##### 



Exhibit 13.1

Financial Statements of United Heritage Bankshares of
Florida, Inc. and Subsidiary

(Item 7.     Financial
Statements)

INDEX TO FINANCIAL STATEMENTS

|                                                            |  |    
|----------------------------------------------------------- |  | ---
|Report of Independent
    Registered Public Accounting Firm |  | F-1
|Consolidated Balance
    Sheets                             |  | F-3
|Consolidated Statements of
    Income                       |  | F-4
|Consolidated Statements of
    Shareholders Equity         |  | F-5
|Consolidated Statements of
    Cash Flows                   |  | F-6
|Notes to Consolidated
    Financial Statements              |  | F-7

F-1



---



##### 





F-2



---



##### 



UNITED HERITAGE BANKSHARES OF FLORIDA, INC. AND SUBSIDIARY



Consolidated Balance Sheets


|                                                                 |                                                                                                                           |                                            |         |        |         |   |         |        |         | 
|---------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | ------- | ------ | ------- | - | ------- | ------ | ------- | 
|                                                                 |                                                                                                                           |                                           
|                                                                 |                                                                                                                           | At December 31,                            |        
|                                                                 |                                                                                                                           |                                            |        
|                                                                 |                                                                                                                           | 2005                                       |         |        | 2004    |  
|-                                                                |                                                                                                                           |                                            | )       |       
|                                                                 |                                                                                                                           | ----------------($-                        |        
|                                                                 |                                                                                                                           | in thousands,                              |        
|                                                                 |                                                                                                                           | except per share                           |        
|                                                                 |                                                                                                                           | amounts                                    |        
|                                                                
|                                                                
|                                                                
|                                                                
|Assets                                                           |                                                                                                                           |                                            |         |        |         |   |         |       
|Cash and due from banks                                          |                                                                                                                           | $                                          | 21,604  |        |         | $ | 12,283  |       
|Interest-bearing demand deposits in other banks                  |                                                                                                                           |                                            |        |        |         |   | 9,857   |       
|Federal funds sold                                               |                                                                                                                           |                                            | 126,119 |        |         |   | 63,831  |       
|                                                                
|                                                                 |                                                                                                                           | Total cash and cash equivalents            |         |        | 147,723 |   |         |        | 85,971  | 
|Securities available for sale                                    |                                                                                                                           |                                            | 164,050 |        |         |   | 68,640  |       
|Securities held to maturity                                      |                                                                                                                           |                                            | 21,119  |        |         |   |        |       
|Loans, net of allowance for loan losses of $4,580
    and $3,077 |                                                                                                                           |                                            | 360,425 |        |         |   | 241,214 |       
|Accrued interest receivable                                      |                                                                                                                           |                                            | 2,599   |        |         |   | 1,124   |       
|Property and equipment, net                                      |                                                                                                                           |                                            | 7,527   |        |         |   | 6,863   |       
|Net deferred tax asset                                           |                                                                                                                           |                                            | 2,771   |        |         |   | 1,180   |       
|Goodwill                                                         |                                                                                                                           |                                            | 950     |        |         |   | 950     |       
|Core deposit intangible, net                                     |                                                                                                                           |                                            | 200     |        |         |   | 267     |       
|Other assets                                                     |                                                                                                                           |                                            | 530     |        |         |   | 258     |       
|                                                                
|                                                                 |                                                                                                                           | Total assets                               |         | $      | 707,894 |   |         | $      | 406,467 | 
|                                                                
|                                                                
|                                                                
|                                                                
|                                                                
|                                                                
|Liabilities and Shareholders
    Equity                        
|                                                                
|                                                                
|                                                                
|                                                                
|Liabilities:                                                     |                                                                                                                           |                                            |         |        |         |   |         |       
|                                                                
|                                                                
|                                                                
|                                                                
|                                                                 | Deposits:                                                                                                                 |                                            |         |        |         |   |         |        |        
|                                                                 |                                                                                                                           | Noninterest-bearing demand deposits        |         | $      | 98,082  |   |         | $      | 52,472  | 
|                                                                 |                                                                                                                           | Savings, NOW and money-market deposits     |         |        | 272,895 |   |         |        | 166,751 | 
|                                                                 |                                                                                                                           | Time deposits                              |         |        | 245,559 |   |         |        | 146,419 | 
|                                                                
|                                                                 |                                                                                                                           | Total deposits                             |         |        | 616,536 |   |         |        | 365,642 | 
|                                                                 | Borrowings                                                                                                                |                                            |         | 31,884 |         |   |         | 6,009  |        
|                                                                 | Other liabilities                                                                                                         |                                            |         | 1,687  |         |   |         | 1,026  |        
|                                                                
|                                                                 |                                                                                                                           | Total liabilities                          |         |        | 650,107 |   |         |        | 372,677 | 
|                                                                
|Commitments and contingencies (Notes 6, 11
    and 13)           |                                                                                                                           |                                            |         |        |         |   |         |       
|                                                                
|                                                                
|                                                                
|                                                                
|Shareholders equity:                                            |                                                                                                                           |                                            |         |        |         |   |         |       
|                                                                 | Common stock, $.01 par value,
    20 million shares authorized, 4,871,908 and
    3,263,406 shares issued and outstanding |                                            |         | 49     |         |   |         | 33     |        
|                                                                 | Additional paid-in capital                                                                                                |                                            |         | 54,361 |         |   |         | 32,021 |        
|                                                                 | Retained earnings                                                                                                         |                                            |         | 5,338  |         |   |         | 2,003  |        
|                                                                 | Accumulated other comprehensive loss                                                                                      |                                            |         | (1,961 | )       |   |         | (267   | )      
|                                                                
|                                                                 |                                                                                                                           | Total shareholders equity                 |         |        | 57,787  |   |         |        | 33,790  | 
|                                                                
|                                                                 |                                                                                                                           | Total liabilities and shareholders equity |         | $      | 707,894 |   |         | $      | 406,467 | 
|                                                                

