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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 10-Q



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Quarterly Report Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

For the Quarterly Period Ended
June 30, 2006

Commission File Number 000-50091



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BANCSHARES OF FLORIDA, INC.

A Florida Corporation



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IRS Employer Identification No. 59-3535315

1185 Immokalee Road

Naples, Florida 34110

(239) 254-2100



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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 a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of accelerated filer and large accelerated filer in Rule 12b-2
of the Exchange Act). Large accelerated filer ̈Accelerated filer  x    Non-accelerated filer ̈

Indicate by check mark whether the Registrant is a shell company (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 July 31, 2006 was 8,871,444 shares of $.01 par value common stock.



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##### Table of Contents

BANCSHARES OF FLORIDA, INC. AND SUBSIDIARIES

Index



|           |  |                                                                                                                            |  |     
|---------- |  | -------------------------------------------------------------------------------------------------------------------------- |  | ----
|           |  |                                                                                                                            |  | Page
|PART I.    |  | Financial Information                                                                                                      |  |     
|           |  |                                                                                                                           
|Item 1.    |  | Financial Statements (Unaudited)                                                                                           |  |     
|           |  |                                                                                                                           
|           |  | Condensed Consolidated Balance SheetsJune 30, 2006 and December 31, 2005                                                   |  | 1   
|           |  |                                                                                                                           
|           |  | Condensed Consolidated Statements of Operations -Three and six-months ended June 30, 2006 and 2005                         |  | 2   
|           |  |                                                                                                                           
|           |  | Condensed Consolidated Statements of Stockholders Equity -Year ended December 31, 2005 and six-months ended June 30, 2006 |  | 3   
|           |  |                                                                                                                           
|           |  | Condensed Consolidated Statements of Comprehensive Income (Loss) -Three and six-months ended June 30, 2006 and 2005        |  | 3   
|           |  |                                                                                                                           
|           |  | Condensed Consolidated Statements of Cash Flows -Six months ended June 30, 2006 and 2005                                   |  | 4   
|           |  |                                                                                                                           
|           |  | Notes to the Condensed Consolidated Financial Statements                                                                   |  | 5   
|           |  |                                                                                                                           
|           |  | Selected Quarterly Consolidated Financial Data                                                                             |  | 17  
|           |  |                                                                                                                           
|Item 2.    |  | Managements Discussion and Analysis of Financial Condition and Results of Operation                                       |  |     
|           |  |                                                                                                                           
|           |  | Overview                                                                                                                   |  | 18  
|           |  |                                                                                                                           
|           |  | Critical Accounting Policies                                                                                               |  | 18  
|           |  |                                                                                                                           
|           |  | Executive Summary                                                                                                          |  | 19  
|           |  |                                                                                                                           
|           |  | Analysis of Financial Condition                                                                                            |  | 20  
|           |  |                                                                                                                           
|           |  | Analysis of Results of Operations                                                                                          |  | 22  
|           |  |                                                                                                                           
|           |  | Liquidity and Capital Resources                                                                                            |  | 27  
|           |  |                                                                                                                           
|Item 3.    |  | Quantitative and Qualitative Disclosures about Market Risk                                                                 |  | 29  
|           |  |                                                                                                                           
|Item 4.    |  | Controls and Procedures                                                                                                    |  | 31  
|           |  |                                                                                                                           
|PART II.   |  | Other Information                                                                                                          |  |     
|           |  |                                                                                                                           
|Item 1.    |  | Legal Proceedings                                                                                                          |  | 32  
|           |  |                                                                                                                           
|Item 4.    |  | Submission of Matters to a Vote of Security Holders                                                                        |  | 32  
|           |  |                                                                                                                           
|Item 6.    |  | Exhibits                                                                                                                   |  | 32  
|           | 
|Signatures |  | 34                                                                                                                        



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##### Table of Contents

BANCSHARES OF FLORIDA, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

June 30, 2006 and December 31, 2005

(In Thousands, except share and per share data)



|                                                                                                                                                                                 |  |               |         |   |                  |   |         |  
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------- | ------- | - | ---------------- | - | ------- | -
|                                                                                                                                                                                 |  | June 30, 2006 |         |   | December 31,2005 |  
|                                                                                                                                                                                 |  | (Unaudited)   |         |   |                  |  
|ASSETS                                                                                                                                                                           |  |               |         |   |                  |   |         |  
|Cash and due from banks                                                                                                                                                          |  | $             | 15,458  |   |                  | $ | 18,976  |  
|Interest-bearing deposits due from other banks                                                                                                                                   |  |               | 1,455   |   |                  |   | 2,402   |  
|Federal funds sold                                                                                                                                                               |  |               | 74,127  |   |                  |   | 28,739  |  
|                                                                                                                                                                                 |  |               |         |   |                  |   |         |  
|TOTAL CASH AND CASH EQUIVALENTS                                                                                                                                                  |  |               | 91,040  |   |                  |   | 50,117  |  
|                                                                                                                                                                                 |  |              
|Securities held to maturity                                                                                                                                                      |  |               | 25      |   |                  |   | 25      |  
|Securities available for sale                                                                                                                                                    |  |               | 42,291  |   |                  |   | 18,597  |  
|Loans held for sale                                                                                                                                                              |  |               |        |   |                  |   | 1,323   |  
|                                                                                                                                                                                 |  |              
|Loans held for investment                                                                                                                                                        |  |               | 607,612 |   |                  |   | 486,251 |  
|Less: Allowance for loan losses                                                                                                                                                  |  |               | 5,666   |   |                  |   | 4,603   |  
|Unearned income and deferred loan fees and costs                                                                                                                                 |  |               | 1,048   |   |                  |   | 852     |  
|                                                                                                                                                                                 |  |               |         |   |                  |   |         |  
|NET LOANS HELD FOR INVESTMENT                                                                                                                                                    |  |               | 600,898 |   |                  |   | 480,796 |  
|                                                                                                                                                                                 |  |              
|Restricted securities, Federal Home Loan Bank stock, at cost                                                                                                                     |  |               | 2,552   |   |                  |   | 918     |  
|Premises and equipment                                                                                                                                                           |  |               | 6,949   |   |                  |   | 6,716   |  
|Accrued interest receivable                                                                                                                                                      |  |               | 2,917   |   |                  |   | 2,196   |  
|Cash surrender value of life insurance                                                                                                                                           |  |               | 3,173   |   |                  |   | 3,128   |  
|Deferred tax asset                                                                                                                                                               |  |               | 3,654   |   |                  |   | 3,951   |  
|Intangible asset                                                                                                                                                                 |  |               | 906     |   |                  |   | 925     |  
|Other assets                                                                                                                                                                     |  |               | 1,862   |   |                  |   | 1,090   |  
|                                                                                                                                                                                 |  |               |         |   |                  |   |         |  
|TOTAL ASSETS                                                                                                                                                                     |  | $             | 756,267 |   |                  | $ | 569,782 |  
|                                                                                                                                                                                 |  |               |         |   |                  |   |         |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                                                             |  |               |         |   |                  |   |         |  
|Deposits                                                                                                                                                                         |  | $             | 593,561 |   |                  | $ | 495,080 |  
|Subordinated debt                                                                                                                                                                |  |               | 11,000  |   |                  |   | 11,000  |  
|Federal home loan bank advances                                                                                                                                                  |  |               | 31,000  |   |                  |   | 3,000   |  
|Accrued interest payable                                                                                                                                                         |  |               | 620     |   |                  |   | 352     |  
|Accrued expenses and other liabilities                                                                                                                                           |  |               | 1,642   |   |                  |   | 1,289   |  
|                                                                                                                                                                                 |  |               |         |   |                  |   |         |  
|TOTAL LIABILITIES                                                                                                                                                                |  |               | 637,823 |   |                  |   | 510,721 |  
|                                                                                                                                                                                 |  |               |         |   |                  |   |         |  
|Stockholders Equity:                                                                                                                                                            |  |               |         |   |                  |   |         |  
|Undesignated Preferred stock, par value $.01 per share, 1,000,000 shares authorized, no shares issued and outstanding at June 30, 2006
and December 31, 2005, respectively       |  |               |        |   |                  |   |        |  
|Common stock, par value $.01 per share, 20,000,000 shares authorized, 8,871,444 and 5,943,783 shares issued and outstanding at June 30,
2006 and December 31, 2005, respectively |  |               | 89      |   |                  |   | 59      |  
|Additional paid-in capital                                                                                                                                                       |  |               | 124,564 |   |                  |   | 66,066  |  
|Accumulated deficit                                                                                                                                                              |  |               | (5,917  | ) |                  |   | (6,870  | )
|Accumulated other comprehensive loss                                                                                                                                             |  |               | (292    | ) |                  |   | (194    | )
|                                                                                                                                                                                 |  |               |         |   |                  |   |         |  
|TOTAL STOCKHOLDERS EQUITY                                                                                                                                                       |  |               | 118,444 |   |                  |   | 59,061  |  
|                                                                                                                                                                                 |  |               |         |   |                  |   |         |  
|TOTAL LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                                                       |  | $             | 756,267 |   |                  | $ | 569,782 |  
|                                                                                                                                                                                 |  |               |         |   |                  |   |         |  

See accompanying notes to condensed consolidated financial statements.



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##### Table of Contents

BANCSHARES OF FLORIDA, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

For the Three and Six-Months Ended June 30, 2006 and 2005

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



|                                                    |  |                             |           |                           |   |           |  |      |           |  |   |           |  
|--------------------------------------------------- |  | --------------------------- | --------- | ------------------------- | - | --------- |  | ---- | --------- |  | - | --------- | -
|                                                    |  | Three-months ended June 30, |           | Six-months ended June 30, |  
|                                                    |  | 2006                        |           | 2005                      |   | 2006      |  | 2005 |          
|INTEREST INCOME                                     |  |                             |           |                           |   |           |  |      |           |  |   |           |  
|                                                    |  |                             |           |                          
|Interest and fees on loans                          |  | $                           | 11,048    |                           | $ | 6,059     |  | $    | 20,430    |  | $ | 11,105    |  
|Interest on securities and other                    |  |                             | 310       |                           |   | 228       |  |      | 525       |  |   | 299       |  
|Interest on federal funds sold                      |  |                             | 500       |                           |   | 384       |  |      | 849       |  |   | 707       |  
|                                                    |  |                             |           |                           |   |           |  |      |           |  |   |           |  
|TOTAL INTEREST INCOME                               |  |                             | 11,858    |                           |   | 6,671     |  |      | 21,804    |  |   | 12,111    |  
|                                                    |  |                             |           |                           |   |           |  |      |           |  |   |           |  
|INTEREST EXPENSE                                    |  |                             |           |                           |   |           |  |      |           |  |   |           |  
|Interest on deposits                                |  |                             | 4,143     |                           |   | 2,080     |  |      | 7,643     |  |   | 3,867     |  
|Interest on subordinated debt                       |  |                             | 200       |                           |   | 34        |  |      | 386       |  |   | 66        |  
|Interest on Federal Home Loan Bank advances         |  |                             | 178       |                           |   | 3         |  |      | 220       |  |   | 4         |  
|                                                    |  |                             |           |                           |   |           |  |      |           |  |   |           |  
|TOTAL INTEREST EXPENSE                              |  |                             | 4,521     |                           |   | 2,117     |  |      | 8,249     |  |   | 3,937     |  
|                                                    |  |                             |           |                           |   |           |  |      |           |  |   |           |  
|NET INTEREST INCOME                                 |  |                             | 7,337     |                           |   | 4,554     |  |      | 13,555    |  |   | 8,174     |  
|                                                    |  |                             |           |                          
|PROVISION FOR LOAN LOSSES                           |  |                             | 656       |                           |   | 399       |  |      | 1,262     |  |   | 695       |  
|                                                    |  |                             |           |                           |   |           |  |      |           |  |   |           |  
|NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES |  |                             | 6,681     |                           |   | 4,155     |  |      | 12,293    |  |   | 7,479     |  
|                                                    |  |                             |           |                           |   |           |  |      |           |  |   |           |  
|NONINTEREST INCOME                                  |  |                             |           |                           |   |           |  |      |           |  |   |           |  
|Service charges and fees                            |  |                             | 240       |                           |   | 371       |  |      | 546       |  |   | 733       |  
|Trust fees                                          |  |                             | 666       |                           |   | 365       |  |      | 1,277     |  |   | 688       |  
|Gain on sale of loans, net                          |  |                             | 100       |                           |   | 83        |  |      | 282       |  |   | 95        |  
|                                                    |  |                             |           |                           |   |           |  |      |           |  |   |           |  
|TOTAL NONINTEREST INCOME                            |  |                             | 1,006     |                           |   | 819       |  |      | 2,105     |  |   | 1,516     |  
|                                                    |  |                             |           |                           |   |           |  |      |           |  |   |           |  
|NONINTEREST EXPENSES                                |  |                             |           |                           |   |           |  |      |           |  |   |           |  
|Salaries and employee benefits                      |  |                             | 3,708     |                           |   | 2,417     |  |      | 7,030     |  |   | 4,656     |  
|Occupancy                                           |  |                             | 965       |                           |   | 713       |  |      | 1,830     |  |   | 1,451     |  
|Equipment rental, depreciation and maintenance      |  |                             | 381       |                           |   | 293       |  |      | 742       |  |   | 550       |  
|Data processing                                     |  |                             | 482       |                           |   | 369       |  |      | 913       |  |   | 658       |  
|Stationary, postage and office supplies             |  |                             | 172       |                           |   | 125       |  |      | 302       |  |   | 260       |  
|Professional fees                                   |  |                             | 219       |                           |   | 282       |  |      | 414       |  |   | 595       |  
|Advertising, marketing and public relations         |  |                             | 176       |                           |   | 108       |  |      | 402       |  |   | 223       |  
|Other                                               |  |                             | 661       |                           |   | 340       |  |      | 1,172     |  |   | 649       |  
|                                                    |  |                             |           |                           |   |           |  |      |           |  |   |           |  
|TOTAL NONINTEREST EXPENSES                          |  |                             | 6,764     |                           |   | 4,647     |  |      | 12,805    |  |   | 9,042     |  
|                                                    |  |                             |           |                           |   |           |  |      |           |  |   |           |  
|INCOME (LOSS) BEFORE INCOME TAX EXPENSE             |  |                             | 923       |                           |   | 327       |  |      | 1,593     |  |   | (47       | )
|                                                    |  |                             |           |                          
|Income tax expense                                  |  |                             | 370       |                           |   |          |  |      | 640       |  |   |          |  
|                                                    |  |                             |           |                           |   |           |  |      |           |  |   |           |  
|NET INCOME (LOSS)                                   |  | $                           | 553       |                           | $ | 327       |  | $    | 953       |  | $ | (47       | )
|                                                    |  |                             |           |                           |   |           |  |      |           |  |   |           |  
|NET INCOME (LOSS) PER SHARE: BASIC                  |  | $                           | 0.07      |                           | $ | 0.02      |  | $    | 0.14      |  | $ | (0.06     | )
|                                                    |  |                             |           |                           |   |           |  |      |           |  |   |           |  
|NET INCOME (LOSS) PER SHARE: DILUTED                |  | $                           | 0.07      |                           | $ | 0.02      |  | $    | 0.14      |  | $ | (0.06     | )
|                                                    |  |                             |           |                           |   |           |  |      |           |  |   |           |  
|WEIGHTED AVERAGE SHARES OUTSTANDING: BASIC          |  |                             | 7,390,499 |                           |   | 5,686,208 |  |      | 6,671,212 |  |   | 5,263,602 |  
|                                                    |  |                             |           |                           |   |           |  |      |           |  |   |           |  
|WEIGHTED AVERAGE SHARES OUTSTANDING: DILUTED        |  |                             | 7,648,394 |                           |   | 5,836,987 |  |      | 6,928,726 |  |   | 5,263,602 |  
|                                                    |  |                             |           |                           |   |           |  |      |           |  |   |           |  
|DIVIDENDS PER SHARE                                 |  | $                           |          |                           | $ |          |  | $    |          |  | $ |          |  
|                                                    |  |                             |           |                           |   |           |  |      |           |  |   |           |  

See accompanying notes to condensed consolidated financial statements.



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##### Table of Contents

BANCSHARES OF FLORIDA, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY

For the Year Ended December 31, 2005 and the Six-Months Ended June 30, 2006 (unaudited)

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



|                                                                                     |  |                 |   |  |              |        |            |              |           |        |   |                |  |                    |         |  |                   |         |   |       |   |      |   |  |   |         |  
|------------------------------------------------------------------------------------ |  | --------------- | - |  | ------------ | ------ | ---------- | ------------ | --------- | ------ | - | -------------- |  | ------------------ | ------- |  | ----------------- | ------- | - | ----- | - | ---- | - |  | - | ------- | -
|                                                                                     |  | Preferred Stock |   |  | Common Stock |        | Additional |              |           |        |   | Accumulated    |  |                    |         | 
|                                                                                     |  | SharesIssued    |   |  | Amount       |        |            | SharesIssued |           | Amount |   | Paid-InCapital |  | AccumulatedDeficit |         |  | ComprehensiveLoss |         |   | Total |  
|Balance, December 31, 2004                                                           |  | 36,097          |   |  | $            | 3,610  |            |              | 4,835,632 |        | $ | 48             |  | $                  | 49,817  |  | $                 | (11,479 | ) |       | $ | (42  | ) |  | $ | 41,954  |  
|                                                                                     |  |                 |   |  |              |        |            |             
|Net income                                                                           |  |                |   |  |              |       |            |              |          |        |   |               |  |                    |        |  |                   | 4,883   |   |       |   |     |   |  |   | 4,883   |  
|Exercise of stock options & warrants                                                 |  |                |   |  |              |       |            |              | 27,797    |        |   |               |  |                    | 277     |  |                   |        |   |       |   |     |   |  |   | 277     |  
|Tax benefit from stock options exercised                                             |  |                |   |  |              |       |            |              |          |        |   |               |  |                    | 107     |  |                   |        |   |       |   |     |   |  |   | 107     |  
|Adjustments to additional paid-in-capital from stock compensation expense            |  |                |   |  |              |       |            |              |          |        |   |               |  |                    | 280     |  |                   |        |   |       |   |     |   |  |   | 280     |  
|Common stock issued, net of offering cost of $739                                    |  |                |   |  |              |       |            |              | 915,000   |        |   | 9              |  |                    | 12,978  |  |                   |        |   |       |   |     |   |  |   | 12,987  |  
|Preferred stock dividends paid at a quarterly rate of 0.02 shares of preferred stock |  | 1,251           |   |  |              | 125    |            |              |          |        |   |               |  |                    |        |  |                   | (125    | ) |       |   |     |   |  |   |        |  
|Preferred stock converted to common at $15.78 per share                              |  | (25,090         | ) |  |              | (2,509 | )          |              | 165,354   |        |   | 2              |  |                    | 2,607   |  |                   | (100    | ) |       |   |     |   |  |   |        |  
|Redemption of preferred stock at $104.00 per share                                   |  | (12,258         | ) |  |              | (1,226 | )          |              |          |        |   |               |  |                    |        |  |                   | (49     | ) |       |   |     |   |  |   | (1,275  | )
|Changes in fair value on available-for-sale securities, net of tax                   |  |                |   |  |              |       |            |              |          |        |   |               |  |                    |        |  |                   |        |   |       |   | (152 | ) |  |   | (152    | )
|                                                                                     |  |                 |   |  |              |        |            |              |           |        |   |                |  |                    |         |  |                   |         |   |       |   |      |   |  |   |         |  
|Balance as of December 31, 2005                                                      |  |                |   |  |              |       |            |              | 5,943,783 |        |   | 59             |  |                    | 66,066  |  |                   | (6,870  | ) |       |   | (194 | ) |  |   | 59,061  |  
|Net income                                                                           |  |                |   |  |              |       |            |              |          |        |   |               |  |                    |        |  |                   | 953     |   |       |   |     |   |  |   | 953     |  
|Exercise of stock options & warrants                                                 |  |                |   |  |              |       |            |              | 52,661    |        |   | 1              |  |                    | 580     |  |                   |        |   |       |   |     |   |  |   | 581     |  
|Tax benefit from stock options exercised                                             |  |                |   |  |              |       |            |              |          |        |   |               |  |                    | 159     |  |                   |        |   |       |   |     |   |  |   | 159     |  
|Adjustments to additional paid-in-capital from stock compensation expense            |  |                |   |  |              |       |            |              |          |        |   |               |  |                    | 95      |  |                   |        |   |       |   |     |   |  |   | 95      |  
|Common stock issued, net of offering cost of $4,120                                  |  |                |   |  |              |       |            |              | 2,875,000 |        |   | 29             |  |                    | 57,664  |  |                   |        |   |       |   |     |   |  |   | 57,693  |  
|Changes in fair value on available for sale securities, net of tax of $59            |  |                |   |  |              |       |            |              |          |        |   |               |  |                    |        |  |                   |        |   |       |   | (98  | ) |  |   | (98     | )
|                                                                                     |  |                 |   |  |              |        |            |              |           |        |   |                |  |                    |         |  |                   |         |   |       |   |      |   |  |   |         |  
|Balance, June 30, 2006                                                               |  |                |   |  | $            |       |            |              | 8,871,444 |        | $ | 89             |  | $                  | 124,564 |  | $                 | (5,917  | ) |       | $ | (292 | ) |  | $ | 118,444 |  
|                                                                                     |  |                 |   |  |              |        |            |              |           |        |   |                |  |                    |         |  |                   |         |   |       |   |      |   |  |   |         |  

