SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

                                 ____________

                                   FORM 10-Q

          [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

               For the Quarterly Period Ended September 30, 2001

                                      OR

    [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                             EXCHANGE ACT OF 1934

                          Commission File No. 0-25160

                        ALABAMA NATIONAL BANCORPORATION
                        -------------------------------
            (Exact Name of Registrant as Specified in Its Charter)

        DELAWARE                                         63-1114426
        --------                                         ----------
(State of Incorporation)                    (I.R.S. Employer Identification No.)

            1927 FIRST AVENUE NORTH, BIRMINGHAM, ALABAMA 35203-4009
            -------------------------------------------------------
                    (Address of principal executive office)

          Registrant's telephone number, including area code:  (205) 583-3600
                                                               --------------

              ____________________________________________________
              (Former Name, Former Address and Former Fiscal Year,
                         if Changed Since Last Report)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
  the preceding 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
                                       ---      -----

     Indicate the number of shares outstanding of each of the registrant's
          classes of common stock, as of the latest practicable date.

          Class                         Outstanding at November 13, 2001
          -----                         --------------------------------
Common Stock, $1.00 Par Value                      11,859,193




                                     INDEX

                ALABAMA NATIONAL BANCORPORATION AND SUBSIDIARIES

PART 1.  FINANCIAL INFORMATION                                            PAGE
------------------------------                                            ----
                                                                       
Item 1.  Financial Statements (Unaudited)

         Consolidated statements of condition
         September 30, 2001 and December 31, 2000.........................    3

         Consolidated statements of income
         Three months ended September 30, 2001 and 2000;
         Nine months ended September 30, 2001 and 2000....................    4

         Consolidated statements of comprehensive income
         Three months ended September 30, 2001 and 2000;
         Nine months ended September 30, 2001 and 2000....................    8

         Consolidated condensed statements of cash flows
         Nine months ended September 30, 2001 and 2000....................   10

         Notes to the unaudited consolidated financial statements
         September 30, 2001...............................................   11

Item 2.  Management's Discussion and Analysis of Financial Condition
         and Results of Operations........................................   15

Item 3.  Quantitative and Qualitative Disclosures about Market Risk.......   32

PART II. OTHER INFORMATION
--------------------------

Item 6.  Exhibits and Reports on Form 8-K.................................   32

SIGNATURES................................................................   33


FORWARD-LOOKING INFORMATION
---------------------------

Statements contained in this Quarterly Report on Form 10-Q that are not
historical facts are forward-looking statements.  In addition, Alabama National
BanCorporation ("Alabama National"), through its senior management, from time to
time makes forward-looking public statements concerning its expected future
operations and performance and other developments.  Such forward-looking
statements are necessarily estimates reflecting Alabama National's best judgment
based upon current information and involve a number of risks and uncertainties,
and various factors could cause results to differ materially from those
contemplated by such forward-looking statements.  Such factors could include
those identified from time to time in Alabama National's Securities and Exchange
Commission filings and other public announcements, including the factors
described in Alabama National's Annual Report on Form 10-K for the year ended
December 31, 2000.  With respect to the adequacy of the allowance for loan
losses for Alabama National, these factors include the rate of growth in the
economy, especially in the Southeast, the relative strength and weakness in the
consumer and commercial credit sectors and in the real estate markets and the
performance of the stock and bond markets.  The forward-looking statements
contained in this Quarterly Report speak only as of the date of this report, and
Alabama National undertakes no obligation to revise these statements following
the date of this Quarterly Report on Form 10-Q.

                                       2


Part I - Financial Information

                    Item 1 - Financial Statements (Unaudited)
                Alabama National BanCorporation and Subsidiaries
                      Consolidated Statements of Condition
                      ------------------------------------
                      (In thousands, except share amounts)


                                                                                           September 30, 2001      December 31, 2000
                                                                                           ------------------      -----------------
                                                                                                              
Assets
     Cash and due from banks................................................................    $   89,617             $   80,476
     Interest-bearing deposits in other banks...............................................        23,373                  7,630
     Investment securities (estimated market values of $185,690 and $61,485)................       182,687                 60,762
     Securities available for sale..........................................................       288,232                325,297
     Trading securities.....................................................................         2,769                    577
     Federal funds sold and securities purchased under resell agreements....................        24,033                 30,260
     Loans held for sale....................................................................        17,582                  5,226
     Loans..................................................................................     1,830,968              1,711,896
     Unearned income........................................................................        (1,043)                (1,086)
                                                                                                ----------             ----------
     Loans, net of unearned income..........................................................     1,829,925              1,710,810
     Allowance for loan losses..............................................................       (23,371)               (22,368)
                                                                                                ----------             ----------
     Net loans..............................................................................     1,806,554              1,688,442
     Property, equipment and leasehold improvements, net....................................        55,072                 52,047
     Intangible assets......................................................................        12,929                 14,347
     Cash surrender value of life insurance.................................................        48,062                 44,473
     Receivable from investment division customers..........................................        65,571                  7,745
     Other assets...........................................................................        37,437                 41,003
                                                                                                ----------             ----------
     Totals.................................................................................    $2,653,918             $2,358,285
                                                                                                ==========             ==========
 Liabilities and Stockholders' Equity
     Deposits:
       Noninterest bearing..................................................................    $  262,994             $  244,400
       Interest bearing.....................................................................     1,605,940              1,562,695
                                                                                                ----------             ----------
     Total deposits.........................................................................     1,868,934              1,807,095
     Federal funds purchased and securities sold under repurchase agreements................       256,105                166,580
     Treasury, tax and loan accounts........................................................         3,325                    900
     Short-term borrowings..................................................................        34,600                 91,439
     Payable for securities purchased for investment division customers.....................        64,816                  5,568
     Accrued expenses and other liabilities.................................................        47,554                 31,173
     Long-term debt.........................................................................       189,104                 83,926
                                                                                                ----------             ----------
     Total liabilities......................................................................     2,464,438              2,186,681

     Common stock, $1 par, authorized 17,500,000 shares; issued 11,921,669 and
       11,921,628 shares at September 30, 2001 and December 31, 2000, respectively..........        11,922                 11,922
     Additional paid-in capital.............................................................        87,862                 86,115
     Retained earnings......................................................................        87,636                 77,812
     Treasury stock at cost, 57,476 and 136,099 shares at September 30, 2001 and
      December 31, 2000, respectively.......................................................        (1,424)                (3,431)
     Accumulated other comprehensive income (loss), net of tax..............................         3,484                   (814)
                                                                                                ----------             ----------
     Total stockholders' equity.............................................................       189,480                171,604
                                                                                                ----------             ----------
     Totals.................................................................................    $2,653,918             $2,358,285
                                                                                                ==========             ==========

See accompanying notes to unaudited consolidated financial statements

                                       3


                Alabama National BanCorporation and Subsidiaries
                  Consolidated Statements of Income (Unaudited)
                  ---------------------------------------------
                      (In thousands, except per share data)




                                                                                               For the three months
                                                                                                ended September 30,
                                                                                               --------------------
                                                                                            2001                  2000
                                                                                            ----                  ----
                                                                                                          
 Interest income:
     Interest and fees on loans.....................................................      $37,056                $37,980
     Interest on securities.........................................................        7,201                  5,997
     Interest on deposits in other banks............................................          162                     28
     Interest on trading securities.................................................           18                     35
     Interest on Federal funds sold and securities purchased
       under resell agreements......................................................          448                    629
                                                                                         --------                -------
 Total interest income..............................................................       44,885                 44,669

 Interest expense:
     Interest on deposits...........................................................        17,603                18,996
     Interest on Federal funds purchased and securities sold
       under repurchase agreements..................................................         2,209                 2,435
     Interest on long and short-term borrowings.....................................         2,532                 2,789
                                                                                          --------               -------
 Total interest expense.............................................................        22,344                24,220
                                                                                          --------               -------
 Net interest income................................................................        22,541                20,449
 Provision for loan losses..........................................................           919                   490
                                                                                          --------               -------
 Net interest income after provision for loan losses................................        21,622                19,959

 Noninterest income:
     Securities gains...............................................................            91                     1
     Gain (loss) on disposition of assets...........................................            24                    (7)
     Service charges on deposit accounts............................................         2,318                 2,095
     Investment services income.....................................................         3,132                 1,603
     Securities brokerage and trust income..........................................         2,092                 1,855
     Origination and sale of mortgage loans.........................................         1,950                   890
     Bank owned life insurance......................................................           618                   515
     Insurance commissions..........................................................           499                   402
     Other..........................................................................         1,011                 1,005
                                                                                          --------               -------
 Total noninterest income...........................................................        11,735                 8,359


                                       4


                Alabama National BanCorporation and Subsidiaries
           Consolidated Statements of Income (Unaudited)(Continued)
           --------------------------------------------------------
                      (In thousands, except per share data)




                                                                                       For the three months
                                                                                        ended September 30,
                                                                                      -----------------------
                                                                                         2001            2000
                                                                                         ----            ----
                                                                                                 
 Noninterest expense:
     Salaries and employee benefits................................................     11,026           9,800
     Commission based compensation.................................................      3,053           1,463
     Occupancy and equipment expenses..............................................      2,400           2,303
     Other.........................................................................      5,870           5,230
                                                                                       -------         -------
 Total noninterest expense.........................................................     22,349          18,796
                                                                                       -------         -------
 Income before provision for income taxes..........................................     11,008           9,522
 Provision for income taxes........................................................      3,500           2,966
                                                                                       -------         -------
 Net income........................................................................    $ 7,508         $ 6,556
                                                                                       =======         =======
 Net income per common share (basic)...............................................    $   .63         $   .56
                                                                                       =======         =======
 Weighted average common shares outstanding (basic)................................     11,846          11,782
                                                                                       =======         =======
 Net income per common share (diluted).............................................    $   .62         $   .55
                                                                                       =======         =======
 Weighted average common and common equivalent shares outstanding (diluted)........     12,135          11,954
                                                                                       =======         =======

 See accompanying notes to unaudited consolidated financial statements

                                       5


               Alabama National BanCorporation and Subsidiaries
                 Consolidated Statement of Income (Unaudited)
                 --------------------------------------------
                     (In thousands, except per share data)




                                                                                            For the nine months
                                                                                            ended September 30,
                                                                                            -------------------
                                                                                         2001                  2000
                                                                                         ----                  ----
                                                                                                        