See notes to consolidated financial statements.

F-3



---



##### 



UNITED HERITAGE BANKSHARES OF FLORIDA, INC. AND SUBSIDIARY



Consolidated Statements of Income


|                           |                                              |                                                         |       |        |        |   |       |        |        |   |       |        |        | 
|-------------------------- | -------------------------------------------- | ------------------------------------------------------- | ----- | ------ | ------ | - | ----- | ------ | ------ | - | ----- | ------ | ------ | 
|                           |                                              |                                                        
|                           |                                              | Year Ended December 31,                                 |      
|                           |                                              |                                                         |      
|                           |                                              | 2005                                                    |       |        | 2004   |   |       | 2003   |       
|                          
|                          
|                           |                                              |                                                        
|                           |                                              | (In thousands, except per                               |      
|                           |                                              | share amounts                                           |      
|                          
|                          
|                          
|                          
|Interest income:           |                                              |                                                         |       |        |        |   |       |        |        |   |       |       
|                           | Loans                                        |                                                         | $     | 21,070 |        |   | $     | 14,202 |        |   | $     | 11,653 |       
|                           | Securities                                   |                                                         |       | 4,849  |        |   |       | 1,633  |        |   |       | 1,330  |       
|                           | Other                                        |                                                         |       | 3,363  |        |   |       | 820    |        |   |       | 570    |       
|                          
|                           |                                              | Total interest income                                   |       |        | 29,282 |   |       |        | 16,655 |   |       |        | 13,553 | 
|                          
|Interest expense:          |                                              |                                                         |       |        |        |   |       |        |        |   |       |       
|                           | Deposits                                     |                                                         |       | 11,993 |        |   |       | 5,888  |        |   |       | 5,583  |       
|                           | Borrowings                                   |                                                         |       | 213    |        |   |       | 25     |        |   |       | 6      |       
|                          
|                           |                                              | Total interest expense                                  |       |        | 12,206 |   |       |        | 5,913  |   |       |        | 5,589  | 
|                          
|                           |                                              | Net interest income                                     |       |        | 17,076 |   |       |        | 10,742 |   |       |        | 7,964  | 
|Provision for loan losses  |                                              |                                                         | 1,540 |        |        |   | 617   |        |        |   | 784   |       
|                          
|                           |                                              | Net interest income after provision for loan
    losses |       |        | 15,536 |   |       |        | 10,125 |   |       |        | 7,180  | 
|                          
|Noninterest income:        |                                              |                                                         |       |        |        |   |       |        |        |   |       |       
|                           | Service charges and fees on deposit accounts |                                                         |       | 581    |        |   |       | 409    |        |   |       | 374    |       
|                           | Other                                        |                                                         |       | 220    |        |   |       | 138    |        |   |       | 152    |       
|                          
|                           |                                              | Total noninterest income                                |       |        | 801    |   |       |        | 547    |   |       |        | 526    | 
|                          
|Noninterest expense:       |                                              |                                                         |       |        |        |   |       |        |        |   |       |       
|                           | Salaries and employee benefits               |                                                         |       | 5,764  |        |   |       | 3,505  |        |   |       | 3,002  |       
|                           | Occupancy and equipment                      |                                                         |       | 2,181  |        |   |       | 1,411  |        |   |       | 1,138  |       
|                           | Other                                        |                                                         |       | 3,128  |        |   |       | 2,430  |        |   |       | 2,117  |       
|                          
|                           |                                              | Total noninterest expense                               |       |        | 11,073 |   |       |        | 7,346  |   |       |        | 6,257  | 
|                          
|Income before income taxes |                                              |                                                         | 5,264 |        |        |   | 3,326 |        |        |   | 1,449 |       
|                           |                                              | Income taxes                                            |       |        | 1,929  |   |       |        | 1,285  |   |       |        | 568    | 
|                          
|Net income                 |                                              | $                                                       | 3,335 |        |        | $ | 2,041 |        |        | $ | 881   |       
|                          
|Earnings per share:        |                                              |                                                         |       |        |        |   |       |        |        |   |       |       
|                           | Basic                                        |                                                         | $     | .74    |        |   | $     | .63    |        |   | $     | .28    |       
|                          
|                           | Diluted                                      |                                                         | $     | .72    |        |   | $     | .61    |        |   | $     | .27    |       
|                          

