##### Table of Contents



U.S. SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended June 30, 2005ORo
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition
period from

to
 Commission file number
 UNITED HERITAGE BANKSHARES OF FLORIDA, INC.
 (Exact Name of Registrant as Specified in Its Charter)
 Florida
    
    04-3691059(State or Other Jurisdiction
    
    (I.R.S. Employerof Incorporation or Organization)
    
    Identification No.)1411 Edgewater Drive, Suite 100, Orlando, Florida
    
    32804(Address of Principal Executive Offices)
    
    (Zip Code)
 Registrants
Telephone Number, Including Area Code (407) 712-6151
  Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report.
 þ o
 o þ
  Common stock, par value $.01 per share
    
    4,859,562 shares outstanding at August 1, 2005




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UNITED HERITAGE BANKSHARES OF FLORIDA, INC.
  PagePart I. FINANCIAL INFORMATIONItem 1. Financial StatementsCondensed
Consolidated Balance Sheets (Unaudited) 
at June 30, 2005 and at December 31, 2004
    
    
    2Condensed
Consolidated Statements of Income (Unaudited) 
Three and Six months ended June 30, 2005 and 2004
    
    
    3Condensed
Consolidated Statements of Shareholders Equity (Unaudited)

Six months ended June 30, 2005 and 2004
    
    
    4Condensed
Consolidated Statements of Cash Flows (Unaudited) 
Six months ended June 30, 2005 and 2004
    
    
    5Notes to Condensed Consolidated Financial Statements (Unaudited)
    
    
    6-9Item 2. Managements Discussion and Analysis
    
    
    10-16Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    17Item 4. Controls and Procedures
    
    
    17Part II. OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    17Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    17Item 3. Defaults upon Senior Securities
    
    
    18Item 4. Submission of Matters to a Vote of Security Holders
    
    
    18Item 5. Other Information
    
    
    18Item 6. Exhibits
    
    
    19SIGNATURES
    
    
    20Ex-31.1 Section 302 CEO CertificationEx-31.2 Section 302 CFO CertificationEx-32.1 Section 906 CEO CertificationEx-32.2 Section 906 CFO Certification
  1




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##### Table of Contents



UNITED HERITAGE BANKSHARES OF FLORIDA, INC.
 
 Part I. FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 
 Condensed Consolidated Balance Sheets (Unaudited)
($ in thousands, except per share amounts)
 At
    
    AtJune 30,
    
    December 31,2005
    
    2004AssetsCash and due from banks
    
    $
    22,231
    
    
    $
    12,283Interest-earning demand deposits in other banks
    
    
    11,792
    
    
    
    9,857Federal funds sold
    
    
    125,915
    
    
    
    63,831Total cash and cash equivalents
    
    
    159,938
    
    
    
    85,971Securities available for sale
    
    
    117,879
    
    
    
    68,640Securities held to maturity
    
    
    3,534
    
    
    
    Loans, net of allowance for loan losses of $3,744 and $3,077
    
    
    292,825
    
    
    
    241,214Property and equipment, net
    
    
    7,102
    
    
    
    6,863Net deferred tax asset
    
    
    1,566
    
    
    
    1,180Goodwill
    
    
    950
    
    
    
    950Core deposit intangible, net
    
    
    233
    
    
    
    267Other assets
    
    
    1,976
    
    
    
    1,382Total assets
    
    $
    586,003
    
    
    $
    406,467Liabilities and Shareholders EquityLiabilities:Deposits:Noninterest-bearing demand deposits
    
    $
    84,156
    
    
    $
    52,472Savings, NOW and money-market deposits
    
    
    221,337
    
    
    
    166,751Time deposits
    
    
    219,284
    
    
    
    146,419Total deposits
    
    
    524,777
    
    
    
    365,642Borrowings
    
    
    4,340
    
    
    
    6,009Other liabilities
    
    
    983
    
    
    
    1,026Total liabilities
    
    
    530,100
    
    
    
    372,677Shareholders Equity:Common stock, $.01 par value, 20 million shares authorized,
4,807,018 and 3,263,406 shares issued and outstanding
    
    
    48
    
    
    
    33Additional paid-in capital
    
    
    53,534
    
    
    
    32,021Retained earnings
    
    
    2,985
    
    
    
    2,003Accumulated other comprehensive loss
    
    
    (664
    )
    
    
    (267
    )Total shareholders equity
    
    
    55,903
    
    
    
    33,790Total liabilities and shareholders equity
    
    $
    586,003
    
    
    $
    406,467
  2




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UNITED HERITAGE BANKSHARES OF FLORIDA, INC.
 