Interest income:
 Interest and fees on loans.....................................................       $112,874              $ 104,036
 Interest on securities.........................................................         20,833                 18,138
 Interest on deposits in other banks............................................            400                    152
 Interest on trading securities.................................................             77                     97
 Interest on Federal funds sold and securities purchased
     under resell agreements....................................................          1,733                  1,901
                                                                                       --------               --------
                                                                                        135,917                124,324


Income expense:
 Interest on deposits...........................................................         57,056                 50,642
 Interest on Federal funds purchased and securities sold
     under repurchase agreements................................................          7,251                  6,745
 Interest on long and short-term borrowings.....................................          7,577                  7,337
                                                                                       --------               --------
 Total interest expense.........................................................         71,884                 64,724
                                                                                       --------               --------
 Net interest income............................................................         64,033                 59,600
 Provision for loan losses......................................................          2,213                  1,753
                                                                                       --------               --------
 Net interest income after provision for loan losses............................         61,820                 57,847

Noninterest income:
 Securities gains...............................................................             91                      1
 Gain (loss) on disposition of assets...........................................             60                    (15)
 Service charges on deposit accounts............................................          6,872                  6,119
 Investment services income.....................................................          9,644                  3,949
 Securities brokerage and trust income..........................................          6,637                  5,454
 Origination and sale of mortgage loans.........................................          5,197                  2,625
 Bank owned life insurance......................................................          1,722                  1,524
 Insurance commissions..........................................................          1,471                  1,499
 Other..........................................................................          3,256                  2,822
                                                                                       --------               --------
Total noninterest income........................................................         34,950                 23,978


                                       6


                Alabama National BanCorporation and Subsidiaries
            Consolidated Statements of Income (Unaudited) (Continued)
            ---------------------------------------------------------
                      (In thousands, except per share data)



                                                                                                    For the nine months
                                                                                                    ended September 30,
                                                                                                    --------------------
                                                                                                  2001               2000
                                                                                                  ----               ----
                                                                                                              
 Noninterest expense:
     Salaries and employee benefits........................................................       33,102             28,867
     Commission based compensation.........................................................        8,917              3,616
     Occupancy and equipment expenses......................................................        7,386              6,630
     Other.................................................................................       17,592             15,539
                                                                                                 -------            -------
 Total noninterest expense.................................................................       66,997             54,652
                                                                                                 -------            -------

 Income before provision for income taxes..................................................       29,773             27,173
 Provision for income taxes................................................................        9,446              8,443
                                                                                                 -------            -------
 Net income................................................................................      $20,327            $18,730
                                                                                                 =======            =======

 Net income per common share (basic).......................................................      $  1.72            $  1.59
                                                                                                 =======            =======

 Weighted average common shares outstanding (basic)........................................       11,819             11,794
                                                                                                 =======            =======

 Net income per common share (diluted).....................................................      $  1.68            $  1.57
                                                                                                 =======            =======

 Weighted average common and common equivalent shares outstanding (diluted)................       12,116             11,956
                                                                                                 =======            =======

 See accompanying notes to unaudited consolidated financial statements

                                       7


                Alabama National BanCorporation and Subsidiaries
           Consolidated Statements of Comprehensive Income (Unaudited)
           -----------------------------------------------------------
                                 (In thousands)



                                                                                            For the three months
                                                                                             ended September 30,
                                                                                            ---------------------
                                                                                              2001          2000
                                                                                              ----          ----
                                                                                                      
 Net income..........................................................................        $7,508         $6,556
 Other comprehensive income:
     Unrealized gains on securities available for sale...............................         2,803          3,496
 Less:  Reclassification adjustment for net gains included
     in net income...................................................................            91             --
                                                                                             ------         ------
 Other comprehensive income, before tax..............................................         2,712          3,496
 Provision for income taxes related to
     items of other comprehensive income.............................................           996          1,215
                                                                                             ------         ------
 Other comprehensive income, net of tax..............................................         1,716          2,281
                                                                                             ------         ------
 Comprehensive income................................................................        $9,224         $8,837
                                                                                             ======         ======

See accompanying notes to unaudited consolidated financial statements

                                       8


                Alabama National BanCorporation and Subsidiaries
           Consolidated Statements of Comprehensive Income (Unaudited)
           -----------------------------------------------------------
                                 (In thousands)


                                                                                               For the nine months
                                                                                                ended September 30,
                                                                                               --------------------
                                                                                            2001                 2000
                                                                                            ----                 ----
                                                                                                           
 Net income..........................................................................      $20,327               $18,730
 Other comprehensive income:
     Unrealized gains on securities available for sale...............................        6,771                 1,622
 Less:  Reclassification adjustment for net gains included
     in net income...................................................................           91                    --
                                                                                           -------               -------
 Other comprehensive income, before tax..............................................        6,680                 1,622
 Provision for income taxes related to
     items of other comprehensive income.............................................        2,382                   505
                                                                                           -------               -------
 Other comprehensive income, net of tax..............................................        4,298                 1,117
                                                                                           -------               -------
 Comprehensive income................................................................      $24,625               $19,847
                                                                                           =======               =======

See accompanying notes to unaudited consolidated financial statements

                                       9


                Alabama National BanCorporation and Subsidiaries
           Consolidated Condensed Statements of Cash Flows (Unaudited)
           -----------------------------------------------------------
                                 (In thousands)



                                                                                                    For the nine months
                                                                                                     ended September 30,
                                                                                                    --------------------
                                                                                                2001                   2000
                                                                                                ----                   ----
                                                                                                                
 Net cash flows provided by operating activities.......................................       $ 43,862               $ 21,586

 Cash flows from investing activities:
 Proceeds from maturities of investment securities.....................................          40,231                  6,476
 Puchases of investment securities.....................................................        (162,074)               (20,954)
 Purchases of securities available for sale............................................        (112,942)               (41,134)
 Proceeds from sale of securities available for sale...................................           5,234                    126
 Proceeds from maturities of securities available for sale.............................         151,690                 58,903
 Net (increase) decrease in interest bearing deposits in other banks...................         (15,743)                 4,875
 Net (increase) decrease in federal funds sold and securities purchased
     under resell agreements...........................................................           6,227                (10,782)
 Net increase in loans.................................................................        (134,603)              (213,810)
 Purchases of property, equipment and leasehold improvements...........................          (6,470)                (6,645)
 Cash paid for bank-owned life insurance...............................................          (1,869)                (8,338)
 Costs capitalized on other real estate owned..........................................            (152)                   (48)
 Proceeds from sale of other real estate owned.........................................           2,148                    524
 Cash paid in purchase business combination, net of cash received......................              --                (19,019)
 Proceeds from sale of property, equipment and leasehold improvements..................              55                      7
                                                                                              ---------              ---------
 Net cash used in investing activities.................................................        (228,268)              (249,819)
                                                                                              ---------              ---------
 Cash flows from financing activities:
 Net increase in deposits..............................................................          61,839                223,498
 Increase in federal funds purchased and securities sold
     under agreements to repurchase....................................................          89,525                  6,200
 Net increase in short and long-term borrowings and capital leases.....................          50,764                  7,495
 Exercise of stock options and other stock based compensation..........................            (408)                    58
 Purchase of treasury stock............................................................              --                   (588)
 Changes incidental to merger..........................................................             (10)                    --
 Dividends on common stock.............................................................          (8,163)                (7,252)
                                                                                              ---------              ---------
 Net cash provided by financing activities.............................................         193,547                229,411
                                                                                              ---------              ---------

 Increase in cash and cash equivalents.................................................           9,141                  1,178
 Cash and cash equivalents, beginning of period........................................          80,476                 78,345
                                                                                              ---------              ---------
 Cash and cash equivalents, end of period..............................................       $  89,617              $  79,523
                                                                                              =========              =========

 Supplemental schedule of noncash investing and financing activities
 Acquisition of collateral in satisfaction of loans....................................       $   1,922              $     601
                                                                                              =========              =========
 Transfer of property to other real estate owned.......................................       $     465              $      --
                                                                                              =========              =========
 Adjustment to market value of securities available for sale, net
     of deferred income taxes..........................................................       $   4,298              $   1,117
                                                                                              =========              =========
 Assets acquired in purchase business combination......................................       $      --              $  70,293
                                                                                              =========              =========
 Liabilities assumed in purchase business combination..................................       $      --              $  54,361
                                                                                              =========              =========


See accompanying notes to unaudited consolidated financial statements

                                       10


                ALABAMA NATIONAL BANCORPORATION AND SUBSIDIARIES
            NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2001

NOTE A - BASIS OF PRESENTATION
------------------------------

The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and the instructions to Form 10-Q and Article 10 of
Regulation S-X.  Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements.  In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included.  Operating results for the three months and nine months ended
September 30, 2001 are subject to year-end audit and are not necessarily
indicative of the results of operations to be expected for the year ending
December 31, 2001.  These interim financial statements should be read in
conjunction with the consolidated financial statements and footnotes thereto
included in Alabama National's Form 10-K for the year ended December 31, 2000.

NOTE B - COMMITMENT AND CONTINGENCIES
-------------------------------------

Alabama National's subsidiary banks make loan commitments and incur contingent
liabilities in the normal course of business, which are not reflected in the
consolidated statements of condition.

NOTE C - RECENTLY ISSUED PRONOUNCEMENTS
---------------------------------------

Derivative Investments and Hedging Activities

Effective January 1, 2001, Alabama National BanCorporation adopted Statement of
Financial Accounting Standard No. 133, Accounting for Derivative Instruments and
Hedging Activities, ("Statement 133").  Statement 133 standardizes the
accounting for derivative instruments, including certain derivative instruments
embedded in other contracts, by requiring that an entity recognize those items
as assets or liabilities in the statement of financial position and measure them
at fair value.  If certain conditions are met, an entity may elect to designate
a derivative instrument as a hedging instrument.  Statement 133 generally
provides for matching the timing of gain or loss recognition on the hedging
instrument with the recognition of (a) the changes in the fair value of the
hedged asset or liability that are attributable to the hedged risk or (b) the
earnings effect of the hedged forecasted transaction.  Alabama National's
derivative activities at September 30, 2001, relate solely to the interest rate
lock commitments (IRLCs), which Alabama National has entered into with certain
customers for specific short-term periods of time.  These IRLCs relate to
prospective mortgage loans, which Alabama National originates and then
immediately transfers to secondary mortgage servicers.  The transfer of these
IRLCs allows Alabama National to pass financial risk associated with potential
changes in interest rates on to secondary mortgage servicers.  Alabama National
also reduces its financial risk associated with mortgage lending by utilizing
"best efforts" agreements with secondary mortgage servicers.  These agreements
relieve Alabama National of its liability to deliver if a mortgage loan fails to
close.  The adoption of Statement 133 as of January 1, 2001, did not have a
material impact on the financial position or results of operations of Alabama
National BanCorporation, as of and for the period ended September 30, 2001.