See notes to consolidated financial statements.

F-4



---



##### 



UNITED HERITAGE BANKSHARES OF FLORIDA, INC. AND SUBSIDIARY



Consolidated Statements of Shareholders Equity


Years Ended December 31, 2005, 2004 and 2003


|                                                                                  |                                                                                                         |                                                                                        |           |            |           |   |          |         |   |              |          |   |               |               |       |               |        |   |        |    |        |   |        |       |        |  
|--------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------- | --------- | ---------- | --------- | - | -------- | ------- | - | ------------ | -------- | - | ------------- | ------------- | ----- | ------------- | ------ | - | ------ | -- | ------ | - | ------ | ----- | ------ | -
|                                                                                  |                                                                                                         |                                                                                        |           |            |           |   |          |         |   |             
|                                                                                  |                                                                                                         | Common Stock                                                                           |           |            |           |   |          |         |   |              |         
|                                                                                  |                                                                                                         |                                                                                        |           |            |           |   | Retained |         |   | Accumulated  |          |   |              
|                                                                                  |                                                                                                         |                                                                                        |           | Additional |           |   | Earnings |         |   | Other        |          |   | Total         |              
|                                                                                  |                                                                                                         | Number of                                                                              |           |            |           |   | Paid-In  |         |   | (Accumulated |          |   | Comprehensive |               |       | Shareholders |       
|                                                                                  |                                                                                                         | Shares                                                                                 |           |            | Par Value |   |          | Capital |   |              | Deficit) |   |               | Income (Loss) |       |               | Equity |  
|-                                                                                 |                                                                                                         |                                                                                        | )         |           
|                                                                                  |                                                                                                         | -----------------------------------------------------------------------------------($- |          
|                                                                                  |                                                                                                         | in thousands                                                                           |          
|Balance at December 31, 2002                                                      |                                                                                                         |                                                                                        | 2,000,000 |            |           | $ | 20       |         |   | $            | 19,980   |   |               | $             | (919  | )             |        | $ | 387    |    |        | $ | 19,468 |      
|                                                                                 
|Comprehensive income:                                                             |                                                                                                         |                                                                                        |           |            |           |   |          |         |   |              |          |   |               |               |       |               |        |   |        |    |        |   |        |      
|                                                                                  | Net income                                                                                              |                                                                                        |           |           |           |   |          |        |   |              |          |  |               |               |       | 881           |        |   |        |   |        |   |        | 881   |       
|                                                                                  | Other comprehensive income (loss)                                                                      |                                                                                        |           |            |           |   |          |         |   |              |          |   |               |               |       |               |        |   |        |    |        |   |        |       |       
|                                                                                  |                                                                                                         | Change in unrealized gain on securities available
    for sale, net of tax             |           |            |          |   |          |         |  |              |          |   |              |               |       |               |       |   |        |    | (676   | ) |        |       | (676   | )
|                                                                                 
|                                                                                  |                                                                                                         | Total comprehensive income                                                             |           |            |           |   |          |         |   |              |          |   |               |               |       |               |        |   |        |    |        |   |        |       | 205    |  
|                                                                                 
|Shares issued in acquisition                                                      |                                                                                                         |                                                                                        | 1,069,388 |            |           |   | 11       |         |   |              | 9,742    |   |               |               |      |               |        |   |       |    |        |   | 9,753  |      
|Stock offering                                                                    |                                                                                                         |                                                                                        | 187,500   |            |           |   | 2        |         |   |              | 2,248    |   |               |               |      |               |        |   |       |    |        |   | 2,250  |      
|                                                                                 
