##### Table of Contents

---

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



---



FORM 10-Q



---



Quarterly Report Pursuant to Section 13 or 15(d)

of the Securities Exchange
Act of 1934



For the Quarterly Period Ended March 31,
2005



Commission File Number 000-50091



---



BANCSHARES OF FLORIDA, INC.



---



A Florida Corporation



IRS Employer Identification No. 59-3535315



1185 Immokalee Road

Naples, Florida 34110

(239) 254-2100



---



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 by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange
Act).    Yes ̈No  x



The number of shares outstanding of the Registrants common stock, as of April 30, 2005
was 5,751,331 shares of $.01 par value common stock.



---



---

##### Table of Contents

BANCSHARES OF FLORIDA, INC. AND SUBSIDIARIES

Index



|         |  |                       |  |                                                                                                                               |  |   
|-------- |  | --------------------- |  | ----------------------------------------------------------------------------------------------------------------------------- |  | --
|         |  |                       |  | Page                                                                                                                         
|PART I.  |  | Financial Information |  |                                                                                                                              
|         |  |                       | 
|         |  | Item 1.               |  | Financial Statements (Unaudited)                                                                                              |  |   
|         |  |                       | 
|         |  |                       |  | Condensed Consolidated Statements of Financial ConditionMarch 31, 2005 and December 31, 2004                                  |  | 1 
|         |  |                       | 
|         |  |                       |  | Condensed Consolidated Statements of Operations -Three months ended March 31, 2005 and 2004                                   |  | 2 
|         |  |                       | 
|         |  |                       |  | Condensed Consolidated Statements of Stockholders Equity -Year ended December 31, 2004 and three months ended March 31, 2005 |  | 3 
|         |  |                       | 
|         |  |                       |  | Condensed Consolidated Statements of Comprehensive Income (Loss) -Three months ended March 31, 2005 and 2004                  |  | 3 
|         |  |                       | 
|         |  |                       |  | Condensed Consolidated Statements of Cash Flows -Three months ended March 31, 2005 and 2004                                   |  | 4 
|         |  |                       | 
|         |  |                       |  | Notes to the Condensed Consolidated Financial Statements                                                                      |  | 5 
|         |  |                       | 
|         |  |                       |  | Selected Quarterly Consolidated Financial Data                                                                                |  | 13
|         |  |                       | 
|         |  | Item 2.               |  | Managements Discussion and Analysis of Financial Condition and Results of Operation                                          |  |   
|         |  |                       | 
|         |  |                       |  | Overview                                                                                                                      |  | 14
|         |  |                       | 
|         |  |                       |  | Critical Accounting Policies                                                                                                  |  | 14
|         |  |                       | 
|         |  |                       |  | Discussion of the Three Months Ended March 31, 2005 Compared to the Three Months Ended March 31, 2004 and December 31, 2004   |  | 15
|         |  |                       | 
|         |  |                       |  | Liquidity and Capital Resources                                                                                               |  | 24
|         |  |                       | 
|         |  | Item 3.               |  | Quantitative and Qualitative Disclosures about Market Risk                                                                    |  | 27
|         |  |                       | 
|         |  | Item 4.               |  | Controls and Procedures                                                                                                       |  | 29
|         |  |                      
|PART II. |  | Other Information     |  |                                                                                                                              
|         |  |                       | 
|         |  | Item 1.               |  | Legal Proceedings                                                                                                             |  | 29
|         |  |                       | 
|         |  | Item 6.               |  | Exhibits and Reports on Form 8-K                                                                                              |  | 29
|         |  |                      
|         |  | Signatures            |  | 31                                                                                                                           



---

##### Table of Contents

BANCSHARES OF FLORIDA, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

March 31, 2005 and December 31, 2004

(In Thousands, except share and per share data)



|                                                                                                                                                                                                                                                   |  |                |         |   |                   |   |         |  
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------- | ------- | - | ----------------- | - | ------- | -
|                                                                                                                                                                                                                                                   |  | March 31, 2005 |         |   | December 31, 2004 |  
|ASSETS                                                                                                                                                                                                                                             |  |                |         |   |                   |   |         |  
|Cash and due from banks                                                                                                                                                                                                                            |  | $              | 15,880  |   |                   | $ | 16,011  |  
|Interest-bearing deposits due from other banks                                                                                                                                                                                                     |  |                | 1,045   |   |                   |   | 67      |  
|Federal funds sold                                                                                                                                                                                                                                 |  |                | 33,860  |   |                   |   | 41,819  |  
|                                                                                                                                                                                                                                                   |  |                |         |   |                   |   |         |  
|TOTAL CASH AND CASH EQUIVALENTS                                                                                                                                                                                                                    |  |                | 50,785  |   |                   |   | 57,897  |  
|                                                                                                                                                                                                                                                   |  |               
|Securities available for sale, at fair value                                                                                                                                                                                                       |  |                | 19,170  |   |                   |   | 25,945  |  
|                                                                                                                                                                                                                                                   |  |               
|Loans                                                                                                                                                                                                                                              |  |                | 361,168 |   |                   |   | 325,981 |  
|Less:                                                                                                                                                                                                                                              |  |                |         |   |                   |   |         |  
|Allowance for loan losses                                                                                                                                                                                                                          |  |                | 3,113   |   |                   |   | 2,817   |  
|Unearned income and deferred loan fees and costs                                                                                                                                                                                                   |  |                | 310     |   |                   |   | 202     |  
|                                                                                                                                                                                                                                                   |  |                |         |   |                   |   |         |  
|NET LOANS                                                                                                                                                                                                                                          |  |                | 357,745 |   |                   |   | 322,962 |  
|                                                                                                                                                                                                                                                   |  |               
|Restricted securities, Federal Home Loan Bank and Federal Reserve stock, at cost                                                                                                                                                                   |  |                | 1,098   |   |                   |   | 1,039   |  
|Premises and equipment                                                                                                                                                                                                                             |  |                | 6,895   |   |                   |   | 6,828   |  
|Accrued interest receivable                                                                                                                                                                                                                        |  |                | 1,384   |   |                   |   | 1,119   |  
|Bank-owned life insurance                                                                                                                                                                                                                          |  |                | 3,039   |   |                   |   | 3,021   |  
|Intangible asset                                                                                                                                                                                                                                   |  |                | 954     |   |                   |   | 964     |  
|Other assets                                                                                                                                                                                                                                       |  |                | 983     |   |                   |   | 1,033   |  
|                                                                                                                                                                                                                                                   |  |                |         |   |                   |   |         |  
|TOTAL ASSETS                                                                                                                                                                                                                                       |  | $              | 442,053 |   |                   | $ | 420,808 |  
|                                                                                                                                                                                                                                                   |  |                |         |   |                   |   |         |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                                                                                                                               |  |                |         |   |                   |   |         |  
|Deposits                                                                                                                                                                                                                                           |  | $              | 390,374 |   |                   | $ | 376,064 |  
|Short term borrowings                                                                                                                                                                                                                              |  |                | 9,000   |   |                   |   | 2,000   |  
|Accrued interest payable                                                                                                                                                                                                                           |  |                | 186     |   |                   |   | 187     |  
|Accrued expenses and other liabilities                                                                                                                                                                                                             |  |                | 992     |   |                   |   | 603     |  
|                                                                                                                                                                                                                                                   |  |                |         |   |                   |   |         |  
|TOTAL LIABILITIES                                                                                                                                                                                                                                  |  |                | 400,552 |   |                   |   | 378,854 |  
|                                                                                                                                                                                                                                                   |  |                |         |   |                   |   |         |  
|Commitments                                                                                                                                                                                                                                        |  |                |         |   |                   |   |         |  
|                                                                                                                                                                                                                                                   |  |               
|Stockholders Equity:                                                                                                                                                                                                                              |  |                |         |   |                   |   |         |  
|Series A Preferred stock, par value $.01 per share, aggregate liquidation preference of $3.5 million; 50,000 shares authorized, 36,819 shares
issued and outstanding at March 31, 2005; 36,097 shares, issued and outstanding at December 31, 2004 |  |                | 3,682   |   |                   |   | 3,610   |  
|Undesignated Preferred stock, par value $.01 per share, 950,000 and 1,000,000 shares authorized, no shares issued and outstanding at March 31,
2005 and December 31, 2004, respectively                                                            |  |                |        |   |                   |   |        |  
|Common stock, par value $.01 per share, 20,000,000 shares authorized, 4,836,331 and 4,835,632 shares issued and outstanding at March 31, 2005
and December 31, 2004, respectively                                                                  |  |                | 48      |   |                   |   | 48      |  
|Additional paid-in capital                                                                                                                                                                                                                         |  |                | 49,842  |   |                   |   | 49,817  |  
|Accumulated deficit                                                                                                                                                                                                                                |  |                | (11,926 | ) |                   |   | (11,479 | )
|Accumulated other comprehensive loss                                                                                                                                                                                                               |  |                | (145    | ) |                   |   | (42     | )
|                                                                                                                                                                                                                                                   |  |                |         |   |                   |   |         |  
|TOTAL STOCKHOLDERS EQUITY                                                                                                                                                                                                                         |  |                | 41,501  |   |                   |   | 41,954  |  
|                                                                                                                                                                                                                                                   |  |                |         |   |                   |   |         |  
|                                                                                                                                                                                                                                                   |  | $              | 442,053 |   |                   | $ | 420,808 |  
|                                                                                                                                                                                                                                                   |  |                |         |   |                   |   |         |  



See accompanying notes
to condensed consolidated financial statements.



1



---

##### Table of Contents

BANCSHARES OF FLORIDA, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

For the Three Months Ended March 31, 2005 and 2004

(In Thousands, except share and per share data)



|                                                                    |  |                              |           |   |      |   |           |  
|------------------------------------------------------------------- |  | ---------------------------- | --------- | - | ---- | - | --------- | -
|                                                                    |  | (unaudited)                  |          
|                                                                    |  | Three-months ended March 31, |          
|                                                                    |  | 2005                         |           |   | 2004 |  
|INTEREST INCOME                                                     |  |                              |           |   |      |   |           |  
|                                                                    |  |                             
|Interest and fees on loans                                          |  | $                            | 5,045     |   |      | $ | 2,882     |  
|Interest on securities available for sale                           |  |                              | 71        |   |      |   | 65        |  
|Interest on federal funds sold                                      |  |                              | 323       |   |      |   | 12        |  
|Interest on other interest earning assets                           |  |                              | 1         |   |      |   | 6         |  
|                                                                    |  |                              |           |   |      |   |           |  
|TOTAL INTEREST INCOME                                               |  |                              | 5,440     |   |      |   | 2,965     |  
|                                                                    |  |                              |           |   |      |   |           |  
|INTEREST EXPENSE                                                    |  |                              |           |   |      |   |           |  
|Interest on deposits                                                |  |                              | 1,788     |   |      |   | 988       |  
|Interest on short term borrowings and subordinated debt             |  |                              | 32        |   |      |   | 2         |  
|                                                                    |  |                              |           |   |      |   |           |  
|TOTAL INTEREST EXPENSE                                              |  |                              | 1,820     |   |      |   | 990       |  
|                                                                    |  |                              |           |   |      |   |           |  
|NET INTEREST INCOME                                                 |  |                              | 3,620     |   |      |   | 1,975     |  
|                                                                    |  |                             
|PROVISION FOR LOAN LOSSES                                           |  |                              | 296       |   |      |   | 333       |  
|                                                                    |  |                              |           |   |      |   |           |  
|NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES                 |  |                              | 3,324     |   |      |   | 1,642     |  
|                                                                    |  |                              |           |   |      |   |           |  
|NONINTEREST INCOME                                                  |  |                              |           |   |      |   |           |  
|Mortgage banking                                                    |  |                              | 12        |   |      |   | 49        |  
|Trust fees                                                          |  |                              | 323       |   |      |   | 243       |  
|Service charges and fees                                            |  |                              | 363       |   |      |   | 149       |  
|                                                                    |  |                              |           |   |      |   |           |  
|TOTAL NONINTEREST INCOME                                            |  |                              | 698       |   |      |   | 441       |  
|                                                                    |  |                              |           |   |      |   |           |  
|NONINTEREST EXPENSES                                                |  |                              |           |   |      |   |           |  
|Salaries and employee benefits                                      |  |                              | 2,239     |   |      |   | 1,290     |  
|Occupancy expenses                                                  |  |                              | 739       |   |      |   | 397       |  
|Equipment rental, depreciation & maintenance                        |  |                              | 257       |   |      |   | 167       |  
|General operating                                                   |  |                              | 1,162     |   |      |   | 741       |  
|                                                                    |  |                              |           |   |      |   |           |  
|TOTAL NONINTEREST EXPENSES                                          |  |                              | 4,397     |   |      |   | 2,595     |  
|                                                                    |  |                              |           |   |      |   |           |  
|LOSS BEFORE INCOME TAXES                                            |  |                              | (375      | ) |      |   | (512      | )
|                                                                    |  |                             
|INCOME TAXES                                                        |  |                              |          |   |      |   |          |  
|                                                                    |  |                              |           |   |      |   |           |  
|NET LOSS                                                            |  | $                            | (375      | ) |      | $ | (512      | )
|                                                                    |  |                              |           |   |      |   |           |  
|LOSS PER SHARE AVAILABLE TO COMMON SHAREHOLDERS (Basic and Diluted) |  | $                            | (0.09     | ) |      | $ | (0.17     | )
|                                                                    |  |                              |           |   |      |   |           |  
|WEIGHTED AVERAGE SHARES OUTSTANDING                                 |  |                              | 4,836,300 |   |      |   | 3,079,364 |  
|                                                                    |  |                              |           |   |      |   |           |  



See accompanying notes
to condensed consolidated financial statements.



2



---

##### Table of Contents

BANCSHARES OF FLORIDA, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY

For the Year Ended December 31, 2004 and the Three-Months Ended March 31, 2005

(In Thousands, except share and per share data; unaudited)



|                                                                                     |  |                 |  |              |       |                           |           |        |   |    |                                        |   |        |  |       |         |   |  |   |      |   |  |   |        |  
|------------------------------------------------------------------------------------ |  | --------------- |  | ------------ | ----- | ------------------------- | --------- | ------ | - | -- | -------------------------------------- | - | ------ |  | ----- | ------- | - |  | - | ---- | - |  | - | ------ | -
|                                                                                     |  | Preferred Stock |  | Common Stock |       | Additional Paid-InCapital |           |        |   |    | Accumulated ComprehensiveIncome (Loss) |   |        |  |      
|                                                                                     |  | SharesIssued    |  | Amount       |       | SharesIssued              |           | Amount |   |    | AccumulatedDeficit                     |   |        |  | Total |        
|Balance as of December 31, 2003                                                      |  |                |  | $            |      |                           | 3,079,199 |        | $ | 31 |                                        | $ | 29,634 |  | $     | (8,389  | ) |  | $ | (56  | ) |  | $ | 21,220 |  
|                                                                                     |  |                 |  |              |       |                           |           |       
|Net loss                                                                             |  |                 |  |              |       |                           |           |        |   |    |                                        |   |        |  |       | (2,880  | ) |  |   |      |   |  |   | (2,880 | )
|                                                                                     |  |                 |  |              |       |                           |           |       
|Preferred stock issued                                                               |  | 34,000          |  |              | 3,400 |                           |           |        |   |    |                                        |   |        |  |       |         |   |  |   |      |   |  |   | 3,400  |  
|Exercise of stock options & warrants                                                 |  |                |  |              |      |                           | 31,433    |        |   |   |                                        |   | 314    |  |       |        |   |  |   |     |   |  |   | 314    |  
|Adjustments to additional paid-in-capital from stock compensation expense            |  |                |  |              |      |                           |          |        |   |   |                                        |   | 119    |  |       |        |   |  |   |     |   |  |   | 119    |  
|Common stock issued, net of offering cost of $1,698                                  |  |                 |  |              |       |                           | 1,725,000 |        |   | 17 |                                        |   | 19,750 |  |       |        |   |  |   |     |   |  |   | 19,767 |  
|Preferred stock dividends paid at a quarterly rate of 0.02 shares of preferred stock |  | 2,097           |  |              | 210   |                           |           |        |   |    |                                        |   |        |  |       | (210    | ) |  |   |      |   |  |   |       |  
|Changes in fair value on available for sale securities                               |  |                |  |              |      |                           |          |        |   |   |                                        |   |       |  |       |        |   |  |   | 14   |   |  |   | 14     |  
|                                                                                     |  |                 |  |              |       |                           |           |        |   |    |                                        |   |        |  |       |         |   |  |   |      |   |  |   |        |  
|Balance as of December 31, 2004                                                      |  | 36,097          |  |              | 3,610 |                           | 4,835,632 |        |   | 48 |                                        |   | 49,817 |  |       | (11,479 | ) |  |   | (42  | ) |  |   | 41,954 |  
|Net loss                                                                             |  |                 |  |              |       |                           |           |        |   |    |                                        |   |        |  |       | (375    | ) |  |   |      |   |  |   | (375   | )
|Exercise of stock options & warrants                                                 |  |                 |  |              |       |                           | 699       |        |   |    |                                        |   | 8      |  |       |        |   |  |   |     |   |  |   | 8      |  
|Adjustments to additional paid-in-capital from stock compensation expense            |  |                |  |              |      |                           |          |        |   |   |                                        |   | 17     |  |       |        |   |  |   |     |   |  |   | 17     |  
|Preferred stock dividends paid at a quarterly rate of 0.02 shares of preferred stock |  | 722             |  |              | 72    |                           |          |        |   |   |                                        |   |       |  |       | (72     | ) |  |   |     |   |  |   |       |  
|Changes in fair value on available for sale securities                               |  |                 |  |              |       |                           |           |        |   |    |                                        |   |        |  |       |         |   |  |   | (103 | ) |  |   | (103   | )
|                                                                                     |  |                 |  |              |       |                           |           |        |   |    |                                        |   |        |  |       |         |   |  |   |      |   |  |   |        |  
|Balance as of March 31, 2005                                                         |  | 36,819          |  | $            | 3,682 |                           | 4,836,331 |        | $ | 48 |                                        | $ | 49,842 |  | $     | (11,926 | ) |  | $ | (145 | ) |  | $ | 41,501 |  
|                                                                                     |  |                 |  |              |       |                           |           |        |   |    |                                        |   |        |  |       |         |   |  |   |      |   |  |   |        |  



BANCSHARES OF FLORIDA, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(LOSS)

(In Thousands, unaudited)



|                                                                                  |  |                             |      |   |      |   |      |  
|--------------------------------------------------------------------------------- |  | --------------------------- | ---- | - | ---- | - | ---- | -
|                                                                                  |  | Three-months endedMarch 31, |     
|                                                                                  |  | 2005                        |      |   | 2004 |  
|Net loss                                                                          |  | $                           | (375 | ) |      | $ | (512 | )
|                                                                                  |  |                             |      |   |      |   |      |  
|Other comprehensive income (loss):                                                |  |                             |      |   |      |   |      |  
|Unrealized gains (losses) on available for sale securities:                       |  |                             |      |   |      |   |      |  
|Unrealized holding gains (losses) arising during the period                       |  |                             | (103 | ) |      |   | 66   |  
|Less reclassification adjustment for gains (losses) realized in net income (loss) |  |                             |     |   |      |   |     |  
|                                                                                  |  |                             |      |   |      |   |      |  
|Net unrealized gains (losses)                                                     |  |                             | (103 | ) |      |   | 66   |  
|                                                                                  |  |                             |      |   |      |   |      |  
|Comprehensive loss                                                                |  | $                           | (478 | ) |      | $ | (446 | )
|                                                                                  |  |                             |      |   |      |   |      |  



See accompanying notes
to condensed consolidated financial statements.