Business Combinations

In June 2001, the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standard No. 141, Business Combinations ("Statement
141"), which has an effective date of June 30, 2001 for all business
combinations initiated after this date.  This statement supercedes Accounting
Principles Board Opinion No.16, Business Combinations, and FASB Statement No.
38, Accounting for Preacquisition Contingencies of Purchase Enterprises.  This
statement requires all business combinations within the scope of Statement 141
to be accounted for using the purchase method of accounting.  For business
combinations completed prior to June 30, 2001, Statement 141 requires
companies to recognize intangible assets apart from goodwill and expand the
disclosures relating to assets acquired and liabilities assumed. The adoption of

                                       11


Statement 141 precludes Alabama National from accounting for any business
acquisition consummated after June 30, 2001, as a pooling of interests.

Goodwill and Other Intangible Assets

In June 2001, the FASB issued Statement of Financial Accounting Standard No.
142, Goodwill and Other Intangible Assets ("Statement 142"), which is effective
for all fiscal years beginning after December 31, 2001.  This statement
addresses the accounting treatment for intangible assets, which are acquired
individually or with a group of other assets, in financial statements upon their
acquisition.  Statement 142 also addresses the accounting for goodwill and other
intangible assets for periods after they have been initially recognized in the
financial statements.  Goodwill will cease to be amortized upon the adoption and
implementation of Statement 142 and an annual test for the impairment of
existing goodwill balances will be required.  Alabama National is currently
evaluating the impact that the adoption of Statement 142 will have on Alabama
National's financial statements.


NOTE D - MERGERS AND ACQUISITIONS
---------------------------------

On January 31, 2001, Peoples State Bank of Groveland merged with a newly formed
subsidiary of Alabama National, whereby Peoples State Bank became a wholly owned
subsidiary of Alabama National.  Pursuant to the Peoples State Bank merger each
share of Peoples State Bank common stock was converted into 1.164 shares of
Alabama National common stock.  A total of 734,609 shares of Alabama National
common stock were issued to Peoples State Bank shareholders.  The Peoples State
Bank merger was accounted for as a pooling of interests and, accordingly,
financial statements for all periods have been restated to reflect the results
of operations of the companies on a combined basis from the earliest period
presented, except dividends per share.

Separate results of Alabama National and Peoples State Bank are presented below:




                                                      Three months ended September 30,         Nine months ended September 30,
                                                      --------------------------------         -------------------------------
                                                            2001               2000               2001                 2000
                                                            ----               ----               ----                 ----
                                                                                                        
 Net interest income
        Alabama National BanCorporation............       $21,161            $19,086             $59,920             $55,688
        Peoples State Bank.........................         1,380              1,363               4,113               3,912
                                                          -------            -------             -------             -------

 As currently reported.............................       $22,541            $20,449             $64,033             $59,600
                                                          =======            =======             =======             =======


 Net income
        Alabama National BanCorporation (1)........       $ 7,101            $ 6,206             $19,474             $17,767
        Peoples State Bank (2).....................           407                350                 853                 963
                                                          -------            -------             -------             -------

 As currently reported.............................       $ 7,508            $ 6,556             $20,327             $18,730
                                                          =======            =======             =======             =======


-------------------
(1)  Includes $314,000 of after-tax merger-related expenses during the nine
     months ended September 30, 2001.
(2)  Includes $467,000 of after-tax merger-related expenses during the nine
     months ended September 30, 2001.


On September 6, 2001, Alabama National entered into a merger agreement with
Farmers National Bancshares, Inc. ("Farmers National"), a one-bank holding
company headquartered in Opelika, Alabama.  Under the terms of the merger
agreement, Farmers National will merge with and into Alabama National, and

                                       12


Farmers National's bank subsidiary, The Farmers National Bank of Opelika, will
merge with and into First American Bank, headquartered in Decatur, Alabama.
Alabama National will issue shares of its common stock to existing shareholders
of Farmers National at an exchange ratio of 0.53125 shares of Alabama National
common stock for each share of Farmers National common stock.  Instead of
Alabama National common stock, shareholders of Farmers National can elect to
receive $17.27 in cash in exchange for each share of Farmers National common
stock, subject to certain limitations.  As of September 30, 2001, Farmers
National had assets of $194.5 million.  The merger with Farmers National is
expected to close in the fourth quarter of 2001.  The merger is subject to
Farmers National shareholder approval and certain regulatory approvals.

NOTE E - EARNINGS PER SHARE
---------------------------

The following table reflects the reconciliation of the numerator and denominator
of the basic earnings per share computation to the diluted earnings per share
computation for the three months and nine months ended September 30, 2001 and
2000.




                                                                                        Per Share
                                                              Income         Shares       Amount
                                                              ------         ------       ------
                                                           (In thousands, except per share amounts)
                                                                                 
 THREE MONTHS ENDED SEPTEMBER 30, 2001
 Basic EPS net income..................................      $  7,508        11,846       $ 0.63
                                                                                          ======
 Effect of dilutive securities.........................            --           289
                                                             --------        ------
 Diluted EPS...........................................      $  7,508        12,135       $ 0.62
                                                             ========        ======       ======

 THREE MONTHS ENDED SEPTEMBER 30, 2000
 Basic EPS net income..................................      $  6,556        11,782       $ 0.56
                                                                                          ======
 Effect of dilutive securities.........................            --           172
                                                             --------        ------
 Diluted EPS...........................................      $  6,556        11,954       $ 0.55
                                                             ========        ======       ======

 NINE MONTHS ENDED SEPTEMBER 30, 2001
 Basic EPS net income..................................      $ 20,327        11,819       $ 1.72
                                                                                          ======
 Effect of dilutive securities.........................            --           297
                                                            ---------        ------
 Diluted EPS...........................................     $  20,327        12,116       $ 1.68
                                                            =========        ======       ======

 NINE MONTHS ENDED SEPTEMBER 30, 2000
 Basic EPS net income..................................     $  18,730        11,794       $ 1.59
                                                                                          ======
 Effect of dilutive securities.........................            --           162
                                                            ---------        ------
 Diluted EPS...........................................     $  18,730        11,956       $ 1.57
                                                            =========        ======       ======



NOTE F - TREASURY STOCK REPURCHASE PLAN
---------------------------------------

On October 17, 2001, the board of directors of Alabama National authorized the
repurchase of up to 300,000 shares of its common stock either through open
market purchases, private transactions, or both.  The repurchased shares may be
used for general corporate purposes, including potential future acquisitions and
re-issuance under certain stock benefit plans of Alabama National. The number of
shares actually acquired will be subject to management discretion and will
depend on subsequent developments, market availability and other factors. The
repurchase program does not obligate Alabama National to acquire any particular
number of shares and may be suspended at any time at the company's discretion.

                                       13


NOTE G  - SEGMENT REPORTING
---------------------------

Alabama National's reportable segments represent the distinct major product
lines it offers and are viewed separately for strategic planning purposes by
management.  The following table is a reconciliation of the reportable segment
revenues, expenses, and profit to Alabama National's consolidated totals (in
thousands).



                                               Securities
                                  Investment   Brokerage    Mortgage                Retail and
                                   Services     & Trust      Lending    Insurance   Commercial     Corporate  Elimination
                                   Division     Division    Division    Division      Banking      Overhead     Entries       Total
                                  ----------   ----------   --------    ---------   ----------     ---------  -----------     -----
                                                                                                      
Nine months ended
-----------------
  September 30, 2001:
  ------------------
Interest income..............      $    --      $ 1,601     $   788     $     5      $ 133,936    $    (42)    $   (371)   $ 135,917
Interest expenses............                       364         507           4         70,244       1,136         (371)      71,884
                                   -------------------------------------------------------------------------------------------------
Net interest income..........                     1,237         281           1         63,692      (1,178)                   64,033
Provision for loan losses....                                                            2,213                                 2,213
Noninterest income...........        9,644        6,637       5,307       1,471         11,867          24                    34,950
Noninterest expense..........        7,253        6,623       3,135       1,514         44,914    $  3,558                    66,997
                                   -------------------------------------------------------------------------------------------------
Net income (loss) before tax       $ 2,391      $ 1,251     $ 2,453     $   (42)     $  28,432    $ (4,712)    $     --    $  29,773
                                   =================================================================================================

Nine months ended
-----------------
  September 30, 2000:
  ------------------
Interest income..............      $    --      $ 2,793     $   318     $    11      $ 122,747    $    (45)    $ (1,500)   $ 124,324
Interest expenses............                     1,500         201          10         63,501       1,012       (1,500)      64,724
                                   -------------------------------------------------------------------------------------------------
Net interest income..........                     1,293         117           1         59,246      (1,057)                   59,600
Provision for loan losses....                                                            1,753                                 1,753
Noninterest income...........        3,949        5,454       2,840       1,504         10,215          16                    23,978
Noninterest expense..........        3,764        5,387       2,060       1,421         39,693       2,327                    54,652
                                   -------------------------------------------------------------------------------------------------
Net income (loss) before tax       $   185      $ 1,360     $   897     $    84      $  28,015    $ (3,368)    $     --    $  27,173
                                   =================================================================================================




                                               Securities
                                  Investment   Brokerage    Mortgage                Retail and
                                   Services     & Trust      Lending    Insurance   Commercial     Corporate  Elimination
                                   Division     Division    Division    Division      Banking      Overhead     Entries       Total
                                  ----------   ----------   --------    ---------   ----------     ---------  -----------     -----
                                                                                                      
Three months ended
------------------
   September 30, 2001:
   ------------------
Interest income..............      $    --      $   423     $   253     $    --      $  44,295    $    (17)    $   (69)    $  44,885
Interest expenses............                        68         135                     21,891         319         (69)       22,344
                                   -------------------------------------------------------------------------------------------------
Net interest income..........                       355         118                     22,404        (336)                   22,541
Provision for loan losses....                                                              919                                   919
Noninterest income...........        3,132        2,092       2,016         499          3,992           4                    11,735
Noninterest expense..........        2,362        2,163       1,154         539         15,292    $    839                    22,349
                                   -------------------------------------------------------------------------------------------------
Net income (loss) before tax       $   770      $   284     $   980     $   (40)     $  10,185    $ (1,171)    $    --     $  11,008
                                   =================================================================================================

Three months ended
------------------
   September 30, 2000:
   ------------------
Interest income..............      $    --      $ 1,158     $   129     $    --      $  44,081    $    (16)    $   (683)   $  44,669
Interest expenses............                       683          87           4         23,692         437         (683)      24,220
                                   -------------------------------------------------------------------------------------------------
Net interest income..........                       475          42          (4)        20,389        (453)                   20,449
Provision for loan losses....                                                              490                                   490
Noninterest income...........        1,603        1,855       1,030         407          3,458           6                     8,359
Noninterest expense..........        1,395        1,885         768         423         13,512         813                    18,796
                                   -------------------------------------------------------------------------------------------------
Net income (loss) before tax       $   208      $   445     $   304     $   (20)     $   9,845    $ (1,260)    $     --    $   9,522
                                   =================================================================================================


Corporate overhead is comprised of compensation and benefits for certain members
of management, merger-related costs, interest expense on parent company debt,
amortization of intangibles and other expenses.