|Balance at December 31, 2003                                                      |                                                                                                         |                                                                                        | 3,256,888 |            |           |   | 33       |         |   |              | 31,970   |   |               |               | (38   | )             |        |   | (289   | )  |        |   | 31,676 |      
|                                                                                 
|Comprehensive income:                                                             |                                                                                                         |                                                                                        |           |            |           |   |          |         |   |              |          |   |               |               |       |               |        |   |        |    |        |   |        |      
|                                                                                  | Net income                                                                                              |                                                                                        |           |           |           |   |          |        |   |              |          |  |               |               |       | 2,041         |        |   |        |   |        |   |        | 2,041 |       
|                                                                                  | Other comprehensive income  Change in
    unrealized loss on securities available for sale, net of tax |                                                                                        |           |           |           |   |          |        |   |              |          |  |               |               |       |              |        |   |        | 22 |        |   |        | 22    |       
|                                                                                 
|                                                                                  |                                                                                                         | Total comprehensive income                                                             |           |            |           |   |          |         |   |              |          |   |               |               |       |               |        |   |        |    |        |   |        |       | 2,063  |  
|                                                                                 
|Proceeds from stock options exercised                                             |                                                                                                         |                                                                                        | 6,518     |            |           |   |         |         |   |              | 51       |   |               |               |      |               |        |   |       |    |        |   | 51     |      
|                                                                                 
|Balance at December 31, 2004                                                      |                                                                                                         |                                                                                        | 3,263,406 |            |           |   | 33       |         |   |              | 32,021   |   |               |               | 2,003 |               |        |   | (267   | )  |        |   | 33,790 |      
|                                                                                 
|Comprehensive income:                                                             |                                                                                                         |                                                                                        |           |            |           |   |          |         |   |              |          |   |               |               |       |               |        |   |        |    |        |   |        |      
|                                                                                  | Net income                                                                                              |                                                                                        |           |           |           |   |          |        |   |              |          |  |               |               |       | 3,335         |        |   |        |   |        |   |        | 3,335 |       
|                                                                                  | Other comprehensive loss                                                                               |                                                                                        |           |            |           |   |          |         |   |              |          |   |               |               |       |               |        |   |        |    |        |   |        |       |       
|                                                                                  |                                                                                                         | Change in unrealized loss on securities available
    for sale, net of tax             |           |            |          |   |          |         |  |              |          |   |              |               |       |               |       |   |        |    | (1,694 | ) |        |       | (1,694 | )
|                                                                                 
|                                                                                  |                                                                                                         | Total comprehensive income                                                             |           |            |           |   |          |         |   |              |          |   |               |               |       |               |        |   |        |    |        |   |        |       | 1,641  |  
|                                                                                 
|Net proceeds from the sale of common stock under
    a private placement offering |                                                                                                         |                                                                                        | 1,537,222 |            |           |   | 15       |         |   |              | 21,463   |   |               |               |      |               |        |   |       |    |        |   | 21,478 |      
|Proceeds from stock options exercised                                             |                                                                                                         |                                                                                        | 71,280    |            |           |   | 1        |         |   |              | 828      |   |               |               |      |               |        |   |       |    |        |   | 829    |      
|Tax benefit from stock options exercised                                          |                                                                                                         |                                                                                        |          |            |           |   |         |         |   |              | 49       |   |               |               |      |               |        |   |       |    |        |   | 49     |      
|                                                                                 
|Balance at December 31, 2005                                                      |                                                                                                         |                                                                                        | 4,871,908 |            |           | $ | 49       |         |   | $            | 54,361   |   |               | $             | 5,338 |               |        | $ | (1,961 | )  |        | $ | 57,787 |      
|                                                                                 

See notes to consolidated financial statements.