3



---

##### Table of Contents

BANCSHARES OF FLORIDA, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Three-Months Ended March 31, 2005 and 2004

(In Thousands)



|                                                                                          |  |                              |         |   |      |   |         |  
|----------------------------------------------------------------------------------------- |  | ---------------------------- | ------- | - | ---- | - | ------- | -
|                                                                                          |  | (unaudited)                  |        
|                                                                                          |  | Three-Months Ended March 31, |        
|                                                                                          |  | 2005                         |         |   | 2004 |  
|CASH FLOWS FROM OPERATING ACTIVITIES                                                      |  |                              |         |   |      |   |         |  
|Net loss                                                                                  |  | $                            | (375    | ) |      | $ | (512    | )
|Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |  |                              |         |   |      |   |         |  
|Depreciation and amortization                                                             |  |                              | 293     |   |      |   | 159     |  
|Provision for loan losses                                                                 |  |                              | 296     |   |      |   | 333     |  
|Amortization of deferred loan fees and costs, net                                         |  |                              | (37     | ) |      |   | 5       |  
|Amortization (accretion) of premiums and discounts on investments, net                    |  |                              | (2      | ) |      |   | 8       |  
|Amortization of intangible assets                                                         |  |                              | 10      |   |      |   |        |  
|Increase in accrued interest receivable                                                   |  |                              | (265    | ) |      |   | (15     | )
|Decrease in other assets                                                                  |  |                              | 50      |   |      |   | 114     |  
|Stock compensation expense                                                                |  |                              | 17      |   |      |   |        |  
|Increase in Bank-owned life insurance                                                     |  |                              | (18     | ) |      |   |        |  
|(Decrease) iIncrease in accrued interest payable                                          |  |                              | (1      | ) |      |   | 70      |  
|Increase in accrued expenses and other liabilities                                        |  |                              | 389     |   |      |   | 534     |  
|                                                                                          |  |                              |         |   |      |   |         |  
|NET CASH PROVIDED BY OPERATING ACTIVITIES                                                 |  |                              | 357     |   |      |   | 696     |  
|                                                                                          |  |                              |         |   |      |   |         |  
|CASH FLOWS FROM INVESTING ACTIVITIES                                                      |  |                              |         |   |      |   |         |  
|Net increase in loans                                                                     |  |                              | (35,042 | ) |      |   | (38,896 | )
|Proceeds from the sale of securities available for sale                                   |  |                              |        |   |      |   | 743     |  
|Proceeds from maturities and principal repayments on securities available for sale        |  |                              | 20,228  |   |      |   |        |  
|Purchase of securities available for sale                                                 |  |                              | (13,554 | ) |      |   |        |  
|Purchase of FHLB stock, net                                                               |  |                              | (59     | ) |      |   | (44     | )
|Purchase of premises and equipment                                                        |  |                              | (360    | ) |      |   | (1,109  | )
|Acquisition cost of business                                                              |  |                              |        |   |      |   | (357    | )
|                                                                                          |  |                              |         |   |      |   |         |  
|NET CASH USED IN INVESTING ACTIVITIES                                                     |  |                              | (28,787 | ) |      |   | (39,663 | )
|                                                                                          |  |                              |         |   |      |   |         |  
|CASH FLOWS FROM FINANCING ACTIVITIES                                                      |  |                              |         |   |      |   |         |  
|Net increase in deposits                                                                  |  |                              | 14,310  |   |      |   | 51,703  |  
|Increase in (repayment of) short term borrowings                                          |  |                              | 7,000   |   |      |   | 3,300   |  
|Proceeds from issuance of Series A preferred stock                                        |  |                              |        |   |      |   | 3,400   |  
|Net proceeds from issuance of common stock                                                |  |                              | 8       |   |      |   | 150     |  
|                                                                                          |  |                              |         |   |      |   |         |  
|NET CASH PROVIDED BY FINANCING ACTIVITIES                                                 |  |                              | 21,318  |   |      |   | 58,553  |  
|                                                                                          |  |                              |         |   |      |   |         |  
|NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS                                      |  |                              | (7,112  | ) |      |   | 19,586  |  
|CASH AND CASH EQUIVALENTS:                                                                |  |                              |         |   |      |   |         |  
|Beginning of period                                                                       |  |                              | 57,897  |   |      |   | 8,424   |  
|                                                                                          |  |                              |         |   |      |   |         |  
|End of period                                                                             |  | $                            | 50,785  |   |      | $ | 28,010  |  
|                                                                                          |  |                              |         |   |      |   |         |  
|SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION                                          |  |                              |         |   |      |   |         |  
|Cash paid during the year for:                                                            |  |                              |         |   |      |   |         |  
|Interest                                                                                  |  | $                            | 4,963   |   |      | $ | 920     |  
|                                                                                          |  |                              |         |   |      |   |         |  
|Noncash Transactions:                                                                     |  |                              |         |   |      |   |         |  
|Increase (decrease) in fair value on securities available for sale                        |  | $                            | (103    | ) |      | $ | 66      |  
|                                                                                          |  |                              |         |   |      |   |         |  
|Increase in preferred stock for dividends paid                                            |  | $                            | 72      |   |      | $ |        |  
|                                                                                          |  |                              |         |   |      |   |         |  



See accompanying notes
to condensed consolidated financial statements.



4



---

##### Table of Contents

BANCSHARES OF FLORIDA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)



NOTE 1Organization and Basis of Presentation



Organization:



Bancshares of Florida Inc., (Bancshares), was incorporated in Florida in September 1998 to serve as a holding company for Bank of Florida -
Southwest, a national banking association then in organization. (Bancshares and its subsidiaries are collectively referred to in this report as the Company).



For approximately the first eleven months following its incorporation, the main activities of Bancshares centered on
applying for a national bank charter, applying to become a bank holding company, hiring and training bank employees, preparing the banking facilities and premises for opening, and conducting an initial public offering of common stock to raise a
minimum of $10 million to fund the startup of Bank of Florida  Southwest. By August 1999, Bancshares had received subscriptions to purchase common stock in an amount in excess of the required minimum, and on August 24, 1999, Bank of
FloridaSouthwest, commenced operations at its office located at 3401 Tamiami Trail North in Naples, Florida. Effective January 1, 2005, Bank of FloridaSouthwest became a Florida state chartered bank and officially changed its name to
Bank of Florida  Southwest.



On April 18, 2000, Bank of
Florida Trust Company (the Trust Company) was incorporated under the laws of the State of Florida as a wholly-owned subsidiary of Bank of Florida  Southwest. Bank of Florida Trust Company applied to the Comptroller of the Currency
and was approved to engage in fiduciary services and estate planning consultation on August 23, 2000. In October 2002, the Trust Company applied to the Florida Department of Financial Services, and upon that applications approval in March
2003, Bancshares acquired the Trust Company from Bank of Florida  Southwest. On July 16, 2004, the Trust Company received approval from the Florida Department of Financial Services to change its name from Florida Trust Company to Bank of
Florida Trust Company as a means to improve the name recognition of the subsidiary with Bancshares and its affiliates. As a subsidiary of Bancshares, Bank of Florida Trust Company offers non-proprietary, third party investment consulting services
and access to an extensive, nationwide network of independent money managers.



On July 16, 2002, Bank of Florida, a newly formed state-chartered commercial bank, opened in Ft. Lauderdale, Florida with over $7 million in capital and on November 5, 2004, Bank of Florida  Tampa Bay opened
with over $8 million in capital. (Bank of Florida  Southwest, Bank of Florida and Bank of Florida  Tampa Bay are collectively referred to as the Banks). The Banks offer a complete range of interest bearing and non-interest
bearing accounts, including commercial and retail checking accounts, money market accounts, individual retirement accounts, regular interest bearing statement savings accounts, and certificates of deposit. Lending products include commercial loans,
real estate loans, home equity loans and consumer/installment loans. In addition, they provide such consumer services as U.S. Savings Bonds, travelers checks, cashiers checks, safe deposit boxes, bank-by-mail services, direct deposit, on-line
banking, and automatic teller services. Specialized services to commercial customers include cash management, expanded on-line banking, lock box, and Door-to-Door banking.



The holding company structure provides flexibility for expansion of our banking business through possible acquisition of
other financial institutions and provision of additional banking-related services, which the traditional bank may not provide under present laws. For example, banking regulations require that banks maintain a minimum ratio of capital to assets. In
the event that the growth of Bank of Florida  Southwest, Bank of Florida or Bank of Florida  Tampa Bay is such that this minimum ratio is not maintained, we may borrow funds, subject to the capital adequacy guidelines of the Federal
Reserve Board, and contribute them to the capital of the Banks, and otherwise raise capital in a manner that is unavailable to our Bank subsidiaries under existing banking regulations. In addition, the Banks may participate loans with each other
such that the excess of an individual Banks loan limit may be shared with another bank, resulting in greater retention within the holding company of the customer relationship, given acceptable credit risk and industry concentration.



The Trust Company presently operates as a subsidiary of
Bancshares, and exercises its trust powers thereunder. The Trust company offers and provides to its customers wealth management services, including fiduciary services, as a trustee, executor, administrator, guardian, custodian of funds, asset
manager (with and without discretion) and investment advisor. It serves all of the Banks with these services, generally having a representative situated in the local bank markets that the Company serves with a link to the centralized administrative
and support services in the Trust Company home office location in Naples, Florida.



5



---

##### Table of Contents

BANCSHARES OF FLORIDA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)



Basis of Presentation:



The unaudited interim condensed consolidated financial
statements reflect all adjustments necessary (consisting of normal recurring adjustments) to present fairly our financial position as of March 31, 2005 and December 31, 2004, and the results of operations and cash flows for the three months ended
March 31, 2005 and 2004, and the stockholders equity for the three and twelve months ended March 31, 2005 and December 31, 2004. The accounting and reporting policies of the Company are in conformity with accounting principles generally
accepted in the United States of America for interim financial information and with the instructions to Form 10-Q, Article 10 of Regulation S-X and prevailing practices within the financial services industry. Accordingly, they do not include all of
the footnotes and information required by accounting principles generally accepted in the United States of America.



The preparation of financial statements, in conformity with accounting principles generally accepted in the United States of America, requires that we
make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expense during the reporting
period. Such estimates are subject to change in the future as additional information becomes available or previously existing circumstances are modified. The Companys significant accounting policies are described in Note 1 of the Notes to
Consolidated Financial Statements included in its 2004 Annual Report on Form 10-KSB filed with the Securities and Exchange Commission. For interim reporting purposes, the Company follows the same basic accounting policies and considers each interim
period as an integral part of an annual period.



These
unaudited condensed consolidated financial statements included herein should be read in conjunction with the financial statements and related footnotes included in the Companys 2004 Form 10-KSB. The results of operations for interim periods
are not necessarily indicative of the results of operations to be expected for the fiscal year ending December 31, 2005 or any other interim period.



Reclassifications:



Certain reclassifications have been made to prior period financial statements to conform to the March 31, 2005 financial statement presentation. These
reclassifications only changed the reporting categories but did not affect our results of operations or financial position.



Stock-based Compensation:



The Company applies the intrinsic-value-based method of accounting prescribed by Accounting Principles Board (APB) Opinion No. 25,
Accounting for Stock Issued to Employees, and related interpretations including Financial Accounting Standards Board (FASB) Interpretation No. 44, Accounting for Certain Transactions involving Stock Compensation, and
Interpretation of APB Opinion No.25, to account for its fixed-plan stock options. Under this method, compensation expense is recorded on the date of grant only if the current market price of the underlying stock exceeded the exercise price.
FASB Statement No. 123, Accounting for Stock-Based Compensation and FASB Statement No. 148, Accounting for Stock-Based Compensation  Transition and Disclosure, an Amendment of FASB Statement No. 123, established accounting and
disclosure requirements using a fair-value-based method of accounting for stock-based compensation plans. As permitted by existing standards, the Company has elected to continue to apply the intrinsic-value-based method of accounting described
above, and has adopted only the disclosure requirements of Statement 123, as amended.



Effective December 15, 2002, the Company adopted Statement of Financial Accounting Standards (SFAS) No. 148, Accounting for Stock-Based CompensationTransition and Disclosure. This statement
amends SFAS No. 123, Accounting for Stock-Based Compensation. It provides alternative methods of transition for an entity that voluntarily changes to the fair value based method of accounting for stock-based employee compensation. It also
amends the disclosure provision of SFAS No. 123 to require prominent disclosure about the effects on reported net income of an entitys accounting policy decisions with respect to stock-based employee compensation.



6



---

##### Table of Contents

BANCSHARES OF FLORIDA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)



The per
share weighted average fair value of stock options granted during the three months ended March 31, 2005 and 2004 was $7.19 and $7.22, respectively, on the date of grant using the Black Scholes option-pricing model with the following weighted average
assumptions:



|                        |  |                                      |   |  |          |  
|----------------------- |  | ------------------------------------ | - |  | -------- | -
|                        |  | For the three months ended March 31, |  
|                        |  | 2005                                 |   |  | 2004     |  
|Expected dividend yield |  | 0.00                                 | % |  | 0.00     | %
|Expected volatility     |  | 36.00                                | % |  | 25.15    | %
|Risk free interest rate |  | 3.96                                 | % |  | 3.33     | %
|Expected life           |  | 7 years                              |   |  | 10 years |  



Had compensation cost
for the Companys stock option plan been determined under SFAS No. 123, based on the fair market value at the grant dates, the Companys proforma net loss and net loss per share would have been as follows (in thousands):



|                                                                                                                                    |  |                                      |       |   |      |   |       |  
|----------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------ | ----- | - | ---- | - | ----- | -
|                                                                                                                                    |  | For the three months ended March 31, |      
|                                                                                                                                    |  | 2005                                 |       |   | 2004 |  
|Net loss as reported                                                                                                                |  | $                                    | (375  | ) |      | $ | (512  | )
|Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax
effects |  |                                      | (373  | ) |      |   | (19   | )
|                                                                                                                                    |  |                                      |       |   |      |   |       |  
|Proforma net loss                                                                                                                   |  | $                                    | (748  | ) |      | $ | (531  | )
|                                                                                                                                    |  |                                      |       |   |      |   |       |  
|Basic and diluted net loss per share as reported                                                                                    |  | $                                    | (0.09 | ) |      | $ | (0.17 | )
|Basic and diluted proforma net loss per share                                                                                       |  | $                                    | (0.17 | ) |      | $ | (0.17 | )



Recent Accounting Pronouncements:



On March 30, 2005, the Financial Accounting Standards
Board (the FASB) issued FASB Interpretation No. 47, Accounting for Conditional Asset Retirement Obligations,(FIN 47). FIN 47 clarifies that the term conditional asset retirement obligationas used
in FASB Statement No. 143, Accounting for Asset Retirement Obligations,refers to a legal obligation to perform an asset retirement activity in which the timing and (or) method of settlement are conditional on a future event that
may or may not be within the control of the entity. FIN 47 also clarifies when an entity would have sufficient information to reasonably estimate the fair value of an asset retirement obligation. FIN 47 is effective no later than the end of fiscal
years ending after December 15, 2005. Retrospective application of interim financial information is permitted but is not required. Early adoption of FIN 47 is encouraged. The Company does not currently have any asset retirement obligations and
therefore, FIN 47 is not applicable.



7



---

##### Table of Contents

BANCSHARES OF FLORIDA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)



On December
16, 2004, the FASB issued FASB Statement No. 123 (revised 2004), Share-Based Payment. Statement 123(R) replaces FASB Statement No. 123, Accounting for Stock-Based Compensation, supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees
and amends FASB Statement No. 95, Statement of Cash Flows. Statement 123(R) requires that all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on their fair values. The
provisions of Statement 123(R) are effective prospectively as of the first interim or annual reporting period that begins after June 15, 2005. On March 30, 2005, the SEC Staff issued Staff Accounting Bulletin No. 107, Application of FASB
Statement 123R, Share-Based Payment which amends the effective date to begin the first annual period beginning after June 15, 2005. The implementation of this statement is expected to result in an additional $482,000 in expense for
fiscal year 2006, based on current options outstanding.



In the
second quarter of 2004, the Emerging Issues Task Force (EITF) released EITF Issue 03-01, The Meaning of Other-Than-Temporary Impairment and its Application to Certain Investments.The issue provided guidance for
evaluating whether an investment is other-than-temporarily impaired and requires certain disclosures with respect to these investments, On September 30, 2004, the FASB issued FASB Staff Position (FSP) EITF 3-1-1, Effective Date
of Paragraph 10-20 of EITF Issue 03-1, The Meaning of Other-Than-Temporary Impairment and its Application to Certain Investments.This Staff Position delayed certain measurement and recognition provisions of EITF 03-1. Please
see Note 3  Securities for information relating to the required disclosures with respect to these investments.



On March 9, 2004, the SEC Staff issued Staff Accounting Bulletin No. 105, Application of Accounting Principles to Loan Commitments(SAB 105). SAB 105 clarifies existing accounting practices relating to the valuation of issued loan commitments, including interest rate lock commitments, subject to SFAS No. 149 and Derivative Implementation Group Issue C13,
Scope Exceptions: When a Loan Commitment is included in the Scope of Statement 133. Furthermore, SAB 105 disallows the inclusion of the values of a servicing component and other internally developed intangible assets in the
initial and subsequent interest rate lock commitment. The provisions of SAB 105 affect only the timing of the recognition of mortgage banking income and were effective for loan commitments entered into after March 31, 2004. The provisions of SAB 105
did not have a material effect on the Companys consolidated results of operations or financial condition.



Losses Per Common Share:



Basic loss per share represents net loss available to common shareholders divided by the weighted-average number of common shares outstanding during the
year. Because we reported net losses in 2005 and 2004, all potentially dilutive securities were anti-dilutive and basic and diluted loss per share were the same in those periods.



At March 31, 2005, there were 484,875 common stock options and 290,523 warrants, respectively, that were anti-dilutive and
therefore not included in the calculation below. At March 31, 2004, there were 366,799 common stock options and 191,856 warrants, respectively, that were anti-dilutive and therefore not included in the calculation below.