                                       14


                 Item 2.  Management's Discussion and Analysis
                of Financial Condition and Results of Operations

Basis of Presentation
---------------------

The following is a discussion and analysis of the consolidated financial
condition of Alabama National and results of operations as of the dates and for
the periods indicated.  On January 31, 2001, Peoples State Bank of Groveland
merged with a newly formed subsidiary of Alabama National, whereby Peoples State
Bank became a wholly owned subsidiary of Alabama National.  Pursuant to the
Peoples State Bank merger each share of Peoples State Bank common stock was
converted into 1.164 shares of Alabama National common stock.  A total of
734,609 shares of Alabama National common stock were issued to Peoples State
Bank shareholders.  The Peoples State Bank merger was accounted for as a pooling
of interests and, accordingly, financial statements for all periods have been
restated to reflect the results of operations of the companies on a combined
basis from the earliest period presented, except dividends per share.  All
significant intercompany accounts and transactions have been eliminated.  The
accounting and reporting policies of Alabama National conform with generally
accepted accounting principles and with general financial services industry
practices.

This information should be read in conjunction with Alabama National's unaudited
consolidated financial statements and related notes appearing elsewhere in this
report and "Management's Discussion and Analysis of Financial Condition and
Results of Operations" appearing in Alabama National's Annual Report on
Form 10-K for the year ended December 31, 2000.

Performance Overview
--------------------

Alabama National's net income was $7.51 million for the third quarter of 2001
(the "2001 third quarter"), compared to $6.56 million for the third quarter of
2000 (the "2000 third quarter").  Net income for the nine months ended September
30, 2001 (the "2001 nine months") was $20.33 million, compared to $18.73 million
for the nine months ended September 30, 2000 (the "2000 nine months").  Net
income per diluted common share for the 2001 and 2000 third quarters was $0.62
and $0.55, respectively.  For the 2001 nine months, net income per diluted
common share was $1.68, compared to $1.57 for the 2000 nine months.  Excluding
after tax merger-related charges incurred during the first quarter of 2001
relating to the Peoples State Bank merger, Alabama National's net income for the
2001 nine months was $21.11 million, compared to $18.73 million for the 2000
nine months, and net income per diluted common share for the 2001 nine months
and 2000 nine months was $1.74 and $1.57, respectively.

The annualized return on average assets for Alabama National was 1.16% for the
2001 third quarter, compared to 1.17% for the 2000 third quarter.  The
annualized return on average assets for Alabama National was 1.09% for the 2001
nine months, compared to 1.17% for the 2000 nine months. The annualized return
on average stockholders' equity decreased for the 2001 third quarter to 16.07%,
as compared to 16.37% for the 2000 third quarter.  The annualized return on
average stockholders' equity decreased for the 2001 nine months to 15.03%, as
compared to 16.36% for the 2000 nine months.  Excluding the after tax merger-
related charges incurred during the first quarter of 2001 relating to the
Peoples State Bank merger, the annualized return on average assets and
annualized return on stockholders' equity for the 2001 nine months were 1.14%
and 15.61%, respectively.  Book value per share at September 30, 2001 was
$15.97, an increase of $1.41 from year-end 2000.  Tangible book value per share
at September 30, 2001 was $14.88, an increase of $1.54 from year-end 2000.
Alabama National paid cash dividends totaling $0.69 on common shares during the
2001 nine months, compared to $0.63 paid on common shares during the 2000 nine
months.

                                       15


Net Income
----------

The principal reason for the increase in net income for each of the 2001 third
quarter and the 2001 nine months, compared to the same periods in 2000, was the
growth in noninterest income. During the 2001 third quarter noninterest income
totaled $11.7 million, compared to $8.4 million in the 2000 third quarter, an
increase of 40.4%.  During the 2001 nine months, Alabama National recorded
noninterest income of $35.0 million compared to $24.0 million during the 2000
nine months, an increase of 45.8%.  During each of the 2001 third quarter, and
2001 nine months, the increase in noninterest income was attributable to
increased production and volume from the investment services division,
securities brokerage division and from fees earned from the origination and sale
of mortgages.  Net interest income also increased slightly in each of the 2001
third quarter and 2001 nine months compared to the same periods in 2000.  Net
interest income is the difference between the income earned on interest bearing
assets and the interest paid on deposits and borrowings used to support such
assets. Net interest income increased by $2.1 million, or 10.2%, to $22.5
million during the 2001 third quarter, from $20.4 million during the 2000 third
quarter. Net interest income increased to $64.0 million during the 2001 nine
months, from $59.6 million during the 2000 nine months, representing an increase
of $4.4 million, or 7.4%.  The increases in noninterest income and net interest
income were offset by increases in noninterest expense of $3.6 million, to $22.3
million for the 2001 third quarter, and $12.3 million, to $67.0 million for the
2001 nine months, compared to $18.8 million and $54.7 million, respectively for
the same periods in 2000. The net income for the 2001 nine months includes
after-tax merger-related charges relating to the Peoples State Bank merger
totaling $781,000.  These charges on a pre-tax basis consist of approximately
$135,000 in legal and accounting fees, $385,000 in employment-related expenses,
$300,000 in advisory fees/commissions, $121,000 in technology conversion
charges, and $57,000 in other charges.  These pre-tax charges increased
noninterest expense for the 2001 nine months by $997,000.

Average earning assets for the 2001 third quarter and nine months increased by
$312.3 million and $331.9 million, respectively, as compared to the same periods
in 2000.  Average interest-bearing liabilities increased by $263.2 million and
$289.6 million during the 2001 third quarter and nine months, respectively, as
compared to the same periods in 2000. The average taxable equivalent rate earned
on assets was 7.63% and 8.03% for the 2001 third quarter and 2001 nine months,
compared to 8.78% and 8.60% for the 2000 third quarter and 2000 nine months,
respectively.  The average rate paid on interest-bearing liabilities was 4.30%
and 4.80% for the 2001 third quarter and 2001 nine months, respectively,
compared to 5.35% and 5.05% for the 2000 third quarter and 2000 nine months,
respectively. The net interest margin was 3.81% and 3.76% for the 2001 third
quarter and 2001 nine months, respectively, compared to 4.00% and 4.10% for the
2000 third quarter and 2000 nine months.  The reduction in net interest margin
is largely due to the effects of interest rate reductions by the Federal Reserve
during the first nine months of 2001.  Alabama National's interest earning
assets have repriced more quickly than its interest-bearing liabilities.  During
the third quarter of 2001 Alabama National's net interest margin improved 7
basis points when compared to the net interest margin recorded in the 2001
second quarter.  Management anticipates that as more interest-bearing
liabilities mature and reprice that the net interest margin will continue to
improve, absent any additional rate reductions by the Federal Reserve or
significant changes in the general interest rate environment.

                                       16


The following tables depict, on a taxable equivalent basis for the 2001 and 2000
third quarter and nine months, certain information related to Alabama National's
average balance sheet and its average yields on assets and average costs of
liabilities.  Such yields or costs are derived by dividing income or expense by
the average daily balance of the associated assets or liabilities.


                 AVERAGE BALANCES, INCOME AND EXPENSES AND RATES
                 (Amounts in thousands, except yields and rates)



                                                                   Nine months ended September 30,
                                                   ----------------------------------------------------------------
                                                                2001                               2000
                                                   -----------------------------      -----------------------------
                                                   Average     Income/    Yield/      Average     Income/    Yield/
                                                   Balance     Expense     Cost       Balance     Expense     Cost
                                                   -------     -------    ------      -------     -------    ------
                                                                                           
Assets:
 Earning assets:
   Loans (1) (3)..............................    $1,785,507   $113,102       8.47%  $1,538,124   $104,190      9.05%
   Securities:
    Taxable...................................       396,226     19,734       6.66      327,874     16,913      6.89
    Tax exempt................................        29,417      1,665       7.57       32,736      1,856      7.57
   Cash balances in other banks...............        13,313        400       4.02        3,650        152      5.56
   Funds sold.................................        49,738      1,733       4.66       39,754      1,881      6.32
   Trading account securities.................         1,699         77       6.06        1,891         97      6.85
                                                  ----------   --------              ----------   --------
       Total earning assets (2)...............     2,275,900    136,711       8.03    1,944,029    125,089      8.60
                                                  ----------   --------              ----------   --------
 Cash and due from banks......................        79,705                             74,501
 Premises and equipment.......................        51,793                             48,430
 Other assets.................................       101,074                             90,996
 Allowance for loan losses....................       (22,939)                           (20,241)
                                                  ----------                         ----------
        Total assets..........................    $2,485,533                         $2,137,715
                                                  ==========                         ==========

 Liabilities:
 Interest-bearing liabilities:
   Interest-bearing transaction accounts......    $  306,897      6,766       2.95      247,781      5,884      3.17
   Savings deposits...........................       319,224      7,736       3.24      324,189      8,588      3.54
   Time deposits..............................       952,014     42,554       5.98      825,202     36,170      5.85
   Funds purchased............................       225,508      7,251       4.30      153,125      6,745      5.88
   Other short-term borrowings................        36,216      1,476       5.45       56,307      2,911      6.91
   Long-term debt ............................       160,371      6,101       5.09      104,012      4,426      5.68
                                                  ----------   --------              ----------   --------
        Total interest-bearing liabilities....     2,000,230     71,884       4.80    1,710,616     64,724      5.05
                                                  ----------   --------              ----------   --------
 Demand deposits..............................       257,834                            242,066
 Accrued interest and other liabilities.......        46,622                             32,095
 Stockholders' equity.........................       180,847                            152,938
                                                  ----------                         ----------
     Total liabilities and stockholders'
      equity..................................    $2,485,533                         $2,137,715
                                                  ==========                         ==========

 Net interest spread..........................                                3.23%                             3.55%
                                                                              ====                              ====
 Net interest income/margin on
   a taxable equivalent basis.................                   64,827       3.81%                  60,365     4.15%
                                                                              ====                              ====
 Tax equivalent adjustment (2)................                      794                                 765
                                                               --------                             -------     ----
 Net interest income/margin...................                 $ 64,033       3.76%                 $59,600     4.10%
                                                               ========       ====                  =======     ====

-------------------
(1)  Average loans include nonaccrual loans.  All loans and deposits are
     domestic.
(2)  Tax equivalent adjustments are based upon assumed tax rate of 34%, and do
     not reflect the disallowance for Federal income tax purposes of interest
     expense related to certain tax exempt assets.
(3)  Fees in the amount of $3,227,000 and $2,627,000 are included in interest
     and fees on loans for the nine months ended September 30, 2001 and 2000,
     respectively.