F-5



---



##### 



UNITED HERITAGE BANKSHARES OF FLORIDA, INC. AND SUBSIDIARY



Consolidated Statements of Cash Flows


|                                                  |                                                                                       |                                                                                                                               |                                              |          |          |        |        |         |         |      |        |         |         |     |  
|------------------------------------------------- | ------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------- | -------- | -------- | ------ | ------ | ------- | ------- | ---- | ------ | ------- | ------- | --- | -
|                                                  |                                                                                       |                                                                                                                              
|                                                  |                                                                                       | Year Ended December 31,                                                                                                       |                                             
|                                                  |                                                                                       |                                                                                                                               |                                             
|                                                  |                                                                                       | 2005                                                                                                                          |                                              |          | 2004     |        |        | 2003    |        
|                                                 
|                                                 
|                                                  |                                                                                       |                                                                                                                              
|                                                  |                                                                                       | (In thousands                                                                                                                 |                                             
|                                                 
|                                                 
|                                                 
|                                                 
|Cash flows from operating activities:             |                                                                                       |                                                                                                                               |                                              |          |          |        |        |         |         |      |        |        
|                                                  | Net income                                                                            |                                                                                                                               | $                                            | 3,335    |          |        |        | 2,041   |         |      |        | 881     |        
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Adjustments to reconcile net income to net cash
    provided by operating activities: |                                                                                                                               |                                              |          |          |        |        |         |         |      |        |         |        
|                                                  |                                                                                       | Deferred income tax benefit                                                                                                   |                                              |          | (570     | )      |        |         | (218    | )    |        |         | (207    | )  
|                                                  |                                                                                       | Provision for loan losses                                                                                                     |                                              |          | 1,540    |        |        |         | 617     |      |        |         | 784     |    
|                                                  |                                                                                       | Depreciation and amortization of property and
    equipment                                                                   |                                              |          | 694      |        |        |         | 533     |      |        |         | 450     |    
|                                                  |                                                                                       | Amortization of core deposit intangible                                                                                       |                                              |          | 67       |        |        |         | 66      |      |        |         | 66      |    
|                                                  |                                                                                       | Net amortization of premiums and discounts on
    securities                                                                  |                                              |          | 743      |        |        |         | 654     |      |        |         | 1,171   |    
|                                                  |                                                                                       | Gain on sale of other real estate                                                                                             |                                              |          |         |        |        |         |        |      |        |         | (28     | )  
|                                                  |                                                                                       | Gain on sale of security available for sale                                                                                   |                                              |          |         |        |        |         |        |      |        |         | (5      | )  
|                                                  |                                                                                       | Tax benefit from stock options exercised                                                                                      |                                              |          | 49       |        |        |         |        |      |        |         |        |    
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                                                       | Net change in year-end balances of:                                                                                           |                                              |          |          |        |        |         |         |      |        |         |         |    
|                                                  |                                                                                       |                                                                                                                               | Accrued interest receivable and other assets |          |          | (1,747 | )      |         |         | (195 | )      |         |         | (56 | )
|                                                  |                                                                                       |                                                                                                                               | Other liabilities                            |          |          | 662    |        |         |         | 123  |        |         |         | (98 | )
|                                                 
|                                                  |                                                                                       | Net cash provided by operating activities                                                                                     |                                              |          | 4,773    |        |        |         | 3,621   |      |        |         | 2,958   |    
|                                                 
|Cash flows from investing activities:             |                                                                                       |                                                                                                                               |                                              |          |          |        |        |         |         |      |        |        
|                                                  | Purchases of securities available for sale                                            |                                                                                                                               |                                              | (123,480 | )        |        |        | (31,121 | )       |      |        | (55,698 | )      