 Condensed Consolidated Statements of Income (Unaudited)
($ in thousands, except per share amounts)
 Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2005
    
    2004
    
    2005
    
    2004Interest income:Loans
    
    $
    4,679
    
    
    $
    3,380
    
    
    $
    8,738
    
    
    $
    6,703Securities
    
    
    1,041
    
    
    
    340
    
    
    
    1,781
    
    
    
    732Other
    
    
    777
    
    
    
    178
    
    
    
    1,285
    
    
    
    287Total interest income
    
    
    6,497
    
    
    
    3,898
    
    
    
    11,804
    
    
    
    7,722Interest expense:Deposits
    
    
    2,710
    
    
    
    1,396
    
    
    
    4,784
    
    
    
    2,712Borrowings
    
    
    31
    
    
    
    5
    
    
    
    43
    
    
    
    8Total interest expense
    
    
    2,741
    
    
    
    1,401
    
    
    
    4,827
    
    
    
    2,720Net interest income
    
    
    3,756
    
    
    
    2,497
    
    
    
    6,977
    
    
    
    5,002Provision for loan losses
    
    
    491
    
    
    
    226
    
    
    
    677
    
    
    
    386Net interest income after provision
for loan losses
    
    
    3,265
    
    
    
    2,271
    
    
    
    6,300
    
    
    
    4,616Noninterest income:Service charges and fees on deposit accounts
    
    
    133
    
    
    
    100
    
    
    
    256
    
    
    
    193Other
    
    
    72
    
    
    
    22
    
    
    
    106
    
    
    
    56Total noninterest income
    
    
    205
    
    
    
    122
    
    
    
    362
    
    
    
    249Noninterest expense:Salaries and employee benefits
    
    
    1,448
    
    
    
    839
    
    
    
    2,659
    
    
    
    1,631Occupancy and equipment
    
    
    535
    
    
    
    281
    
    
    
    1,002
    
    
    
    638Other
    
    
    753
    
    
    
    529
    
    
    
    1,409
    
    
    
    1,183Total noninterest expense
    
    
    2,736
    
    
    
    1,649
    
    
    
    5,070
    
    
    
    3,452Income before income taxes
    
    
    734
    
    
    
    744
    
    
    
    1,592
    
    
    
    1,413Income taxes
    
    
    278
    
    
    
    277
    
    
    
    610
    
    
    
    547Net income
    
    $
    456
    
    
    $
    467
    
    
    $
    982
    
    
    $
    866Earnings per share:Basic
    
    $
    .09
    
    
    $
    .15
    
    
    $
    .24
    
    
    $
    .27Diluted
    
    $
    .09
    
    
    $
    .14
    
    
    $
    .23
    
    
    $
    .26Dividends per share
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
  3




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UNITED HERITAGE BANKSHARES OF FLORIDA, INC.
 
 Condensed Consolidated Statements of Shareholders Equity (Unaudited)
 Six Months Ended June 30, 2005 and 2004
($ in thousands)
 AccumulatedOtherCompre-Common Stock
    
    Additional
    
    Retained
    
    hensive
    
    TotalNumber of
    
    Par
    
    Paid-In
    
    Earnings
    
    Income
    
    ShareholdersShares
    
    Value
    
    Capital
    
    (Deficit)
    
    (Loss)
    
    EquityBalance at December
31, 2003
    
    
    3,256,888
    
    
    $
    33
    
    
    $
    31,970
    
    
    $
    (38
    )
    
    $
    (289
    )
    
    $
    31,676Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    866
    
    
    
    
    
    
    
    866Other comprehensive
income-change in
unrealized loss on
securities available
for sale, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (347
    )
    
    
    (347
    )Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    519Balance at June 30, 2004
    
    
    3,256,888
    
    
    $
    33
    
    
    $
    31,970
    
    
    $
    828
    
    
    $
    (636
    )
    
    $
    32,195Balance at December 31,
2004
    
    
    3,263,406
    
    
    $
    33
    
    
    $
    32,021
    
    
    $
    2,003
    
    
    $
    (267
    )
    
    $
    33,790Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    982
    
    
    
    
    
    
    
    982Other comprehensive
loss-change in
unrealized loss on
securities available
for sale, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (397
    )
    
    
    (397
    )Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    585Net proceeds from the
sale of common stock
under a private placement
offering
    
    
    1,537,222
    
    
    
    15
    
    
    
    21,463
    
    
    
    
    
    
    
    
    
    
    
    21,478Proceeds from stock
options exercised
    
    
    6,390
    
    
    
    
    
    
    
    50
    
    
    
    
    
    
    
    
    
    
    
    50Balance at June 30, 2005
    
    
    4,807,018
    
    
    $
    48
    
    
    $
    53,534
    
    
    $
    2,985
    
    
    $
    (664
    )
    
    $
    55,903
  4




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UNITED HERITAGE BANKSHARES OF FLORIDA, INC.
 