BANCSHARES OF FLORIDA, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(LOSS)

(In Thousands, unaudited)



|                                                                                                      |  |                             |     |                           |      |   |      |  |   |      |   |  |   |     |  
|----------------------------------------------------------------------------------------------------- |  | --------------------------- | --- | ------------------------- | ---- | - | ---- |  | - | ---- | - |  | - | --- | -
|                                                                                                      |  | Three-months ended June 30, |     | Six-months ended June 30, |     
|                                                                                                      |  | 2006                        |     |                           | 2005 |   | 2006 |  |   | 2005 |  
|Net income (loss)                                                                                     |  | $                           | 553 |                           |      | $ | 327  |  | $ | 953  |   |  | $ | (47 | )
|Other comprehensive income (loss):                                                                    |  |                             |     |                           |      |   |      |  |   |      |   |  |   |     |  
|Unrealized (losses) gains on available-for-sale securities:                                           |  |                             |     |                           |      |   |      |  |   |      |   |  |   |     |  
|Unrealized holding (losses) gains arising during the Period, net of income tax benefit of $59 in 2006 |  |                             | (69 | )                         |      |   | 81   |  |   | (98  | ) |  |   | (22 | )
|                                                                                                      |  |                             |     |                           |      |   |      |  |   |      |   |  |   |     |  
|Comprehensive income (loss)                                                                           |  | $                           | 484 |                           |      | $ | 408  |  | $ | 855  |   |  | $ | (69 | )
|                                                                                                      |  |                             |     |                           |      |   |      |  |   |      |   |  |   |     |  

See accompanying notes to condensed consolidated financial statements.



3



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##### Table of Contents

BANCSHARES OF FLORIDA, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Six-Months Ended June 30, 2006 and 2005

(In Thousands)



|                                                                                          |  |                                       |          |   |      |   |          |  
|----------------------------------------------------------------------------------------- |  | ------------------------------------- | -------- | - | ---- | - | -------- | -
|                                                                                          |  | (unaudited) Six-Months Ended June 30, |         
|                                                                                          |  | 2006                                  |          |   | 2005 |  
|CASH FLOWS FROM OPERATING ACTIVITIES                                                      |  |                                       |          |   |      |   |          |  
|Net income (loss)                                                                         |  | $                                     | 953      |   |      | $ | (47      | )
|Adjustments to reconcile net income (loss) to net cash provided by operating activities:  |  |                                       |          |   |      |   |          |  
|Depreciation and amortization                                                             |  |                                       | 698      |   |      |   | 598      |  
|Provision for loan losses                                                                 |  |                                       | 1,262    |   |      |   | 695      |  
|Accretion of deferred loan fees and costs, net                                            |  |                                       | (354     | ) |      |   | (130     | )
|Amortization (accretion) of premiums and discounts on investments, net                    |  |                                       | 8        |   |      |   | (51      | )
|Gain on sale of loans held for sale, net                                                  |  |                                       | (282     | ) |      |   | (95      | )
|Proceeds from sale of loans held for sale                                                 |  |                                       | 53,714   |   |      |   | 21,344   |  
|Originations of loans held for sale                                                       |  |                                       | (52,109  | ) |      |   | (21,249  | )
|Amortization of intangible assets                                                         |  |                                       | 19       |   |      |   | 19       |  
|Increase in accrued interest receivable                                                   |  |                                       | (721     | ) |      |   | (626     | )
|Deferred income tax expense                                                               |  |                                       | 640      |   |      |   |         |  
|Increase in bank-owned life insurance                                                     |  |                                       | (45      | ) |      |   | (40      | )
|(Increase) Decrease in other assets                                                       |  |                                       | (897     | ) |      |   | 19       |  
|Stock compensation expense                                                                |  |                                       | 95       |   |      |   | 61       |  
|Increase (decrease) in accrued interest payable                                           |  |                                       | 268      |   |      |   | (48      | )
|Increase in accrued expenses and other liabilities                                        |  |                                       | 353      |   |      |   | 557      |  
|                                                                                          |  |                                       |          |   |      |   |          |  
|NET CASH PROVIDED BY OPERATING ACTIVITIES                                                 |  |                                       | 3,602    |   |      |   | 1,007    |  
|                                                                                          |  |                                       |          |   |      |   |          |  
|CASH FLOWS FROM INVESTING ACTIVITIES                                                      |  |                                       |          |   |      |   |          |  
|Net increase in loans held for investment                                                 |  |                                       | (121,010 | ) |      |   | (67,791  | )
|Proceeds from maturing securities and principal payments on available-for-sale securities |  |                                       | 498      |   |      |   | 332,533  |  
|Purchase of securities available-for-sale                                                 |  |                                       | (24,357  | ) |      |   | (326,079 | )
|(Purchase) Redemption of restricted securities, net                                       |  |                                       | (1,634   | ) |      |   | 31       |  
|Purchase of premises and equipment, net                                                   |  |                                       | (931     | ) |      |   | (658     | )
|                                                                                          |  |                                       |          |   |      |   |          |  
|NET CASH USED IN INVESTING ACTIVITIES                                                     |  |                                       | (147,434 | ) |      |   | (61,964  | )
|                                                                                          |  |                                       |          |   |      |   |          |  
|CASH FLOWS FROM FINANCING ACTIVITIES                                                      |  |                                       |          |   |      |   |          |  
|Net increase in deposits                                                                  |  |                                       | 98,481   |   |      |   | 68,698   |  
|Takedown of Advances                                                                      |  |                                       | 86,000   |   |      |   | 9,000    |  
|Repayment of Advances                                                                     |  |                                       | (58,000  | ) |      |   | (6,000   | )
|Redemption of Series A preferred stock                                                    |  |                                       |         |   |      |   | (1,275   | )
|Net proceeds from issuance of common stock                                                |  |                                       | 58,274   |   |      |   | 12,995   |  
|                                                                                          |  |                                       |          |   |      |   |          |  
|NET CASH PROVIDED BY FINANCING ACTIVITIES                                                 |  |                                       | 184,755  |   |      |   | 83,418   |  
|                                                                                          |  |                                       |          |   |      |   |          |  
|NET INCREASE IN CASH AND CASH EQUIVALENTS                                                 |  |                                       | 40,923   |   |      |   | 22,461   |  
|CASH AND CASH EQUIVALENTS:                                                                |  |                                       |          |   |      |   |          |  
|Beginning of period                                                                       |  |                                       | 50,117   |   |      |   | 57,897   |  
|                                                                                          |  |                                       |          |   |      |   |          |  
|End of period                                                                             |  | $                                     | 91,040   |   |      | $ | 80,358   |  
|                                                                                          |  |                                       |          |   |      |   |          |  
|SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION                                          |  |                                       |          |   |      |   |          |  
|Cash paid during the period for:                                                          |  |                                       |          |   |      |   |          |  
|Interest                                                                                  |  | $                                     | 7,981    |   |      | $ | 3,985    |  
|                                                                                          |  |                                       |          |   |      |   |          |  
|Noncash Transactions:                                                                     |  |                                       |          |   |      |   |          |  
|Unrealized holding loss on securities available-for-sale                                  |  | $                                     | (98      | ) |      | $ | (22      | )
|                                                                                          |  |                                       |          |   |      |   |          |  
|Increase in preferred stock for dividends paid                                            |  | $                                     |         |   |      | $ | 274      |  
|                                                                                          |  |                                       |          |   |      |   |          |  
|Tax benefit from exercise of common stock options                                         |  | $                                     | 159      |   |      | $ | 3        |  
|                                                                                          |  |                                       |          |   |      |   |          |  

See accompanying notes to condensed consolidated financial statements.



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##### Table of Contents

BANCSHARES OF FLORIDA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE
1Organization and Basis of Presentation

Basis of Presentation:

In the opinion of management, the accompanying unaudited interim condensed consolidated financial statements reflect all adjustments necessary (consisting
of normal recurring adjustments) to present fairly our financial position as of June 30, 2006 and December 31, 2005, and the results of operations for the three and six-month periods ended June 30, 2006 and 2005, the cash flows for
the six months ended June 30, 2006 and 2005, and the stockholders equity for the six and twelve months ended June 30, 2006 and December 31, 2005.

The consolidated financial statements of Bancshares of Florida, Inc. (the Company) include the accounts of the Company and its wholly-owned subsidiaries, Bank of Florida  Southwest, Bank of Florida,
and Bank of Florida  Tampa Bay (collectively, the Banks), and Bank of Florida Trust Company. All significant intercompany balances and transactions have been eliminated.

The assets under advice by Bank of Florida Trust Company, as well as the obligations associated with those assets, are not included as part of the
consolidated financial statements of the Company.

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 consolidated 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 consolidated 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 2005 Annual Report on Form 10-K 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 2005 Form 10-K. 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, 2006 or any other interim period.

Reclassifications:

Certain reclassifications have been made to prior period financial statements to
conform to the June 30, 2006 financial statement presentation. These reclassifications only changed the reporting categories but did not affect our results of operations or financial position.

Stock-based Compensation:

Prior to January 1,
2006, the Companys stock option plans were accounted for under the recognition and measurement provisions of APB Opinion No. 25 (Opinion 25), Accounting for Stock Issued to Employees,and related interpretations, as permitted by
FASB Statement No. 123, Accounting for Stock-Based Compensation (as amended by SFAS No. 148, Accounting for Stock-Based Compensation Transition and Disclosure) (collectively SFAS 123). No stock-based employee compensation
cost was recognized in the Companys Statements of Operations through December 31, 2005, as all options granted to employees under the plans had an exercise price equal to the market value of the underlying common stock on the date of
grant. Effective January 1, 2006, the Company adopted the fair value recognition provisions of FASB Statement No. 123(R), Share-Based Payment (SFAS 123R), using the modified-prospective-transition method. Under that transition
method, compensation cost recognized in 2006 includes: (a) compensation cost for all share-based payments granted prior to, but not yet vested as of January 1, 2006, based on the grant date fair value estimated in accordance with the
original provisions of



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##### Table of Contents

BANCSHARES OF FLORIDA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

NOTE 1Organization and Basis of Presentation (Contd)

SFAS 123, and (b) compensation cost for all share-based payments granted subsequent to December 31, 2005, based on the grant-date fair value estimated in
accordance with the provisions of SFAS 123(R). As of December 31, 2005, only 10,551 stock options were not fully vested.

In addition,
prior to the adoption of SFAS 123R, the tax benefits of stock option exercises were classified as operating cash flows. Since the adoption of SFAS 123R, tax benefits resulting from tax deductions in excess of the compensation cost recognized for
options are classified as financing cash flows. As the Company adopted the modified prospective transition method, the prior period cash flow statement was not adjusted to reflect current period presentation.

In 2005, the Companys Board of Directors approved the acceleration of vesting of virtually all outstanding stock options that existed as of
December 14, 2005 (the Acceleration). In accordance with SFAS 123, in 2005 the Company expensed the remaining unrecognized compensation cost associated with the options with accelerated vesting in the pro forma disclosure. These
actions were taken in order to avoid expense recognition in future financial statements upon adoption of SFAS 123(R).

As a result of
adopting SFAS 123(R) on January 1, 2006, the total fair value of shares vested and recognized as compensation expense was approximately $12,100 and $19,700, respectively, for the three and six-months ended June 30, 2006. There was no
associated tax benefit recognized in connection with these incentive stock options. As of June 30, 2006, the Company had 15,000 nonvested options outstanding and there was $145,400 of total unrecognized compensation cost related to these
nonvested options. This cost is expected to be recognized monthly on a straight-line basis, over the vesting periods, through June 30, 2010.

As part of the adoption of SFAS 123R, the Company examined its historical pattern of option exercises in an effort to determine if there were any patterns based on certain employee populations. From this analysis, the Company could not
identify any patterns in the exercise of options. As such, the Company used the guidance in Staff Accounting Bulletin No. 107 to determine the estimated life of options issued subsequent to the adoption of SFAS 123R. Based on this guidance, the
estimated term was deemed to be the midpoint of the vesting term and the contractual term((vesting term and original contractual term)/2). Expected volatility is based on historical volatility of the Company stock.

The fair value of each option granted during the three months ended June 30, 2006 and 2005 was $12.05 and $7.62, respectively, and for the six
months ended June 30, 2006 and 2005 was $12.05 and $7.33, respectively, on the date of grant using the Black Scholes option-pricing model with the following weighted average assumptions:



|                        |  |                                    |   |  |                                  |   |  |         |   |  |         |  
|----------------------- |  | ---------------------------------- | - |  | -------------------------------- | - |  | ------- | - |  | ------- | -
|                        |  | For the three monthsended June 30, |   |  | For the six monthsended June 30, |  
|                        |  | 2006                               |   |  | 2005                             |   |  | 2006    |   |  | 2005    |  
|Expected dividend yield |  | 0.00                               | % |  | 0.00                             | % |  | 0.00    | % |  | 0.00    | %
|Expected volatility     |  | 47.00                              | % |  | 38.00                            | % |  | 47.00   | % |  | 37.00   | %
|Risk free interest rate |  | 4.97                               | % |  | 3.98                             | % |  | 4.97    | % |  | 3.96    | %
|Expected life           |  | 7 years                            |   |  | 7 years                          |   |  | 7 years |   |  | 7 years |  



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##### Table of Contents

BANCSHARES OF FLORIDA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

NOTE 1Organization and Basis of Presentation (Contd)

The following table illustrates the effect on net earnings and earnings per share if the Company had applied the fair value recognition provisions of SFAS
123 to options granted under the Companys stock option plan for the three and six-months ended June 30, 2005. For purposes of this pro forma disclosure, the value of the options is estimated using the Black-Scholes option-pricing model
and is being amortized to expense over the options vesting periods. ($ in thousands, except per share data):



|                                                                                                                                    |  |                                         |       |   |                                       |   |       |  
|----------------------------------------------------------------------------------------------------------------------------------- |  | --------------------------------------- | ----- | - | ------------------------------------- | - | ----- | -
|                                                                                                                                    |  | For the three monthsended June 30, 2005 |       |   | For the six monthsended June 30, 2005 |  
|Net income (loss) as reported                                                                                                       |  | $                                       | 327   |   |                                       | $ | (47   | )
|Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax
effects |  |                                         | (163  | ) |                                       |   | (536  | )
|                                                                                                                                    |  |                                         |       |   |                                       |   |       |  
|Proforma net income (loss)                                                                                                          |  | $                                       | 164   |   |                                       | $ | (583  | )
|                                                                                                                                    |  |                                         |       |   |                                       |   |       |  
|Earnings ( loss) per share as reported:                                                                                             |  |                                         |       |   |                                       |   |       |  
|Earnings (loss) per share - basic                                                                                                   |  | $                                       | 0.02  |   |                                       | $ | (0.06 | )
|                                                                                                                                    |  |                                         |       |   |                                       |   |       |  
|Earnings (loss) per common and common equivalent share - diluted                                                                    |  | $                                       | 0.02  |   |                                       | $ | (0.06 | )
|                                                                                                                                    |  |                                         |       |   |                                       |   |       |  
|Proforma loss per share:                                                                                                            |  |                                         |       |   |                                       |   |       |  
|                                                                                                                                    |  |                                         |       |   |                                       |   |       |  
|Loss per share - basic                                                                                                              |  | $                                       | (0.01 | ) |                                       | $ | (0.16 | )
|                                                                                                                                    |  |                                         |       |   |                                       |   |       |  
|Loss per common and common equivalent share - diluted                                                                               |  | $                                       | (0.01 | ) |                                       | $ | (0.16 | )
|                                                                                                                                    |  |                                         |       |   |                                       |   |       |  

The Company has also issued warrants to the Board of Directors of the Company and Board members
and Advisory Board members of the Companys subsidiaries. At June 30, 2006 and December 31, 2005 warrants to purchase 245,079 and 288,190 common shares, respectively, at an average exercise price of $11.08 and $11.09, respectively,
were outstanding. Of that amount, 222,279 and 265,390, respectively, were fully vested. If, at any time, the holders of these warrants cease to serve as a director of the Company or a Company subsidiary, or an Advisory Board member, the warrants
shall immediately expire. Compensation expense totaling $71,000 and $61,000 was recognized during the six months ended June 30, 2006 and 2005, respectively in connection with certain of these warrants and options.

In 2000, the Company adopted the 1999 Stock Option Plan (the Plan) pursuant to which the Companys board of directors may grant stock options
to officers and key employees. The Plan, as amended at the 2005 Annual Shareholders meeting, authorized grants of options to purchase no less than 11.5% of outstanding shares. In no event, however, would the number of reserved shares ever exceed
1,000,000 shares. The 2006 Stock compensation Plan was approved by shareholders on June 8, 2006.

This plan provides for the grant of
the following: options to purchase common stock; restricted shares of common stock (which may be subject to both grant and forfeiture conditions) (Restricted Stock); Stock units (which are a contractual right for a recipient to receive
shares of Restricted Stock at a certain date or upon the occurrence of a certain event); and stock appreciation rights (entitling the grantee to receive the difference in value between the underlying common stock on the date of exercise and the
value of such stock on the date of grant) (SARS), which may be either freestanding or granted in tandem with an option. Options to purchase common stock may be either incentive stock options (ISOs), which are intended to
satisfy the requirements of Section 422 of the Internal Revenue Code of 1986, as amended (the Code), or non-qualified stock options (NQOs) which are not intended to satisfy the requirements of Section 422 of the
Code.