Components used in computing loss per share for the three months ended March
31, 2005 and 2004, are summarized as follows (in thousands, except share data):



|                                      |  |                                      |      |   |                                     |           |                |   |       |          |  |   |                                   |   |               |           |  |   |       |  
|------------------------------------- |  | ------------------------------------ | ---- | - | ----------------------------------- | --------- | -------------- | - | ----- | -------- |  | - | --------------------------------- | - | ------------- | --------- |  | - | ----- | -
|                                      |  | For the Three months ended March 31, |     
|                                      |  | 2005                                 |      |   | 2004                                |          
|                                      |  | NetLoss                              |      |   | Weighted Average Shares Outstanding |           | Loss Per Share |   |       | Net Loss |  |   | Weighted AverageSharesOutstanding |   | Loss PerShare |          
|Net loss                              |  | $                                    | (375 | ) |                                     |           |                |   |       |          |  | $ | (512                              | ) |               |           |  |   |       |  
|Less preferred stock dividends        |  |                                      | (72  | ) |                                     |           |                |   |       |          |  |   |                                  |   |               |           |  |   |       |  
|                                      |  |                                      |      |   |                                     |           |                |   |       |          |  |   |                                   |   |               |           |  |   |       |  
|Loss available to common shareholders |  | $                                    | (447 | ) |                                     | 4,836,300 |                | $ | (0.09 | )        |  | $ | (512                              | ) |               | 3,079,364 |  | $ | (0.17 | )
|                                      |  |                                      |      |   |                                     |           |                |   |       |          |  |   |                                   |   |               |           |  |   |       |  



8



---

##### Table of Contents

BANCSHARES OF FLORIDA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)



NOTE 2Segment
Information



The Company has five reportable segments:
Bank of FloridaSouthwest, based in Naples, Florida; Bank of Florida, based in Fort Lauderdale, Florida; Bank of FloridaTampa Bay, based in Tampa, Florida; Bank of Florida Trust Company, based in Naples, Florida; and Bancshares of
Florida, Inc., the parent corporation.



Measurement of Segment Profit or
Loss and Segment Assets:



The Companys reportable
business segments are strategic business units that offer distinctive products and services that are marketed through different channels. These are managed separately because of their management, marketing and distribution requirements.



The following presents financial information of reportable segments as of
and for the three-month periods ended March 31, 2005 and 2004 and December 31, 2004. The Other column includes executive management and finance and accounting expense; expense for acquisitions, capital-raising, shareholder/investor
relations, and various professional services; and entries necessary to reconcile the identified segments to the reported consolidated amounts. When performance of these segments is reported in the text of Managements Discussion and Analysis of
Financial Condition and Results of Operations and in similar texts, figures are stated before the latter eliminating entries.



|                                |  |                           |         |                               |   |         |                          |  |   |                            |   |       |   |         |                           |   |         |   |  |   |         |  
|------------------------------- |  | ------------------------- | ------- | ----------------------------- | - | ------- | ------------------------ |  | - | -------------------------- | - | ----- | - | ------- | ------------------------- | - | ------- | - |  | - | ------- | -
|For the Three Months Ended:     |  | Bank ofFlorida -Southwest |         | Bank ofFlorida, Ft.Lauderdale |   |         | Bank ofFlorida -TampaBay |  |   | Bank ofFloridaTrustCompany |   | Other |   |         | Bancsharesof Florida,Inc. |  
|March 31, 2005                  |  |                           |         |                               |   |         |                          |  |   |                            |   |       |   |         |                           |   |         |   |  |   |         |  
|Net interest income             |  | $                         | 1,927   |                               | $ | 1,437   |                          |  | $ | 240                        |   |       | $ | 16      |                           | $ |        |   |  | $ | 3,620   |  
|Provision for loan losses       |  |                           | 145     |                               |   |        |                          |  |   | 151                        |   |       |   |        |                           |   |        |   |  |   | 296     |  
|Noninterest income              |  |                           | 270     |                               |   | 102     |                          |  |   | 3                          |   |       |   | 323     |                           |   |        |   |  |   | 698     |  
|Noninterest expense             |  |                           | 1,078   |                               |   | 1,189   |                          |  |   | 437                        |   |       |   | 317     |                           |   | 1,376   |   |  |   | 4,397   |  
|Holding company servicing costs |  |                           | 469     |                               |   | 225     |                          |  |   | 63                         |   |       |   | 21      |                           |   | (778    | ) |  |   |        |  
|                                |  |                           |         |                               |   |         |                          |  |   |                            |   |       |   |         |                           |   |         |   |  |   |         |  
|Net income (loss)               |  | $                         | 505     |                               | $ | 125     |                          |  | $ | (408                       | ) |       | $ | 1       |                           | $ | (598    | ) |  | $ | (375    | )
|                                |  |                           |         |                               |   |         |                          |  |   |                            |   |       |   |         |                           |   |         |   |  |   |         |  
|End of period assets            |  | $                         | 250,073 |                               | $ | 168,157 |                          |  | $ | 44,291                     |   |       | $ | 2,313   |                           | $ | (22,781 | ) |  | $ | 442,053 |  
|                                |  |                           |         |                               |   |         |                          |  |   |                            |   |       |   |         |                           |   |         |   |  |   |         |  
|Assets under advice             |  | $                         |        |                               | $ |        |                          |  | $ |                           |   |       | $ | 200,139 |                           | $ |        |   |  | $ | 200,139 |  
|                                |  |                           |         |                               |   |         |                          |  |   |                            |   |       |   |         |                           |   |         |   |  |   |         |  
|December 31, 2004               |  |                           |         |                               |   |         |                          |  |   |                            |   |       |   |         |                           |   |         |   |  |   |         |  
|Net interest income             |  | $                         | 1,821   |                               | $ | 1,114   |                          |  | $ | 38                         |   |       | $ | 16      |                           | $ | 9       |   |  | $ | 2,998   |  
|Provision for loan losses       |  |                           | 150     |                               |   | 175     |                          |  |   | 126                        |   |       |   |        |                           |   |        |   |  |   | 451     |  
|Noninterest income              |  |                           | 267     |                               |   | 63      |                          |  |   | 1                          |   |       |   | 285     |                           |   |        |   |  |   | 616     |  
|Noninterest expense             |  |                           | 1,356   |                               |   | 1,103   |                          |  |   | 425                        |   |       |   | 292     |                           |   | 980     |   |  |   | 4,156   |  
|Holding company servicing costs |  |                           |        |                               |   |        |                          |  |   |                           |   |       |   |        |                           |   |        |   |  |   |        |  
|                                |  |                           |         |                               |   |         |                          |  |   |                            |   |       |   |         |                           |   |         |   |  |   |         |  
|Net income (loss)               |  | $                         | 582     |                               | $ | (101    | )                        |  | $ | (512                       | ) |       | $ | 9       |                           | $ | (971    | ) |  | $ | (993    | )
|                                |  |                           |         |                               |   |         |                          |  |   |                            |   |       |   |         |                           |   |         |   |  |   |         |  
|End of period assets            |  | $                         | 246,862 |                               | $ | 144,853 |                          |  | $ | 33,404                     |   |       | $ | 2,333   |                           | $ | (6,644  | ) |  | $ | 420,808 |  
|                                |  |                           |         |                               |   |         |                          |  |   |                            |   |       |   |         |                           |   |         |   |  |   |         |  
|Assets under advice             |  | $                         |        |                               | $ |        |                          |  | $ |                           |   |       | $ | 202,138 |                           | $ |        |   |  | $ | 202,138 |  
|                                |  |                           |         |                               |   |         |                          |  |   |                            |   |       |   |         |                           |   |         |   |  |   |         |  
|March 31, 2004                  |  |                           |         |                               |   |         |                          |  |   |                            |   |       |   |         |                           |   |         |   |  |   |         |  
|Net interest income             |  | $                         | 1,334   |                               | $ | 623     |                          |  | $ |                           |   |       | $ | 18      |                           | $ |        |   |  | $ | 1,975   |  
|Provision for loan losses       |  |                           | 153     |                               |   | 180     |                          |  |   |                           |   |       |   |        |                           |   |        |   |  |   | 333     |  
|Noninterest income              |  |                           | 163     |                               |   | 35      |                          |  |   |                           |   |       |   | 243     |                           |   |        |   |  |   | 441     |  
|Noninterest expense             |  |                           | 1,271   |                               |   | 647     |                          |  |   |                           |   |       |   | 251     |                           |   | 426     |   |  |   | 2,595   |  
|Holding company servicing costs |  |                           |        |                               |   |        |                          |  |   |                           |   |       |   |        |                           |   |        |   |  |   |        |  
|                                |  |                           |         |                               |   |         |                          |  |   |                            |   |       |   |         |                           |   |         |   |  |   |         |  
|Net income (loss)               |  | $                         | 73      |                               | $ | (169    | )                        |  | $ |                           |   |       | $ | 10      |                           | $ | (426    | ) |  | $ | (512    | )
|                                |  |                           |         |                               |   |         |                          |  |   |                            |   |       |   |         |                           |   |         |   |  |   |         |  
|End of period assets            |  | $                         | 197,972 |                               | $ | 84,429  |                          |  | $ |                           |   |       | $ | 2,571   |                           | $ | (3,650  | ) |  | $ | 281,322 |  
|                                |  |                           |         |                               |   |         |                          |  |   |                            |   |       |   |         |                           |   |         |   |  |   |         |  
|Assets under advice             |  | $                         |        |                               | $ |        |                          |  | $ |                           |   |       | $ | 150,345 |                           | $ |        |   |  | $ | 150,345 |  
|                                |  |                           |         |                               |   |         |                          |  |   |                            |   |       |   |         |                           |   |         |   |  |   |         |  



9



---

##### Table of Contents

BANCSHARES OF FLORIDA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)



NOTE 3Securities



The amortized cost, gross unrealized gains and losses and
estimated fair value of securities available for sale shown in the condensed consolidated balance sheets of the Company at March 31, 2005 and December 31, 2004 are as follows (In Thousands):



|                                                           |  |               |        |                 |        |    |                      |   |      |   |  |   |       
|---------------------------------------------------------- |  | ------------- | ------ | --------------- | ------ | -- | -------------------- | - | ---- | - |  | - | ------
|                                                           |  | AMORTIZEDCOST |        | GROSSUNREALIZED |        |    | ESTIMATED FAIR VALUE
|                                                           |  |               | GAINS  |                 | LOSSES |    |                     
|March 31, 2005                                             |  |               |        |                 |        |    |                      |   |      |   |  |   |       
|Mortgage-backed securities of U.S. government agencies     |  | $             | 3,712  |                 | $      |   |                      | $ | (76  | ) |  | $ | 3,636 
|U.S. Treasury securities and other U.S. agency obligations |  |               | 15,552 |                 |        | 2  |                      |   | (71  | ) |  |   | 15,483
|Independent Bankers Bank stock                             |  |               | 51     |                 |        |   |                      |   |     |   |  |   | 51    
|                                                           |  |               |        |                 |        |    |                      |   |      |   |  |   |       
|Totals                                                     |  | $             | 19,315 |                 | $      | 2  |                      | $ | (147 | ) |  | $ | 19,170
|                                                           |  |               |        |                 |        |    |                      |   |      |   |  |   |       
|                                                           |  |               |       
|                                                           |  | AMORTIZEDCOST |        | GROSSUNREALIZED |        |    | ESTIMATEDFAIR VALUE 
|                                                           |  |               | GAINS  |                 | LOSSES |    |                     
|December 31, 2004                                          |  |               |        |                 |        |    |                      |   |      |   |  |   |       
|Mortgage-backed securities of U.S. government agencies     |  | $             | 3,943  |                 | $      | 10 |                      | $ | (34  | ) |  | $ | 3,919 
|U.S. Treasury securities and other U.S. agency obligations |  |               | 21,993 |                 |        | 3  |                      |   | (21  | ) |  |   | 21,975
|Independent Bankers Bank stock                             |  |               | 51     |                 |        |   |                      |   |     |   |  |   | 51    
|                                                           |  |               |        |                 |        |    |                      |   |      |   |  |   |       
|Totals                                                     |  | $             | 25,987 |                 | $      | 13 |                      | $ | (55  | ) |  | $ | 25,945
|                                                           |  |               |        |                 |        |    |                      |   |      |   |  |   |       



Management evaluates
securities for other-than-temporary impairment at least on a quarterly basis, and more frequently when economic or market concerns warrant such evaluation. Consideration is given to (1) the length of time and the extent to which the fair value has
been less than cost, (2) the financial condition and near-term prospects of the issuer, and (3) the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in
fair value.



The unrealized losses on investment securities
available for sale were caused by interest rate changes. It is expected that the securities would not be settled at a price less than the par value of the investments. Because the decline in fair value is attributable to changes in interest rates
and not credit quality, and because the Banks have the ability and intent to hold these investments until a market price recovery or maturity, these investments are not considered other-than-temporarily impaired.



Information pertaining to securities with gross unrealized losses at March
31, 2005, aggregated by investment category and length of time that individual securities have been in a continuous loss position, is as follows:



|                                                           |  |                         |     |                    |            |   |                       |  |   |            |   |  |   |      
|---------------------------------------------------------- |  | ----------------------- | --- | ------------------ | ---------- | - | --------------------- |  | - | ---------- | - |  | - | -----
|                                                           |  | Less Than Twelve Months |     | Over Twelve Months
|                                                           |  | Gross Unrealized Losses |     |                    | Fair Value |   | GrossUnrealizedLosses |  |   | Fair Value
|                                                           |  | (In Thousands)         
|Securities available for sale:                             |  |                         |     |                    |            |   |                       |  |   |            |   |  |   |      
|Mortgage-backed securities of U.S. government agencies     |  | $                       | (10 | )                  |            | $ | 841                   |  | $ | (66        | ) |  | $ | 2,795
|U.S. Treasury securities and other U.S. agency obligations |  |                         | (27 | )                  |            |   | 14,026                |  |   | (44        | ) |  |   | 1,431
|                                                           |  |                         |     |                    |            |   |                       |  |   |            |   |  |   |      
|Total securities available for sale                        |  | $                       | (37 | )                  |            | $ | 14,867                |  | $ | (110       | ) |  | $ | 4,226
|                                                           |  |                         |     |                    |            |   |                       |  |   |            |   |  |   |      



10



---

##### Table of Contents

BANCSHARES OF FLORIDA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)



NOTE 4Loans



The following table sets forth the composition of the
loan portfolio at March 31, 2005 and December 31, 2004 (in thousands).



|                                         |  |               |         |   |                  |   |         |  
|---------------------------------------- |  | ------------- | ------- | - | ---------------- | - | ------- | -
|                                         |  | March 31,2005 |         |   | December 31,2004 |  
|Real estate:                             |  |               |         |   |                  |   |         |  
|Commercial real estate                   |  | $             | 119,943 |   |                  | $ | 103,597 |  
|Construction                             |  |               | 73,544  |   |                  |   | 65,172  |  
|Multi-family                             |  |               | 17,286  |   |                  |   | 14,627  |  
|One-to-four family residential           |  |               | 74,464  |   |                  |   | 60,124  |  
|                                         |  |               |         |   |                  |   |         |  
|Total Real Estate Loans                  |  |               | 285,237 |   |                  |   | 243,520 |  
|Commercial Loans                         |  |               | 38,533  |   |                  |   | 42,721  |  
|Lines of credit                          |  |               | 22,918  |   |                  |   | 23,871  |  
|Consumer loans                           |  |               | 14,480  |   |                  |   | 15,869  |  
|                                         |  |               |         |   |                  |   |         |  
|Total Gross loans                        |  |               | 361,168 |   |                  |   | 325,981 |  
|Less: allowance for loan losses          |  |               | (3,113  | ) |                  |   | (2,817  | )
|Less: unamortized loan (fees) costs, net |  |               | (310    | ) |                  |   | (202    | )
|                                         |  |               |         |   |                  |   |         |  
|Total loans, net                         |  | $             | 357,745 |   |                  | $ | 322,962 |  
|                                         |  |               |         |   |                  |   |         |  



At March 31, 2005 and
December 31, 2004, the Company had non-accrual loans with a balance of $483,000 and $544,000, respectively. At March 31, 2005 and December 31, 2004, the Company did not hold any loans that were classified as impaired.



The following table represents the activity in the allowance for loan losses
during the three months ended March 31, 2005 and 2004.



|                          |  |           |       |      |   |      
|------------------------- |  | --------- | ----- | ---- | - | -----
|                          |  | March 31,
|                          |  | 2005      |       | 2004
|Beginning balance         |  | $         | 2,817 |      | $ | 1,568
|Provision for loan losses |  |           | 296   |      |   | 333  
|Charge-offs               |  |           |      |      |   |     
|Recoveries                |  |           |      |      |   | 1    
|                          |  |           |       |      |   |      
|Ending balance            |  | $         | 3,113 |      | $ | 1,902
|                          |  |           |       |      |   |      



NOTE 5Intangible Assets



On July 27, 2004, the Company acquired 100% ownership of
Bank of Florida  Tampa Bay (In Organization) that had not yet been incorporated or commenced its planned principal operations. The Company does not believe this acquisition was a business combination pursuant to the provisions of SFAS No. 141,
Accounting for Business Combinations, but rather an acquisition of net assets. Accordingly, the excess of fair value of the liabilities assumed over the fair value of the assets acquired of $974,000 was allocated to an amortizable
identifiable intangible. The balance of the intangible asset was $954,000 ($974,000 gross carrying amount less $20,000 accumulated amortization) at March 31, 2005 and is being amortized on a straight-line basis over 25 years. Following is the
estimated amortization expense for each of the five succeeding periods ending December 31st:



|                              |  |   |       
|----------------------------- |  | - | ------
|Remaining nine months of 2005 |  | $ | 29,216
|2006                          |  |   | 38,955
|2007                          |  |   | 38,955
|2008                          |  |   | 38,955
|2009                          |  |   | 38,955



11



---

##### Table of Contents

BANCSHARES OF FLORIDA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)



NOTE 6Subordinated
Debt



During June of 2004, Bank of Florida 
Southwest issued $2 million in subordinated debt to a local community bank. Interest is payable at a rate of Prime less one percent during the first sixty days, Prime plus zero percent for the next sixty days, and Prime plus one percent thereafter.
The interest rate at March 31, 2005 was 6.75%. This debt matures and is payable in full in June of 2010. Bank of Florida  Southwest may prepay the debt at its option (and with the approval of the Office of the Comptroller of the Currency, if
necessary) without penalty plus accrued interest.



The
subordinated debt issued qualifies as Tier II capital for regulatory risk-based capital guidelines for the Companys Bank of Florida - Southwest subsidiary and for Bancshares of Florida, Inc.



NOTE 7Stockholders Equity



During 2004, the Company authorized the issuance and sale of up to 50,000
shares of Series A Preferred Stock, par value $0.01, to only accredited investors. During March 2004, the Company issued 34,000 shares of the Series A Preferred Stock for consideration of $3,400,000 at an offering price of $100 per share.



The shares of Series A Preferred Stock have no voting rights,
but have a liquidation value of $100 per share. Dividends are payable on the first day of each quarter, payable in arrears. The dividends are payable at a quarterly rate of 0.02 shares of Series A Preferred Stock. The Company may redeem the shares
of Series A Preferred Stock at its discretion at any time. The redemption price for the shares of Series A Preferred Stock is based on a declining premium scale, for which the redemption price is $105 per share in the first year following issuance,
and such redemption price decreases by $1.00 in each subsequent year.