 Condensed Consolidated Statements of Cash Flows (Unaudited)
(In thousands)
 Six Months EndedJune 30,2005
    
    2004Cash flows from operating activities:Net income
    
    $
    982
    
    
    $
    866Adjustments to reconcile net income
to net cash provided by operating activities:Provision for loan losses
    
    
    677
    
    
    
    386Depreciation and amortization of property and equipment
    
    
    335
    
    
    
    288Deferred income tax (benefit)
    
    
    (146
    )
    
    
    (111
    )Net amortization of premiums and discounts on securities
    
    
    350
    
    
    
    362Amortization of core deposit intangible
    
    
    34
    
    
    
    33Net change in period-end balances of:Other assets
    
    
    (594
    )
    
    
    (80
    )Other liabilities
    
    
    (43
    )
    
    
    (23
    )Net cash provided by operating activities
    
    
    1,595
    
    
    
    1,721Cash flows from investing activities:Purchase of securities available for sale
    
    
    (61,408
    )
    
    
    (3,078
    )Principal collections, calls and maturities of securities available for sale
    
    
    11,182
    
    

    
    10,559Purchase of securities held to maturity
    
    
    (3,534
    )
    
    
    Net funding of loans
    
    
    (52,288
    )
    
    
    (26,261
    )Purchase of premises and equipment
    
    
    (574
    )
    
    
    (427
    )Net cash used in investing activities
    
    
    (106,622
    )
    
    
    (19,207
    )Cash flows from financing activities:Net increase in deposits
    
    
    159,135
    
    
    
    45,795Net decrease in borrowings
    
    
    (1,669
    )
    
    
    (2,742
    )Net proceeds from sale of common stock
    
    
    21,528
    
    
    
    Net cash provided by financing activities
    
    
    178,994
    
    
    
    43,053Net increase in cash and cash equivalents
    
    
    73,967
    
    
    
    25,567Cash and cash equivalents at beginning of period
    
    
    85,971
    
    
    
    60,629Cash and cash equivalents at end of period
    
    $
    159,938
    
    
    $
    86,196Supplemental disclosures of cash flow information:Cash paid during the period for:Interest
    
    $
    4,743
    
    
    $
    2,671Income taxes
    
    $
    995
    
    
    $
    839Noncash transaction-Accumulated other comprehensive income (loss), net change in
unrealized loss on securities available for sale, net of tax
    
    $
    (397
    )
    
    $
    (347
    )
  5




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##### Table of Contents



UNITED HERITAGE BANKSHARES OF FLORIDA, INC.
 
 Notes to Condensed Consolidated Financial Statements (Unaudited)
 1. General and Basis of Presentation.
   2. Loans .
 At
    
    AtJune 30,
    
    December 31,2005
    
    2004Real estate  mortgage
    
    $
    154,240
    
    
    $
    133,257Construction and land development
    
    
    81,247
    
    
    
    60,675Commercial, financial and agricultural
    
    
    55,511
    
    
    
    44,720Installment and consumer lines
    
    
    6,067
    
    
    
    5,998Total loans
    
    
    297,065
    
    
    
    244,650Allowance for loan losses
    
    
    (3,744
    )
    
    
    (3,077
    )Deferred loan fees, net
    
    
    (496
    )
    
    
    (359
    )Loans, net
    
    $
    292,825
    
    
    $
    241,214
  6




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##### Table of Contents



UNITED HERITAGE BANKSHARES OF FLORIDA, INC.
 Notes to Condensed Consolidated Financial Statements (Unaudited), Continued
 3. Loan Impairment and Loan Losses .
 Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2005
    
    2004
    
    2005
    
    2004Beginning balance
    
    $
    3,253
    
    
    $
    2,621
    
    
    $
    3,077
    
    
    $
    2,526Provision for loan losses
    
    
    491
    
    
    