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##### Table of Contents

BANCSHARES OF FLORIDA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

NOTE 1Organization and Basis of Presentation (Contd)

The exercise price of the stock options may not be less than the fair market value of common stock on the date the option is granted. The Plan provides
for the grants of options at the discretion of the Board of Directors or a committee designated by the Board of Directors to administer the Plan. Each stock option granted under the Plan has a maximum term of ten years, subject to earlier
termination in the event the participant ceases to be an employee. The committee shall determine the period during which stock options vest at the date of grant. The Plan will terminate on June 8, 2016.

At June 30, 2006, there were 404,934 shares available for grant under the Plan. The total intrinsic value of options exercised during the three and
six months ended June 30, 2006 was $23,600 and $29,000, respectively. Stock option activity during the period was as follows:



|                           |  |                    |   |  |                                       |       |                           |           |                         |   |          
|-------------------------- |  | ------------------ | - |  | ------------------------------------- | ----- | ------------------------- | --------- | ----------------------- | - | ---------
|Stock Option Plan          |  | OPTIONSOUTSTANDING |   |  | WEIGHTED AVERAGE OPTIONPRICEPER SHARE |       | REMAININGCONTRACTUAL TERM |           | AGGREGATEINTRINSICVALUE
|Balance December 31, 2005  |  | 655,189            |   |  | $                                     | 14.61 |                           |           |                         |   |          
|Granted                    |  | 4,449              |   |  |                                       | 21.65 |                           |           |                         |   |          
|Exercised                  |  | (9,550             | ) |  |                                       | 10.54 |                           |           |                         |   |          
|Forfeited                  |  | (1,200             | ) |  |                                       | 17.30 |                           |           |                         |   |          
|                           |  |                    |   |  |                                       |       |                           |           |                         |   |          
|Balance, June 30, 2006     |  | 648,888            |   |  | $                                     | 14.94 |                           | 7.5 years |                         | $ | 5,133,022
|                           |  |                    |   |  |                                       |       |                           |           |                         |   |          
|Exercisable, June 30, 2006 |  |                    |   |  |                                       |       |                           | 7.5 years |                         | $ | 5,089,721
|                           |  |                    |   |  |                                       |       |                           |           |                         |   |          
|Stock Warrants Outstanding |  |                    |   |  |                                       |       |                           |           |                         |   |          
|Balance December 31, 2005  |  | 288,190            |   |  | $                                     | 11.09 |                           |           |                         |   |          
|Granted                    |  |                   |   |  |                                       |      |                           |           |                         |   |          
|Exercised                  |  | (43,111            | ) |  |                                       | 11.15 |                           |           |                         |   |          
|Forfeited                  |  |                   |   |  |                                       |      |                           |           |                         |   |          
|                           |  |                    |   |  |                                       |       |                           |           |                         |   |          
|Balance June 30, 2006      |  | 245,079            |   |  | $                                     | 11.08 |                           |           |                         |   |          
|                           |  |                    |   |  |                                       |       |                           |           |                         |   |          

Recent Accounting Pronouncements:

In June 2006, the Financial Accounting Standards Board (the FASB) issued FASB Interpretation No. 48, Accounting for Uncertainty
in Income Taxes-an interpretation of FASB Statement No. 109,(FIN 48). FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an enterprises financial statements in accordance with FASB
Statement No. 109, Accounting for Income Taxes. This interpretation prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to
be taken in a tax return. This statement is effective for fiscal years beginning after December 15, 2006. Management believes this Statement will not have a material effect on the Companys consolidated financial statements.

In March 2006, the FASB issued FASB Statement No. 156, Accounting for Servicing of Financial Assets,(FAS 156) which
amends FASB Statement No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities. This Statement addresses the recognition and measurement of separately recognized servicing assets
and liabilities, such as those common with mortgage securitization activities, and provides an approach to simplify efforts to obtain hedge-like accounting. It also clarifies when an obligation to service financial assets should be separately
recognized as a servicing asset or servicing liability and requires that those separately recognized assets or liabilities be initially measured at fair value, if practicable. FAS 156 permits an entity to choose either the amortization method or the
fair value method for subsequent measurement and also permits a servicer that uses derivative financial instruments to offset risks on servicing to report both the derivative financial instrument and related servicing asset or liability by using a
consistent measurement attribute  fair value.



8



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##### Table of Contents

BANCSHARES OF FLORIDA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

NOTE 1Organization and Basis of Presentation (Contd)

This Statement shall be effective for all separately recognized servicing assets and liabilities acquired or issued after the beginning of an entitys first fiscal
year beginning after September 15, 2006, with early adoption permitted. Management believes this Statement will not have a material effect on the Companys consolidated financial statements.

In February 2006, the FASB issued FASB Statement No. 155, Accounting for Hybrid Financial Instruments  an amendment of FASB
Statements No. 133 and 140.This statement amends FASB Statements No. 133, Accounting for Derivative Instruments and Hedging Activities (FAS 133), and No. 140, Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities (FAS 140). This Statement allows financial instruments that have embedded derivatives to be accounted for as a whole (eliminating the need to bifurcate the
derivative from its host) if the holder elects to account for the whole instrument on a fair value basis. It also clarifies which interest-only strips and principal-only strips are not subject to the requirements of FAS 133; establishes a
requirement to evaluate interests in securitized financial assets to identify interest that are freestanding derivatives or that are hybrid financial instruments that contain an embedded derivative requiring bifurcation; clarifies that
concentrations of credit risk in the form of subordination are not embedded derivatives; and, amends FAS 140 to eliminate the prohibition on a qualifying special-purpose entity from holding a derivative financial instrument that pertains to a
beneficial interest other than another derivative financial instrument. This Statement shall be effective for all financial instruments acquired or issued after the beginning of an entitys first fiscal year beginning after September 15,
2006. Management believes this Statement will not have a material effect on the Companys consolidated financial statements.

Income (Loss) Per
Common Share:

Basic income (loss) per share represents net income (loss) available to common shareholders minus preferred stock
dividends divided by the weighted-average number of common shares outstanding during the period. Dilutive income per share is computed based on the weighted-average number of common shares outstanding plus the effect of stock options and
warrants outstanding computed using the treasury stock method.

Components used in computing income per share for the three months ended
June 30, 2006 and 2005, are summarized as follows ($ in thousands, except share data):



|                                                  |  |                                     |     |                                   |           |                |   |           |  |   |                                   |   |                |           |  |   |     
|------------------------------------------------- |  | ----------------------------------- | --- | --------------------------------- | --------- | -------------- | - | --------- |  | - | --------------------------------- | - | -------------- | --------- |  | - | ----
|                                                  |  | For the three months ended June 30,
|                                                  |  | 2006                                |     | 2005                             
|                                                  |  | NetIncome                           |     | Weighted-AverageSharesOutstanding |           | IncomePerShare |   | NetIncome |  |   | Weighted-AverageSharesOutstanding |   | IncomePerShare
|Net income                                        |  | $                                   | 553 |                                   |           |                |   |           |  | $ | 327                               |   |                |           |  |   |     
|Less premium paid on preferred stock              |  |                                     |    |                                   |           |                |   |           |  |   | (149                              | ) |                |           |  |   |     
|Less preferred stock dividends                    |  |                                     |    |                                   |           |                |   |           |  |   | (53                               | ) |                |           |  |   |     
|                                                  |  |                                     |     |                                   |           |                |   |           |  |   |                                   |   |                |           |  |   |     
|Income available to common shareholders  basic   |  |                                     | 553 |                                   | 7,390,499 |                | $ | 0.07      |  |   | 125                               |   |                | 5,686,208 |  | $ | 0.02
|Dilutive effect of stock options outstanding      |  |                                     |     |                                   | 183,993   |                |   |           |  |   |                                   |   |                | 95,800    |  |   |     
|Dilutive effect of warrants outstanding           |  |                                     |     |                                   | 73,902    |                |   |           |  |   |                                   |   |                | 54,979    |  |   |     
|                                                  |  |                                     |     |                                   |           |                |   |           |  |   |                                   |   |                |           |  |   |     
|Income available to common shareholders  diluted |  | $                                   | 553 |                                   | 7,648,394 |                | $ | 0.07      |  | $ | 125                               |   |                | 5,836,987 |  | $ | 0.02
|                                                  |  |                                     |     |                                   |           |                |   |           |  |   |                                   |   |                |           |  |   |     



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##### Table of Contents

BANCSHARES OF FLORIDA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

NOTE 1Organization and Basis of Presentation (Contd)

Because the Company reported net losses in the first six months of 2005, all potentially dilutive securities were anti-dilutive and basic and diluted loss
per share were the same in that period. At June 30, 2005, there were 509,725 common stock options and 209,523 warrants, respectively, which were anti-dilutive and therefore not included in the calculation below. Components used in computing
income (loss) per share for the six months ended June 30, 2006 and 2005, are summarized as follows ($ in thousands, except share data):



|                                                         |  |                                   |     |                                   |           |                  |   |         |  |   |                                   |   |              |           |  |   |       |  
|-------------------------------------------------------- |  | --------------------------------- | --- | --------------------------------- | --------- | ---------------- | - | ------- |  | - | --------------------------------- | - | ------------ | --------- |  | - | ----- | -
|                                                         |  | For the six months ended June 30, |    
|                                                         |  | 2006                              |     | 2005                              |          
|                                                         |  | NetIncome                         |     | Weighted-AverageSharesOutstanding |           | EarningsPerShare |   | NetLoss |  |   | Weighted-AverageSharesOutstanding |   | LossPerShare |          
|Net income (loss)                                        |  | $                                 | 953 |                                   |           |                  |   |         |  | $ | (47                               | ) |              |           |  |   |       |  
|Less premium paid on preferred stock                     |  |                                   |    |                                   |           |                  |   |         |  |   | (149                              | ) |              |           |  |   |       |  
|Less preferred stock dividends                           |  |                                   |    |                                   |           |                  |   |         |  |   | (125                              | ) |              |           |  |   |       |  
|                                                         |  |                                   |     |                                   |           |                  |   |         |  |   |                                   |   |              |           |  |   |       |  
|Income (loss) available to common shareholders  basic   |  |                                   | 953 |                                   | 6,671,212 |                  | $ | 0.07    |  |   | (321                              | ) |              | 5,263,602 |  | $ | (0.06 | )
|Dilutive effect of stock options outstanding             |  |                                   |     |                                   | 183,623   |                  |   |         |  |   |                                   |   |              |          |  |   |       |  
|Dilutive effect of warrants outstanding                  |  |                                   |     |                                   | 73,891    |                  |   |         |  |   |                                   |   |              |          |  |   |       |  
|                                                         |  |                                   |     |                                   |           |                  |   |         |  |   |                                   |   |              |           |  |   |       |  
|Income (loss) available to common shareholders  diluted |  | $                                 | 953 |                                   | 6,928,726 |                  | $ | 0.06    |  | $ | (321                              | ) |              | 5,263,602 |  | $ | (0.06 | )
|                                                         |  |                                   |     |                                   |           |                  |   |         |  |   |                                   |   |              |           |  |   |       |  



10



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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. The following presents financial information of reportable segments as of and
for the three-month periods ended June 30, 2006 and 2005 and March 31, 2006. 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 (In thousands).



|                                    |  |                           |         |                               |   |                          |  |   |                            |   |       |   |         |                                        |   |         |   |  |   |        
|----------------------------------- |  | ------------------------- | ------- | ----------------------------- | - | ------------------------ |  | - | -------------------------- | - | ----- | - | ------- | -------------------------------------- | - | ------- | - |  | - | -------
|For the Three Months Ended:         |  | Bank ofFlorida -Southwest |         | Bank ofFlorida, Ft.Lauderdale |   | Bank ofFlorida -TampaBay |  |   | Bank ofFloridaTrustCompany |   | Other |   |         | Bancsharesof Florida,Inc.-Consolidated
|June 30, 2006                       |  |                           |         |                               |   |                          |  |   |                            |   |       |   |         |                                        |   |         |   |  |   |        
|Net interest income                 |  | $                         | 3,328   |                               | $ | 3,001                    |  | $ | 806                        |   |       | $ | 20      |                                        | $ | 182     |   |  | $ | 7,337  
|Provision for loan losses           |  |                           | 330     |                               |   | 249                      |  |   | 77                         |   |       |   |        |                                        |   |        |   |  |   | 656    
|Noninterest income                  |  |                           | 172     |                               |   | 142                      |  |   | 26                         |   |       |   | 666     |                                        |   |        |   |  |   | 1,006  
|Noninterest expense                 |  |                           | 1,486   |                               |   | 1,849                    |  |   | 733                        |   |       |   | 515     |                                        |   | 2,181   |   |  |   | 6,764  
|Holding company servicing costs     |  |                           | 617     |                               |   | 436                      |  |   | 164                        |   |       |   | 25      |                                        |   | (1,242  | ) |  |   |       
|                                    |  |                           |         |                               |   |                          |  |   |                            |   |       |   |         |                                        |   |         |   |  |   |        
|Net income (loss) before income tax |  |                           | 1,067   |                               |   | 609                      |  |   | (142                       | ) |       |   | 146     |                                        |   | (757    | ) |  |   | 923    
|Income tax expense (benefit)        |  |                           | 401     |                               |   | 229                      |  |   | (48                        | ) |       |   | 58      |                                        |   | (270    | ) |  |   | 370    
|                                    |  |                           |         |                               |   |                          |  |   |                            |   |       |   |         |                                        |   |         |   |  |   |        
|Net income (loss)                   |  | $                         | 666     |                               | $ | 380                      |  | $ | (94                        | ) |       | $ | 88      |                                        | $ | (487    | ) |  | $ | 553    
|                                    |  |                           |         |                               |   |                          |  |   |                            |   |       |   |         |                                        |   |         |   |  |   |        
|End of period assets                |  | $                         | 390,062 |                               | $ | 284,511                  |  | $ | 92,149                     |   |       | $ | 2,882   |                                        | $ | (13,337 | ) |  | $ | 756,267
|                                    |  |                           |         |                               |   |                          |  |   |                            |   |       |   |         |                                        |   |         |   |  |   |        
|Assets under advice                 |  | $                         |        |                               | $ |                         |  | $ |                           |   |       | $ | 384,154 |                                        | $ |        |   |  | $ | 384,154
|                                    |  |                           |         |                               |   |                          |  |   |                            |   |       |   |         |                                        |   |         |   |  |   |        
|March 31, 2006                      |  |                           |         |                               |   |                          |  |   |                            |   |       |   |         |                                        |   |         |   |  |   |        
|Net interest income                 |  | $                         | 2,865   |                               | $ | 2,671                    |  | $ | 644                        |   |       | $ | 19      |                                        | $ | 19      |   |  | $ | 6,218  
|Provision for loan losses           |  |                           | 235     |                               |   | 259                      |  |   | 112                        |   |       |   |        |                                        |   |        |   |  |   | 606    
|Noninterest income                  |  |                           | 298     |                               |   | 163                      |  |   | 26                         |   |       |   | 612     |                                        |   |        |   |  |   | 1,099  
|Noninterest expense                 |  |                           | 1,416   |                               |   | 1,690                    |  |   | 574                        |   |       |   | 503     |                                        |   | 1,858   |   |  |   | 6,041  
|Holding company servicing costs     |  |                           | 608     |                               |   | 424                      |  |   | 147                        |   |       |   | 25      |                                        |   | (1,204  | ) |  |   |       
|                                    |  |                           |         |                               |   |                          |  |   |                            |   |       |   |         |                                        |   |         |   |  |   |        
|Net income (loss) before income tax |  |                           | 904     |                               |   | 461                      |  |   | (163                       | ) |       |   | 103     |                                        |   | (635    | ) |  |   | 670    
|Income tax expense (benefit)        |  |                           | 342     |                               |   | 177                      |  |   | (59                        | ) |       |   | 41      |                                        |   | (231    | ) |  |   | 270    
|                                    |  |                           |         |                               |   |                          |  |   |                            |   |       |   |         |                                        |   |         |   |  |   |        
|Net income (loss)                   |  | $                         | 562     |                               | $ | 284                      |  | $ | (104                       | ) |       | $ | 62      |                                        | $ | (404    | ) |  | $ | 400    
|                                    |  |                           |         |                               |   |                          |  |   |                            |   |       |   |         |                                        |   |         |   |  |   |        
|End of period assets                |  | $                         | 309,549 |                               | $ | 232,978                  |  | $ | 75,777                     |   |       | $ | 2,746   |                                        | $ | (914    | ) |  | $ | 620,136
|                                    |  |                           |         |                               |   |                          |  |   |                            |   |       |   |         |                                        |   |         |   |  |   |        
|Assets under advice                 |  | $                         |        |                               | $ |                         |  | $ |                           |   |       | $ | 409,092 |                                        | $ |        |   |  | $ | 409,092
|                                    |  |                           |         |                               |   |                          |  |   |                            |   |       |   |         |                                        |   |         |   |  |   |        
|June 30, 2005                       |  |                           |         |                               |   |                          |  |   |                            |   |       |   |         |                                        |   |         |   |  |   |        
|Net interest income                 |  | $                         | 2,259   |                               | $ | 1,882                    |  | $ | 397                        |   |       | $ | 16      |                                        | $ |        |   |  | $ | 4,554  
|Provision for loan losses           |  |                           | 189     |                               |   | 116                      |  |   | 94                         |   |       |   |        |                                        |   |        |   |  |   | 399    
|Noninterest income                  |  |                           | 347     |                               |   | 93                       |  |   | 14                         |   |       |   | 365     |                                        |   |        |   |  |   | 819    
|Noninterest expense                 |  |                           | 1,154   |                               |   | 1,189                    |  |   | 446                        |   |       |   | 331     |                                        |   | 1,527   |   |  |   | 4,647  
|Holding company servicing costs     |  |                           | 472     |                               |   | 233                      |  |   | 65                         |   |       |   | 21      |                                        |   | (791    | ) |  |   |       
|                                    |  |                           |         |                               |   |                          |  |   |                            |   |       |   |         |                                        |   |         |   |  |   |        
|Net income (loss) before income tax |  |                           | 791     |                               |   | 437                      |  |   | (194                       | ) |       |   | 29      |                                        |   | (736    | ) |  |   | 327    
|Income tax expense (benefit)        |  |                           |        |                               |   |                         |  |   |                           |   |       |   |        |                                        |   |        |   |  |   |       
|                                    |  |                           |         |                               |   |                          |  |   |                            |   |       |   |         |                                        |   |         |   |  |   |        
|Net income (loss)                   |  | $                         | 791     |                               | $ | 437                      |  | $ | (194                       | ) |       | $ | 29      |                                        | $ | (736    | ) |  | $ | 327    
|                                    |  |                           |         |                               |   |                          |  |   |                            |   |       |   |         |                                        |   |         |   |  |   |        
|End of period assets                |  | $                         | 256,945 |                               | $ | 200,615                  |  | $ | 52,539                     |   |       | $ | 2,370   |                                        | $ | (7,742  | ) |  | $ | 504,727
|                                    |  |                           |         |                               |   |                          |  |   |                            |   |       |   |         |                                        |   |         |   |  |   |        
|Assets under advice                 |  | $                         |        |                               | $ |                         |  | $ |                           |   |       | $ | 200,139 |                                        | $ |        |   |  | $ | 200,139
|                                    |  |                           |         |                               |   |                          |  |   |                            |   |       |   |         |                                        |   |         |   |  |   |        



