stock at a
rate not in excess of $0.06 per share, multiplied by a fraction, the numerator
of which shall be the number of days in such dividend period elapsed prior to
the Effective Time, and the denominator of which shall be the number of days in
such dividend period; or

(d) except for this Agreement, or pursuant to the exercise of
stock options outstanding as of the date hereof and pursuant to the terms
thereof in existence on the date hereof, issue, sell, pledge, encumber,
authorize the issuance of, enter into any Contract to issue, sell, pledge,
encumber, or authorize the issuance of, or otherwise permit to become
outstanding, any additional shares of FFB Common Stock or any other capital
stock of any FFB Company, or any Rights to acquire such stock; or

<PAGE> 55

(e) adjust, split, combine, or reclassify any capital stock of
any FFB Company or issue or authorize the issuance of any other securities in
respect of or in substitution for shares of FFB Common Stock, or sell, lease,
mortgage, or otherwise dispose of or otherwise encumber any shares of capital
stock of any FFB Subsidiary (unless any such shares of stock are sold or
otherwise transferred to another FFB Company) or any Asset having a book value
in excess of $100,000 other than in the ordinary course of business for
reasonable and adequate consideration and other than dispositions in the
ordinary course of business of (i) investment securities, (ii) loans, including
dispositions thereof through loan participation agreements, and (iii) other real
estate owned by any FFB Company; or

(f) except for purchases of U.S. Treasury securities, U.S.
Government agency securities and mortgage-backed balloon loans, which in each
case have maturities of five years or less, purchase any securities or make any
material investment, either by purchase of stock or securities, contributions
to capital, Asset transfers, or purchase of any Assets, in any Person other
than a wholly owned FFB Subsidiary, or otherwise acquire direct or indirect
control over any Person, other than in connection with (i) foreclosures in the
ordinary course of business, or (ii) acquisitions of control by a depository
institution Subsidiary in its fiduciary capacity; or

(g) grant any increase in compensation or benefits to the
employees or officers of any FFB Company, except in accordance with past
practice or previously approved by the Board of Directors of FFB, or as required
by Law; except as disclosed in Section 7.2(g) of the FFB Disclosure Memorandum,
pay any severance or termination pay or any bonus other than pursuant to written
policies or written Contracts in effect on the date of this Agreement and
disclosed in Section 7.2(g) of the FFB Disclosure Memorandum; and enter into or
amend any severance agreements with officers of any FFB Company; grant any
increase in fees or other increases in compensation or other benefits to
directors of any FFB Company except in accordance with past practice disclosed
in Section 7.2(g) of the FFB Disclosure Memorandum; or voluntarily accelerate
the vesting of any stock options or other stock-based compensation or employee
benefits; or

(h) enter into or amend any employment Contract between any FFB
Company and any Person (unless such amendment is required by Law) that the FFB
Company does not have the unconditional right to terminate without Liability
(other than Liability for services already rendered) at any time on or after the
Effective Time; or

(i) adopt any new employee benefit plan of any FFB Company or
make any material change in or to any existing employee benefit plans of any FFB
Company other than any such change that is required by Law or that, in the
opinion of counsel, is necessary or advisable to maintain the tax qualified
status of any such plan; or

(j) make any significant change in any Tax or accounting methods
or systems of internal accounting controls, except as may be appropriate to
conform to changes in Tax Laws or regulatory accounting requirements or GAAP; or

<PAGE> 56

(k) commence any material Litigation other than in accordance
with past practice, settle any Litigation involving any Liability of any FFB
Company for material money damages or imposing material restrictions upon the
operations of any FFB Company; or

(l) modify, amend, or terminate any material Contract (other than
any loan Contract, the modification, amendment, or termination of which does not
result in the FFB Companies recognizing a loss that exceeds $50,000) or waive,
release, compromise, or assign any material rights or claims, other than in
connection with the modification, amendment, or termination of a loan Contract
permitted under the preceding clause of this paragraph (1).

7.3 COVENANTS OF REGIONS. From the date of this Agreement until the
earlier of the Effective Time or the termination of this Agreement, Regions
covenants and agrees that it shall and shall cause each of its Subsidiaries to
take no action which would (i) materially adversely affect the ability of any
Party to obtain any Consents required for the transactions contemplated hereby
without imposition of a condition or restriction of the type referred to in the
last sentences of Sections 9.1(b) and 9.1(c) of this Agreement, or
(ii) materially adversely affect the ability of any Party to perform its
covenants and agreements under this Agreement; PROVIDED, that the foregoing
shall not prevent any Regions Company from discontinuing or disposing of any of
its Assets or business if such action is, in the judgment of Regions, desirable
in the conduct of the business of Regions and its Subsidiaries.

7.4 ADVERSE CHANGES IN CONDITION. Each Party agrees to give written
notice promptly to the other Party upon becoming aware of the occurrence or
impending occurrence of any event or circumstance relating to it or any of its
Subsidiaries which (i) is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on it or (ii) would cause or constitute a
material breach of any of its representations, warranties, or covenants
contained herein, and to use its reasonable efforts to prevent or promptly to
remedy the same.

7.5 REPORTS. Each Party and its Subsidiaries shall file all reports
required to be filed by it with Regulatory Authorities between the date of this
Agreement and the Effective Time and shall deliver to the other Party copies of
all such reports promptly after the same are filed. If financial statements are
contained in any such reports filed with the SEC, such financial statements will
fairly present the consolidated financial position of the entity filing such
statements as of the dates indicated and the consolidated results of operations,
changes in stockholders' equity, and cash flows for the periods then ended in
accordance with GAAP (subject in the case of interim financial statements to
normal recurring year-end adjustments that are not material and to the absence
from interim financial statements of any (in the case of FFB) or complete (in
the case of Regions) footnote disclosures). As of the respective dates, such
reports filed with the SEC will comply in all material respects with the
Securities Laws and will not contain any untrue statement of material fact or
omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. Any financial statements contained in any other
reports to another Regulatory Authority shall be prepared in accordance with
Laws applicable to such reports.

<PAGE> 57

ARTICLE 8
ADDITIONAL AGREEMENTS

8.1 PROXY STATEMENT; STOCKHOLDER APPROVAL. As soon as reasonably
practicable after execution of this Agreement, FFB shall call a Stockholders'
Meeting for the purpose of voting upon approval of this Agreement and such
other related matters as it deems appropriate. In connection with the
Stockholders' Meeting, (i) FFB shall promptly prepare and mail the Proxy
Statement to its stockholders, (ii) Regions shall furnish to FFB all
information concerning Regions and Regions Companies that FFB may reasonably
request in connection with such Proxy Statement, (iii) the Board of Directors
of FFB shall recommend (subject to compliance with their fiduciary duties as
advised by counsel) to its stockholders the approval of this Agreement, and
(iv) the Board of Directors and officers of FFB shall (subject to compliance
with their fiduciary duties as advised by counsel) use their reasonable efforts
to obtain such stockholders' approval.

8.2 APPLICATIONS. Regions shall promptly prepare and file, and FFB
shall cooperate in the preparation and, where appropriate, filing of,
applications with all Regulatory Authorities having jurisdiction over the
transactions contemplated by this Agreement seeking the requisite Consents
necessary to consummate the transactions contemplated by this Agreement.

8.3 FILINGS WITH STATE OFFICES. Upon the terms and subject to the
conditions of this Agreement, FFB shall execute and file the Florida Articles of
Merger with the Secretary of State of the State of Florida.

8.4 AGREEMENT AS TO EFFORTS TO CONSUMMATE. Subject to the terms and
conditions of this Agreement, each Party agrees to use, and to cause its
Subsidiaries to use, its reasonable efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, all things necessary, proper, or
advisable under applicable Laws to consummate and make effective, as soon as
practicable after the date of this Agreement, the transactions contemplated by
this Agreement, including using its reasonable efforts to lift or rescind any
Order adversely affecting its ability to consummate the transactions
contemplated herein and to cause to be satisfied the conditions referred to in
Article 9 of this Agreement; PROVIDED, that nothing herein shall preclude either
Party from exercising its rights under this Agreement. Each Party shall use,
and shall cause each of its Subsidiaries to use, its reasonable efforts to
obtain all Consents necessary or desirable for the consummation of the
transactions contemplated by this Agreement.

8.5 INVESTIGATION AND CONFIDENTIALITY.

(a) Prior to the Effective Time, each Party shall keep the other
Party advised of all material developments relevant to its business and to
consummation of the Merger and shall permit the other Party to make or cause to
be made such investigation of the business and properties of it and its
Subsidiaries and of their respective financial and legal conditions as the other
Party reasonably requests, provided that such investigation shall be reasonably
related to the transactions contemplated hereby and shall not interfere
unnecessarily with normal operations. FFB shall cooperate with Regions in
obtaining, at Regions' election and expense, environmental

<PAGE> 58

audits of any or all of the properties owned or occupied by FFB. No
investigation by a Party shall affect the representations and warranties of the
other Party.

(b) Each Party shall, and shall cause its Representatives to,
maintain the confidentiality of all written, oral, and other confidential
information furnished to it by the other Party concerning its and its
Subsidiaries' businesses, operations, and financial positions ("Confidential
Information") and shall not use such information for any purpose except in
furtherance of the transactions contemplated by this Agreement. Each Party
shall maintain the confidentiality of all Confidential Information obtained in
connection with this Agreement or the transactions contemplated hereby unless
(i) such information becomes publicly available through no fault of such Party,
or was, is, or becomes available to that Party from a source other than the
other Party or its Representatives, which source was itself not bound by a
confidentiality agreement with, or other contractual, legal, or fiduciary
obligation of confidentiality with respect to that information, or (ii) the
furnishing or use of such information is required by proper judicial,
administrative, or other legal proceeding, provided that the other Party is
promptly notified in writing of such request, unless such notification is not,
in the opinion of counsel, permitted by Law. Each Party and its Representatives
will hold and maintain all Confidential Information in confidence and will not
disclose to any third party or permit any third party access to any Confidential
Information or the substance thereof provided that a Party may disclose
Confidential Information to such of its Representatives who need to know such
information in connection with the transactions contemplated hereby. If this
Agreement is terminated prior to the Effective Time, each Party shall promptly
return or certify the destruction of all documents and copies thereof, and all
work papers containing confidential information received from the other Party.

(c) Each Party agrees to give the other Party notice as soon as
practicable after any determination by it of any fact or occurrence relating to
the other Party which it has discovered through the course of its investigation
and which represents, or is reasonably likely to represent, either a material
breach of any representation, warranty, covenant, or agreement of the other
Party or which has had or is reasonably likely to have a Material Adverse Effect
on the other Party.

8.6 PRESS RELEASES. Prior to the Effective Time, FFB and Regions
shall consult with each other as to the form and substance of any press release
or other public disclosure materially related to this Agreement or any other
transaction contemplated hereby; PROVIDED, that nothing in this Section 8.6
obligations imposed by Law.

8.7 CERTAIN ACTIONS. Except to the extent necessary to comply with
the fiduciary duties as advised by counsel of FFB's Board of Directors, no FFB
Company nor any Affiliate thereof nor any Representative retained by any FFB
Company shall (i) directly or indirectly solicit any Acquisition Proposal by any
Person, (ii) furnish any non-public information that it is not legally obligated
to furnish with respect to, (iii) negotiate with respect to, or (iv) enter into
any Contract with respect to, any Acquisition Proposal, but FFB may communicate
information about such an Acquisition Proposal to its stockholders if to the
extent that it or its directors are

25
<PAGE> 59
required to do so in order to comply with its or their fiduciary duties as
advised by counsel. FFB shall promptly notify Regions orally and in writing in
the event that it receives any inquiry or proposal relating to any such
transaction. FFB shall (i) immediately cease and cause to be terminated any
existing activities, discussions, or negotiations with any Persons conducted
heretofore with respect to any of the foregoing, and (ii) direct and use its
reasonable efforts to cause all of its Representatives not to engage in any of
the foregoing subject to fiduciary duties as aforesaid.

8.8 STATE TAKEOVER LAWS. Each FFB Company shall take all necessary
steps to exempt the transactions contemplated by this Agreement from, if
applicable, or if necessary challenge the applicability of Section 607 ET SEQ.
of the FBCA.

8.9 CHARTER PROVISIONS. Each FFB Company shall take all necessary
action to ensure that the entering into of this Agreement and the consummation
of the Merger and the other transactions contemplated hereby or thereby do not
and will not result in the grant of any rights to any Person under the Articles
of Incorporation, Bylaws, or other governing instruments of any FFB Company or
restrict or impair the ability of Regions or any of its Subsidiaries to vote, or
otherwise to exercise the rights of a stockholder with respect to, shares of any
FFB Company that may be directly or indirectly acquired or controlled by it.

8.10 EMPLOYEE BENEFITS AND CONTRACTS. Following the Effective Time,
Regions shall provide generally to officers and employees of the FFB Companies,
who at or after the Effective Time become employees of a Regions Company,
employee benefits under employee benefit plans (other than stock option or other
plans involving the potential issuance of Regions Common Stock except as set
forth in this Section 8.10), on terms and conditions which when taken as a whole
are substantially similar to those currently provided by the Regions Companies
to their similarly situated officers and employees. For purposes of
participation and vesting (but not accrual of benefits) under such employee
benefit plans, (i) service under any qualified defined benefit plans of FFB
shall be treated as service under Regions' qualified defined benefit plans, (ii)
service under any qualified defined contribution plans of FFB shall be treated
as service under Regions' qualified defined contribution plans, and (iii)
service under any other employee benefit plans of FFB shall be treated as
service under any similar employee benefit plans maintained by Regions (for the
purpose of this provision, the FFB 401(k) plan shall be deemed to be similar to
the Regions Profit Sharing/401(k) Plan). Except as otherwise provided in
Section 8.10 of the FFB Disclosure Memorandum, Regions also shall cause FFB and
its Subsidiaries to honor all employment, severance, consulting, and other
compensation Contracts disclosed in Section 8.10 of the FFB Disclosure
Memorandum to Regions between any FFB Company and any current or former
director, officer, or employee thereof, and all provisions for vested benefits
or other vested amounts earned or accrued through the Effective Time under the
FFB Benefit Plans.

8.11 INDEMNIFICATION.

(a) For a period of six years after the Effective Time, Regions
shall, and shall cause the Surviving Corporation to, indemnify, defend, and hold
harmless the present and former directors, officers, employees, and agents of
each of the FFB Companies (each, an "Indemnified

26
<PAGE> 60

Party") against all Liabilities arising out of actions or omissions occurring
at or prior to the Effective Time (including the transactions contemplated by
this Agreement) to the full extent permitted under Florida Law and by FFB's
Articles of Incorporation and Bylaws as in effect on the date hereof, including
provisions relating to advances of expenses incurred in the defense of any
Litigation, PROVIDED, however, that the indemnification provided by this
Section 8.11(a) shall not apply to any claim against an Indemnified Party if
such Indemnified Party knew of the existence of the claim and failed to make a
good faith effort to require FFB to notify its director and officer liability
insurance carrier of the existence of such claim prior to the Effective Time,
and provided, further, that all rights to indemnification in respect of any
claim (a "claim") made in writing received by Regions within such six-year
period provided hereby shall continue until final disposition of the claim.
Without limiting the foregoing, in any case in which approval is required to
effectuate any indemnification, the determination of any such approval shall
be made, at the election of the Indemnified Party, by independent counsel
mutually agreed upon between Regions and the Indemnified Party.

(b) Any Indemnified Party wishing to claim indemnification under
paragraph (a) of this Section 8.11, upon learning of any such Liability or
Litigation, shall promptly notify Regions thereof. In the event of any such
Litigation (whether arising before or after the Effective Time), (i) Regions or
FFB shall have the right to assume the defense thereof and Regions shall not be
liable to such Indemnified Parties for any legal expenses of other counsel or
any other expenses subsequently incurred by such Indemnified Parties in
connection with the defense thereof, except that if Regions or FFB elects not to
assume such defense or counsel for the Indemnified Parties advises in writing
that there are material substantive issues which raise conflicts of interest
between Regions or FFB and the Indemnified Parties, the Indemnified Parties may
retain counsel satisfactory to them, and Regions or FFB shall pay all reasonable
fees and expenses of such counsel for the Indemnified Parties promptly as
statements therefor are received; provided, that (i) Regions shall be obligated
pursuant to this paragraph (b) to pay for only one firm of counsel for all
Indemnified Parties in any jurisdiction, (ii) the Indemnified Parties will
cooperate (to the extent reasonably appropriate under the circumstances) in the
defense of any such Litigation, and (iii) Regions shall not be liable for any
settlement effected without its prior written consent; and provided further that
Regions shall not have any obligation hereunder to any Indemnified Party when
and if a court of competent jurisdiction shall determine, and such determination
shall have become final, that the indemnification of such Indemnified Party in
the manner contemplated hereby is prohibited by applicable Law.

8.12 REGIONS MERGER SUBSIDIARY ORGANIZATION. Regions shall organize
Regions Merger Subsidiary under the Laws of the State of Florida. Prior to the
Effective Time, the outstanding capital stock of Regions Merger Subsidiary
shall consist of 1,000 shares of Regions Merger Subsidiary Common Stock, all of
which shares shall be owned by Regions. Prior to the Effective Time, Regions
Merger Subsidiary shall not (i) conduct any business operations whatsoever or
(ii) enter into any Contract or agreement of any kind, acquire any assets or
incur any Liability, except as may be specifically contemplated by this
Agreement or the Plan of Merger or as the Parties may otherwise agree.
Regions, as the sole stockholder of Regions Merger Subsidiary, shall vote prior
to the Effective Time the shares of Regions Merger Subsidiary Common Stock in
favor of the Plan of Merger.

27
<PAGE> 61

8.13 SALE OF SECURITIES. Prior to the Effective Time, FFB shall
effect the sale of all of the Securities.

ARTICLE 9
CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE

9.1 CONDITIONS TO OBLIGATIONS OF EACH PARTY. The respective
obligations of each Party to consummate the Merger and the other transactions
contemplated hereby are subject to the satisfaction of the following conditions,
unless waived by both Parties pursuant to Section 11.6 of this Agreement:

(a) STOCKHOLDER APPROVAL. The stockholders of FFB shall have
approved this Agreement and the Plan of Merger, and the consummation of the
transactions contemplated hereby and thereby, including the Merger, as and to
the extent required by Law or by the provisions of any governing instruments.

(b) REGULATORY APPROVALS. All Consents of, filings and
registrations with, and notifications to, all Regulatory Authorities required
for consummation of the Merger shall have been obtained or made and shall be in
full force and effect and all waiting periods required by Law shall have
expired. No Consent obtained from any Regulatory Authority which is necessary
to consummate the transactions contemplated hereby shall be conditioned or
restricted in a manner (including requirements relating to the raising of
additional capital or the disposition of Assets) which in the reasonable
judgment of the Board of Directors of Regions would so materially adversely
impact the economic or business benefits of the transactions contemplated by
this Agreement to Regions that, had such condition or requirement been known,
Regions would not, in its reasonable judgment, have entered into this Agreement.

(c) CONSENTS AND APPROVALS. Each Party shall have obtained any
and all Consents required for consummation of the Merger (other than those
referred to in Section 9.1(b) of this Agreement) or for the preventing of any
Default under any Contract or Permit of such Party which, if not obtained or
made, is reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on such Party. No Consent so obtained which is
necessary to consummate the transactions contemplated hereby shall be
conditioned or restricted in a manner which in the reasonable judgment of the
Board of Directors of Regions would so materially adversely impact the economic
or business benefits of the transactions contemplated by this Agreement to
Regions that, had such condition or restriction been known, Regions would not,
in its reasonable judgment, have entered into this Agreement.

(d) LEGAL PROCEEDINGS. No court or governmental or regulatory
authority of competent jurisdiction shall have enacted, issued, promulgated,
enforced, or entered any Law or Order (whether temporary, preliminary, or
permanent) or taken any other action

28
<PAGE> 62

which prohibits, restricts, or makes illegal consummation of the transactions
contemplated by this Agreement.

9.2 CONDITIONS TO OBLIGATIONS OF REGIONS. The obligations of
Regions to consummate the Merger and the other transactions contemplated hereby
are subject to the satisfaction of the following conditions, unless waived by
Regions pursuant to Section 11.6(a) of this Agreement:

(a) REPRESENTATIONS AND WARRANTIES. For purposes of this Section
9.2(a), the accuracy of the representations and warranties of FFB set forth in
this Agreement shall be assessed as of the date of this Agreement and as of the
Effective Time with the same effect as though all such representations and
warranties had been made on and as of the Effective Time (provided that
representations and warranties which are confined to a specified date shall
speak only as of such date). The representations and warranties of FFB set
forth in Section 5.3 of this Agreement shall be true and correct (except for
inaccuracies which are de minimus in amount). The representations and
warranties of FFB set forth in Sections 5.18, 5.19, and 5.21 of this Agreement
shall be true and correct in all material respects. There shall not exist
inaccuracies in the representations and warranties of FFB set forth in this
Agreement (including the representations and warranties set forth in Sections
5.3, 5.18, 5.19, and 5.21) such that the aggregate effect of such inaccuracies
has, or is reasonably likely to have, a Material Adverse Effect on FFB; provided
that, for purposes of this sentence only, those representations and warranties
which are qualified by references to "material" or "Material Adverse Effect" or
to the "Knowledge" of FFB or to a matter being "known" by FFB shall be deemed
not to include such qualifications.

(b) PERFORMANCE OF AGREEMENTS AND COVENANTS. Each and all of the
agreements and covenants of FFB to be performed and complied with pursuant to
this Agreement and the other agreements contemplated hereby prior to the
Effective Time shall have been duly performed and complied with in all material
respects.

(c) CERTIFICATES. FFB shall have delivered to Regions (i) a
certificate, dated as of the Effective Time and signed on its behalf by its
duly authorized officers to the effect that the conditions of its obligations
set forth in Sections 9.2(a) and 9.2(b) of this Agreement have been satisfied,
and (ii) certified copies of resolutions duly adopted by FFB's Board of
Directors and stockholders evidencing the taking of all corporate action
necessary to authorize the execution, delivery, and performance of this
Agreement, and the consummation of the transactions contemplated hereby, all in
such reasonable detail as Regions and its counsel shall request.

(d) OPINION OF COUNSEL. Regions shall have received an opinion
of Elias, Matz, Tiernan & Herrick, L.L.P., counsel to FFB, dated as of the
Effective Time, in form reasonably satisfactory to Regions, as to the matters
set forth in Exhibit 3.

(e) CLAIMS LETTERS. Each of the directors and officers of FFB
shall have executed and delivered to Regions letters in substantially the form
of Exhibit 4.

29
<PAGE> 63

(f) SALE OF SECURITIES. FFB shall have completed the sale of all
of the Securities.

9.3 CONDITIONS TO OBLIGATIONS OF FFB. The obligations of FFB to
consummate the Merger and the other transactions contemplated hereby are subject
to the satisfaction of the following conditions, unless waived by FFB pursuant
to Section 11.6(b) of this Agreement:

(a) REPRESENTATIONS AND WARRANTIES. For purposes of this Section
9.3(a), the accuracy of the representations and warranties of Regions set forth
in this Agreement shall be assessed as of the date of this Agreement and as of
the Effective Time with the same effect as though all such representations and
warranties had been made on and as of the Effective Time (provided that
representations and warranties which are confined to a specified date shall
speak only as of such date). The representations and warranties of Regions set
forth in Section 6.5 of this Agreement shall be true and correct in all material
respects. There shall not exist inaccuracies in the representations and
warranties of Regions set forth in this Agreement (including the representations
and warranties set forth in Section 6.5) such that the aggregate effect of such
inaccuracies has, or is reasonably likely to have, a Material Adverse Effect on
Regions; provided that, for purposes of this sentence only, those
representations and warranties which are qualified by references to "material"
or "Material Adverse Effect" or to the "Knowledge" of Regions or to a matter
being "known" by Regions shall be deemed not to include such qualifications.

(b) PERFORMANCE OF AGREEMENTS AND COVENANTS. Each and all of the
agreements and covenants of Regions to be performed and complied with pursuant
to this Agreement and the other agreements contemplated hereby prior to the
Effective Time shall have been duly performed and complied with in all material
respects.

(c) CERTIFICATES. Regions shall have delivered to FFB (i) a
certificate, dated as of the Effective Time and signed on its behalf by its duly
authorized officers to the effect that the conditions of its obligations set
forth in Sections 9.3(a) and 9.3(b) of this Agreement have been satisfied, and
(ii) certified copies of resolutions duly adopted by Regions' Board of Directors
evidencing the taking of all corporate action necessary to authorize the
execution, delivery, and performance of this Agreement, and the consummation of
the transactions contemplated hereby, all in such reasonable detail as FFB and
its counsel shall request.

(d) OPINION OF COUNSEL. FFB shall have received an opinion of
Lange, Simpson, Robinson & Somerville, counsel to Regions, dated as of the
Effective Time, in form reasonably acceptable to FFB, as to the matters set
forth in Exhibit 5.

(e) OPINION OF FINANCIAL ADVISOR. FFB shall have received an
opinion of Robert W. Baird & Co. Inc., dated as of a date within five days of
the date of the Proxy Statement, to the effect that the Cash Payment Amount is
fair to the stockholders of FFB from a financial point of view.

30
<PAGE> 64

ARTICLE 10
TERMINATION

10.1 TERMINATION. Notwithstanding any other provision of this
Agreement, and notwithstanding the approval of this Agreement by the
stockholders of FFB, this Agreement may be terminated and the Merger abandoned
at any time prior to the Effective Time:

(a) By mutual consent of the Board of Directors of Regions and
the Board of Directors of FFB; or

(b) By the Board of Directors of either Party (provided that the
terminating Party is not then in breach of any representation or warranty
contained in this Agreement under the applicable standard set forth in Section
9.2(a) of this Agreement in the case of FFB and Section 9.3(a) of this Agreement
in the case of Regions or in material breach of any covenant or other agreement
contained in this Agreement) in the event of an inaccuracy of any representation
or warranty of the other Party contained in this Agreement which cannot be or
has not been cured within 30 days after the giving of written notice to the
breaching Party of such inaccuracy and which inaccuracy would provide the
terminating Party the ability to refuse to consummate the Merger under the
applicable standard set forth in Section 9.2(a) of this Agreement in the case of
FFB and Section 9.3(a) of this Agreement in the case of Regions; or

(c) By the Board of Directors of either Party in the event of a
material breach by the other Party of any covenant or agreement contained in
this Agreement which cannot be or has not been cured within 30 days after the
giving of written notice to the breaching Party of such breach; or

(d) By the Board of Directors of either Party in the event
(i) any Consent of any Regulatory Authority required for consummation of the
Merger and the other transactions contemplated hereby shall have been denied by
final nonappealable action of such authority or if any action taken by such
authority is not appealed within the time limit for appeal, or (ii) the
stockholders of FFB fail to vote their approval of this Agreement and the Plan
of Merger and the transactions contemplated hereby and thereby as required by
the FBCA at the Stockholders' Meeting or any adjournment or postponement
thereof where the transactions were presented to such stockholders for approval
and voted upon; or

(e) By the Board of Directors of either Party in the event that
the Merger shall not have been consummated by April 30, 1997, except that a
Party that has breached the obligation to consummate the Closing and has failed
to cure such breach may not terminate under this subsection; or

(f) By the Board of Directors of either Party in the event that
any of the conditions precedent to the obligations of such Party to consummate
the Merger, other than

31
<PAGE> 65

the conditions in Section 9.2(a) in the case of FFB or 9.3(a) in the case of
Regions, cannot be satisfied or fulfilled by the date specified in Section
10.1(e) of this Agreement.

10.2 EFFECT OF TERMINATION. In the event of the termination and
abandonment of this Agreement pursuant to Section 10.1 of this Agreement, this
Agreement shall become void and have no effect, and neither Party shall have any
claim or legal right to redress, whether for breach of contract or otherwise, as
a result of a breach of any representation, warranty, covenant, or condition of
this Agreement, except that (i) the provisions of this Section 10.2 and Article
11 and Section 8.5(b) of this Agreement shall survive any such termination and
abandonment, and (ii) a termination pursuant to Section 10.1(b), 10.1(c), or
10.1(f) of this Agreement shall not relieve the breaching Party from Liability
for an uncured willful and knowing breach of a representation, warranty,
material covenant, or material agreement giving rise to such termination.

10.3 NON-SURVIVAL OF REPRESENTATIONS AND COVENANTS. The
respective representations, warranties, obligations, covenants, and agreements
of the Parties shall not survive the Effective Time except this Section 10.3,
Articles 2, 3, 4, and 11 of this Agreement, and Section 8.11 of this Agreement.

ARTICLE 11
MISCELLANEOUS

11.1 DEFINITIONS. Except as otherwise provided herein, the
capitalized terms set forth below shall have the following meanings:

"ACQUISITION PROPOSAL" with respect to a Party shall mean any tender
offer or exchange offer or any proposal for a merger, acquisition of all of the
stock or assets of, or other business combination involving such Party or any of
its Subsidiaries or the acquisition of a substantial equity interest in, or a
substantial portion of the assets of, such Party or any of its Subsidiaries.

"AFFILIATE" of a Person shall mean any other Person directly, or
indirectly through one or more intermediaries, controlling, controlled by, or
under common control with such Person.

"AGREEMENT" shall mean this Agreement and Plan of Reorganization,
including the Exhibits delivered pursuant hereto and incorporated herein by
reference.

"ASSETS" of a Person shall mean all of the assets, properties,
businesses, and rights of such Person of every kind, nature, character, and
description, whether real, personal or mixed, tangible or intangible, accrued or
contingent, or otherwise relating to or utilized in such Person's business,
directly or indirectly, in whole or in part, whether or not carried on the books
and records of such Person, and whether or not owned in the name of such Person
or any Affiliate of such Person and wherever located.

32
<PAGE> 66

"AVERAGE CLOSING PRICE" shall mean the average of the daily last
sales prices of Regions Common Stock as reported on the Nasdaq National Market
System (as reported by THE WALL STREET JOURNAL or, if not reported thereby,
another authoritative source as chosen by Regions) for the five consecutive full
trading days in which such shares are traded on the Nasdaq National Market
System ending at the close of trading on the last trading prior to the date of
the Effective Time.

"BHC ACT" shall mean the federal Bank Holding Company Act of 1956,
as amended.

"CASH PAYMENT AMOUNT" shall mean an amount in cash equal to $11.65
plus (in the case the amount in clause (i)(B) of the following sentence exceeds
the amount in clause (i)(A) of the following sentence) or minus (in the case the
amount in clause (i)(A) of the following sentence exceeds the amount in clause
(i)(B) of the following sentence), the Cash Payment Amount Adjustment (as
defined herein). The Cash Payment Amount Adjustment (the "Cash Payment Amount
Adjustment") shall be equal to the quotient obtained by dividing (i) the
aggregate difference (positive or negative) between (A) the principal amount of
the Securities sold as of the date of such sales and (B) the gross proceeds
obtained by FFB on the sales of such Securities pursuant to Section 8.13 of the
Agreement by (ii) 3,469,770; PROVIDED, HOWEVER, that the maximum Cash Payment
Amount Adjustment shall not exceed $.29 and shall be rounded down to the nearest
whole cent.

"CLOSING" shall mean the closing of the transactions contemplated
hereby, as described in Section 1.2 of this Agreement.

"CLOSING DATE" shall mean the date on which the Closing occurs.

"CONSENT" shall mean any consent, approval, authorization,
clearance, exemption, waiver, or similar affirmation by any Person pursuant to
any Contract, Law, Order, or Permit.

"CONTRACT" shall mean any written or oral agreement, arrangement,
authorization, commitment, contract, indenture, instrument, lease, obligation,
plan, practice, restriction, understanding or undertaking of any kind or
character, or other document to which any Person is a party or that is binding
on any Person or its capital stock, Assets, or business.

"DEFAULT" shall mean (i) any breach or violation of or default under
any Contract, Order, or Permit, (ii) any occurrence of any event that with the
passage of time or the giving of control or both would constitute a breach or
violation of or default under any Contract, Order, or Permit, or (iii) any
occurrence of any event that with or without the passage of time or the giving
of notice would give rise to a right to terminate or revoke, change the current
terms of, or renegotiate, or to accelerate, increase, or impose any Liability
under, any Contract, Order, or Permit where, in any such event, such Default is

33
<PAGE> 67

reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on a Party.

"DGCL" shall mean the General Corporation Law of Delaware.

"EFFECTIVE TIME" shall mean the date and time at which the Merger
becomes effective as defined in Section 1.3 of this Agreement.