    226
    
    
    
    677
    
    
    
    386Net loan recoveries (charge-offs)
    
    
    
    
    
    
    22
    
    
    
    (10
    )
    
    
    (43
    )Balance at June 30
    
    $
    3,744
    
    
    $
    2,869
    
    
    $
    3,744
    
    
    $
    2,869
  AtJune 30,
    
    December 31,2005
    
    2004Impaired loans with a valuation allowance
    
    $
    68
    
    
    $
    83Impaired loans without a valuation allowance
    
    
    
    
    
    
    Less: Valuation allowance on impaired loans
    
    
    (4
    )
    
    
    (5
    )Total net impaired loans
    
    $
    64
    
    
    $
    78
  Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2005
    
    2004
    
    2005
    
    2004Average net investment in impaired
loans
    
    $
    52
    
    
    $
    367
    
    
    $
    56
    
    
    $
    358Interest income recognized on
impaired loans
    
    $
    1
    
    
    $
    1
    
    
    $
    1
    
    
    $
    2Interest income received on
impaired loans
    
    $
    1
    
    
    $
    1
    
    
    $
    1
    
    
    $
    2
  AtJune 30,
    
    December 31,2005
    
    2004Nonaccrual loans
    
    $
    68
    
    
    $
    50Accruing loans past due 90 days or more
    
    
    
    
    
    
    44Total
    
    $
    68
    
    
    $
    94
  7




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UNITED HERITAGE BANKSHARES OF FLORIDA, INC.
 Notes to Condensed Consolidated Financial Statements (Unaudited), Continued
 4. Earnings Per Share.
 Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2005
    
    2004
    
    2005
    
    2004Weighted-average common
shares outstanding
    
    
    4,804,982
    
    
    
    3,256,888
    
    
    
    4,157,954
    
    
    
    3,256,888Dilutive shares issuable under
stock option plan
    
    
    83,954
    
    
    
    38,580
    
    
    
    84,894
    
    
    
    38,580Weighted-average common
shares on a diluted basis
    
    
    4,888,936
    
    
    
    3,295,468
    
    
    
    4,242,848
    
    
    
    3,295,468
 5. Private Placement Offering.
 6. Stock Option Plans.
  AverageNumber of
    
    ExerciseOptions
    
    PriceOutstanding, December 31, 2003
    
    
    335,992
    
    
    $
    10.62Granted
    
    
    151,412
    
    
    
    12.00Outstanding, June 30, 2004
    
    
    487,404
    
    
    $
    11.05Outstanding, December 31, 2004
    
    
    546,716
    
    
    $
    11.41Granted
    
    
    225,374
    
    
    
    14.00Exercised
    
    
    (6,390
    )
    
    
    7.82Outstanding, June 30, 2005
    
    
    765,700
    
    
    $
    12.20
  8




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UNITED HERITAGE BANKSHARES OF FLORIDA, INC.
 Notes to Condensed Consolidated Financial Statements (Unaudited), Continued
 6. Stock Option Plans, Continued. Accounting for Stock-Based Compensation, Accounting for
Stock-Based Compensation Transition and Disclosure Accounting for Stock Issued to Employees
 Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2005
    
    2004
    
    2005
    
    2004Weighted-average grant-date fair value per
option of stock options
issued during the period
    
    $
    4.98
    
    
    $
    4.42
    
    
    $
    4.97
    
    
    $
    4.42Net income, as reported
    
    $
    456
    
    
    $
    467
    
    
    $
    982
    
    
    $
    866Deduct: Total stock-based employee
compensation determined under the
fair value based method for
all awards, net of related tax effect
    
    
    (281
    )
    
    
    (150
    )
    
    
    (313
    )
    
    
    (300
    )Proforma net income
    
    $
    175
    
    
    $
    317
    
    
    $
    669
    
    
    $
    566Basic income per share, as reported
    
    $
    .09
    
    
    $
    .15
    
    
    $
    .24
    
    
    $
    .27Proforma basic income per share
    
    $
    .04
    
    
    $
    .10
    
    
    $
    .16
    
    
    $
    .18Diluted income per share, as reported
    
    $
    .09
    
    
    $
    .14
    
    
    $
    .23
    
    
    $
    .26Proforma diluted income per share
    
    $
    .04
    
    
    $
    .09
    
    
    $
    .16
    
    
    $
    .17
 Share-Based Payment
 7. Reclassifications .
 9




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##### Table of Contents



UNITED HERITAGE BANKSHARES OF FLORIDA, INC.
 