On July 30, 2004, the Company completed a common stock offering, selling 1,500,000 shares of common stock at $12.50 per share. Also during that quarter, the underwriter, Advest, Inc., acquired an additional 225,000 shares at $12.50 per
share. After underwriting discounts and commissions and other offering expenses, the Company received $19.8 million in proceeds.



On April 26, 2005, the Company completed a private placement offering through Allen & Company LLC, selling 915,000 shares of common stock at $15.00 a
share to accredited investors. The shares of the Companys common stock issued in conjunction with the private placement offering were issued pursuant to exemptions from the registration requirements of the Securities Act of 1933, as amended
(the Securities Act), and are restricted securities. Such shares may not be offered or sold in the United States absent registration with the Securities and Exchange Commission under the Securities Act or an applicable
exception therefrom. The Company has agreed to file a registration statement covering the resale of the Companys common stock. The Company received approximately $13.0 million in net proceeds.



NOTE 8Retirement Plan



During 2004, the Company implemented a supplemental executive retirement
plan (the Plan) to provide supplemental income for certain key executives after their retirement. The funding of the Plan involved the purchase of bank-owned life insurance (BOLI) policies. The Plan is structured such that
each participant is scheduled to receive specified levels of salary continuation income after the retirement age of 65 for a certain number of years. In the event a participant leaves the employment of the Company before retirement, only the
benefits vested through that date would be paid to the employee. The Plan also provides for 100% vesting in the event of a change in Company ownership.



The BOLI is recorded at the amounts to be realized under the insurance contract, which represents the amounts contributed to the cash surrender value of
the policies. The Company recognized revenue from the investment returns from the BOLI of $18,000 and compensation expense of $17,000 for the amounts accrued toward the participants retirement fund, during the quarter ended March 31, 2005. The
Company has approximately $46,900 accrued at March 31, 2005, which is included in other liabilities in the accompanying consolidated balance sheets. No income or expense items were recognized for the three months ended March 2004.



12



---

##### Table of Contents

SELECTED QUARTERLY CONSOLIDATED FINANCIAL DATA



|                                                                                  |  |                                                |           |    |               |   |           |                |  |   |               |    |  |                |           |    |  |   |           |   
|--------------------------------------------------------------------------------- |  | ---------------------------------------------- | --------- | -- | ------------- | - | --------- | -------------- |  | - | ------------- | -- |  | -------------- | --------- | -- |  | - | --------- | --
|                                                                                  |  | Quarter Ended                                  |          
|                                                                                  |  | March 31, 2005                                 |           |    | Dec. 31, 2004 |   |           | Sept. 30, 2004 |  |   | June 30, 2004 |    |  | March 31, 2004 |          
|                                                                                  |  | (Dollars In Thousands, except per share data.) |          
|Statement of Operations Data:                                                     |  |                                                |           |    |               |   |           |                |  |   |               |    |  |                |           |    |  |   |           |   
|Total interest income                                                             |  | $                                              | 5,440     |    |               | $ | 4,526     |                |  | $ | 3,907         |    |  | $              | 3,368     |    |  | $ | 2,965     |   
|Total interest expense                                                            |  |                                                | 1,820     |    |               |   | 1,528     |                |  |   | 1,317         |    |  |                | 1,128     |    |  |   | 990       |   
|                                                                                  |  |                                                |           |    |               |   |           |                |  |   |               |    |  |                |           |    |  |   |           |   
|Net interest income before provision for loan losses                              |  |                                                | 3,620     |    |               |   | 2,998     |                |  |   | 2,590         |    |  |                | 2,240     |    |  |   | 1,975     |   
|Provision for loan losses                                                         |  |                                                | 296       |    |               |   | 451       |                |  |   | 263           |    |  |                | 230       |    |  |   | 333       |   
|                                                                                  |  |                                                |           |    |               |   |           |                |  |   |               |    |  |                |           |    |  |   |           |   
|Net interest income after provision for loan losses                               |  |                                                | 3,324     |    |               |   | 2,547     |                |  |   | 2,327         |    |  |                | 2,010     |    |  |   | 1,642     |   
|Noninterest income                                                                |  |                                                | 698       |    |               |   | 616       |                |  |   | 611           |    |  |                | 503       |    |  |   | 441       |   
|Gain on sale of investments                                                       |  |                                                |          |    |               |   |          |                |  |   | (1            | )  |  |                | 5         |    |  |   |          |   
|Noninterest expense                                                               |  |                                                | 4,397     |    |               |   | 4,156     |                |  |   | 3,794         |    |  |                | 3,038     |    |  |   | 2,595     |   
|Provision for income taxes                                                        |  |                                                |          |    |               |   |          |                |  |   |              |    |  |                |          |    |  |   |          |   
|                                                                                  |  |                                                |           |    |               |   |           |                |  |   |               |    |  |                |           |    |  |   |           |   
|Net loss                                                                          |  |                                                | (375      | )  |               |   | (993      | )              |  |   | (856          | )  |  |                | (520      | )  |  |   | (512      | ) 
|                                                                                  |  |                                                |           |    |               |   |           |                |  |   |               |    |  |                |           |    |  |   |           |   
|Share Data:                                                                       |  |                                                |           |    |               |   |           |                |  |   |               |    |  |                |           |    |  |   |           |   
|Basic loss per share                                                              |  | $                                              | (0.09     | )  |               | $ | (0.22     | )              |  | $ | (0.22         | )  |  | $              | (0.19     | )  |  | $ | (0.17     | ) 
|Diluted loss per share                                                            |  |                                                | (0.09     | )  |               |   | (0.22     | )              |  |   | (0.22         | )  |  |                | (0.19     | )  |  |   | (0.17     | ) 
|Book value per common share (period end)                                          |  |                                                | 7.82      |    |               |   | 7.93      |                |  |   | 8.13          |    |  |                | 6.50      |    |  |   | 6.76      |   
|Weighted average shares outstanding used for basic and diluted earnings per share |  |                                                | 4,836,300 |    |               |   | 4,835,632 |                |  |   | 4,220,137     |    |  |                | 3,094,199 |    |  |   | 3,079,364 |   
|Total shares outstanding                                                          |  |                                                | 4,836,331 |    |               |   | 4,835,632 |                |  |   | 4,835,632     |    |  |                | 3,094,199 |    |  |   | 3,094,199 |   
|                                                                                  |  |                                                |           |    |              
|Balance Sheet Data:                                                               |  |                                                |           |    |               |   |           |                |  |   |               |    |  |                |           |    |  |   |           |   
|Total assets                                                                      |  | $                                              | 442,053   |    |               | $ | 420,808   |                |  | $ | 344,644       |    |  | $              | 297,343   |    |  | $ | 281,322   |   
|Total cash and cash equivalents                                                   |  |                                                | 50,785    |    |               |   | 57,897    |                |  |   | 41,880        |    |  |                | 20,051    |    |  |   | 28,010    |   
|Interest-earning assets                                                           |  |                                                | 416,322   |    |               |   | 394,851   |                |  |   | 326,387       |    |  |                | 276,979   |    |  |   | 247,676   |   
|Investment securities                                                             |  |                                                | 19,170    |    |               |   | 25,945    |                |  |   | 10,196        |    |  |                | 6,281     |    |  |   | 7,388     |   
|Loans held for investment                                                         |  |                                                | 361,168   |    |               |   | 325,981   |                |  |   | 284,599       |    |  |                | 263,746   |    |  |   | 239,458   |   
|Allowance for loan losses                                                         |  |                                                | 3,113     |    |               |   | 2,817     |                |  |   | 2,368         |    |  |                | 2,132     |    |  |   | 1,902     |   
|Deposit accounts                                                                  |  |                                                | 390,374   |    |               |   | 376,064   |                |  |   | 298,878       |    |  |                | 265,102   |    |  |   | 252,857   |   
|Stockholders equity                                                              |  |                                                | 41,501    |    |               |   | 41,954    |                |  |   | 42,835        |    |  |                | 23,575    |    |  |   | 24,325    |   
|                                                                                  |  |                                                |           |    |              
|Performance Ratios:                                                               |  |                                                |           |    |               |   |           |                |  |   |               |    |  |                |           |    |  |   |           |   
|Return on average assets                                                          |  |                                                | (0.35     | )% |               |   | (1.07     | )%             |  |   | (1.05         | )% |  |                | (0.72     | )% |  |   | (0.81     | )%
|Return on average common stockholders equity                                     |  |                                                | (3.87     | )  |               |   | (10.39    | )              |  |   | (10.03        | )  |  |                | (10.13    | )  |  |   | (8.87     | ) 
|Interest-rate spread during the period                                            |  |                                                | 3.13      |    |               |   | 3.03      |                |  |   | 2.95          |    |  |                | 3.05      |    |  |   | 3.11      |   
|Net interest margin                                                               |  |                                                | 3.61      |    |               |   | 3.45      |                |  |   | 3.36          |    |  |                | 3.36      |    |  |   | 3.43      |   
|Efficiency ratio1                                                                 |  |                                                | 101.83    |    |               |   | 115.00    |                |  |   | 118.53        |    |  |                | 110.75    |    |  |   | 107.41    |   
|                                                                                  |  |                                                |           |    |              
|Asset Quality Ratios:                                                             |  |                                                |           |    |               |   |           |                |  |   |               |    |  |                |           |    |  |   |           |   
|Allowance for loan losses to period end loans                                     |  |                                                | 0.86      | %  |               |   | 0.86      | %              |  |   | 0.83          | %  |  |                | 0.81      | %  |  |   | 0.79      | % 
|Allowance for loan losses to nonperforming loans                                  |  |                                                | 644.83    |    |               |   | 480.70    |                |  |   | 540.68        |    |  |                | 168.67    |    |  |   | 2928.52   |   
|Net charge-offs to average loans                                                  |  |                                                | 0.00      |    |               |   | 0.00      |                |  |   | 0.04          |    |  |                | 0.00      |    |  |   | 0.00      |   
|Nonperforming assets to period end total assets                                   |  |                                                | 0.11      |    |               |   | 0.14      |                |  |   | 0.13          |    |  |                | 0.43      |    |  |   | 0.02      |   
|Capital and Liquidity Ratios:                                                     |  |                                                |           |    |               |   |           |                |  |   |               |    |  |                |           |    |  |   |           |   
|Average equity to average assets                                                  |  |                                                | 9.85      | %  |               |   | 11.28     | %              |  |   | 10.48         | %  |  |                | 7.07      | %  |  |   | 9.11      | % 
|Leverage (4.00% required minimum)                                                 |  |                                                | 9.44      |    |               |   | 11.07     |                |  |   | 12.90         |    |  |                | 8.19      |    |  |   | 9.55      |   
|Risk-based capital:                                                               |  |                                                |           |    |               |   |           |                |  |   |               |    |  |                |           |    |  |   |           |   
|Tier 1                                                                            |  |                                                | 10.63     | %  |               |   | 11.85     | %              |  |   | 14.29         | %  |  |                | 9.57      | %  |  |   | 11.40     | % 
|Total                                                                             |  |                                                | 11.96     |    |               |   | 13.24     |                |  |   | 15.78         |    |  |                | 11.24     |    |  |   | 12.29     |   
|Average loans held for investment to average deposits                             |  |                                                | 88.44     |    |               |   | 90.37     |                |  |   | 97.03         |    |  |                | 95.95     |    |  |   | 95.47     |   
|Trust Assets Under Advice:                                                        |  |                                                |           |    |               |   |           |                |  |   |               |    |  |                |           |    |  |   |           |   
|Total assets under advice                                                         |  | $                                              | 200,139   |    |               | $ | 202,138   |                |  | $ | 185,873       |    |  | $              | 162,185   |    |  | $ | 150,345   |   
|Trust fee income                                                                  |  |                                                | 323       |    |               |   | 285       |                |  |   | 277           |    |  |                | 258       |    |  |   | 243       |   
|Trust fees as a % of average assets under advice                                  |  |                                                | 0.64      | %  |               |   | 0.59      | %              |  |   | 0.64          | %  |  |                | 0.66      | %  |  |   | 0.69      | % 

---

|1 | Efficiency ratio = Noninterest expense divided by the total of net interest income before provision for loan losses plus noninterest income (excluding net securities
gains and losses).
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



13



---

##### Table of Contents

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



OVERVIEW



Bancshares of Florida,
Inc. was incorporated in Florida in September 1998 to serve as a holding company for Bank of Florida - Southwest, which opened as a full service commercial bank in August 1999. In April 2000, Bank of Florida Trust Company was incorporated under the
laws of the State of Florida as a wholly-owned subsidiary of Bank of Florida - Southwest; it became a subsidiary of the holding company in March 2003. Bank of Florida Trust Company offers investment management, trust administration, estate planning,
and financial planning services largely to its commercial borrowers and other high net worth individuals. The Companys overall focus is to develop a total financial services relationship with its client base. In July 2002, Bank of Florida, a
newly formed state-chartered commercial bank, commenced operations in Ft. Lauderdale, Florida, focusing on the same kind of customer base in its market as the founding bank and in November 2004, the Bank of Florida - Tampa Bay opened for business.
The Companys primary customer base is businesses, professionals, and entrepreneurs with commercial real estate borrowing needs. The Banks also provide technology-based cash management and other depository services. The holding company
structure provides flexibility for expansion of the Companys banking business through possible acquisition of other financial institutions and provision of support and additional banking-related services to its subsidiary banks.



The primary market areas of the Company are Collier and Lee Counties on the
southwest coast of Florida (served by Bank of Florida - Southwest) and Broward, Dade, and Palm Beach Counties on the southeast coast (served by Bank of Florida). With the opening of a de novo bank in the Tampa Bay market in November 2004,
Hillsborough and Pinellas Counties became another primary market area to be served on the west coast of Florida. The high population growth and income demographics of the counties in which the Company operates support its plans to grow loans,
deposits, and wealth management revenues with limited, highly selective, full-service locations. These counties together constitute nearly 50% of the deposit market share in the state of Florida.



CRITICAL ACCOUNTING POLICIES



The Companys consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America. The financial information contained within these statements is, to a significant
extent, based on approximate measures of the financial effects of transactions and events that have already occurred. Critical accounting policies are those that involve the most complex and subjective decisions and assessments, and have the
greatest potential impact on the Companys stated results of operations. In managements opinion, the Companys critical accounting policies deal with the following area: the establishment of the Companys allowance for loan
losses, as explained in detail in the Provision and Allowance for Loan Losses sections of this discussion and analysis.



Our allowance for loan loss methodology incorporates a variety of risk considerations, both quantitative and qualitative, in establishing an allowance for
loan loss that management believes is appropriate at each reporting date. Quantitative factors include our historical loss experience, peer bank loss experience, delinquency and charge-off trends, collateral values, changes in nonperforming loans,
loan concentrations and other factors. Qualitative factors include the general economic conditions in our state. Size and complexity of individual credits in relation to loan structure, existing loan policies and pace of portfolio growth are other
qualitative factors that are considered in the methodology. As we add new products and increase the complexity of our loan portfolio, we shall enhance our methodology accordingly. Management may report a materially different amount for the provision
for loan losses in the statement of operations to change the allowance for loan losses if its assessment of the above factors were different. This discussion and analysis should be read in conjunction with our consolidated financial statements and
the accompanying notes presented elsewhere herein as well as with portions of this Managements Discussion and Analysis section. Although management believes the levels of the allowance as of March 31, 2005 and December 31, 2004 were adequate
to absorb probable losses inherent in the loan portfolio, a decline in local economic conditions, or other factors, could result in increasing losses that cannot be reasonably predicted at this time.



This discussion presents managements analysis (MD&A) of
the financial condition and results of operations of the Company for each of the three month periods ended March 31, 2005 and 2004 and the three month period ended December 31, 2004 and includes the statistical disclosures required by SEC Guide 3
(Statistical Disclosure by Bank Holding Companies). The discussion should be read in conjunction with the consolidated financial statements of the Company and the notes related thereto which appear elsewhere in this document



14



---

##### Table of Contents

DISCUSSION OF THE THREE MONTHS ENDED MARCH 31, 2005

COMPARED TO THE THREE MONTHS ENDED MARCH 31, 2004 AND DECEMBER 31,
2004



Management Summary



The Company improved operating performance by $618,000 or 62% from fourth
quarter 2004 to a net loss of $375,000 for first quarter 2005. Compared to first quarter 2004, there was a 27% improvement. The loss per share was reduced to $0.09, 58% less than fourth quarter 2004 and 46% less than first quarter 2004. Before
consideration of approximately $720,000 in net expenses related to recent expansion into Palm Beach County and Tampa Bay, quarterly earnings were positive for the first time in Company history at nearly $350,000.



First quarter 2005 highlights at the affiliate level include:



| |  |  | The Fort Lauderdale bank (Bank of Florida) earned $125,000, amply absorbing all the costs of its new Boca Raton banking center after only one quarter of operation. Total assets
increased 16% during the last 90 days to $168 million, with the Boca Raton location contributing $14 million in deposits at quarter end.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The Tampa Bay bank (Bank of Florida, Tampa Bay), which opened in November 2004, reached $44 million in assets at March 31, 2005, and reduced its net loss by 20% from the prior
quarter to $408,000.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The Naples bank (Bank of Florida - Southwest), which has been profitable since third quarter 2003, had another strong quarter with net income of $505,000, which compares to $73,000
in first quarter 2004. Total assets exceeded $250 million, 26% greater than one year earlier.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The trust and investment advisory company (Bank of Florida Trust Company) achieved its fifth consecutive quarter of profitability, with assets under advice maintained in excess of
$200 million, an increase of 33% over a year ago despite a soft equity market and settlement of certain estate assets.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Below are first quarter 2005 balance sheet and income statement highlights at the Company level:



| |  |  | Total loans grew $35 million or 11% during the last ninety days, nearly $3.8 million higher than the average quarterly pace in 2004. Loans at quarter end were $361 million, up 51%
in the last twelve months.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Top-line revenue, which combines net banking spread income and all fee income, rose 19% over fourth quarter 2004 to $4.3 million, 79% higher than first quarter 2004. Growth was
enhanced by a 16 basis point expansion in net interest margin to 3.61% compared to fourth quarter 2004, reflective of the Company having positioned its balance sheet to benefit from a rising rate environment.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Noninterest expense increased 5.8% in the quarter compared to fourth quarter 2004, or a rise of $241,000 against a top-line revenue increase of $704,000. As a result, the efficiency
ratio fell 13 percentage points to a more favorable 102%, the best it has ever been for the Company.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Asset quality continued to be strong, with nonperforming loans at 0.13% of loans outstanding at quarter end and no net charge-offs. These measures are consistent with our historic
norm and very favorable to national peer bank levels as of year-end 2004.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Especially significant to the Companys plan of continued rapid growth in earning assets, which have increased 68% in the last twelve months, is nearly $13.0 million in net proceeds from common equity raised
since March 31, 2005 via the sale of 915,000 shares of common stock through a private placement with Allen and Company LLC; the transaction closed on April 26. As a result of the additional 915,000 shares, proforma book value per common share at
March 31, 2005 is $8.84, an increase of $1.02 per share.