                                       17


                 AVERAGE BALANCES, INCOME AND EXPENSES AND RATES
                 (Amounts in thousands, except yields and rates)


                                                                   Three months ended September 30,
                                                   ----------------------------------------------------------------
                                                                2001                               2000
                                                   -----------------------------      -----------------------------
                                                   Average     Income/    Yield/      Average     Income/    Yield/
                                                   Balance     Expense     Cost       Balance     Expense     Cost
                                                   -------     -------    ------      -------     -------    ------
                                                                                           
Assets:
 Earning assets:
   Loans (1) (3)................................  $1,835,876   $37,138      8.03%  $1,639,850    $38,029      9.23%
   Securities:
    Taxable.....................................     415,038     6,841      6.54      322,831      5,576      6.87
    Tax exempt..................................      28,882       546      7.50       33,203        638      7.64
   Cash balances in other banks.................      16,016       162      4.01        2,423         28      4.60
   Funds sold...................................      50,767       448      3.50       35,277        609      6.87
   Trading account securities...................       1,304        18      5.48        1,965         35      7.09
                                                  ----------  --------             ----------   --------
       Total earning assets (2).................   2,347,883    45,153      7.63    2,035,549     44,915      8.78
                                                  ----------  --------             ----------   --------
 Cash and due from banks........................      75,365                           73,421
 Premises and equipment.........................      51,400                           49,726
 Other assets...................................     106,614                           97,166
 Allowance for loan losses......................     (23,183)                         (21,390)
                                                  ----------                       ----------
        Total assets............................  $2,558,079                       $2,234,472
                                                  ==========                       ==========

 Liabilities:
 Interest-bearing liabilities:
   Interest-bearing transaction accounts........  $  320,600     2,091      2.59      250,699      2,140      3.40
   Savings deposits.............................     334,349     2,433      2.89      327,313      2,991      3.64
   Time deposits................................     937,711    13,079      5.53      893,515     13,865      6.17
   Funds purchased..............................     255,648     2,209      3.43      159,942      2,435      6.06
   Other short-term borrowings..................      38,762       347      3.55       89,597      1,584      7.03
   Long-term debt...............................     176,781     2,185      4.90       79,571      1,205      6.02
                                                  ----------  --------             ----------   --------
        Total interest-bearing liabilities......   2,063,851    22,344      4.30    1,800,637     24,220      5.35
                                                  ----------  --------             ----------   --------
 Demand deposits................................     266,229                          242,636
 Accrued interest and other liabilities.........      42,658                           31,834
 Stockholders' equity...........................     185,341                          159,365
                                                  ----------                       ----------
     Total liabilities and stockholders'
      equity....................................  $2,558,079                       $2,234,472
                                                  ==========                       ==========

 Net interest spread............................                            3.33%                             3.43%
                                                                            ====                              ====
 Net interest income/margin on
   a taxable equivalent basis...................                22,809      3.85%                 20,695      4.04%
                                                                            ====                              ====
 Tax equivalent adjustment (2)..................                   268                               246
                                                              --------                           -------
 Net interest income/margin.....................               $22,541      3.81%                $20,449      4.00%
                                                              ========      ====                 =======      ====


------------------
(1)  Average loans include nonaccrual loans.  All loans and deposits are
     domestic.
(2)  Tax equivalent adjustments are based upon assumed tax rate of 34%, and do
     not reflect the disallowance for Federal income tax purposes of interest
     expense related to certain tax exempt assets.
(3)  Fees in the amount of $1,143,000 and $906,000 are included in interest and
     fees on loans for the three months ended September 30, 2001 and 2000,
     respectively.

                                       18


The following tables set forth, on a taxable equivalent basis, the effect which
varying levels of earning assets and interest-bearing liabilities and the
applicable rates had on changes in net interest income for the 2001 third
quarter and nine months, compared to the 2000 third quarter and nine months,
respectively.  For the purposes of these tables, changes, which are not solely
attributable to volume or rate, are allocated to volume and rate on a pro rata
basis.


                  ANALYSIS OF CHANGES IN NET INTEREST INCOME
                          (Amounts in thousands)



                                                                            Nine Months Ended September 30,
                                                                      -------------------------------------------
                                                                                 2001 Compared to 2000
                                                                                    Variance Due to
                                                                      -------------------------------------------
                                                                          Volume        Yield/Rate       Total
                                                                      -------------------------------------------
                                                                                              
Earning assets:
 Loans...........................................................         $19,131        $ (10,219)     $ 8,912
 Securities:
   Taxable.......................................................           3,732             (911)       2,821
   Tax exempt....................................................            (191)              --         (191)
 Cash balances in other banks....................................             326              (78)         248
 Funds sold......................................................             573             (721)        (148)
 Trading account securities......................................              (9)             (11)         (20)
                                                                          -------        ---------      -------
      Total interest income......................................          23,562          (11,940)      11,622

 Interest-bearing liabilities:
 Interest-bearing transaction accounts...........................           1,528             (646)         882
 Savings and money market deposits...............................            (130)            (722)        (852)
 Time deposits...................................................           5,577              807        6,384
 Funds purchased.................................................           3,408           (2,902)         506
 Other short-term borrowings.....................................            (901)            (534)      (1,435)
 Long-term debt..................................................           2,435             (760)       1,675
                                                                          -------        ---------      -------

      Total interest expense.....................................          11,917           (4,757)       7,160
                                                                          -------        ---------      -------
      Net interest income on  a taxable
        equivalent basis.........................................         $11,645        $  (7,183)       4,462
                                                                          =======        =========      -------
 Taxable equivalent adjustment...................................                                           (29)
                                                                                                        -------
 Net interest income.............................................                                       $  4,433
                                                                                                        ========


                                       19


                     ANALYSIS OF CHANGES IN NET INTEREST INCOME
                             (Amounts in thousands)



                                                                           Three Months Ended September 30,
                                                                      -------------------------------------------
                                                                                 2001 Compared to 2000
                                                                                    Variance Due to
                                                                      -------------------------------------------
                                                                          Volume       Yield/Rate       Total
                                                                      -------------------------------------------
                                                                                               
 Earning assets:
 Loans............................................................       $18,426        $(19,317)      $  (891)
 Securities:
   Taxable........................................................         2,907          (1,642)        1,265
   Tax exempt.....................................................           (81)            (11)          (92)
 Cash balances in other banks.....................................           159             (25)          134
 Funds sold.......................................................         1,047          (1,208)         (161)
 Trading account securities.......................................           (10)             (7)          (17)
                                                                         -------        --------        ------

      Total interest income.......................................        22,448         (22,210)          238

 Interest-bearing liabilities:
 Interest-bearing transaction accounts............................         2,164          (2,213)          (49)
 Savings and money market deposits................................           411            (969)         (558)
 Time deposits....................................................         3,439          (4,225)         (786)
 Funds purchased..................................................         4,745          (4,971)         (226)
 Other short-term borrowings......................................          (661)           (576)       (1,237)
 Long-term debt...................................................         2,397          (1,417)          980
                                                                         -------        --------        ------

      Total interest expense......................................        12,495         (14,371)       (1,876)
                                                                         -------        --------        ------
      Net interest income on a taxable
        equivalent basis..........................................       $ 9,953        $ (7,839)        2,114
                                                                         =======        ========
 Taxable equivalent adjustment....................................                                         (22)
                                                                                                        ------
 Net interest income..............................................                                      $2,092
                                                                                                        ======


The provision for loan losses represents a charge to current earnings necessary
to maintain the allowance for loan losses at an appropriate level based on
management's analysis of the potential risk in the loan portfolio.  The amount
of the provision is a function of the level of loans outstanding, the level of
non-performing loans, historical loan loss experience, the amount of loan losses
actually charged against the allowance during a given period and current
economic conditions.  The provision for loan losses was $919,000 for the 2001
third quarter, an increase of $429,000 when compared with $490,000 recorded in
the 2000 third quarter.  The provision for loan losses was $2.2 million for the
2001 nine months, compared to $1.8 million in the 2000 nine months.  The
increase during the 2001 third quarter and nine months is attributable to a
higher level of net charge-offs, growth in the loan portfolio and an increase in
nonperforming loans.  The allowance for loan losses as a percentage of
outstanding loans, net of unearned income, was 1.28% at September 30, 2001,
compared to 1.31% at December 31, 2000.