 Managements Discussion and Analysis
 Capital Resources and Commitments
    Contractual Obligations
    
    AmountTime deposit maturities
    
    $
    219,284Borrowings
    
    
    4,340Operating leases
    
    
    8,936Loan commitments and unused lines of credit
    
    
    76,552Standby letters of credit
    
    
    2,685Undisbursed construction loans in process
    
    
    36,513Total
    
    $
    348,310
  Regulatory Capital Requirements
  10




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UNITED HERITAGE BANKSHARES OF FLORIDA, INC.
   MinimumTo Be WellCapitalized UnderMinimum Capital
    
    Prompt CorrectiveActual
    
    Requirement
    
    Action ProvisionsAmount
    
    %
    
    Amount
    
    %
    
    Amount
    
    %As of June 30, 2005:Total capital to
Risk-
Weighted assets:Consolidatd
    
    $
    59,128
    
    
    
    15.89
    %
    
    $
    29,777
    
    
    
    8.00
    %
    
    $
    37,222
    
    
    
    10.00
    %Bank
    
    $
    58,589
    
    
    
    15.68
    %
    
    $
    29,897
    
    
    
    8.00
    %
    
    $
    37,371
    
    
    
    10.00
    %Tier I Capital to
Risk-
Weighted Assets:Consolidated
    
    $
    55,384
    
    
    
    14.88
    %
    
    $
    14,889
    
    
    
    4.00
    %
    
    $
    22,333
    
    
    
    6.00
    %Bank
    
    $
    54,845
    
    
    
    14.68
    %
    
    $
    14,949
    
    
    
    4.00
    %
    
    $
    22,423
    
    
    
    6.00
    %Tier I Capital
to Average Assets:Consolidatd
    
    $
    55,384
    
    
    
    10.49
    %
    
    $
    21,128
    
    
    
    4.00
    %
    
    $
    26,410
    
    
    
    5.00
    %Bank
    
    $
    54,845
    
    
    
    10.38
    %
    
    $
    21,126
    
    
    
    4.00
    %
    
    $
    26,408
    
    
    
    5.00
    %As of December 31,
2004:Total capital to
Risk-
Weighted assets:Consolidatd
    
    $
    34,746
    
    
    
    12.00
    %
    
    $
    23,159
    
    
    
    8.00
    %
    
    $
    28,949
    
    
    
    10.00
    %Bank
    
    $
    34,393
    
    
    
    11.83
    %
    
    $
    23,258
    
    
    
    8.00
    %
    
    $
    29,072
    
    
    
    10.00
    %Tier I Capital to
Risk-
Weighted Assets:Consolidatd
    
    $
    31,669
    
    
    
    10.94
    %
    
    $
    11,580
    
    
    
    4.00
    %
    
    $
    17,369
    
    
    
    6.00
    %Bank
    
    $
    31,316
    
    
    
    10.77
    %
    
    $
    11,629
    
    
    
    4.00
    %
    
    $
    17,443
    
    
    
    6.00
    %Tier I Capital
to Average Assets:Consolidatd
    
    $
    31,669
    
    
    
    8.12
    %
    
    $
    15,592
    
    
    
    4.00
    %
    
    $
    19,490
    
    
    
    5.00
    %Bank
    
    $
    31,316
    
    
    
    8.04
    %
    
    $
    15,586
    
    
    
    4.00
    %
    
    $
    19,482
    
    
    
    5.00
    %
 11




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##### Table of Contents



UNITED HERITAGE BANKSHARES OF FLORIDA, INC.
  Six Months
    
    
    
    
    
    Six MonthsEnded
    
    Year Ended
    
    EndedJune 30,
    
    December 31,
    
    June 30,2005
    
    2004
    
    2004Average equity as a percentage
of average assets
    
    
    9.57
    %
    
    
    8.81
    %
    
    
    9.15
    %Total equity to total assets at end of period
    
    
    9.54
    %
    
    
    8.31
    %
    
    
    8.75
    %Return on average assets (1)
    
    
    .40
    %
    
    
    .56
    %
    
    
    .51
    %Return on average equity (1)
    
    
    4.20
    %
    
    
    6.38
    %
    
    
    5.53
    %Noninterest expense to average assets (1)
    
    
    2.07
    %
    
    
    2.02
    %
    
    
    2.01
    %Nonperforming loans and foreclosed assets to
total assets at end of period
    