15



---

##### Table of Contents

Statements of Financial Condition



The following tables summarize the major components of the Statements of Financial Condition and key ratios for the periods
ending March 31, 2005 and 2004, and December 31, 2004, respectively.



|                                                    |  |                                       |           |   |                     |   |           |   |  |   |           |    |  |       |   
|--------------------------------------------------- |  | ------------------------------------- | --------- | - | ------------------- | - | --------- | - |  | - | --------- | -- |  | ----- | --
|                                                    |  | AT                                    |           |   | INCREASE/(DECREASE) |  
|                                                    |  | (IN THOUSANDS, EXCEPT PER SHARE DATA) |          
|                                                    |  | March 31,2005                         |           |   | March 31,2004       |   |           | $ |  |   | %         |   
|Total assets                                        |  | $                                     | 442,053   |   |                     | $ | 281,322   |   |  | $ | 160,731   |    |  | 57.1  | % 
|Cash and cash equivalents                           |  |                                       | 50,785    |   |                     |   | 28,010    |   |  |   | 22,775    |    |  | 81.3  | % 
|Interest-earning assets                             |  |                                       | 416,322   |   |                     |   | 247,676   |   |  |   | 168,646   |    |  | 68.1  | % 
|Investment securities                               |  |                                       | 19,170    |   |                     |   | 7,388     |   |  |   | 11,782    |    |  | 159.5 | % 
|Loans held for investment                           |  |                                       | 361,168   |   |                     |   | 239,458   |   |  |   | 121,710   |    |  | 50.8  | % 
|Allowance for loan losses                           |  |                                       | 3,113     |   |                     |   | 1,902     |   |  |   | 1,211     |    |  | 63.7  | % 
|Deposit accounts                                    |  |                                       | 390,374   |   |                     |   | 252,857   |   |  |   | 137,517   |    |  | 54.4  | % 
|Stockholders equity                                |  |                                       | 41,501    |   |                     |   | 24,325    |   |  |   | 17,176    |    |  | 70.6  | % 
|                                                    |  |                                       |           |   |                     |   |           |   |  |   |           |    |  |       |   
|Total shares outstanding                            |  |                                       | 4,836,331 |   |                     |   | 3,094,199 |   |  |   | 1,742,132 |    |  | 56.3  | % 
|Book value per common share                         |  |                                       | 7.82      |   |                     |   | 6.76      |   |  |   | 1.06      |    |  | 15.7  | % 
|                                                    |  |                                       |           |   |                     |   |           |   |  |   |           |    |  |       |   
|Allowance for loan losses to total loans            |  |                                       | 0.86      | % |                     |   | 0.79      | % |  |   | 0.07      | %  |  | 8.5   | % 
|Allowance for loan losses to nonperforming loans    |  |                                       | 644.83    | % |                     |   | 2928.52   | % |  |   | (2283.69  | )% |  | (78.0 | )%
|Nonperforming loans to total loans                  |  |                                       | 0.13      | % |                     |   | 0.03      | % |  |   | 0.10      | %  |  | 333.3 | % 
|Nonperforming assets to total assets                |  |                                       | 0.11      | % |                     |   | 0.02      | % |  |   | 0.09      | %  |  | 450.0 | % 
|                                                    |  |                                       |           |   |                     |   |           |   |  |   |           |    |  |       |   
|Leverage (Tier 1 to average total assets)           |  |                                       | 9.44      | % |                     |   | 9.55      | % |  |   | (0.11     | )% |  | (1.2  | )%
|Assets under advice  Bank of Florida Trust Company |  | $                                     | 200,139   |   |                     | $ | 150,345   |   |  | $ | 49,794    |    |  | 33.1  | % 



|                                                    |  |                                       |           |   |                     |   |           |   |  |   |        |    |  |       |   
|--------------------------------------------------- |  | ------------------------------------- | --------- | - | ------------------- | - | --------- | - |  | - | ------ | -- |  | ----- | --
|                                                    |  | AT                                    |           |   | INCREASE/(DECREASE) |  
|                                                    |  | (IN THOUSANDS, EXCEPT PER SHARE DATA) |          
|                                                    |  | March 31,2005                         |           |   | Dec. 31, 2004       |   |           | $ |  |   | %      |   
|Total assets                                        |  | $                                     | 442,053   |   |                     | $ | 420,808   |   |  | $ | 21,245 |    |  | 5.0   | % 
|Cash and cash equivalents                           |  |                                       | 50,785    |   |                     |   | 57,897    |   |  |   | (7,112 | )  |  | (12.3 | )%
|Interest-earning assets                             |  |                                       | 416,322   |   |                     |   | 394,851   |   |  |   | 21,471 |    |  | 5.4   | % 
|Investment securities                               |  |                                       | 19,170    |   |                     |   | 25,945    |   |  |   | (6,775 | )  |  | (26.1 | )%
|Loans held for investment                           |  |                                       | 361,168   |   |                     |   | 325,981   |   |  |   | 35,187 |    |  | 10.8  | % 
|Allowance for loan losses                           |  |                                       | 3,113     |   |                     |   | 2,817     |   |  |   | 296    |    |  | 10.5  | % 
|Deposit accounts                                    |  |                                       | 390,374   |   |                     |   | 376,064   |   |  |   | 14,310 |    |  | 3.8   | % 
|Stockholders equity                                |  |                                       | 41,501    |   |                     |   | 41,954    |   |  |   | (453   | )  |  | (1.1  | )%
|                                                    |  |                                       |           |   |                     |   |           |   |  |   |        |    |  |       |   
|Total shares outstanding                            |  |                                       | 4,836,331 |   |                     |   | 4,835,632 |   |  |   | 699    |    |  | 0.0   | % 
|Book value per common share                         |  |                                       | 7.82      |   |                     |   | 7.93      |   |  |   | (0.11  | )  |  | (1.4  | )%
|                                                    |  |                                       |           |   |                     |   |           |   |  |   |        |    |  |       |   
|Allowance for loan losses to total loans            |  |                                       | 0.86      | % |                     |   | 0.86      | % |  |   | 0.00   | %  |  | 0.0   | % 
|Allowance for loan losses to nonperforming loans    |  |                                       | 644.83    | % |                     |   | 480.70    | % |  |   | 164.13 | %  |  | 34.1  | % 
|Nonperforming loans to total loans                  |  |                                       | 0.13      | % |                     |   | 0.18      | % |  |   | (0.05  | )% |  | (27.8 | )%
|Nonperforming assets to total assets                |  |                                       | 0.11      | % |                     |   | 0.14      | % |  |   | (0.03  | )% |  | (21.4 | )%
|                                                    |  |                                       |           |   |                     |   |           |   |  |   |        |    |  |       |   
|Leverage (Tier 1 to average total assets)           |  |                                       | 9.44      | % |                     |   | 11.07     | % |  |   | (1.63  | )% |  | (14.7 | )%
|Assets under advice  Bank of Florida Trust Company |  | $                                     | 200,139   |   |                     | $ | 202,138   |   |  | $ | (1,999 | )  |  | (1.0  | )%



16



---

##### Table of Contents

Loans in the Companys combined banks rose by $35 million or 11% over the last three
months to $361 million; since March 31, 2004, loans have risen $122 million or 51%. The first quarter 2005 increase was nearly $3.8 million higher than the average quarterly pace in 2004. Reflective of the Companys business model focusing on
businesses, professionals, and entrepreneurs, commercial loans, largely secured by commercial real estate, comprised the entirety of loan growthup $35 million (14%), accounting for 80% of loans outstanding at March 31, 2005. The remaining
loans at quarter end were comprised of $29 million in residential mortgage loans (8% of total loans), $29 million in home equity and other consumer lines of credit (8% of total loans), and $14 million in consumer installment loans (4% of total
loans).



Asset quality remained excellent by peer
standards with nonperforming loans and 30-89 day delinquencies at 0.13% and 0.53%, respectively, of loans outstanding as of March 31, 2005. There were no net charge-offs for the quarter versus $30,000 for all of 2004. Compared to the most recently
available data for national peer banks as of December 31, 2004 in the $300 to $500 million size group, the Companys ratios for nonperforming loans, loans 30-89 days past due, and net charge-offs as a percent of average loans were 0.18%, 0.11%,
and 0.01%, respectively, versus 0.59%, 0.72%, and 0.16%, respectively, for peers.



As of March 31, 2005, the allowance for loan losses reached $3.113 million, up $296,000 (11%) from year-end 2004 and up $1.211 million (64%) from March 31, 2004. The ratio of the loan loss allowance to total loans
outstanding at 0.86% was unchanged from December 31, 2004 and up 7 basis points from twelve months earlier. Nonperforming loans declined to $483,000 at quarter end from $586,000 at December 31, 2004 and a high of $1.3 million at June 30, 2004.
Coverage of the loan loss allowance over nonperformers was 645% at March 31, 2005, in comparison to coverage of 481% and 2,929% 90 days and one year earlier, respectively.



Investment securities and overnight investments were $53.0 million at March 31, 2005, a decrease of $14.7
million during the quarter. The reduction was used to fund loan growth. Since March 31, 2004, investment securities and overnight investments have increased nearly $46 million reflective of deposit growth and additional liquidity.



Securities available for sale totaled $19.2 million, a decrease of $6.8
million or 26%, compared to December 31, 2004. The average yield on investment securities for the first three months of 2005 was 2.88%, a decline of 32 basis points compared to the same period on year ago and down 107 basis points from the previous
quarter. The Company does not have any securities classified as held to maturity or trading at March 31, 2005 or December 31, 2004.



Federal Funds sold totaled $33.9 million at March 31, 2005, a decline of $8.0 million from December 31, 2004. This category of earning assets can be
subject to large daily fluctuations based on the availability of these types of funds and daily funding requirements. The average yield on federal funds for the first three months of 2005 was 2.46%, up 138 basis points compared to the first three
months of 2004 and up 58 basis points from the previous quarter.



Total earning assets reached $416.3 million at March 31, 2005, up $21 million over the last three months compared to a $35 million increase in loans. As a result, the mix of loans to earning assets rose to 87% from 83% due to
the reduction of investments noted above. The loan/earning asset ratio was 97% at March 31, 2004, reflective of less relative liquidity at that date compared to the present time.



Deposits rose $14 million or 4% during first quarter 2005 to
$390 million; compared to one year ago, the increase was $138 million or 54%. Average deposits rose $62 million or 16% compared to fourth quarter 2004, with growth in checking (both non-interest and interest bearing) and money market accounts
comprising $47 million of this increase. The Company is committed to expanding its deposit base with less reliance on higher-cost CDs, which presently constitute 44% of average deposits versus 17% for noninterest-bearing checking accounts. This
latter source of funds is targeted to increase based on a vigorous program to market the Companys state-of-the-art cash management products and on-line banking capabilities, which also have the potential to generate additional fee income.



Stockholders equity at $41.5 million was
$17.2 million higher compared to March 31, 2004. This increase resulted from the Companys 1.725 million-share common stock offering during third quarter, 2004, which netted proceeds of $19.8 million and stock dividends on the March 30, 2004
$3.4 million preferred stock offering, partially offset by losses incurred, net of minor changes in other capital accounts. Equity decreased $453,000 during the last 90 days largely due to losses.



17



---

##### Table of Contents

The Companys Tier 1 leverage ratio decreased 11 basis points in the last 12 months to 9.44% at
March 31, 2005, well above the minimum for well-capitalized bank holding companies of 5.0%. This reflects the impact of rapid 70% growth in average total assets compared to first quarter 2004. As a result of nearly $13 million in net proceeds from
common equity raised since March 31, 2005, the proforma Tier 1 leverage ratio is 11.74%.



Results of Operations



The following tables summarize the major components of the Statements Operations and key ratios for the three months ending March 31, 2005 and 2004 and December 31, 2004, respectively.



First Quarter 2005 Compared to First Quarter 2004



|                                                        |  |                                       |           |   |                     |   |           |   |  |   |           |    |  |       |   
|------------------------------------------------------- |  | ------------------------------------- | --------- | - | ------------------- | - | --------- | - |  | - | --------- | -- |  | ----- | --
|                                                        |  | FOR THE THREE MONTHSENDED             |           |   | INCREASE/(DECREASE) |  
|                                                        |  | (IN THOUSANDS, EXCEPT PER SHARE DATA) |          
|                                                        |  | MARCH 31,2005                         |           |   | MARCH 31,2004       |   |           | $ |  |   | %         |   
|Total interest income                                   |  | $                                     | 5,440     |   |                     | $ | 2,965     |   |  | $ | 2,475     |    |  | 83.5  | % 
|Total interest expense                                  |  |                                       | 1,820     |   |                     |   | 990       |   |  |   | 830       |    |  | 83.8  | % 
|                                                        |  |                                       |           |   |                     |   |           |   |  |   |           |    |  |       |   
|Net interest income before provision                    |  |                                       | 3,620     |   |                     |   | 1,975     |   |  |   | 1,645     |    |  | 83.3  | % 
|Provision for loan losses                               |  |                                       | 296       |   |                     |   | 333       |   |  |   | (37       | )  |  | (11.1 | )%
|                                                        |  |                                       |           |   |                     |   |           |   |  |   |           |    |  |       |   
|Net interest income after provision                     |  |                                       | 3,324     |   |                     |   | 1,642     |   |  |   | 1,682     |    |  | 10.24 | % 
|Non interest income                                     |  |                                       | 698       |   |                     |   | 441       |   |  |   | 257       |    |  | 58.3  | % 
|Noninterest expense                                     |  |                                       | 4,397     |   |                     |   | 2,595     |   |  |   | 1,802     |    |  | 69.4  | % 
|Provision for income taxes                              |  |                                       |          |   |                     |   |          |   |  |   |          |    |  |      |   
|                                                        |  |                                       |           |   |                     |   |           |   |  |   |           |    |  |       |   
|Net loss                                                |  |                                       | (375      | ) |                     |   | (512      | ) |  |   | 137       |    |  | 26.8  | % 
|                                                        |  |                                       |           |   |                     |   |           |   |  |   |           |    |  |       |   
|Basic loss per share                                    |  | $                                     | (0.09     | ) |                     | $ | (0.17     | ) |  | $ | 0.08      |    |  | 45.6  | % 
|Diluted loss per share                                  |  |                                       | (0.09     | ) |                     |   | (0.17     | ) |  |   | 0.08      |    |  | 45.6  | % 
|Weighted average shares used for diluted loss per share |  |                                       | 4,836,300 |   |                     |   | 3,079,364 |   |  |   | 1,756,936 |    |  | 57.1  | % 
|                                                        |  |                                       |           |  
|Top-line revenue                                        |  | $                                     | 4,318     |   |                     | $ | 2,416     |   |  | $ | 1,902     |    |  | 78.7  | % 
|Net interest margin                                     |  |                                       | 3.61      | % |                     |   | 3.42      | % |  |   | 0.19      | %  |  | 5.6   | % 
|Efficiency ratio                                        |  |                                       | 101.83    | % |                     |   | 107.41    | % |  |   | (5.58     | )% |  | (5.2  | )%
|Average equity to average assets                        |  |                                       | 9.85      | % |                     |   | 9.56      | % |  |   | 0.29      | %  |  | 3.0   | % 
|Average loans held for investment to average deposits   |  |                                       | 88.44     | % |                     |   | 95.47     | % |  |   | (7.03     | )% |  | (7.4  | )%
|Net charge-offs to average loans                        |  |                                       | 0.00      | % |                     |   | 0.00      | % |  |   | 0.00      | %  |  | 0.0   | % 



The Companys
first quarter net loss decreased $137,000 to $375,000 compared to first quarter 2004. Top-line revenue climbed $1.9 million on a 68% growth in earning assets and a 33% increase in assets under advice. We define top-line revenue, which is a non-GAAP
term, as the sum of the Companys lending or spread income (interest income less interest expense) plus fee income (excluding net securities gains/losses), both of which often pertain to the same customer base and can be matched against the
underlying noninterest expense to generate those revenue components. Approximately $273,000 of the top-line revenue increase reflects expansion in the net interest margin.



Noninterest expense rose $1.8 million in the first quarter, or $100,000 less than the increase in top-line revenue. The
resulting net improvement was further increased by a $37,000 reduction in loan loss provision expense from first quarter 2004. Though loans are 51% higher than one year earlier, the provision decreased based on an updated review of the quality and
mix of the loan portfolio at the Fort Lauderdale bank, which eliminated the need to increase the loan loss allowance at that affiliate from the year-end level.



18



---

##### Table of Contents

First Quarter 2005 Compared to Fourth Quarter 2004



|                                                        |  |                                       |           |   |                     |   |           |   |  |   |        |    |  |       |   
|------------------------------------------------------- |  | ------------------------------------- | --------- | - | ------------------- | - | --------- | - |  | - | ------ | -- |  | ----- | --
|                                                        |  | FOR THE THREE MONTHSENDED             |           |   | INCREASE/(DECREASE) |  
|                                                        |  | (IN THOUSANDS, EXCEPT PER SHARE DATA) |          
|                                                        |  | MARCH 31,2005                         |           |   | DECEMBER 31,2004    |   |           | $ |  |   | %      |   
|Total interest income                                   |  | $                                     | 5,440     |   |                     | $ | 4,526     |   |  | $ | 914    |    |  | 20.2  | % 
|Total interest expense                                  |  |                                       | 1,820     |   |                     |   | 1,528     |   |  |   | 292    |    |  | 19.1  | % 
|                                                        |  |                                       |           |   |                     |   |           |   |  |   |        |    |  |       |   
|Net interest income before provision                    |  |                                       | 3,620     |   |                     |   | 2,998     |   |  |   | 622    |    |  | 20.7  | % 
|Provision for loan losses                               |  |                                       | 296       |   |                     |   | 451       |   |  |   | (155   | )  |  | (34.4 | )%
|                                                        |  |                                       |           |   |                     |   |           |   |  |   |        |    |  |       |   
|Net interest income after provision                     |  |                                       | 3,324     |   |                     |   | 2,547     |   |  |   | 777    |    |  | 30.5  | % 
|Non interest income                                     |  |                                       | 698       |   |                     |   | 616       |   |  |   | 82     |    |  | 13.3  | % 
|Noninterest expense                                     |  |                                       | 4,397     |   |                     |   | 4,156     |   |  |   | 241    |    |  | 5.8   | % 
|Provision for income taxes                              |  |                                       |          |   |                     |   |          |   |  |   |       |    |  |      |   
|                                                        |  |                                       |           |   |                     |   |           |   |  |   |        |    |  |       |   
|Net loss                                                |  |                                       | (375      | ) |                     |   | (993      | ) |  |   | 618    |    |  | 62.2  | % 
|                                                        |  |                                       |           |   |                     |   |           |   |  |   |        |    |  |       |   
|Basic loss per share                                    |  | $                                     | (0.09     | ) |                     | $ | (0.22     | ) |  | $ | 0.13   |    |  | 58.0  | % 
|Diluted loss per share                                  |  |                                       | (0.09     | ) |                     |   | (0.22     | ) |  |   | 0.13   |    |  | 58.0  | % 
|Weighted average shares used for diluted loss per share |  |                                       | 4,836,300 |   |                     |   | 4,835,632 |   |  |   | 668    |    |  | 0.0   | % 
|                                                        |  |                                       |           |  
|Top-line revenue                                        |  | $                                     | 4,318     |   |                     | $ | 3,614     |   |  | $ | 704    |    |  | 19.5  | % 
|Net interest margin                                     |  |                                       | 3.61      | % |                     |   | 3.45      | % |  |   | 0.16   | %  |  | 4.6   | % 
|Efficiency ratio                                        |  |                                       | 101.83    | % |                     |   | 115.00    | % |  |   | (13.17 | )% |  | (11.5 | )%
|Average equity to average assets                        |  |                                       | 9.85      | % |                     |   | 11.28     | % |  |   | (1.43  | )% |  | (12.7 | )%
|Average loans held for investment to average deposits   |  |                                       | 88.44     | % |                     |   | 90.37     | % |  |   | (1.93  | )% |  | (2.1  | )%
|Net charge-offs to average loans                        |  |                                       | 0.00      | % |                     |   | 0.00      | % |  |   | 0.00   | %  |  | 0.0   | % 



The Companys
first quarter net loss decreased $618,000 to $375,000 compared to fourth quarter 2004. Top-line revenue climbed $704,000 on a 5% growth in earning assets and a 1% decrease in assets under advice. Approximately $103,000 of the top-line revenue
increase reflects expansion in the net interest margin.