"ENVIRONMENTAL LAWS" shall mean all Laws relating to pollution or
protection of human health or the environment (including ambient air, surface
water, ground water, land surface, or subsurface strata) and which are
administered, interpreted, or enforced by the United States Environmental
Protection Agency and state and local agencies with jurisdiction over, and
including common law in respect of, pollution or protection of the environment,
including the Comprehensive Environmental Response Compensation and Liability
Act, as amended, 42 U.S.C. 9601 ET SEQ. ("CERCLA"), the Resource Conservation
and Recovery Act, as amended, 42 U.S.C. 6901 et seq. ("RCRA"), and other Laws
relating to emissions, discharges, releases, or threatened releases of any
Hazardous Material, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or handling of any
Hazardous Material.

"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.

"ERISA AFFILIATE" shall have the meaning provided in Section 5.14 of
this Agreement.

"ERISA PLAN" shall have the meaning provided in Section 5.14 of this
Agreement.

"EXCHANGE AGENT" shall have the meaning provided in Section 4.1 of
this Agreement.

"EXHIBITS" 1 through 6, inclusive, shall mean the Exhibits so
marked, copies of which are attached to this Agreement. Such Exhibits are
hereby incorporated by reference herein and made a part hereof, and may be
referred to in this Agreement and any other related instrument or document
without being attached hereto.

"FBCA" shall mean the Florida Business Corporation Act.

"FFB BENEFIT PLANS" shall have the meaning set forth in Section 5.14
of this Agreement.

"FFB COMMON STOCK" shall mean the $0.01 par value common stock of
FFB.

"FFB COMPANIES" shall mean, collectively, FFB and all FFB
Subsidiaries.

34
<PAGE> 68

"FFB DISCLOSURE MEMORANDUM" shall mean the written information
entitled "FFB Disclosure Memorandum" delivered prior to the date of this
Agreement to Regions describing in reasonable detail the matters contained
therein and, with respect to each disclosure made therein, specifically
referencing each Section of this Agreement under which such disclosure is being
made. Information disclosed with respect to one Section shall not be deemed to
be disclosed for purposes of any other Section not specifically referenced with
respect thereto.

"FFB FINANCIAL STATEMENTS" shall mean (i) the consolidated balance
sheets (including related notes and schedules, if any) of FFB as of March 31,
1996, and as of December 31, 1995 and 1994, and the related consolidated
statements of income, changes in stockholders' equity, and cash flows (including
related notes and schedules, if any) for the three months ended March 31, 1996
and for each of the three years ended December 31, 1995, 1994, and 1993, as
filed by FFB in SEC Documents, and (ii) the consolidated balance sheets of FFB
(including related notes and schedules, if any) and related statements of
income, changes in stockholders' equity, and cash flows (including related notes
and schedules, if any) with respect to quarterly periods ended subsequent to
March 31, 1996.

"FFB STOCK OPTION PLAN" shall mean the existing stock option plan of
FFB designated as follows: Key Employee Stock Compensation Program.

"FFB SUBSIDIARIES" shall mean the Subsidiaries of FFB, which shall
include the FFB Subsidiaries described in Section 5.4 of this Agreement and any
corporation, bank, savings association, or other organization acquired as a
Subsidiary of FFB in the future and owned by FFB at the Effective Time.

"GAAP" shall mean generally accepted accounting principles,
consistently applied during the periods involved.

"HAZARDOUS MATERIAL" shall mean (i) any hazardous substance,
hazardous material, hazardous waste, regulated substance, or toxic substance (as
those terms are defined by any applicable Environmental Laws) and (ii) any
chemicals, pollutants, contaminants, petroleum, petroleum products, or oil (and
specifically shall include asbestos requiring abatement, removal, or
encapsulation pursuant to the requirements of governmental authorities and any
polychlorinated biphenyls).

"HOLA" shall mean the Home Owners' Loan Act, as amended.

"HSR ACT" shall mean Section 7A of the Clayton Act, as added by
Title II of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, and the rules and regulations promulgated thereunder.

"INTERNAL REVENUE CODE" shall mean the Internal Revenue Code of
1986, as amended, and the rules and regulations promulgated thereunder.

35
<PAGE> 69

"KNOWLEDGE" as used with respect to a Person shall mean the actual
knowledge of the chairman, president, chief financial officer, chief accounting
officer, chief credit officer, general counsel, any assistant or deputy general
counsel, or any senior or executive vice president of such Person.

"LAW" shall mean any code, law, ordinance, regulation, reporting or
licensing requirement, rule, or statute applicable to a Person or its Assets,
Liabilities, or business, including those promulgated, interpreted, or enforced
by any of the Regulatory Authorities.

"LIABILITY" shall mean any direct or indirect, primary or secondary
liability, indebtedness, obligation, penalty, cost, or expense (including costs
of investigation, collection, and defense), claim, deficiency, guaranty, or
endorsement of or by any Person (other than endorsements of notes, bills,
checks, and drafts presented for collection or deposit in the ordinary course of
business) of any type, whether accrued, absolute, or contingent, liquidated or
unliquidated, matured or unmatured, or otherwise.

"LIEN" shall mean any conditional sale agreement, default of title,
easement, encroachment, encumbrance, hypothecation, infringement, lien,
mortgage, pledge, reservation, restriction, security interest, title retention,
or other security arrangement, or any adverse right or interest, charge, or
claim of any nature whatsoever of, on, or with respect to any property or
property interest, other than (i) Liens for current property or other Taxes not
yet due and payable, (ii) such imperfections of title and encumbrances, if any,
as do not materially detract from the value or interfere with the present use of
any of such Party's Assets, (iii) for depository institution Subsidiaries of a
Party, pledges to secure deposits, and other Liens incurred in the ordinary
course of the banking business, and (iv) Liens that arise by operation of Law
with respect to Liabilities that are not delinquent or are being contested in
good faith.

"LITIGATION" shall mean any action, arbitration, cause of action,
claim, complaint, criminal prosecution, demand letter, governmental or other
examination or investigation, hearing, inquiry, administrative, or other
proceeding, or notice (written or oral) by any Person alleging potential
Liability or requesting information about a potential claim relating to or
affecting a Party, its business, its Assets (including Contracts related to
it), or the transactions contemplated by this Agreement, but shall not include
regular, periodic examinations of depository institutions and their Affiliates
by Regulatory Authorities.

"LOAN PROPERTY" shall mean any property owned by the Party in
question or by any of its Subsidiaries or in which such Party or Subsidiary
holds a security interest, and, where required by the context, includes the
owner or operator of such property, but only with respect to such property.

"MATERIAL" for purposes of this Agreement shall be determined in
light of the facts and circumstances of the matter in question; provided that
any specific monetary amount stated in this Agreement shall determine
materiality in that instance.

36
<PAGE> 70

"MATERIAL ADVERSE EFFECT" on a Party shall mean an event, change, or
occurrence which, together with any other event, change, or occurrence, has a
material adverse impact on (i) the financial position, business, or results of
operations of such Party and its Subsidiaries, taken as a whole, or (ii) the
ability of such Party to perform its obligations under this Agreement or to
consummate the Merger or the other transactions contemplated by this Agreement,
provided that "material adverse effect" shall not be deemed to include the
impact of (a) changes in banking and similar Laws of general applicability or
interpretations thereof by courts or governmental authorities, (b) changes in
GAAP or regulatory accounting principles generally applicable to banks and
savings associations and their holding companies, (c) the cost of a special
deposit insurance premium assessed by the Federal Deposit Insurance Corporation
with respect to the recapitalization of the SAIF, (d) expenses incurred by FFB
and FFB Companies in connection with the transactions contemplated by this
Agreement, (e) actions and omissions of a Party (or any of its Subsidiaries)
taken with the prior informed consent of the other Party in contemplation of the
transactions contemplated hereby, and (f) the Merger and compliance with the
provisions of this Agreement on the operating performance of the Parties.

"MERGER" shall mean the merger of Regions Merger Subsidiary into and
with FFB referred to in Section 1.1 of this Agreement.

"NASD" shall mean the National Association of Securities Dealers,
Inc.

"1933 ACT" shall mean the Securities Act of 1933, as amended.

"1934 ACT" shall mean the Securities Exchange Act of 1934, as
amended.

"OPTION EXCHANGE RATIO" shall mean the Cash Payment Amount divided
by the Average Closing Price.

"ORDER" shall mean any administrative decision or award, decree,
injunction, judgment, order, quasi-judicial decision or award, ruling, or writ
of any federal, state, local, or foreign or other court, arbitrator, mediator,
tribunal, administrative agency, or Regulatory Authority.

"PARTICIPATION FACILITY" shall mean any facility or property in
which the Party in question or any of its Subsidiaries participates in the
management and, where required by the context, said term means the owner or
operator of such facility or property, but only with respect to such facility or
property.

"PARTY" shall mean either FFB or Regions, and "PARTIES" shall mean
both FFB and Regions.

"PERMIT" shall mean any federal, state, and local governmental
approval, authorization, certificate, easement, filing, franchise, license,
notice, permit, or right to

37
<PAGE> 71

which any Person is a party or that is or may be binding upon or inure to the
benefit of any Person or its securities, Assets, or business.

"PERSON" shall mean a natural person or any legal, commercial, or
governmental entity, such as, but not limited to, a corporation, general
partnership, joint venture, limited partnership, limited liability company,
trust, business association, group acting in concert, or any person acting in a
representative capacity.

"PLAN OF MERGER" shall mean the Plan of Merger between FFB and
Regions Merger Subsidiary in substantially the form of Exhibit 1.

"PROXY STATEMENT" shall mean the proxy statement used by FFB to
solicit the approval of its stockholders of the transactions contemplated by
this Agreement and the Plan of Merger.

"REGIONS COMPANIES" shall mean, collectively, Regions and all
Regions Subsidiaries.

"REGIONS FINANCIAL STATEMENTS" shall mean (i) the consolidated
statements of condition (including related notes and schedules, if any) of
Regions as of March 31, 1996, and the restated consolidated statements of
condition (including related notes and schedules, if any) of Regions as of
December 31, 1995 and 1994, the related statements of income, changes in
stockholders' equity, and cash flows (including related notes and schedules, if
any) for the three months ended March 31, 1996 and the related restated
statements of income, changes in stockholders' equity, and cash flows (including
related notes and schedules, if any) for each of the three years ended
December 31, 1995, 1994, and 1993, as filed by Regions in SEC Documents and
reflecting the acquisition of First National Bancorp accounted for as a pooling
of interests and (ii) the consolidated statements of condition of Regions
(including related notes and schedules, if any) and related statements of
income, changes in stockholders' equity, and cash flows (including related
notes and schedules, if any) included in SEC Documents filed with respect to
periods ended subsequent to March 31, 1996.

"REGIONS MERGER SUBSIDIARY" shall mean Regions Merger Subsidiary,
Inc., a corporation to be formed as a wholly-owned subsidiary of Regions,
organized and existing under the Laws of the State of Florida.

"REGIONS MERGER SUBSIDIARY COMMON STOCK" shall mean the $1.00 par
value common stock of Regions Merger Subsidiary.

"REGULATORY AUTHORITIES" shall mean, collectively, the Federal Trade
Commission, the United States Department of Justice, the Board of the Governors
of the Federal Reserve System, the Office of Thrift Supervision (including its
predecessor, the Federal Home Loan Bank Board), the Office of the Comptroller of
the Currency, Federal

38
<PAGE> 72

Deposit Insurance Corporation, all state regulatory agencies having
jurisdiction over the Parties and their respective Subsidiaries, the NYSE, the
NASD, and the SEC.

"REPRESENTATIVES" means with respect to any Party its directors,
officers, employees, agents, advisors, attorneys, accountants, and other
representatives.

"RIGHTS" shall mean all arrangements, calls, commitments, Contracts,
options, rights to subscribe to, scrip, understandings, warrants, or other
binding obligations of any character whatsoever relating to, or securities or
rights convertible into or exchangeable for, shares of the capital stock of a
Person or by which a Person is or may be bound to issue additional shares of its
capital stock or other Rights.

"SEC" shall mean the United States Securities and Exchange
Commission.

"SEC DOCUMENTS" shall mean all forms, proxy statements, registration
statements, reports, schedules, and other documents filed, or required to be
filed, by a Party or any of its Subsidiaries with any Regulatory Authority
pursuant to the Securities Laws.

"SECURITIES" shall mean the securities of FFB listed in Exhibit 6.

"SECURITIES LAWS" shall mean the 1933 Act, the 1934 Act, the
Investment Company Act of 1940, as amended, the Investment Advisors Act of 1940,
as amended, the Trust Indenture Act of 1939, as amended, and the rules and
regulations of any Regulatory Authority promulgated thereunder.

"STOCKHOLDERS' MEETING" shall mean the meeting of the stockholders
of FFB to be held pursuant to Section 8.1 of this Agreement, including any
adjournment or adjournments thereof.

"SUBSIDIARIES" shall mean all those corporations, banks,
associations, or other entities of which the entity in question owns or controls
50% or more of the outstanding equity securities either directly or through an
unbroken chain of entities as to each of which 50% or more of the outstanding
equity securities is owned directly or indirectly by its parent; PROVIDED, there
shall not be included any such entity acquired through foreclosure or any such
entity the equity securities of which are owned or controlled in a fiduciary
capacity.

"SURVIVING CORPORATION" shall mean FFB as the Surviving Corporation
resulting from the Merger.

"TAX" or "TAXES" shall mean all federal, state, and local taxes,
charges, fees, levies, imposts, duties, or other assessments, including income,
gross receipts, excise, employment, sales, use, transfer, license, payroll,
franchise, severance, stamp, occupation, windfall profits, environmental,
federal highway use, commercial rent, customs duties, capital stock, paid-up
capital, profits, withholding, Social Security, single business and
unemployment, disability, real property, personal property, registration, ad
valorem, value

39
<PAGE> 73

added, alternative or add-on minimum, estimated, or other tax or governmental
fee of any kind whatsoever, imposed or required to be withheld by the United
States or any state, local, foreign government or subdivision or agency
thereof, including any interest, penalties or additions thereto.

Any singular term in this Agreement shall be deemed to include the plural, and
any plural term the singular. Whenever the words "include," "includes" or
"including" are used in this Agreement, they shall be deemed followed by the
words "without limitation."

11.2 EXPENSES.

(a) Except as otherwise provided in this Section 11.2,
each of the Parties shall bear and pay all direct costs and expenses incurred by
it or on its behalf in connection with the transactions contemplated hereunder,
including filing, registration, and application fees, printing fees, and fees
and expenses of its own financial or other consultants, investment bankers,
accountants, and counsel, except that Regions shall bear and pay the filing fees
payable in connection with the Proxy Statement and printing costs incurred in
connection with the printing of the Proxy Statement.

(b) Nothing contained in this Section 11.2 shall
constitute or shall be deemed to constitute liquidated damages for the willful
and knowing breach by a Party of the terms of this Agreement or otherwise limit
the rights of the nonbreaching Party.

11.3 BROKERS AND FINDERS. Each of the Parties represents and
warrants that, except Robert W. Baird & Co. Inc. as to FFB, neither it nor any
of its officers, directors, employees, or Affiliates has employed any broker or
finder or incurred any Liability for any financial advisory fees, investment
bankers' fees, brokerage fees, commissions, or finders' fees in connection with
this Agreement or the transactions contemplated hereby. In the event of a claim
by any broker or finder based upon his or its representing or being retained by
or allegedly representing or being retained by FFB or Regions, each of FFB and
Regions, as the case may be, agrees to indemnify and hold the other Party
harmless of and from any Liability in respect of any such claim.

11.4 ENTIRE AGREEMENT. Except as otherwise expressly provided
herein, this Agreement (including the documents and instruments referred to
herein) constitutes the entire agreement between the Parties with respect to the
transactions contemplated hereunder and supersedes all prior arrangements or
understandings with respect thereto, written or oral, other than the
confidentiality agreement between the Parties, which shall remain in effect.
Except as contemplated by Articles 3 and 4 of this Agreement and Section 8.11 of
this Agreement, nothing in this Agreement expressed or implied, is intended to
confer upon any Person, other than the Parties or their respective successors,
any rights, remedies, obligations, or liabilities under or by reason of this
Agreement.

11.5 AMENDMENTS. To the extent permitted by Law, this Agreement
may be amended by a subsequent writing signed by each of the Parties upon the
approval of the Boards of Directors of each of the Parties; PROVIDED, that after
any approval by the holders of FFB Common

40
<PAGE> 74

Stock, there shall be made no amendment that pursuant to the FBCA requires
further approval by such stockholders without the further approval of such
stockholders.

11.6 WAIVERS.

(a) Prior to or at the Effective Time, Regions, acting
through its Board of Directors, chief executive officer, vice chairman, or other
authorized officer, shall have the right to waive any Default in the performance
of any term of this Agreement by FFB, to waive or extend the time for the
compliance or fulfillment by FFB of any and all of its obligations under this
Agreement, and to waive any or all of the conditions precedent to the
obligations of Regions under this Agreement, except any condition which, if not
satisfied, would result in the violation of any Law. No such waiver shall be
effective unless in writing signed by a duly authorized officer of Regions
except that any unfulfilled conditions shall be deemed to have been waived at
the Effective Time.

(b) Prior to or at the Effective Time, FFB, acting
through its Board of Directors, chief executive officer, or other authorized
officer, shall have the right to waive any Default in the performance of any
term of this Agreement by Regions, to waive or extend the time for the
compliance or fulfillment by Regions of any and all of its obligations under
this Agreement, and to waive any or all of the conditions precedent to the
obligations of FFB under this Agreement, except any condition which, if not
satisfied, would result in the violation of any Law. No such waiver shall be
effective unless in writing signed by a duly authorized officer of FFB except
that any unfulfilled conditions shall be deemed to have been waived at the
Effective Time.

(c) The failure of any Party at any time or times to
require performance of any provision hereof shall in no manner affect the right
of such Party at a later time to enforce the same or any other provision of this
Agreement. No waiver of any condition or of the breach of any term contained in
this Agreement in one or more instances shall be deemed to be or construed as a
further or continuing waiver of such condition or breach or a waiver of any
other condition or of the breach of any other term of this Agreement.

11.7 ASSIGNMENT. Except as expressly contemplated hereby, neither
this Agreement nor any of the rights, interests, or obligations hereunder shall
be assigned by any Party hereto (whether by operation of Law or otherwise)
without the prior written consent of the other Party. Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit of, and be
enforceable by the Parties and their respective successors and assigns.

11.8 NOTICES. All notices or other communications which are
required or permitted hereunder shall be in writing and sufficient if delivered
by hand, by facsimile transmission, by registered or certified mail, postage
pre-paid, or by courier or overnight carrier, to the persons at the addresses
set forth below (or at such other address as may be provided hereunder), and
shall be deemed to have been delivered as of the date so delivered:

41
<PAGE> 75

FFB:

Florida First Bancorp, Inc.
144 Harrison Avenue
Panama City, Florida 32401
Telecopy Number: (904) 872-7191
Attn: Andrew W. Stein
President and Chief
Executive Officer

Copy to Counsel:

Elias, Matz, Tiernan & Herrick, L.L.P.
734 Fifteenth Street, N.W., 12th Floor
Washington, D.C. 20005
Telecopy Number: (202) 393-0105
Attention: Philip Ross Bevan

Regions:

Regions Financial Corporation
417 North 20th Street
Birmingham, Alabama 35203
Telecopy Number: (205) 326-7571
Attention: Richard D. Horsley
Vice Chairman and Executive
Financial Officer

Copy to Counsel:

Regions Financial Corporation
417 North 20th Street
Birmingham, Alabama 35203
Telecopy Number: (205) 326-7099
Attention: Samuel E. Upchurch, Jr.
General Counsel and
Corporate Secretary

11.9 GOVERNING LAW. Except to the extent the laws of the State of
Florida apply to the Merger, this Agreement shall be governed by and construed
in accordance with the Laws of the State of Delaware, without regard to any
applicable conflicts of Laws.

11.10 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.

11.11 CAPTIONS. The captions contained in this Agreement are for
reference purposes only and are not part of this Agreement.

11.12 INTERPRETATIONS. Neither this Agreement nor any uncertainty
or ambiguity herein shall be construed or resolved against any Party, whether
under any rule of construction or otherwise. No Party to this Agreement shall
be considered the draftsman. The Parties acknowledge and agree that this
Agreement has been reviewed, negotiated, and accepted by all

42
<PAGE> 76

Parties and their attorneys and shall be construed and interpreted according to
the ordinary meaning of the words used so as fairly to accomplish the purposes
and intentions of the Parties.

11.13 ENFORCEMENT OF AGREEMENT. The Parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement was not performed in accordance with its specific terms or was
otherwise breached. It is accordingly agreed that the Parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof in any court of the United
States or any state having jurisdiction, this being in addition to any other
remedy to which they are entitled at law or in equity.

11.14 SEVERABILITY. Any term or provision of this Agreement which
is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction,
be ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of
this Agreement is so broad as to be unenforceable, the provision shall be
interpreted to be only so broad as is enforceable.

IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be
executed on its behalf and its corporate seal to be hereunto affixed and
attested by officers thereunto as of the day and year first above written.

ATTEST: FLORIDA FIRST BANCORP, INC.

By: /s/ Joyce R. Garrett By: /s/ Andrew W. Stein
-------------------------- --------------------------------
Joyce R. Garrett Andrew W. Stein
Assistant Secretary President and Chief Executive Officer

[CORPORATE SEAL]

REGIONS FINANCIAL CORPORATION

By: /s/ Samuel E. Upchurch, Jr. By: /s/ J. Stanley Mackin
-------------------------- -----------------------------
Samuel E. Upchurch, Jr. J. Stanley Mackin
General Counsel and Corporate Chairman and Chief Executive Officer
Secretary

[CORPORATE SEAL]

43
<PAGE> 77

Appendix B
<PAGE> 78

PLAN OF MERGER

REGIONS MERGER SUBSIDIARY, INC.

INTO AND WITH

FLORIDA FIRST BANCORP, INC.

Pursuant to this Plan of Merger ("Plan of Merger"), REGIONS MERGER
SUBSIDIARY, INC., a corporation organized and existing under the laws of the
State of Florida ("Merger Sub") and a wholly owned subsidiary of REGIONS
FINANCIAL CORPORATION, a corporation organized and existing under the laws of
the State of Delaware ("Regions"), shall be merged into and with FLORIDA FIRST
BANCORP, INC., a corporation organized and existing under the laws of the State
of Florida ("FFB").

ARTICLE 1
DEFINITIONS

Except as otherwise provided herein, the capitalized terms set forth
below shall have the following meanings:

1.1 "ARTICLES OF MERGER" shall mean the Articles of Merger to be
executed by FFB and filed with the Secretary of State of the State of Florida
relating to the merger of Merger Sub into and with FFB as contemplated by
Section 2.1 of this Plan of Merger.

1.2 "AVERAGE CLOSING PRICE" shall mean the average of the daily last
sales prices of Regions Common Stock as reported on the Nasdaq National Market
System (as reported by THE WALL STREET JOURNAL or, if not reported thereby,
another authoritative source as chosen by Regions) for the five consecutive full
trading days in which such shares are traded on the Nasdaq National Market
System ending at the close of trading on the last trading prior to the date of
the Effective Time.

1.3 "CASH PAYMENT AMOUNT" shall have the definition as set forth in
Section 11.1 of the Merger Agreement.

1.4 "EFFECTIVE TIME" shall mean the date and time on which the Merger
becomes effective pursuant to the laws of the State of Florida as defined in
Section 2.2 of this Plan of Merger.

1.5 "EXCHANGE AGENT" shall mean the exchange agent selected by Regions.

<PAGE> 79

1.6 "FBCA" shall mean the Florida Business Corporation Act, as in
effect at the Effective Time.

1.7 "FFB COMMON STOCK" shall mean the $0.01 par value common stock of
FFB.

1.8 "FFB COMPANIES" shall mean, collectively, FFB and all FFB
Subsidiaries.

1.9 "FFB STOCK PLANS" shall have the meaning set forth in the Merger
Agreement.

1.10 "INTERNAL REVENUE CODE" shall mean the Internal Revenue Code of
1986, as amended, and the rules and regulations promulgated thereunder.

1.11 "LAW" shall mean any code, law, ordinance, regulation, reporting or
licensing requirement, rule, or statute applicable to a person or its assets,
liabilities, or business, including those promulgated, interpreted, or enforced
by any federal or state regulatory agencies having jurisdiction over a person or
its Subsidiaries

1.12 "MERGER" shall mean the merger of FFB into and with Merger Sub as
provided in Section 2.1 of this Plan of Merger.

1.13 "MERGER AGREEMENT" shall mean the Agreement and Plan of
Reorganization, dated as of May 29, 1996, by and between FFB and Regions.

1.14 "MERGER SUB COMMON STOCK" shall mean the $1.00 par value common
stock of Merger Sub.

1.15 "OPTION EXCHANGE RATIO" shall mean the Cash Payment Amount divided
by the Average Closing Price.

1.16 "REGIONS COMMON STOCK" shall mean the $.625 par value common stock
of Regions.

1.17 "REGIONS COMPANIES" shall mean, collectively, Regions and all
Regions Subsidiaries.

1.18 "SUBSIDIARIES" shall mean all those corporations, banks,
associations, or other entities of which the entity in question owns or controls
50% or more of the outstanding equity securities either directly or through an
unbroken chain of entities as to each of which 50% or more of the outstanding
equity securities is owned directly or indirectly by its parent; provided, there
shall not be included any such entity acquired through foreclosure or any such
entity the equity securities of which are owned or controlled in a fiduciary
capacity.

1.19 "SURVIVING CORPORATION" shall refer to FFB as the surviving
corporation resulting from the Merger.

2
<PAGE> 80

ARTICLE 2
TERMS OF MERGER

2.1 MERGER. Subject to the terms and conditions set forth in this Plan
of Merger, at the Effective Time, Merger Sub shall be merged into and with FFB
in accordance with the provisions of Sections 607.1101, 607.1103, 607.1105, and
607.1107 of the FBCA and with the effect specified in Section 607.1106 of the
FBCA. FFB shall be the Surviving Corporation of the Merger and shall continue
to be governed by the laws of the State of Florida.

2.2 EFFECTIVE TIME. The Merger shall become effective on the date and
at the time specified in the Articles of Merger to be filed with the Secretary
of State of the State of Florida as provided in Section 607.1105 of the FBCA.

2.3 ARTICLES OF INCORPORATION. The Articles of Incorporation of FFB,
as in effect immediately prior to the Effective Time, shall remain in full force
and effect following the Effective Time as the Articles of Incorporation of the
Surviving Corporation until otherwise amended or repealed as provided by law or
by such Articles of Incorporation.

2.4 BYLAWS. The Bylaws of FFB, as in effect immediately prior to the
Effective Time, shall continue in full force and effect as the Bylaws of the
Surviving Corporation until otherwise amended or repealed as provided by law or
by such Bylaws.

2.5 DIRECTORS AND OFFICERS. The directors of FFB in office immediately
prior to the Effective Time, together with such additional persons as may
thereafter be elected, shall serve as the directors of the Surviving Corporation
from and after the Effective Time in accordance with the Bylaws of the Surviving
Corporation. The officers of FFB in office immediately prior to the Effective
Time, together with such additional persons as may thereafter be elected, shall
serve as the officers of the Surviving Corporation from and after the Effective
Time in accordance with the Bylaws of the Surviving Corporation.

ARTICLE 3
MANNER OF CONVERTING SHARES

3.1 CONVERSION OF SHARES. Subject to the provisions of this Article 3,
at the Effective Time, by virtue of the Merger and without any action on the
part of Regions, FFB, or Merger Sub, or the stockholders of any of the
foregoing, the shares of the constituent corporations shall be converted as
follows:

(a) Each share of Regions Common Stock issued and outstanding
immediately prior to the Effective Time shall remain issued and outstanding
from and after the Effective Time.

3
<PAGE> 81

(b) Each share of Merger Sub Common Stock issued and outstanding
immediately prior to the Effective Time shall be converted into and
exchanged for one share of FFB Common Stock.

(c) Each share of FFB Common Stock (excluding shares held by FFB
or any of its Subsidiaries or by Regions or any of its Subsidiaries, in each
case other than in a fiduciary capacity or as a result of debts previously
contracted) issued and outstanding at the Effective Time shall be cancelled
and converted into the right to receive in consideration thereof a cash
payment from Regions in the amount of the Cash Payment Amount.

3.3 SHARES HELD BY FFB OR REGIONS. Each of the shares of FFB Common
Stock held by any FFB Company or by any Regions Company, in each case other than
in a fiduciary capacity or as a result of debts previously contracted, shall be
canceled and retired at the Effective Time and no consideration shall be issued
in exchange therefor.

3.4 CONVERSION OF STOCK OPTIONS.

(a) At the Effective Time, each option to purchase or acquire
shares of FFB Common Stock pursuant to stock options ("FFB Options") granted by
FFB under the FFB Stock Plans, which are outstanding at the Effective Time,
whether or not exercisable, shall be converted into and become Options with
respect to Regions Common Stock, and Regions shall assume each FFB Option, in
accordance with the terms of the FFB Stock Plan and stock option agreement by
which it is evidenced, except that from and after the Effective Time,
(i) Regions and its Compensation Committee shall be substituted for FFB and the
Committee of FFB's Board of Directors (including, if applicable, the entire
Board of Directors of FFB) administering such FFB Stock Plan, (ii) each FFB
Option assumed by Regions may be exercised solely for shares of Regions Common
Stock, (iii) the number of shares of Regions Common Stock subject to such FFB
Option shall be equal to the number of shares of FFB Common Stock subject to
such FFB Option immediately prior to the Effective Time multiplied by the Option
Exchange Ratio, and (iv) the per share exercise price under each such FFB Option
shall be adjusted by dividing the per share exercise price under each such FFB
Option by the Option Exchange Ratio and rounding up to the nearest cent.
Notwithstanding the provisions of clause (iii) of the preceding sentence,
Regions shall not be obligated to issue any fraction of a share of Regions
Common Stock upon exercise of FFB Options and any fraction of a share of Regions
Common Stock that otherwise would be subject to a converted FFB Option shall
represent the right to receive a cash payment equal to the product of such
fraction and the difference between the market value of one share of Regions
Common Stock and the per share exercise price of such Option. The market value
of one share of Regions Common Stock shall be the closing price of such common
stock on the Nasdaq National Market System (as reported by THE WALL STREET
JOURNAL or, if not reported thereby, any other authoritative source selected by
Regions) on the last trading day preceding the

4
<PAGE> 82

Effective Time. In addition, notwithstanding the provisions of clauses (iii)
and (iv) of the first sentence of this Section 3.4, each FFB Option which is an
"incentive stock option" shall be adjusted as required by Section 424 of the
Internal Revenue Code, and the regulations promulgated thereunder, so as not to
constitute a modification, extension, or renewal of the option, within the
meaning of Section 424(h) of the Internal Revenue Code. Regions agrees to take
all necessary steps to effectuate the foregoing provisions of this Section 3.4.

(c) All restrictions or limitations on transfer with respect to
FFB Common Stock awarded under the FFB Stock Plans or any other plan, program,
or arrangement of any FFB Company, to the extent that such restrictions or
limitations shall not have already lapsed, and except as otherwise expressly
provided in such plan, program, or arrangement, shall remain in full force and
effect with respect to shares of Regions Common Stock into which such restricted
stock is converted pursuant to Section 3.1 of this Plan of Merger.

ARTICLE 4
DELIVERY OF CONSIDERATION

4.1 EXCHANGE PROCEDURES. Promptly after the Effective Time, Regions
and the Surviving Corporation shall cause the Exchange Agent to mail to the
former stockholders of FFB appropriate transmittal materials (which shall
specify that delivery shall be effected, and risk of loss and title to the
certificates theretofore representing shares of FFB Common Stock shall pass,
only upon proper delivery of such certificates to the Exchange Agent). After
the Effective Time, each holder of shares of FFB Common Stock (other than shares
to be canceled pursuant to

5
<PAGE> 83

Section 3.3 of this Plan of Merger) promptly upon the surrender of the
certificate or certificates representing such shares to the Exchange Agent,
shall receive in exchange therefor the consideration provided in Section 3.1 of
this Plan of Merger, together with all undelivered dividends and other
distributions in respect of such shares (without interest thereon) pursuant to
Section 4.2 of this Plan of Merger. Regions shall not be obligated to deliver
any cash payments to which any former holder of FFB Common Stock is entitled as
a result of the Merger, until such holder surrenders such holder's certificate
or certificates representing the shares of FFB Common Stock for exchange as
provided in this Section 4.1, or otherwise complies with the procedures of the
Exchange Agent with respect to lost, stolen, or destroyed certificates. The
certificate or certificates of FFB Common Stock so surrendered shall be duly
endorsed as the Exchange Agent may require. Any other provision of this Plan
of Merger notwithstanding, neither Regions, FFB, nor the Exchange Agent shall
be liable to a holder of FFB Common Stock for any amounts paid or property
delivered in good faith to a public official pursuant to any applicable
abandoned property law.