    
    .01
    %
    
    
    .02
    %
    
    
    .10
    %
 
 (1)
    
    Annualized for the six months ended June 30, 2005 and 2004. Six
    
    
    
    
    
    SixMonths Ended
    
    Year Ended
    
    Month EndedJune 30,
    
    December 31,
    
    June 30,2005
    
    2004
    
    2004Loans
    
    
    6.71
    %
    
    
    6.46
    %
    
    
    6.50
    %Investment securities
    
    
    3.54
    %
    
    
    3.01
    %
    
    
    2.83
    %Other interest-earning assets
    
    
    2.66
    %
    
    
    1.28
    %
    
    
    .91
    %All interest-earning assets
    
    
    5.16
    %
    
    
    4.92
    %
    
    
    4.80
    %Savings, NOW and money-market deposits
    
    
    2.00
    %
    
    
    1.61
    %
    
    
    1.52
    %Time deposits
    
    
    3.21
    %
    
    
    2.75
    %
    
    
    2.72
    %All interest-bearing liabilities
    
    
    2.60
    %
    
    
    2.11
    %
    
    
    2.06
    %Interest-rate spread
    
    
    2.56
    %
    
    
    2.81
    %
    
    
    2.74
    %
 Changes in Financial Condition
  12




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##### Table of Contents



UNITED HERITAGE BANKSHARES OF FLORIDA, INC.
 Results of Operations
  Three Months Ended June 30,2005
    
    2004Interest
    
    Average
    
    
    
    
    
    Interest
    
    AverageAverage
    
    and
    
    Yield/
    
    Average
    
    and
    
    Yield/Balance
    
    Dividends
    
    Cost
    
    Balance
    
    Dividends
    
    Cost($ in thousands)Interest-earning assets:Loans
    
    $
    273,119
    
    
    $
    4,679
    
    
    
    6.85
    %
    
    $
    213,328
    
    
    $
    3,380
    
    
    
    6.34
    %Securities
    
    
    115,131
    
    
    
    1,041
    
    
    
    3.62
    %
    
    
    49,325
    
    
    
    340
    
    
    
    2.76
    %Other (1)
    
    
    108,404
    
    
    
    777
    
    
    
    2.87
    %
    
    
    77,041
    
    
    
    178
    
    
    
    .92
    %Total interest-earning assets
    
    
    496,654
    
    
    
    6,497
    
    

    
    5.23
    %
    
    
    339,694
    
    
    
    3,898
    
    
    
    4.59
    %Noninterest-earning assets
    
    
    34,131
    
    
    
    
    
    
    
    
    
    
    
    20,232Total assets
    
    $
    530,785
    
    
    
    
    
    
    
    
    
    
    $
    359,926Interest-bearing liabilities:Savings, NOW and money-market accounts
    
    
    197,398
    
    
    
    1,059
    
    
    
    2.15
    %
    
    
    150,810
    
    
    
    572
    
    
    
    1.52
    %Time deposits
    
    
    197,671
    
    
    
    1,651
    
    
    
    3.34
    %
    
    
    122,551
    
    
    
    824
    
    
    
    2.69
    %Other borrowings(2)
    
    
    4,913
    
    
    
    31
    
    
    
    2.52
    %
    
    
    3,509
    
    
    
    5
    
    
    
    .57
    %Total interest-bearing liabilities
    
    
    399,982
    
    
    
    2,741
    
    
    
    2.74
    %
    
    
    276,870
    
    
    
    1,401
    
    
    
    2.02
    %Noninterest-bearing deposits
    
    
    73,149
    
    
    
    
    
    
    
    
    
    
    
    49,387Noninterest-bearing liabilities
    
    
    2,300
    
    
    
    
    
    
    
    
    
    
    
    2,164Stockholders equity
    
    
    55,354
    
    
    
    
    
    
    
    
    
    
    
    31,505Total liabilities and stockholders equity
    
    $
    530,785
    
    
    
    
    
    
    
    
    
    
    $
    359,926Net interest income
    
    
    
    
    
    $
    3,756
    
    
    
    
    
    
    
    
    
    
    $
    2,497Interest-rate spread (3)
    
    
    
    
    
    
    
    
    
    
    2.49
    %
    
    
    
    
    
    
    
    
    
    
    2.57
    %Net interest margin (4)
    
    
    
    
    
    
    
    
    
    
    3.03
    %
    
    
    