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##### Table of Contents

BANCSHARES OF FLORIDA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

NOTE 2Segment Information (contd)

The following presents financial information of reportable segments as of and for the six-month periods ended June 30, 2006 and 2005. 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 (In thousands).



|                                    |  |                           |         |                               |   |                          |  |   |                            |   |       |   |         |                                        |   |         |   |  |   |         |  
|----------------------------------- |  | ------------------------- | ------- | ----------------------------- | - | ------------------------ |  | - | -------------------------- | - | ----- | - | ------- | -------------------------------------- | - | ------- | - |  | - | ------- | -
|For the Six Months Ended:           |  | Bank ofFlorida -Southwest |         | Bank ofFlorida, Ft.Lauderdale |   | Bank ofFlorida -TampaBay |  |   | Bank ofFloridaTrustCompany |   | Other |   |         | Bancsharesof Florida,Inc.-Consolidated |  
|June 30, 2006                       |  |                           |         |                               |   |                          |  |   |                            |   |       |   |         |                                        |   |         |   |  |   |         |  
|Net interest income                 |  | $                         | 6,193   |                               | $ | 5,672                    |  | $ | 1,450                      |   |       | $ | 39      |                                        | $ | 201     |   |  | $ | 13,555  |  
|Provision for loan losses           |  |                           | 565     |                               |   | 509                      |  |   | 188                        |   |       |   |        |                                        |   |        |   |  |   | 1,262   |  
|Noninterest income                  |  |                           | 470     |                               |   | 306                      |  |   | 52                         |   |       |   | 1,277   |                                        |   |        |   |  |   | 2,105   |  
|                                    |  |                           |         |                               |   |                         
|Noninterest expense                 |  |                           | 2,900   |                               |   | 3,538                    |  |   | 1,309                      |   |       |   | 1,016   |                                        |   | 4,042   |   |  |   | 12,805  |  
|Holding company servicing costs     |  |                           | 1,226   |                               |   | 860                      |  |   | 310                        |   |       |   | 50      |                                        |   | (2,446  | ) |  |   |        |  
|                                    |  |                           |         |                               |   |                          |  |   |                            |   |       |   |         |                                        |   |         |   |  |   |         |  
|Net income (loss) before income tax |  |                           | 1,972   |                               |   | 1,071                    |  |   | (305                       | ) |       |   | 250     |                                        |   | (1,395  | ) |  |   | 1,593   |  
|Income tax expense (benefit)        |  |                           | 744     |                               |   | 406                      |  |   | (107                       | ) |       |   | 99      |                                        |   | (502    | ) |  |   | 640     |  
|                                    |  |                           |         |                               |   |                          |  |   |                            |   |       |   |         |                                        |   |         |   |  |   |         |  
|Net income (loss)                   |  | $                         | 1,228   |                               | $ | 665                      |  | $ | (198                       | ) |       | $ | 151     |                                        | $ | (893    | ) |  | $ | 953     |  
|                                    |  |                           |         |                               |   |                          |  |   |                            |   |       |   |         |                                        |   |         |   |  |   |         |  
|End of period assets                |  | $                         | 390,062 |                               | $ | 284,511                  |  | $ | 92,149                     |   |       | $ | 2,882   |                                        | $ | (13,337 | ) |  | $ | 756,267 |  
|                                    |  |                           |         |                               |   |                          |  |   |                            |   |       |   |         |                                        |   |         |   |  |   |         |  
|Assets under advice                 |  | $                         |        |                               | $ |                         |  | $ |                           |   |       | $ | 384,154 |                                        | $ |        |   |  | $ | 384,154 |  
|                                    |  |                           |         |                               |   |                          |  |   |                            |   |       |   |         |                                        |   |         |   |  |   |         |  
|June 30, 2005                       |  |                           |         |                               |   |                          |  |   |                            |   |       |   |         |                                        |   |         |   |  |   |         |  
|Net interest income                 |  | $                         | 4,186   |                               | $ | 3,319                    |  | $ | 637                        |   |       | $ | 32      |                                        | $ |        |   |  | $ | 8,174   |  
|Provision for loan losses           |  |                           | 334     |                               |   | 116                      |  |   | 245                        |   |       |   |        |                                        |   |        |   |  |   | 695     |  
|Noninterest income                  |  |                           | 617     |                               |   | 194                      |  |   | 17                         |   |       |   | 688     |                                        |   |        |   |  |   | 1,516   |  
|Noninterest expense                 |  |                           | 2,232   |                               |   | 2,377                    |  |   | 883                        |   |       |   | 648     |                                        |   | 2,902   |   |  |   | 9,042   |  
|Holding company servicing costs     |  |                           | 941     |                               |   | 458                      |  |   | 128                        |   |       |   | 42      |                                        |   | (1,569  | ) |  |   |        |  
|                                    |  |                           |         |                               |   |                          |  |   |                            |   |       |   |         |                                        |   |         |   |  |   |         |  
|Net income (loss) before income tax |  |                           | 1,296   |                               |   | 562                      |  |   | (602                       | ) |       |   | 30      |                                        |   | (1,333  | ) |  |   | (47     | )
|Income tax expense (benefit)        |  |                           |        |                               |   |                         |  |   |                           |   |       |   |        |                                        |   |        |   |  |   |        |  
|                                    |  |                           |         |                               |   |                          |  |   |                            |   |       |   |         |                                        |   |         |   |  |   |         |  
|Net income (loss)                   |  | $                         | 1 296   |                               | $ | 562                      |  | $ | (602                       | ) |       | $ | 30      |                                        | $ | (1,333  | ) |  | $ | (47     | )
|                                    |  |                           |         |                               |   |                          |  |   |                            |   |       |   |         |                                        |   |         |   |  |   |         |  
|End of period assets                |  | $                         | 256,945 |                               | $ | 200,615                  |  | $ | 52,539                     |   |       | $ | 2,370   |                                        | $ | (7,742  | ) |  | $ | 504,727 |  
|                                    |  |                           |         |                               |   |                          |  |   |                            |   |       |   |         |                                        |   |         |   |  |   |         |  
|Assets under advice                 |  | $                         |        |                               | $ |                         |  | $ |                           |   |       | $ | 200,139 |                                        | $ |        |   |  | $ | 200,139 |  
|                                    |  |                           |         |                               |   |                          |  |   |                            |   |       |   |         |                                        |   |         |   |  |   |         |  



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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 June 30, 2006 and December 31, 2005 are as follows (In Thousands):



|                                                           |  |               |        |                  |   |        |  |   |                      |   |  |   |       
|---------------------------------------------------------- |  | ------------- | ------ | ---------------- | - | ------ |  | - | -------------------- | - |  | - | ------
|                                                           |  |               |        | GROSS UNREALIZED |   |        | 
|                                                           |  | AMORTIZEDCOST |        | GAINS            |   | LOSSES |  |   | ESTIMATEDFAIR VALUE 
|June 30, 2006                                              |  |               |        |                  |   |        |  |   |                      |   |  |   |       
|Available for sale securities:                             |  |               |        |                  |   |        |  |   |                      |   |  |   |       
|Mortgage-backed securities                                 |  | $             | 28,675 |                  | $ |       |  | $ | (191                 | ) |  | $ | 28,484
|U.S. Treasury securities and other U.S. agency obligations |  |               | 14,033 |                  |   | 1      |  |   | (278                 | ) |  |   | 13,756
|Independent Bankers Bank stock                             |  |               | 51     |                  |   |       |  |   |                     |   |  |   | 51    
|                                                           |  |               |        |                  |   |        |  |   |                      |   |  |   |       
|Total Securities available for sale                        |  | $             | 42,759 |                  | $ | 1      |  | $ | (469                 | ) |  | $ | 42,291
|                                                           |  |               |        |                  |   |        |  |   |                      |   |  |   |       
|Securities held to maturity  Other Bonds                  |  | $             | 25     |                  | $ |       |  | $ |                     |   |  | $ | 25    
|                                                           |  |               |        |                  |   |        |  |   |                      |   |  |   |       
|Total Securities                                           |  | $             | 42,784 |                  | $ | 1      |  | $ | (469                 | ) |  | $ | 42,316
|                                                           |  |               |        |                  |   |        |  |   |                      |   |  |   |       
|                                                           |  |               |       
|                                                           |  |               |        | GROSS UNREALIZED |   |        | 
|                                                           |  | AMORTIZEDCOST |        | GAINS            |   | LOSSES |  |   | ESTIMATED FAIR VALUE
|December 31, 2005                                          |  |               |        |                  |   |        |  |   |                      |   |  |   |       
|Available for sale securities:                             |  |               |        |                  |   |        |  |   |                      |   |  |   |       
|Mortgage-backed securities                                 |  | $             | 4,827  |                  | $ |       |  | $ | (132                 | ) |  | $ | 4,695 
|U.S. Treasury securities and other U.S. agency obligations |  |               | 14,030 |                  |   | 3      |  |   | (182                 | ) |  |   | 13,851
|Independent Bankers Bank stock                             |  |               | 51     |                  |   |       |  |   |                     |   |  |   | 51    
|                                                           |  |               |        |                  |   |        |  |   |                      |   |  |   |       
|Totals                                                     |  | $             | 18,908 |                  | $ | 3      |  | $ | (314                 | ) |  | $ | 18,597
|                                                           |  |               |        |                  |   |        |  |   |                      |   |  |   |       
|Securities held to maturity  Other Bonds                  |  | $             | 25     |                  | $ |       |  | $ |                     |   |  | $ | 25    
|                                                           |  |               |        |                  |   |        |  |   |                      |   |  |   |       
|Total Securities                                           |  | $             | 18,933 |                  | $ | 3      |  | $ | (314                 | ) |  | $ | 18,622
|                                                           |  |               |        |                  |   |        |  |   |                      |   |  |   |       

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.



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BANCSHARES OF FLORIDA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

NOTE 3Securities (contd)

Information pertaining to securities with gross unrealized losses at June 30, 2006, 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
|                                                           |  | GrossUnrealizedLosses   |      |                    | Fair Value |   | GrossUnrealizedLosses |  |   | Fair Value
|                                                           |  | (In Thousands)         
|Securities available for sale:                             |  |                         |      |                    |            |   |                       |  |   |            |   |  |   |      
|Mortgage-backed securities of U.S. government agencies     |  | $                       | (33  | )                  |            | $ | 25,032                |  | $ | (159       | ) |  | $ | 3,452
|U.S. Treasury securities and other U.S. agency obligations |  |                         | (161 | )                  |            |   | 9,322                 |  |   | (116       | ) |  |   | 4,409
|                                                           |  |                         |      |                    |            |   |                       |  |   |            |   |  |   |      
|Total securities available for sale                        |  | $                       | (194 | )                  |            | $ | 34,354                |  | $ | (275       | ) |  | $ | 7,861
|                                                           |  |                         |      |                    |            |   |                       |  |   |            |   |  |   |      

NOTE 4Loans

The following table sets forth the composition of the loan portfolio at June 30, 2006 and December 31, 2005 (In thousands).



|                                                     |  |              |         |   |                  |   |         |  
|---------------------------------------------------- |  | ------------ | ------- | - | ---------------- | - | ------- | -
|                                                     |  | June 30,2006 |         |   | December 31,2005 |  
|Real estate:                                         |  |              |         |   |                  |   |         |  
|Commercial real estate                               |  | $            | 204.866 |   |                  | $ | 180,039 |  
|Real estate - construction                           |  |              | 220,297 |   |                  |   | 141,534 |  
|One-to-four family residential                       |  |              | 72,007  |   |                  |   | 64,805  |  
|Multi-family                                         |  |              | 16,175  |   |                  |   | 25,255  |  
|                                                     |  |              |         |   |                  |   |         |  
|Total Real Estate Loans                              |  |              | 513,345 |   |                  |   | 411,633 |  
|Commercial Loans                                     |  |              | 56,738  |   |                  |   | 36,834  |  
|Lines of credit                                      |  |              | 24,482  |   |                  |   | 26,393  |  
|Consumer loans                                       |  |              | 13,047  |   |                  |   | 11,391  |  
|                                                     |  |              |         |   |                  |   |         |  
|Total Gross loans held for investment                |  |              | 607,612 |   |                  |   | 486,251 |  
|Less: allowance for loan losses                      |  |              | (5,666  | ) |                  |   | (4,603  | )
|Less: unamortized loan (fees) costs, net             |  |              | (1,048  | ) |                  |   | (852    | )
|                                                     |  |              |         |   |                  |   |         |  
|Total loans held for investment, net                 |  | $            | 600,898 |   |                  | $ | 480,796 |  
|                                                     |  |              |         |   |                  |   |         |  
|Residential one-to-four family  loans held for sale |  | $            |        |   |                  | $ | 1,323   |  
|                                                     |  |              |         |   |                  |   |         |  

At June 30, 2006, the Company had one loan totaling $625,000 which was classified as impaired
under SFAS 114. A loan is considered impaired when, based on current information and events; it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement. Specific impairment on
loans in this category is calculated based on the present value of expected future cash flows discounted at the loans effective interest rate, or for collateral-dependent loans, at the fair value of the collateral. A specific allowance was not
required on this loan as no loss is expected. At December 31, 2005, the Company had one loan totaling $500,000 which was classified as impaired under SFAS No. 114. The average recorded investment in impaired loans during the six months
ended June, 2006 and 2005 was $732,000 and $399,000, respectively. The amount of the interest recognized on impaired loans during the six-month periods was not significant.



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##### Table of Contents

BANCSHARES OF FLORIDA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

NOTE 4Loans (Contd)

At June 30, 2006, the Company had no non-accrual loans outstanding. At December 31, 2005, the Company had non-accrual loans with a balance of
$321,000. There were no loans past due 90 days or more and still accruing interest at June 30, 2006 and December 31, 2005, respectively. The following table represents the activity in the allowance for loan losses during the six months
ended June 30, 2006 and 2005 (In thousands).



|                          |  |          |       |   |      |   |      
|------------------------- |  | -------- | ----- | - | ---- | - | -----
|                          |  | June 30,
|                          |  | 2006     |       |   | 2005
|Beginning balance         |  | $        | 4,603 |   |      | $ | 2,817
|Provision for loan losses |  |          | 1,262 |   |      |   | 695  
|Charge-offs               |  |          | (200  | ) |      |   |     
|Recoveries                |  |          | 1     |   |      |   | 1    
|                          |  |          |       |   |      |   |      
|Ending balance            |  | $        | 5,666 |   |      | $ | 3,513
|                          |  |          |       |   |      |   |      

NOTE 5Intangible Asset

Intangible assets subject to amortization includes a market value adjustment related to the acquisition of Bank of Florida  Tampa Bay on July 27, 2004. On that date, 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 $906,000 ($974,000 gross carrying amount less $68,000 accumulated amortization) and $925,000 ($974,000 gross carrying amount less $49,000 accumulated amortization) at
June 30, 2006 and December 31, 2005, respectively. This intangible is being amortized on a straight-line basis over 25 years. The estimated amortization expense for each of the five succeeding years ending December 31stis $38,955 per year.

NOTE
6Subordinated Debt

On October 7, 2005, Bank of Florida, Ft. Lauderdale, issued $3.0 million in subordinated debt with a
maturity of December 15, 2015. Interest is payable quarterly in arrears, commencing December 15, 2005, at a rate of 1.9% over the quarterly adjustable three-month LIBOR rate. The interest rate at June 30, 2006 was 7.23%. Upon the
occurrence and continuation of a Tax Event (a Special Event), Bank of Florida may prepay the debt at its option (and with the approval of its regulators, if necessary), in whole or in part, without penalty, at par through
December 15, 2010. After that date, Bank of Florida may prepay the debt at its option (and with the approval of its regulators, if necessary), in whole or in part, without penalty, at par, irrespective of the occurrence of a Special
Event. The subordinated debt issued qualifies as Tier II capital for regulatory risk-based capital guidelines for the Company and its Bank of Florida, Ft. Lauderdale subsidiary.

On September 30, 2005, Bank of Florida, Ft. Lauderdale, issued $3.0 million in subordinated debt with a maturity of December 15, 2011. Interest
is payable quarterly in arrears, commencing December 15, 2005, at a rate of two and one-half percent over the quarterly adjustable three-month LIBOR rate. The interest rate at June 30, 2006 was 7.83%. Bank of Florida may prepay the debt at
its option (and with the approval of its regulators, if necessary), in whole or in part, without penalty, at par after December 15, 2006. The subordinated debt issued qualifies as Tier II capital for regulatory risk-based capital guidelines for
the Company and its Bank of Florida, Ft. Lauderdale subsidiary.

On August 5, 2005, Bank of Florida  Southwest issued $5.0
million in junior subordinated debt with a maturity of October 7, 2015. Interest is payable quarterly in arrears, commencing October 7, 2005, at a rate of two percent over the quarterly adjustable three-month LIBOR rate. The interest rate
at June 30, 2006 was 7.07%. Upon the occurrence and continuation of a Tax Event (a Special Event), Bank of Florida  Southwest may prepay



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##### Table of Contents

BANCSHARES OF FLORIDA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

NOTE 6Subordinated Debt (contd)

the debt at its option (and with the approval of its regulators, if necessary) in whole at a redemption price of 105% of par plus accrued interest during the first five
years. Bank of FloridaSouthwest will also have the right to repay this debt security at par, anytime on or after October 7, 2010. The subordinated debt issued qualifies as Tier II capital for regulatory risk-based capital guidelines for
the Company and its Bank of FloridaSouthwest subsidiary.