4.2 RIGHTS OF FORMER FFB STOCKHOLDERS. At the Effective Time, the
stock transfer books of FFB shall be closed as to holders of FFB Common Stock
immediately prior to the Effective Time and no transfer of FFB Common Stock by
any such holder shall thereafter be made or recognized. Until surrendered for
exchange in accordance with the provisions of Section 4.1 of this Plan of
Merger, each certificate theretofore representing shares of FFB Common Stock
(other than shares to be canceled pursuant to Section 3.3 of this Plan of
Merger) shall from and after the Effective Time represent for all purposes only
the right to receive the consideration provided in Sections 3.1 and 3.4 of this
Plan of Merger in exchange therefor, subject, however, to the Surviving
Corporation's obligation to pay any dividends or make any other distributions
with a record date prior to the Effective Time which have been declared or made
by FFB in respect of such shares of FFB Common Stock in accordance with the
terms of this Plan of Merger and which remain unpaid at the Effective Time.

4.3 REGIONS TO MAKE CASH AVAILABLE. At or prior to the Effective Time,
Regions shall deposit, or shall cause to be deposited, with the Exchange Agent,
for the benefit of the holders of certificates representing FFB Common Stock,
for exchange in accordance with this Article 4, the requisite aggregate amount
of the Cash Payment Amount to be paid pursuant to Section 3.1(c) in exchange for
outstanding shares of FFB Common Stock.

ARTICLE 5
MISCELLANEOUS

5.1 CONDITIONS PRECEDENT. Consummation of the Merger by Merger Sub
shall be conditioned on the satisfaction of, or waiver by Regions of, of the
conditions precedent to the Merger set forth in Sections 9.1 and 9.2 of the
Merger Agreement. Consummation of the Merger by FFB shall be conditioned on the
satisfaction of, or waiver by FFB of, of the conditions precedent to the Merger
set forth in Sections 9.1 and 9.3 of the Merger Agreement.

6
<PAGE> 84

5.2 TERMINATION. This Plan of Merger may be terminated at any time
prior to the Effective Time by the parties hereto as provided in Article 10 of
the Merger Agreement.

IN WITNESS WHEREOF, each of the Parties has caused this Plan of Merger
to be executed on its behalf and its corporate seal to be hereunto affixed and
attested by officers thereunto as of the day and year first above written.

ATTEST:

FLORIDA FIRST BANCORP, INC.

By: By:
---------------------- ----------------------
Gary L. Smith Andrew W. Stein
Secretary President and Chief Executive Officer

[CORPORATE SEAL]

ATTEST: REGIONS MERGER SUBSIDIARY, INC.

By: By:
---------------------- ----------------------
Samuel E. Upchurch, Jr. [Name]
Corporate Secretary [Title]

[CORPORATE SEAL]

7
<PAGE> 85
APPENDIX C
<PAGE> 86

AGREEMENT

THIS AGREEMENT ("Agreement") is made and entered into as of the
29th day of May, 1996, by and between the undersigned, ______________, a
resident of __________, ______________, and Regions Financial Corporation, a
corporation organized and existing under the laws of the State of Delaware
("Regions").

On even date herewith, Regions and Florida First Bancorp, Inc., a
corporation organized and existing under the laws of the State of Florida
("FFB"), have entered into an Agreement and Plan of Reorganization (the "Merger
Agreement"). The Merger Agreement generally provides for the merger of Regions
Merger Subsidiary, Inc., a wholly owned subsidiary of Regions to be organized,
with and into FFB (the "Merger") and the conversion of the issued and
outstanding shares of the $0.01 par value common stock of FFB ("FFB Common
Stock") into the right to receive a cash payment. The Merger Agreement is
subject to the affirmative vote of the stockholders of FFB, the receipt of
certain regulatory approvals, and the satisfaction of other conditions.

The undersigned is a member of the Board of Directors of FFB and
is the owner of _________ shares of FFB Common Stock and has rights by option
or otherwise to acquire _________ additional shares of FFB Common Stock
("Shares"). In order to induce Regions to enter into the Merger Agreement, the
undersigned is entering into this Agreement with Regions to set forth certain
terms and conditions governing the actions to be taken by the undersigned
solely in his capacity as a stockholder of FFB with respect to the Shares until
consummation of the Merger.

NOW, THEREFORE, in consideration of the transactions contemplated
by the Merger Agreement and the mutual promises and covenants contained herein,
the parties agree as follows:

1. Without the written prior consent of Regions, which consent
shall not be unreasonably withheld, the undersigned shall not transfer, sell,
assign, convey, or encumber any of the Shares during the term of this Agreement
except (i) transfers by operation of law, by will, or pursuant to the laws of
descent and distribution, (ii) transfers in which the transferee shall agree in
writing to be bound by the provisions of paragraphs 1, 2, and 3 of this
Agreement as fully as the undersigned, or (iii) to Regions pursuant to the
terms of the Merger Agreement. Without limiting the generality of the
foregoing, the undersigned shall not grant to any party any option or right to
purchase the Shares or any interest therein. Further, except with respect to
the Merger, the undersigned shall not during the term of this Agreement approve
or ratify any agreement or contract pursuant to which the Shares would be
transferred to any other party as a result of a consolidation, merger, share
exchange, or acquisition.

2. The undersigned intends to, and will, vote (or cause to be
voted) all of the Shares over which he has voting authority (other than in a
fiduciary capacity) in favor of the Merger Agreement and the Merger at any
meeting of stockholders of FFB called to vote on the
<PAGE> 87

Merger Agreement or the Merger or the adjournment thereof or in any other
circumstance upon which a vote, consent, or other approval with respect to the
Merger Agreement or the Merger is sought. Further, the undersigned intends to,
and will, surrender the certificate or certificates representing the Shares
over which the undersigned has dispositive authority to Regions upon
consummation of the Merger as described in the Merger Agreement and hereby
waives any rights of appraisal, or rights to dissent from the Merger, that the
undersigned may have.

3. Except as otherwise provided in this Agreement, at any
meeting of stockholders of FFB or at any adjournment thereof or any other
circumstances upon which their vote, consent, or other approval is sought, the
undersigned will vote (or cause to be voted) all of the Shares over which the
undersigned has voting authority (other than in a fiduciary capacity) (i)
against any merger agreement, share exchange, or merger (other than the Merger
Agreement and the Merger), consolidation, combination, sale of substantial
assets, merger, recapitalization, dissolution, liquidation, or winding-up of or
by FFB or (ii) any amendment of FFB's Articles of Incorporation or Bylaws or
other proposal or transaction involving FFB or any of its subsidiaries, which
amendment or other proposal or transaction would in any manner impede,
frustrate, prevent, or nullify the Merger, the Merger Agreement, or any of the
other transactions contemplated thereby.

4. The undersigned covenants and agrees with Regions that for a
period of four years after the effective time of the Merger, the undersigned
shall not, without the prior written consent of Regions, directly or indirectly
serve as a consultant to, serve as a management official of, or be or become a
major stockholder of any financial institution having an office in the county
or counties located in the State of Florida, in which FFB operates a branch as
of the date of this Agreement. It is expressly understood that the covenants
contained in this paragraph 4 do not apply to (i) "management official"
positions which the undersigned holds with financial institutions other than
FFB as of the date of this Agreement, (ii) securities holdings which cause the
undersigned to be deemed a major stockholder of a financial institution other
than FFB as of the date of this Agreement, or (iii) advisory relationships with
a financial institution which the undersigned has as of the date of this
Agreement or may have after the date hereof solely in the capacity as legal
counsel, accountant, investment advisor, or broker/dealer. For the purposes of
the covenants contained in this paragraph 4, the following terms shall have the
following respective meanings:

(a) The term "management official" shall refer to service
of any type which gives the undersigned the authority
to participate, directly or indirectly, in
policy-making functions of the financial institution.
This includes, but is not limited to, service as an
organizer, officer, director, or advisory director of
the financial institution. It is expressly
understood that the undersigned may be deemed a
management official of the financial institution
whether or not he holds any official, elected, or
appointed position with such financial institution.

(b) The term "financial institution" shall refer to any
insured depository institution or its holding company
or an affiliate. It is expressly understood

- 2 -
DC961360.013
<PAGE> 88

that the term financial institution shall include any
financial institution as defined herein that after
the date of this Agreement makes application to an
appropriate federal or state regulatory authority for
approval to organize.

(c) The term "major stockholder" shall refer to the
beneficial ownership of 2% or more of any class of
voting securities of such company or the ownership of
2% of the total equity interest in such company,
however denominated.

In the case of an undersigned who is, as of the date
of this Agreement, not a full-time salaried officer of FFB, the provisions of
this paragraph 4 shall be of no further force and effect if the undersigned is
not offered employment as a director or advisory director of Regions or any of
its subsidiaries at the effective time of the Merger or if the undersigned is
so employed, the undersigned's employment is terminated by Regions after the
effective time of the Merger.

In the case of an undersigned who is, as of the date of this
Agreement, a full-time salaried officer of FFB, the provisions of this
paragraph 4 shall be of no further force and effect if (i) the undersigned is
not offered employment as an officer of Regions or the depository institution
subsidiary of Regions operating in any county in which FFB has an office at the
effective time of the Merger, or (ii) the undersigned is so employed, the
undersigned's employment is terminated, without just cause, by Regions after
the effective time of the Merger.

5. The undersigned acknowledges and agrees that Regions could
not be made whole by monetary damages in the event of any default by the
undersigned of the terms and conditions set forth in this Agreement. It is
accordingly agreed and understood that Regions in addition to any other remedy
which it may have at law or in equity, shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and specifically to enforce
the terms and provisions hereof in any action instituted in any court of the
United States or in any state having appropriate jurisdiction.

6. Any term or provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of
this Agreement is so broad as to be unenforceable, the provision shall be
interpreted to be only so broad as is enforceable.

7. Except with respect to the covenants contained in paragraph
4, which shall be governed by the terms set forth therein and shall be
effective only upon consummation of the Merger, the covenants and obligations
set forth in this Agreement shall expire and be of no further force and effect
on the earlier of: (i) April 30, 1997 or such date to which the Merger
Agreement is extended; or (ii) the date on which the Merger Agreement shall
terminate.

- 3 -
DC961360.013
<PAGE> 89

IN WITNESS WHEREOF, this Agreement has been duly executed under
seal and delivered by the undersigned as of the day and year first above
written.

As to the Undersigned,
signed in the presence of:

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

Name:
---------------------------
(Please print or type)

REGIONS FINANCIAL CORPORATION

By:
---------------------------------
Samuel E. Upchurch, Jr.
General Counsel and Corporate
Secretary

- 4 -
DC961360.013
<PAGE> 90
APPENDIX C
<PAGE> 91

AGREEMENT

NOW, THEREFORE, in consideration of the transactions contemplated
by the Merger Agreement and the mutual promises and covenants contained herein,
the parties agree as follows:

(b) The term "financial institution" shall refer to any
insured depository institution or its holding company
or an affiliate. It is expressly understood

- 2 -
DC961360.013
<PAGE> 93

- 3 -
DC961360.013
<PAGE> 94

IN WITNESS WHEREOF, this Agreement has been duly executed under
seal and delivered by the undersigned as of the day and year first above
written.

As to the Undersigned,
signed in the presence of:

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

Name:
---------------------------
(Please print or type)

REGIONS FINANCIAL CORPORATION

By:
---------------------------------
Samuel E. Upchurch, Jr.
General Counsel and Corporate
Secretary

- 4 -
DC961360.013
<PAGE> 95

APPENDIX D
<PAGE> 96
[LETTERHEAD] BAIRD

November 7, 1996

Florida First Bancorp, Inc.
144 Harrison Avenue
Panama City, Florida 32401

Gentlemen:

You have requested our opinion as to the fairness, from a financial point of
view, to the stockholders of Florida First Bancorp, Inc. ("Florida First") of
the cash payment to be received by them under the terms of an Agreement and
Plan of Reorganization and related Merger Agreement, dated as of May 29, 1996,
(the "Agreements") between Florida First and Regions Financial Corporation
("Regions") pursuant to which Florida First will merge with Regions Merger
Subsidiary, a wholly-owned subsidiary of Regions (the "Merger"). Upon
consummation of the Merger, each outstanding share of the $ .01 par value
common stock of Florida First ("Florida First Common Stock") will be converted
into the right to receive a cash payment of $11.65 subject to possible
adjustment in accordance with the Agreements. The foregoing summary of the
Merger is qualified in its entirety by reference to the Agreements.

Robert W. Baird & Co. Incorporated ("Baird"), as part of its investment banking
business, is engaged in the evaluation of businesses and their securities in
connection with mergers and acquisitions, negotiated underwriting, competitive
bidding, secondary distributions of listed and unlisted securities, private
placements, and valuations for estate, corporate and other purposes. In the
ordinary course of our business, we actively trade Florida First Common Stock
for our own account and for the accounts of our customers. Also, Baird has
provided investment banking services to Florida First in the past for which
Baird has received customary fees. As you know, we have been retained to
represent Florida First in an investment capacity and assisted in negotiating
the Agreements for which we will receive substantial compensation.

In reaching our opinion, we have studied and analyzed the financial position,
both current and historical, of Florida First. We have met with the senior
management of Florida First to review its business history, current operations,
and future prospects. In performing our
<PAGE> 97
Board of Directors
Florida First Bancorp. Inc.
November 7, 1996
Page Two

investigation, we have reviewed and analyzed, among other things, the
following: (i) the Agreements; (ii) draft of the Proxy Statement to be filed
with the Securities and Exchange Commission and Office of Thrift Supervision
which will serve as a proxy statement for Florida First to solicit the
requisite shareholders approval of the Merger; (iii) audited consolidated
financial statements of Florida First and Regions for each of the five years
ending December 31, 1995, and unaudited consolidated financial statements for
the six month period ended June 30, 1996; (iv) Annual Reports to Shareholders
and Annual Reports on Form 10-K of Florida First and Regions for each of the
five years ended December 31, 1995; and the Quarterly Reports to Shareholders
and Quarterly Reports on Form 10-Q for the three and six month periods ended
June 30, 1996; (v) various management reports, financial records, regulatory
filings, and such other documents as were furnished to us by the management of
Florida First and Regions; (vi) market price, trading data, and dividend
history of Florida First Common Stock; (vii) market prices, trading data, and
dividend histories of the publicly-traded securities of other thrift
institutions we deemed comparable; and (viii) the financial terms and
characteristics of recent mergers and acquisitions with respect to other thrift
institutions we found relevant to our inquiry. In rendering our opinion, we
have analyzed certain financial and other information relating to other
institutions we deemed comparable to Florida First and conducted such other
studies, analyses and inquiries as we considered appropriate. Our
investigation into the affairs of Regions was necessarily limited to an
analysis of its financial condition and capability to make the cash payments
provided for under the Agreements.

In performing our review, we have relied upon and assumed without independent
verification the accuracy and completeness of all information publicly
available or otherwise provided to or received by us. We have not performed or
considered any independent evaluation or appraisal of the assets or liabilities
(contingent or otherwise) of Florida First. With respect to financial
forecasts and other information and data provided to or otherwise reviewed by
or discussed with us, we have been advised by the management of Florida First
that such forecasts and other information and data were prepared on bases
reflecting reasonable estimates and judgments as to the expected future
financial performance of Florida First. We have not been asked to consider,
and our opinion does not address, the relative merits of the Merger as compared
to any alternative business strategy that might exist for Florida First or the
effect of any other transaction in which Florida First might engage. The
opinion we express herein is necessarily based on
<PAGE> 98
Board of Directors
Florida First Bancorp. Inc.
November 7, 1996
Page Three

market, economic, and other relevant considerations as they exist and can be
evaluated as of the date of this letter and we have assumed that Regions will
receive regulatory approvals without undue delay. We have not undertaken to
reaffirm or revise this opinion or otherwise comment on any events occurring
after the date hereof.

Based upon and subject to the foregoing, our experience as investment bankers
and such other factors as we deem relevant, it is our opinion that, as of the
date hereof, the cash payment provided for in the Agreement and Plan of
Reorganization and related Merger Agreement is fair, from a financial point of
view, to the shareholders of Florida First Bancorp, Inc.

Very truly yours,

/s/ Robert W. Baird & Co. Incorporated

ROBERT W. BAIRD & CO. INCORPORATED
<PAGE> 99
APPENDIX A

REVOCABLE PROXY
FLORIDA FIRST BANCORP, INC.

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF FLORIDA
FIRST BANCORP (THE "COMPANY") FOR USE ONLY AT THE SPECIAL MEETING OF
STOCKHOLDERS TO BE HELD ON DECEMBER 10, 1996 AND AT ANY ADJOURNMENT THEREOF.

The undersigned, being a stockholder of the Company, hereby appoints
the Board of Directors of the Company, or any successors thereto, as proxies
with full power of substitution, and hereby authorizes the said proxies to
represent and vote, as designated below, all the shares of Common Stock of the
Company held of record on October 31, 1996, at the Special Meeting of
Stockholders of the Company to be held at the Company's home office located at
144 Harrison Avenue, Panama City, Florida on December 10, 1996 at 4:00 p.m.,
Central Time, and at any adjournment thereof.

THIS PROXY MAY BE REVOKED AT ANY TIME BEFORE IT IS EXERCISED.

THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE COMPANY.
SHARES OF COMMON STOCK OF THE COMPANY WILL BE VOTED AS SPECIFIED. IF NO
SPECIFICATION IS MADE BELOW, SHARES WILL BE VOTED FOR PROPOSALS 1 AND 2, AND
OTHERWISE AT THE DISCRETION OF THE PROXIES. THE BOARD OF DIRECTORS RECOMMENDS
YOU VOTE "FOR" PROPOSALS 1 AND 2.

The undersigned hereby acknowledges receipt of a Notice of Special
Meeting of Stockholders of Florida First Bancorp, Inc. called for December 10,
1996, a Proxy Statement for the Special Meeting, the Company's 1995 Annual
Report to Stockholders and the Company's Quarterly Report on Form 10-QSB/A for
the quarter ended June 30, 1996, prior to the signing of this Proxy.

(Continued and to be signed on the reverse side)

Florida First Bancorp, Inc.
PO Box 11090
New York, N.Y. 10203-0090

<PAGE> 100

<TABLE>
<S> <C>
1. PROPOSAL TO consider and vote upon the Agreement and Plan of 2. PROPOSAL TO adjourn the Special Meeting if
Reorganization, dated as of May 29, 1996 ("Agreement"), by and between necessary to solicit additional proxies in
the Company and Regions Financial Corporation ("Regions") and the favor of Proposal No. 1.
related Plan of Merger ("Plan of Merger") by and between the Company
and Regions Merger Subsidiary, Inc., a Florida corporation and wholly FOR /X/ AGAINST /X/ ABSTAIN /X/
owned, newly formed subsidiary of Regions ("Merger Subsidiary"),
pursuant to which, among other things, (i) Merger Subsidiary will be In their discretion, the proxies are authorized
merged with and into the Company, with the Company becoming a wholly to vote upon such other matters as may properly
owned subsidiary of Regions (the "Merger"); and (ii) each stockholder come before the Special Meeting, or any
of the Company will be entitled to receive $11.65 in cash ("Merger adjournment thereof, as described in the
Consideration"), subject to certain adjustments which may increase or accompanying Proxy Statement. Management is not
decrease the Merger Consideration by a maximum of $.29 per share as aware of any other matters which could come
described in the Proxy Statement, in consideration for each share of before the Special Meeting.
common stock of the Company owned by such stockholder.
I /X/ plan /X/ do not plan to attend the Special
FOR /X/ AGAINST /X/ ABSTAIN /X/ meeting.
- ------------------------------------------------------------------------------------------------------------------------------------
Please sign exactly as your name(s) appear(s)
on this Proxy. Only one signature is required
in case of joint ownership. When signing in a
representative capacity, please give title.

----------------------------------------------
Signature

Dated: , 1996
----------------------------------

VOTES MUST BE INDICATED
PLEASE MARK, SIGN, DATE AND PROMPTLY RETURN THIS CARD USING THE (X) IN BLACK OR BLUE INK. /X/
ENCLOSED POSTAGE PAID ENVELOPE.

</TABLE>
<PAGE> 101
EXHIBIT ____

FLORIDA FIRST BANCORP, INC.
--------------------
1995 ANNUAL REPORT

<PAGE> 102

FLORIDA FIRST BANCORP, INC. AND SUBSIDIARY
================================================================================
CONTENTS

<TABLE>
<S> <C>
Selected Financial and Other Data 2
President's Message 4
Operational Review 6
Statement of Management 8
Independent Auditors' Report 9
Consolidated Statements of Financial Condition 10
Consolidated Statements of Operations 11
Consolidated Statements of Stockholders' Equity 12
Consolidated Statements of Cash Flows 13
Notes to Consolidated Financial Statements 14
Directors and Officers 32
Corporate Information 34
Office Locations 34

Management's Discussion and Analysis of Financial
Condition and Results of Operations Appendix A

</TABLE>

<PAGE> 103

FLORIDA FIRST BANCORP, INC. AND SUBSIDIARY 2

SELECTED FINANCIAL AND OTHER DATA

<TABLE>
<CAPTION>
December 31,
-----------------------------------------------------------------
1995 1994 1993 1992 1991
-----------------------------------------------------------------
(In thousands, except per share amounts)
AT YEAR END
<S> <C> <C> <C> <C> <C>
Total assets $303,329 $278,029 $272,510 $268,792 $265,705
Loans receivable - net 174,683 170,082 172,003 175,053 180,465
Securities held to maturity - net 68,848 56,162 68,913 52,449 41,643
Securities available for sale - net 32,543 23,868
Cash and cash equivalents 14,437 12,766 15,182 19,597 15,395
Real estate owned 317 3,235 5,815 12,088 17,822
Deposits 250,041 225,678 210,079 213,062 203,022
FHLB advances and other borrowings 30,721 32,593 46,164 42,100 52,600
Stockholders' equity 20,574 17,564 14,047 11,515 8,154
Stockholders' equity per share 6.13 5.33 4.97 4.08 4.36
Stockholders' equity per share, fully diluted 6.05 5.21 4.62 4.08 4.36
-----------------------------------------------------------------
FOR THE YEAR
Interest income $ 21,589 $ 18,544 $ 18,387 $ 19,946 $ 22,269
Interest expense 12,898 10,793 11,186 13,534 17,827
-----------------------------------------------------------------
Net interest income 8,691 7,751 7,201 6,412 4,442
Provision for losses on interest-earning assets 10 408 846 1,556 921
-----------------------------------------------------------------
Net interest income after provision for losses 8,681 7,343 6,355 4,856 3,521
Other income 2,235 1,278 2,857 2,410 1,928
Operating expenses 7,030 6,326 6,301 5,523 5,585
Real estate owned expenses - net 29 269 1,115 706 2,011
-----------------------------------------------------------------
Income (loss) before income taxes
and extraordinary items 3,857 2,026 1,796 1,037 (2,147)
Income tax provision (benefit) 1,446 (608) (801) 448
-----------------------------------------------------------------
Income (loss) before extraordinary items 2,411 2,634 2,597 589 (2,147)
Extraordinary income - utilization of
net operating loss carryforward 402
Extraordinary expense - prepayment penalties 74 80 15 12
-----------------------------------------------------------------
Net income (loss) $ 2,411 $ 2,560 $ 2,517 $ 976 $ (2,159)
=================================================================
Earnings per share:
Primary income per share:

Income (loss) before extraordinary items $ .72 $ .86 $ .87 $ .29 $ (1.15)
Extraordinary items (.03) (.03) .19 (.01)
-----------------------------------------------------------------
Net income (loss) $ .72 $ .83 $ .84 $ .48 $ (1.16)
=================================================================
Fully diluted income per share:
Income (loss) before extraordinary items $ .72 $ .86 $ .85 $ .29 $ (1.15)
Extraordinary items (.03) (.03) .19 (.01)
-----------------------------------------------------------------
Net income (loss) $ .72 $ .83 $ .82 $ .48 $ (1.16)
=================================================================
Dividends per share $ .06
=================================================================
FOR THE YEAR
Yield on loans 8.52% 8.25% 8.73% 9.32% 9.86%
Yield on securities and other
interest-earning assets 6.13 5.22 4.68 5.33 8.05
Yield on total interest-earning assets 7.60 7.20 7.46 8.28 9.46
Cost of deposits 4.61 3.81 3.90 4.86 6.68
Cost of borrowings 6.03 6.51 7.29 7.96 8.86
Cost of total interest-bearing liabilities 4.77 4.23 4.45 5.42 7.12
Interest rate spread 2.83 2.97 3.01 2.86 2.34
Net interest margin 3.06 3.01 2.92 2.66 1.89
-----------------------------------------------------------------
SIGNIFICANT RATIOS
Return on average assets .82% .94% .95% .37% (.82)%
Return on average equity 12.70 16.95 20.47 11.36 (21.72)
Stockholders' equity to total assets 6.78 6.32 5.16 4.28 3.07
Net non-performing assets to total assets .92 2.15 2.78 6.04 9.81
-----------------------------------------------------------------
Retail banking facilities - full service 9 8 8 8 9
limited service 1 1 1 1 1
</TABLE>

<PAGE> 104

FLORIDA FIRST BANCORP, INC. AND SUBSIDIARY 3

BOARD OF DIRECTORS:
FLORIDA FIRST
BANCORP, INC.
Front Row (Left to Right):
Andrew W. Stein, Tommy M.
(PHOTO) Cooley. (Center): Joseph K.
Tannehill, William H. Carr.
(Back Row): C. L. Jinks, Jr.,
G. Bayne Collins, James E.
McIntyre, John Robert
Middlemas.

DIRECTORS EMERITI:
FLORIDA FIRSTBANK
Front: Girard L. Clemons, Jr. (PHOTO)
Back Row (Left to Right): A.
F. Myers, H. Kent Hall.

PRINCIPAL
OFFICERS:
FLORIDA FIRSTBANK
Left to Right:
(PHOTO) Gary L. Smith,
Steven A. Rudloff,
Andrew W. Stein,
Barbara Larrabee Haag,
S. Derek Tolson.

<PAGE> 105

FLORIDA FIRST BANCORP, INC. AND SUBSIDIARY 4

PRESIDENT'S MESSAGE

Dear Stockholder:

Nineteen hundred ninety five was a year of great progress for Florida First
Bancorp, Inc. Earnings before taxes of $3.9 million shattered all previous
records and represent a 90% increase over 1994! Non-performing assets fell to
their lowest levels since Florida First became a public company and will no
longer constrain our earnings going forward. Most noteworthy are the across the
board improvements experienced in virtually every sector of our operations.
Improvements in our interest margin and expansion of total assets to $303
million boosted net interest income to record levels. As a result of a more
favorable interest rate environment and of marketing initiatives undertaken
throughout 1995, non-interest income grew 75% to $2.2 million compared to 1994.
Our progress is confirmed by the performance of our stock which is trading at
its highest level in ten years. We are looking forward to another successful
year as these positive trends appear to be carrying over into 1996.

The name change of the Bank has been very well received by our customers in all
of the markets we serve. The name conveys the full range of bank products we
offer and dispels the idea of a limited service thrift. During the year, our
improved ability to sell Bank products and services was confirmed as consumer
loans increased 20%, credit card advances doubled, commercial and income
property loans grew 10.5% and demand deposits grew 61%. The name change and
attendant marketing supported the continued sales efforts of our staff.

During 1995, we completed the reorganization whereby the Company became the
holding company of the Bank. The holding company provides greater flexibility
in operations and capital structure. Although we have not yet utilized that
flexibility, we are in a position to take advantage of opportunities that may
become available.

Although we have made great strides, we still have a long way to go to complete
our transformation from a traditional thrift to a community bank. Our balance
sheet bears too many similarities to a thrift with, in our view, an
unacceptable net interest spread. Despite our successes in 1995, it will take
several years to reposition our balance sheet with higher yielding assets such
as small business and consumer loans.

To further support the necessity of making the balance sheet more like that of a
bank, the role played by residential mortgage lending has changed dramatically
in recent years. While significant non-interest income is derived from this
activity, it has not been a good source of high yielding assets for the Bank.
With residential mortgage interest rates at current levels, the Bank cannot
originate fixed-rate loans for portfolio and realize a spread sufficient to
warrant the interest rate risks.

There is a necessary cost increase involved when new products and services are
introduced. Operating expenses increased 11% in 1995 compared to 1994.
Personnel and resources necessary to manage the Company's diversification were
added in 1995. In particular, a commercial lending department was created. A new
branch was opened in February 1995 in Spring Hill which held $10.3 million in
deposits at year end. We also incurred one-time expenses of $167,000 related to
the holding company reorganization and the change of name of the Bank.

We continue our commitment to innovative product development. In 1995, we
initiated ACH origination for our commercial clients and introduced voice
response account inquiry for all customers. We are especially excited about our

<PAGE> 106

FLORIDA FIRST BANCORP, INC. AND SUBSIDIARY 5

product offerings via the Internet which is presently averaging five inquiries
daily, primarily for credit card services. In March 1996, we will offer our
check card which we believe, when combined with a checking account offered
through the Internet and electronic payroll transfer, will allow our products to
be utilized anywhere in the country. A consumer will not be hindered by
merchant reluctance to accept out of town checks, and cash can be accessed from
virtually any ATM in the country. In addition to expanding our Internet
offerings, we are researching greater utilization of proprietary ATM's,
automated bill pay systems and home banking alternatives.

There are several challenges we face. The increased consumer acceptance of
alternative delivery systems of bank products creates some economies of size
that were heretofore unrealized. Price pressures on community banks are
increasing in light of the high level of consolidation in the banking industry.
This competitive disadvantage will have to be offset with superior customer
service and responsiveness.

Another competitive disadvantage we face is the disparity between deposit
insurance premiums paid by thrifts compared to banks. The average institution
with a thrift charter is insured by the Savings Association Insurance Fund
("SAIF") of the Federal Deposit Insurance Corporation ("FDIC") and pays $.23
per $100 of deposits in annual insurance premiums. Commercial banks are
insured by the Bank Insurance Fund ("BIF") of the FDIC and pay no deposit
insurance premium because the BIF has reached its statutory reserve requirement.
Florida FirstBank will pay $575,000 in FDIC premiums while a comparably sized
commercial bank will pay nothing. This is a real inequity, The SAIF is
undercapitalized because of the thrift industry crisis of the late 1980's, but
the present thrift industry is healthy and prosperous. These institutions cost
the taxpayers nothing, and it is a disservice to those who had the confidence to
invest in the industry to further disadvantage them.

Congress had passed a resolution to the disparity. It called for a one time
assessment of .85% of deposits to recapitalize SAIF resulting in parity of
deposit insurance premiums. The measure was estimated to impact Florida
FirstBank as a one time charge to earnings of approximately $2.0 million before
provision for income taxes, but would result in approximately $500,000 annual
pre-tax increase in earnings. In addition, the SAIF and BIF would ultimately
have been merged and the thrift and bank charters combined. Though the inequity
to our stockholders and customers was not mitigated, we supported resolving the
issue in one step and creating a level playing field. Unfortunately, the
congressional action was attached to the Balanced Budget Act of 1995 that was
vetoed by the President for reasons unrelated to the SAIF recapitalization. It
is probable that this issue will be resolved in 1996 with a similar financial
outcome.

In conclusion, we are pleased with the trends experienced by the Company in
recent years and the accomplishments realized in 1995. We are excited by the
challenges and opportunities that we will face in 1996 and thank you for your
continued support.

Sincerely,

/s/ Andrew W. Stein
- -----------------------
Andrew W. Stein
President and
Chief Executive Officer

<PAGE> 107
FLORIDA FIRST BANCORP, INC. AND SUBSIDIARY 6

OPERATIONAL REVIEW

On May 1, 1995, Florida First Federal Savings Bank (the "Bank") completed its
reorganization into the holding company form of organization pursuant to which
Florida First Bancorp, Inc. (the "Company") became the holding company for the
Bank. As the Company presently does not own any Company presently does not own
any operating subsidiaries other than the Bank, the discussion below relates
primarily to the Bank, and the financial data for periods prior to the
reorganization reflects financial data of the Bank.

