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U. S. SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549

Form 10-Q
(Mark One)

[X] Quarterly report under Section 13 or 15 (d) of the Securities Exchange Act of 1934

For the quarterly period ended September 30, 2002

[   ] Transition report under Section 13 or 15 (d) of the Exchange Act

For the transition period from __________________ to ______________

Commission file number 333-95087

CENTERSTATE BANKS OF FLORIDA, INC.
(Exact Name of Small Business Issuer as Specified in Its Charter)

7722 State Road 544 East
Winter Haven, Florida 33881
(Address of Principal Executive Offices)

(863) 419-0833
(Issuer’s Telephone Number, Including Area Code)

Check whether the issuer: (1) filed all reports required to be filed by Section 12, 13 or 15 (d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days:

YES [X]     NO [   ]

State the number of shares outstanding of each of the issuer’s classes of common Equity, as of the latest practicable date:

CENTERSTATE BANKS OF FLORIDA, INC. AND SUBSIDIARIES

INDEX

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

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Centerstate Banks of Florida, Inc. and Subsidiaries

See notes to the accompanying condensed consolidated financial statements

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Centerstate Banks of Florida, Inc. and Subsidiaries

See notes to the accompanying condensed consolidated financial statements.

3

Centerstate Banks of Florida, Inc. and Subsidiaries

See notes to the accompanying condensed consolidated financial statements.

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CenterState Banks of Florida, Inc. and Subsidiaries

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

NOTE 1: Holding company and subsidiaries background information

     CenterState Banks of Florida, Inc (the “Company”) is a multi-bank holding company that was formed as part of a merger of three independent commercial banks in Central Florida (First National Bank of Osceola County, Community National Bank of Pasco County and First National Bank of Polk County). First National Bank of Osceola County is a national bank chartered in September 1989. It operates from three full service locations and one remote location within Osceola County and two full service locations in Orange County, which is contiguous with Osceola County. Community National Bank of Pasco County is a national bank chartered in November 1989. It operates from seven full service locations within Pasco and contiguous counties. First National Bank of Polk County is a national bank chartered in February 1992. It operates from four full service locations within Polk County. The Company, through its subsidiary banks, provides traditional deposit and lending products and services to its commercial and retail customers. The three banks maintain their separate identities as wholly owned subsidiaries of the Company.

     C.S. Processing, Inc. is a majority owned (75%) subsidiary of the Company. The three wholly owned subsidiary banks of the Company each own 25%, and the remaining 25% is owned by CenterState Bank of Florida (“CenterState Bank”). The Company’s investment in the subsidiary to date is $360,000 and CenterState Bank contributed $120,000. C. S. Processing processes checks and renders statements (i.e. “item processing center”) for the Company’s three subsidiary banks and for Centerstate Bank (see Note 6 below, merger with Centerstate Bank). Operations began during July 2001. The Company’s last subsidiary bank converted in April 2002. C. S. Processing operates on a break-even basis. Its operating expenses are charged to each bank as fees based on the bank’s usage.

NOTE 2: Basis of presentation

     The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim

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financial information and with the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. These statements should be read in conjunction with the consolidated financial statements included in the Company’s Annual Report on Form 10-KSB for the year ended December 31, 2001. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the results for the interim periods have been made. The results of operations of the three and nine month periods ended September 30, 2002 are not necessarily indicative of the results expected for the full year.

NOTE 3: Common stock outstanding and earnings per share data

     Basic earnings per share is based on the weighted average number of common shares outstanding during the periods. Diluted earnings per share includes the weighted average number of common shares outstanding during the periods and the further dilution from stock options using the treasury method. The following is a reconciliation of the numerators and denominators of the basic and diluted earnings per share computations for the periods presented (dollars are in thousands, except per share data).

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NOTE 4: Comprehensive income

     Under Statement of Financial Accounting Standards No. 130, “Reporting Comprehensive Income,” certain transactions and other economic events that bypass the income statement must be displayed as other comprehensive income. The Company’s comprehensive income consists of net earnings and unrealized gains and losses on securities available-for-sale, net of deferred income taxes.