NOTE 7Federal Home Loan Bank Advances

At June 30, 2006, the Company had $31.0 million in advances from the Federal Home Loan Bank (FHLB), at an average rate of 5.51%, with varying
maturities. The Company had $3.0 million in FHLB advances at December 31, 2005 at a rate of 4.26%, maturing on June 24, 2008. At June 30, 2006 and December 31, 2005, the Company had an unused credit line with the FHLB of $30.9
million and $32.1 million, respectively. Borrowings from the FHLB may be either on a fixed or variable rate basis. These borrowings are collateralized by the Companys FHLB stock and a blanket lien on one-to-four family residential loans and
certain loans secured by multifamily dwellings totaling $56.8 million as of June 30, 2006. The following table provides the amount, interest rate and maturity of outstanding FHLB advances at June 30, 2006 and December 31, 2005,
respectively ($ in thousands).



|                                 |  |                  |        |      |                      |   |        |   |       |  |      |  
|-------------------------------- |  | ---------------- | ------ | ---- | -------------------- | - | ------ | - | ----- |  | ---- | -
|                                 |  | At June 30, 2006 |        |      | At December 31, 2005 |  
|                                 |  | Amount           |        | Rate |                      |   | Amount |   | Rate  | 
|Fixed Rate; Matures 6/24/2008    |  | $                | 3,000  |      | 4.26                 | % |        | $ | 3,000 |  | 4.26 | %
|Fixed Rate; Matures 6/24/ 2008   |  |                  | 3,000  |      | 4.26                 |   |        |   |       |  |      |  
|Variable Rate; Matures 6/13/2011 |  |                  | 15,000 |      | 5.81                 |   |        |   |      |  |     |  
|Variable Rate; Matures 6/13/2011 |  |                  | 10,000 |      | 5.81                 |   |        |   |      |  |     |  
|                                 |  |                  |        |      |                      |   |        |   |       |  |      |  
|Total FHLB Advances              |  | $                | 31,000 |      | 5.51                 | % |        | $ | 3,000 |  | 4.26 |  
|                                 |  |                  |        |      |                      |   |        |   |       |  |      |  

NOTE 8Proposed Merger and Acquisition

On March 7, 2006 the Company announced the execution of a definitive agreement with Bristol Bank, a $90 million-asset bank based in Coral Gables,
Florida, by which Bancshares of Florida, Inc. will acquire Bristol Bank by merging it into Bank of Florida, Ft. Lauderdale, a wholly-owned subsidiary of Bancshares of Florida, Inc. Under the terms of the definitive agreement, Bristols
shareholders will receive $20.9 million, of which 70% will be paid in Bancshares common stock and 30% in cash. This equates to approximately 2.07 times Bristols book value at December 31, 2005. The Company received final regulatory
approval to consummate this acquisition on July 14, 2006. Upon final approval from the shareholders of Bristol Bank, the transaction is anticipated to close before the end of the third quarter of 2006.



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##### Table of Contents

SELECTED QUARTERLY CONSOLIDATED FINANCIAL DATA



|                                                              |  |                                                |           |   |               |   |           |               |  |   |               |   |  |              |           |   |  |   |           |  
|------------------------------------------------------------- |  | ---------------------------------------------- | --------- | - | ------------- | - | --------- | ------------- |  | - | ------------- | - |  | ------------ | --------- | - |  | - | --------- | -
|                                                              |  | Quarter Ended                                  |          
|                                                              |  | June 30,2006                                   |           |   | March 31,2006 |   |           | Dec. 31, 2005 |  |   | Sept. 30,2005 |   |  | June 30,2005 |          
|                                                              |  | (Dollars In Thousands, except per share data.) |          
|Statement of Operations Data:                                 |  |                                                |           |   |               |   |           |               |  |   |               |   |  |              |           |   |  |   |           |  
|Total interest income                                         |  | $                                              | 11,858    |   |               | $ | 9,945     |               |  | $ | 8,820         |   |  | $            | 7,560     |   |  | $ | 6,671     |  
|Total interest expense                                        |  |                                                | 4,521     |   |               |   | 3,727     |               |  |   | 3,040         |   |  |              | 2,371     |   |  |   | 2,117     |  
|                                                              |  |                                                |           |   |               |   |           |               |  |   |               |   |  |              |           |   |  |   |           |  
|Net interest income before provision for loan losses          |  |                                                | 7,337     |   |               |   | 6,218     |               |  |   | 5,780         |   |  |              | 5,189     |   |  |   | 4,554     |  
|Provision for loan losses                                     |  |                                                | 656       |   |               |   | 606       |               |  |   | 594           |   |  |              | 614       |   |  |   | 399       |  
|                                                              |  |                                                |           |   |               |   |           |               |  |   |               |   |  |              |           |   |  |   |           |  
|Net interest income after provision for loan losses           |  |                                                | 6,681     |   |               |   | 5,612     |               |  |   | 5,186         |   |  |              | 4,575     |   |  |   | 4,155     |  
|Noninterest income                                            |  |                                                | 1,006     |   |               |   | 1,099     |               |  |   | 878           |   |  |              | 865       |   |  |   | 819       |  
|Noninterest expense                                           |  |                                                | 6,764     |   |               |   | 6,041     |               |  |   | 5,448         |   |  |              | 4,853     |   |  |   | 4,647     |  
|                                                              |  |                                                |           |   |               |   |           |               |  |   |               |   |  |              |           |   |  |   |           |  
|Net income before tax                                         |  |                                                | 923       |   |               |   | 670       |               |  |   | 616           |   |  |              | 587       |   |  |   | 327       |  
|Income tax expense (benefit)                                  |  |                                                | 370       |   |               |   | 270       |               |  |   | (3,728        | ) |  |              |          |   |  |   |          |  
|                                                              |  |                                                |           |   |               |   |           |               |  |   |               |   |  |              |           |   |  |   |           |  
|Net income                                                    |  | $                                              | 553       |   |               |   | 400       |               |  |   | 4,344         |   |  |              | 587       |   |  |   | 327       |  
|                                                              |  |                                                |           |   |               |   |           |               |  |   |               |   |  |              |           |   |  |   |           |  
|Share Data:                                                   |  |                                                |           |   |               |   |           |               |  |   |               |   |  |              |           |   |  |   |           |  
|Basic income per share                                        |  | $                                              | 0.07      |   |               | $ | 0.07      |               |  | $ | 0.73          |   |  | $            | 0.10      |   |  | $ | 0.02      |  
|Diluted income per share                                      |  |                                                | 0.07      |   |               |   | 0.06      |               |  |   | 0.70          |   |  |              | 0.10      |   |  |   | 0.02      |  
|Book value per common share (period end)                      |  |                                                | 13.35     |   |               |   | 10.01     |               |  |   | 9.94          |   |  |              | 9.17      |   |  |   | 9.07      |  
|Weighted-average shares outstanding - basic                   |  |                                                | 7,390,499 |   |               |   | 5,943,933 |               |  |   | 5,923,862     |   |  |              | 5,917,630 |   |  |   | 5,686,208 |  
|Weighted-average shares outstanding - diluted                 |  |                                                | 7,648,394 |   |               |   | 6,213,178 |               |  |   | 6,224,724     |   |  |              | 6,168,208 |   |  |   | 5,836,987 |  
|Total shares outstanding                                      |  |                                                | 8,871,444 |   |               |   | 5,944,533 |               |  |   | 5,943,783     |   |  |              | 5,919,385 |   |  |   | 5,916,685 |  
|                                                              |  |                                                |           |   |              
|Balance Sheet Data:                                           |  |                                                |           |   |               |   |           |               |  |   |               |   |  |              |           |   |  |   |           |  
|Total assets                                                  |  | $                                              | 756,267   |   |               | $ | 620,136   |               |  | $ | 569,782       |   |  | $            | 518,083   |   |  | $ | 504,727   |  
|Total cash and cash equivalents                               |  |                                                | 91,040    |   |               |   | 36,320    |               |  |   | 50,117        |   |  |              | 43,081    |   |  |   | 80,358    |  
|Interest-earning assets                                       |  |                                                | 728,062   |   |               |   | 588,641   |               |  |   | 538,255       |   |  |              | 494,945   |   |  |   | 476,863   |  
|Investment securities                                         |  |                                                | 42,316    |   |               |   | 18,319    |               |  |   | 18,622        |   |  |              | 19,094    |   |  |   | 19,520    |  
|Loans                                                         |  |                                                | 607,612   |   |               |   | 551,078   |               |  |   | 487,574       |   |  |              | 445,494   |   |  |   | 394,210   |  
|Allowance for loan losses                                     |  |                                                | 5,666     |   |               |   | 5,055     |               |  |   | 4,603         |   |  |              | 4,084     |   |  |   | 3,513     |  
|Deposit accounts                                              |  |                                                | 593,561   |   |               |   | 535,192   |               |  |   | 495,080       |   |  |              | 443,308   |   |  |   | 444,762   |  
|Other borrowings                                              |  |                                                | 42,000    |   |               |   | 24,000    |               |  |   | 14,000        |   |  |              | 19,000    |   |  |   | 5,000     |  
|Stockholders equity                                          |  |                                                | 118,444   |   |               |   | 59,485    |               |  |   | 59,061        |   |  |              | 54,285    |   |  |   | 53,666    |  
|                                                              |  |                                                |           |   |              
|Performance Ratios:                                           |  |                                                |           |   |               |   |           |               |  |   |               |   |  |              |           |   |  |   |           |  
|Return on average assets                                      |  |                                                | 0.32      | % |               |   | 0.26      | %             |  |   | 3.14          | % |  |              | 0.46      | % |  |   | 0.27      | %
|Return on average common stockholders equity                 |  |                                                | 2.48      |   |               |   | 2.77      |               |  |   | 31.50         |   |  |              | 4.27      |   |  |   | 2.63      |  
|Interest-rate spread during the period                        |  |                                                | 3.85      |   |               |   | 3.77      |               |  |   | 3.77          |   |  |              | 3.71      |   |  |   | 3.46      |  
|Net interest margin                                           |  |                                                | 4.60      |   |               |   | 4.43      |               |  |   | 4.42          |   |  |              | 4.31      |   |  |   | 3.99      |  
|Efficiency ratio1                                             |  |                                                | 81.08     |   |               |   | 82.57     |               |  |   | 81.83         |   |  |              | 80.16     |   |  |   | 86.49     |  
|                                                              |  |                                                |           |   |              
|Asset Quality Ratios:                                         |  |                                                |           |   |               |   |           |               |  |   |               |   |  |              |           |   |  |   |           |  
|Allowance for loan losses to period end loans                 |  |                                                | 0.93      | % |               |   | 0.92      | %             |  |   | 0.94          | % |  |              | 0.92      | % |  |   | 0.89      | %
|Allowance for loan losses to nonperforming loans              |  |                                                |          |   |               |   | 11121.59  |               |  |   | 1435.40       |   |  |              | 1350.37   |   |  |   | 748.85    |  
|Net charge-offs to average loans                              |  |                                                | 0.03      |   |               |   | 0.12      |               |  |   | 0.06          |   |  |              | 0.04      |   |  |   | 0.00      |  
|Nonperforming assets to period end total assets               |  |                                                |          |   |               |   | 0.01      |               |  |   | 0.06          |   |  |              | 0.06      |   |  |   | 0.09      |  
|                                                              |  |                                                |           |   |              
|Capital and Liquidity Ratios:                                 |  |                                                |           |   |               |   |           |               |  |   |               |   |  |              |           |   |  |   |           |  
|Average equity to average assets                              |  |                                                | 12.96     | % |               |   | 9.53      | %             |  |   | 9.97          | % |  |              | 10.74     | % |  |   | 10.66     | %
|Leverage (4.00% required minimum)                             |  |                                                | 17.01     |   |               |   | 9.46      |               |  |   | 10.28         |   |  |              | 10.46     |   |  |   | 10.77     |  
|Risk-based capital:                                           |  |                                                |           |   |               |   |           |               |  |   |               |   |  |              |           |   |  |   |           |  
|Tier 1                                                        |  |                                                | 16.87     | % |               |   | 9.35      | %             |  |   | 10.48         | % |  |              | 10.88     | % |  |   | 12.07     | %
|Total                                                         |  |                                                | 19.29     |   |               |   | 11.97     |               |  |   | 13.37         |   |  |              | 13.34     |   |  |   | 13.33     |  
|Average loans held for investment to average deposits         |  |                                                | 100.35    |   |               |   | 97.65     |               |  |   | 97.44         |   |  |              | 93.32     |   |  |   | 89.16     |  
|                                                              |  |                                                |           |   |              
|Trust Assets Under Advice:                                    |  |                                                |           |   |               |   |           |               |  |   |               |   |  |              |           |   |  |   |           |  
|Total assets under advice                                     |  | $                                              | 384,154   |   |               | $ | 409,092   |               |  | $ | 390,002       |   |  | $            | 340,753   |   |  | $ | 306,152   |  
|Trust fee income                                              |  |                                                | 666       |   |               |   | 612       |               |  |   | 457           |   |  |              | 401       |   |  |   | 365       |  
|Trust fees as a % of average assets under advice (annualized) |  |                                                | 0.69      | % |               |   | 0.60      | %             |  |   | 0.47          | % |  |              | 0.47      | % |  |   | 0.48      | %

---

|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).
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

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

OVERVIEW

Bancshares of Florida, Inc, incorporated in Florida in September 1998, is a $756.3 million financial
services company. Our subsidiary Banks are separately chartered independent community banks with local boards that provide full-service commercial banking in a private banking environment. Our Trust Company offers investment management, trust
administration, estate planning, and financial planning services largely to the Banks 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, which is primarily 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, including possible acquisitions of other financial institutions, and provision of support and additional banking-related services to its subsidiary banks.

Our corporate vision is to achieve $1 billion in assets within the next two years and be recognized as a premier financial services company in our
markets, while maintaining a well-controlled environment. Our primary strategy to achieve this vision is to focus on core deposit growth with state-of-the-art products and services and to focus lending on commercial real estate properties in the $1
million to $10 million size range.

The primary market areas of the Company are among the fastest growing markets in Florida. Those markets
include Collier and Lee Counties on the southwest coast of Florida (served by Bank of FloridaSouthwest) and Broward, Miami-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. The notes to the consolidated financial statements include a summary of the significant accounting policies and methods used in the preparation of our consolidated financial statements. Management believes that, of our significant
accounting policies, the following involve a higher degree of judgment and complexity. Our management has discussed these critical accounting assumptions and estimates with the Board of Directors Audit Committee.

Allowance for Loan Losses:

The allowance for loan losses is established as losses are estimated to have occurred through a provision for loan losses charged to operations. Loan
losses are charged against the allowance when management believes the collectibility of a loan balance is unlikely. Subsequent recoveries, if any, are credited to the allowance.

The allowance for loan losses is comprised of: (1) a component for individual loan impairment measured according to SFAS No. 114,
Accounting by Creditors for Impairment of a Loan , and (2) a measure of collective loan impairment according to SFAS No. 5, Accounting for Contingencies. The allowance for loan losses is established
and maintained at levels deemed adequate to cover losses inherent in the portfolio as of the balance sheet date. This estimate is based upon managements evaluation of the risks in the loan portfolio and changes in the nature and volume of loan
activity. Estimates for loan losses are derived by analyzing historical loss experience, current trends in delinquencies and charge-offs, historical peer bank experience, changes in the size and composition of the loan portfolio, adverse situations
that may affect the borrowers ability to repay, estimated value of any underlying collateral and prevailing economic conditions. This evaluation is inherently subjective, as it requires estimates that are susceptible to significant
revision as more information becomes available.



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##### Table of Contents

A loan is considered impaired when, based on current information and events, it is probable that the
Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral
value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Larger impaired credits that are
measured according to SFAS No. 114 have been defined to include loans which are classified as doubtful, substandard or special mention risk grades where the borrower relationship is greater than $250,000. For such loans that are considered
impaired, an allowance is established when the discounted cash flows (or collateral value or observable market price) of the impaired loan is lower than the carrying value of that loan.

Loans made outside the scope of SFAS No. 114 are measured according to SFAS No. 5 and include commercial and commercial real estate loans that
are performing or have not been specifically identified under SFAS No. 114, and large groups of smaller balance homogeneous loans evaluated based on regulatory guidelines and historical peer bank loss experience which are adjusted for
qualitative factors.

Income Taxes:

Provisions for income taxes are based on taxes payable or refundable for the current year and deferred taxes on temporary differences between the tax basis of assets and liabilities and their reported amounts in the
consolidated financial statements, as well as net operating loss carryforwards and tax credit carryforwards. Deferred tax assets and liabilities are included in the consolidated financial statements at currently enacted income tax rates applicable
to the period in which the deferred tax assets and liabilities are expected to be realized or settled. In the event of changes in the tax laws, deferred tax assets and liabilities are adjusted in the period of the enactment of those changes, with
the cumulative effects included in the current years income tax provision. Net deferred tax assets, whose realization is dependent on taxable earnings of future years, are recognized when a more-likely-than-not criterion is met. The Company
and its subsidiaries file consolidated tax returns.

EXECUTIVE SUMMARY

The following discussion presents managements analysis of the financial condition as
of June 30, 2006 and results of operations of the Company for the three and six-month periods ended June 30, 2006 and 2005. This discussion should be read in conjunction with the condensed consolidated financial statements of the
Company and the notes related thereto which appear elsewhere in this document

Total Assets grew to $756.3 million at June 30, 2006,
up $186.5 million or 33% from December 31, 2005. During the second quarter 2006, the Company completed its fifth and largest common stock raise, issuing 2.875 million shares at $21.50 per share, with net proceeds totaling $57.7 million.
Book value per share at June 30, 2006 rose to $13.35, up 34% from the end of last year. Loans climbed $56.5 million or 10% during the last 90 days, just behind our previous quarters record growth of $63.5 million, our net interest margin
rose 17 basis points over first quarter 2006 to an all-time high of 4.60%, and asset quality remained excellent with no nonperforming loans and only 0.10% in delinquent loans/loans outstanding. Compared to second quarter 2005, top-line revenue,
which the Company defines as the sum of net interest income plus noninterest income (excluding net securities gains and losses), climbed 55%, improving our efficiency ratio by 6 percentage points to 81%.

The Company realized second quarter net income of $553,000, or $0.07 per diluted share. On a pretax basis, second quarter 2006 net income was $923,000, a
$596,000 improvement from the same period last year. This represented an increase over the first quarter 2006 of $153,000 or 38%. For the first half of this year, net income was $953,000 or $0.14 per diluted share, a $1.6 million pretax improvement
from the comparable 2005 period.

The Company also continues to expand our strong footprint via branch activities. During the second
quarter, we opened a branch in the growing area of Bonita Springs in south Lee County, hired staff for the opening of a branch in Aventura in north Miami-Dade in mid-August and opened a stand-alone residential mortgage origination office with an
established team of professionals. In addition to these initiatives, we have continued to invest in our core business in the first six months of this year with key manager and support hires in our deposit/cash management activities, lending and
credit administration, and human resources.



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Key financial results for the Companys affiliates are:



| |  |  | Bank of Florida-Southwest, based in Naples, produced pretax earnings for the quarter of $1.067 million, up 35% over second quarter 2005, with loans climbing 18% since the beginning
of the year to $312.4 million, including $24.0 million since March 31, 2006.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Pretax earnings at Fort Lauderdale-based Bank of Florida, which currently includes our Palm Beach County location, climbed 40% over second quarter last year to $609,000 pretax.
Total loans rose $21.4 million during the quarter to $217.7 million, which represented a 30% growth since the beginning of the year.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Bank of Florida-Tampa Bay, which opened in November 2004, grew its loans to $77.5 million, up 41% during the six months and $11.1 million in the last 90 days. Notably, the bank
reduced its second quarter pretax loss to $142,000 from $194,000 in second quarter 2005.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Lastly, Bank of Florida Trust Company increased its pretax earnings by 403% compared to second quarter 2005 to $146,000, reflective of a 92% increase in assets under advice to
$384.2 million. Pretax earnings for the current quarter were $43,000 or 42% greater than the first quarter of this year.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

ANALYSIS OF FINANCIAL CONDITION

Investment securities and overnight investments

Total investment securities and overnight investments were $116.4 million at June 30, 2006, an increase of $69.1 million or 146% over the levels at
December 31,2005. This increase was primarily the result of the temporary investment of funds into overnight instruments from the Companys common stock offering in May 2006, which netted proceeds of $57.7 million. These funds will be
redeployed into higher rate interest earning assets in support of loan demand.