The Bank made several careful decisions and critical changes during 1995 which
helped position it for a future of long-term profitability, beneficial
relationships for both retail consumers and commercial businesses, and lasting
support for the communities it serves. The Bank introduced a new corporate name
and identity, began the process of restructuring the corporate balance sheet to
reflect that of a community bank, focused sales efforts on gaining market share
in the Bank's primary markets, and embraced new technology as a means of meeting
the changing demands of its customers.

NEW CORPORATE
NAME AND IDENTITY

Prior to the deregulation of the banking industry, distinct differences existed
between thrifts and commercial banks. However, today's banks and thrifts more
closely resemble financial supermarkets. Customers now demand the ability to
shop for all of their banking needs under one financial umbrella. As the
financial industry continues to consolidate, and competition within service
markets increases, the need for a clear and concise corporate identity becomes
even more apparent.

Findings of a 1994 market research study conducted by the Marketing Workshop of
Atlanta, Georgia, clearly revealed that consumers were unaware that Florida
First Federal Savings Bank offered many of the same, if not all, of the
financial products and services of competing commercial banks. The general
belief was that the Bank only offered those products traditional to thrifts:
residential mortgage loans, savings accounts and certificates of deposit. After
careful review, management elected to reshape the Bank's corporate direction and
public image.

(Graph)

The process of selecting a new corporate name, logo, colors and overall image
began. In May 1995, Florida First Federal Savings Bank changed its name to
Florida FirstBank, a "full-service community bank", committed to establishing
beneficial relationships with both retail consumers and commercial businesses.

SHIFTING THE CORPORATE BALANCE SHEET

In keeping with the new corporate image as a full-service financial provider,
increased emphasis was placed on consumer and commercial lending. Management of
the Bank believes that a shift toward increased consumer and small-business
lending is critical to long-term profitability. Historically, the thrift
industry was established for the purpose of promoting home ownership through
mortgage financing. In the current environment of thin interest margins, it is
no longer prudent to pursue the mortgage loan market as the primary means of
lending. Now more than ever, for a bank to prosper, it must diversify and offer
a full range of consumer and commercial products. The Bank believes there is
increased earning potential in these areas, and plans to market them
aggressively in 1996. An added benefit to this approach will be strengthened
relationships with our existing customers, who already supply the Bank with a
significant base of deposits.

(Graph)

RETAIL SALES

In 1995, the Bank experienced its best year for retail account sales, It is
management's belief that the increase in new accounts and deposits is directly
attributable to the emphasis placed on retail sales and a corporate sales
culture. For the last two years, the Bank has committed the entire organization
to change, to continuous improvement, and to the ongoing execution of a
successful sales and service

<PAGE> 108
FLORIDA FIRST BANCORP, INC. AND SUBSIDIARY 7

strategy. The Bank is committed to making sales and the delivery of quality
customer service its corporate trademark.

As a direct result of the Bank's commitment to sales and service, cross sales
per customer (the number of new relationships opened per customer contact)
increased from 1994 to 1995 by 26.9%. Cross sales ratios increased from a 1994
average of 1.97 relationships per customer contact, to an average of 2.50
relationships per contact in 1995. The Bank also experienced a 40.7% increase
in new accounts opened and a net account increase of 12.7% when comparing 1994
to 1995.

Along with new account growth, total deposits increased in 1995. During 1995,
Florida FirstBank realized a $24.3 million or a 10.8% increase in core
deposits, from $225.7 million at December 31, 1994, to $250.0 million at
December 31, 1995. Management also believes that the key to the Bank's
long-term success lies in increasing market share within its primary service
market, Bay County, Florida. Deposits for the Bay County market increased by
approximately $10.4 market increased by approximately $10.4 million or 6.8% when
compared to the same period in 1994. This increase in retail deposits positions
the Bank as the third largest financial institution within the Bay County
market.

TECHNOLOGY

The Bank continually explores the application of new technology to enhance its
retail delivery system and operating efficiencies. One innovative new way in
reaching other markets and customers is through the Internet. In the summer of
1995, Florida FirstBank became the first financial institution located in the
Florida Panhandle to offer its products and services via the Internet.

Many experts feel the "Net" is the most revolutionary communications medium to
be introduced since the onset of television and radio. The potential advantages
of marketing on the Internet, the communications super highway, are vast.
Service markets are no longer bound by geography.

Customers can browse through the Bank's product and services, apply for a credit
card, even open a checking or savings account from anywhere in the United
States, or even the world. Customer inquiries and account activity on the
Internet have been quite impressive for the first six months of operation. The
Bank is currently averaging approximately 200 new account inquiries each month.
The Bank's Internet home page may be found on the worldwide web at:
http://interoz.com/flafirstbank.

(Graph)

The Bank currently plans to introduce a debit or "Check Card" in the spring of
1996. This exciting new product will allow customers to make purchases without
having to write a check. The new Florida FirstBank "Check Card" will work much
like an ATM card. Customers will be able to purchase merchandise at any retail
merchant worldwide that accepts VISA. Once the "Check Card" is presented to
the merchant, the amount of the purchase is automatically deducted from the
customer's checking account.

While many financial institutions are limiting products or services due to cost
or complexity, Florida FirstBank continually evaluates new and existing
products, services and technology to determine whether they are or can satisfy
its customer's needs. This has enabled Florida FirstBank to develop new
business and non-traditional services that best meet the changing demands of
the modern consumer. The Bank's intention is not to assemble either the
flashiest or the greatest number of services. Instead, Florida FirstBank
strives to achieve the right balance for its customers.

(Graph)

Florida FirstBank's goal is to be a strong full-service financial provider, to
offer exceptional customer service, and to invest in the communities we serve
through increased consumer and commercial lending.

At Florida FirstBank, we want to put choice back into our customers' hands.
This array of choices will distinguish the Bank as a responsive and innovative
community bank.

<PAGE> 109
8

STATEMENT OF MANAGEMENT

The management of Florida First Bancorp, Inc. (the "Company") has prepared and
is responsible for the consolidated financial statements and all the other
information. whether audited or unaudited, in this Annual Report. The
consolidated financial statements were prepared in accordance with generally
accepted accounting principles and necessarily include amounts that are based on
the Company's best estimates and judgments. The estimate of collateral values
is subject to a diversity of opinion regarding assumptions inherent in the
estimation process, In addition, the estimate of collateral values is highly
dependent upon management's intention regarding disposal of the property.
Financial information included elsewhere in this Annual Report is consistent
with the consolidated financial statements.

The Company maintains a system of internal accounting control, which, among
other things, provides reasonable assurance that assets are safeguarded and
that reliable financial records are maintained for preparing consolidated
financial statements.

Deloitte & Touche LLP, the Company's independent public accountants, audits the
fiscal year-end consolidated financial statements in accordance with generally
accepted auditing standards. The responsibility of the independent public
accountants is limited to an expression of their opinion with respect to the
fairness of the consolidated financial statements as they are presented in the
Company's Annual Report. The Company's Board of Directors has an Audit
Committee consisting solely of non-management directors. This committee
recommends the engagement of an independent public accounting firm to the Board
and meets periodically with management, the internal auditor and the
independent public accountants to discuss audit, internal accounting control
and financial reporting matters.

<TABLE>
<S> <C> <C>
/s/ Andrew W. Stein /s/ Barbara L. Haag /s/ Gary L. Smith
ANDREW W. STEIN BARBARA L. HAAG GARY L. SMITH
President and Senior Vice President and Senior Vice President and
Chief Executive Officer Treasurer Secretary
February 16, 1996
</TABLE>
<PAGE> 110
9

INDEPENDENT AUDITORS' REPORT

To the Stockholders and Board of Directors of Florida First Bancorp, Inc.

We have audited the accompanying consolidated statements of financial condition
of Florida FirstBancorp, Inc. and subsidiary (the "Company") as of December 31,
1995 and 1994, and the related consolidated statements of operations,
stockholders' equity and cash flows for each of the three years in the period
ended December 31, 1995. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

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

In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of the Company as of December 31,
1995 and 1994 and the results of its operations and its cash flows for each of
the three years in the period ended December 31, 1995 in conformity with
generally accepted accounting principles.

/s/ Deloitte & Touche LLP

Tampa, Florida
FEBRUARY 16, 1996

<PAGE> 111

FLORIDA FIRST BANCORP, INC. AND SUBSIDIARY 10

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

December 31,
--------------------
Notes 1995 1994
---------------------------------
(In thousands)
<S> <C> <C> <C>
ASSETS
Cash 2 $ 5,686 $ 5,052
Interest-bearing deposits 2,3,4,14 8,751 7,714
-------------------
Cash and cash equivalents
Loans held for sale 14,437 12,766
2,11 3,304 1,398
Mortgage-backed securities available for sale - net 2,3,5 19,177 8,860
Other securities available for sale - net 2,3,5 13,366 15,008
Mortgage-backed securities held to maturity - net
(approximate market values - $16,805 and $22,031, respectively) 2,3,5 16,752 23,087
Other securities held to maturity - net (approximate
market values - $51,835 and $31,951, respectively) 2,3,5 52,096 33,075
Loans receivable - net 2,3,6,12,14 171,379 168,684
Accrued interest receivable:
Loans 1,499 1,297
Mortgage-backed securities 221 184
Other securities 331 362
Real estate owned 7 317 3,235
Premises and equipment - net 8 4,401 4,075
Federal Home Loan Bank ("FHLB") stock - at cost 2,3,12 2,766 2,766
Deferred income taxes 13 1,852 2,174
Other assets 1,431 1,058
-------------------
TOTAL $303,329 $278,029
===================

LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits 2,10,11 $250,041 $225,678
FHLB advances 2,5,11,12 30,721 32,593
Advances by borrowers for taxes and insurance 701 823
Income tax payable 45
Other liabilities 1,247 1,371
-------------------
Total liabilities 282,755 260,465
-------------------
COMMITMENTS AND CONTINGENCIES 2,5,12,14

STOCKHOLDERS' EQUITY: 15,16,17
Preferred stock, 1,000,000 shares authorized;
none issued and outstanding
Common stock, 6,500,000 shares, $.01 par value
per share authorized; 3,358,245 and 3,292,770
shares issued and outstanding, respectively 34 33
Additional paid-in capital 16,096 15,958
Unrealized gains (losses) on securities
available for sale - net of taxes 1,5 112 (547)
Retained income 4,332 2,120
------------------
Total stockholders' equity 20,574 17,564
-------------------
TOTAL $303,329 $278,029
===================
</TABLE>

See accompanying notes to consolidated financial statements.

<PAGE> 112
FLORIDA FIRST BANCORP, INC. AND SUBSIDIARY 11

CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
Year Ended December 31,
----------------------------------------------------
Notes 1995 1994 1993
--------------------------------------------------------------
(in thousands. except per share amounts)
<S> <C> <C> <C> <C>
INTEREST INCOME:
Loans 3,6 $ 14,872 $ 13,897 $ 14,760
Mortgage-backed securities 3,5 2,150 1,541 1,468
Other securities 3,5 3,475 2,145 1,524
Other interest income 3,4 1,092 961 635
------------------------------------------------
Total interest income 21,589 18,544 18,387
------------------------------------------------
INTEREST EXPENSE:
Deposits 3,10,11 11,076 8,217 8,198
Short-term borrowings 3,11,12 66 6 29
Long-term borrowings 3,11,12 1,756 2,570 2,959
------------------------------------------------
Total interest expense 12,898 10,793 11,186
------------------------------------------------
NET INTEREST INCOME 8,691 7,751 7,201
Provision for losses on interest-earning assets 5,6 10 408 846
NET INTEREST INCOME AFTER
PROVISION FOR LOSSES 8,681 7,343 6,355
OTHER INCOME:
Loan correspondent and servicing fees 552 591 817
Service charges 771 660 509
Gains (losses) on sales of:
Loans 263 (133) 776
Mortgage-backed securities available for sale 5 34 203
Other securities available for sale 5 (78)
Pair-off transactions, equity securities and
mutual funds 10 (99) (22)
Real estate 7 265 87 46
Subsidiary 9 109
Other operating income

Total other income 418 172 419
------------------------------------------------
2,235 1,278 2,857
------------------------------------------------
OPERATING EXPENSES:
Employee compensation and benefits 17 3,327 3,018 3,152
Occupancy and equipment 8 1,394 1,218 1,145
Advertising, promotion and training 287 298 322
Expenses related to reorganization and name change 167
Federal deposit and other insurance premiums 747 776 747
Professional fees 262 295 301
Other operating expenses 846 721 634
------------------------------------------------
Total operating expenses 7,030 6,326 6,301
------------------------------------------------
REAL ESTATE OWNED EXPENSES:
Real estate owned operating expense - net 7 29 76 91
Real estate owned writedowns 7 193 1,024
------------------------------------------------
Total real estate owned expenses 29 269 1,115
------------------------------------------------
INCOME BEFORE INCOME TAXES AND
EXTRAORDINARY ITEMS 3,857 2,026 1,796
Income tax Provision (benefit) 13 1,446 (608) (801)
------------------------------------------------
INCOME BEFORE EXTRAORDINARY ITEMS 2,411 2,634 2,597
Extraordinary expense - prepayment penalties 12 74 80
------------------------------------------------
NET INCOME $ 2,411 $ 2,560 $ 2,517
================================================
EARNINGS PER SHARE:
PRIMARY INCOME PER SHARE
income before extraordinary items $ .72 $ .86 $ .87
Extraordinary items (.03) (.03)
------------------------------------------------
NET INCOME $ .72 $ .83 $ .84
================================================
FULLY DILUTED INCOME PER SHARE
Income before extraordinary items $ .72 $ .86 $ .85
Extraordinary items (.03) (.03)
------------------------------------------------
NET INCOME $ .72 $ .83 $ .82
================================================
DIVIDENDS PER SHARE $ .06
================================================
</TABLE>

See accompanying notes to consolidated financial statements.
<PAGE> 113
12

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
Net
Common Stock Additional Unrealized Retained Total
-------------------- Paid-in Gains Income Stockholders'
Shares Amount Capital (Losses) (Deficit) Equity
-------------------------------------------------------------------------
(In thousands, except number of shares)
<S> <C> <C> <C> <C> <C> <C>
Balances, December 31, 1992 2,821,772 $28 $14,444 $(2,957) $11,515

Warrants/options exercised 4,590 15 15

Net income 2,517 2,517
---------------------------------------------------------------------
Balances, December 31, 1993 2,826,362 28 14,459 (440) 14,047

Warrants/options exercised 466,408 5 1,499 1,504

Net changes in unrealized gains
(losses) on securities
available for sale $(547) (547)

Net income 2,560 2,560
---------------------------------------------------------------------
Balances, December 31, 1994 3,292,770 33 15,958 (547) 2,120 17,564

Options exercised 65,475 1 138 139

Dividends paid, October 12, 1995 (199) (199)

Net changes in unrealized gains
(losses) on securities
available for sale 659 659

Net income 2,411 2,411
---------------------------------------------------------------------

Balances, December 31, 1995 3,358,245 $34 $16,096 $ 112 $ 4,332 $20,574
=====================================================================
</TABLE>

See accompanying notes to consolidated financial statements.
<PAGE> 114
FLORIDA FIRST BANCORP, INC. AND SUBSIDIARY 13

CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
Year Ended December 31,
----------------------------------
1995 1994 1993
----------------------------------
(in thousands)
<S> <C> <C> <C>
Cash flows from operating activities:
Interest received from loans $ 14,670 13,849 $ 14,859
Interest received from mortgage-backed securities 2,112 1,510 1,459
Interest received from other securities and interest-earning assets 4,599 2,928 2,108
Interest paid on deposits and borrowings (12,894) (10,872) (11,220)
Loan fees received 819 659 1,333
Service charges received 771 660 509
Loans originated for sale (29,688) (34,699) (63,334)
Proceeds from sales of loans held for sale 27,852 41,222 62,947
Redemption of mutual fund 1,006
Cash paid to employees and vendors (7,185) (6,506) (6,151)
Other, net (966) (1,966) (1,163)
---------------------------------
Net cash provided by operating activities 90 7,791 1,347
---------------------------------
Cash flows from investing activities:
Net loan activity other than purchases and sales (4,362) (5,070) (1,467)
Principal collected on mortgage-backed and other securities 20,810 13,236 21,070
Purchases of:
Loans and participations (60)
Mortgage-backed securities available for sale (4,041) (19,224)
Other securities available for sale (8,848) (30,141)
Mortgage-backed securities held to maturity (4,088) (11,757)
Other securities held to maturity (32,939) (14,518)
Equity securities (116)
Premises and equipment (713) (650) (292)
FHLB stock (34) (148)
Proceeds from sales of:
Loans and participations 1,297 4,474
Mortgage-backed securities available for sale 1,051 11,605
Other securities available for sale 9,348
Equity securities 122
Real estate owned 586 569 1,826
Premises and equipment 23 35
Other net 1,225 4,369 5,405
---------------------------------
Net cash used in investing activities (20,728) (13,832) (6,857)
---------------------------------
Cash flows from financing activities:
Net increase (decrease) in:
Deposits 24,363 15,599 (2,983)
FHLB advances (1,872) (13,571) 4,064
Advances by borrowers for taxes and insurance (122) 94 (1)
Net proceeds from sales of common stock and exercise of warrants and stock options 139 1,503 15
Dividends paid (199)
---------------------------------
Net cash provided by financing activities 22,309 3,625 1,095
---------------------------------
Net increase (decrease) in cash and cash equivalents 1,671 (2,416) (4,415)
Cash and cash equivalents at beginning of period 12,766 15,182 19,597
---------------------------------
Cash and cash equivalents at end of period $ 14,437 $ 12,766 $ 15,182
=================================
Reconciliation of net income to net cash provided by operating activities:
Net Income $ 2,411 $ 2,560 $ 2,517
---------------------------------
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for losses on interest-earning assets 10 408 846
Real estate owned writedowns 193 1,024
Provision for deferred income tax expense (benefit) 322 (1,043) (880)
Increase in income tax payable 45
Accretion of discounts/amortization of premiums on mortgage loans and deferred loan fees (183) (260) (399)
Accretion of discounts/amortization of premiums on securities - net 51 87 326
(Increase) decrease in interest receivable on interest-earning assets (208) (257) 40
Increase (decrease) in accrued interest payable 4 (79) (35)
Depreciation and amortization 349 347 424
Net (gains) losses on sales of:

Loans (263) 133 (776)
Mortgage-backed securities available for sale (34) (203)
Other securities available for sale 78
Pair-off transactions and equity securities (10) 99 22
Real estate owned (265) (66) (46)
Subsidiary (109)
Premises and equipment (21) (8)
Write-off of obsolete equipment 38 1 1
(Increase) decrease in loans held for sale (1,906) 5,382 43
Increase (decrease) in accrued expenses and other liabilities (124) (119) 106
(Increase) decrease in other assets (225) 426 (1,546)
---------------------------------
Total adjustments (2,321) 5,231 (1,170)
---------------------------------
Net cash provided by operating activities $ 90 $ 7,791 $ 1,347
=================================
Income taxes paid $ 1,146 $ 436 $ 57
=================================
Supplemental schedule of noncash investing and financing activities:
Loans settled by acquisition of real estate $ 822 $ 473 $ 1,807
=================================
</TABLE>

See accompanying notes to consolidated financial statements.

<PAGE> 115
FLORIDA FIRST BANCORP. INC. AND SUBSIDIARY 14

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION - The consolidated financial statements include the
accounts of Florida First Bancorp, Inc. ("FFB") and its wholly owned subsidiary
Florida FirstBank (the "Bank") and the Bank's wholly owned subsidiaries Service
First, Inc. ("Service First") and, during the year ended December 31, 1993,
Sunbird Management Company, Inc. ("Sunbird Management") (collectively referred
to as the "Company"). The Company's consolidated results of operations are
primarily those of the Bank. Sales of the Bank's real estate owned ("REO") is
the principal activity of Service First. On December 31, 1993, Sunbird
Management, which engaged in rental property management activities, was sold.
Significant intercompany balances and transactions have been eliminated in
consolidation.

THE REORGANIZATION - On May 1, 1995, FFB became a unitary savings and loan
holding company in accordance with the terms of an Agreement and Plan of
Reorganization, dated February 16, 1995 (the "Agreement"), by and among the
Bank, FFFSB Interim Federal Savings Association ("Interim") and FFB. Pursuant
to the Agreement: (1) FFB was organized as a wholly owned subsidiary of the
Bank; (2) Interim was organized as a wholly owned subsidiary of FFB; (3)
Interim merged with and into the Bank, with the Bank as the surviving
institution and (4) upon such merger, (i) the outstanding shares of common
stock, par value $1.00 per share. of the Bank became, by operation of
law, on a one-for-one basis, common stock, par value $.01 per share, of FFB,
(ii) the common stock of Interim held by FFB was converted into common stock of
the Bank, and (iii) the common stock of FFB held by the Bank was cancelled (the
"Reorganization"). Accordingly, the Bank became a wholly owned subsidiary of
FFB and the stockholders of the Bank became stockholders of FFB.

The common stock of FFB has been registered with the Securities and Exchange
Commission ("SEC") under Section 12(g) of the Securities and Exchange Act of
1934, as amended, and has been substituted for the Common Stock of the Bank on
the Nasdaq National Market System under the symbol "FFPC." In addition, in
connection with the Reorganization, the Bank made a capital distribution to FFB
in the amount of $500,000. The Reorganization was accounted for in a manner
similar to a pooling of interests method of accounting. The pooling of interests
method treats the historical balance sheet and income statement accounts of the
combining companies as though the combination had occurred at the beginning of
the earliest period shown.

CASH EQUIVALENTS - Cash and cash equivalents include cash on hand,
interest-bearing deposits and federal funds sold which are generally purchased
and sold for one-day periods.

LOANS HELD FOR SALE - Mortgage loans originated and intended for sale in the
secondary market or for sale to correspondents are carried at the lower of cost
or estimated market value in the aggregate. Net unrealized losses are recognized
in a valuation allowance by charges to income. At December 31, 1995. a market
value adjustment was not required on the $3.3 million of loans held for sale
since there would have been a gain in the aggregate. At December 31, 1994, loans
held for sale amounted to $1.4 million after a valuation allowance of $5,000 was
established for net unrealized losses. Mortgages with fixed interest rates
generally will decrease in value during periods of increasing interest rates and
increase in value during periods of decreasing interest rates. (The cost of the
forward commitments, described below, used by the Bank is deducted from the
net gain or loss on the sale of mortgage loans.) Accordingly, fluctuations in
prevailing interest rates may result in a gain or loss to the Bank as a result
of adjustments to the carrying value of loans held for sale or upon the sale of
loans to the extent that the Bank has not obtained prior commitments by
investors to purchase such loans at agreed upon terms or otherwise hedged the
value of the loans against changes in interest rates.

The Bank currently employs forward commitments of 90 days or less, as a hedging
technique to protect the value of its mortgage production from "pipeline risk"
(the risk created by offering and committing to agreed-upon interest rates for a
future closing, generally within 60 days). Forward commitments are legal
agreements between two parties to purchase and sell a specific quantity of a
financial instrument, at a specified price, with delivery and settlement at a
specified future date. The Bank adjusts the amount of its unhedged loans in
process based on market conditions and loan closing rates. At December 31, 1995,
the Bank had a total pipeline of loans in process pending closing of $1.2
million, all of which had locked-in rates with commitments to fund as well as
loans of $3.3 million which had closed and were available for sale. The Bank has
not used any other hedging techniques.

MORTGAGE-BACKED AND OTHER SECURITIES - Mortgage-backed and other securities are
classified into three categories: (i) securities held to maturity, (ii) trading
securities, and (iii) securities available for sale. Debt instruments that the
Bank has the positive intent and ability to hold to maturity are accounted for
at amortized historical cost while trading securities are reported at fair

<PAGE> 116
FLORIDA FIRST BANCORP. INC. AND SUBSIDIARY 15

value with unrealized gains or losses included in earnings. Securities available
for sale are reported at fair value but unrealized gains or losses are excluded
from earnings and reported as a separate component of stockholders' equity. Fair
value is defined as the amount which would be realized in a current transaction
other than in a forced or liquidation sale. The quoted market price is used when
available to determine the fair value. Anything not classified as held to
maturity or a trading security is to be treated as available for sale.
Mortgage-backed and other securities held for investment are carried at cost,
adjusted for amortization of premiums and accretion of discounts using a method
that approximates level yield. These securities are classified as held to
maturity based on management's intent and the Bank's ability to hold such
securities to maturity.

On November 15, 1995, the Financial Accounting Standards Board ("FASB") issued
a Special Report, "A Guide to Implementation of Statement of Financial
Accounting Standards ("SFAS") No. 115 on Accounting for Certain Investments in
Debt and Equity Securities." The Special Report addressed the most commonly
asked questions about SFAS No. 115, many of them emphasizing the restrictive
nature of the held to maturity securities category. In addition, effective
November 15, 1995, the FASB permitted a one-time opportunity for institutions to
reassess the appropriateness of the designations of all securities held upon the
initial application of the Special Report. Any resulting redesignations were to
be made in conjunction with the implementation of the FASB's supplemental
guidance had to occur no later than December 31, 1995. Furthermore,
redesignations had to be accounted for at fair value in accordance with
paragraph 15 of SFAS No. 115. This transition guidance meant that institutions
were permitted to transfer debt securities from the held for investment
portfolio before calendar year-end 1995, without calling into question their
intent to hold other debt securities to maturity. The Bank reassessed the
designations of its securities portfolio and subsequently transferred $13.2
million in mortgage-backed and other securities from the held to maturity
portfolio to the available for sale portfolio and also transferred $2.0 million
in other securities from available for sale to held to maturity.

At December 31, 1995 and 1994, mortgage-backed and other securities with fair
values totalling $32.5 million and $23.9 million, respectively, were classified
as available for sale which resulted in aggregate net unrealized gains, net of
income taxes, at December 31, 1995 totalling $112,000 compared to unrealized
losses of $547,000 at December 31, 1994. In addition, the Bank owned equity
securities during 1994 consisting of an investment in an adjustable-rate mutual
fund which concentrated investment of its assets in mortgage-backed securities.
This mutual fund was sold during the fourth quarter of 1994 resulting in a
realized loss of $97,000.

MORTGAGE SERVICING RIGHTS - On May 12, 1995, the FASB issued SFAS No. 122,
"Accounting for Mortgage Servicing Rights." SFAS No. 122 amends SFAS No. 65,
"Accounting for Certain Mortgage Banking Activities" to eliminate the accounting
distinction between rights to service mortgage loans that are acquired through
loan origination activities and those acquired through purchase transactions.
When an enterprise purchases or originates mortgage loans, the cost of acquiring
those loans includes the cost of the related mortgage servicing rights. If the
enterprise sells or securities the loans and retains the servicing rights, the
enterprise should allocate the total cost of the loans to the servicing rights
and the loans (without the servicing rights) based on their relative fair
values, if practicable. If it is not practicable to estimate fair values, the
entire cost of acquiring the loans should be allocated to the mortgage loans.
Any cost allocated to servicing rights should be recognized as a separate asset.
SFAS No. 122 applies prospectively in fiscal years beginning after December 15,
1995; however, earlier application was encouraged. The Bank adopted SFAS No. 122
during the second quarter of 1995. Servicing rights totalling $153,000 at
December 31, 1995, will be amortized over the average expected life of the loans
and will effectively reduce servicing fee income in the future. During 1995,
servicing fee income was reduced by $10,000 due to the amortization of the
servicing rights.

LOANS RECEIVABLE AND ALLOWANCE FOR LOSSES ON LOANS - The allowance for losses on
loans is increased by provisions charged to income and decreased by charge-offs,
net of recoveries. Charge-offs include the excess of a loan's book value over
the estimated fair value of the collateral received and transferred to REO.

The Bank's policy as it relates to general reserves uses, among other factors,
the guidelines prescribed in the "Interagency Policy Statement on the Allowance
for Loan and Lease Losses" ("Policy Statement") dated December 21, 1993 issued
by the Federal Financial Institutions Examination Council ("FFIEC"). These
guidelines suggest certain ratios for the establishment of general reserves as
well as specific factors as consideration to subjectively determine if the
assigned ratios are appropriate. Management's periodic evaluation of the
adequacy of the allowance is based on such factors as consideration of the
effectiveness of management's risk identification system, asset concentrations,
level and trend of delinquencies, troubled debt restructurings, REO and losses
thereon.

The Policy Statement also sets forth quantitative measures for analyzing the
allowance with respect to assets
<PAGE> 117
FLORIDA FIRST BANCORP. INC. AND SUBSIDIARY 16

classified substandard and doubtful, described below, and with respect to the
remaining portion of an institution's loan portfolio. Specifically, the Policy
Statement sets forth the following quantitative measures which examiners may use
to determine the reasonableness of an allowance: the sum of (i) 50% of the
portfolio that is classified doubtful; (ii) 15% of the portfolio that is
classified substandard and (iii) with respect to the portions of the portfolio
that have not been classified (including loans designated special mention),
estimated credit losses over the upcoming twelve months based on facts and
circumstances available on the evaluation date. While the Policy Statement sets
forth these quantitative measures, such guidance is not intended as a "floor" or
"ceiling." Management of the Bank has reviewed all of the factors and the
suggested ratios to create a methodology that serves as the basis for
subjectively determining the necessary level for general reserves.

Provisions for loan losses include charges to reduce the recorded balances of
mortgage loans receivable to their estimated fair value, as applicable. Such
provisions are based on management's estimate of fair value of the collateral,
as applicable, considering the current and currently anticipated future
operating or sales conditions, thereby causing these estimates to be
particularly susceptible to changes that could result in a material adjustment
to results of operations in the near term. Recovery of the carrying value of
such loans is dependent to a great extent on economic, operating and other
conditions that may be beyond the Bank's control. While the Bank believes its
year-end allowance for loan losses is adequate in lignt of present economic
conditions, there can be no assurances that the Bank will not be required to
make additional provisions for loan losses in the future in response to changing
economic conditions or regulatory guidelines or directives.

The fair value of loan collateral is estimated using appraisals or computations
that take into consideration, among other things, estimates as to future
occupancy percentages, rental rate structures and estimated operating income of
the property capitalized at a rate based on the return on investment for
comparable properties, less disposal costs discounted to present value.

In May 1993, the FASB issued SFAS No. 114, "Accounting by Creditors for
Impairment of a Loan." The statement generally would require all creditors to
account for impaired loans, except those loans that are accounted for at fair
value or at the lower of cost or fair value, at the present value of the
expected future cash flows discounted at the loan's effective interest rate. In
October 1994, the FASB issued SFAS No. 118, "Accounting by Creditors for
Impairment of a Loan - Income Recognition and Disclosures. This statement amends
SFAS No. 114 to allow a creditor to use existing methods for recognizing
interest income on an impaired loan. SFAS No. 118 does not change the
provisions in SFAS No. 114 that require a creditor to measure impairment based
on the present value of expected future cash flows discounted at the loan's
effective interest rate, or at the market price of the loan, or the fair value
of the collateral if the loan is collateral dependent. SFAS No. 114 and SFAS No.
118 are effective for fiscal years beginning after December 15, 1994 and had no
material effect on the Bank's financial statements when adopted.

UNCOLLECTED INTEREST - The Bank reverses all previously accrued interest and
ceases accruing interest on certain loans which may become uncollectible and on
loans which are more than 90 days past due. Such interest, if ultimately
collected, is credited to income in the period of recovery.

LOAN POINTS AND PREMIUMS AND DISCOUNTS ON LOANS - The Bank defers all loan
origination and commitment fees and direct loan origination costs. Deferred fees
and costs are amortized to income over the contractual life of the loan as a
yield adjustment. Unearned discounts on installment loans are amortized into
income using the interest method over the estimated terms of the related loans.

LOAN CORRESPONDENT FEES - Fees paid to the Bank under correspondent lending
arrangements are recorded to income as received. Under such arrangements, loans
originated by the Bank are sold to another lender by agreement. Though no formal
commitment exists for the Bank to sell or the buyer to purchase, such loans
receive preapproval for purchase by the proposed buyer prior to closing the loan
and are generally funded within two weeks of closing.

REAL ESTATE OWNED - Properties acquired by foreclosure or deed-in-lieu of
foreclosure are recorded at estimated fair value less estimated costs to sell.
Foreclosed assets held for the production of income should be treated the same
way they would be had the assets been acquired in a manner other than
foreclosure. Costs relating to the development and improvement of the property
are capitalized, whereas those relating to holding the property are charged to
expense. Capitalized costs were $5,000 and $48,000 in 1995 and 1994,
respectively.