     The table below sets forth the Company’s comprehensive income for the periods indicated below (in thousands of dollars).

NOTE 5: Effect of new pronouncements

     In June 2001, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 141, “Business Combinations.” This Statement addresses financial accounting and reporting for business combinations and supersedes Accounting Principles Board (“APB”) Opinion No. 16, Business Combinations, and FASB Statement No. 38, Accounting for Preacquisition Contingencies of Purchased Enterprises. All business combinations in the scope of this

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Statement are to be accounted for using one method, the purchase method. The provisions of this Statement apply to all business combinations initiated after June 30, 2001. This Statement also applies to all business combinations accounted for using the purchase method for which the date of acquisition is July 1, 2001, or later. Adoption of this Statement did not have a significant impact on the financial position or results of operations of the Company.

     In June 2001, the FASB issued SFAS No. 142, “Goodwill and Other Intangible Assets.” This Statement addresses financial accounting and reporting for acquired goodwill and other intangible assets and supersedes APB Opinion No. 17, Intangible Assets. It addresses how intangible assets that are acquired individually or with a group of other assets (but not those acquired in a business combination) should be accounted for in financial statements upon their acquisition. This Statement also addresses how goodwill and other intangible assets should be accounted for after they have been initially recognized in the financial statements. Enterprises are required to adopt SFAS No. 142 for fiscal years beginning after December 15, 2001. Adoption of this Statement did not have a significant impact on the financial position or results of operations of the Company.

     In June 2001, the FASB issued SFAS No. 143, “Accounting for Asset Retirement Obligations.” This Statement addresses financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs. This Statement applies to all entities that have legal obligations associated with the retirement of long-lived assets that result from the acquisition, construction, development or normal use of the asset. As used in this Statement, a legal obligation results from existing law, statute, ordinance, written or oral contract, or by legal construction of a contract under the doctrine of promissory estoppel. Enterprises are required to adopt SFAS No. 143 for fiscal years beginning after June 15, 2002. Management does not expect the impact of adopting the provisions of SFAS 143 to significantly impact the financial position or results of operations of the Company.

     In August 2001, the FASB issued SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.” This Statement addresses financial accounting and reporting for the impairment or disposal of long-lived assets. This Statement supersedes FASB Statement No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of, and the accounting and reporting provisions of APB Opinion No. 30, Reporting the Results of Operations—Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions, for the disposal of a segment of a business (as previously defined in that Opinion). This Statement also amends Accounting Research Bulletin (“ARB”) No. 51, Consolidated Financial Statements, to eliminate the exception to consolidation for a subsidiary for which control is likely to be temporary. The provisions of this Statement are effective for financial statements issued for fiscal years beginning after December 15, 2001, and interim periods within those fiscal years. Adoption of this Statement did not have a significant impact on the financial position or results of operations of the Company.

     In June 2002, the FASB issued SFAS No. 146, “Accounting for Costs Associated with Exit or Disposal Activities” This Statement addresses financial accounting and reporting for costs associated with exit or disposal activities and nullifies Emerging Issues Task Force (EITF) Issue No. 94-3, “Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring).” The provisions of this Statement are effective for exit or disposal activities that are initiated after December 31, 2002, with early application encouraged. Management does not expect the impact of adopting the provisions of SFAS No. 146 to significantly impact the financial position or results of operations of the Company.

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     In October 2002, the FASB issued SFAS No. 147, “Acquisitions of Certain Financial Institutions an amendment of FASB Statements No. 72 and 144 and FASB Interpretation No. 9.” Except for transactions between two or more mutual enterprises, this Statement removes acquisitions of financial institutions from the scope of both Statement 72 and Interpretation 9 and requires that those transactions be accounted for in accordance with SFAS No. 141, and SFAS No. 142. In addition, this Statement amends SFAS No. 144 to include in its scope long-term customer-relationship intangible assets of financial institutions such as depositor- and borrower-relationship intangible assets and credit cardholder intangible assets. The provisions of this Statement are effective on or after October 1, 2002. Management does not expect the impact of adopting the provisions of SFAS No. 147 to significantly impact the financial position or results of operations of the Company.