Noninterest expense rose $241,000 in the first quarter, or only about 1/3 of the increase in top-line revenue. The resulting net improvement of $463,000 was further increased by a $155,000 reduction in the loan loss provision from fourth
quarter 2004. Though loans rose 11% during the last 90 days, the provision decreased based on an updated review of the quality and mix of the loan portfolio at the Fort Lauderdale bank, which eliminated the need to increase the loan loss allowance
at that affiliate from the year-end level.



Discussion of Changes by
Income Statement Line Item for the Above Quarterly Periods



Company-wide top-line revenue climbed 79% compared to first quarter 2004 versus a 69% rise in overhead expense. Compared to fourth quarter 2004, top-line revenue rose 20%, versus a 6% rise in overhead. Of the two components of
top-line revenue, net interest income rose $1.6 million or 83% versus the same quarter last year, while noninterest income climbed $257,000 or 58%. The largest portion of the latter increase was due to greater service
charges and fees (up $214,000 or 143%, due to continued growth in customer accounts and overdraft fees), followed by higher trust fees (up $80,000 or 33%, due to 33% more assets under advice). Compared to fourth quarter 2004, net interest income
rose $622,000 or 21% while noninterest income climbed $82,000 or 13%, largely for the same reasons as the first quarter 2005/first quarter 2004 changes.



The most significant reason for first quarter net interest income growth over the same period a year ago was a 76% increase in average
earning assets and a reduction in the proportion of underlying interest bearing liabilities; the resulting increase in net interest income was $1.4 million (volume variance) or 83% of the total increase in net interest income. The balance of the
rise in net interest income was caused by an improvement in the net interest margin, which increased 19 basis points to 3.61% over the same period last year (rate variance of $273,000). Compared to fourth quarter 2004, $518,000 of the
$621,000 increase in net interest income was due to higher earning asset volumes (which rose by 18%), with the balance reflecting an improved net interest margin (which increased 16 basis points).



The margin improvement reflects the interest sensitivity of the
balance sheet, which includes the sensitivity of loan yields to changes in the prime rate (approximately 53% of loans immediately adjust to prime rate changes);



19



---

##### Table of Contents

the portion of deposits held in CDs (only the new or renewing maturities of which are eligible to reprice with changes in
interest rates; CDs constitute 44% of total average first quarter 2005 deposits); the ability to lag rate increases in other interest-bearing liabilities; and the mix of noninterest-bearing deposits (demand deposits were 17% of average first
quarter 2005 deposits, up from 15% one year earlier). The prime rate averaged 5.44% for first quarter 2005 (including two 1⁄4 point rate increases, ending at 5.75%), up 50 basis points from the fourth quarter 2004 average prime (4.94%, also
reflecting two 1⁄4 point rate increases) and 144 basis points from the first quarter 2004 average of 4.0%. For first quarter 2005, the average yield on loans was 5.98%, up 24 and 68 basis points from fourth quarter 2004 and first quarter 2004,
respectively.



Total noninterest expense in the
first quarter increased $1.8 million or 69% over the same quarter last year. The primary source of the increase ($950,000 or 223%) related to holding company expansion. Beginning with first quarter 2005, certain activities related to
operations, finance, and other support services previously housed in the individual banks were consolidated into the holding company, which can now provide these services in a more cost-effective and consistent manner as the Companys
subsidiaries expand into multiple geographic markets. Noninterest expense for the current quarter also included an additional $360,000 and $500,000 over the same period last year for expansion into the Palm Beach County and Tampa Bay markets,
respectively. Total noninterest expense of the other banking and trust subsidiaries, excluding first quarter 2005 servicing expense paid to the holding company, remained nearly level when compared to the same period last year.



Noninterest expense increased $241,000 (5.8%) in comparison to
the fourth quarter of 2004. Personnel expense accounted for $53,000 of the increase (up 2.7%), reflecting overall merit increases and selected additions to staff, largely in lending-related areas; compensation expense related to warrants issued in
connection with the openings of the Tampa Bay bank and the Palm Beach County location decreased by $102,000. Higher occupancy expense accounted for $37,000 of the increase (up 5.1%, primarily telephone and depreciation) and general operating expense
explains the balance of the $148,000 (up 14.6%). The increased general operating expense largely reflects higher accounting, compliance, and supplies costs.



Despite the increase in overhead of an expanding company, the first quarter 2005 efficiency ratio decreased to a more favorable 102% compared to 107% for
the same period last year and 115% for the immediately preceding quarter. The improvements reflect the greater relative growth in top-line revenue.



See the asset quality discussion in the Statements ofFinancial Condition section above to explain the change in loan
loss provisionexpense during the respective periods.



20



---

##### Table of Contents

Average Balances, Income and Expenses, and Rates



The following tables represent, for the three-month periods indicated, certain information related to our average balance
sheet and its annualized average yields on assets and annualized average costs of liabilities. Such yields are derived by dividing income or expense by the average balance of the corresponding assets or liabilities. Average balances have been
derived from daily averages. Discussion of these tables is included above in the net interest income sections of the Results of Operations.



|                                                                        |  |                                      |         |                      |      |       |                   |  |      |                |  |                      |         |  |                   |       |   |  |      |  
|----------------------------------------------------------------------- |  | ------------------------------------ | ------- | -------------------- | ---- | ----- | ----------------- |  | ---- | -------------- |  | -------------------- | ------- |  | ----------------- | ----- | - |  | ---- | -
|                                                                        |  | For the Three-Months Ended March 31, |        
|                                                                        |  | 2005                                 |         |                      | 2004 |      
|                                                                        |  | AverageBalance                       |         | InterestandDividends |      |       | AverageYield/Rate |  |      | AverageBalance |  | InterestandDividends |         |  | AverageYield/Rate |      
|Assets:                                                                 |  |                                      |         |                      |      |       |                   |  |      |                |  |                      |         |  |                   |       |   |  |      |  
|Earning assets:                                                         |  |                                      |         |                      |      |       |                   |  |      |                |  |                      |         |  |                   |       |   |  |      |  
|Interest earning deposits                                               |  | $                                    | 1,258   |                      | $    | 1     |                   |  | 0.32 | %              |  | $                    | 46      |  | $                 |      |   |  | 0.00 | %
|Securities(3)                                                           |  |                                      | 9,993   |                      |      | 71    |                   |  | 2.88 | %              |  |                      | 8,888   |  |                   | 71    |   |  | 3.20 | %
|Federal funds sold                                                      |  |                                      | 53,343  |                      |      | 323   |                   |  | 2.46 | %              |  |                      | 4,457   |  |                   | 12    |   |  | 1.08 | %
|Loans(4)                                                                |  |                                      | 342,176 |                      |      | 5,045 |                   |  | 5.98 | %              |  |                      | 218,292 |  |                   | 2,882 |   |  | 5.30 | %
|                                                                        |  |                                      |         |                      |      |       |                   |  |      |                |  |                      |         |  |                   |       |   |  |      |  
|Total interest-earning assets                                           |  |                                      | 406,770 |                      |      | 5,440 |                   |  | 5.42 | %              |  |                      | 231,683 |  |                   | 2,965 |   |  | 5.13 | %
|                                                                        |  |                                      |         |                      |      |       |                   |  |      |                |  |                      |         |  |                   |       |   |  |      |  
|Non interest-earning assets                                             |  |                                      | 25,207  |                      |      |       |                   |  |      |                |  |                      | 22,948  |  |                   |       |   |  |      |  
|                                                                        |  |                                      |         |                      |      |       |                   |  |      |                |  |                      |         |  |                   |       |   |  |      |  
|Total Assets                                                            |  | $                                    | 431,977 |                      |      |       |                   |  |      |                |  | $                    | 254,631 |  |                   |       |   |  |      |  
|                                                                        |  |                                      |         |                      |      |       |                   |  |      |                |  |                      |         |  |                   |       |   |  |      |  
|Liabilities:                                                            |  |                                      |         |                      |      |       |                   |  |      |                |  |                      |         |  |                   |       |   |  |      |  
|Interest-bearing liabilities:                                           |  |                                      |         |                      |      |       |                   |  |      |                |  |                      |         |  |                   |       |   |  |      |  
|NOW & Money market                                                      |  | $                                    | 144,124 |                      |      | 523   |                   |  | 1.47 | %              |  | $                    | 93,035  |  |                   | 276   |   |  | 1.19 | %
|Savings                                                                 |  |                                      | 5,416   |                      |      | 20    |                   |  | 1.50 | %              |  |                      | 1,019   |  |                   | 1     |   |  | 0.39 | %
|Time deposit                                                            |  |                                      | 170,738 |                      |      | 1,244 |                   |  | 2.95 | %              |  |                      | 100,755 |  |                   | 711   |   |  | 2.83 | %
|Other borrowings                                                        |  |                                      | 2,100   |                      |      | 33    |                   |  | 6.37 | %              |  |                      | 376     |  |                   | 2     |   |  | 2.13 | %
|                                                                        |  |                                      |         |                      |      |       |                   |  |      |                |  |                      |         |  |                   |       |   |  |      |  
|Total interest-bearing liabilities                                      |  | $                                    | 322,378 |                      |      | 1,820 |                   |  | 2.29 | %              |  | $                    | 195,185 |  |                   | 990   |   |  | 2.03 | %
|                                                                        |  |                                      |         |                      |      |       |                   |  |      |                |  |                      |         |  |                   |       |   |  |      |  
|Demand deposits                                                         |  |                                      | 65,849  |                      |      |       |                   |  |      |                |  |                      | 33,830  |  |                   |       |   |  |      |  
|Other non-interest bearing liabilities                                  |  |                                      | 1,605   |                      |      |       |                   |  |      |                |  |                      | 1,274   |  |                   |       |   |  |      |  
|                                                                        |  |                                      |         |                      |      |       |                   |  |      |                |  |                      |         |  |                   |       |   |  |      |  
|Total non-interest bearing liabilities                                  |  |                                      | 67,454  |                      |      |       |                   |  |      |                |  |                      | 35,104  |  |                   |       |   |  |      |  
|                                                                        |  |                                      |         |                      |      |      
|Stockholders equity                                                    |  |                                      | 42,145  |                      |      |       |                   |  |      |                |  |                      | 24,342  |  |                   |       |   |  |      |  
|                                                                        |  |                                      |         |                      |      |       |                   |  |      |                |  |                      |         |  |                   |       |   |  |      |  
|Total Liabilities & Stockholders Equity                                |  | $                                    | 431,977 |                      |      |       |                   |  |      |                |  | $                    | 254,631 |  |                   |       |   |  |      |  
|                                                                        |  |                                      |         |                      |      |       |                   |  |      |                |  |                      |         |  |                   |       |   |  |      |  
|Net interest income                                                     |  |                                      |         |                      | $    | 3,620 |                   |  |      |                |  |                      |         |  | $                 | 1,975 |   |  |      |  
|                                                                        |  |                                      |         |                      |      |       |                   |  |      |                |  |                      |         |  |                   |       |   |  |      |  
|Interest-rate spread(1)                                                 |  |                                      |         |                      |      |       |                   |  | 3.13 | %              |  |                      |         |  |                   |       |   |  | 3.10 | %
|Net interest margin(2)                                                  |  |                                      |         |                      |      |       |                   |  | 3.61 | %              |  |                      |         |  |                   |       |   |  | 3.42 | %
|Ratio of average interest-bearing liabilities to average earning assets |  |                                      |         |                      |      | 79.3  | %                 |  |      |                |  |                      |         |  |                   | 84.2  | % |  |      |  

---

|(1) | Interest rate spread is the average rate earned on total interest-earning assets less the
average rate paid on interest-bearing liabilities.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Net interest margin is net interest income divided by total interest-earning assets.
|--- | ------------------------------------------------------------------------------------

|(3) | Tax exempt income, to the extent included in the amounts above, is not reflected on a tax
equivalent basis. Securities include required investments in Federal Home Loan Bank and Federal Reserve Bank stock which earn dividends paid on a quarterly and semi-annual basis, respectively.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | For purposes of this analysis, non-accruing loans, if any, are included in the average balance outstanding.
|--- | -----------------------------------------------------------------------------------------------------------



21



---

##### Table of Contents

|                                                                        |  |                            |         |                      |                   |       |                   |  |      |                |  |                      |         |  |                   |       |   |  |      |  
|----------------------------------------------------------------------- |  | -------------------------- | ------- | -------------------- | ----------------- | ----- | ----------------- |  | ---- | -------------- |  | -------------------- | ------- |  | ----------------- | ----- | - |  | ---- | -
|                                                                        |  | For the Three-Months Ended |        
|                                                                        |  | March 31, 2005             |         |                      | December 31, 2004 |      
|                                                                        |  | AverageBalance             |         | InterestandDividends |                   |       | AverageYield/Rate |  |      | AverageBalance |  | InterestandDividends |         |  | AverageYield/Rate |      
|Assets:                                                                 |  |                            |         |                      |                   |       |                   |  |      |                |  |                      |         |  |                   |       |   |  |      |  
|Earning assets:                                                         |  |                            |         |                      |                   |       |                   |  |      |                |  |                      |         |  |                   |       |   |  |      |  
|Interest earning deposits                                               |  | $                          | 1,258   |                      | $                 | 1     |                   |  | 0.32 | %              |  | $                    |        |  | $                 |      |   |  | 0.00 | %
|Securities(3)                                                           |  |                            | 9,993   |                      |                   | 71    |                   |  | 2.88 | %              |  |                      | 8,034   |  |                   | 80    |   |  | 3.95 | %
|Federal funds sold                                                      |  |                            | 53,343  |                      |                   | 323   |                   |  | 2.46 | %              |  |                      | 43,311  |  |                   | 205   |   |  | 1.88 | %
|Loans(4)                                                                |  |                            | 342,176 |                      |                   | 5,045 |                   |  | 5.98 | %              |  |                      | 293,295 |  |                   | 4,241 |   |  | 5.74 | %
|                                                                        |  |                            |         |                      |                   |       |                   |  |      |                |  |                      |         |  |                   |       |   |  |      |  
|Total interest-earning assets                                           |  |                            | 406,770 |                      |                   | 5,440 |                   |  | 5.42 | %              |  |                      | 344,640 |  |                   | 4,526 |   |  | 5.21 | %
|                                                                        |  |                            |         |                      |                   |       |                   |  |      |                |  |                      |         |  |                   |       |   |  |      |  
|Non interest-earning assets                                             |  |                            | 25,207  |                      |                   |       |                   |  |      |                |  |                      | 26,001  |  |                   |       |   |  |      |  
|                                                                        |  |                            |         |                      |                   |       |                   |  |      |                |  |                      |         |  |                   |       |   |  |      |  
|Total Assets                                                            |  | $                          | 431,977 |                      |                   |       |                   |  |      |                |  | $                    | 370,641 |  |                   |       |   |  |      |  
|                                                                        |  |                            |         |                      |                   |       |                   |  |      |                |  |                      |         |  |                   |       |   |  |      |  
|Liabilities:                                                            |  |                            |         |                      |                   |       |                   |  |      |                |  |                      |         |  |                   |       |   |  |      |  
|Interest-bearing liabilities:                                           |  |                            |         |                      |                   |       |                   |  |      |                |  |                      |         |  |                   |       |   |  |      |  
|NOW & Money market                                                      |  | $                          | 144,124 |                      |                   | 523   |                   |  | 1.47 | %              |  | $                    | 114,879 |  |                   | 384   |   |  | 1.33 | %
|Savings                                                                 |  |                            | 5,416   |                      |                   | 20    |                   |  | 1.50 | %              |  |                      | 4,914   |  |                   | 20    |   |  | 1.61 | %
|Time deposit                                                            |  |                            | 170,738 |                      |                   | 1,244 |                   |  | 2.95 | %              |  |                      | 156,666 |  |                   | 1,094 |   |  | 2.77 | %
|Other borrowings                                                        |  |                            | 2,100   |                      |                   | 33    |                   |  | 6.37 | %              |  |                      | 2,000   |  |                   | 29    |   |  | 5.68 | %
|                                                                        |  |                            |         |                      |                   |       |                   |  |      |                |  |                      |         |  |                   |       |   |  |      |  
|Total interest-bearing liabilities                                      |  | $                          | 322,378 |                      |                   | 1,820 |                   |  | 2.29 | %              |  | $                    | 278,459 |  |                   | 1,527 |   |  | 2.18 | %
|                                                                        |  |                            |         |                      |                   |       |                   |  |      |                |  |                      |         |  |                   |       |   |  |      |  
|Demand deposits                                                         |  |                            | 65,849  |                      |                   |       |                   |  |      |                |  |                      | 48,106  |  |                   |       |   |  |      |  
|Other non-interest bearing liabilities                                  |  |                            | 1,605   |                      |                   |       |                   |  |      |                |  |                      | 2,286   |  |                   |       |   |  |      |  
|                                                                        |  |                            |         |                      |                   |       |                   |  |      |                |  |                      |         |  |                   |       |   |  |      |  
|Total non-interest bearing liabilities                                  |  |                            | 67,454  |                      |                   |       |                   |  |      |                |  |                      | 50,392  |  |                   |       |   |  |      |  
|                                                                        |  |                            |         |                      |                   |      
|Stockholders equity                                                    |  |                            | 42,145  |                      |                   |       |                   |  |      |                |  |                      | 41,790  |  |                   |       |   |  |      |  
|                                                                        |  |                            |         |                      |                   |       |                   |  |      |                |  |                      |         |  |                   |       |   |  |      |  
|Total Liabilities & Stockholders Equity                                |  | $                          | 431,977 |                      |                   |       |                   |  |      |                |  | $                    | 370,641 |  |                   |       |   |  |      |  
|                                                                        |  |                            |         |                      |                   |       |                   |  |      |                |  |                      |         |  |                   |       |   |  |      |  
|Net interest income                                                     |  |                            |         |                      | $                 | 3,620 |                   |  |      |                |  |                      |         |  | $                 | 2,999 |   |  |      |  
|                                                                        |  |                            |         |                      |                   |       |                   |  |      |                |  |                      |         |  |                   |       |   |  |      |  
|Interest-rate spread(1)                                                 |  |                            |         |                      |                   |       |                   |  | 3.13 | %              |  |                      |         |  |                   |       |   |  | 3.03 | %
|Net interest margin(2)                                                  |  |                            |         |                      |                   |       |                   |  | 3.61 | %              |  |                      |         |  |                   |       |   |  | 3.45 | %
|Ratio of average interest-bearing liabilities to average earning assets |  |                            |         |                      |                   | 79.3  | %                 |  |      |                |  |                      |         |  |                   | 80.8  | % |  |      |  