Because of the inherent uncertainty of assumptions made during the assessment
process, there can be no assurance that loan losses in future periods will not
exceed the allowance for loan losses or that additional allocations to the
allowance will not be required.  See Asset Quality.
                                     -------------

                                       20



Total noninterest income for the 2001 third quarter was $11.7 million, compared
to $8.4 million for the 2000 third quarter, an increase of 40.4%. For the 2001
nine months, noninterest income increased to $35.0 million, compared to $24.0
million for the 2000 nine months, an increase of 45.8%. The components of
noninterest income include service charges on deposits, investment services
revenue, securities brokerage and trust revenue, insurance commissions, and fees
relating to the origination and sale of mortgage loans.  Service charges on
deposits for the 2001 third quarter and 2000 third quarter were $2.3 million and
$2.1 million, respectively.  For the 2001 nine months, service charge income
increased to $6.9 million, from $6.1 million for the 2000 nine months.  Revenue
from the investment division totaled $3.1 million in the 2001 third quarter, an
increase of $1.5 million, or 95.4%, as compared to $1.6 million recorded in the
2000 third quarter.  During the 2001 nine months, the investment division
revenue totaled $9.6 million, an increase of $5.7 million, or 144.2%, as
compared to $3.9 million in the 2000 nine months.  The substantial increase in
revenue in the investment division was due to increased liquidity of community
banks served by this division and the decline of interest rates during 2001,
both of which led to increased demand for fixed income securities by its
customers.  Securities brokerage and trust revenue increased 12.8%, to $2.1
million in the 2001 third quarter, compared to $1.9 million in the 2000 third
quarter.  For the 2001 nine months, securities brokerage and trust revenue
totaled $6.6 million, as compared to $5.5 million during the 2000 nine months,
an increase of 21.7%.  The increase in the securities brokerage and trust
division during each period of 2001 is attributable to continued expansion in
the number of customers and total customer assets under management by these
departments.  Insurance commissions totaled $499,000 and $1.5 million during the
2001 third quarter and 2001 nine months, respectively, as compared to $402,000
and $1.5 million recorded in the same periods during 2000.  Fees generated from
the origination and sale of mortgages increased to $2.0 million for the 2001
third quarter, from $890,000 in the 2000 third quarter, representing a 119.1%
increase. During the 2001 nine months mortgage fees increased to $5.2 million,
from $2.6 million during the 2000 nine months, an increase of 98.0%. This
increase is primarily a result of declining interest rates and the impact the
interest rate environment has on refinancing and new mortgage origination
activity. Other noninterest income totaled $1.0 million during each of the 2001
and 2000 third quarters. Other noninterest income increased to $3.3 million
during the 2001 nine months, an increase of 15.4%, compared to $2.8 million
recorded in the 2000 nine months.

Noninterest expense was $22.3 million for the 2001 third quarter, compared to
$18.8 million for the 2000 third quarter.  For the 2001 nine months, noninterest
expense was $67.0 million, compared to $54.7 million for the 2000 nine months.
Noninterest expense includes salaries and employee benefits, commission based
compensation, occupancy and equipment expenses and other expenses.  Salaries and
employee benefits were $11.0 million for the 2001 third quarter, compared to
$9.8 million for the 2000 third quarter.  For the 2001 nine months, salaries and
employee benefits were $33.1 million, compared to $28.9 million in the 2000 nine
months.  The increase in salaries and employee benefits represents general
staffing increases concurrent with expansion of offices and business lines and
merit compensation increases.  Commission based compensation was $3.1 million
for the 2001 third quarter, compared to $1.5 million for the 2000 third quarter.
For the 2001 nine months, commission based compensation was $8.9 million,
compared to $3.6 million in the 2000 nine months.  The increase in commission
based compensation during these periods is attributable to increased production
in the mortgage, securities brokerage and investment divisions.  A significant
portion of compensation in these areas is incentive based.  Occupancy and
equipment expense totaled $2.4 million in the 2001 third quarter and $2.3
million in the 2000 third quarter. Occupancy and equipment expense totaled $7.4
million in the 2001 nine months and $6.6 million in the 2000 nine months. The
2001 third quarter and nine months include expenses related to two banking
branches opened in third and fourth quarters of 2000 and expenses related to two
banking branches acquired during August of 2000, which expenses were not
incurred for the full periods in 2000.  Other noninterest expense increased to
$5.9 million in the 2001 third quarter, compared with $5.2 million in the 2000
third quarter.  Other noninterest expense was $17.6 million in the 2001 nine
months and $15.5 million in the 2000 nine months.

                                       21



Because of an increase in pre-tax income, income tax expense was $3.5 million
for the 2001 third quarter, compared to $3.0 million for the 2000 third quarter.
For the 2001 nine months, income tax expense was $9.4 million, compared to $8.4
million for the 2000 nine months.  The effective tax rates for the 2001 third
quarter and the 2001 nine months were 31.8% and 31.7%, respectively, compared to
31.1% for each of the same periods of 2000.  These effective tax rates are
impacted by items of income and expense that are not subject to federal or state
taxation.

Earning Assets
--------------

Loans comprised the largest single category of Alabama National's earning assets
on September 30, 2001.  Loans, net of unearned income, were $1.83 billion, or
69.0% of total assets at September 30, 2001, compared to $1.71 billion, or
72.5%, at December 31, 2000.  Loans grew $119.1 million, or 7.0%, during the
2001 nine months, compared to the 2000 year-end.  Average loans grew $247.4
million, or 16.1%, during the 2001 nine months, compared to the 2000 nine
months.  The following table details the composition of the loan portfolio by
category at the dates indicated:


                          COMPOSITION OF LOAN PORTFOLIO
                     (Amounts in thousands, except percentage)




                                                         September 30, 2001        December 31, 2000
                                                         ------------------        -----------------
                                                                     Percent                  Percent
                                                         Amount      of Total     Amount      of Total
                                                         ------      --------     ------      --------
                                                                                 
 Commercial, financial and
   agricultural...................................     $  252,023       13.77%   $  275,107      16.07%
 Real estate:
   Construction...................................        217,270       11.87       185,814      10.85
   Mortgage - residential.........................        530,087       28.95       490,152      28.63
   Mortgage - commercial..........................        562,286       30.71       498,858      29.14
   Mortgage - other...............................          4,254         .22         4,238        .25
 Consumer.........................................         81,106        4.43        79,458       4.64
 Lease financing receivables......................         72,113        3.94        58,668       3.43
 Securities brokerage margin loans................         15,702         .86        29,901       1.75
 Other............................................         96,127        5.25        89,700       5.24
                                                       ----------      ------    ----------     ------

   Total gross loans..............................      1,830,968      100.00%    1,711,896     100.00%
                                                                       ======                   ======
 Unearned income..................................         (1,043)                   (1,086)
                                                       ----------                ----------
   Total loans, net of
     unearned income..............................      1,829,925                 1,710,810
 Allowance for loan losses........................        (23,371)                  (22,368)
                                                       ----------                ----------
   Total net loans................................     $1,806,554                $1,688,442
                                                       ==========                ==========


The carrying value of investment securities increased $121.9 million in the 2001
nine months, from $60.8 million at December 31, 2000, to $182.7 million at
September 30, 2001. During the 2001 nine months, Alabama National purchased
$162.1 million of investment securities and received $40.2 million from
maturities, including principal paydowns of mortgage backed securities.

The carrying value of securities available for sale decreased $37.1 million in
the 2001 nine months from $325.3 million at December 31, 2000, to $288.2 million
at September 30, 2001.  Purchases of available for sale securities totaled
$112.9 million and maturities, calls, and sales of available for sale securities
totaled $156.9 million.  During the 2001 nine months, unrealized gains on
available for sale securities totaled $4.3 million net of income taxes.

                                       22


Trading account securities, which had a balance of $2.8 million at September 30,
2001, are securities owned by Alabama National prior to sale and delivery to
Alabama National's customers.  It is the policy of Alabama National to limit
positions in such securities to reduce its exposure to market and interest rate
changes. Federal funds sold and securities purchased under agreements to resell
totaled $24.0 million at September 30, 2001 and $30.3 million at December 31,
2000.


Deposits and Other Funding Sources
----------------------------------

Deposits increased by $61.8 million from year-end 2000, to $1.87 billion at
September 30, 2001.  All categories of deposits experienced growth during the
2001 nine months, except time deposits greater than $100,000.  Included in time
deposits greater than $100,000 at September 30, 2001 and December 31, 2000, were
$34.0 million and $87.1 million of brokered deposits, respectively.  During the
2001 nine months, Alabama National decreased its reliance on brokered deposits
due to increases in the other categories of deposits and other funding sources.
Excluding brokered deposits, time deposits greater than $100,000 actually
increased during the 2001 nine months.

Federal funds purchased and securities sold under agreements to repurchase
totaled $256.1 million at September 30, 2001, an increase of $89.5 million from
December 31, 2000.  The treasury, tax and loan account increased to $3.3 million
at September 30, 2001, compared with $900,000 at December 31, 2000.  Short-term
borrowings at September 30, 2001 totaled $34.6 million, including a note payable
to a third party bank of $29.6 million and advances from the Federal Home Loan
Bank ("FHLB") totaling $5.0 million.

                                       23


Alabama National's short-term borrowings at September 30, 2001 and December 31,
2000 are summarized as follows:

                             SHORT-TERM BORROWINGS
                            (Amounts in thousands)



                                                                                            September 30,      December 31,
                                                                                                 2001              2000
                                                                                            -------------      ------------
                                                                                                         
         Note payable to third party bank under secured master note
         agreement; rate varies with LIBOR and was 3.36375% and 7.4318%
         at September 30, 2001 and December 31, 2000, respectively;
         collateralized by Alabama National's stock in subsidiary banks.                       $29,600          $27,439

         FHLB debt due at various maturities ranging from April 23, 2001
         through October 12, 2001; bearing interest at fixed and variable
         rates ranging from 5.08375% to 6.40% and 6.40% to 6.7575% at
         June 30, 2001and December 31, 2000, respectively; collateralized
         by FHLB stock and certain first mortgages. All of these notes
         were called, matured or refinanced during the nine month period
         ended September 30, 2001.                                                                  --           58,000

         FHLB open ended note payable; rate varies daily based on the
         FHLB Daily Rate Credit interest price and was 3.59% and 6.35% at
         September 30, 2001 and December 31, 2000, respectively;
         collateralized by FHLB stock and certain first mortgage loans.                          5,000            6,000

                                                                                               -------------------------
         Total short-term borrowings                                                           $34,600          $91,439
                                                                                               =========================


Alabama National's long-term debt at September 30, 2001 and December 31, 2000 is
summarized as follows:

                                LONG-TERM DEBT
                            (Amounts in thousands)


                                                                                           September 30,    December 31,
                                                                                               2001             2000
                                                                                           -------------    ------------
                                                                                                      
         FHLB debt due April 23, 2004; rate varies with LIBOR and was
         6.48% at December 31, 2000; rate changes to 5.02% from April 23,
         2001 to April 23, 2004; convertible at the option of the FHLB on
         April 23, 2001 to a three month LIBOR advance; collateralized by
         FHLB stock and certain first mortgage loans. Advance was called
         during 2001 second quarter.
                                                                                             $     --         $13,700