Losses are charged to operations as incurred or when it is determined that the
investment in REO is greater than its estimated fair value. Recognition of real
estate sales is dependent upon the transaction meeting certain payment criteria
relating to the nature of the property sold and the terms of the sale. Under
certain circumstances, the sale is not recorded until the necessary criteria are
met, thus
<PAGE> 118
FLORIDA FIRST BANCORP. INC. AND SUBSIDIARY 17

resulting in the property remaining classified as REO. In addition, any gain on
such sales must be deferred until the necessary criteria are met.

PREMISES AND EQUIPMENT - Premises and equipment are carried at cost less
accumulated depreciation. Depreciation is computed on the straight-line method
over the estimated useful lives of the assets which range from three to forty
years.

In March 1995, the FASB issued SFAS No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of." The statement
establishes accounting standards for the impairment of long-lived assets,
certain identifiable intangibles, and goodwill related to those assets to be
held and used and for long-lived assets and certain identifiable intangibles
which would be disposed. An impairment loss is measured as the amount by which
the carrying amount of the asset exceeds the fair value of the asset. SFAS No.
121 is effective for fiscal years beginning after December 15, 1995 and will not
have a material effect on the Company's financial statements when adopted.

INCOME TAXES - The Company follows the practice of filing consolidated federal
and state income tax returns. The effect of tax law changes are accounted for by
the Company in the year the tax law is enacted.

SFAS No. 109, "Accounting for Income Taxes," requires the Company to recognize
the tax consequences of an event under the asset and liability method at the
same time such event is recognized in the financial statements. As specifically
related to financial institutions, the statement also provides that a deferred
tax liability generally will not be recognized for "bad debt reserves" that
arose in tax years beginning before December 31, 1987. However, a deferred tax
liability shall be recognized for such reserves arising in tax years beginning
after December 31, 1987. The Company adopted SFAS No. 109 on January 1. 1993.

INTEREST RATE SWAP AND CAP AGREEMENTS - The differential to be paid or received
according to an interest rate swap agreement is accrued as interest rates
change. The premium paid at the origination of an interest rate cap contract is
amortized over the term of the contract.

INCOME PER SHARE - Primary earnings per share for the 1995, 1994 and 1993
periods were computed by dividing applicable income amounts by the weighted
average number of shares of common stock outstanding during each period,
including the effect of unexercised (but exercisable) stock options (and
warrants with respect to the 1994 and 1993 periods) using the treasury stock
method. The treasury stock method assumes that funds from the exercise of
options and warrants would be used to purchase common stock at the average
market price during the period for primary earnings per share calculations. This
method also assumes that Common stock was purchased at the end-of-period price
for fully diluted earnings per share calculations (unless the average price
during the period exceeded the end-of-period price, in which case the average
price was used) Fully diluted earnings per share for the 1995 and 1994 periods
were computed using the assumption that all outstanding and exercisable stock
options and warrants had been converted at the beginning of each period. During
the years ended December 31, 1995, 1994 and 1993, outstanding options totalling
111,325 and 143,175, respectively, were included in the calculation of primary
and fully diluted earnings per share. During the year ended December 31, 1993,
outstanding warrants and options representing the right to purchase 619,271
shares were used in the calculation of primary and fully diluted earnings per
share. Primary and fully diluted earnings per share were calculated using the
following information:

<TABLE>
<CAPTION>
Weighted
Average Number
of Shares Stock
Outstanding Price
-------------- ------
<S> <C> <C>
Primary Earnings Per Share:
For the year ended
December 31, 1995 3,337,044 $ 6.32
(Average
Price)

For the year ended
December 31, 1994 3,063,483 $ 5.35
(Average
Price)
For the year ended
December 31, 1993 2,990,735 $ 4.11
(Average
Price)

Fully Diluted Earnings Per Share:
For the year ended
December 31, 1995 3,346,179 $ 7.38
(At Period
End)

For the year ended
December 31, 1994 3,063,483 $ 5.35
(Average
Price)*

For the year ended
December 31, 1993 3,051,687 $ 4.75
(At Period
End)
</TABLE>

*Average price was used in the calculation of fully diluted earnings per share
since it was higher than the market price at the end of the period.

During 1995, 1994 and 1993, 65,475, 466,408 and 4,590 shares, respectively, of
common stock were issued pursuant to the exercise of warrants and options.

RECLASSIFICATIONS - Certain amounts in the prior years' consolidated financial
statements have been reclassified for comparative purposes.

<PAGE> 119
FLORIDA FIRST BANCORP. INC. AND SUBSIDIARY 18

FINANCIAL INSTRUMENTS - FAIR VALUES

The estimated fair value amounts in the table below have been determined by
using available market information and appropriate valuation methodologies.
However, considerable judgment is necessarily required to interpret
market data to develop the estimates of fair value. Accordingly, the estimates
presented herein are not necessarily indicative of the amounts the Bank could
realize in a current market exchange. The use of different market assumptions
and/or estimation methodologies may have a material effect on the estimated fair
value amounts.

<TABLE>
<CAPTION>
DECEMBER 31,
------------
(in thousands)
--------------
1995 1994
----------------- -----------------
Carrying Fair Carrying Fair
Amount Value Amount Value
------ ----- ------ -----

<S> <C> <C> <C> <C>
Assets:
Cash and cash equivalents $ 14,437 $ 14,437 $ 12,766 $ 12,766
Loans held for sale 3,304 3,318 1,398 1,398
Securities held to maturity 68,848 68,640 56,162 53,981
Securities available for sale 32,543 32,543 23,868 23,868
Loans receivable 168,918 177,567 165,947 162,211
FHLB stock 2,766 2,766 2,766 2,766

Liabilities:

Demand deposits 97,404 97,404 87,470 87,470
Time deposits 152,501 153,491 138,208 136,206
FHLB advances 30,721 30,800 32,593 31,188
Off-balance sheet items:
Commitments to extend credit
unrealized gains (losses) 53 (54)
Excess servicing rights 707 1,164
</TABLE>

CASH AND CASH EQUIVALENTS - For cash and cash equivalents, the carrying amount
is a reasonable estimate of fair value.

LOANS HELD FOR SALE - Loans held for sale are valued in the aggregate at quoted
prices at which such loans would sell in the secondary market.

SECURITIES - Estimated fair value for securities held to maturity and available
for sale is based on quoted market prices. if available. If a quoted market
price is not available, fair value is estimated using quoted market prices for
similar securities.

LOANS RECEIVABLE - The fair value of fixed-rate loans is estimated by
discounting the future cash flows using the current rates at which similar loans
of comparable risk and duration would be made. The fair value of adjustable-rate
loans is calculated using price assumptions utilized by the Office of Thrift
Supervision ("OTS") in their net portfolio value model as of December 31, 1995
and 1994, respectively. It was not practicable to estimate the fair value of
non-performing loans totalling $2.5 million at December 31, 1995 and $2.7
million at December 31, 1994 in the Bank's portfolio because it is not
practicable to reasonably assess the credit adjustment that would be applied in
the marketplace for such loans.

FHLB STOCK - The fair value of FHLB stock is equal to the carrying amount since
there is no readily available market for the stock.

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 price assumptions utilized by the OTS as of December 31, 1995
and 1994, respectively.

FHLB ADVANCES - Rates currently available to the Bank for debt with similar
terms and remaining maturities are used to estimate fair value of existing debt.

COMMITMENTS TO EXTEND CREDIT - The fair value of loan commitments is estimated
in the aggregate using the quoted price at which such loans would sell in the
secondary market.

EXCESS SERVICING RIGHTS - The fair value of excess servicing rights is
determined based on the estimated discounted net cash flows to be received less
the estimated costs of servicing. The discount interest rate used in the
calculation is equal to the current quoted market rates for loans with similar
characteristics.
<PAGE> 120
FLORIDA FIRST BANCORP. INC. AND SUBSIDIARY 19

INTEREST RATE RISK

At December 31, 1995, approximately 62% of the Company's total assets consisted
of assets that earned interest at variable interest rates while approximately
33% of total assets earned interest at fixed interest rates. These assets were
funded primarily with liabilities carrying short-term interest rates that vary
with market rates over time.

At December 31, 1995, the Company had gross interest-earning assets of $288.4
million bearing a weighted average effective yield of 7.83% and interest-bearing
liabilities of $280.6 million bearing a weighted average effective interest rate
of 4.75%. The shorter maturities and repricing characteristics of the
interest-bearing liabilities indicate that the Company is generally exposed to
interest rate risk because, in a rising rate environment, its interest-bearing
liabilities will normally reprice faster, thereby reducing net interest income.
However, to the extent that the amount of the Company's interest-earning assets
exceed its interest-bearing liabilities, such situation will be partially
alleviated.

INTEREST-BEARING DEPOSITS

Interest-bearing deposits are summarized as follows:

<TABLE>
<CAPTION>
December 31.
------------
1995 1994
----------------------
(in thousands)
<S> <C> <C>
Fixed rate $ 99 $2,391
Variable rate 8,652 5,323
------ ------
Total $8,751 $7,714
====== ======
</TABLE>

Interest-bearing deposits are considered cash equivalents and as such, their
market value does not differ from their book value. The variable-rate funds are
federal funds sold at the FHLB of Atlanta. The fixed-rate deposits consist
primarily of certificates of deposit at other financial institutions, all of
which are fully insured by the Federal Deposit Insurance Corporation ("FDIC").
At December 31, 1995, a time deposit at the FHLB of Atlanta totalling $100,000
was pledged as collateral in a lender's liability lawsuit (see Note 14).

SECURITIES HELD TO MATURITY AND AVAILABLE FOR SALE

Securities held to maturity at the dates indicated were as follows:

December 31,
--------------------------------------------------------------------------------------------
1995 1994
------------------------------------------- ----------------------------------------------
(in thousands)
Gross Gross Gross Gross
Amortized Unrealized Unrealized Fair Amortized Unrealized Unrealized Fair
Cost Gains Losses Value Cost Gains Losses Value
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Mortgage-pool securities $20,201 $ 77 $20,124 $11,786 $ 230 $11,556

Real estate mortgage
investment conduits
("REMICs") 30,895 $ 154 339 30,710 17,239 $ 6 818 16,427

Notes receivable 1,000 1 1,001 4,000 90 3,910

Equity securities 50 8 58
------- ------- ------- ------- ------- ------- ------- -------
52,096 155 416 51,835 33,075 14 1,138 31,951

U.S. agency mortgage-
backed securities 16,752 113 60 16,805 23,087 1,056 22,031
------- ------- ------- ------- ------- ------- ------- -------

Total securities held
to maturity - net $68,848 $ 268 $ 476 $68,640 $56,162 $ 14 $ 2,194 $53,982
======= ======= ======= ======= ======= ======= ======= =======
</TABLE>

<PAGE> 121
FLORIDA FIRST BANCORP. INC. AND SUBSIDIARY 20

Securities available for sale at the dates indicated were as follows:

December 31,
--------------------------------------------------------------------------------------------
1995 1994
-------------------------------------------- ---------------------------------------------
(in thousands)
Gross Gross Gross Gross
Amortized Unrealized Unrealized Fair Amortized Unrealized Unrealized Fair
Cost Gains Losses Value Cost Gains Losses Value
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Mortgage-pool securities 2,357 $ 1 $ 2,358

REMICs 8,016 73 $ 6 8,083 $ 4,201 $ 4 $ 31 $ 4,174

Notes Receivable 3,000 75 2,925

U.S. Treasury securities 11,002 168 10,834
--------------------------------------------------------------------------------------------
13,373 74 81 13,366 15,203 4 199 15,008

U.S. agency mortgage-
backed securities 19,006 228 57 19,177 9,212 352 8,860
--------------------------------------------------------------------------------------------
Total securities available
for sale - net $32,379 $ 302 $ 138 $32,543 $24,415 $ 4 $ 551 $23,868
======= ======= ======= ======= ======= ======= ======= =======
</TABLE>

The amortized cost and fair values of securities at December 31, 1995 by
contractual maturity are shown below. Expected maturities of securities will
differ from contractual maturities because borrowers may have the right to call
or repay obligations with or without incurring call or prepayment penalties.
The table below does not include equity securities.

<TABLE>
<CAPTION>
Securities Held to Maturity Securities Available for Sale
--------------------------- -----------------------------
(in thousands)
Amortized Fair Amortized Fair
Cost Value Cost Value
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
Due after 1 year through 5 years $ 4,010 $ 4,002 $ 11,170 $ 11,076

Due after 5 years through 10 years 3,974 4,010 5,794 5,812

Due after 10 years 60,864 60,628 15,415 15,655
--------------------------------------------------------------------

Total $ 68,848 $ 68,640 $ 32,379 $ 32,543
====================================================================
</TABLE>

The Bank invests in mortgage-related securities such as collateralized mortgage
obligations ("CMOs") and REMICs which are generally divided into tranches
whereby principal repayments from the underlying mortgages are used in a
predetermined order to retire the securities according to the priority of the
tranches. The Bank only invests in CMOs and REMICs that are rated at least AA by
a nationally recognized rating service. Mortgage-backed securities represent
participating interests in pools of long-term first mortgage loans. Although
mortgage-backed securities are initially issued wihin a stated maturity date,
the underlying mortgage collateral may be prepaid by the mortgagor and,
therefore, such securities may not reach their maturity date.

For the year ended December 31, 1995, gains from pair-off transactions amounted
to $4,000 compared to losses of $2,000 for the same period in 1994. In this type
of investment, the buyer does not take title to any security but instead enters
a contract to buy and a contract to sell specific securities. The intent is to
pair-off the transactions against each other before delivery to take advantage
of market value movements or interest rate spreads. The Bank also received
proceeds from sales of mortgage-backed and other securities available for sale
during 1995 of $10.4 million resulting in gross gains of $34,000 and gross
losses of $85,000. In addition, FFB (the holding company) and Service First sold
ownership in equity securities at gains of $6,000 and $7,000, respectively. No
such sales occurred during 1994.

At December 31, 1995, mortgage-backed securities with a book value of $2.3
million and fair value of $2.4 million were pledged to secure public deposits
and treasury, tax and loan deposits.

<PAGE> 122
FLORIDA FIRST BANCORP. INC. AND SUBSIDIARY 21

LOANS RECEIVABLE

The table below presents a comparative summary of loans receivable:

<TABLE>
<CAPTION>
December 31,
-------------------------
1995 1994
-------------------------
(in thousands)
<S> <C> <C>
Real estate loans:
Mortgage $161,403 $161,708
Construction 6,846 7,145
Insured or guaranteed 741 760
Installment loans
receivable 7,279 5,136
Other loans receivable 2,993 2,308
-----------------------
Total loans receivable 179,262 177,057

Undisbursed portion of
loans-in-process (3,804) (3,899)
Allowance for loan losses (3,739) (3,860)
Deferred origination
fees, net (329) (599)
Discount on loans
purchased (11) (14)
Unearned income on
installment loans (1)
-----------------------
Total loans
receivable - net $171,379 $168,684
=======================
</TABLE>

The Bank originates and purchases both adjustable and fixed interest rate
mortgage loans. At December 31, 1995, the composition of these loans was as
follows:

<TABLE>
<CAPTION>
Fixed Rate Adjustable Rate
----------------------------------------------------------------
Term to Term to Rate
Maturity Book Value Adjustment Book Value
---------------------------- -----------------------------------
(in thousands)

<S> <C> <C> <C>
1 mo. - 1 yr. $ 1,460 1 mo. - 1 yr. $113,611
1 yr. - 3 yr. 1,998 1 yr. - 3 yr. 6,633
3 yr. - 5 yr. 2,029 3 yr. - 5 yr. 7,297
5 yr. -10 yr. 7,440
Over 10 years 34,990
------- --------
$47,917 $127,541
======= ========
</TABLE>

The allowance for loan losses, deferred origination fees and unearned discounts
on loans purchased have not been subtracted from the above table.

Adjustable-rate mortgage loans may have both annual and lifetime interest rate
adjustment limitations and are generally indexed to the one-year U.S. Treasury
Bill rate plus a margin. Future market factors may affect the correlation of the
interest rate adjustment to the rates the Bank pays on the short-term deposits
that have been primarily utilized to fund these loans.

At December 31, 1995, 1994 and 1993, the Bank was servicing loans for others
amounting to $83.8 million, $77.6 million and $69.7 million, respectively.
Servicing loans for others generally consists of collecting mortgage payments,
maintaining escrow accounts, disbursing payments to investors and processing
foreclosures. Loan servicing income is recorded on the accrual basis and
includes servicing fees from investors and certain charges collected from
borrowers, such as late payment fees. In connection with these loans serviced
for others, the Bank held borrowers' escrow balances of $584,000, $433,000 and
$434,000 at December 31, 1995, 1994 and 1993, respectively.

The Bank had loans to related parties amounting to $1.6 million and $2.0 million
at December 31, 1995 and 1994, respectively. The schedule below summarizes the
activity of loans to related parties of the Bank:

<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------
1995 1994
-----------------------
(in thousands)

<S> <C> <C>
Balance, beginning of period $1,999 $1,447
Additions 792 888
Repayments (106) (232)
Reductions, resignations (1,110) (104)
----------------
Balance, end of period $1,575 $1,999
================
</TABLE>

The above table details loans to related parties (directors, executive officers
and principal stockholders) if total indebtedness of the borrower exceeded
$60,000 at any time during 1995 or 1994. The additions during 1994 include loans
totalling $759,000 to a stockholder (owning more than 10% of the issued
outstanding common stock) who became a principal stockholder upon the exercise
of his stock warrants in September 1994. These loans were originated prior to
the exercise of such warrants at terms then available to the general public.
These loans are included as a reduction in 1995 since this stockholder's
percentage of ownership decreased to 9.0% due to the exercise of employee stock
options during the year. Additions during 1995 include a loan to the Chairman of
the Board collateralized by commercial real estate at terms available to the
general public.

The Bank is subject to numerous lending-related regulations including one which
restricts the amount that can be loaned to any one borrower. Under the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989 ("FIRREA"), the Bank
may not, after August 9, 1989, make real estate loans to one borrower in excess
of 15% of its unimpaired capital and surplus. This 15% limitation resulted in a
dollar limitation of approximately $3.5 million at December 31, 1995. At such
date, the Bank did not have any loans to individual borrowers or a group of
related borrowers in excess of this amount.
<PAGE> 123
FLORIDA FIRST BANCORP. INC. AND SUBSIDIARY 22

At December 31, 1995 and 1994, the Bank had $2.8 million and $6.0 million,
respectively, in net non-performing assets consisting of non-accrual loans,
troubled debt restructurings and REO, of which $1.4 million and $566,000,
respectively, consisted of loans that had been restructured and were performing
in accordance with their restructured terms. During the years ended December 31,
1995, 1994 and 1993, the difference between interest income which would have
been recorded on all delinquent loans and the interest income actually recorded
was approximately $172,000, $160,000 and $254,000, respectively. These amounts
also include any interest owed through the date immediately preceding the
transfer of loans to REO.

As a general policy, all loans delinquent 90 days or more are placed on
non-accrual status. In addition, management reviews certain other loans which
exhibit indications of potential or prior difficulty to determine which, if any,
are impaired as to collectibility and, therefore, need to be placed on
non-accrual status prior to becoming 90 days delinquent. At December 31, 1994,
the Bank had $909,000 in loans on non-accrual status which were not yet 90 days
delinquent but had no such loans at December 31, 1995. During the year ended
December 31, 1995, the Bank recorded $204,000 in interest income on net
non-performing loans.

Net non-performing loans were comprised of the following:

<TABLE>
<CAPTION>
December 31,
-----------------
1995 1994
-----------------
(in thousands)
<S> <C> <C>
Nature of collateral:
Residential real estate $ 159 $ 412
Commercial real estate 1,312 1,893
Land 78
Consumer and other 137 66
-----------------
1,686 2,371
Valuation allowances (596) (200)
-----------------
1,090 2,171
Loans considered troubled
debt restructurings 1,371 566
-----------------
Net non-performing loans $ 2,461 $2,737
=================
</TABLE>

The Bank classifies certain loans as troubled debt restructurings ("TDR's")
because such loans bear terms which do not comply with the Bank's standard
underwriting criteria and relate to loans which were troubled or non-performing.
Modifications to these loans primarily consisted of temporary payment deferrals
and extensions of generally two years or less of the maturity date. Interest
earned on all restructured loans for the year ended December 31, 1995, was not
materially different from the interest that would have been earned if the
modifications had not been made. The Bank's restructured loans are actually
performing loans but are included in the calculation of non-performing assets
because the terms have been modified due to specific or anticipated
difficulties on the part of the borrower. The Bank has not restructured any
loans since the implementation of SFAS No. 114 and SFAS No. 118, which met the
required definition of an impaired loan (See Note 1). There were no valuation
allowances established on the TDR's totalling $1.4 million and $566,000 at
December 31, 1995 and 1994, respectively.

The changes in the allowance for losses on loans were as follows:

<TABLE>
<CAPTION>
Year Ended December 31,
------------------------------------
1995 1994 1993
------------------------------------
(in thousands)
<S> <C> <C> <C>
Balance,
beginning of
period $3,860 $3,554 $3,754
------------------------------------
Provision charged
to income 10 408 846
Charge-offs (131) (211) (1,083)
Recoveries 109 37
------------------------------------

Balance,
end of period $3,739 $3,860 $3,554
====================================
</TABLE>

For the year ended December 31, 1995, $10,000 was provided for losses on one
residential loan involving flood damage. During 1994 and 1993, the Bank charged
$408,000 and $672,000, respectively, to income in order to maintain the general
loss allowance at a level deemed appropriate by management. The remainder of the
provision during 1993 was used to establish specific reserves. At December 31,
1995 and 1994, specific loan loss reserves amounted to $596,000 and $212,000
while general reserves totalled approximately $3.1 million and $3.6 million,
respectively.

At December 31, 1995, the Bank had $28.3 million of commercial real estate loans
which are considered by management to have a greater risk of uncollectibility
due to the borrowers' dependency on income production or future development of
the real estate in order to pay the principal and interest due. Of the
commercial real estate loans, $8.3 million are collateralized by hotel and motel
properties, $7.7 million by commercial and office buildings, $4.0 million by
retail, manufacturing and wholesale properties, $3.0 million by restaurants and
$5.3 million by other improved real estate (service and repair shops,
healthcare, civic, etc.). Virtually all properties collateralizing these loans
are located in the greater
<PAGE> 124
FLORIDA FIRST BANCORP. INC. AND SUBSIDIARY 23

Panama City area. Under FIRREA, a federally chartered savings institution's
aggregate non-residential or commercial real estate loans may not exceed 400% of
its total capital as determined under the capital standard provisions of FIRREA.
At December 31, 1995, the Bank was in compliance with this limitation.

Regulatory capital requirements, effective December 7, 1989, require that the
portion of non-residential construction and land loans which exceeds an 80%
loan-to-value ratio be deducted from total capital for purposes of the
risk-based capital standard over a five-year phase-in period which commenced
July 1, 1990. At December 31, 1995, the Bank had no investment in loans subject
to this deduction requirement.

REAL ESTATE OWNED

Real estate owned at December 31, 1995 and 1994 is summarized as follows:

<TABLE>
<CAPTION>
December 31,
------------------
1995 1994
------------------
(in thousands)
<S> <C> <C>
Residential $ 31 $ 160
Land 186 1,523
Commercial real estate 59 1,508
---- ------
Total 276 3,191
Under contract to sell 41 44
---- ------
Total real estate owned $317 $3,235
==== ======
</TABLE>

For the years ended December 31, 1994 and 1993, $193,000 and $1.0 million,
respectively, was charged to income as a reduction to the value of REO. There
were no such charges to income during the year ended December 31, 1995. Of the
$1.0 million charged to income during 1993, the majority was used for writedowns
of the carrying value of commercial properties and vacant land while a
significant portion of the $193,000 during 1994 was applied to commercial
properties.

For the year ended December 31, 1995, the Bank sold REO with a book value of
$2.8 million resulting in net gains of $183,000. The Bank also recognized in
fiscal 1995 $82,000 in deferred gains on the sales of two REO properties since
adequate investment had been achieved per SFAS No. 66 "Accounting for Sales of
Real Estate". Of the amount sold, $269,000 consisted of residential real
estate, $1.3 million consisted of vacant land and $1.2 million consisted of
commercial real estate. During the year ended December 31, 1995, the Bank
reclassified one loan totalling $771,000 from a loan deemed to be in-substance
foreclosure to a TDR which change reduced total REO.

PREMISES AND EQUIPMENT

Premises and equipment by major classification are as follows:

<TABLE>
<CAPTION>
December 31,
--------------------
1995 1994
--------------------
(in thousands)
<S> <C> <C>
Land $ 874 $ 874
Buildings and improvements 5,225 4,938
Furniture, fixtures and equipment 2,083 1,793
------ -------
Total 8,182 7,605
Less accumulated depreciation (3,781) (3,530)
------ -------
Premises and equipment - net $4,401 $ 4,075
====== =======
</TABLE>

INVESTMENT IN SUBSIDIARIES

On December 31, 1993, the Bank sold one of its subsidiaries, Sunbird Management,
for $600,000, receiving $150,000 in cash and a mortgage note in the amount of
$450,000. The Bank established this subsidiary to provide rental management
services for its own units as well as for all owners at Sunbird Condominiums. As
a result of the sale of the last of the units held by the Bank during 1993, this
subsidiary became nonincludable for regulatory capital purposes which would
require the Bank to deduct the investment in this subsidiary from its capital
when calculating compliance with tangible capital regulations. This led to the
decision to sell Sunbird Management, which sale resulted in a gain of $109,000.
<PAGE> 125
FLORIDA FIRST BANCORP. INC. AND SUBSIDIARY 24

10.

DEPOSITS

Deposits are summarized as follows:

<TABLE>
<CAPTION>
December 31,
------------------
1995 1994
------------------
(in thousands)
<S> <C> <C>
NOW accounts
(2.47% to 4.41% for 1995
and 2.47% to 4.60% for
1994, respectively) $ 42,740 $ 40,387
Non-interest-bearing
checking accounts 8,998 5,587
Money market deposit
accounts (2.47% to
4.41% for 1995 and
2.47% to 4.60%
for 1994, respectively) 22,477 16,171
Passbook accounts
(2.75% for 1995
and 1994) 23,189 25,190
Accrued interest payable
on deposits 136 135
Certificate accounts:
Less than 3.01% 106 108
3.01%- 4.00% 771 23,128
4.01%- 5.00% 25,202 68,028
5.01%- 6.00% 92,516 33,305
6.01%- 8.00% 32,603 11,554
8.01%-10.00% 901 1,120
10.01%-12.00% 402 965
---------------------
Total certificates 152,501 138,208
---------------------
Total deposits $250,041 $225,678
=====================
</TABLE>

At December 31, 1995, the scheduled maturities of certificate accounts are
summarized as follows (in thousands):

<TABLE>
<CAPTION>
Year Ended December 31,
- -----------------------
<S> <C>
1996 $107,769
1997 26,782
1998 5,411
1999 7,006
2000 2,142
Thereafter 3,391
--------
Total $152,501
========
</TABLE>

The related interest expense for deposits is summarized below:

<TABLE>
<CAPTION>
Year Ended December 31,
---------------------------
1995 1994 1993
---------------------------
(in thousands)
<S> <C> <C> <C>
NOW
accounts $ 1,466 $ 1,232 $ 1,150
Money market
deposit
accounts 899 505 494
Passbook
accounts 642 805 861
Certificate
accounts 8,069 5,675 5,693
------- ------- -------
Total $11,076 $ 8,217 $ 8,198
======= ======= =======
</TABLE>

The weighted average cost of deposits at December 31, 1995, 1994 and 1993 was
4.60%, 4.25% and 3.73%, respectively. Deposits with a balance greater than
$100,000 equalled approximately $24.0 million at December 31, 1995 and the Bank
had no brokered deposits at such date. The Bank participates in the State of
Florida public deposits program which allows the Bank to accept deposits from
municipalities, schools and other state agencies in amounts that would not be
covered by federal deposit insurance. State law requires that the Bank pledge
securities to cover the uninsured portion of the deposits of the State. At
December 31, 1995, public deposits totalled $3.0 million.

11.

HEDGING ACTIVITIES

The Bank uses certain hedging instruments to protect its interest margin, and
one such instrument is an interest rate cap. An interest rate cap is a guarantee
given by one party to another party, in exchange for a premium, to ensure that
if interest rates rise above an agreed upon specified rate, the issuer of the
cap will pay to the purchaser the difference between the market rate and the
specified rate. At December 31, 1995, the Bank had two outstanding caps as
follows:

<TABLE>
<CAPTION>
Notional Effective Premium at Maturity Protected
Amount Date 12-31-95 Date Rate Index(1)
-----------------------------------------------------------------
(in thousands)
<C> <C> <C> <C> <C> <C>
$5.0 MILLION 12-12-94 $148 12-13-99 8.00% 3 MO. LIBOR
5.0 MILLION 01-17-95 80 01-18-00 9.00 3 YR.CMT
</TABLE>

(1) London Interbank Offering Rate ("LIBOR") and Constant Maturity
Treasury ("CMT")
<PAGE> 126
FLORIDA FIRST BANCORP. INC. AND SUBSIDIARY 25

The Bank purchased the first interest rate cap shown above to lengthen its
liabilities and hedge its current interest margin which adds approximately .01%
to the Bank's cost of funds per year. The Bank purchased the second interest
rate cap to hedge a specific security because it is an adjustable-rate security
with a lifetime cap of 9.00%. Hedging activities engaged in by the Bank resulted
in net decreases in the interest margin of $57,000, $0 and $25,000, for the
years ended December 31, 1995, 1994 and 1993, respectively.

On December 31, 1995, the Bank had one outstanding short position to sell a $1.0
million Federal Home Loan Mortgage Corporation ("FHLMC") 30-year 7.00% security.
This trade was entered to protect the Bank's mortgage loan commitments against
rising interest rates. This position was settled in January 1996 at a loss of
$16,500 which was recorded in December 1995.

12.

FHLB ADVANCES

At December 31, 1995, FHLB advances were repayable as follows:

<TABLE>
<CAPTION>
Weighted Average
Amount Rate
--------------
(in thousands)
<S> <C> <C>
1996 $ 9,600 6.11%
1997 13,300 5.92
1998 600 5.57
1999 and after 7,221 5.78
-------
Total $30,721
=======
</TABLE>

The weighted average interest rates on advances at December 31, 1995 and 1994
were 5.94% and 6.03%, respectively. The highest balances outstanding during 1995
and 1994 were $35.7 million and $45.9 million, respectively.

During 1994 and 1993, the Bank prepaid advances totalling $9.0 million and $7.7
million, respectively, primarily because of the high interest costs associated
with the advances which funds were reborrowed at substantially lower rates or
replaced with deposits. Prepayment penalties of $70,000 and $80,000, net of tax,
respectively, which are considered extraordinary items, were recorded in
connection with these transactions. The Bank did not prepay any FHLB advances
during 1995.

During 1995, the Bank collateralized its advances under a blanket floating lien
agreement with the FHLB of Atlanta which requires the Bank to maintain, as
collateral for its advances, all of its FHLB stock and certain qualifying first
mortgage loans in an amount that, when discounted at 65%, is at least equal to
100% of the advances.

Previously, from January 1991 through September 7, 1994, the Bank borrowed funds
from the FHLB of Atlanta under a specific collateral agreement which required
the Bank to identify individual loans and/or other acceptable securities whose
aggregate market value equalled or exceeded total outstanding advances by the
required percentage. The various types of qualifying collateral included
residential and multi-family first mortgages, U. S. government and agency
securities, mortgage-backed securities, and other real estate-related
collateral.

13.

INCOME TAXES

On January 1, 1993, the Company adopted SFAS No. 109 and elected not to restate
any prior periods. SFAS No. 109 requires the Company to recognize the tax
consequences of an event under the asset and liability method at the same time
such event is recognized in the financial statements. There was no cumulative
effect of the adoption of SFAS No. 109 on January 1, 1993 at which date the
Company had deferred tax assets of approximately $2.4 million which were subject
to a valuation allowance of approximately $2.4 million since the use of such
assets to offset any future tax liability was not determined to be more likely
than not as required by SFAS No.109.