Securities available for sale totaled $42.3 million, an
increase of $23.7 million compared to those held at December 31, 2005. The purchase of additional securities during the quarter was part of an asset and liability strategy to position the balance sheet for volatility in interest rates. The
Company holds one bond for $25,000 that was classified as held to maturity at June 30, 2006 and December 31, 2005. The Company does not currently engage in trading activities and, therefore, did not hold any securities classified as
trading at June 30, 2006 or December 31, 2005.

Federal Funds sold totaled $74.1 million at June 30, 2006, an increase of
$45.4 million from December 31, 2005. As previously mentioned, the increase in federal funds sold is primarily the result of funds raised through the issuance of 2,875,000 shares of the Companys common stock during the second quarter of
2006. This category of earning assets is normally used as a temporary investment vehicle to support the Companys daily funding requirements. The average yield on federal funds for the first six months of 2006 was 4.76%, up 207 basis points
compared to the first six months of 2005 and averaged 4.98% during most recent quarter.

Loans

Total gross loans, including loans held for sale, totaled $607.6 million at June 30, up $56.5 million or 10% during the last 90 days for a total of
$120.0 million or 25% since the beginning of the year. This increase compares to growth of $33.0 million in the comparable quarter last year, with pipelines at all the bank affiliates remaining strong.

Construction loans, largely secured by commercial real estate, totaled $220.3 million (37% of total loans) at June 30, 2006, up $78.8 million since
the end of last year. Commercial real estate loans, including multi-family dwellings but excluding those in construction, increased by $15.7 million and total 36% of total loans outstanding, while commercial and industrial loans, a product line
which the Company is giving renewed focus, climbed $19.9 million to approximately 9% of total loans outstanding. One-to-four family residential loans, including loans held for sale, were $72.0 million (12% of total loans), up $5.9 million from
year-end and while consumer lines of credit and installment and other loans remained level at $24.5 million (4% of total loans) and $13.0 million (2% of total loans), respectively.



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##### Table of Contents

Asset quality

The Companys asset quality continues to be strong, with nonperforming loans (non-accruals and 90+ days past due) decreasing from $321,000 at year-end 2005 to zero at June 30, 2006. Consequently,
non-performers as a percent of loans outstanding fell from 0.07% at December 31, 2005, to zero. Thirty-to-ninety day delinquent loans were $623,000 or 0.10% of loans outstanding at June 30, 2006. There were $44,000 in net charge-offs
during the second quarter for a total of $198,000 in net charge-offs for the first half of 2006, resulting in net charge-offs to average loans of 0.07%. These levels compare to zero in net charge-offs for the first half of 2005.

Deposits

Total deposits rose $58.4 million during the second quarter for a total increase since the beginning of the year of $98.5 million or 20%. Average deposits for the first six months of 2006 totaled $549.6 million, up $146.1 million or 36%
compared to the same period last year. Average noninterest-bearing checking (DDA) accounts comprised 16% of total average deposits for the first six months of 2005, relatively level to that for the same period last year. During the past 90 days, DDA
balances have increased slightly to $93.2 million, up 7% from the end of the first quarter 2006. These increases are reflective of the Companys vigorous strategy to expand its source of low-cost funds.

The annualized average rate paid on total interest bearing deposits during the first six months of 2006 was 3.34%, an increase of 103 basis points
compared to the same period last year. For the third quarter of 2006, the annualized average rate paid on total interest bearing deposits was 3.45%, an increase of 110 basis points compared to the second quarter of 2005. These increases resulted
primarily from the higher interest rate environment under which we currently operate, and in competition in the pricing of deposit products.

Borrowings

While client deposits remain our primary source of funding for asset growth,
management uses other borrowings as a funding source for loan growth, regulatory capital needs, and to as a tool to manage the Companys interest rate risk. At June 30, 2006, borrowings totaled $42.0 million, an increase of $28.0 million
compared to December 31, 2005. Total borrowings at June 30, 2006, consisted of $11.0 million in subordinated debt and $31.0 million in Federal Home Loan Bank (FHLB) Advances compared to $11.0 million and $3.0 million,
respectively, at the end of 2005. During the second quarter of 2006, the Company took down $25.0 million in floating rate FHLB advances with an interest rate floor contract and purchased mortgage-backed securities, as a partial hedge against the
potential future impact of falling interest rates. All of the Companys borrowings are long-term with maturities ranging from June 2008 through December 2015.

Stockholders equity

Total stockholders equity was $118.4 million at June 30, 2006, a $59.4 million
increase since December 31, 2005. This increase was primarily the result of the Companys 2,875,000 share common stock offering in May 2006, which netted proceeds of $57.7 million. The Company intend to use the proceeds from the secondary
offering to capitalize our Palm Beach County banking location, making it the fourth bank in our multi-bank structure, expected in the winter; finance the cash portion of our purchase of $93.0 million-asset Bristol Bank in the dynamic city of Coral
Gables, Florida; and support our continued rapid earning asset growth throughout South Florida and Tampa Bay, which has exceeded our initial growth projections. Integration plans are well underway to close and merge Bristol into our Fort Lauderdale
bank by the end of August and implement our commercial banking and wealth management business model in that new market, which our management team knows well.

As a result of the common stock offering, coupled with record earnings growth, the Companys Tier 1 leverage ratio increased to 17.01% at June 30, 2006, up from 10.28% at December 31, 2005.



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##### Table of Contents

ANALYSIS OF RESULTS OF OPERATIONS

Second Quarter 2006 Compared to Second Quarter 2005

Consolidated net income for the second quarter of 2006 totaled $553,000. Income before income tax was $923,000, an increase of $596,000 or 182% compared
to second quarter 2005. Top-line revenue climbed $3.0 million or 55%, primarily driven by $2.8 million greater net interest income, resulting from $181 million or 40% growth in earning assets and a 61 basis point increase in the net interest margin
to 4.60%. Approximately $1.4 million of the top-line revenue increase reflects expansion in the net interest margin.

The strong $3.0
million increase in top-line revenue against a $2.1 million or 46% increase in noninterest expense produced continued favorable operating leverage. The bulk of the expense increase relates to personnel costs. Since year-end 2005, there have been 29
additions to staff across the Companys areas of strategic focus, including residential mortgage origination and sales; deposit growth/cash management services; lending and credit administration; and selected branch expansion. The provision for
loan losses rose $257,000, consistent with 54% growth in loans and continued strong asset quality.

The following tables summarize the
major components of the Statements Operations and key ratios for the three months ending June 30, 2006 and 2005, respectively.



|                                              |  |                                       |           |   |                     |   |           |   |  |   |           |   |  |       |   
|--------------------------------------------- |  | ------------------------------------- | --------- | - | ------------------- | - | --------- | - |  | - | --------- | - |  | ----- | --
|                                              |  | FOR THE THREE MONTHSENDED             |           |   | INCREASE/(DECREASE) |  
|                                              |  | (IN THOUSANDS, EXCEPT PER SHARE DATA) |          
|                                              |  | JUNE 30,2006                          |           |   | JUNE 30,2005        |   |           | $ |  |   | %         |  
|Total interest income                         |  | $                                     | 11,858    |   |                     | $ | 6,671     |   |  | $ | 5,187     |   |  | 77.8  | % 
|Total interest expense                        |  |                                       | 4,521     |   |                     |   | 2,117     |   |  |   | 2,404     |   |  | 113.6 | % 
|                                              |  |                                       |           |   |                     |   |           |   |  |   |           |   |  |       |   
|Net interest income before provision          |  |                                       | 7,337     |   |                     |   | 4,554     |   |  |   | 2,783     |   |  | 61.1  | % 
|Provision for loan losses                     |  |                                       | 656       |   |                     |   | 399       |   |  |   | 257       |   |  | 64.4  | % 
|                                              |  |                                       |           |   |                     |   |           |   |  |   |           |   |  |       |   
|Net interest income after provision           |  |                                       | 6,681     |   |                     |   | 4,155     |   |  |   | 2,526     |   |  | 60.8  | % 
|Noninterest income                            |  |                                       | 1,006     |   |                     |   | 819       |   |  |   | 187       |   |  | 22.8  | % 
|Noninterest expense                           |  |                                       | 6,764     |   |                     |   | 4,647     |   |  |   | 2,117     |   |  | 45.6  | % 
|                                              |  |                                       |           |   |                     |   |           |   |  |   |           |   |  |       |   
|Net income before income tax expense          |  |                                       | 923       |   |                     |   | 327       |   |  |   | 596       |   |  | 182.0 | % 
|Income tax expense                            |  |                                       | 370       |   |                     |   |          |   |  |   | 370       |   |  | 100.0 | % 
|                                              |  |                                       |           |   |                     |   |           |   |  |   |           |   |  |       |   
|Net income                                    |  |                                       | 553       |   |                     |   | 327       |   |  |   | 226       |   |  | 68.8  | % 
|                                              |  |                                       |           |   |                     |   |           |   |  |   |           |   |  |       |   
|Basic Income per share                        |  | $                                     | 0.07      |   |                     | $ | 0.02      |   |  | $ | 0.05      |   |  | 250.0 | % 
|Diluted Income per share                      |  |                                       | 0.07      |   |                     |   | 0.02      |   |  |   | 0.05      |   |  | 250.0 | % 
|Weighted average shares outstanding - basic   |  |                                       | 7,390,499 |   |                     |   | 5,686,208 |   |  |   | 1,704,291 |   |  | 30.0  | % 
|Weighted average shares outstanding - diluted |  |                                       | 7,648,394 |   |                     |   | 5,836,987 |   |  |   | 1,811,407 |   |  | 31.0  | % 
|                                              |  |                                       |           |  
|Return on average assets                      |  |                                       | 0.32      | % |                     |   | 0.27      | % |  |   | 0.05      |   |  | 18.5  | % 
|Return on average common stockholders equity |  |                                       | 2.48      | % |                     |   | 2.63      | % |  |   | (0.15     | ) |  | (5.7  | )%
|                                              |  |                                       |           |  
|Top-line revenue                              |  | $                                     | 8,343     |   |                     | $ | 5,373     |   |  | $ | 2,970     |   |  | 55.3  | % 
|Net interest margin                           |  |                                       | 4.60      | % |                     |   | 3.99      | % |  |   | 0.61      |   |  | 15.3  | % 
|Efficiency ratio                              |  |                                       | 81.08     | % |                     |   | 86.49     | % |  |   | (5.41     | ) |  | (6.3  | )%

Net interest income

Net interest income in the second quarter totaled $7.3 million, up $2.8 million or 61% greater than the second quarter of 2005. Approximately $744,000 of the increase in net interest income was due to an improved net
interest margin, which rose to 4.60% in the second quarter, up 61 basis points in the past four quarters. The higher margin reflects the Company having positioned its balance sheet to benefit from the current rising rate environment, with 48% of its
loans adjusting to a prime rate change either immediately or within 90 days. In addition, the Company has managed its deposit mix and competitively repriced its products so that the overall increase in the rate on interest-bearing liabilities has
lagged the increase in the yield on earning assets. Lastly, the increase in the second quarter reflects a lower proportion of interest-bearing liabilities because of the recent equity offering. The balance of the increase in second quarter net
interest income was due to higher earning asset volumes, up $181 million (40%) compared to the same period last year.



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##### 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. Discussion of these tables is included above in the net interest income sections of the Results of Operations (dollars in thousands).



|                                                                        |  |                                     |         |                      |      |        |                   |  |      |                |  |                       |         |  |                    |       |   |  |      |  
|----------------------------------------------------------------------- |  | ----------------------------------- | ------- | -------------------- | ---- | ------ | ----------------- |  | ---- | -------------- |  | --------------------- | ------- |  | ------------------ | ----- | - |  | ---- | -
|                                                                        |  | For the Three-Months Ended June 30, |        
|                                                                        |  | 2006                                |         |                      | 2005 |       
|                                                                        |  | AverageBalance                      |         | InterestandDividends |      |        | AverageYield/Rate |  |      | AverageBalance |  | Interest andDividends |         |  | Average Yield/Rate |      
|Assets:                                                                 |  |                                     |         |                      |      |        |                   |  |      |                |  |                       |         |  |                    |       |   |  |      |  
|Earning assets:                                                         |  |                                     |         |                      |      |        |                   |  |      |                |  |                       |         |  |                    |       |   |  |      |  
|Loans                                                                   |  | $                                   | 572,703 |                      | $    | 11,048 |                   |  | 7.74 | %              |  | $                     | 381,085 |  | $                  | 6,059 |   |  | 6.38 | %
|Securities1                                                             |  |                                     | 24,342  |                      |      | 287    |                   |  | 4.73 | %              |  |                       | 23,956  |  |                    | 222   |   |  | 3.72 | %
|Federal funds sold                                                      |  |                                     | 40,295  |                      |      | 500    |                   |  | 4.98 | %              |  |                       | 52,608  |  |                    | 384   |   |  | 2.93 | %
|Interest-bearing deposits2                                              |  |                                     | 2,036   |                      |      | 23     |                   |  | 4.53 | %              |  |                       | 429     |  |                    | 6     |   |  | 0.00 | %
|                                                                        |  |                                     |         |                      |      |        |                   |  |      |                |  |                       |         |  |                    |       |   |  |      |  
|Total interest-earning assets                                           |  |                                     | 639,376 |                      |      | 11,858 |                   |  | 7.44 | %              |  |                       | 458,078 |  |                    | 6,671 |   |  | 5.84 | %
|                                                                        |  |                                     |         |                      |      |        |                   |  |      |                |  |                       |         |  |                    |       |   |  |      |  
|Noninterest-earning assets                                              |  |                                     | 47,039  |                      |      |        |                   |  |      |                |  |                       | 33,173  |  |                    |       |   |  |      |  
|                                                                        |  |                                     |         |                      |      |        |                   |  |      |                |  |                       |         |  |                    |       |   |  |      |  
|Total Assets                                                            |  | $                                   | 686,415 |                      |      |        |                   |  |      |                |  | $                     | 491,251 |  |                    |       |   |  |      |  
|                                                                        |  |                                     |         |                      |      |        |                   |  |      |                |  |                       |         |  |                    |       |   |  |      |  
|Liabilities:                                                            |  |                                     |         |                      |      |        |                   |  |      |                |  |                       |         |  |                    |       |   |  |      |  
|Interest-bearing liabilities:                                           |  |                                     |         |                      |      |        |                   |  |      |                |  |                       |         |  |                    |       |   |  |      |  
|                                                                        |  |                                     |         |                      |      |       
|Interest bearing checking                                               |  | $                                   | 52,159  |                      |      | 98     |                   |  | 0.75 | %              |  | $                     | 52,310  |  |                    | 46    |   |  | 0.35 | %
|Money market accounts                                                   |  |                                     | 207,901 |                      |      | 1,677  |                   |  | 3.24 | %              |  |                       | 134,278 |  |                    | 736   |   |  | 2.20 | %
|Savings                                                                 |  |                                     | 3,646   |                      |      | 10     |                   |  | 1.10 | %              |  |                       | 5,572   |  |                    | 20    |   |  | 1.44 | %
|Time deposit                                                            |  |                                     | 217,339 |                      |      | 2,358  |                   |  | 4.35 | %              |  |                       | 162,420 |  |                    | 1,278 |   |  | 3.16 | %
|Subordinated debt                                                       |  |                                     | 11,000  |                      |      | 200    |                   |  | 7.29 | %              |  |                       | 2,000   |  |                    | 34    |   |  | 6.82 | %
|FHLB Advances                                                           |  |                                     | 13,220  |                      |      | 178    |                   |  | 5.40 | %              |  |                       | 341     |  |                    | 3     |   |  | 3.53 | %
|                                                                        |  |                                     |         |                      |      |        |                   |  |      |                |  |                       |         |  |                    |       |   |  |      |  
|Total interest-bearing liabilities                                      |  | $                                   | 505,265 |                      |      | 4,521  |                   |  | 3.59 | %              |  | $                     | 356,921 |  |                    | 2,117 |   |  | 2.38 | %
|                                                                        |  |                                     |         |                      |      |        |                   |  |      |                |  |                       |         |  |                    |       |   |  |      |  
|Noninterest-bearing deposits                                            |  |                                     | 89,078  |                      |      |        |                   |  |      |                |  |                       | 72,832  |  |                    |       |   |  |      |  
|Other liabilities                                                       |  |                                     | 3,138   |                      |      |        |                   |  |      |                |  |                       | 9,147   |  |                    |       |   |  |      |  
|Stockholders equity                                                    |  |                                     | 88,934  |                      |      |        |                   |  |      |                |  |                       | 52,351  |  |                    |       |   |  |      |  
|                                                                        |  |                                     |         |                      |      |        |                   |  |      |                |  |                       |         |  |                    |       |   |  |      |  
|Total Liabilities & Stockholders Equity                                |  | $                                   | 686,415 |                      |      |        |                   |  |      |                |  | $                     | 491,251 |  |                    |       |   |  |      |  
|                                                                        |  |                                     |         |                      |      |        |                   |  |      |                |  |                       |         |  |                    |       |   |  |      |  
|Net interest income                                                     |  |                                     |         |                      | $    | 7,337  |                   |  |      |                |  |                       |         |  | $                  | 4,554 |   |  |      |  
|                                                                        |  |                                     |         |                      |      |        |                   |  |      |                |  |                       |         |  |                    |       |   |  |      |  
|Interest-rate spread                                                    |  |                                     |         |                      |      |        |                   |  | 3.85 | %              |  |                       |         |  |                    |       |   |  | 3.46 | %
|Net interest margin                                                     |  |                                     |         |                      |      |        |                   |  | 4.60 | %              |  |                       |         |  |                    |       |   |  | 3.99 | %
|Ratio of average interest-bearing liabilities to average earning assets |  |                                     |         |                      |      | 79.0   | %                 |  |      |                |  |                       |         |  |                    | 77.9  | % |  |      |  

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



|                                         |  |        |       |   |      |   |       |        |  |   |       |  
|---------------------------------------- |  | ------ | ----- | - | ---- | - | ----- | ------ |  | - | ----- | -
|                                         |  | VOLUME |       |   | RATE |   |       | CHANGE | 
|Increase (decrease) in interest income:  |  |        |       |   |      |   |       |        |  |   |       |  
|Loans2                                   |  | $      | 3,696 |   |      | $ | 1,293 |        |  | $ | 4,989 |  
|Securities1                              |  |        | 5     |   |      |   | 60    |        |  |   | 65    |  
|Federal funds sold                       |  |        | (153  | ) |      |   | 269   |        |  |   | 116   |  
|Interest-bearing deposits                |  |        | 12    |   |      |   | 5     |        |  |   | 17    |  
|                                         |  |        |       |   |      |   |       |        |  |   |       |  
|Total interest income                    |  |        | 3,560 |   |      |   | 1,627 |        |  |   | 5,187 |  
|                                         |  |        |       |   |      |   |       |        |  |   |       |  
|Increase (decrease) in interest expense: |  |        |       |   |      |   |       |        |  |   |       |  
|NOW and Money market deposits            |  |        | 594   |   |      |   | 399   |        |  |   | 993   |  
|Savings deposits                         |  |        | (6    | ) |      |   | (4    | )      |  |   | (10   | )
|Time deposits                            |  |        | 596   |   |      |   | 484   |        |  |   | 1,080 |  
|Subordinated debt                        |  |        | 164   |   |      |   | 2     |        |  |   | 166   |  
|FHLB Advances                            |  |        | 173   |   |      |   | 2     |        |  |   | 175   |  
|                                         |  |        |       |   |      |   |       |        |  |   |       |  
|Total interest expense                   |  |        | 1,521 |   |      |   | 883   |        |  |   | 2,404 |  
|                                         |  |        |       |   |      |   |       |        |  |   |       |  
|Total change in net interest income      |  | $      | 2,039 |   |      | $ | 744   |        |  | $ | 2,783 |  
|                                         |  |        |       |   |      |   |       |        |  |   |       |  

---

|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.
|- | -----------------------------------------------------------------------------------------------



23



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##### Table of Contents

Noninterest income

Noninterest income was $1.0 million in the second quarter, a $187,000 or 23% increase over the second quarter 2005. This increase was primarily the result of a steady improvement in trust revenues and increased fees
from selling mortgages into the secondary market. Second quarter 2006 trust fees climbed $301,000 or 82% over second quarter 2005 to $666,000, while the gain on sale of mortgage loans into the secondary market rose to $100,000 in the second quarter,
up $17,000 or 20% from the comparable quarter of 2005. The Company has implemented a business strategy to actively address the needs of its high net worth clientele by placing experienced originators in each of its markets. These improvements more
than offset the $131,000 reduction in service charges and fees on deposit accounts, primarily in NSF fees.