         FHLB debt due at various maturities ranging from November 5,
         2003 through August 11, 2011; bearing interest at fixed rates
         ranging from 3.31% to 6.00% and 4.74% to 6.00% at September 30,
         2001and December 31, 2000, respectively; convertible at the option
         of the FHLB at dates ranging from October 9, 2001 to March 26,
         2003;collateralized by FHLB stock, certain first mortgage loans and
         pledged available for sale securities.                                               164,000          45,000

         FHLB debt due February 11, 2003; interest rate varies with LIBOR
         and was 5.6275% and 6.5275% at September 30, 2001 and December 31,
         2000, respectively; collateralized by FHLB stock and certain first
         mortgage loans.                                                                       25,000          25,000

         Various notes payable                                                                     22              29

         Capital leases payable                                                                    82             197

                                                                                             -------------------------
         Total long-term debt                                                                $189,104         $83,926
                                                                                             =========================


                                       24


Asset Quality
-------------

Nonperforming loans are comprised of loans past due 90 days or more and still
accruing interest, loans accounted for on a nonaccrual basis and loans in which
the terms have been restructured to provide a reduction or deferral of interest
or principal because of a deterioration in the financial position of the
borrower.  At September 30, 2001, Alabama National had no loans past due 90 days
or more and still accruing interest.  Accrual of interest is discontinued on a
loan when management believes, after considering economic and business
conditions and collection efforts, that the borrower's financial condition is
such that the collection of interest is doubtful.  It is Alabama National's
policy to place a delinquent loan on nonaccrual status when it becomes 90 days
or more past due.  When a loan is placed on nonaccrual status, all interest that
is accrued on the loan is reversed and deducted from earnings as a reduction of
reported interest.  No additional interest is accrued on the loan balance until
the collection of both principal and interest becomes reasonably certain.  When
a problem loan is finally resolved, there may ultimately be an actual writedown
or charge-off of the principal balance of the loan which would necessitate
additional charges to the allowance for loan losses.

At September 30, 2001, nonperforming assets totaled $10.1 million, compared to
$5.1 million at year-end 2000.  Nonperforming assets as a percentage of loans
plus other real estate were 0.55% at September 30, 2001, compared to 0.30% at
December 31, 2000.  The increase in nonperforming assets is attributable to the
current slowdown in the national economy. Although the level of nonperforming
assets has increased since year-end 2000, the current levels are still below
industry averages.  The following table presents Alabama National's
nonperforming assets for the dates indicated.

                            NONPERFORMING ASSETS
                 (Amounts in thousands, except percentages)


                                                                                   September 30,      December 31,
                                                                                       2001              2000
                                                                                   -------------      ------------
                                                                                                
 Nonaccrual loans...........................................................        $ 8,224              $3,642
 Restructured loans.........................................................             --                  --
 Loans past due 90 days or more and still accruing..........................             --                  --
                                                                                    -------              ------

     Total nonperforming loans..............................................          8,224               3,642

 Other real estate owned....................................................          1,911               1,468
                                                                                    -------              ------

     Total nonperforming assets.............................................        $10,135              $5,110
                                                                                    =======              ======

 Allowance for loan losses to period-end loans..............................           1.28%               1.31%

 Allowance for loan losses to period-end
     nonperforming loans....................................................         284.18              614.17

 Allowance for loan losses to period-end
     nonperforming assets...................................................         230.60              437.73

 Net charge-offs to average loans...........................................           0.09                0.04

 Nonperforming assets to period-end loans
     and other real estate owned............................................           0.55                0.30

 Nonperforming loans to period-end loans....................................           0.45                0.21


                                       25



Net loan charge-offs for the 2001 nine months totaled $2.1 million or 0.09%
(annualized) of average loans for the period.  The allowance for loan losses as
a percentage of total loans, net of unearned income, was 1.28% at September 30,
2001, compared to 1.31% at December 31, 2000.  The following table analyzes
activity in the allowance for loan losses for the 2001 nine months.


                    ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES
                  For the Nine Months Ended September 30, 2001
                   (Amounts in thousands, except percentages)



                                                                      
 Allowance for loan losses at
      beginning of period.........................................       $22,368

 Charge-offs:
      Commercial, financial and agricultural......................           866
      Real estate - mortgage......................................           262
      Consumer....................................................           949
                                                                         -------
           Total charge-offs......................................         2,077
                                                                         -------
 Recoveries:
      Commercial, financial and agricultural......................           208
      Real estate - mortgage......................................           162
      Consumer....................................................           497
                                                                         -------
           Total recoveries.......................................           867
                                                                         -------
            Net charge-offs.......................................         1,210
                                                                         -------

 Provision for loan losses........................................         2,213
                                                                         -------

 Allowance for loan losses at
      end of period...............................................       $23,371
                                                                         =======


                                       26


The loan portfolio is periodically reviewed to evaluate the outstanding loans
and to measure both the performance of the portfolio and the adequacy of the
allowance for loan losses.  This analysis includes a review of delinquency
trends, actual losses and internal credit ratings.  Based on this analysis,
management considers the allowance for loan losses at September 30, 2001 to be
adequate to cover possible loan losses in the portfolio as of that date.
However, because of the inherent uncertainty of assumptions made during the
evaluation process, there can be no assurance that loan losses in future periods
will not exceed the allowance for loan losses or that additional allocations to
the allowance will not be required.

Interest Rate Sensitivity
-------------------------

Alabama National monitors and manages the pricing and maturity of its assets and
liabilities in order to diminish the potential adverse impact that changes in
interest rates could have on net interest income. The principal monitoring
technique employed by Alabama National is simulation analysis, which technique
is augmented by "gap" analysis.

In simulation analysis, Alabama National reviews each individual asset and
liability category and its projected behavior in various different interest
rate environments.  These projected behaviors are based upon management's
past experiences and upon current competitive environments, including the
various environments in the different markets in which Alabama National
competes. Using this projected behavior and differing rate scenarios as inputs,
the simulation analysis generates as output a projection of net interest income.
Alabama National also periodically verifies the validity of this approach by
comparing actual results with those that were projected in previous models. See
Market Risk.
-----------

Another technique used by Alabama National in interest rate management is the
measurement of the interest sensitivity "gap," which is the positive or negative
dollar difference between assets and liabilities that are subject to interest
rate repricing within a given period of time.  Interest rate sensitivity can be
managed by repricing assets and liabilities, selling securities available for
sale, replacing an asset or liability at maturity or by adjusting the interest
rate during the life of an asset or liability.

Alabama National evaluates interest sensitivity risk and then formulates
guidelines regarding asset generation and repricing, and sources and prices of
off-balance sheet commitments in order to decrease interest sensitivity risk.
Alabama National uses computer simulations to measure the net income effect of
various interest rate scenarios.  The modeling reflects interest rate changes
and the related impact on net income over specified periods of time.

                                       27


The following table illustrates Alabama National's interest rate sensitivity at
September 30, 2001, assuming relevant assets and liabilities are collected and
paid, respectively, based upon historical experience rather than their stated
maturities.

                          INTEREST SENSITIVITY ANALYSIS
                      (Amounts in thousands, except ratios)




                                                                                    September 30, 2001
                                                         ------------------------------------------------------------------------
                                                            Zero       After Three      One
                                                           Through       Through      Through
                                                            Three        Twelve        Three    Greater Than
                                                            Months       Months        Years     Three Years       Total
                                                         -----------  ----------    ----------- -------------    -----------
                                                                                                  
 Assets:
 Earning assets:
    Loans (1)......................................      $895,138      $ 198,154      $322,188      $423,803      $1,839,283
    Securities (2).................................        25,561         60,322       123,909       248,436         458,238
    Trading securities.............................         2,769              -             -             -           2,769
    Interest-bearing deposits in
      other banks..................................        23,373              -             -             -          23,373
    Funds sold.....................................        24,033              -             -             -          24,033
                                                         --------      ---------      --------      ---------     ----------
         Total interest-earning assets.............      $970,874      $ 258,486      $446,097       $672,239     $2,347,696

 Liabilities:
 Interest-bearing liabilities:
    Interest-bearing deposits:
        Demand deposits............................       $125,878     $       -     $      -      $199,207       $  325,085
        Savings and money market deposits..........        121,575             -            -       228,617          350,192
        Time deposits (3)..........................        279,389       520,591      102,732        27,951          930,663
     Funds purchased...............................        256,105             -            -             -          256,105
     Short-term borrowings (4).....................         37,925             -            -             -           37,925
     Long-term debt................................         90,003        40,014       59,036            51          189,104
                                                          --------     ---------     --------      --------       ----------
        Total interest-bearing liabilities.........       $910,875     $ 560,605     $161,768      $455,826       $2,089,074
                                                          --------     ---------     --------      --------       ----------

 Period gap........................................       $ 59,999     $(302,119)    $284,329      $216,413
                                                          ========     =========     ========      ========

 Cumulative gap....................................       $ 59,999     $(242,120)    $ 42,209      $258,622       $  258,622
                                                          ========     =========     ========      ========       ==========
 Ratio of cumulative gap to total
  earning assets...................................           2.56%       -10.31%        1.80%        11.02%

 

 -----------------
 (1)  Excludes nonaccrual loans of $8,224,000.
 (2)  Excludes available for sale equity securities of $12,681,000.
 (3)  Excludes matured certificates which have not been redeemed by the customer
      and on which no interest is accruing.
 (4)  Includes treasury, tax and loan account of $3,325,000.

Alabama National generally benefits from increasing market rates of interest
when it has an asset-sensitive gap and generally benefits from decreasing market
rates of interest when it is liability sensitive.  Alabama National is liability
sensitive through the one year time frame, except for the zero through three
month period.  However, Alabama National's gap analysis is not a precise
indicator of its interest sensitivity position.  The analysis presents only a
static view of the timing of maturities and repricing opportunities, without
taking into consideration that changes in interest rates do not affect all
assets and liabilities equally.  For example, rates paid on a substantial
portion of core deposits may change contractually within a relatively short time
frame, but those rates are viewed by management as significantly less interest-
sensitive than market-based rates, such as those paid on non-core deposits.
Accordingly, management believes that a liability-sensitive gap position is not
as indicative of Alabama National's true interest sensitivity as it would be for
an organization which depends to a greater extent on purchased funds to support
earning assets.  Net interest income may be affected by other significant
factors in a given interest rate environment, including changes in the volume
and mix of earning assets and interest-bearing liabilities.