    
    
    
    
    
    
    
    2.94
    %Ratio of interest-earning assets to
interest-bearing liabilities
    
    
    1.24
    
    
    
    
    
    
    
    
    
    
    
    1.23
 
 (1)
    
    Includes interest-earning demand deposits, federal funds sold and Federal Home Loan Bank
stock.(2)
    
    Includes securities sold under agreements to repurchase and federal funds purchased lines of
credit.(3)
    
    Interest-rate spread represents the difference between the average yield on interest-earning
assets and
the average cost of interest-bearing liabilities.(4)
    
    Net interest margin is annualized net interest income divided by average interest-earning
assets. 13




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##### Table of Contents



UNITED HERITAGE BANKSHARES OF FLORIDA, INC.
  Six Months Ended June 30,2005
    
    
    
    
    
    2004Interest
    
    Average
    
    
    
    
    
    
    
    
    
    Interest
    
    AverageAverage
    
    and
    
    Yield/
    
    
    
    
    
    Average
    
    and
    
    Yield/Balance
    
    Dividends
    
    Cost
    
    
    
    
    
    Balance
    
    Dividends
    
    Cost($ in thousands)Interest-earning assets:Loans
    
    $
    260,284
    
    
    $
    8,738
    
    
    
    6.71
    %
    
    
    
    
    
    $
    207,456
    
    
    $
    6,703
    
    
    
    6.50
    %Securities
    
    
    100,641
    
    
    
    1,781
    
    
    
    3.54
    %
    
    
    
    
    
    
    52,022
    
    
    
    732
    
    
    
    2.83
    %Other (1)
    
    
    96,672
    
    
    
    1,285
    
    
    
    2.66
    %
    
    
    
    
    

    
    63,731
    
    
    
    287
    
    
    
    .91
    %Total interest-earning assets
    
    
    457,597
    
    
    
    11,804
    
    
    
    5.16
    %
    
    
    
    
    
    
    323,209
    
    
    
    7,722
    
    
    
    4.80
    %Noninterest-earning assets
    
    
    31,294
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20,954Total assets
    
    $
    488,891
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    344,163Interest-bearing liabilities:Savings, NOW and money-market accounts
    
    
    186,556
    
    
    
    1,870
    
    
    
    2.00
    %
    
    
    
    
    
    
    138,997
    
    
    
    1,049
    
    
    
    1.52
    %Time deposits
    
    
    181,419
    
    
    
    2,914
    
    
    
    3.21
    %
    
    
    
    
    
    
    122,878
    
    
    
    1,663
    
    
    
    2.72
    %Other borrowings (2)
    
    
    3,626
    
    
    
    43
    
    
    
    2.37
    %
    
    
    
    
    
    
    3,189
    
    
    
    8
    
    
    
    .50
    %Total interest-bearing liabilities
    
    
    371,601
    
    
    
    4,827
    
    
    
    2.60
    %
    
    
    
    
    
    
    265,064
    
    
    
    2,720
    
    
    
    2.06
    %Noninterest-bearing deposits
    
    
    69,208
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    45,594Noninterest-bearing liabilities
    
    
    1,274
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,024Stockholders equity
    
    
    46,809
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    31,481Total liabilities and
stockholders equity
    
    $
    488,891
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    344,163Net interest income
    
    
    
    
    
    $
    6,977
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    5,002Interest-rate spread (3)
    
    
    
    
    
    
    
    
    
    
    2.56
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2.74
    %Net interest margin (4)
    
    
    
    
    
    
    
    
    
    
    3.05
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3.11
    %Ratio of interest-earning assets to
interest-bearing liabilities
    
    
    1.23
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1.22
 
 (1)
    
    Includes interest-earning demand deposits, federal funds sold and Federal Home Loan
Bank stock.(2)
    
    Includes securities sold under agreements to repurchase and federal funds purchased
lines of credit.(3)
    
    Interest-rate spread represents the difference between the average yield on
interest-earning assets and the average cost of interest-bearing liabilities.(4)
    
    Net interest margin is annualized net interest income divided by average
interest-earning assets. 14




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##### Table of Contents



UNITED HERITAGE BANKSHARES OF FLORIDA, INC.
 Comparison of the Three-Month Periods Ended June 30, 2005 and 2004
 General Operating Results.
 Interest Income.
 Interest Expense.
 Provision for Loan Losses.
 Noninterest Income.
 Noninterest Expense.
 Income Taxes.
 15




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##### Table of Contents



UNITED HERITAGE BANKSHARES OF FLORIDA, INC.
 Comparison of the Six-Month Periods Ended June 30, 2005 and 2004
 General Operating Results.
 Interest Income.
 Interest Expense.
 Provision for Loan Losses.
 Noninterest Income.
 Noninterest Expense.
 Income Taxes.
 16




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##### Table of Contents



UNITED HERITAGE BANKSHARES OF FLORIDA, INC.
 