Pursuant to the Company's adoption of SFAS No. 109, no deferred taxes have been
provided on the income tax reserves that arose prior to 1988 of $2.0 million as
the bad debt reserves for income tax purposes are included in taxable income of
later years only if the bad debt reserves are used subsequently for purposes
other than to absorb bad debt losses. Because the Company does not intend to use
the reserves for purposes other than to absorb bad debt losses, no deferred
income taxes have been provided. SFAS No. 109 requires the recognition of
deferred tax consequences of differences between financial statement and income
tax treatment of allowances for loan losses arising after December 31, 1987.

Under SFAS 109, the Company had net deferred income taxes of approximately $1.9
million as of December 31, 1995 which were primarily related to tax bad debt
reserves and excess taxable income over book income on investments. Based on
historical earnings of the Company, the valuation allowance for deferred tax
assets totalling approximately $45,000 at the beginning of the year was reduced
to zero at December 31, 1995. The change in the valuation allowance represents
management's change in estimation of future net operating loss carry forwards
("NOL").
<PAGE> 127
FLORIDA FIRST BANCORP. INC. AND SUBSIDIARY 26

The components of the income tax expense and benefit, respectively, are as
follows:

<TABLE>
<CAPTION>
December 31,
-------------------------------
1995 1994 1993
--------------------------------
(in thousands)
<S> <C> <C> <C>
Deferred federal $ 230 $ (943) $ (1,014)

Deferred state 25 (100) (85)
------ ------- --------
Total deferred 255 (1,043) (1,099)
Current federal 1,191 435 298
----- ------ -------
Net expense (benefit) $1,446 $ (608) $ (801)
====== ====== =======
</TABLE>

The income tax expense and benefit, respectively, differs from the amounts
determined by applying the U.S. federal income tax rate of 34% to income before
income taxes for the following reasons:

<TABLE>
<CAPTION>
December 31,
-------------------------------
1995 1994 1993
--------------------------------
(in thousands)
<S> <C> <C> <C>
Tax at federal tax rate $1,311 $ 664 $ 584
Reduction in valuation
allowance (45) (1,091) (834)
Utilization of federal
NOL (622)

State Income tax, net of
federal benefit 140

Provision (credit) for
alternative minimum
tax ("AMT") (94) 43
Other 40 (87) 28
---------------------------------
Tax expense (benefit) $1,446 $ (608) $(801)
=================================
</TABLE>

The tax effects of temporary differences that give rise to deferred tax assets
and deferred tax liabilities are presented in the table following.

<TABLE>
<CAPTION>
December 31,
--------------------
1995 1994
--------------------
(in thousands)
<S> <C> <C>
Deferred tax liabilities:
Depreciation $ (28) $ (20)
Loan fee income (140) (154)
Accrued interest (63) (70)
Unrealized gain on securities (67)
Other (29)

--------------------
(327) (244)
--------------------
Deferred tax assets:
Excess of taxable income
recognized over book on
investments 577 481
Excess book bad debt reserve
over tax reserve 1,439 1,672
State NOL carryforward (expires
in years through 2006) 157 281
Other 6 29
----------------------
Gross deferred tax assets 2,179 2,463
Less valuation allowance (45)
----------------------
Deferred tax assets after
valuation allowance 2,179 2,418
----------------------
Net deferred tax asset $1,852 $2,174
======================
</TABLE>

14.

COMMITMENTS AND CONTINGENCIES

At December 31, 1995, the Bank had loan commitments, excluding undisbursed
portions of loans-in-process outstanding, of approximately $3.8 million.
Commitments, which are disbursed subject to certain limitations, extend over
periods of time with the majority disbursed within a six-month period. At
December 31, 1995, $2.9 million were variable-rate commitments and $4.2 million
were fixed-rate commitments. These commitments included a range of interest
rates from a low of 6.4% on fixed-rate mortgage products to as high as 14.9% on
certain fixed-rate consumer loans. At December 31, 1995, there was approximately
$156,000 in outstanding letters of credit and $8.9 million available in unused
lines of credit, with the majority consisting of home equity lines-of-credit.

At December 31, 1995, the Bank was obligated under various lease agreements for
office properties extending to the year 1997. The minimum annual rentals
required under these leases are not considered material to the Bank's financial
position or its results of operations.

At December 31, 1995, the Bank had pledged certain mortgage-backed securities
for public deposits and treasury, tax and loan deposits (see Note 5).
<PAGE> 128
FLORIDA FIRST BANCORP. INC. AND SUBSIDIARY 27

At December 31, 1995, the Bank had pledged a $100,000 time deposit as collateral
in a lender's liability lawsuit. This lawsuit, brought against the Bank by one
of its borrowers against whom the Bank had initiated foreclosure proceedings,
resulted in a judgment against the institution in the amount of $75,000. The
Bank and the borrower had previously agreed that any judgement obtained against
the Bank would be offset to the extent of deficiency judgements obtained by the
Bank against the borrower. The borrower filed Chapter 7 bankruptcy and all
adversary proceedings terminated as a result. A deficiency judgement was awarded
to the Bank for an amount in excess of the borrower's judgement against the
Bank. It is anticipated that the collateral funds will be returned to the Bank
and all judgements will be satisfied as a result of the offset and bankruptcy.

Other than the proceedings discussed herein, the Company is only involved in
routine legal proceedings occurring in the ordinary course of business which
will not have a material effect on the consolidated financial statements.

15.

REGULATORY CAPITAL REQUIREMENTS AND OTHER RELATED MATTERS

Under regulatory capital requirements promulgated to implement the provisions of
FIRREA, the Bank must have: (i) tangible capital equal to 1.5% of adjusted total
assets, (ii) core capital equal to 3.0% of adjusted total assets, and (iii)
total risk-based capital equal to 8.0% of adjusted risk-weighted assets. In
measuring an institution's compliance with all three FIRREA capital standards,
thrift institutions must deduct from their capital (with several exceptions
primarily for mortgage-banking subsidiaries and insured depository institution
subsidiaries) their investments in, and advances, to, subsidiaries engaged (as
principal) in activities not permissible for national banks. At December 31,
1995, the Bank had one such subsidiary, Service First, which was subject to this
capital reduction. On January 18, 1996, the Board of Directors of the Bank,
being the sole stockholder of this subsidiary, elected to liquidate the
subsidiary and disburse its assets to the Bank. In computing an institution's
risk-based capital in (iii) above, similar capital deduction and provisions
generally apply to: (a) other investments in equity securities (not meeting the
definition of a subsidiary) and in real estate and (b) that portion of land
loans and non-residential construction loans in excess of an 80% loan-to-value
ratio. Under FIRREA, the FDIC may suspend deposit insurance for an institution
that has no tangible capital (computed by considering qualifying supervisory
goodwill).

In August 1993, the OTS adopted amended regulations related to incorporating an
interest-rate risk component into the risk-based capital regulation. Under the
amended regulation, only institutions with an "above normal" level of interest
rate risk exposure will be required to maintain additional capital for interest
rate risk. "Above normal" institutions are defined as institutions that would
suffer a loss of market value portfolio equity exceeding 2.0% of the estimated
market value of their assets in the event of a 200 basis point increase or
decrease (with certain minor exceptions) in interest rates. The interest rate
risk component will be calculated, on a quarterly basis, as one-half of the
difference between an institution's measured interest rate risk and 2.0%
multiplied by the market value of its assets. Institutions unable to satisfy
the interest rate risk component would be required to submit a capital plan to
the OTS describing how they will attain compliance in the future. The final
rule was originally effective as of January 1, 1994, subject to a two quarter
"lag" time between the reporting date used to calculate an institution's
interest-rate risk and the effective date of each quarter's interest-rate risk
components. The OTS has since delayed implementation of the rule until further
notice. Using data available at December 31, 1995, management has determined
that this regulation should not have an adverse effect on the Bank's ability to
meet its regulatory capital requirements.

Deposits of the Bank are currently insured by the Savings Association Insurance
Fund ("SAIF"). Both the SAIF and the Bank Insurance Fund ("BIF"), the deposit
insurance fund that covers most commercial bank deposits, are statutorily
required to be recapitalized to a ratio of 1.25% of insured reserve deposits.
Members of the SAIF currently are paying deposit insurance premiums of between
23 and 31 basis points. The FDIC established a new assessment rate schedule
beginning on or about January 1, 1996, and as a consequence, a substantial
majority of banks will then only be paying the statutory minimum amount of
$2,000. With respect to SAIF member institutions, the FDIC has retained the
existing assessment rate of 23-31 basis points. In announcing this rule, the
FDIC noted that the premium differential may have adverse consequences for SAIF
members, including reduced earnings and an impaired ability to raise funds in
the capital markets. In addition, SAIF members, such as the Bank, could be
placed at a substantial disadvantage to BIF members with respect to pricing of
loans and deposits and the ability to achieve lower operating costs.

While the BIF has reached the required reserve ratio, the underfunded status of
the SAIF has resulted in the introduction of federal legislation, the Balanced
Budget Act of 1995, intended to, among other things, recapitalize the SAIF and
address the resulting premium disparity. Although such legislation was vetoed,
this legislation would have required savings institutions like the Bank to
<PAGE> 129
FLORIDA FIRST BANCORP. INC. AND SUBSIDIARY 28

pay a one-time estimated charge of $.80 to $.85 for every $100 of insured
deposits to recapitalize the depleted SAIF. Based on total insured deposits of
$234.8 million at March 31, 1995, the Company would have incurred a onetime
charge of between $1.9 million to $2.0 million on a pre-tax basis ($1.2 million
after tax). This charge would have represented on a pro forma basis, a decrease
in book value per share at December 31, 1995 of between $.35 and $.37 after tax.
Management does not believe that this one-time charge to the Bank, if incurred,
will have a material impact on the Company's overall financial condition or
future operating results.

The proposed legislation also contemplated the merger of the BIF and the SAIF
following the recapitalization of the SAIF. Thereafter, federal deposit
insurance premiums would be assessed similarly for all FDIC insured
institutions. In addition, the legislation proposed the wholesale conversion of
savings institutions into banks. Questions regarding the federal tax
consequences resulting from such conversions and permissible activities of the
converted institutions are still being debated in Congress. The Company cannot
presently predict with any degree of certainty what form future legislation may
take, nor when or whether it may be enacted.

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
At December 31, 1995, the Bank had the following regulatory capital and capital ratios:
Actual Actual
Capital Required Excess Capital Required
Amount Amount Amount Ratio Ratio
- --------------------------------------------------------------------------------------------------------------------------------
(In thousands)
<S> <C> <C> <C> <C> <C>
Adjusted tangible capital to
adjusted total assets $20,018 $ 4,550 $15,468 6.6% 1.5%
Adjusted core capital to
adjusted total assets 20,018 9,100 10,918 6.6 3.0
Total risk-based capital to
risk-weighted assets 21,858 11,946 9,911 14.6 8.0
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>

At December 31, 1995 and 1994, the Bank was in compliance with all existing
applicable regulatory capital standards. Pursuant to a capital directive issued
by the OTS in 1991, the Bank offered for sale 934,375 Units ("Unit") at $5.50
per Unit with each Unit consisting of two shares of common stock of the Bank and
a warrant to purchase an additional share of common stock for $3.25 anytime
prior to 5:00 p.m., Eastern Time, on September 30, 1994. The Offering was
completed on October 31, 1992 resulting in the sale of 476,511 Units for
proceeds of $2.4 million, net of stock issuance costs of approximately $235,000.
Upon completion of the offering, the Bank issued an additional 953,022 shares of
common stock and 476,511 warrants. As a result, the Bank achieved compliance
with its fully phased-in regulatory capital requirements and as such, was
released from the capital directive on February 19, 1993. During 1994, 466,408
shares of common stock were issued pursuant to the exercise of warrants and
options. Of the original 476,511 warrants issued in connection with the Bank's
rights offering, 461,223 were exercised prior to their expiration on September
30, 1994 resulting in additional stockholders' equity of $1.5 million. The
remaining 15,288 warrants expired unexercised.

The Federal Deposit Insurance Corporation Improvement Act of 1991 ("FDICIA")
required each appropriate agency and the FDIC to, among other things, take
prompt corrective action to resolve the problems of insured depository
institutions that fall below a certain capital ratio. In September 1992, the
federal banking agencies (including the OTS) adopted substantially similar
regulations which were intended to implement the system of prompt corrective
action established by the FDICIA. These regulations became effective December
19, 1992. Under the regulations, a savings institution shall be deemed to be (i)
"well capitalized" if it has total risk-based capital of 10.0% or more, has a
Tier I risk-based capital ratio of 6.0% or more, has a Tier I leverage capital
ratio of 5.0% or more and is not subject to any order or final capital directive
to meet and maintain a specific capital level for any capital measure, (ii)
"adequately capitalized" if it has a total risk-based capital ratio of 8.0% or
more, a Tier I risk-based capital ratio of 4.0% or more and a Tier I leverage
capital ratio of 4.0% or more (3.0% under certain circumstances) and does not
meet the definition of "well capitalized," (iii) "under-capitalized" if it has a
total risk-based capital ratio that is less than 8.0%, a Tier I risk-based
capital ratio that is less than 4.0% or a Tier I leverage capital ratio that is
less than 4.0% (3.0% under certain circumstances), (iv) "significantly
undercapitalized" if it has a total risk-based capital ratio that is less than
6.0%, a Tier I risk-based capital ratio that is less than 3.0% or a Tier I
leverage capital ratio that is less than 3.0%, and (v) "critically
undercapitalized" if it has a ratio of tangible equity to total assets that is
equal to
<PAGE> 130
FLORIDA FIRST BANCORP. INC. AND SUBSIDIARY 29

or less than 2.0%. The FIDICIA and the regulations also specify circumstances
under which the OTS may reclassify a well capitalized savings institution as
adequately capitalized and may require an adequately capitalized savings
institution or an undercapitalized savings institution to comply with
supervisory actions as if it were in the next lower category (except that the
OTS may not reclassify a significantly undercapitalized savings institution as
critically undercapitalized). The OTS has indicated that it intends to lower the
leverage ratio discussed above to 3.0% from the current level of 4.0%. Based on
the above definitions, the Bank is considered "well capitalized."

16.

CONVERSION TO STOCK INSTITUTION

In order to grant a priority to eligible savings account holders in the event of
future liquidation, the Bank, at the time of its conversion to a stock
institution, established a liquidation account in an amount equal to its total
retained income of $7.5 million as of June 30, 1986, adjusted as described
below. In the event of future liquidation of the converted Bank (and only in
such event) an eligible account holder who has continued to maintain his deposit
account shall be entitled to receive a distribution from the liquidation account
to the extent it still exists. The total amount of the liquidation account will
be decreased as the balances of eligible account holders have been or will be
reduced on annual determination dates (December 31) which commenced on December
31, 1986. No dividends may be paid to the Company if such dividends would reduce
the regulatory capital of the Bank below the amount required for the liquidation
account. At December 31, 1995, the liquidation account totalled approximately
$800,000.

17.

STOCK COMPENSATION PROGRAM

The Bank adopted a stock compensation program ("Program") for key officers and
employees in connection with its stock conversion in 1986, which Program became
the Program of FFB pursuant to the terms of the Agreement. Under the Program,
the option exercise price of FFB stock shall equal at least the fair market
value of the shares covered by such option on the date the option was granted.
In accordance with the Bank's plan of conversion, 186,875 shares of Common
Stock were reserved for issuance under the Program. At December 31, 1995,
options covering 100 shares remained unallocated. Options granted under the
Program are exercisable as determined by the Option Committee of the Board of
Directors and may have a term of up to ten years. The schedule below
summarizes the activity of officer and employee stock options:

<TABLE>
<CAPTION>
Year Ended December 31,
------------------------------
1995 1994 1993
------------------------------

<S> <C> <C> <C>
Balance, beginning
of period 143,175 147,650 129,650
Granted 44,700 6,300 18,600
Exercised (65,475) (9,675) (100)
Terminated (10,875) (1,100) (500)
---------------------------------

Balance, end of
period 111,525 143,175 147,650
=================================
Options exercisable
at year end 83,725 116,175 121,250
=================================
Weighted Average price
at year end $ 3.60 $ 2.30 $ $2.16
=================================
</TABLE>

PARENT COMPANY ONLY FINANCIAL
INFORMATION

Condensed financial statements of FFB as of and for the year ended December 31,
1995, are presented below as if the Reorganization had occurred at the beginning
of the year. During the year ended December 31, 1995, FFB received a $500,000
dividend from the Bank in connection with the Reorganization of the Bank into
the holding company structure (See Note 1).

CONDENSED STATEMENT
OF FINANCIAL CONDITION

<TABLE>
<CAPTION>
At December 31,
1995
---------------
(in Thousands)
<S> <C>
ASSETS
Cash, deposited with subsidiary $ 448
-------
Investment in subsidiary 20,130
-------
TOTAL $20,578
=======

LIABILITIES AND STOCKHOLDERS EQUITY

Income tax payable $ 4
Stockholder's equity 20,574
-------
TOTAL $20,578
=======
</TABLE>

CONDENSED STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
Year Ended
December 31, 1995
-----------------
(in thousands)
<S> <C>
Revenues $ 22
Expenses 11
------
Income before earnings of subsidiary 11
Earnings of subsidiary 2,404
Provision for income taxes 4
------
NET INCOME $2,411
======
</TABLE>

<PAGE> 131
FLORIDA FIRST BANCORP. INC. AND SUBSIDIARY 30

<TABLE>
<CAPTION>
CONDENSED STATEMENT OF CASH FLOWS

Year Ended
December 31, 1995
-----------------
(in thousands)
<S> <C>
Cash flows from operating activities:
Interest and dividends $ 16
Cash paid to vendors (11)
-------
Net cash provided by operating
activities 5
-------

Cash flows from investing activities:

Return of capital from subsidiary 500
Purchase of equity securities (116)
Proceeds from sales of equity
securities 122
Net cash provided by investing -------
activities 506
-------
Cash flows from financing activities:
Net proceeds from exercise of
stock options 136
Dividends paid to stockholders (199)
-------
Net cash used in financing
activities (63)
Net increase in cash and cash -------
equivalents 448
Cash and cash equivalents at
beginning of period
Cash and cash equivalents at
-------
end of period $ 448
=======
Reconciliation of net income to
net cash provided by operating activities:
Net income $ 2,411
-------
Adjustments to reconcile net
income to net cash provided
by operating activities:
Equity earnings of subsidiary (2,404)
Increase in income tax payable 4
Gain on sale of equity securities (6)
-------
Total adjustments (2,406)
-------
Net cash provided by operating
activities $ 5
=======
</TABLE>

19.

OTHER MATTERS

The Bank's primary service area was struck by Hurricane Opal on October 4, 1995.
It is management's assessment that damage from the hurricane is not expected to
have a significant impact, if any, on the future operating results of the
Company.
<PAGE> 132
FLORIDA FIRST BANCORP INC. AND SUBSIDIARY 31

20.

SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

Summarized quarterly financial information for the years ended December 31, 1995
and 1994 is as follows (in thousands, except per share amounts):

1995

<TABLE>
<CAPTION> 1995
-----------------------------------------------------------
First Second Third Fourth
Quarter Quarter Quarter Quarter
-----------------------------------------------------------
<S> <C> <C> <C> <C>
Interest income $5,120 $ 5,328 $5,510 $ 5,631
Interest expense 2,973 3,227 3,362 3,336
-----------------------------------------------------------
Net interest income 2,147 2,101 2,148 2,295
Provision for losses on
interest-earning assets 10
-----------------------------------------------------------
Net interest income after
provision for losses 2,137 2,101 2,148 2,295
Other income 511 542 595 587
Operating expenses 1,701 1,840 1,768 1,721
Real estate owned (income)
expense - net 21 (2) 30 (20)
-----------------------------------------------------------
Income before income taxes 926 805 945 1,181
Provision for income taxes 315 302 358 471
-----------------------------------------------------------
Net income $ 611 $ 503 $ 587 $ 710
==================================================================================================================================

Earnings per share:
Primary and fully diluted
income per share:

Net income $ .18 $ .15 $ .17 $ .22
==================================================================================================================================
Dividends per share $ .06
==================================================================================================================================
<CAPTION>
1994
------------------------------------------------------------
First Second Third Fourth
Quarter Quarter Quarter Quarter
------------------------------------------------------------
<S> <C> <C> <C> <C>
Interest income $ 4,437 $ 4,517 $ 4,693 $ 4,897
Interest expense 2,615 2,613 2,728 2,837
------------------------------------------------------------
Net interest income 1,822 1,904 1,965 2,060
Provision for losses on
Interest-earning assets 103 185 120
------------------------------------------------------------
Net interest income after
provision for losses 1,822 1,801 1,780 1,940
Other income 304 264 293 417
Operating expenses 1,520 1,551 1,550 1,705
Real estate owned expenses - net 80 38 27 124
------------------------------------------------------------
Income before income taxes and
extraordinary item 526 476 496 528
Income tax benefit (608)
------------------------------------------------------------
Income before extraordinary item 526 476 496 1,136
Extraordinary expense -
prepayment penalties 60 10 4
------------------------------------------------------------
Net income $ 466 $ 476 $ 486 $ 1,132
==================================================================================================================================
Earnings per share:
Primary and fully diluted
income per share:
Income before extraordinary item $ .17 $ .15 $ .17 $ .37
Extraordinary item (.02) (.01)
-----------------------------------------------------------
Net income $ .15 $ .15 $ .16 $ .37
==================================================================================================================================
</TABLE>

<PAGE> 133
FLORIDA FIRST BANCORP. INC. AND SUBSIDIARY 32

[PHOTO]

OFFICERS OF FLORIDA FIRST BANK (Left to Right): James W. Parker, Wanda C.
Greggo, Lynda S. Saye, Scott D. Ratliff, Lesley L. Hall, Irene J. Wynn, Cathy
T. Monroe, Jenny L. Shiver, Tracy L. Allen, Douglas G. Harvey, Brenda M. Nolte,
Joyce R. Garrett, William C. Harlow.

Building renovations and new corporate logo, as seen at the Lynn Haven Office,
reflect Florida FirstBank's repositioning as a progressive, full-service
community bank.

[PHOTO]

HERNANDO AND CITRUS COUNTY BRANCH OFFICERS (Left to Right): Delores A. Hammond,
Vera E. Frederick.

[PHOTO]

BAY COUNTY
BRANCH
OFFICERS

(Left to Right): Sheila T. Parker, Virginia H. Cotton, C. David Powell, Vera D.
Lansing, Wyvon C. Sexton, Teresa A. Hoehn.
<PAGE> 134
FLORIDA FIRST BANCORP. INC. AND SUBSIDIARY 33

BOARD OF DIRECTORS

<TABLE>
<S> <C> <C>
William H. Carr C. L. Jinks, Jr. Andrew W. Stein
President Owner President and Chief Executive Officer
Marsh, Carr, Galloway, C. L. Jinks Company Florida First Bancorp, Inc. and
Colley, Averett, P. C. Florida FirstBank

G. Bayne Collins James E. McIntyre, Chairman Audit Committee Joseph K. Tannehill
President President, West Florida Gas Company Owner
Collins & Associates, Inc. Tannehill International Industries

Tommy M. Cooley, Chairman John Robert Middlemas, Vice Chairman
President, Credit Bureau of Partner
Ft. Walton Beach Black Insurance Agency of Panama City
Owner, Cooley Management Co.
</TABLE>

DIRECTORS EMERITI OF FLORIDA FIRSTBANK

Girard L. Clemons, Jr.
Owner
The Clemons Company

H. Kent Hall
Owner
Imperial Furniture Company

A. F. Myers
Retired, Former President
Kendrick-Myers Oldsmobile

PRINCIPAL OFFICERS

Andrew W. Stein
President and Chief Executive Officer
Florida First Bancorp, Inc. and
Florida FirstBank

Steven A. Rudloff
Vice President Human Resources
Florida FirstBank

Barbara Larrabee Haag, C.P.A.
Senior Vice President and Treasurer
Florida First Bancorp, Inc. and
Florida FirstBank

S. Derek Tolson
Vice President Commercial Lending
Florida FirstBank

Gary L. Smith
Senior Vice President Retail Banking
and Secretary
Florida First Bancorp, Inc. and
Florida FirstBank

OFFICERS OF FLORIDA FIRSTBANK

Virginia H. Cotton
Assistant Vice President

Vera E. Frederick
Assistant Vice President

Wanda C. Greggo
Assistant Vice President
and Internal Auditor

Lesley L. Hall
Assistant Vice President

William C. Harlow
Assistant Vice President

Douglas G. Harvey
Assistant Vice President

Vera D. Lansing
Assistant Vice President

Brenda M. Nolte
Assistant Vice President

James W. Parker
Assistant Vice President

Irene J. Wynn
Assistant Vice President

Delores A. Hammond
Branch Officer

Teresa A. Hoehn
Branch Officer

Sheila T. Parker
Branch Officer

C. David Powell
Branch Officer

Wyvon C. Sexton
Branch Officer

Joyce R. Garrett
Assistant Secretary

Cathy T. Monroe
Assistant Secretary

Jenny L. Shiver
Assistant Secretary

Tracy L. Allen
Assistant Treasurer

Scott D. Ratliff
Assistant Treasurer

Lynda S. Saye
Assistant Treasurer
<PAGE> 135
FLORIDA FIRST BANCORP. INC. AND SUBSIDIARY 34

CORPORATE INFORMATION

<TABLE>
<S> <C> <C> <C>
Transfer Agent and Registrar Auditors Corporate Counsel Special Counsel
The Bank of New York Deloitte & Touche LLP Bryant & Higby, Chartered Elias, Matz, Tiernan & Herrick L.L.P.
Receive and Deliver Dept-1 1W Suite 1200 833 Harrison Avenue 734 15th Street NW
P.O. Box 11002 201 E. Kennedy Blvd. Panama City, Fl 32401 Washington, DC 20005
Church Street Station Tampa, Florida 33602
New York, New York 10286
Inquiries: 1-800-524-4458

</TABLE>

ANNUAL MEETING

The annual stockholders' meeting will be held April 25, 1996, at 4:30 p.m.,
Central Time, at Florida FirstBank's Main Office located at 144 Harrison
Avenue, Panama City, Florida.

FORM 10-KSB

A copy of the Company's Form 10-KSB, as filed with the Securities and Exchange
Commission, is available to all stockholders of record by writing: Barbara
Larrabee Haag, Senior Vice President and Treasurer, Florida First Bancorp, Inc.,
P.O. Box 670, Panama City, FL 32402-0670.

SIGNIFICANT STOCK DATA

The Company's common stock is traded on the over-the-counter market and is
quoted on the Nasdaq National Market System under the symbol "FFPC". See "Market
Prices and Related Stockholder Matters" in Appendix A, Management's Discussion
and Analysis of Financial Condition and Results of Operations included in
Florida First Bancorp, Inc.'s Annual Report for the year ended December 31, 1995
for further information. The high and low trades for such stock during 1995
were: Low, $5.00 High, $8.00

BRANCH LOCATIONS OF FLORIDA FIRSTBANK

Main Office
132/144 Harrison Avenue
Panama City, Florida 32401
904/872-7000

Callaway/Parker Office
103 South Tyndall Parkway
Panama City, Florida 32404
904/872-7060

Drive-In
918 Harrison Avenue
Panama City, Florida 32401
904/872-7017

Eastside Office
2621 East Business Highway 98
Panama City, Florida 32401
904/872-7020

Lynn Haven Office
630 Ohio Avenue
Lynn Haven, Florida 32444
904/265-3603

23rd Street Office
2118 West 23rd Street
Panama City, Florida 32405
904/872-7030

Thomas Drive Office
2209 Thomas Drive
Panama City Beach, Florida 32407
904/234-1044

Beverly Hills Office
3527 North Lecanto Highway
Beverly Hills, Florida 34465
352/746-3323

Spring Hill Office
13080 Cortez Boulevard
Brooksville, Florida 34613
352/596-9401

Seven Hills Office
11198 Spring Hill Drive
Spring Hill, Florida 34609
352/688-2015
<PAGE> 136

FLORIDA FIRST BANCORP, INC.

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

APPENDIX A

DECEMBER 31, 1995
<PAGE> 137
FLORIDA FIRST BANCORP. INC. AND SUBSIDIARY 1

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

GENERAL

On May 1, 1995, Florida FirstBank (the "Bank") completed its reorganization into
the holding company form of organization pursuant to which Florida First
Bancorp, Inc, ("FFB" or the "Company") became the holding company for the Bank.
As a result, the Bank became the wholly owned subsidiary of the Company and the
stockholders of the Bank became, on a one-for-one basis, stockholders of FFB. As
the Company presently does not own any operating subsidiaries other than the
Bank, the discussion below with respect to the results of operations and
financial condition relate primarily to the Bank, and the financial data for the
period prior to the reorganization reflects financial data of the Bank. For
purposes of the discussion, references to the Company will include the Bank.

FFB or the Company recorded consolidated net income for the years ended December
31, 1995, 1994 and 1993 of $2.4 million, $2.6 million and $2.5 million,
respectively. The decrease in net income in 1995 resulted primarily from the
increase in the provision for income taxes combined with reduced loan
correspondent fees and higher operating expenses. In 1994, the Company's results
were significantly affected by the adoption of Statement of Financial Accounting
Standard ("SFAS") No. 109, "Accounting for Income Taxes" which resulted in the
recognition of a $608,000 tax benefit. The Company's net income before taxes in
1995 was $3.8 million as compared to $2.0 million in 1994. The Company's
operations were favorably affected by increased net interest income, a reduction
in the loan loss provision, increased service charge income as well as gains on
sales of real estate owned ("REO") and loans originated for sale. The Company's
net interest margin improved due to both the Company's increased net interest
income not withstanding the decline in market rates of interest during much of
1995, as well as an increase in net interest-earning assets. Although interest
rates declined during 1995, net interest income improved due to the
effectiveness of the Company's asset/liability management.

The increase in net income in 1994 when compared to 1993 reflects the beneficial
effect of the reduction in the amount of the loan loss provision and REO
expenses (including writedowns) as well as an improvement in the Company's net
interest income. The Company's interest rate spread improved primarily due to
the general decline of market rates of interest during 1993 which resulted in
the Company's cost of funds declining more rapidly than its yield on
interest-earning assets. This positive effect continued through 1994 even though
market rates of interest actually increased during this period. The adverse
effects of rising rates will generally be reflected more quickly since
liabilities reprice more often and for shorter terms than assets. The Company's
deposit pricing strategies during 1994 prevented this occurrence. These positive
results were partially offset by decreased non-interest income during fiscal
1994 which resulted primarily from decreased loan correspondent fees, losses
incurred on sales of loans originated for sale and the non-recurrence of gains
on sales of mortgage-backed securities and recovery income experienced during
the 1993 periods. In addition, FFB recorded a tax benefit of $608,000 for 1994
to reflect the recognition of a net deferred tax asset in accordance with the
provisions of SFAS No. 109.

CHANGES IN FINANCIAL CONDITION

Total assets at December 31, 1995 and 1994 were $303.3 million and $278.0
million, respectively. During 1995, cash and cash equivalents increased by $1.7
million, net loans receivable (including loans held for sale) increased by $4.6
million and mortgage-backed and other securities (including securities available
for sale) increased by $21.4 million. The increase in total assets was partially
offset by a $2.9 million decrease in REO as a result of the sale of such
properties and the reclassification of one in-substance foreclosure as a
performing loan. Cash increased due to increased deposits, a portion of which
was used to purchase securities for yield enhancement pursuant to the Company's
asset/liability management policy. During the year ended December 31, 1995, the
Company purchased $49.9 million in mortgage-backed and other securities and sold
$10.4 million in mortgage-backed and other securities available for sale. Loan
demand during 1995 did not require the use of all available funds, therefore,
the Company purchased mortgage-related securities to increase its interest
income. Net loans receivable increased due to commercial and consumer loan
originations which the Company emphasized during the period. Net deposits
increased by $24.4 million partially due to deposits attributable to a new
branch office which opened in January 1995 (which had $10.3 million in deposits
at year end) as well as to the receipt of $3.0 million in public deposits from
the State of Florida. Net deposits also increased as a result of promotions to
increase core deposits.
<PAGE> 138
FLORIDA FIRST BANCORP. INC. AND SUBSIDIARY 2

Stockholders' equity at December 31, 1995 was $20.6 million or $6.13 per share
($6.05 on a fully diluted basis) compared to $17.6 million or $5.33 per share
($5.21 on a fully diluted basis) at December 31, 1994. The increase in
stockholders' equity reflected net income and to a lesser extent, the issuance
of common stock pursuant to options exercised during the year ended December 31,
1995. At December 31, 1995, stockholders' equity also included unrealized gains,
net of income taxes, on securities available for sale totalling $112,000
compared to unrealized losses of $547,000 at December 31, 1994. Generally
decreasing market rates of interest have resulted in an increase in the value of
FFB's securities available for sale. During the third quarter of 1995, FFB
established a regular dividend policy and paid a quarterly dividend which
reduced stockholders' equity by $199,000. On December 19, 1995, FFB declared a
quarterly dividend of $.06 per share payable on January 16, 1996 to
stockholders' of record as of January 2, 1996.