Noninterest expense

Noninterest expense totaled $6.8 million for the second quarter of 2006. Although this increase reflected a 46% or $2.1 million increase compared to
second quarter 2005, the Companys efficiency ratio has improved a substantial 541 basis points to 81%, reflecting significant positive operating leverage.

Slightly more than half or $1.3 million of the increase in second quarter 2006 expense over second quarter 2005 occurred in personnel expense, caused by additions to staff and greater incentive compensation expense.
Approximately $340,000 of the increase is explained by higher occupancy and equipment-related expense. Building lease and utilities costs rose due to additional space required for business expansion, and equipment rental, maintenance, and
depreciation expense increased accordingly. Other increases, which are attributable to the fast growth of the Company, occurred in the areas of data processing expense ($113,000), stationary, postage and office supplies ($47,000), seminars, travel
and entertainment ($111,000), and advertising, marketing and public relations ($68,000).

Provision and Allowance for Loan Losses

The second quarter provision for loan losses was $656,000, up $257,000 (64%) from second quarter 2005. The increase reflects loan growth as well
as continuing assessment of losses inherent in the portfolio based on a variety of client-specific factors, including the Companys historic, as well as peer bank experience, and industry and economic trends. At June 30, 2006, the loan
loss allowance was 0.93% of total loans. While there were no nonperforming loans as of June 30, there were $44,000 in net charge-offs during the second quarter, resulting in a ratio of net charge-offs to average loans of 0.03%. All the above
asset quality measures are consistent with the Companys historic experience and compare very favorably to national peer bank levels. Following is the allocation of the allowance for loan losses by type of loan (dollars in thousands):



|                               |  |               |       |                        |                   |   |        |               |                        |  |       |        |  |                        |       |  |       |  
|------------------------------ |  | ------------- | ----- | ---------------------- | ----------------- | - | ------ | ------------- | ---------------------- |  | ----- | ------ |  | ---------------------- | ----- |  | ----- | -
|                               |  | June 30, 2006 |       |                        | December 31, 2005 |   |        | June 30, 2005 |                       
|                               |  | AMOUNT        |       | % LOANSIN EACHCATEGORY |                   |   | AMOUNT |               | % LOANSIN EACHCATEGORY |  |       | AMOUNT |  | % LOANSIN EACHCATEGORY |      
|Commercial real estate         |  | $             | 1,707 |                        | 33.7              | % |        | $             | 1,516                  |  | 36.9  | %      |  | $                      | 1,147 |  | 35.7  | %
|Construction                   |  |               | 2,486 |                        | 36.3              | % |        |               | 1,675                  |  | 29.0  | %      |  |                        | 934   |  | 20.5  | %
|Multifamily                    |  |               | 175   |                        | 2.7               | % |        |               | 248                    |  | 5.2   | %      |  |                        | 202   |  | 5.4   | %
|One-to-four family residential |  |               | 328   |                        | 11.9              | % |        |               | 286                    |  | 13.6  | %      |  |                        | 285   |  | 17.8  | %
|Commercial                     |  |               | 609   |                        | 9.3               | % |        |               | 480                    |  | 7.6   | %      |  |                        | 555   |  | 11.0  | %
|Lines of credit                |  |               | 176   |                        | 4.0               | % |        |               | 241                    |  | 5.4   | %      |  |                        | 221   |  | 6.4   | %
|Consumer                       |  |               | 185   |                        | 2.1               | % |        |               | 157                    |  | 2.3   | %      |  |                        | 169   |  | 3.2   | %
|                               |  |               |       |                        |                   |   |        |               |                        |  |       |        |  |                        |       |  |       |  
|Total                          |  | $             | 5,666 |                        | 100.0             | % |        | $             | 4,603                  |  | 100.0 | %      |  | $                      | 3,513 |  | 100.0 | %
|                               |  |               |       |                        |                   |   |        |               |                        |  |       |        |  |                        |       |  |       |  



24



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##### Table of Contents

Six-months Ended June 30, 2006 Compared to Six-months Ended June 30, 2005

Consolidated net income for the first half of 2006 totaled $953,000. Income before income tax was $1.6 million, a 100% improvement compared to the first
six months of 2005. Top-line revenue climbed $6.0 million or 62%, primarily driven by $5.4 million greater net interest income, a result of $173 million or 40% growth in earning assets and a 71 basis point increase in the net interest margin to
4.52%. Approximately $1.4 million of the top-line revenue increase reflects expansion in the net interest margin.

The strong $6.0 million
increase in top-line revenue against a $3.8 million or 42% increase in noninterest expense produced continued favorable operating leverage. The bulk of the expense increase relates to personnel costs. The provision for loan losses rose $567,000,
consistent with 54% growth in loans and continued strong asset quality.

The following tables summarize the major components of the
Statements Operations and key ratios for the six months ending June 30, 2006 and 2005, respectively.



|                                              |  |                                       |           |   |                     |   |           |    |  |   |           |   |  |        |   
|--------------------------------------------- |  | ------------------------------------- | --------- | - | ------------------- | - | --------- | -- |  | - | --------- | - |  | ------ | --
|                                              |  | FOR THE SIX MONTHSENDED               |           |   | INCREASE/(DECREASE) |  
|                                              |  | (IN THOUSANDS, EXCEPT PER SHARE DATA) |          
|                                              |  | JUNE 30,2006                          |           |   | JUNE 30,2005        |   |           | $  |  |   | %         |  
|Total interest income                         |  | $                                     | 21,804    |   |                     | $ | 12,111    |    |  | $ | 9,693     |   |  | 80.0   | % 
|Total interest expense                        |  |                                       | 8,249     |   |                     |   | 3,937     |    |  |   | 4,312     |   |  | 109.5  | % 
|                                              |  |                                       |           |   |                     |   |           |    |  |   |           |   |  |        |   
|Net interest income before provision          |  |                                       | 13,555    |   |                     |   | 8,174     |    |  |   | 5,381     |   |  | 65.8   | % 
|Provision for loan losses                     |  |                                       | 1,262     |   |                     |   | 695       |    |  |   | 567       |   |  | 81.6   | % 
|                                              |  |                                       |           |   |                     |   |           |    |  |   |           |   |  |        |   
|Net interest income after provision           |  |                                       | 12,293    |   |                     |   | 7,479     |    |  |   | 4,814     |   |  | 64.4   | % 
|Noninterest income                            |  |                                       | 2,105     |   |                     |   | 1,516     |    |  |   | 589       |   |  | 38.9   | % 
|Noninterest expense                           |  |                                       | 12,805    |   |                     |   | 9,042     |    |  |   | 3,763     |   |  | 41.6   | % 
|                                              |  |                                       |           |   |                     |   |           |    |  |   |           |   |  |        |   
|Net income (loss) before income tax expense   |  |                                       | 1,593     |   |                     |   | (47       | )  |  |   | 1,640     |   |  | 3489.4 | % 
|Income tax expense                            |  |                                       | 640       |   |                     |   |          |    |  |   | 640       |   |  | 100.0  | % 
|                                              |  |                                       |           |   |                     |   |           |    |  |   |           |   |  |        |   
|Net income (loss)                             |  |                                       | 953       |   |                     |   | (47       | )  |  |   | 1,000     |   |  | 2127.7 | % 
|                                              |  |                                       |           |   |                     |   |           |    |  |   |           |   |  |        |   
|Basic Income (loss) per share                 |  | $                                     | 0.14      |   |                     | $ | (0.06     | )  |  | $ | 0.20      |   |  | 333.3  | % 
|Diluted Income (loss) per share               |  |                                       | 0.14      |   |                     |   | (0.06     | )  |  |   | 0.20      |   |  | 333.3  | % 
|Weighted average shares outstanding - basic   |  |                                       | 6,671,212 |   |                     |   | 5,263,602 |    |  |   | 1,407,610 |   |  | 26.7   | % 
|Weighted average shares outstanding - diluted |  |                                       | 6,928,726 |   |                     |   | 5,263,602 |    |  |   | 1,665,124 |   |  | 31.6   | % 
|                                              |  |                                       |           |  
|Return on average assets                      |  |                                       | 0.29      | % |                     |   | (0.02     | )% |  |   | 0.31      |   |  | 1550.0 | % 
|Return on average common stockholders equity |  |                                       | 2.55      | % |                     |   | (0.18     | )% |  |   | 2.73      |   |  | 1516.7 | % 
|                                              |  |                                       |           |  
|Top-line revenue                              |  | $                                     | 15,660    |   |                     | $ | 9,690     |    |  | $ | 5,970     |   |  | 61.6   | % 
|Net interest margin                           |  |                                       | 4.52      | % |                     |   | 3.81      | %  |  |   | 0.71      |   |  | 18.6   | % 
|Efficiency ratio                              |  |                                       | 81.77     | % |                     |   | 93.31     | %  |  |   | (11.54    | ) |  | (12.4  | )%

Net interest income

Net interest income for the first half of 2006 totaled $13.6 million, up $5.4 million or 66% greater than the first six months of 2005. Approximately $1.4 million of the increase in net interest income was due to an
improved net interest margin, with $4.0 million a result of $31.4 million growth in net interest earning assets. The yield on interest earning assets for the first six months of 2006 was 7.27%, a 162 basis point increase over the same period last
year, while the cost of funds increased 112 basis points to 3.46%. This resulted in a 50 basis point increase in the interest-rate spread primarily due to a 200 basis point increase in the prime rate since June 2005.

In addition, total average interest earning assets increased $172.6 million to $604.7 million for the first half of 2006 and total average interest
bearing liabilities increased $141.2 million to $480.9 million. This positive growth in net earning assets of $31.4 million was reflective of the companies campaign to grow average noninterest bearing deposits which were $88.3 million for the first
six months of 2006, an increase of $22.3 million compared to the same period last year.



25



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##### 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. Discussion of these tables is included above in the net interest income sections of the Results of Operations (dollars in thousands).



|                                                                        |  |                                   |         |                      |      |        |                    |  |      |                |  |                      |         |  |                    |        |   |  |      |  
|----------------------------------------------------------------------- |  | --------------------------------- | ------- | -------------------- | ---- | ------ | ------------------ |  | ---- | -------------- |  | -------------------- | ------- |  | ------------------ | ------ | - |  | ---- | -
|                                                                        |  | For the Six-Months Ended June 30, |        
|                                                                        |  | 2006                              |         |                      | 2005 |       
|                                                                        |  | AverageBalance                    |         | InterestandDividends |      |        | Average Yield/Rate |  |      | AverageBalance |  | InterestandDividends |         |  | Average Yield/Rate |       
|Assets:                                                                 |  |                                   |         |                      |      |        |                    |  |      |                |  |                      |         |  |                    |        |   |  |      |  
|Earning assets:                                                         |  |                                   |         |                      |      |        |                    |  |      |                |  |                      |         |  |                    |        |   |  |      |  
|Loans                                                                   |  | $                                 | 545,430 |                      | $    | 20,430 |                    |  | 7.55 | %              |  | $                    | 361,738 |  | $                  | 11,105 |   |  | 6.19 | %
|Securities1                                                             |  |                                   | 21,929  |                      |      | 494    |                    |  | 4.54 | %              |  |                      | 17,013  |  |                    | 292    |   |  | 3.46 | %
|Federal funds sold                                                      |  |                                   | 35,942  |                      |      | 849    |                    |  | 4.76 | %              |  |                      | 52,974  |  |                    | 707    |   |  | 2.69 | %
|Interest-bearing deposits2                                              |  |                                   | 1,383   |                      |      | 31     |                    |  | 4.52 | %              |  |                      | 363     |  |                    | 7      |   |  | 3.89 | %
|                                                                        |  |                                   |         |                      |      |        |                    |  |      |                |  |                      |         |  |                    |        |   |  |      |  
|Total interest-earning assets                                           |  |                                   | 604,684 |                      |      | 21,804 |                    |  | 7.27 | %              |  |                      | 432,088 |  |                    | 12,111 |   |  | 5.65 | %
|                                                                        |  |                                   |         |                      |      |        |                    |  |      |                |  |                      |         |  |                    |        |   |  |      |  
|Noninterest-earning assets                                              |  |                                   | 41,493  |                      |      |        |                    |  |      |                |  |                      | 29,551  |  |                    |        |   |  |      |  
|                                                                        |  |                                   |         |                      |      |        |                    |  |      |                |  |                      |         |  |                    |        |   |  |      |  
|Total Assets                                                            |  | $                                 | 646,177 |                      |      |        |                    |  |      |                |  | $                    | 461,639 |  |                    |        |   |  |      |  
|                                                                        |  |                                   |         |                      |      |        |                    |  |      |                |  |                      |         |  |                    |        |   |  |      |  
|Liabilities:                                                            |  |                                   |         |                      |      |        |                    |  |      |                |  |                      |         |  |                    |        |   |  |      |  
|Interest-bearing liabilities:                                           |  |                                   |         |                      |      |        |                    |  |      |                |  |                      |         |  |                    |        |   |  |      |  
|                                                                        |  |                                   |         |                      |      |       
|Interest bearing checking                                               |  | $                                 | 52,115  |                      |      | 164    |                    |  | 0.63 | %              |  | $                    | 43,646  |  |                    | 71     |   |  | 0.33 | %
|Money market accounts                                                   |  |                                   | 189,417 |                      |      | 2,911  |                    |  | 3.10 | %              |  |                      | 121,723 |  |                    | 1,234  |   |  | 2.04 | %
|Savings                                                                 |  |                                   | 4,075   |                      |      | 23     |                    |  | 1.14 | %              |  |                      | 5,494   |  |                    | 40     |   |  | 1.47 | %
|Time deposit                                                            |  |                                   | 215,688 |                      |      | 4,545  |                    |  | 4.25 | %              |  |                      | 166,571 |  |                    | 2,522  |   |  | 3.05 | %
|Subordinated debt                                                       |  |                                   | 11,000  |                      |      | 386    |                    |  | 7.08 | %              |  |                      | 2,000   |  |                    | 66     |   |  | 6.65 | %
|FHLB Advances                                                           |  |                                   | 8,564   |                      |      | 220    |                    |  | 5.18 | %              |  |                      | 221     |  |                    | 4      |   |  | 3.65 | %
|                                                                        |  |                                   |         |                      |      |        |                    |  |      |                |  |                      |         |  |                    |        |   |  |      |  
|Total interest-bearing liabilities                                      |  | $                                 | 480,859 |                      |      | 8,249  |                    |  | 3.46 | %              |  | $                    | 339,655 |  |                    | 3,937  |   |  | 2.34 | %
|                                                                        |  |                                   |         |                      |      |        |                    |  |      |                |  |                      |         |  |                    |        |   |  |      |  
|Noninterest-bearing deposits                                            |  |                                   | 88,304  |                      |      |        |                    |  |      |                |  |                      | 66,036  |  |                    |        |   |  |      |  
|Other liabilities                                                       |  |                                   | 2,345   |                      |      |        |                    |  |      |                |  |                      | 126     |  |                    |        |   |  |      |  
|Stockholders equity                                                    |  |                                   | 74,669  |                      |      |        |                    |  |      |                |  |                      | 55,822  |  |                    |        |   |  |      |  
|                                                                        |  |                                   |         |                      |      |        |                    |  |      |                |  |                      |         |  |                    |        |   |  |      |  
|Total Liabilities & Stockholders Equity                                |  | $                                 | 646,177 |                      |      |        |                    |  |      |                |  | $                    | 461,639 |  |                    |        |   |  |      |  
|                                                                        |  |                                   |         |                      |      |        |                    |  |      |                |  |                      |         |  |                    |        |   |  |      |  
|Net interest income                                                     |  |                                   |         |                      | $    | 13,555 |                    |  |      |                |  |                      |         |  | $                  | 8,174  |   |  |      |  
|                                                                        |  |                                   |         |                      |      |        |                    |  |      |                |  |                      |         |  |                    |        |   |  |      |  
|Interest-rate spread                                                    |  |                                   |         |                      |      |        |                    |  | 3.81 | %              |  |                      |         |  |                    |        |   |  | 3.31 | %
|Net interest margin                                                     |  |                                   |         |                      |      |        |                    |  | 4.52 | %              |  |                      |         |  |                    |        |   |  | 3.81 | %
|Ratio of average interest-bearing liabilities to average earning assets |  |                                   |         |                      |      | 79.5   | %                  |  |      |                |  |                      |         |  |                    | 78.6   | % |  |      |  

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



|                                         |  |        |       |   |      |   |       |        |  |   |       |  
|---------------------------------------- |  | ------ | ----- | - | ---- | - | ----- | ------ |  | - | ----- | -
|                                         |  | VOLUME |       |   | RATE |   |       | CHANGE | 
|Increase (decrease) in interest income:  |  |        |       |   |      |   |       |        |  |   |       |  
|Loans2                                   |  | $      | 6,880 |   |      | $ | 2,445 |        |  | $ | 9,325 |  
|Securities1                              |  |        | 111   |   |      |   | 91    |        |  |   | 202   |  
|Federal funds sold                       |  |        | (402  | ) |      |   | 544   |        |  |   | 142   |  
|Interest-bearing deposits                |  |        | 23    |   |      |   | 1     |        |  |   | 24    |  
|                                         |  |        |       |   |      |   |       |        |  |   |       |  
|Total interest income                    |  |        | 6,612 |   |      |   | 3,081 |        |  |   | 9,693 |  
|                                         |  |        |       |   |      |   |       |        |  |   |       |  
|Increase (decrease) in interest expense: |  |        |       |   |      |   |       |        |  |   |       |  
|NOW and Money market deposits            |  |        | 1,067 |   |      |   | 703   |        |  |   | 1,770 |  
|Savings deposits                         |  |        | (8    | ) |      |   | (9    | )      |  |   | (17   | )
|Time deposits                            |  |        | 1,035 |   |      |   | 988   |        |  |   | 2,023 |  
|Subordinated debt                        |  |        | 316   |   |      |   | 4     |        |  |   | 320   |  
|FHLB Advances                            |  |        | 214   |   |      |   | 2     |        |  |   | 216   |  
|                                         |  |        |       |   |      |   |       |        |  |   |       |  
|Total interest expense                   |  |        | 2,624 |   |      |   | 1,688 |        |  |   | 4,312 |  
|                                         |  |        |       |   |      |   |       |        |  |   |       |  
|Total change in net interest income      |  | $      | 3,988 |   |      | $ | 1,393 |        |  | $ | 5,381 |  
|                                         |  |        |       |   |      |   |       |        |  |   |       |  

---

|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.
|- | -----------------------------------------------------------------------------------------------



26



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##### Table of Contents

Noninterest income

Noninterest income was $2.1 million in the first six months of 2006, a $589,000 or 39% increase over the comparable period of 2005. This increase was primarily the result of a steady improvement in trust revenues and
increased fees from selling mortgages into the secondary market. For the first half of 2006 trust fees climbed $589,000 or 86% over the first six months of 2005 to $1.3 million, while the gain on sale of mortgage loans into the secondary market rose
to $282,000 in the first six months of 2006, up $187,000 or 197% from the comparable period of 2005. In the first half of this year, $53.7 million of residential loans were sold into the secondary market versus $21.3 million in the first six months
of 2005. These improvements more than offset the $292,000 reduction in NSF fees between the two periods.