---

|(1) | Interest rate spread is the average rate earned on total interest-earning assets less the average rate paid on interest-bearing liabilities.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Net interest margin is net interest income divided by total interest-earning assets.
|--- | ------------------------------------------------------------------------------------

|(3) | Tax exempt income, to the extent included in the amounts above, is not reflected on a tax
equivalent basis. Securities include required investments in Federal Home Loan Bank and Federal Reserve Bank stock which earn dividends paid on a quarterly and semi-annual basis, respectively.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | For purposes of this analysis, non-accruing loans, if any, are included in the average balance outstanding.
|--- | -----------------------------------------------------------------------------------------------------------



22



---

##### Table of Contents

FOR THE THREE MONTHS ENDED MARCH 31, 2005

COMPARED TO MARCH 31, 2004

INCREASE (DECREASE) DUE TO CHANGE IN (IN
THOUSANDS)



|                                         |  |        |       |      |   |     |        |  |   |      
|---------------------------------------- |  | ------ | ----- | ---- | - | --- | ------ |  | - | -----
|                                         |  | VOLUME |       | RATE |   |     | CHANGE
|Increase (decrease) in interest income:  |  |        |       |      |   |     |        |  |   |      
|Federal funds sold                       |  | $      | 296   |      | $ | 15  |        |  | $ | 311  
|Other investments1                       |  |        | 8     |      |   | (7  | )      |  |   | 1    
|Loans2                                   |  |        | 1,795 |      |   | 368 |        |  |   | 2,163
|                                         |  |        |       |      |   |     |        |  |   |      
|Total interest income                    |  |        | 2,099 |      |   | 376 |        |  |   | 2,475
|                                         |  |        |       |      |   |     |        |  |   |      
|Increase (decrease) in interest expense: |  |        |       |      |   |     |        |  |   |      
|NOW and Money market deposits            |  |        | 182   |      |   | 65  |        |  |   | 247  
|Savings deposits                         |  |        | 16    |      |   | 3   |        |  |   | 19   
|Time deposits                            |  |        | 502   |      |   | 31  |        |  |   | 533  
|Other borrowings                         |  |        | 27    |      |   | 4   |        |  |   | 31   
|                                         |  |        |       |      |   |     |        |  |   |      
|Total interest expense                   |  |        | 727   |      |   | 103 |        |  |   | 830  
|                                         |  |        |       |      |   |     |        |  |   |      
|Total change in net interest income      |  | $      | 1,372 |      | $ | 273 |        |  | $ | 1,645
|                                         |  |        |       |      |   |     |        |  |   |      

---

|1 | Tax-exempt income, to the extent included in the amounts above, is not reflected on a tax equivalent basis.
|- | -----------------------------------------------------------------------------------------------------------

|2 | For purpose of this analysis, non-accruing loans, if any, are included in the average balances.
|- | -----------------------------------------------------------------------------------------------



FOR THE THREE MONTHS ENDED MARCH 31, 2005

COMPARED TO DECEMBER 31, 2004

INCREASE (DECREASE) DUE TO CHANGE IN (IN THOUSANDS)



|                                         |  |        |     |      |   |     |        |  |   |     |  
|---------------------------------------- |  | ------ | --- | ---- | - | --- | ------ |  | - | --- | -
|                                         |  | VOLUME |     | RATE |   |     | CHANGE | 
|Increase (decrease) in interest income:  |  |        |     |      |   |     |        |  |   |     |  
|Federal funds sold                       |  | $      | 56  |      | $ | 62  |        |  | $ | 118 |  
|Other investments1                       |  |        | 13  |      |   | (21 | )      |  |   | (8  | )
|Loans2                                   |  |        | 628 |      |   | 176 |        |  |   | 804 |  
|                                         |  |        |     |      |   |     |        |  |   |     |  
|Total interest income                    |  |        | 697 |      |   | 217 |        |  |   | 914 |  
|                                         |  |        |     |      |   |     |        |  |   |     |  
|Increase (decrease) in interest expense: |  |        |     |      |   |     |        |  |   |     |  
|NOW and Money market deposits            |  |        | 98  |      |   | 41  |        |  |   | 139 |  
|Savings deposits                         |  |        | 1   |      |   | (1  | )      |  |   |    |  
|Time deposits                            |  |        | 79  |      |   | 71  |        |  |   | 150 |  
|Other borrowings                         |  |        | 1   |      |   | 3   |        |  |   | 4   |  
|                                         |  |        |     |      |   |     |        |  |   |     |  
|Total interest expense                   |  |        | 179 |      |   | 114 |        |  |   | 293 |  
|                                         |  |        |     |      |   |     |        |  |   |     |  
|Total change in net interest income      |  | $      | 518 |      | $ | 103 |        |  | $ | 621 |  
|                                         |  |        |     |      |   |     |        |  |   |     |  

---

|1 | Tax-exempt income, to the extent included in the amounts above, is not reflected on a tax equivalent basis.
|- | -----------------------------------------------------------------------------------------------------------

|2 | For purpose of this analysis, non-accruing loans, if any, are included in the average balances.
|- | -----------------------------------------------------------------------------------------------



Provision and Allowance for Loan Losses



The allowance for loan losses is an estimated amount that management
believes will be adequate to absorb losses inherent in the loan portfolio based on evaluations of its collectibility. The evaluations take into consideration such factors as changes in the nature and volume of the portfolio, overall portfolio
quality, specific problem loans and commitments, and current anticipated economic conditions that may affect the borrowers ability to pay. Management also considers the results of independent internal and external credit reviews.



23



---

##### Table of Contents

The allowance for credit losses is established through a provision for loan losses charged against
income. Loans are charged against the allowance when management believes that the collectibility of the principal is unlikely. While management uses the best information available to estimate probable losses on loans, future additions to the
allowance may be necessary based on changes in economic conditions.



An analysis of the change in the Companys allowance for possible loan losses and loan loss experience (charge-offs) is furnished in the following table for the three-month periods ended March 31, 2005, December 31, 2004 and March 31,
2004.



|                                           |  |               |       |                  |   |       |               |  |   |      
|------------------------------------------ |  | ------------- | ----- | ---------------- | - | ----- | ------------- |  | - | -----
|                                           |  | March 31,2005 |       | December 31,2004 |   |       | March 31,2004
|Balance at beginning of period             |  | $             | 2,817 |                  | $ | 2,368 |               |  | $ | 1,568
|Provision for losses charged to operations |  |               | 296   |                  |   | 451   |               |  |   | 333  
|Consumer loan charge-offs                  |  |               |      |                  |   | (2    | )             |  |   |     
|Recoveries                                 |  |               |      |                  |   |      |               |  |   | 1    
|                                           |  |               |       |                  |   |       |               |  |   |      
|Balance at end of period                   |  | $             | 3,113 |                  | $ | 2,817 |               |  | $ | 1,902
|                                           |  |               |       |                  |   |       |               |  |   |      



Discussion of the
above table, including nonperforming loans, charge-off experience, and change in loan loss provision expense, is contained above in the asset quality section of Statements ofFinancial Conditionand in the loan loss
provision expense sections of Results of Operations.



The allocation of the allowance for loan losses by type of loan has corresponded to the increases in loan balances by type (dollars in thousands):



|                               |  |                |       |                        |                   |   |        |                |                        |  |       |        |  |                        |       |  |       |  
|------------------------------ |  | -------------- | ----- | ---------------------- | ----------------- | - | ------ | -------------- | ---------------------- |  | ----- | ------ |  | ---------------------- | ----- |  | ----- | -
|                               |  | March 31, 2005 |       |                        | December 31, 2004 |   |        | March 31, 2004 |                       
|                               |  | AMOUNT         |       | % LOANSIN EACHCATEGORY |                   |   | AMOUNT |                | % LOANSIN EACHCATEGORY |  |       | AMOUNT |  | % LOANSIN EACHCATEGORY |      
|Commercial real estate         |  | $              | 953   |                        | 33.2              | % |        | $              | 520                    |  | 31.8  | %      |  | $                      | 434   |  | 30.9  | %
|Construction                   |  |                | 835   |                        | 20.4              | % |        |                | 549                    |  | 20.0  | %      |  |                        | 333   |  | 15.0  | %
|Multifamily                    |  |                | 162   |                        | 4.8               | % |        |                | 94                     |  | 4.5   | %      |  |                        | 61    |  | 3.5   | %
|One-to-four family residential |  |                | 287   |                        | 20.6              | % |        |                | 55                     |  | 18.4  | %      |  |                        | 129   |  | 30.6  | %
|Commercial                     |  |                | 484   |                        | 10.7              | % |        |                | 829                    |  | 13.1  | %      |  |                        | 332   |  | 7.0   | %
|Lines of credit                |  |                | 199   |                        | 6.3               | % |        |                | 463                    |  | 7.3   | %      |  |                        | 396   |  | 8.4   | %
|Consumer                       |  |                | 193   |                        | 4.0               | % |        |                | 307                    |  | 4.9   | %      |  |                        | 217   |  | 4.6   | %
|                               |  |                |       |                        |                   |   |        |                |                        |  |       |        |  |                        |       |  |       |  
|Total                          |  | $              | 3,113 |                        | 100.0             | % |        | $              | 2,817                  |  | 100.0 | %      |  | $                      | 1,902 |  | 100.0 | %
|                               |  |                |       |                        |                   |   |        |                |                        |  |       |        |  |                        |       |  |       |  



Liquidity and Capital Resources



Liquidity Management Liquidity management involves monitoring sources and uses of funds in order to meet day-to-day cash flow requirements while maximizing profits. Liquidity represents the ability of a company to convert
assets into cash or cash equivalents without significant loss and to raise additional funds by increasing liabilities.



Liquidity management is made more complicated because different balance sheet components are subject to scheduled maturities and varying degrees of
management control. For example, the timing of maturities of certain holdings in the investment portfolio is very predictable and subject to a high degree of control at the time of purchase; other investment holdings, such as mortgage-backed
securities, are much less predictable due to sensitivity to financial market rates. Net deposit inflows and outflows, whether related to time deposits or nonmaturity instruments such as money market accounts or demand deposits, are also difficult to
predict, as they are greatly influenced by general interest rates, economic conditions and competition.



24



---

##### Table of Contents

Asset liquidity is provided by cash and assets which are readily marketable, which can be pledged, or
which will mature in the near future. Liability liquidity is provided by access to core funding sources, principally the ability to generate customer deposits in our primary markets. In addition, liability liquidity is provided through the ability
to borrow against approved lines of credit, including Federal Funds purchased from correspondent banks and the Federal Home Loan Bank (FHLB). Such borrowings have historically been relatively small, averaging $100,000 for first quarter 2005, $0 for
fourth quarter 2004, and $376,000 for first quarter 2004. At March 31, 2005, FHLB borrowings were $7.0 million versus zero at December 31, 2004 and $3.3 million at March 31, 2004.



Management regularly reviews the Banks liquidity position and has implemented internal policies which establish
guidelines for sources of asset-based liquidity and limit the total amount of purchased funds used to support the balance sheet and funding from non-core sources.



Short-Term Investments and Securities Available for Sale Short-term investments, which consist of federal
funds sold and interest-bearing deposits, are a component source of the Companys liquidity and are generally invested on an overnight basis. The subsidiary Banks enter into Federal Funds transactions with their principal correspondent banks,
and primarily act as net sellers of such funds. The sale of Federal Funds amounts to a short-term loan from the Banks to other banks.



Federal funds sold and interest-bearing deposits averaged $54.6 million for first quarter 2005, about 1,112% higher than the $4.5 million average for
first quarter 2004 and about 26% higher than the $43.3 million average in fourth quarter 2004. This higher level represents the liquidity management policy of the Company commensurate with increased deposit levels and was additionally higher due to
an increase in deposit activity (see below) as those funds await redeployment into higher yielding loans. At March 31, 2005, federal funds sold and interest-bearing deposits totaled $34.9 million versus $41.9 million at December 31, 2004 and $47,000
at March 31, 2004.



The Company invests primarily in
obligations of the United States, or obligations guaranteed as to principal and interest by the United States, and in other taxable securities (no nontaxable securities are held at this time). Management determines the appropriate classification of
investment securities at the time of purchase. If management has the intent and the Company has the ability (or is required for regulatory reasons) to hold these securities until maturity or on a long-term basis, they are classified as
held-to-maturity investments. Securities to be held for indefinite periods of time and not intended to be held to maturity or on a long-term basis are classified as available-for-sale. The volume of sales of available-for-sale securities is based on
several factors, including but not limited to changes in interest rates, resultant prepayment risk, liquidity needs at the Banks and other factors related to interest rate and resultant prepayment risk.



All the Companys securities are presently classified as
available-for-sale. Investment securities totaled $19.2 million at March 31, 2005, down 26% from $25.9 million December 31, 2004, but up 159% from $7.4 million one year earlier.



Deposits- Deposits from the Companys primary markets provide a relatively stable funding source for its loan
portfolio and other earning assets. Total deposits were $390 million at March 31, 2005, up $138 million or 54% from one year earlier and up $14 million or 4% over the last three months. The proceeds of these deposits have been invested in federal
funds sold as they await redeployment into longer term assets, primarily commercial real estate secured loans. The funding requirements for loans have continued to grow over the last twelve months, with loans outstanding increasing by $122 million
or 51% over the last twelve months to $361 million at March 31, 2005. During first quarter 2005, loans rose $35 million or 11%.



Total deposits averaged $388 million in first quarter 2005, up 75% or $159 million from the same period last year and up 19% or $62 million from fourth
quarter 2004. Non-interest bearing deposits represented 17% of average total deposits during first quarter 2005, rising $32 million or 95% over the same quarter last year, when they averaged 15% of total deposits. Management continues to make a
concerted effort to attract deposits from commercial relationships, including the offering of attractive cash management and other technology-based products that aid a company in the control of its deposits.



The Company anticipates that a stable base of deposits will be the primary
source of funding to meet both its short-term and long-term liquidity needs in the future. However, as a result of the short-term nature of a substantial portion of the Companys deposit base, its cost of funds is sensitive to fluctuations in
rates of interest.



25



---

##### Table of Contents

NOW and money market deposits, a large portion of which can be sensitive to short-term interest rate
movements, averaged $144 million in first quarter 2005, an increase of $51 million (up 55%) from first quarter 2004 and up $29 million (25%) from fourth quarter 2004. The Company will need to maintain these deposits, or find alternative sources of
liquidity, in order to support its asset levels. Although management believes a substantial amount of the existing time deposits will renew, or substitute deposits will be originated, the need to retain this funding source may impact the
Companys ability to react to changes in market rates of interest. At an average of $171 million, time deposits were 44% of total deposits in first quarter 2005, virtually the same mix as in the comparable quarter last year, and a slight
decrease from a 48% mix in fourth quarter 2004.



Other
Sources of Funds- In addition to deposits within its geographic market place, the sources of funds available to the Banks for lending and other business purposes include loan repayments, sales of loans and securities, borrowings from the
Federal Home Loan Bank (FHLB), national market funding sources, and contributions from Bancshares. Loan repayments are a relatively stable source of funds, while deposit inflows and outflows and loan prepayments are influenced significantly by
competition, general interest rates and money market conditions. Borrowings may be used on a short-term basis to compensate for reductions in other sources, such as deposits at less than projected levels, and may also be used to fund the origination
of mortgage loans designated to be sold in the secondary market.



Certificates of deposits raised from national market funding sources (included in the CD discussion above) totaled $47 million in first quarter 2005, or 12% of total deposits. This level compares to $36 million or 14% of total deposits four
quarters earlier and $58 million or 15% of total deposits at December 31, 2004.



At March 31, 2005, the Company had $7 million in outstanding short-term (30-day) borrowings from the FHLB of its present $30.3 million line, and there was $21.8 million in other available lines from correspondents. To
the extent that additional collateral becomes available beyond the present amount identified for the FHLB line, total borrowings from the FHLB could be as high as $67 million based on a maximum of 20% of the Bank of Florida - Southwest banks
assets and 10% of the Ft. Lauderdale banks assets as of March 31, 2005.



Capital- The Federal Reserve Board and other bank regulatory agencies require bank holding companies and financial institutions to maintain capital at adequate levels based on a percentage of assets and
off-balance sheet exposures, adjusted for risk weights ranging from 0% to 100%. Under the risk-based standard, capital is classified into two tiers. Tier 1 capital consists of common stockholders equity, excluding the unrealized gain (loss) on
available-for-sale securities, minus certain intangible assets. Tier 2 capital consists of the general allowance for credit losses subject to certain limitations. An institutions qualifying capital base for purposes of its risk-based capital
ratio consists of the sum of its Tier 1 and Tier 2 capital. Bank holding companies and banks are also required to maintain capital at a minimum level based on total assets as defined by a leverage ratio.