During 1994, 466,408 shares of common stock were issued pursuant to the exercise
of warrants as well as options granted under the Bank's key employee stock
compensation program. Of the original 476,511 warrants issued in 1992, 461,223
were exercised prior to their expiration on September 30, 1994 resulting in
additional equity of $1.5 million. See Note 15 of Notes to Consolidated
Financial Statements in the Annual Report.

NON-PERFORMING ASSETS

The composition of non-performing assets (including non-accrual loans, REO, and
troubled debt restructurings ("TDRs") at the dates presented was as follows:

<TABLE>
<CAPTION>
Non-Performing Assets
at December 31,
-----------------------------
1995 1994 1993
-----------------------------
(Dollars in Thousands)
<S> <C> <C> <C>
Nature of Collateral:
Residential real estate $ 190 $ 572 $ 490
Commercial real estate 1,371 3,401 3,458
Land 264 1,523 2,839
Consumer and other 137 66 67
-------------------------------
1,962 5,562 6,854
Specific valuation
allowances (596) (200) (200)
-------------------------------
1,366 5,362 6,654

Loans considered TDRs 1,371 566 495
Loans on properties
under contract to sell 41 44 418
-------------------------------

Total - net $ 2,778 $ 5,972 $ 7,567
===============================
Percentage of
total assets 0.9% 2.2% 2.8%
===============================
</TABLE>

As a general policy, all loans delinquent 90 days or more are placed on
non-accrual status. In addition, management reviews other loans which exhibit
indications of potential difficulty to determine which, if any, are impaired as
to collectibility and, therefore, should be placed on non-accrual status prior
to becoming 90 days delinquent. The Company did not have any loans at December
31, 1995 which had been placed on nonaccrual status prior to becoming 90 days
delinquent. During the years ended December 31, 1995, 1994 and 1993, the
difference between interest income which would have been recorded on all
non-performing loans had such assets been performing throughout the periods and
interest income actually recorded was approximately $172,000, $160,000 and
$254,000, respectively. See "Business - Non-performing Assets" in FFB's Annual
Report on Form 10-KSB ("Form 10-KSB") for the year ended December 31, 1995 for
additional information with respect to non-performing assets.
<PAGE> 139
FLORIDA FIRST BANCORP. INC. AND SUBSIDIARY 3

Loans considered TDRs and loans on properties under contract to sell are
actually earning assets but are included in the calculation of non-performing
assets because such loans bear terms which may not comply with the Company's
standard underwriting criteria and relate to loans or properties that were
troubled or nonperforming (see Note 6 of Notes to Consolidated Financial
Statements included in the Annual Report). With respect to REO properties, the
Company recorded sales for the year ended December 31, 1995 of $2.8 million
resulting in net gains of $183,000. The Company also recognized $82,000 in
deferred gains on the sales of two REO properties since the loans have been
performing and have appropriate loan-to-value ratios. REO expenses (net of
related income) associated with managing and maintaining REO properties resulted
in net expenses of $29,000, $76,000 and $91,000 for the years ended 1995, 1994
and 1993, respectively. The reduction in REO expenses in 1995 compared to 1994
and 1993 was attributable to the decrease in the number of REO properties owned.

The Company has decreased the amount of its net nonperforming assets by $4.8
million or 63.3% since December 31, 1993. The decrease in the level of
nonperforming assets reflects the sale of $5.4 million of REO properties during
1994 and 1995. The increase in TDRs from December 31, 1993 to December 31, 1995
primarily reflects the reclassification of one loan totalling $771,000 from a
loan deemed to be in-substance foreclosure to a TDR, which change also
contributed to the reduction in the amount of non-performing commercial real
estate loans. The increase in the specific valuation allowance primarily
represents a transfer of $350,000 from general reserves to cover potential
losses to a marina from Hurricane Opal. See Notes 6 and 7 to Consolidated
Financial Statements included in FFB's Annual Report for further details of
loans on non-accrual and REO.

RESULTS OF OPERATIONS

As stated previously, FFB's consolidated results of operations are primarily
those of the Bank. The largest components of the Company's total income and
total expense are interest items. As a result, the Company's earnings are
largely dependent upon its net interest income, which is determined principally
by the Company's interest rate spread (i.e., the difference between the yields
earned on its interest-earning assets, primarily loans and investments, and the
rates paid on its interest-bearing liabilities, primarily deposits and
borrowings) and the relative amounts of interest-earning assets and
interest-bearing liabilities. The interest rate spread is affected by economic
factors that generally affect interest rates, the level of loan demand, other
investment opportunities and deposit flows. When interest-earning assets equal
or exceed interest-bearing liabilities, any positive interest rate spread will
generate net interest income. However, to the extent interest-bearing
liabilities exceed interest-earning assets, the interest rate spread must be
increased in order to offset the excess of interest-bearing liabilities in
order to produce net interest income. The measurement of net interest income
divided by average interest-earning assets, called the net interest margin,
indicates the relationship between interest-earning assets and interest-bearing
liabilities. If interest-earning assets exceed interest-bearing liabilities,
the net interest margin will be greater than the interest rate spread. If the
opposite situation exists, the net interest margin will be less than the
interest rate spread.

The Company's net income also is affected by the level of its other types of
income and expense which include loan correspondent and servicing fees, service
charges, gains and losses on the sale of loans originated for sale as well as
provisions for estimated losses on interest-earning assets, writedowns on REO
and operating expenses. The Company's operating expenses principally consist of
employee compensation, occupancy expense, federal deposit insurance premiums
and other general and administrative expenses. The Company's results of
operations are also significantly affected by general economic and competitive
conditions, particularly changes in market interest rates, government policies
and actions of regulatory authorities.

NOT INTEREST INCOME. The Company earned net interest income before provision for
loan losses of $8.7 million, $7.8 million and $7.2 million in fiscal 1995, 1994
and 1993, respectively, an increase of 20.7% between 1993 and 1995. Declining
general market rates of interest during 1993 had a positive effect on the
Company's net interest income since its interest-bearing liabilities repriced
more often than its interest-earning assets. General market rates of interest
increased during 1994 and the first quarter of 1995, but such increase did not
adversely affect net interest income for either year because the Company was
able to favorably restructure a portion of its borrowings and to delay
increasing interest rates on deposit products. In addition, a majority of the
Company's mortgage-backed and other securities have variable rates that adjust
monthly. Throughout the remainder of 1995, general market interest rates
declined which, as in 1993, had a positive effect on the net interest margin.
The rise in interest rates during 1994 did result, however, in a modest decline
in the interest spread when comparing 1994 to 1993. The

<PAGE> 140
FLORIDA FIRST BANCORP. INC. AND SUBSIDIARY 4

Company's interest-rate spread decreased from 3.01 % during 1993 to 2.97% during
1994 and also decreased to 2.83% during 1995.

The Company's net interest income is determined by both the interest rate spread
and the relative amounts of interest-earning assets and interest-bearing
liabilities. Average interest-earning assets increased by $26.4 million when
comparing 1995 to 1994, while average interest-bearing liabilities increased by
only $15.3 million during the same period. The Company's net interest margin
improved from 2.92% to 3.01% to 3.06% during the years ended December 31, 1993,
1994 and 1995, respectively, due to both increased net interest income as well
as increases in interest-earning assets which exceeded the increases in
interest-bearing liabilities.

The following table sets forth for the periods indicated, information regarding
(1) the average balances of interest-earning assets and interest-bearing
liabilities, (2) the total dollar amount of interest income and interest
expense, and (3) the resultant average yields and costs. Average balances are
determined on a monthly basis unless otherwise noted. The yields and costs at
December 31, 1995 are also included.

<TABLE>
<CAPTION>
AT Year Ended December 31,
----------------------------------------------------------------------
DECEMBER 31,
1995 1995 1994
------------ ---------------------------------------------------------------------
Average Average
Yield/ Average Yield/ Average Yield
Rate Balance Interest Rate Balance Interest Rate
----------- ---------------------------------------------------------------------

(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
Interest-earning assets:
Loans 8.61%(1) $174,489 $ 14,872 8.52% $168,458 $ 13,897 8.25%
Mortgage-backed
securities(2,3) 6.77 34,852 2,150 6.17 26,452 1,541 5.83
Securities(2,3,4) 6.66 57,454 3,475 6.05 42,451 2,145 5.05
Other interest-
earning assets(2,5) 5.81 17,257 1,092 6.33 20,203 961 4.76
-------------------- --------------------

Total interest-
earning assets(4) 7.83(1) 284,052 21,589 7.60 257,564 18,544 7.20
---- ------------------------------- -------------------------------
Interest-bearing liabilities:
Deposits 4.60 240,192 11,076 4.61 215,571 8,217 3.81
FHLB advances(2,6) 6.06 30,230 1,822 6.03 39,552 2,576 6.51
------------------- -------------------

Total interest-bearing
liabilities(6) 4.76 270,422 12,898 4.77 255,123 10,793 4.23
---- ------------------------------- -------------------------------

Net earning (costing)
balance and interest
rate spread 3.07% $ 13,630 2.83% $ 2,441 2.97%
==== ======== ================ ====

Average interest-earning
assets, net interest income
and net interest margin on
average interest-earning
assets(7) $284,052 $ 8,691 3.06% $257,564 $ 7,751 3.01%
=============================================================================
</TABLE>

<TABLE>
<CAPTION>
Year Ended December 31,
-------------------------------------
1993
-------------------------------------
Average
Average Yield/
Balance Interest Rate
-------------------------------------
<S> <C> <C> <C>
Interest-earning assets:
Loans $169,083 $ 14,760 8.73%
Mortgage-backed
securities(2,3) 25,789 1,468 5.70
Securities(2,3,4) 33,985 1,524 4.48
Other interest-
earning assets(2,5) 17,686 635 3.59
-------------------

Total interest-
earning assets (4) 246,543 18,387 7.46
-------------------------------

Interest-bearing liabilities:
Deposits 210,175 8,198 3.90
FHLB advances(2,6) 40,993 2,988 7.29
-------------------

Total interest-bearing
liabilities 251,168 11,186 4.45
-------------------------------

Net earning (costing)
balance and interest
rate spread $ (4.625) 3.01%
======== ====
Average interest-earning
assets, net interest income
and net interest margin on
average interest-earning
assets(7) $246,543 $ 7,201 2.92%
===============================
</TABLE>

(1)Yield calculations at December 31, 1995 are based on note rates and do not
consider the non-accrual of interest for loans that are non-performing.
Management's estimate of the effect of loans on non-accrual would indicate no
material change in the yields stated.

(2)Average balances were calculated on a daily basis.

(3)Mortgage-backed and other securities for the year ended December 31, 1995,
include those available for sale.

(4)Includes cost of hedging activities. Without hedging activities, the average
yield on other securities would have been 6.08% and the average yield on
interest-earning assets would have been 7.61% for the year ended December 31,
1995. No hedging of securities was in effect during 1994 and 1993.

(5)Includes interest-bearing deposits and stock in the Federal Home Loan Bank
("FHLB") of Atlanta.

(6)Includes the cost of hedging activities. Without hedging activities, the
average cost of borrowings would have been 5.91% and 7.23% and the average cost
of total interest-bearing liabilities would have been 4.76% and 4.44% for the
years ended December 31, 1995 and 1993, respectively. There were no such
hedging costs during 1994.

(7)Net interest income divided by average interest-earning assets (net interest
margin).
<PAGE> 141
FLORIDA FIRST BANCORP. INC. AND SUBSIDIARY 5

The following table presents certain information regarding changes in interest
income and interest expense of the Company for the periods indicated. For each
category of interest-earning asset and interest-bearing liability, information
is provided with respect to changes attributable to (1) changes in volume
(change in volume multiplied by old rate) and (2) changes in rate (change in
rate multiplied BY old volume). The net change attributable to the combined
impact of volume and rate has been allocated proportionated to the change due to
volume and the change due to rate.

<TABLE>
<CAPTION>
FISCAL 1995 COMPARED Fiscal 1994 Compared
TO FISCAL 1994 to Fiscal 1993
----------------------------------------------------------------------

Increase (decrease) due to Increase (decrease) due to
----------------------------------------------------------------------

Volume Rate Total Volume Rate Total
----------------------------------------------------------------------
(In Thousands)

<S> <C> <C> <C> <C> <C> <C>
Interest-earning assets:
Loans $ 509 466 $ 975 $ (54) $ (809) $ (863)
Mortgage-backed securities 515 94 609 38 35 73
Other securities 852 478 1,330 411 210 621
Other interest-earning assets (104) 235 131 99 227 326
--------------------------------------------------------------

Total interest-earning assets 1,772 1,273 3,045 494 (337) 157
--------------------------------------------------------------

Interest-bearing liabilities:
Deposits 1,007 1,852 2,859 188 169) 19
FHLB advances (574) (180) (754) (102) (310) (412)
--------------------------------------------------------------

Total interest-bearing liabilities 433 1,672 2,105 86 (479) (393)
--------------------------------------------------------------

Net change in interest income $ 1,339 (399) $ 940 $ 408 $ 142 $ 550
==============================================================
</TABLE>

INTEREST ON LOANS. Interest on loans increased $975,000 or 7.0% from 1994 to
1995 primarily due to an increase in the average portfolio balance from $168.5
million for the year ended December 31, 1994, to $174.5 million for the same
period in 1995. The increase in the average balance of loans outstanding when
comparing 1995 to 1994 was primarily due to an increase in the origination of
commercial business and consumer loans resulting in an increase in these
portfolios of approximately $6.0 million. Also contributing to the increase in
loan interest income was an increase in the average portfolio yield from 8.25%
to 8.52% for the years ended December 31, 1994 and 1995, respectively, which
increase reflected primarily the effects of generally rising market rates of
interest during 1994 and early 1995 as well as, to a lesser extent, the
origination of commercial business and consumer loans which generally carry a
higher rate of interest than residential loans.

From 1993 to 1994, interest on loans decreased by $863,000 or 5.8% primarily due
to a decrease in the average portfolio yield from 8.73% to 8.25%, which decrease
was caused by generally decreasing market rates of interest during 1993.
However, interest adjustments generally do not occur more frequently than
annually on most of the Company's adjustable-rate mortgages ("ARMs"). Thus,
changes in the weighted average yield on the loan portfolio lags substantially
behind general market interest rate trends thereby mitigating the effects of
declining market rates on the yield of the Company's loan portfolio. Also
contributing to the decline in interest income on loans was a slight decrease in
the average balance of loans outstanding to $168.5 million for 1994 from $169.1
million for 1993. This decrease reflected the effects of loans sold both in the
secondary market as well as under various correspondent lending arrangements. As
a consequence, normal amortization of loans held for portfolio reduced the
average balance of loans outstanding. As interest rates began to rise during the
first half of 1994, the level of refinancings declined substantially, also
contributing to the decline in the average balance outstanding.
<PAGE> 142
FLORIDA FIRST BANCORP. INC. AND SUBSIDIARY 6

INTEREST ON MORTGAGE-BACKED SECURITIES. Interest on mortgage-backed securities,
including those available for sale, increased from 1994 to 1995 by $609,000 or
39.5% due to higher average portfolio balances of $34.9 million for the year
ended December 31, 1995 compared to $26.5 million for the year ended December
31, 1994. The average portfolio yield on mortgage-backed securities also
increased to 6.17% from 5.83% when comparing the year ended December 31, 1995 to
the same period in 1994. The increases in both the average portfolio balances
and portfolio yields were primarily due to the purchase of fixed-rate
mortgage-backed securities with higher yields. See Note 5 of Notes to
Consolidated Financial Statements included in FFB's Annual Report for changes in
the available for sale portfolio.

From 1993 to 1994, interest on mortgage-backed securities increased by $72,000
or 4.9% due to increases in both the average portfolio balance outstanding and
the yield earned thereon. For 1994, the average portfolio balance increased by
$663,000 to $26.5 million and earned an average of 5.83% compared to 5.70% in
1993. The increase in both the average portfolio balance and portfolio yield was
primarily due to the purchase of $11.7 million of mortgage-backed securities
with a weighted average yield of approximately 6.70%. Also contributing to the
increase in yield was the upward repricing of variable-rate securities many of
which adjust monthly and therefore more closely reflect market interest rates
which were rising during much of 1994.

INTEREST AND DIVIDENDS ON OTHER SECURITIES. Interest and dividends on other
securities increased by $1.3 million or 62.1 % from 1994 to 1995 primarily due
to an increase in the average portfolio balance from $42.5 million for the year
ended December 31, 1994 to $57.5 million for the same period in 1995, which
increase resulted from purchases of securities. Increased deposits were used to
purchase securities (collateralzed by mortgage loans) with increased
interest-rate sensitivity. Also contributing to the increase in interest and
dividends on other securities was an increase in the average portfolio yield
from 5.05% for the year ended December 31, 1994 to 6.05% for the same period in
1995. By the end of the first quarter of 1994, rates had begun to rise and
continued to rise throughout a portion of 1995. A substantial portion of the
Company's portfolio of other securities consist of adjustable-rate securities
whose yields have adjusted upward as general market interest rates increased.
See Note 5 of Notes to Consolidated Financial Statements included in FFB's
Annual Report for changes in the available for sale portfolio.

In January 1995, the Company purchased a five-year $5.0 million notional amount
interest rate cap Providing protection if the three-year Constant Maturity
Treasury Index ("CMT") exceeds 9.00%. The Company purchased the cap to hedge a
specific security because it is an adjustable-rate security with a lifetime cap
of 9.00%. The amortization of the cap premium reduced interest earned on
securities by $20,000 for the year ended December 31, 1995. See Note 11 of
Notes to Consolidated Financial Statements included in FFB's Annual Report for
further details.

From 1993 to 1994, interest and dividends on other securities increased by
$621,000 or 40.7% primarily due to an increase in the average balance from $34.0
million during 1993 to $42.5 million during 1994. Proceeds from loan sales,
repayments of loans and increased deposits were used to purchase U.S. government
and agency securities as well as adjustable-rate securities collateralized by
mortgage loans. Also contributing to the increase in interest and dividends on
other securities was an increase in the average portfolio yield from 4.48% to
5.05%. By the end of the first quarter of 1994, market rates had begun to rise
and continued to rise throughout the year. Because of the high volume of
adjustable-rate securities held by the Company, yields adjusted upward as
general market interest rates increased.

OTHER INTEREST INCOME. Other interest income, consisting of interest on insured
certificates of deposit and FHLB of Atlanta overnight deposits as well as
dividends on FHLB stock, increased from 1994 to 1995 by $131,000 or 13.6% from
$961,000 for the year ended December 31, 1994 to $1.1 million for the same
period in 1995. The increase was primarily attributable to an increase in the
average yield earned from 4.76% for the year ended December 31, 1994 to 6.33%
for the same period in 1995. The majority of the assets held during these
periods were deposits at the FHLB of Atlanta. Partially offsetting the increase
in other interest income when comparing the respective periods was a decrease in
the average balance outstanding from $20.2 million for the year ended December
31, 1994 to $17.3 million for the same period in 1995. Such decrease in
interest-bearing deposits reflected the investment of available funds in
mortgage-backed and other securities rather than overnight funds.

From 1993 to 1994, other interest income increased by $326,000 or 51.3% from
$635,000 to $961,000. The increase was primarily attributable to an increase in
the average yield earned from 3.59% during 1993 to 4.76% during 1994 partially
due to investments in insured certificates of deposit. In addition, the majority
of the
<PAGE> 143
FLORIDA FIRST BANCORP. INC. AND SUBSIDIARY 7

assets held during the periods were deposits at the FHLB of Atlanta which earn
interest at a rate that fluctuates daily. This causes the yield to closely
reflect general market interest rates which increased during 1994. Also
contributing to the increase when comparing 1993 to 1994 was an increase in the
average balance outstanding from $17.7 million to $20.2 million due to increases
in interest-bearing deposits resulting from the receipt of proceeds from loan
sales, increased deposits and principal repayments on securities and loans.

INTEREST EXPENSE ON DEPOSITS. Deposit interest expense increased from 1994 to
1995 by $2.9 million or 34.8% as a result of an increase in the average balance
of deposits from $215.6 million for the year ended December 31, 1994 to $240.2
million during 1995. Also contributing to the increase in interest expense on
deposits was an increase in the average cost of deposits from 3.81% for the
year ended December 31, 1994 to 4.61% during 1995. This increase was reflective
of the increase in general market interest rates which occurred during 1994 and
part of 1995. The average balance of deposits increased as a result of marketing
promotions conducted by the Company to encourage investment in core deposits
such as NOW and Money Market accounts and in certificates of deposit with a term
of two years or less. In conjunction with its emphasis on commercial business
loans, the Company also received an additional $3.4 million in non-interest
bearing commercial checking accounts. In addition, during January 1995, the
Company's ninth full-service branch was opened, and as of December 31, 1995, the
new branch had received over $10.3 million in deposits. The Company also
received $3.0 million in a certificate of deposit from the State of Florida
during the first quarter of 1995. The Company currently participates in the
State of Florida's public deposits program which allows the Company to accept
deposits from municipalities, schools and other state agencies in amounts that
would not be covered by federal deposit insurance. State law requires that the
Company pledge securities to cover the uninsured portion of the deposits of the
state. Also contributing to the increase in the average balance of deposits was
the retention by the Company of the majority of the interest recredits totalling
$11.2 million.

From 1993 to 1994, interest expense on deposits increased slightly by $19,000
primarily due to an increase in the average balance of deposits from $210.2
million to $215.6 million. The average balance of deposits increased as a result
of marketing promotions conducted by the Company to encourage investment in core
deposits such as NOW accounts and in certificates of deposit with a term of less
than one year. The increase in deposit interest expense caused by the increase
in the average balance was offset partially by the decrease in the average cost
of deposits from 3.90% to 3.81%. Interest rate increases experienced during 1994
had only a marginal effect on the average cost of deposits during the period.

INTEREST EXPENSE ON BORROWINGS. Interest expense on borrowings decreased from
1994 to 1995 by $754,000 or 29.3% due to the decline in both the weighted
average cost and the average balance outstanding. The weighted average interest
rate on borrowings decreased from 6.51% for the year ended December 31, 1994 to
6.03% for the year ended December 31, 1995. Also contributing to the decrease in
interest expense was the decrease in average borrowings from $39.6 million for
the year ended December 31, 1994, to $30.2 million for the same period in 1995.
The average balance outstanding decreased primarily due to repayments as the
Company continued to use deposits instead of higher cost borrowings to fund its
obligations. During 1994, the Company prepaid certain advances which allowed it
to borrow new funds at significantly lower interest rates for longer terms, thus
significantly reducing the average cost of borrowings when comparing fiscal 1995
to the same period in 1994.

From 1993 to 1994, interest on borrowings declined by 13.8% or $412,000 due
primarily to reductions in the average rate paid and to a lesser extent, the
average balance outstanding. FHLB advance repayments during the year resulted in
a reduction in the average balance from $41.0 million during 1993 to $39.6
million during 1994. In addition, the Company prepaid FHLB advances totalling
$9.0 million which required the payment of prepayment penalties amounting to
$70,000. This allowed the Company to borrow new funds at significantly lower
interest rates for longer terms as well as to utilize lower cost deposit
balances to fund its asset growth. Consequently, the average rate paid on
borrowings decreased from 7.29% during 1993 to 6.51% during 1994.

In December 1994, the Company purchased a five-year $5.0 million notional amount
interest rate cap providing protection if the three-month London Interbank
Offering Rate ("LIBOR") exceeds 8.0%. This cap was purchased to lengthen the
Company's liabilities and hedge its current interest margin. The amortization of
the cap premium added approximately $37,000 to the Company's cost of funds
during the year. No such expense was incurred during 1994. See Note 11 of Notes
to Consolidated Financial Statements included in FFB's Annual Report for further
details.
<PAGE> 144
FLORIDA FIRST BANCORP. INC. AND SUBSIDIARY 8

In prior years, the Company also engaged in interest rate swaps as well as
Interest rate caps as hedges of short-term deposit liabilities that increased
borrowing costs during the year ended December 31, 1993 by $25,000. During the
first quarter of 1993, the remaining balance of prepaid cap fees totalling
$85,000 was expensed since the outstanding interest rate cap contracts were
considered ineffective. These hedging activities were originally intended to
hedge against rising interest rates. Since general market rates decreased
throughout 1993, the swaps and caps became ineffective and increased interest
expense as the Company was (i) required to pay interest at a higher rate than it
was receiving from the other parties to the swap agreements; and (ii) had to
continue to amortize the prepaid cap fees.

PROVISION FOR LOSSES ON INTEREST-EARNING ASSETS. During 1995, $10,000 was
provided for losses on one residential loan involving flood damage. During 1993
and 1994, $846,000 and $408,000, respectively, was provided for losses on
interest-earning assets reflecting the Company's reduced exposure to losses on
its interest-earning assets. The Company's evaluation of the adequacy of its
allowance for losses included, among other things, consideration of the decrease
in the level of non-performing assets. At December 31, 1995, the Company's total
allowance for losses amounted to $3.7 million with $3.1 million and $596,000
allocated for general and specific reserves, respectively. See "Financial
Condition - Non-performing Assets" included herein.

The following table summarizes activity related to allowances for losses on
loans for the years ended December 31, 1994 and 1995:

<TABLE>
<CAPTION>
General Specific Total
Reserves Reserves Reserves
-----------------------------------
(In Thousands)
<S> <C> <C> <C>
Balance, January 1, 1994 $3,343 $ 211 $ 3,554
--------------------------------
Charge-offs:
Nature of collateral:
Residential real estate 11 11
Commercial real estate 189 189
Land 12 12
--------------------------------
Total charge-offs 23 189 212

Recoveries (58) (52) (110)
--------------------------------
Net charge-offs (35) 137 102
Fiscal 1994 provisions 373 35 408
Transfers (102) 102
--------------------------------

Balance, December 31, 1994 3,649 211 3,860
--------------------------------
Charge-offs:
Nature of collateral:

Residential real estate 49 49
Commercial real estate 78 78
Consumer 4 4
--------------------------------
Total charge-offs 82 49 131
Fiscal 1995 provisions 10 10
Transfers (424) 424

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

BALANCE, DECEMBER 31, 1995 $3,143 $ 596 $ 3,739
================================

Loan loss reserves to gross
non-performing assets 110.82%
======
Loan loss reserves to
loans receivable 2.14%
======
</TABLE>
<PAGE> 145
FLORIDA FIRST BANCORP. INC. AND SUBSIDIARY 9

The Company's policy as it relates to general reserves uses the guidelines
prescribed in the "Interagency Policy Statement on the Allowance for Loan and
Lease Losses" dated December 21, 1993 issued by the Federal Financial
Institutions Examination Council ("FFIEC"). These guidelines suggest certain
ratios for the establishment of general reserves depending on the classification
of the asset involved as well as specific factors to be considered to
subjectively determine if the assigned ratios are appropriate. Such factors
include the effectiveness of management's risk identification system, asset
concentrations, level and trend of delinquencies, TDRs, REO and losses thereon.
Management of the Company has reviewed all of the factors and the suggested
ratios to create a formula that serves as the basis for subjectively determining
the necessary level for general reserves.

The general reserve is management's estimate of potential loss since there is no
way to measure with certainty all of the risks inherent in the Company's balance
sheet. In addition to the factors mentioned above, the subjective analysis
includes such factors as past loss experience, identification of adverse
situations related to borrowers, current economic conditions and collateral
values. Using this methodology and all available information, management
believes that its allowance for losses was adequate as of December 31, 1995.
However, changing economic and market factors could result in the need to
provide additions to the Company's allowance. Such additional provisions would
adversely affect net income, See "Non-performing Assets" included herein and
Note 6 of Notes to Consolidated Financial Statements included in the Annual
Report as well as "Business Non-performing Assets" in FFB's Form 10-KSB for
additional information with respect to non-performing assets.

OTHER INCOME. From 1994 to 1995, other income increased by $957,000 or 74.9%
from $1.3 million to $2.2 million. The increase in other income resulted from
increases in service charges; increases in gains on sales of: loans,
mortgage-backed securities available for sale, trading securities, pair-off
transactions and REO; and increases in other operating income. Partially
offsetting these increases were declines in loan correspondent and servicing
fees as well as losses on sales of other securities available for sale.

Loan correspondent and servicing fees decreased by $39,000 from 1994 to 1995
which decline resulted from decreased activity in loans closed for
correspondents. Such loans totalled $21.7 million compared to $15.1 million
during 1994 and 1995, respectively. During 1995, such activity declined as the
Company sold a greater portion of its residential loan originations to the
Federal Home Loan Mortgage Corporation ("FHLMC") due to better pricing.

Service charges amounted to $660,000 and $771,000 for the years ended December
31, 1994 and 1995, respectively. The increase of $111,000 resulted from
increased activity related to various deposit account service charges such as
overdraft charges and returned check fees.

Gain on sales of loans amounted to $263,000 for the year ended December 31,
1995, compared to a loss of $133,000 for 1994. The gain during the 1995 period
resulted from the increased value of the loans originated for sale in the
secondary market caused by higher interest rates on newly originated fixed-rate
loans. The Company sold loans to FHLMC totalling $14.1 million in exchange for
cash as well as $765,000 to the Student Loan Marketing Association ("SLMA")
during the year ended December 31, 1995. In addition, loans totalling $2.0
million were sold to FHLMC in exchange for two securities. The Company adopted
SFAS No. 122, "Accounting for Mortgage Servicing Rights", during 1995 and
recorded related gains on sales of loans totalling $184,000. See Note 1 of Notes
to Consolidated Financial Statements included in FFB's Annual Report for further
details and a discussion of SFAS No. 122.

Gain on sales of mortgage-backed securities available for sale totalled $34,000
while losses on securities available for sale totalled $85,000 for the fiscal
year ended December 31, 1995. The Company sold $1.1 million of mortgage-backed
securities and $9.3 million of U.S. Treasury securities from its available for
sale portfolio. These securities were sold to obtain funds for reinvestment in
assets with higher yields. In addition, during the first quarter of 1995,
Service First sold its ownership in equity securities at a gain of $7,000 which
partially offset the losses recorded on securities available for sale. No such
sales occurred during 1994.

Gains on pair-off transactions, equity securities and mutual funds amounted to
$10,000 for the year ended December 31, 1995 compared to losses of $99,000 for
the year ended December 31, 1994. Pair-off transactions are a type of investment
in which the buyer (in this case the Company) does not take title to any
security but instead enters a contract to buy and a contract to sell specific
securities. The intent is to pair-off the transactions against each other before
delivery to take advantage of market value movements or interest rate spreads.
Gains of $6,000 experienced during 1995 resulted from the sale of equity
securities held by FFB and gains of $4,000 were recorded on pair-off transac-
<PAGE> 146
FLORIDA FIRST BANCORP. INC. AND SUBSIDIARY 10

tions compared to losses of $2,000 during 1994 on similar transactions. The
remaining $97,000 of losses recorded during 1994 related to a decrease in the
value of a mutual fund held by the Company.

Gains on sales of real estate increased by $178,000 from $87,000 to $265,000 for
the years ended December 31, 1994 and 1995, respectively, due to the sale of one
REO property consisting of vacant gulf-front land. The Company also recognized
deferred gains on the sales of two REO properties since the loans have been
performing and have appropriate loan-to-value ratios.

Other operating income increased by $246,000 from 1994 to 1995 primarily due to
a $58,000 increase in rental income, a $71,000 increase in income from the
Company's credit card program and a $97,000 increase in recoveries on assets.
During 1995, the Company began receiving additional rent from two of its tenants
upon the completion of the improvement of additional space. The increase in
recoveries on assets reflects the receipt of $42,000 in full settlement of a
claim against an investment brokerage firm relating to a mutual fund in which
the Company had prior ownership.

Other income decreased from 1993 to 1994 by $1.6 million or 55.3% from $2.9
million to $1.3 million. The decrease in other income resulted from losses on
sales of loans originated for sale, losses on mutual funds, a reduction in loan
correspondent and servicing fees, as well as a decrease in other operating
income. Also contributing to the decline in 1994 was the non-reocurrence of the
recognition of gains on sales of mortgage-backed securities and a gain on the
sale of a subsidiary which occurred in 1993. These declines were partially
offset by increases in service charge income and gains on real estate sales.