                                       28


Market Risk
-----------

Alabama National's earnings are dependent on its net interest income which is
the difference between interest income earned on all earning assets, primarily
loans and securities, and interest paid on all interest bearing liabilities,
primarily deposits.  Market risk is the risk of loss from adverse changes in
market prices and rates.  Alabama National's market risk arises primarily from
inherent interest rate risk in its lending, investing and deposit gathering
activities.  Alabama National seeks to reduce its exposure to market risk
through actively monitoring and managing its interest rate risk.  Management
relies upon static "gap" analysis to determine the degree of mismatch in the
maturity and repricing distribution of interest earning assets and interest
bearing liabilities which quantifies, to a large extent, the degree of market
risk inherent in Alabama National's balance sheet.  Gap analysis is further
augmented by simulation analysis to evaluate the impact of varying levels of
prevailing interest rates and the sensitivity of specific earning assets and
interest bearing liabilities to changes in those prevailing rates.  Simulation
analysis consists of evaluating the impact on net interest income given changes
from 200 basis points below to 200 basis points above the current prevailing
rates.  Management makes certain assumptions as to the effect varying levels of
interest rates have on certain earning assets and interest bearing liabilities,
which assumptions consider both historical experience and consensus estimates of
outside sources.

With respect to the primary earning assets, loans and securities, certain
features of individual types of loans and specific securities introduce
uncertainty as to their expected performance at varying levels of interest
rates.  In some cases, prepayment options exist whereby the borrower may elect
to repay the obligation at any time. These prepayment options make anticipating
the performance of those instruments difficult given changes in prevailing
rates.  At September 30, 2001, mortgage backed securities with a carrying value
of $384.1 million, or 14.5% of total assets, and essentially every loan, net of
unearned income, (totaling $1.83 billion, or 69.0% of total assets), carried
such prepayment options.  Management believes that assumptions used in its
simulation analysis about the performance of financial instruments with such
prepayment options are appropriate.  However, the actual performance of these
financial instruments may differ from management's estimates due to several
factors, including the diversity and financial sophistication of the customer
base, the general level of prevailing interest rates and the relationship to
their historical levels, and general economic conditions.  The difference
between those assumptions and actual results, if significant, could cause the
actual results to differ from those indicated by the simulation analysis.

Deposits totaled $1.87 billion, or 70.4% of total assets, at September 30, 2001.
Since deposits are the primary funding source for earning assets, the associated
market risk is considered by management in its simulation analysis.  Generally,
it is anticipated that deposits will be sufficient to support funding
requirements.  However, the rates paid for deposits at varying levels of
prevailing interest rates have a significant impact on net interest income and
therefore, must be quantified by Alabama National in its simulation analysis.
Specifically, Alabama National's spread, the difference between the rates earned
on earning assets and rates paid on interest bearing liabilities, is generally
higher when prevailing rates are higher.  As prevailing rates reduce, the spread
tends to compress, with severe compression at very low prevailing interest
rates.  This characteristic is called "spread compression" and adversely effects
net interest income in the simulation analysis when anticipated prevailing rates
are reduced from current rates.  Management relies upon historical experience to
estimate the degree of spread compression in its simulation analysis. Management
believes that such estimates of possible spread compression are reasonable.
However, if the degree of spread compression varies from that expected, the
actual results could differ from those indicated by the simulation analysis.

                                       29


The following table illustrates the results of simulation analysis used by
Alabama National to determine the extent to which market risk would affect net
interest margin for the next twelve months if prevailing interest rates
increased or decreased the specified amounts from current rates.  Because of the
inherent use of estimates and assumptions in the simulation model used to derive
this information, the actual results of the future impact of market risk on
Alabama National's net interest margin may differ from that found in the table.


                                   MARKET RISK
                             (Amounts in thousands)




                                As of September 30, 2001                   As of December 31, 2000
       Change in                ------------------------                   -----------------------
  Prevailing Interest      Net Interest          Change from         Net Interest          Change from
      Rates (1)           Income Amount        Income Amount        Income Amount        Income Amount
  -------------------     -------------        -------------        -------------        -------------
                                                                             
 +200 basis points.......    $ 105,405            3.65%                  $ 91,547           5.06%

 +100 basis points.......      104,157            2.42                     89,413           2.61

  0 basis points.........      101,695              --                     87,136             --

 -100 basis points.......       97,728           (3.90)                     84,039         (3.55)

 -200 basis points.......       92,903           (8.65)                     81,948         (5.95)


 -----------------
 (1)  Assumes an immediate rate change of this magnitude.

                                       30


Liquidity and Capital Adequacy
------------------------------

Alabama National's net loan to deposit ratio was 97.9% at September 30, 2001,
compared to 94.7% at year-end 2000.  Alabama National's liquid assets as a
percentage of total deposits were 7.3% at September 30, 2001, compared to 6.6%
at year-end 2000. At September 30, 2001, Alabama National had unused federal
funds lines of approximately $120.7 million, unused lines at the Federal Home
Loan Bank of $115.6 million and an unused credit line with a third party bank of
$5.4 million. During the 2001 second quarter, the maximum credit amount under
this third party bank facility was increased from $32.0 million to $35.0
million. Alabama National also has access to approximately $148.0 million via a
credit facility with the Federal Reserve Bank of Atlanta. At September 30, 2001
and year-end 2000, there were no outstanding borrowings under this Federal
Reserve credit facility. Management analyzes the level of off-balance sheet
assets such as unfunded loan commitments and outstanding letters of credit as
they relate to the levels of cash, cash equivalents, liquid investments, and
available funds lines in an attempt to minimize the possibility that a potential
liquidity shortfall will exist. Based on this analysis, management believes that
Alabama National has adequate liquidity to meet short-term operating
requirements. However, no assurances can be given in this regard.

Alabama National's stockholders' equity increased by $17.9 million from December
31, 2000, to $189.5 million at September 30, 2001.  This increase was
attributable to the following (in thousands):


 Net income............................................................ $20,327
 Dividends.............................................................  (8,163)
 Issuance of stock from treasury.......................................     372
 Additional paid in capital related to stock based compensation........   1,052
 Changes incidental to merger..........................................     (10)
 Increase in unrealized gain on securities
   available for sale, net of deferred taxes...........................   4,298
                                                                        -------
 Net increase.......................................................... $17,876
                                                                        =======

A strong capital position is vital to the continued profitability of Alabama
National because it promotes depositor and investor confidence and provides a
solid foundation for future growth of the organization.  The capital of Alabama
National and its subsidiary banks (the "Banks") exceeded all prescribed
regulatory capital guidelines at September 30, 2001.  Under the capital
guidelines of their regulators, Alabama National and the Banks are currently
required to maintain a minimum risk-based total capital ratio of 8%, with at
least 4% being Tier 1 capital.  Tier 1 capital consists of common stockholders'
equity, qualifying perpetual preferred stock, and minority interests in equity
accounts of consolidated subsidiaries, less goodwill.  In addition, Alabama
National and the Banks must maintain a minimum Tier 1 leverage ratio (Tier 1
capital to total assets) of at least 3%, but this minimum ratio is increased by
100 to 200 basis points for other than the highest rated institutions.  The
following table sets forth the risk-based and leverage ratios of Alabama
National and each subsidiary bank at September 30, 2001:





                                                                    Tier 1 Risk       Total Risk       Tier 1
                                                                       Based            Based         Leverage
                                                                    -----------       ----------      --------
                                                                                             
Alabama National BanCorporation....................................     8.88%           10.08%           6.83%
 National Bank of Commerce of Birmingham...........................     9.84            10.95            7.82
 Alabama Exchange Bank.............................................    13.51            14.76            7.48
 Bank of Dadeville.................................................    12.00            13.25            8.12
 Citizens & Peoples Bank, N.A......................................     9.11            10.30            6.54
 Community Bank of Naples, N.A.....................................     9.71            10.96            7.01
 First American Bank...............................................     9.39            10.63            7.87
 First Citizens Bank...............................................    13.72            14.89            7.20
 First Gulf Bank...................................................     9.81            11.06            7.07
 Georgia State Bank................................................    10.75            11.79            7.07
 Public Bank.......................................................    10.08            11.12            8.23
 Peoples State Bank................................................     9.92            11.17            7.23
 Required minimums.................................................     4.00             8.00            4.00


                                       31



Item 3 - Quantitative and Qualitative Disclosures about Market Risk

The information required by this item is contained in Item 2 herein under the
headings "Interest Rate Sensitivity" and "Market Risk".


Part II Other Information

Item 6 - Exhibits and Reports on Form 8-K

(a)  Exhibits:      Exhibit 3.1 - Certificate of Incorporation (filed as an
                            Exhibit to Alabama National's Registration Statement
                            on Form S-1 (Commission File no. 33-83800) and
                            incorporated herein by reference).

                    Exhibit 3.1A - Certificate of Amendment of Certificate of
                            Incorporation (filed as an Exhibit to Alabama
                            National's Annual Report of Form 10-K for the year
                            ended December 31, 1996 and incorporated herein by
                            reference).

                    Exhibit 3.1B - Certificate of Merger (filed as an Exhibit to
                            Alabama National's Annual Report of Form 10-K for
                            the year ended December 31, 1997 and incorporated
                            herein by reference).

                    Exhibit 3.1C - Certificate of Amendment of Certificate of
                            Incorporation dated April 23, 1998 (filed as an
                            Exhibit to Alabama National's Report of Form 10-Q
                            for the quarter ended March 31, 1998 and
                            incorporated herein by reference).

                    Exhibit 3.2 - Bylaws (filed as an Exhibit to Alabama
                            National's Registration Statement on Form S-1
                            (Commission File No. 33-83800) and incorporated
                            herein by reference).


                    Exhibit 10.1 - Agreement and Plan of Merger dated as of
                            September 6, 2001 by and between Farmers National
                            Bancshares, Inc. and Alabama National Bancorporation
                            (Filed as Appendix A to Alabama National's
                            Registration Statement on Form S-4 (Commission File
                            No. 333-71256) and incorporated herein by reference.

                    Exhibit 11 - Computation of Earnings Per Share

(b)  Reports on Form 8-K

                    None.

                                       32


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                        ALABAMA NATIONAL BANCORPORATION


Date:  November 13, 2001       /s/ John H. Holcomb, III
       -----------------      --------------------------
                              John H. Holcomb, III, its Chairman and
                               Chief Executive Officer



Date: November 13, 2001       /s/ William E. Matthews, V.
      -----------------       --------------------------
                              William E. Matthews, V., its Executive Vice
                               President and Chief Financial Officer

                                       33