 Item 3. Quantitative and Qualitative Disclosures About Market Risk
   
 Item 4. Controls and Procedures
 a.
    
    Evaluation of disclosure controls and procedures. The Company maintains controls and
procedures designed to ensure that information required to be disclosed in the reports that the
Company files or submits under the Securities Exchange Act of 1934 is recorded, processed,
summarized and reported within the time periods specified in the rules and forms of the
Securities and Exchange Commission. Based upon their evaluation of those controls and procedures
performed within 90 days of the filing date of this report, the Chief Executive and Chief
Financial officers of the Company concluded that the Companys disclosure controls and procedures
were adequate.b.
    
    Changes in internal controls.The Company made no significant changes in its
internal controls or in other factors that could significantly affect these controls
subsequent to the date of the evaluation of those controls by the Chief Executive and
Chief Financial officers.
 17




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##### Table of Contents



UNITED HERITAGE BANKSHARES OF FLORIDA, INC.
 
 Part II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 2. Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity
Securities
  
 Item 3. Defaults upon Senior Securities
  
 Item 4. Submission of Matters to a Vote of Security Holders
  
 Item 5. Other Information




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##### Table of Contents



UNITED HERITAGE BANKSHARES OF FLORIDA, INC.
 
 Item 6. Exhibits
  3.1
    
    
    
    
    Articles of Incorporation of United Community Bankshares of Florida,
Inc. **3.2
    
    
    
    
    Bylaws of United Community Bankshares of Florida, Inc. ****4.1
    
    
    
    
    Specimen Stock Certificate of United Community Bankshares of
Florida, Inc. **10.1
    
    
    
    
    Employment Agreement, dated as of March 15, 2004, between United
Heritage Bank and David G. Powers ***10.2
    
    
    
    
    United Community Bankshares of Florida, Inc. Directors Stock Option
Plan *10.3
    
    
    
    
    United Community Bankshares of Florida, Inc.s Officers and
Employees Stock Option Plan *10.4
    
    
    
    
    Employment Agreement, dated as of March 15, 2004, between United
Heritage Bank and Shirley L. Tyler ***10.5
    
    
    
    
    Amendment to United Community Bankshares of Florida, Inc.
Directors Stock Option Plan *****10.6
    
    
    
    
    Amendment to United Community Bankshares of Florida, Inc. Officers
and Employees Stock Option Plan *****14.1
    
    
    
    
    Code of Ethics *31.1
    
    
    
    
    Certification of Chief Executive Officer required by
Rule 13a-14(a)/15d-14(a) under the Exchange Act31.2
    
    
    
    
    Certification of Chief Financial Officer required by
Rule 13a-14(a)/15d-14(a) under the Exchange Act32.1
    
    
    
    
    Certification of Chief Executive Officer, pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.32.2
    
    
    
    
    Certification of Chief Financial Officer, pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
 
 *
    
    Incorporated by reference to the corresponding exhibit number in the Companys Form 10-KSB
filed for the year ended December 31, 2003.**
    
    Incorporated by reference to the corresponding exhibit number in the Companys Form 10-QSB
filed for the quarter ended March 31, 2003.***
    
    Incorporated by reference to the corresponding exhibit number in the Companys Form 10-QSB
filed for the quarter ended March 31, 2004.****
    
    Incorporated by reference to the corresponding exhibit number in the Companys Form 10-QSB
filed for the quarter ended June 30, 2004.*****
    
    Incorporated by reference to the corresponding exhibit number in the Companys Form 10-Q
filed for the quarter ended March 31, 2005. 19




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##### Table of Contents



UNITED HERITAGE BANKSHARES OF FLORIDA, INC.
 
 SIGNATURES
   United Heritage Bankshares of Florida, Inc.By:
    
    /s/ David G. PowersName:
    
    David G. Powers, President andChief Executive OfficerBy:
    
    /s/ Shirley L. TylerName:
    
    Shirley L. Tyler, Executive VicePresident and Treasurer
 20