NOTE 6: Merger

     On April 16, 2002, the Company announced that a letter of intent was signed with CenterState Bank (a non publicly traded commercial bank). The Company will acquire CenterState Bank in a stock and cash transaction. Shareholders of CenterState Bank will receive $2.40 cash and 0.53631 share of the Company’s common stock for each share of common stock of CenterState Bank, subject to possible adjustment as set forth in the merger agreement. The Company will account for this transaction using the purchase method of accounting.

ITEM 2: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Some of the statements in this report constitute forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995 and the Securities Exchange Act of 1934. These statements related to future events, other future financial performance or business strategies, and include statements containing terminology such as ``may,’’ ``will,’’ ``should,’’ ``expects,’’ ``scheduled,’’ ``plans,’’ ``intends’’, ``anticipates,’’ ``believes,’’ ``estimates,’’ ``potential,’’ or ``continue” or the negative of such terms or other comparable terminology. Actual events or results may differ materially from the results anticipated in these forward looking statements, due to a variety of factors, including, without limitation: the effects of future economic conditions; governmental monetary and fiscal policies, as well as legislative and regulatory changes; the risks of changes in interest rates and the level and composition of deposits, loan demand, and the values of loan collateral; and the effects of competition from other commercial banks, thrifts, consumer finance companies, and other financial institutions operating in the Company’s market area and elsewhere. All forward looking statements attributable to the Company are expressly qualified in their entirety by these cautionary statements. The Company disclaims any intent or obligation to update these forward looking statements, whether as a result of new information, future events or otherwise. There is no assurance that future results, levels of activity, performance or goals will be achieved.

COMPARISON OF BALANCE SHEETS AT SEPTEMBER 30, 2002 AND DECEMBER 31, 2001

Overview

     Total assets of the Company were $379.7 million as of September 30, 2002, compared to $341.4 million at December 31, 2001, an increase of $38.3 million or 11.2%. This increase was primarily the result of the Company’s internally generated loan growth funded by an increase in deposits.

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Federal funds sold and money market accounts

     Federal funds sold and money market accounts was $43.3 million at September 30, 2002 as compared to $18.9 million at December 31, 2001, an increase of $24.4 million or 129%. The Company has increased federal funds sold and money market, primarily due to the relatively low rate of yields offered on short term U.S. Treasury and government agency securities.

Investment securities

     Securities available-for-sale, consisting primarily of U.S. Treasury and government agency securities, were $32.9 million at September 30, 2002 compared to $44.0 million at December 31, 2001, a decrease of $11.1 million or 25.2%. These securities have been recorded at market value. The Company classifies its securities as “available-for-sale” to provide for greater flexibility to respond to changes in interest rates. The U.S. governmental agency security that was classified as held-to-maturity at December 31, 2001 ($1.5 million) matured during February 2002. As of September 30, 2002, the Company does not own any investments classified as held-to-maturity.

Loans

     Total gross loans were $271.0 million at September 30, 2002, compared to $244.9 million at December 31, 2001, an increase of $26.1 million or 10.7%. For the same period, real estate loans increased by $24.4 million or 12.8%, commercial loans increased by $3.0 million or 9.7%, and all other loans including consumer loans decreased by $1.2 million or 5.2%. Total loans net of unearned fees and allowance for loan losses were $267.2 million at September 30, 2002, compared to $241.3 million at December 31, 2001, an increase of $25.9 million or 10.7%.

     The following table sets forth information concerning the loan portfolio by collateral types as of the dates indicated (dollars are in thousands).

Credit quality and allowance for loan losses

     The Company’s allowance for loan losses represents management’s estimate of an amount adequate to provide for potential losses within the existing loan portfolio. Loans are charged against the allowance when management believes collection of the principal is unlikely. The allowance consists of

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amounts established for specific loans and is also based on historical loan loss experience. The specific reserve element is the result of a regular analysis of all loans and commitments based on credit rating classifications and other factors. Management also weighs general economic conditions based on knowledge of specific factors that may affect the collectibility of loans. At September 30, 2002, the allowance for loan losses was $3.4 million or 1.25% of total loans outstanding, compared to $3.1 million or 1.26%, at December 31, 2001.