Loan correspondent and servicing fees decreased by $226,000 from 1993 to 1994
due to a reduction in loans closed for correspondents (on a servicing released
basis) from $30.1 million during 1993 to $21.7 million during 1994. Loan
originations were negatively impacted by rising interest rates during 1994 which
also affected loan correspondent activity.

Service charges (deposit account fees and certain loan fees) increased by
$151,000 from $509,000 to $660,000 for the years ended December 31, 1993 and
1994, respectively, due to a higher fee structure implemented during the latter
part of 1993.

Losses on sales of loans amounted to $133,000 for the year ended December 31,
1994, compared to gains of $776,000 for the same period in 1993. The gains
during the 1993 period resulted from the increased value of fixed-rate loans
held for sale in the secondary market. This situation was not repeated during
1994 as rates increased reducing the market value of fixed-rate loans originated
at lower rates. During the year ended December 31, 1994, $18.2 million in loans
were sold to the FHLMC on a servicing retained basis for a net loss (net of
applicable hedging gains) of $132,000. Losses on loan sales for 1994 also
included a negative fair value adjustment of $5,000 on loans held for sale
partially offset by gains on student loan sales totalling $4,000. During the
year ended December 31, 1993, the Company realized gains of $772,000 on sales of
$38.2 million of mortgage loans sold to FHLMC while sales of $559,000 of student
loans sold to SLMA resulted in gains of $4,000.

The decrease in gains on sales of mortgage-backed securities resulted from gains
recorded during the second quarter of 1993 which did not recur in 1994. Though
the Company holds certain mortgage-backed securities in its available for sale
portfolio, none were sold during 1994 since all liquidity needs were satisfied.

For the years ended December 31, 1993 and 1994, net losses of $22,000 and $2,000
were recorded on pair-off transactions. Losses on mutual funds amounted to
$97,000 during the year ended December 31, 1994. Since interest rates increased
during 1994, the Company experienced a loss in the value of one mutual fund
which it owned. The Company subsequently received a settlement amount of $42,000
related to allegations of fund mismanagement. (See other operating income
discussion above.) No such losses were recorded during 1993.

Gains on sales of real estate (primarily REO) increased by $41,000 from $46,000
to $87,000 for the years ended December 31, 1993 and 1994, respectively,
primarily due to an improved market for such sales.

On December 31, 1993, the Company sold one of its subsidiaries, Sunbird
Management, for $600,000, receiving $150,000 in cash and a mortgage note for
$450,000, resulting in a gain of $109,000. At one time, the Company owned a
significant number of units in a condominium project located in Panama City
Beach and had established this subsidiary to provide rental management services
for owners of units in the complex. As a result of selling the last of these
units during 1993, the activities of this subsidiary became nonincluclable for
regulatory capital purposes which would have required the Company to deduct the
investment in this subsidiary
<PAGE> 147
FLORIDA FIRST BANCORP. INC. AND SUBSIDIARY 11

from its regulatory capital when calculating compliance with tangible and core
capital regulations. Based upon an analysis of the operations of the subsidiary
compared to the effect on the Company's regulatory capital, management decided
to sell Sunbird Management.

Other operating income decreased by $247,000 from 1993 to 1994. During 1993,
other operating income included the receipt of $135,000 in full settlement of an
outstanding judgment against a former borrower. Also contributing to the decline
in other operating income was the decrease in income from real estate
operations. During December 1993, Sunbird Management was sold and the Company
ceased engaging in rental property management activities.

OPERATING EXPENSES. From 1994 to 1995, total operating expenses increased by
$704,000 or 11.1% from $6.3 million to $7.0 million primarily due to
increased personnel costs, occupancy and equipment expense and other operating
expense. Also contributing to the increase were non-recurring expenses related
to the plan of reorganization and the Company's name change. These increases
were partially offset by decreases in federal deposit and other insurance
premiums as well as professional fees.

Compensation and benefits increased by $309,000 from 1994 to 1995 reflecting
costs relating to increased staff and other general increases in salaries for
merit and promotion.

From 1994 to 1995, occupancy and equipment expense increased by $176,000 due to
increased costs associated with computer services and equipment maintenance as
well as certain branch renovation costs.

The expenses related to the plan of reorganization and the name change totalling
$167,000 were related to legal fees, promotional costs and costs associated with
the write-off of the remaining book value of the Company's existing signs and
stationery.

From 1994 to 1995, deposit insurance premiums decreased by $29,000 as a result
of lower premium rates of .26% of deposits during 1995 compared to .30% of
deposits during 1994. This decrease was partially offset by increased average
deposit balances. The savings of $33,000 in professional fees was due to
decreased legal needs as non-performing assets have declined.

In addition to the insurance premiums on deposits, all institutions are charged
an assessment by the OTS calculated by using an asset-based formula. The rate is
dependent on whether or not an institution is considered an institution
requiring more than normal supervision and is, as a result, termed troubled. In
the past, the Bank was an institution which required more than normal
supervision and thus was required to pay an assessment rate 50% higher than the
general rate. The assessment rate is largely dependent upon the results of an
institution's annual examination for safety and soundness performed by the OTS.
The Bank's assessment was reviewed during its 1994 examination and was
subsequently reduced. The OTS assessment expense for the years ended December
31, 1995, 1994 and 1993 was $75,000, $92,000 and $109,000, respectively.

Other operating expenses increased $125,000 from $721,000 during 1994 to
$846,000 during 1995. This increase primarily reflected certain core costs
associated with the Company's credit card program as well as various other
consumer loan products. At December 31, 1995, the Company had issued over 1,600
credit cards carrying a total balance of $983,000.

Total operating expenses increased slightly from 1993 to 1994 by $25,000 or 0.4%
primarily due to increased occupancy and equipment expense, insurance premiums
and other operating expenses. Partially offsetting these increases were
decreases in personnel costs and advertising expense.

Compensation and benefits decreased by $134,000 from 1993 to 1994 as a result of
a reduction in total commissions paid to loan originators. As interest rates
rose during 1994, the level of loan originations decreased to $58.3 million
compared to $99.7 million during 1993.

From 1993 to 1994, occupancy and equipment expense increased by $73,000 due to
expected increases related to computer services as well as certain branch office
renovations.

Advertising costs declined by $24,000 from $322,000 for the year ended December
31, 1993 to $298,000 for the prior year due to lower training costs.

Federal deposit and other insurance premiums increased by $29,000 primarily due
to increased average deposit balances, which increase was partially offset by a
decrease in the deposit insurance assessment rate. Insurance premium rates
decreased from .31% during 1993 to .30% during 1994.

Other operating expenses increased $87,000 from $634,000 during 1993 to $721,000
during 1994 which primarily reflected costs associated with the Company's new
credit card program. The remaining increase was due to normal increases in the
cost of doing business, however, none of the amounts related to these individual
expenses was considered material.
<PAGE> 148
FLORIDA FIRST BANCORP. INC. AND SUBSIDIARY 12

REAL ESTATE OWNED EXPENSES. During 1995, 1994 and 1993, the Company recorded net
REO operating expense totalling $29,000, $76,000 and $91,000, respectively, the
improvement being attributable to reduced expenses due to fewer REO properties
owned.

During 1993 and 1994, writedowns of $1.0 million and $193,000, respectively,
were recorded as a result of new appraisals and fair value analyses of certain
REO properties. No such writedowns were necessary during 1995. See Note 7 of
Notes to Consolidated Financial Statements included in FFB's Annual Report.

The detail of REO writedowns for the periods indicated were as follows:

<TABLE>
<CAPTION>
For the Year Ended
December 31,
-------------------
1995 1994 1993
-------------------
(In Thousands)
<S> <C> <C> <C>
Nature of Collateral:
Commercial real estate $ 131 $ 142
Undeveloped land 62 882
-------------------

Total REO writedowns $0 $ 193 $1,024
===================
</TABLE>

Although management of the Company believes that as of December 31, 1995, no
further writedowns are necessary, changing economic factors that affect real
estate market values and which are not in the Company's control could result in
further writedowns of its REO. In addition, there can be no assurances that the
Company will not be required to make future adjustments to its reserve and
charge-off policies in response to changing economic conditions or regulatory
guidelines. Such writedowns and charge-offs would adversely effect the Company's
net income.

INCOME TAXES. On January 1, 1993, FFB adopted SFAS No. 109, "Accounting for
Income Taxes", which requires recognition of the tax consequences of an event
under the asset and liability method at the same time such event is recognized
in the financial statements. Pursuant to the adoption of SFAS No. 109, no
deferred taxes have been provided on the income tax reserves that arose prior to
1988 of $2.0 million as the bad debt reserves for income tax purposes are
included in taxable income of later years only if the bad debt reserves are used
subsequently for purposes other than to absorb bad debt losses. SFAS No. 109
requires the recognition of deferred tax consequences of differences between
financial statement and income tax treatment of allowances for loan losses
arising after December 31, 1987. There was no cumulative effect of adopting SFAS
No. 109 on January 1, 1993 and prior years' financial statements were not
restated.

For the year ended December 31, 1993, FFB recorded a tax benefit of $801,000 and
adjusted the valuation allowance to $1.1 million, which, when netted against
deferred tax assets of $2.2 million, resulted in net deferred tax assets of $1.1
million. For the year ended December 31, 1994, the tax benefit amounted to
$608,000 while the valuation allowance was adjusted to $45,000 resulting in net
deferred tax assets of $2.2 million. For the year ended December 31, 1995,
income tax expense of $1.4 million was recorded on income of $3.8 million and
the valuation allowance was reduced to zero. See Note 13 of Notes to
Consolidated Financial Statements included in FFB's Annual Report.

In January 1993, the OTS issued Thrift Bulletin 56 adopting SFAS No. 109 for
regulatory reporting purposes subject to a limitation on the amount of net
deferred tax assets that can be included in regulatory capital. Net deferred tax
assets represent deferred tax assets, reduced by any valuation allowances, in
excess of deferred tax liabilities. Application of the limit depends on the
possible sources of taxable income available to an institution to realize
deferred tax assets. Deferred tax assets that can be realized from taxes paid in
prior carryback years and future reversals of existing taxable temporary
differences generally are not limited. To the extent that the realization of
deferred tax assets depends on an institution's future taxable income (exclusive
of reversing temporary differences and carryforwards), or its tax-planning
strategies, such deferred tax assets are limited for regulatory capital purposes
to the lesser of the amount that can be realized within one year of the
quarter-end report date, or ten percent (10%) of core capital. The Company
recognized a net deferred tax asset due to future reversals of existing taxable
temporary differences and estimates of future taxable income. The $1.9 million
in deferred tax assets at December 31, 1995 is includable for regulatory capital
purposes.

EXTRAORDINARY ITEMS. For the year ended December 31, 1993 and 1994, prepayment
penalties of $80,000 and $70,000 were recorded due to the early repayment of
FHLB advances. During the fourth quarter of 1994, four certificates of deposit
were withdrawn prior to maturity at a total penalty cost of $4,000. The funds
from the certificates of deposit were then reinvested at higher rates. No such
extraordinary item occurred during fiscal 1995.
<PAGE> 149
FLORIDA FIRST BANCORP. INC. AND SUBSIDIARY 13

INTEREST RATE SENSITIVITY

The matching of assets and liabilities may be analyzed by examining the extent
to which such assets and liabilities are "interest rate sensitive" and by
monitoring an institution's interest rate sensitivity "gap." An asset or
liability is said to be interest rate sensitive within a specific time period if
it will mature or reprice within that time period. The interest rate sensitivity
gap is defined as the difference between the amount of interest-earning assets
anticipated, based upon certain assumptions, to mature or reprice within a
specific time period and the amount of interest-bearing liabilities anticipated,
based upon certain assumptions, to mature or reprice within that same time
period. A gap is considered positive when the amount of interest rate sensitive
assets maturing within a specific time frame exceeds the amount of interest rate
sensitive liabilities maturing within that same time frame. During a period of
falling interest rates, a negative gap would tend to result in an increase in
net interest income while a positive gap would tend to adversely affect net
income. In a rising interest rate environment, an institution with a positive
gap would generally be expected, absent the effects of other factors, to
experience a greater increase in the yield of its assets relative to the costs
of its liabilities and thus an increase in the institution's net interest
income, whereas an institution with a negative gap would be expected to
experience the opposite results.

At December 31, 1995, total interest-bearing liabilities maturing or repricing
within one year exceeded total interest-earning assets maturing or repricing
within the same time period by $4.9 million representing a negative cumulative
one-year gap of 1.8% of total assets compared to $2.4 million or 0.85% of total
assets at December 31, 1994. The change resulted from the purchase of securities
with average repricing periods or maturities of more than one year as well as
the restructuring of debt and the purchase of an interest rate cap for hedging
purposes. See "Interest Expense on Borrowings" included herein.

On December 31, 1995, the Company had one outstanding short position to sell a
$1.0 million FHLMC 30-year 7.00% security. This trade was entered to protect the
Company's mortgage loan commitments against rising interest rates. This position
was settled in January 1996 at a loss of $16,500 which was recorded in December
1995. See Note 1 of Notes to Consolidated Financial Statements included in the
Annual Report.

The following table summarizes the contractual maturities or repricing
characteristics of the Company's interest-earning assets and interest-bearing
liabilities at December 31, 1995. The table also includes management's estimate
of prepayments at such date. The weighted average interest rate of each category
of assets and liabilities is set forth below the respective dollar amounts. The
principal balance of a fixed-rate asset is shown in the period the asset is
fully satisfied or contractually due. For example, a $10.0 million fixed-rate
loan balance outstanding with 120 remaining contractual payments would be shown
as $10.0 million in the "More Than Five Through Ten Years" column. The full
balance of adjustable- and variable-rate assets are included in the period in
which such assets are first scheduled to reprice rather than in the period in
which they mature.
<PAGE> 150
FLORIDA FIRST BANCORP. INC. AND SUBSIDIARY 14

One More Than More Than More Than
Year 1 through 3 3 through 5 5 through 10 More than 10
or less Years Years Years Years Totals
---------------------------------------------------------------------------------------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C>
Interest-earning assets:
Adjustable- and variable-rate
mortgage loans, net(1) ............... $ 101,018 $ 6,633 $ 7,297 $ 114,948
8.41% 7.38% 7.64% 8.30%
Fixed-rate mortgage loans, net(1)....... $ 1,325 $ 1,981 $ 1,635 $ 7,391 $ 34,990 $ 47,322
10.42% 9.08% 9.48% 8.51% 9.01% 8.99%
Other loans, net(1)..................... $ 12,728 $ 17 $ 394 $ 49 $ 13,188
9.89% 12.25% 9.45% 9.15% 9.88%
Mortgage-backed securities, net ........ $ 10,549 $ 9,109 $ 2,979 $ 4,672 $ 8,620 $ 35,929
7.25% 6.10% 6.73% 7.18% 6.70% 6.77%
Other securities, net .................. $ 37,410 $ 2,050 $ 5,114 $ 20,888 $ 65,462
6.58% 6.89% 6.55% 6.82% 6.66%
Other interest-earning assets .......... $ 11,418 $ 99
5.81% 5.30% $ 11,517
Mortgage loan prepayments(2) ........... $ 9,838 $ 11,441 $ 5,720 $ 2,860 $ (29,859) 5.81%
-----------------------------------------------------------------------------------
Total interest-earning assets .......... $ 184,286 $ 31,330 $ 18,025 $ 20,086 $ 34,639 $ 288,366
7.90% 6.91% 7.72% 7.57% 7.99% 7.83%
-----------------------------------------------------------------------------------
Interest-bearing liabilities:
NOW/Super NOW accounts(3,4) ............ $ 42,740 $ 8.998 $ 51,738
3.56% 0.00% 2.94%
Money market deposit accountS(3) ....... $ 22,477 22,477
4.09% 4.09%
Passbook/statement accounts(3,5) ....... $ 11,594 $ 2,319 $ 3,478 $ 5,798 $ 23,189
2.72% 2.72% 2.72% 2.72% 2.72%
Certificate accounts ................... $ 107,769 $ 32,193 $ 9,148 $ 3,391 $ 152,501
5.32% 5.96% 6.19% 6.35% 5.53%
FHLB advances .......................... $ 9,600 $ 13,900 $ 2,121 $ 5,100 $ 30,721
6.11% 5.90% 5.37% 5.95% 5.94%
-----------------------------------------------------------------------------------
Total interest-bearing liabilities ..... $ 194,180 $ 48,412 $ 14,747 $ 14,289 $ 8,998 $ 280,626
4.67% 5.79% 5.25% 4.73% 0.00% 4.75%
-----------------------------------------------------------------------------------
Difference between interest-earning
assets and interest-bearing liabilities $ (9,894) $ (17,082) $ 3,278 $ 5,797 $ 25,641 $ 7,740
Effect of hedging .......................... 5,000 (5,000)
-----------------------------------------------------------------------------------
Cumulative difference between
interest-earning assets and
interest-bearing liabilities ........... $ (4,894) $ (21,976) $ (23,698) $ (17,901) $ 7,740 $ 7,740
===================================================================================
Cumulative difference as a
percentage of total assets(6) .......... -1.76% -7.90% -8.52% -6.44% 2.78% 2.78%
=====================================================================================
</TABLE>

Difference between interest-earning

(1)Loan amounts include $41 million in various contra assets used to reduce the
amount shown on the balance sheet. Loans-in-process of $3.8 million have
been netted from this schedule. See Note 6 of Notes to Consolidated
Financial Statements included in the Annual Report.

(2)Represents management's estimate of prepayments on loans and securities.
These amounts were not included in the calculation of the weighted average
interest rates.

(3)Deposit amounts do not include accrued interest of $136,000 which is included
in deposits on the balance sheet. See Note 10 of Notes to Consolidated
Financial Statements included in the Annual Report.

(4)Non-interest-bearing NOW accounts are shown in the "More Than 10 Years"
category since they are not interest-sensitive.

(5)Based on management's decay rate assumptions which were determined using
historical passbook deposit trends. Though use of a decay rate is the
acceptable method of determining repricing periods, the interest rate paid
on these accounts is subject to change at any time. If the total passbook
amount was included in the "One Year or Less" category, the Company's
negative one-year gap ratio would be 9.2% at December 31, 1995.

(6)Total consolidated assets at December 31, 1995 amounted to $303.3 million.
<PAGE> 151
FLORIDA FIRST BANCORP. INC. AND SUBSIDIARY 15

LIQUIDITY AND CAPITAL RESOURCES

LIQUIDITY. Liquidity refers to the Company's ability to generate sufficient cash
to meet the funding needs of current loan demand, savings deposit withdrawals,
and to pay operating expenses. The Company is required under applicable federal
regulations to maintain specified levels of "liquid" investments in qualifying
types of United States Treasury securities, federal agency securities and other
permissible investments having maturities of five years or less. Regulations
currently in effect require the Company to maintain liquid assets of not less
than 5% of its net withdrawable accounts plus short-term borrowings, of which
short-term liquid assets must consist of not less than 1%. These levels can be
changed from time to time by the OTS to reflect economic conditions. The
Company's regulatory liquidity ratios at December 31, 1995 and 1994 were 10.7%
and 15.7%, respectively, while the average ratios for the years ended December
31, 1995 and 1994 were approximately 15.1% and 19.0%, respectively. These ratios
were significantly higher than required due to the desire to maintain shorter
asset maturities in a rising rate environment.

The Company's primary sources of funds have historically consisted of deposits,
amortization and prepayments of outstanding loans, borrowings from the FHLB of
Atlanta and other sources, including reverse repurchase agreements, and sales of
loans originated for sale. As part of its interest rate risk strategy, the
Company, since 1992, has sold the majority of its fixed-rate mortgage loans
originated in the secondary market.

During fiscal 1994 and 1995, the Company used its resources primarily to meet
its ongoing commitments to fund maturing savings certificates and deposit
withdrawals, fund existing and continuing loan commitments, and maintain its
liquidity. At December 31, 1995, the total of approved loan commitments amounted
to $7.1 million and the Company had $3.8 million of undisbursed loan funds.
Scheduled repayments of FHLB advances in 1996 totalled $9.6 million at December
31, 1995. The amount of savings certificates which mature in fiscal 1996
totalled $107.8 million at December 31, 1995, a substantial portion of which
management believes, on the basis of prior experience, will remain in the
Company. See Notes 10, 12 and 14 of Notes to Consolidated Financial Statements
included in the Annual Report.

CAPITAL RESOURCES. Consolidated assets of FFB totalled $278.0 million at
December 31, 1994 and $303.3 million at December 31, 1995. Stockholders' equity
increased from $17.6 million at December 31, 1994 to $20.6 million at December
31, 1995. The increase in stockholders' equity reflects net income of $2.4
million for the year and to a lesser extent, the issuance of common stock
pursuant to the exercise of options. Also contributing to the increase in
stockholders' equity was the inclusion of unrealized gains, net of income taxes,
on securities available for sale of $112,000 at December 31, 1995.

At December 31, 1995, the Bank exceeded each of the OTS regulatory capital
requirements as follows (dollar amounts are shown in thousands):

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------
Actual Actual
Capital Required Excess Capital Required
Amount Amount Amount Ratio Ratio
----------------------------------------------------
<S> <C> <C> <C> <C> <C>
Adjusted tangible capital to
adjusted total assets $20,018 $ 4,550 $15,468 6.6% 1.5%

Adjusted core capital to
adjusted total assets 20,018 9,100 10,918 6.6 3.0

Total risk-based capital to
risk-weighted assets 21,858 11,946 9,912 14.6 8.0
- -----------------------------------------------------------------------------------
</TABLE>

During 1993, the Bank operated two subsidiaries, one of which was sold as of
December 31, 1993 at a gain of $109,000 (see "Results of Operations - Other
Income" included herein). The remaining subsidiary, Service First, was formerly
involved in real estate development which is a non-permissible activity for
national banks. As a result, the Bank is required under OTS regulatory capital
requirements to deduct its investment in this subsidiary from capital when
calculating the Bank's regulatory capital requirements.
<PAGE> 152
FLORIDA FIRST BANCORP. INC. AND SUBSIDIARY 16

IMPACT OF INFLATION AND CHANGING PRICES

The Consolidated Financial Statements and related Notes included in the Annual
Report 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.

Unlike many industrial companies, substantially all of the assets and virtually
all of the liabilities of FFB are monetary in nature. As a result, interest
rates have a more significant impact on FFB's performance than the general level
of inflation. Over short periods of time, interest rates may not necessarily
move in the same direction or in the same magnitude as inflation.

The accounting principles for depository institutions are currently undergoing
review to determine whether the historical cost model or market-based measures
of valuation is the appropriate measure for reporting the assets of such
institutions in their financial statements. Any proposal recommending the latter
measure is controversial because any change in applicable accounting principles
which requires depository institutions to carry mortgage loans at fair market
value could result in substantial losses to such institutions and increased
volatility in their results of operations.

IMPACT OF REGULATORY DEVELOPMENTS AND NEW ACCOUNTING STANDARDS

The deposits of the Company are insured by the Savings Association Insurance
Fund ("SAIF") administered by the Federal Deposit Insurance Corporation
("FDIC") which, due to the large number of failed savings institutions in
recent years, has been unable to attain a statutorily-required reserve ratio of
1.25% of insured deposits. The Balanced Budget Act of 1995 provided that all
SAIF member institutions would pay a special one-time assessment on their
deposits as of March 31, 1995 in an amount which in the aggregate would be
sufficient to bring the reserve ratio in the SAIF Fund to the required level.
Based on the level of reserves maintained by the SAIF Fund, it was anticipated
that the amount of the special assessment required to recapitalize the SAIF was
to be approximately 80 to 85 basis points of SAIF-assessable deposits. Although
the Balanced Budget Act of 1995 was vetoed by the President of the United
States in December 1995 for reasons which were unrelated to the
recapitalization of SAIF, it is possible that some kind of legislative action
will be undertaken to recapitalize the SAIF that will impact the Company's
insured deposits. A one-time special assessment of 85 basis points would result
in the Company incurring a pre-tax charge of approximately $2.0 million, which
management believes would not affect the Company's status as a
"well-capitalized" institution under applicable laws and regulations.
Management of the Company currently is unable to predict whether there will be
legislation to recapitalize the SAIF and, if so, whether and to what extent the
Company may be assessed in order to recapitalize the SAIF.

Unless and until the SAIF is recapitalized and the insurance premiums of
SAIF-insured institutions are reduced to levels which are comparable to those
currently being assessed members of the Bank Insurance Fund ("BIF")
administered by the FDIC, which insures the deposits of commercial banks and
has attained the reserve ratio required by law, SAIF-insured institutions will
have a significant, competitive disadvantage to BIF-insured institutions with
respect to the pricing of loans and deposits and the ability to achieve lower
operating costs. In order to reduce this competitive advantage, a number of
SAIF-insured institutions recently have filed applications to establish
affiliated BIF-insured institutions, which could attract deposits formerly
maintained at the related SAIF-insured institution, thus reducing the
institutions' overall effective rate for deposit insurance. The transfer of
insured deposits from SAIF-insured institutions to BIF-insured institutions
could materially reduce the deposits at SAIF-insured institutions, which could
reduce the insurance assessments obtained by the SAIF and, thus, adversely
affect the ability of the SAIF to resolve troubled savings institutions and to
meet its other obligations. Such reduction in the assessable deposit base of
SAIF could result in an increase in the amount of any one-time assessment of
SAIF-insured institutions which may be imposed in order to recapitalize the
SAIF.

The Balanced Budget Act of 1995 also provided for the merger of the BIF and SAIF
on January 1, 1998, with such merger being conditioned upon the prior
elimination of the thrift charter. The Banking Committees of the House of
Representatives and the Senate in adopting the Balanced Budget Act of 1995
agreed that Congress should consider and act upon separate legislation as early
as possible in 1996 to eliminate the thrift charter. If adopted, such
legislation would require the Bank, as a federally chartered savings bank, to
convert to a bank charter, which likely would be regulated by the Office of the
Comptroller of the Currency and not the OTS, which would go out of existence,
and likely would require the
<PAGE> 153
FLORIDA FIRST BANCORP. INC. AND SUBSIDIARY 17

Company to register as a bank holding company under the Bank Holding Company Act
of 1956, as amended ("BHCA") and be subject to regulation by the Board of
Governors of the Federal Reserve System (the "Federal Reserve Board"). Although
the Company currently is unable to predict whether the existence of the thrift
charter and the OTS may be the subject of future legislation and, if so, what
the final contents of such legislation will be and their effects, if any, on the
Company and the Bank, such legislation could result in, among other things, the
Company becoming subject to the same regulatory capital requirements, activities
limitations and other requirements which are applicable to bank holding
companies under the BHCA. Unlike savings and loan holding companies, bank
holding companies are subject to regulatory capital requirements, which
generally are comparable to the regulatory capital requirements which are
applicable to the Bank, and unlike unitary savings and loan holding companies
such as the Company, which generally are not subject to activities limitations,
bank holding companies generally are prohibited from engaging in activities or
acquiring or controlling, directly or indirectly, the voting securities or
assets of any company engaged in any activity other than banking, managing or
controlling banks and bank subsidiaries or another activity that the Federal
Reserve Board has determined, by regulation or otherwise, to be so closely
related to banking or managing or controlling banks as to be a proper incident
thereto.

In anticipation of the possible elimination of the thrift charter through future
legislation, the Balanced Budget Act of 1995 provided for the repeal of a
provision of the Code which provided thrift institutions, such as the Company,
which meet certain definitional tests primarily relating to their assets and the
nature of their business, to establish a tax reserve for bad debts and to make
annual additions thereto, which additions may, within specified limitations, be
deducted in arriving at taxable income. In addition, the Balanced Budget Act of
1995 provided that a savings institution must recapture for federal income tax
purposes (i.e. take into income) certain of its bad debt reserves which were
previously established through deductions established under the percentage of
taxable income method. It is not anticipated that these provisions, if enacted
into law, would have a material adverse effect on the Company's financial
condition or operations. Management of the Company currently is unable to
predict whether elimination of the thrift charter and/or elimination of related
tax benefits will be the subject of future legislation and, if so, what the
contents of such legislation will be and its effects, if any, on the Company and
the Bank.

In May 1993, the FASB issued SFAS No. 114, "Accounting by Creditors for
Impairment of a Loan." The statement generally would require all creditors to
account for impaired loans, except those loans that are accounted for at fair
value or at the lower of cost or fair value, at the present value of the
expected future cash flows discounted at the loan's effective interest rate. In
October 1994, the FASB issued SFAS No. 118, "Accounting by Creditors for
Impairment of a Loan-Income Recognition and Disclosures." This statement amends
SFAS No. 114 to allow a creditor to use existing methods for recognizing
interest income on an impaired loan. SFAS No. 118 does not change the
provisions in SFAS No. 114 that require a creditor to measure impairment based
on the present value of expected future cash flows discounted at the loan's
effective interest rate, or at the market price of the loan, or the fair value
of the collateral if the loan is collateral dependent. SFAS No. 114 and SFAS
No. 118 were effective for fiscal years beginning after December 15, 1994,
and earlier application is encouraged. FFB adopted SFAS No. 114 as amended on
January 1, 1995 which did not have a material effect on FFB's financial
statements.

In October 1994, the FASB issued SFAS No. 119, "Disclosure about Derivative
Financial Instruments and Fair Value of Financial Instruments." This statement
requires disclosure about derivative financial instruments - futures, forwards,
swap and option contracts, and other financial instruments with similar
characteristics. SFAS No. 119 requires disclosures about amounts, nature, and
terms of derivative financial instruments that are not subject to SFAS No. 105
as they do not result in off-balance-sheet risk of accounting loss. It requires
that a distinction be made between financial instruments held or issued for
trading purposes (including dealing and other trading activities measured at
fair value with gains and losses recognized in earnings) and financial
instruments held or issued for purposes other than trading. It also amends SFAS
Nos. 105 and 107 to require that this distinction be made in certain disclosures
required by those statements. SFAS No. 119 is effective for financial statements
issued for fiscal years ending after December 15, 1994. FFB adopted SFAS No. 119
as of December 31, 1995. There was no material effect on FFB'S consolidated
financial statements.

On May 12, 1995, the FASB issued SFAS No. 122, "Accounting for Mortgage
Servicing Rights." SFAS No. 122 amends SFAS No. 65, "Accounting for Certain
Mortgage Banking Activities" to eliminate the accounting distinction between
rights to service mortgage loans that are acquired through loan origination
activities and those acquired through purchase transactions. When
<PAGE> 154
FLORIDA FIRST BANCORP. INC. AND SUBSIDIARY 18

an enterprise purchases or originates mortgage loans, the cost of acquiring
those loans includes the cost of the related mortgage servicing rights. If the
enterprise sells or securitizes the loans and retains the servicing rights, the
enterprise should allocate the total cost of the loans to the servicing rights
and the loans (without the servicing rights) based on their relative fair
values, if practicable. If it is not practicable to estimate fair values, the
entire cost of acquiring the loans should be allocated to the mortgage loans.
Any cost allocated to servicing rights should be recognized as a separate asset.
SFAS No. 122 applies prospectively in fiscal years beginning after December 15,
1995; however, earlier application was encouraged. The Company adopted SFAS No.
122 during the second quarter of 1995.

MARKET PRICES AND RELATED STOCKHOLDER MATTERS

The common stock of the Company is traded on the Nasdaq National Market System
under the symbol "FFPC." As of December 31, 1995, the Company had approximately
624 stockholders of record and an unknown number of broker registered
shareholders and 3,358,245 shares of common stock issued and outstanding.
During the third quarter of 1995, the Company established a regular dividend
policy and paid a quarterly dividend which reduced stockholders' equity by
$199,000. On December 19, 1995, the Company declared a quarterly dividend of
$.06 per share (or $202,000) payable on January 16, 1996 to stockholders of
record on January 2, 1996. No dividends were declared or paid on the Company's
common stock during 1993 or 1994.

The following table sets forth the market price information as reported by
Nasdaq for the common stock during the periods presented:

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------
Closing Sales Price Range
-------------------------------------------
1995 1994
-------------------------------------------
High Low High Low
-------------------------------------------
<S> <C> <C> <C> <C>
First quarter $5-3/4 $5 5-1/2 $4-3/4
Second quarter 6 5-3/8 6 4-3/4
Third quarter 8 7-1/4 6-1/4 5-3/8
Fourth quarter 7-3/4 7 5-7/8 4-1/2
- ------
- -----------------------------------------------------------------------
</TABLE>

At December 31, 1995, the stock closed at $7-3/8 with a bid price of $7 and an
asked price of $7-3/4.
<PAGE> 155

FLORIDA FIRST BANCORP, INC.