Noninterest expense

Noninterest expense totaled $12.8 million for the six months of 2006. Although this increase reflected a 42% or $3.8 million increase compared to the same
period of 2005, the Companys efficiency ratio has improved a substantial 1,154 basis points to 82%, reflecting significant positive operating leverage.

A total of $2.4 million of the increase in noninterest expense between the two periods occurred in personnel expense, caused by additions to staff and greater incentive compensation expense. During the first six
months of 2006 there were 29 additions to staff, bringing total full-time equivalent employees to 184 (including commissioned mortgage loan originators). The majority of these hires, reflective of the Companys primary expansion initiatives,
have been in secondary mortgage market origination and support (8), deposit and cash management related (7), lending and credit (7), and two new branches (7). In addition, a key manager and additional specialist joined our Human Resources area in
the second quarter. Approximately $571,000 of the increase is explained by higher occupancy and equipment-related expense. As discussed earlier, occupancy costs rose due to additional space required for business expansion. Other increases that are
attributable to the fast growth of the Company occurred in the areas of data processing expense ($255,000), seminars, travel and entertainment ($162,000), and advertising, marketing and public relations ($179,000).

Provision and Allowance for Loan Losses

The
provision for loan losses for the first six months of 2006 was $1.3 million, up $567,000 (82%) from the same period last year. The increase reflects loan growth as well as continuing assessment of losses inherent in the portfolio based on a
variety of client-specific factors. There were $198,000 in net charge-offs during the first six months of 2006, resulting in a ratio of net charge-offs to average loans of 0.07% compared to zero net charge-offs for the first half of 2005. There were
no nonperforming loans at June 30, 2006 compared to $469,000 at June 30, 2005 and loans thirty to eighty-nine days delinquent have been reduced from $1.1 million at June 30, 2005 to $623,000 at June 30, 2006.

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. Asset liquidity is provided by cash and assets which are readily marketable, which
can be pledged, or which will mature in the near future.

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 be used to fund the origination of mortgage loans designated to be sold in the secondary market.

At June 30, 2006, the Company had $31.0 million in outstanding borrowings from the FHLB of its present $61.9 million line, and there was $29.8
million in other available lines from correspondents. To the extent that



27



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##### Table of Contents

additional collateral becomes available beyond the present amount identified for the FHLB line, total borrowings from the
FHLB could be as high as $111.9 million based on a maximum of 20% of the Bank of FloridaSouthwest banks assets, 10% of the Ft. Lauderdale banks assets and 10% of Bank of Florida  Tampa Bay banks assets as of
June 30, 2006.

Management regularly reviews the Banks liquidity position and has implemented internal policies that 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. At June 30, 2006, the Banks exceeded their regulatory liquidity requirements.

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 average 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 | %

The Company was considered well capitalized as of June 30, 2006. The following table reflects
the actual capital levels and minimum required levels at June 30, 2006 ($ in thousands):



|                                         |  |        |         |       |                                            |   |        |                                                                               |        |  |      |        |  |       |        |  |       |  
|---------------------------------------- |  | ------ | ------- | ----- | ------------------------------------------ | - | ------ | ----------------------------------------------------------------------------- | ------ |  | ---- | ------ |  | ----- | ------ |  | ----- | -
|                                         |  | Actual |         |       | MinimumRequiredFor CapitalAdequacyPurposes |   |        | Minimum RequiredTo Be WellCapitalized UnderPrompt CorrectiveActionRegulations |       
|                                         |  | Amount |         | Ratio |                                            |   | Amount |                                                                               | Ratio  |  |      | Amount |  | Ratio |       
|Total capital (to risk weighted assets)  |  |        |         |       |                                            |   |        |                                                                               |        |  |      |        |  |       |        |  |       |  
|Consolidated                             |  | $      | 133,038 |       | 19.29                                      | % |        | $                                                                             | 55,174 |  | 8.00 | %      |  | $     |       |  | N/A   |  
|Bank of Florida - Southwest              |  | $      | 37,796  |       | 10.42                                      | % |        | $                                                                             | 29,014 |  | 8.00 | %      |  | $     | 36,268 |  | 10.00 | %
|Bank of Florida                          |  | $      | 25,648  |       | 10.66                                      | % |        | $                                                                             | 19,242 |  | 8.00 | %      |  | $     | 24,053 |  | 10.00 | %
|Bank of Florida  Tampa Bay              |  | $      | 18,655  |       | 21.54                                      | % |        | $                                                                             | 6,927  |  | 8.00 | %      |  | $     | 8,659  |  | 10.00 | %
|Tier 1 capital (to risk weighted assets) |  |        |         |       |                                            |   |        |                                                                               |        |  |      |        |  |       |        |  |       |  
|Consolidated                             |  | $      | 116,371 |       | 16.87                                      | % |        | $                                                                             | 27,587 |  | 4.00 | %      |  | $     |       |  | N/A   |  
|Bank of Florida - Southwest              |  | $      | 29,870  |       | 8.24                                       | % |        | $                                                                             | 14,507 |  | 4.00 | %      |  | $     | 21,761 |  | 6.00  | %
|Bank of Florida                          |  | $      | 17,646  |       | 7.34                                       | % |        | $                                                                             | 9,621  |  | 4.00 | %      |  | $     | 14,432 |  | 6.00  | %
|Bank of Florida  Tampa Bay              |  | $      | 17,917  |       | 20.69                                      | % |        | $                                                                             | 3,464  |  | 4.00 | %      |  | $     | 5,195  |  | 6.00  | %
|Tier 1 capital (to average assets)       |  |        |         |       |                                            |   |        |                                                                               |        |  |      |        |  |       |        |  |       |  
|Consolidated                             |  | $      | 116,371 |       | 17.01                                      | % |        | $                                                                             | 27,362 |  | 4.00 | %      |  | $     |       |  | N/A   |  
|Bank of Florida - Southwest              |  | $      | 29,870  |       | 8.65                                       | % |        | $                                                                             | 13,815 |  | 4.00 | %      |  | $     | 17,269 |  | 5.00  | %
|Bank of Florida                          |  | $      | 17,646  |       | 7.01                                       | % |        | $                                                                             | 10,062 |  | 4.00 | %      |  | $     | 12,578 |  | 5.00  | %
|Bank of Florida  Tampa Bay              |  | $      | 17,917  |       | 21.54                                      | % |        | $                                                                             | 3,328  |  | 4.00 | %      |  | $     | 4,160  |  | 5.00  | %



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##### Table of Contents

Off-Balance Sheet Financial Instruments

The Company is party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers.
These financial instruments include undisbursed lines of credit and standby letters of credit. These instruments involve, to varying degrees, elements of credit and interest-rate risk in excess of the amounts recognized in the consolidated balance
sheet. The contract or notional amounts of those instruments reflect the extent of the Companys involvement in particular classes of financial instruments.

The Companys exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and undisbursed loans in process is represented by the
contractual amount of those instruments. The Company uses the same credit policies in making commitments as it does for on-balance-sheet instruments.

Undisbursed lines of credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination
clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total committed amounts do not necessarily represent future cash requirements. The Company evaluates each customers
creditworthiness on a case-by-case basis. The amount of collateral obtained, if it is deemed necessary by the Company upon extension of credit, is based on managements credit evaluation of the counter party. Standby letters of credit are
conditional lending commitments issued by the Company to guarantee the performance of a customer to a third party. Management believes that the Company has adequate resources to fund all of its commitments.

A summary of the amounts of the Companys financial instruments, with off-balance sheet risk at June 30, 2006, follows (In thousands):



|                             |  |                 |        
|---------------------------- |  | --------------- | -------
|                             |  | Contract Amount
|Standby letters of credit    |  | $               | 5,306  
|Undisbursed lines of credit  |  | $               | 143,309
|Commitments to extend credit |  | $               | 96,064 

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.

A positive gap
position represents a greater amount of interest sensitive assets re-pricing (or maturing). In this instance, the impact on net interest income would be positive in a rising rate environment and negative if rates were to decline. Conversely, 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. Thus, an increase in rates would negatively impact
net interest income, as the cost of interest bearing liabilities would increase prior to the increase in the yield on interest-earning assets.

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 that 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.



29



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##### Table of Contents

At June 30, 2006, the Company had $448.3 million in interest sensitive assets compared to
$326.7 million in interest sensitive liabilities that will mature or reprice within a year, resulting in a positive gap position of $121.6 million or 16.7%. Within the first 90 days of a rate change, the Company is positively gapped by $334.6
million, reflecting, among other factors, that 48% of the portfolio (including cash flow) will reprice with a prime rate change.

The
following is a consolidated maturity and repricing analysis of rate sensitive assets and liabilities as of June 30, 2006.



|                                                                                                |  |                        |         |   |            |   |          |             |  |   |            |    |  |       |         |   |  |   |        
|----------------------------------------------------------------------------------------------- |  | ---------------------- | ------- | - | ---------- | - | -------- | ----------- |  | - | ---------- | -- |  | ----- | ------- | - |  | - | -------
|                                                                                                |  | 0-90 DAYS              |         |   | 91-180DAYS |   |          | 181-365DAYS |  |   | OVER 1YEAR |    |  | TOTAL
|                                                                                                |  | (Dollars in Thousands)
|Interest-earning assets:                                                                        |  |                        |         |   |            |   |          |             |  |   |            |    |  |       |         |   |  |   |        
|Federal funds sold                                                                              |  | $                      | 74,127  |   |            | $ |         |             |  | $ |           |    |  | $     |        |   |  | $ | 74,127 
|Due from banks and investment securities (including required investments in FHLB and FRB stock) |  |                        | 1,455   |   |            |   |         |             |  |   | 1,535      |    |  |       | 43,335  |   |  |   | 46,325 
|Loans                                                                                           |  |                        | 340,366 |   |            |   | 15,248   |             |  |   | 15,544     |    |  |       | 235,406 |   |  |   | 606,564
|                                                                                                |  |                        |         |   |            |   |          |             |  |   |            |    |  |       |         |   |  |   |        
|Total interest-earning assets                                                                   |  |                        | 415,948 |   |            |   | 15,248   |             |  |   | 17,079     |    |  |       | 278,741 |   |  |   | 727,016
|                                                                                                |  |                        |         |   |            |   |          |             |  |   |            |    |  |       |         |   |  |   |        
|Interest-bearing deposits (Non CDs)                                                             |  |                        | 26,296  |   |            |   | 59,403   |             |  |   | 73,484     |    |  |       | 128,706 |   |  |   | 287,889
|Certificates of deposit                                                                         |  |                        | 55,032  |   |            |   | 57,783   |             |  |   | 48,649     |    |  |       | 50,987  |   |  |   | 212,451
|Other borrowings                                                                                |  |                        |        |   |            |   |         |             |  |   | 6,000      |    |  |       | 36,000  |   |  |   | 42,000 
|                                                                                                |  |                        |         |   |            |   |          |             |  |   |            |    |  |       |         |   |  |   |        
|Total interest-bearing liabilities                                                              |  |                        | 81,328  |   |            |   | 117,186  |             |  |   | 128,133    |    |  |       | 215,693 |   |  |   | 542,340
|                                                                                                |  |                        |         |   |            |   |          |             |  |   |            |    |  |       |         |   |  |   |        
|Interest Sensitivity Gap:                                                                       |  |                        |         |   |            |   |          |             |  |   |            |    |  |       |         |   |  |   |        
|Rate-sensitive assets less rate-sensitive liabilities                                           |  | $                      | 334,620 |   |            | $ | (101,938 | )           |  | $ | (111,054   | )  |  | $     | 63,048  |   |  | $ | 184,676
|                                                                                                |  |                        |         |   |            |   |          |             |  |   |            |    |  |       |         |   |  |   |        
|Cumulative interest sensitivity gap                                                             |  | $                      | 334,620 |   |            | $ | 232,682  |             |  | $ | 121,628    |    |  | $     | 184,676 |   |  |   |        
|                                                                                                |  |                        |         |   |            |   |          |             |  |   |            |    |  |       |         |   |  |   |        
|Interest sensitivity gap ratio                                                                  |  |                        | 46.0    | % |            |   | (14.0    | )%          |  |   | (15.3      | )% |  |       | 8.7     | % |  |   |        
|                                                                                                |  |                        |         |   |            |   |          |             |  |   |            |    |  |       |         |   |  |   |        
|Cumulative interest sensitivity gap ratio                                                       |  |                        | 46.0    | % |            |   | 32.0     | %           |  |   | 16.7       | %  |  |       | 25.4    | % |  |   |        
|                                                                                                |  |                        |         |   |            |   |          |             |  |   |            |    |  |       |         |   |  |   |        

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 financial performance and could cause actual results for fiscal 2006 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.



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##### Table of Contents

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(as defined in Rules 13a-15(e) under the Securities Exchange Act of 1934) are effective to ensure that the information required to be disclosed by the
Company in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the U.S. Securities and Exchange Commissions rules and forms.

(b) Managements Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act
Rule 13a-15(f). Such internal controls over financial reporting were designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles. Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our internal
control over financial reporting based on the framework in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Based upon our evaluation under the framework in Internal Control-Integrated Framework, our management concluded that our internal control over
financial reporting was effective as of June 30, 2006. Our managements assessment of the effectiveness of our internal control over financial reporting as of December 31, 2005 has been audited by Hacker, Johnson & Smith PA,
an independent registered public accounting firm, as stated in their report included in our Form 10-K for the year ended December 31, 2005.

(c)
Changes in Internal Controls

Bancshares of Florida, Inc. has made no significant changes in its internal controls over financial
reporting during the six months ended June 30, 2006 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

(d) 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.



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##### Table of Contents

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 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

On June 8, 2006, the Company held its
Annual Meeting of shareholders at which the following proposals were considered and acted upon:

PROPOSAL I  To elect
fourteen directors as follows:



|                       |  |            |  |                
|---------------------- |  | ---------- |  | ---------------
|Director               |  | Votes For: |  | Votes Withheld:
|Donald R. Barber       |  | 4,751,584  |  | 269,397        
|Joe B. Cox             |  | 5,012,506  |  | 8,475          
|Earl L. Frye           |  | 4,791,316  |  | 229,665        
|H. Wayne Huizenga, Jr. |  | 4,798,616  |  | 222,365        
|John B. James          |  | 4,760,284  |  | 260,697        
|LaVonne Johnson        |  | 4,749,884  |  | 271,097        
|Edward Kaloust         |  | 5,011,106  |  | 9,875          
|Martin P. Mahan        |  | 4,750,584  |  | 270,397        
|Michael L. McMullan    |  | 4,750,584  |  | 270,397        
|Harry K. Moon, M.D.    |  | 5,013,106  |  | 7,875          
|Michael T. Putziger    |  | 5,012,106  |  | 8,875          
|Richard Rochon         |  | 4,793,416  |  | 227,565        
|Ramon A. Rodriguez     |  | 4,793,416  |  | 227,565        
|Terry W. Stiles        |  | 5,013,106  |  | 7,875          

PROPOSAL II  To approve the Companys 2006 Stock
Compensation and the suspension of the Companys 1999 Stock Option Plan;



|          |  |         |  |        
|--------- |  | ------- |  | -------
|For       |  | Against |  | Abstain
|3,077,477 |  | 430,988 |  | 13,025 

PROPOSAL III  To approve the ratification of the appointment of
Hacker, Johnson & Smith, P.A. as the independent auditors for Bancshares of Florida, Inc. and its subsidiaries;



|          |  |         |  |        
|--------- |  | ------- |  | -------
|For       |  | Against |  | Abstain
|4,994,210 |  | 22,321  |  | 4,450  

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 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



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##### Table of Contents

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. The exhibits that are denominated by
an (k.) were previously filed as part of Form 10-Q filed with the SEC on August 4, 2005. The exhibits that are denominated by an (l.) were previously filed as part of Form 10-Q filed with the SEC on November 3, 2005. The exhibits that are
denominated by a (m.) were previously filed as part of Form 10-K filed with the SEC on March 13,2006. The exhibits that are denominated by a (n.) were previously filed as part of Schedule DEF 14A filed with the SEC on April 21, 2006. The exhibits
that are denominated by a (o.) were previously filed as part of Form 10-Q filed with the SEC on May 4,,2006. The exhibit numbers correspond to the exhibit numbers in the referenced document.



|              |  |                                                                                                                
|------------- |  | ---------------------------------------------------------------------------------------------------------------
|ExhibitNumber |  | Description of Exhibit                                                                                         
|m.2.1         |  | Agreement and Plan of Merger to acquire Bristol Bank dated March 7, 2006                                       
|              | 
|k.3.1         |  | Amended and Restated Articles of Incorporation                                                                 
|              | 
|a.3.2         |  | Bylaws                                                                                                         
|              | 
|b.4.1         |  | Specimen Common Stock Certificate                                                                              
|              | 
|n.4.2         |  | 2006 Stock Compensation Plan                                                                                   
|              | 
|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                                                                
|              | 
|l.10.1        |  | Amended and Restated Employment Agreement of Michael L. McMullan, dated February 1, 2005                       
|              | 
|l.10.1.1      |  | Amendment to Employment Agreement of Martin P. Mahan dated February 1, 2005                                    
|              | 
|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                            
|              | 
|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                                               
|              | 
|m.10.15       |  | Change in Control Agreement of Jim Goehler, dated November 30, 2005                                            
|              | 
|m.10.16       |  | Change in Control Agreement of Daniel Taylor, dated March 18, 2005                                             
|              | 
|o.10.17       |  | Change in Control Agreement of Sharon I. Hill, dated March 21, 2006                                            
|              | 
|10.18         |  | Change in Control Agreement of Tracy L. Keegan, dated July 24, 2006                                            
|              | 
|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              



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##### 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: August 1, 2006 |  | By:                         |  | /s/ MICHAEL L. MCMULLAN                                             
|                      |  |                             |  | Michael L. McMullan                                                 
|                      |  |                             |  | Chief Executive Officer (Principal Executive Officer)               
|                      |  |                            
|Dated: August 1, 2006 |  | By:                         |  | /s/ Tracy L. Keegan                                                 
|                      |  |                             |  | Tracy L. Keegan                                                     
|                      |  |                             |  | Chief Financial Officer (Principal Financial and Accounting Officer)



34