     The following table sets forth information concerning the activity in the allowance for loan losses during the periods indicated (in thousands of dollars).

Nonperforming assets

     Nonperforming assets include (1) non-accrual loans; (2) accruing loans that are 90 days or more delinquent that are deemed by management to be adequately secured and in the process of collection; (3) OREO (i.e. real estate acquired through foreclosure or deed in lieu of foreclosure); and (4) other repossessed assets (not real estate). All delinquent loans are reviewed on a regular basis and are placed on non-accrual status when, in the opinion of management, the possibility of collecting additional interest is deemed insufficient to warrant further accrual. As a matter of policy, interest is not accrued on loans past due 90 days or more unless the loan is both well secured and in the process of collection. When a loan is placed on non-accrual status, interest accruals cease and uncollected accrued interest is reversed and charged against current income. Additional interest income on such loans is recognized only when received.

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     The following table sets forth information regarding the components of nonperforming assets at the dates indicated (in thousands of dollars).

     Management is continually analyzing its loan portfolio in an effort to recognize and resolve its problem assets as quickly and efficiently as possible. As of September 30, 2002, management believes that its allowance for loan losses was adequate. However, management recognizes that many factors can adversely impact various segments of its market. Accordingly, there is no assurance that losses in excess of such reserves will not be incurred.

Bank premises and equipment

     Bank premises and equipment was $15.1 million at September 30, 2002 compared to $14.8 million at December 31, 2001, an increase of $0.3 million or 2%.

C. S. Processing, Inc.

     C.S. Processing, Inc. is a majority owned (75%) subsidiary of the Company. The three wholly owned subsidiary banks of the Company each own 25%, and the remaining 25% is owned by Centerstate Bank (see Merger Note 6). At September 30, 2002, the Company’s investment in the subsidiary to date was $360,000 and Centerstate Bank contributed $120,000. C. S. Processing processes checks and renders statements (i.e. “item processing center”) for the Company’s three subsidiary banks and for Centerstate Bank. Operations began during July 2001. The last subsidiary bank to convert did so in April 2002.

Deposits

     Total deposits were $345.6 million at September 30, 2002, compared to $308.0 million at December 31, 2001, an increase of $37.6 million or 12.2%. During the nine month period ended September 30, 2002, demand deposits increased by $14.4 million (26.8%), NOW deposits increased by $2.2 million (5.1%), savings and money market accounts increased by $8.3 million (10.9%), and time deposits increased by $12.7 million (9.5%).

Repurchase agreements

     The Company enters into agreements to repurchase securities under which the Company pledges investment securities owned and under its control as collateral against borrowed funds. These short-term borrowings totaled $4.1 million at September 30, 2002 compared to $4.6 million at December 31, 2001, a decrease of $0.5 million, or 10.9%.

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Stockholders’ equity

     Shareholders’ equity at September 30, 2002, was $28.862 million, or 7.6% of total assets, compared to $27.717 million, or 8.1% of total assets at December 31, 2001. The increase in stockholders’ equity was due to year-to-date net income ($1.725 million) and stock options exercised ($47 thousand) less dividends paid ($423 thousand), and a net decrease in the market value of securities available for sale, net of deferred taxes ($204 thousand). The Company paid dividends of $0.05 per share on March 29, 2002, June 28, 2002 and September 30, 2002.

     The Comptroller of the Currency has established risk-based capital requirements for national banks. These guidelines are intended to provide an additional measure of a bank’s capital adequacy by assigning weighted levels of risk to asset categories. Banks are also required to systematically maintain capital against such “off- balance sheet” activities as loans sold with recourse, loan commitments, guarantees and standby letters of credit. These guidelines are intended to strengthen the quality of capital by increasing the emphasis on common equity and restricting the amount of loan loss reserves and other forms of equity such as preferred stock that may be included in capital. As of September 30, 2002, each of the Company’s three subsidiary banks exceeded the minimum capital levels to be considered “Well Capitalized” under the terms of the guidelines.

     Selected consolidated capital ratios at September 30, 2002 and December 31, 2001 are presented in the table below.