The regulators define five classifications for measuring capital levels,
including well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized, although these terms are not used to represent overall financial condition. If adequately capitalized, regulatory
approval is required to accept brokered (national market) deposits. If undercapitalized, capital distributions are limited, as is asset growth and expansion, and plans for capital restoration are required. The regulatory minimum requirements
(adequately capitalized) are 4% for Tier 1, 8% for total risk-based capital, and 4% for the Tier 1 leverage ratio. The minimum requirements for the first three classifications are:



|                       |  |                                 |   |  |                                 |   |  |   |  
|---------------------- |  | ------------------------------- | - |  | ------------------------------- | - |  | - | -
|                       |  | Capital to risk-weighted assets |   |  | Tier 1 capitalto average assets |  
|                       |  | Total                           |   |  | Tier 1                          |   | 
|Well capitalized       |  | 10                              | % |  | 6                               | % |  | 5 | %
|Adequately capitalized |  | 8                               | % |  | 4                               | % |  | 4 | %
|Undercapitalized       |  | 6                               | % |  | 3                               | % |  | 3 | %



26



---

##### Table of Contents

The Company was considered well capitalized as of March 31, 2005. The following table reflects the actual
capital levels and minimum required levels at March 31, 2005 (in thousands):



|                                         |  |        |        |       |                                                |   |        |                                                                                |        |  |      |        |  |       |        |  |       |  
|---------------------------------------- |  | ------ | ------ | ----- | ---------------------------------------------- | - | ------ | ------------------------------------------------------------------------------ | ------ |  | ---- | ------ |  | ----- | ------ |  | ----- | -
|                                         |  | Actual |        |       | Minimum Required For Capital Adequacy Purposes |   |        | Minimum RequiredTo Be WellCapitalized
UnderPrompt CorrectiveAction Regulations |       
|                                         |  | Amount |        | Ratio |                                                |   | Amount |                                                                                | Ratio  |  |      | Amount |  | Ratio |       
|Total capital (to risk weighted assets)  |  |        |        |       |                                                |   |        |                                                                                |        |  |      |        |  |       |        |  |       |  
|Consolidated                             |  | $      | 45,795 |       | 11.98                                          | % |        | $                                                                              | 30,583 |  | 8.00 | %      |  | $     | 38,228 |  | 10.00 | %
|Bank of Florida - Southwest              |  | $      | 22,681 |       | 9.79                                           | % |        | $                                                                              | 18,543 |  | 8.00 | %      |  | $     | 23,178 |  | 10.00 | %
|Bank of Florida                          |  | $      | 12,007 |       | 10.10                                          | % |        | $                                                                              | 9,515  |  | 8.00 | %      |  | $     | 11,893 |  | 10.00 | %
|Bank of Florida  Tampa Bay              |  | $      | 7,603  |       | 21.18                                          | % |        | $                                                                              | 2,872  |  | 8.00 | %      |  | $     | 3,590  |  | 10.00 | %
|Tier 1 capital (to risk weighted assets) |  |        |        |       |                                                |   |        |                                                                                |        |  |      |        |  |       |        |  |       |  
|Consolidated                             |  | $      | 40,682 |       | 10.63                                          | % |        | $                                                                              | 15,312 |  | 4.00 | %      |  | $     | 22,969 |  | 6.00  | %
|Bank of Florida - Southwest              |  | $      | 18,866 |       | 8.14                                           | % |        | $                                                                              | 9,271  |  | 4.00 | %      |  | $     | 13,907 |  | 6.00  | %
|Bank of Florida                          |  | $      | 10,986 |       | 9.24                                           | % |        | $                                                                              | 4,757  |  | 4.00 | %      |  | $     | 7,136  |  | 6.00  | %
|Bank of Florida  Tampa Bay              |  | $      | 7,326  |       | 20.41                                          | % |        | $                                                                              | 1,436  |  | 4.00 | %      |  | $     | 2,154  |  | 6.00  | %
|Tier 1 capital (to average assets)       |  |        |        |       |                                                |   |        |                                                                                |        |  |      |        |  |       |        |  |       |  
|Consolidated                             |  | $      | 40,682 |       | 9.44                                           | % |        | $                                                                              | 17,240 |  | 4.00 | %      |  | $     | 21,551 |  | 5.00  | %
|Bank of Florida - Southwest              |  | $      | 18,866 |       | 7.79                                           | % |        | $                                                                              | 9,688  |  | 4.00 | %      |  | $     | 12,110 |  | 5.00  | %
|Bank of Florida                          |  | $      | 10,986 |       | 7.15                                           | % |        | $                                                                              | 6,147  |  | 4.00 | %      |  | $     | 7,684  |  | 5.00  | %
|Bank of Florida  Tampa Bay              |  | $      | 7,326  |       | 18.16                                          | % |        | $                                                                              | 1,613  |  | 4.00 | %      |  | $     | 2,017  |  | 5.00  | %



Subsequent to March
31, 2005, the Company raised nearly $13.0 million in net proceeds from common equity via the sale of 915,000 shares of common stock at $15.00 per share through a private placement with Allen and Company LLC. This includes 700,000 shares sold as of
April 11, 2005 and an additional 215,000 shares sold on April 26, 2005. Effective April 15, 2005, $3.5 million in additional capital was contributed to the Bank of Florida and $3.0 million to the Bank of Florida  Southwest. As a result, Bank
of Floridas Tier 1 capital ratio was restored to be in excess of the 8% minimum requirement per regulatory agreement through June 30, 2005 (the end of its first three years as a de novo bank). In addition, Bank of Florida 
Southwests total capital ratio was restored to be in excess of the 10% well-capitalized minimum. Including the impact of the additional capital on a proforma basis as of March 31, 2005, the total capital, Tier 1 risk-based capital, and Tier 1
leverage capital ratios were 14.56%, 13.22%, and 11.74%, respectively, for the Company; 11.08%, 9.43%, and 9.03%, respectively, for the Bank of Florida  Southwest; and 13.04%, 12.18%, and 9.43%, respectively, for the Bank of Florida.



Item 3. Quantitative and Qualitative Disclosures about Market Risk



Interest Sensitivity



The objective of interest sensitivity management is to minimize the risk associated with the effect of interest rate changes on the net interest margin while maintaining net interest income at acceptable levels. Managing this risk involves
monthly monitoring of the interest sensitive assets relative to interest sensitive liabilities over specific time intervals. All assets and liabilities are evaluated as maturing at the earlier of re-pricing date or contractual maturity date. While
liabilities without specific terms such as money market, NOW and savings accounts are generally considered core deposits for liquidity purposes, they are deemed to re-price for purposes of interest rate sensitivity analysis. Management subjectively
sets rates on all accounts.



At March 31, 2005, the Company had
$270 million in interest sensitive assets compared to $275 million in interest sensitive liabilities that will mature or reprice within a year, resulting in a negative gap position of $4.4 million or 1.6%. Within the first 90 days of a rate change,
the Company is positively gapped by $50 million, reflecting, among other factors, that 61% of the portfolio (including cash flow) will reprice with a prime rate change. Beyond that time period, the cumulative impact of maturing CDs, net of maturing
loans, creates a negatively gapped position.



27



---

##### Table of Contents

A negative gap position is indicative of a bank that has a greater amount of interest sensitive
liabilities re-pricing (or maturing) than it does interest sensitive assets, in a given time interval. In this instance, the impact on net interest income would be positive in a declining rate environment and negative if rates were rising.
Conversely, a positive gap position represents a greater amount of interest sensitive assets re-pricing (or maturing). Thus, an increase in rates would positively impact net interest income, as the yield on interest-earning assets would increase
prior to the increase in the cost of interest bearing liabilities.



The following is a consolidated maturity and repricing analysis of rate sensitive assets and liabilities as of March 31, 2005.



|                                                                                                |  |                        |         |   |            |   |         |             |  |   |            |   |  |       |         |   |  |   |        
|----------------------------------------------------------------------------------------------- |  | ---------------------- | ------- | - | ---------- | - | ------- | ----------- |  | - | ---------- | - |  | ----- | ------- | - |  | - | -------
|                                                                                                |  | 0-90 DAYS              |         |   | 91-180DAYS |   |         | 181-365DAYS |  |   | OVER 1YEAR |   |  | TOTAL
|                                                                                                |  | (Dollars in Thousands)
|Interest-earning assets:                                                                        |  |                        |         |   |            |   |         |             |  |   |            |   |  |       |         |   |  |   |        
|Federal funds sold                                                                              |  | $                      | 33,860  |   |            | $ |        |             |  | $ |           |   |  | $     |        |   |  | $ | 33,860 
|Due from banks and investment securities (including required investments in FHLB and FRB stock) |  |                        | 1,045   |   |            |   |        |             |  |   | 1,545      |   |  |       | 18,723  |   |  |   | 21,313 
|Loans                                                                                           |  |                        | 218,597 |   |            |   | 7,626   |             |  |   | 7,643      |   |  |       | 123,879 |   |  |   | 357,745
|                                                                                                |  |                        |         |   |            |   |         |             |  |   |            |   |  |       |         |   |  |   |        
|Total interest-earning assets                                                                   |  |                        | 253,502 |   |            |   | 7,626   |             |  |   | 9,188      |   |  |       | 142,602 |   |  |   | 412,918
|                                                                                                |  |                        |         |   |            |   |         |             |  |   |            |   |  |       |         |   |  |   |        
|Interest-bearing deposits (Non-CDs)                                                             |  |                        | 159,286 |   |            |   |        |             |  |   |           |   |  |       |        |   |  |   | 159,286
|Certificates of deposit                                                                         |  |                        | 44,128  |   |            |   | 32,730  |             |  |   | 38,532     |   |  |       | 52,054  |   |  |   | 167,444
|Other borrowings                                                                                |  |                        |        |   |            |   |        |             |  |   |           |   |  |       | 9,000   |   |  |   | 9,000  
|                                                                                                |  |                        |         |   |            |   |         |             |  |   |            |   |  |       |         |   |  |   |        
|Total interest-bearing liabilities                                                              |  | $                      | 203,414 |   |            |   | 32,730  |             |  |   | 38,532     |   |  |       | 61,054  |   |  |   | 335,730
|                                                                                                |  |                        |         |   |            |   |         |             |  |   |            |   |  |       |         |   |  |   |        
|Interest Sensitivity Gap:                                                                       |  |                        |         |   |            |   |         |             |  |   |            |   |  |       |         |   |  |   |        
|Sensitive assets less rate sensitive liabilities                                                |  | $                      | 50,088  |   |            | $ | (25,104 | )           |  | $ | (29,344    | ) |  | $     | 81,548  |   |  | $ | 77,188 
|                                                                                                |  |                        |         |   |           
|Cumulative interest sensitivity gap                                                             |  |                        | 50,088  |   |            |   | 24,984  |             |  |   | (4,360     | ) |  |       | 77,188  |   |  |   |        
|                                                                                                |  |                        |         |   |           
|Interest sensitivity gap ratio                                                                  |  |                        | 124.6   | % |            |   | 23.3    | %           |  |   | 23.8       | % |  |       | 233.6   | % |  |   |        
|                                                                                                |  |                        |         |   |           
|Cumulative interest sensitivity gap ratio                                                       |  |                        | 124.6   | % |            |   | 110.6   | %           |  |   | 98.4       | % |  |       | 123.0   | % |  |   |        



The impact on net
interest income described above is general, as other factors would additionally maximize or minimize the effect. For example, a change in the prime interest rate could effect an immediate change in rates on prime-related assets, whereas a liability
which reprices according to changes in Treasury rates might (1) lag in the timing of the change and (2) change rates in an amount less than the change in the prime interest rate. In addition, in the case of an expanding balance sheet with the
Companys characteristics, the 180 day period at which the gap turns negative could be continuously pushed further out in a rising rate environment.



Management believes that the current balance sheet structure of interest sensitive assets and liabilities does not represent a material risk to earnings
or liquidity in the event of a change in market rates.



SAFE HARBOR
STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995



Certain statements in this quarterly Report on Form 10-Q may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which statements generally can be
identified by the use of forward-looking terminology, such as may, will, expect, estimate, anticipate, believe, target, plan, project, or
continue or the negatives thereof or other variations thereon or similar terminology, and are made on the basis of managements plans and current analyses of Bancshares of Florida, Inc., its business and the industry as a whole.
These forward-looking statements are subject to risks and uncertainties, including, but not limited to, economic conditions, competition, interest rate sensitivity and exposure to regulatory and legislative changes. The above factors, in some cases,
have affected, and in the future could affect Bancshares of Florida, Inc.s



28



---

##### Table of Contents

financial performance and could cause actual results for fiscal 2005 and beyond to differ materially from those expressed
or implied in such forward-looking statements. Bancshares of Florida, Inc. does not undertake to publicly update or revise its forward-looking statements even if experience or future changes make it clear that any projected results expressed or
implied therein will not be realized.



Item 4. CONTROLS AND PROCEDURES



(a)
Evaluation of Disclosure Controls and Procedures



Bancshares of Florida, Inc. maintains controls and procedures designed to ensure that information required to be disclosed in the reports that Bancshares of Florida, Inc. 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 managements evaluation of those controls and procedures performed within the 90 days
preceding the filing of this Report, the Chief Executive Officer and Chief Financial Officer of Bancshares of Florida, Inc. concluded that, subject to the limitations noted below, Bancshares of Florida, Inc.s disclosure controls and procedures
were adequate for the above described purpose.



(b) Changes in Internal
Controls



Bancshares of Florida, Inc. has 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 Officer and Chief Financial Officer of Bancshares of
Florida, Inc.



(c) Limitations on the Effectiveness of Controls



Our management, including our Chief Executive Officer
and Chief Financial Officer, does not expect that our disclosure controls and internal controls will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance
that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent
limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within Bancshares of Florida, Inc. have been detected. These inherent limitations include the
realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by
management override of the control.



The design of any system
of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may
become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur
and not be detected.



PART II.  OTHER INFORMATION



ITEM 1. LEGAL PROCEEDINGS



From
time-to-time, the Company may be involved in various legal proceedings arising in the ordinary course of business. Management believes that the ultimate aggregate liabilities arising form these proceedings, if any, will not have a material adverse
effect on our financial condition or results of operations.



ITEM 6. EXHIBITS



The following
exhibits are filed with the Securities and Exchange Commission and are incorporated by reference into this Form 10-Q. The exhibits which are denominated by an (a.) were previously filed as a part of a Registration Statement on Form SB-2 for
Bancshares of Florida with the SEC on March 24, 1999, File No. 333-74997. The exhibits which are denominated by a (b.) were previously filed as a part of Amendment No. 1 to Form SB-2, filed with the SEC on May 7, 1999. The exhibits which are
denominated by a (c.) were previously filed as a part of Form 10-KSB filed with the SEC on March 30, 2000. The exhibits which are denominated by a (d.) were previously filed as a part of an exhibit to Form 10-QSB/A-1 filed on December 3, 2001. The
exhibits which are denominated by an (e.) were previously filed as a part of a Registration Statement on Form SB-2 for Bancshares of Florida with the SEC on December 28, 2001, File No. 333-76094. The exhibits which are denominated by an (f.) were
previously filed as part of a Form 10-QSB/A filed on September 10, 2002. The exhibit numbers correspond to



29



---

##### Table of Contents

the exhibit numbers in the referenced document. (g.) were previously filed as a part of Form 10-KSB filed with the SEC on
March 30, 2003. The exhibits which are denominated by an (h.) were previously filed as part of a Form 10-QSB/A filed on August 12, 2003. The exhibits which are denominated by an (i.) were previously filed as part of a Registration Statement on Form
SB-2 filed with the SEC on June 24, 2004, File No. 333-116833. The exhibits which are denominated by an (j.) were previously filed as part of a Form 10-KSB filed with the SEC on March 30, 2005.



|              |  |                                                                                                                              
|------------- |  | -----------------------------------------------------------------------------------------------------------------------------
|ExhibitNumber |  | Description of Exhibit                                                                                                       
|a.3.1         |  | Amended and Restated Articles of Incorporation.                                                                              
|              | 
|a.3.2         |  | Bylaws.                                                                                                                      
|              | 
|3.3           |  | Amendment to Articles of Incorporation changing the corporate name filed as an exhibit to Form 8-K filed on October 29, 2001.
|              | 
|3.4           |  | Amendment to Articles of Incorporation changing the corporate name filed as an exhibit to Form 8-K filed on May 10, 2002.    
|              | 
|i.3.5         |  | Amendment to Articles of Incorporation designating preferences, rights and limitations of Series A Preferred Stock.          
|              | 
|b.4.1         |  | Specimen Common Stock Certificate.                                                                                           
|              | 
|b.4.3         |  | Form of Stock Purchase Warrant1999 Offering.                                                                                
|              | 
|e.4.4         |  | Form of Stock Purchase Warrant2002 Offering.                                                                                
|              | 
|i.4.5         |  | Form of Stock Purchase Warrant A 2004 Offering.                                                                             
|              | 
|i.4.6         |  | Form of Stock Purchase Warrant B 2004 Offering.                                                                             
|              | 
|b.10.1        |  | Employment Agreement of Michael L. McMullan, dated as of April 28, 1999.                                                     
|              | 
|c.10.1.1      |  | Amendment to Employment Agreement of Michael L. McMullan dated August 24, 1999.                                              
|              | 
|f.10.1.2      |  | Amendment to Employment Agreement of Michael L. McMullan dated July 30, 2001.                                                
|              | 
|f.10.1.3      |  | Amendment to Employment Agreement of Michael L. McMullan dated August 30, 2002.                                              
|              | 
|c.10.4        |  | 1999 Stock Option Plan.                                                                                                      
|              | 
|c.10.5        |  | Form of Incentive Stock Option Agreement.                                                                                    
|              | 
|d.10.6        |  | Employment Agreement of Craig D. Sherman, dated as of May 3, 1999.                                                           
|              | 
|f.10.6.1      |  | Amendment to Employment Agreement of Craig Sherman, dated as of July 30, 2001.                                               
|              | 
|f.10.8        |  | Employment Agreement of John B. James, dated as of October 1, 2001.                                                          
|              | 
|f.10.9        |  | Lease between Citizens Reserve, LLC and Citizens National Bank of Southwest Florida.                                         
|              | 
|g.10.11       |  | Employment Agreement of Martin P. Mahan, dated as of September 16, 2002.                                                     
|              | 
|h.10.13       |  | Employee Severance Agreement of John S. Chaperon, dated as of March 1, 2003.                                                 
|              | 
|j.10.14       |  | Employment Agreement of Julie W. Husler, dated as of May 1, 2002.                                                            
|              | 
|10.15         |  | Form of Registration Rights Agreement filed as an exhibit to Form 8-K on April 11, 2005.                                     
|              | 
|j.14.1        |  | Code of Ethical Conduct                                                                                                      
|              | 
|21.1          |  | Subsidiaries of the Registrant.                                                                                              
|              | 
|31.1          |  | Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 - President and Chief Executive Officer              
|              | 
|31.2          |  | Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 - Chief Financial Officer                            
|              | 
|32.1          |  | Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002  President and Chief Executive Officer              
|              | 
|32.2          |  | Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002  Chief Financial Officer                            



30



---

##### Table of Contents

SIGNATURES



In accordance with
the requirements of the Securities Exchange Act of 1934, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



|                   |  |                             |  |                                                                     
|------------------ |  | --------------------------- |  | --------------------------------------------------------------------
|                   |  | BANCSHARES OF FLORIDA, INC.
|                   |  |                            
|Dated: May 3, 2005 |  | By:                         |  | /s/ MICHAEL L. MCMULLAN                                             
|                   |  |                             |  | Michael L. McMullan                                                 
|                   |  |                             |  | Chief Executive Officer (Principal Executive Officer)               
|                   |  |                            
|Dated: May 3, 2005 |  | By:                         |  | /s/ DAVID G. WALLACE                                                
|                   |  |                             |  | David G. Wallace                                                    
|                   |  |                             |  | Chief Financial Officer (Principal Financial and Accounting Officer)





31