|                                                  | Sales of securities available for sale                                                |                                                                                                                               |                                              |         |          |        |        | 106     |         |      |        | 243     |        
|                                                  | Maturities and principal collections on
    securities available for sale             |                                                                                                                               |                                              | 24,614   |          |        |        | 18,117  |         |      |        | 37,699  |        
|                                                  | Purchases of securities held to maturity                                              |                                                                                                                               |                                              | (21,122  | )        |        |        |        |         |      |        |        |        
|                                                  | Net funding of loans                                                                  |                                                                                                                               |                                              | (120,751 | )        |        |        | (43,351 | )       |      |        | (42,096 | )      
|                                                  | Cash and cash equivalents acquired in business
    combination                        |                                                                                                                               |                                              |         |          |        |        |        |         |      |        | 25,594  |        
|                                                  | Proceeds from sale of other real estate                                               |                                                                                                                               |                                              |         |          |        |        |        |         |      |        | 611     |        
|                                                  | Purchase of property and equipment                                                    |                                                                                                                               |                                              | (1,358   | )        |        |        | (1,986  | )       |      |        | (143    | )      
|                                                 
|                                                  |                                                                                       | Net cash used in investing activities                                                                                         |                                              |          | (242,097 | )      |        |         | (58,235 | )    |        |         | (33,790 | )  
|                                                 
|Cash flows from financing activities:             |                                                                                       |                                                                                                                               |                                              |          |          |        |        |         |         |      |        |        
|                                                  | Net increase in deposits                                                              |                                                                                                                               |                                              | 250,894  |          |        |        | 79,070  |         |      |        | 60,309  |        
|                                                  | Net increase in borrowings                                                            |                                                                                                                               |                                              | 25,875   |          |        |        | 835     |         |      |        | 4,337   |        
|                                                  | Net proceeds from sale of common stock                                                |                                                                                                                               |                                              | 22,307   |          |        |        | 51      |         |      |        | 2,250   |        
|                                                 
|                                                  |                                                                                       | Net cash provided by financing activities                                                                                     |                                              |          | 299,076  |        |        |         | 79,956  |      |        |         | 66,896  |    
|                                                 
|Net increase in cash and cash equivalents         |                                                                                       |                                                                                                                               | 61,752                                       |          |          |        | 25,342 |         |         |      | 36,064 |        
|Cash and cash equivalents at beginning of year    |                                                                                       |                                                                                                                               | 85,971                                       |          |          |        | 60,629 |         |         |      | 24,565 |        
|                                                 
|Cash and cash equivalents at end of year          |                                                                                       | $                                                                                                                             | 147,723                                      |          |          | $      | 85,971 |         |         | $    | 60,629 |        
|                                                 
|Supplemental disclosure of cash flow information: |                                                                                       |                                                                                                                               |                                              |          |          |        |        |         |         |      |        |        
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Cash paid for:                                                                        |                                                                                                                               |                                              |          |          |        |        |         |         |      |        |         |        
|                                                  |                                                                                       | Interest                                                                                                                      |                                              | $        | 12,045   |        |        | $       | 5,498   |      |        | $       | 5,896   |    
|                                                 
|                                                  |                                                                                       | Income taxes                                                                                                                  |                                              | $        | 2,250    |        |        | $       | 1,524   |      |        | $       | 620     |    
|                                                 
|                                                  | Noncash transaction                                                                  |                                                                                                                               |                                              |          |          |        |        |         |         |      |        |         |        
|                                                  |                                                                                       | Accumulated other comprehensive income (loss),
    change in unrealized loss on securities available for sale, net
    of tax |                                              | $        | (1,694   | )      |        | $       | 22      |      |        | $       | (676    | )  
|                                                 

See notes to consolidated financial statements.

F-6



---



##### 



UNITED HERITAGE BANKSHARES OF FLORIDA, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

At December 31, 2005 and 2004 and for Each of the Three
Years

in the Period Ended December 31, 2005


(1) Organizational Background and Consolidation
Policy

United Heritage Bankshares of Florida, Inc.,
formerly known as United Community Bankshares of Florida, Inc.
(the Holding Company). The Holding Company owns 100%
of the common stock of United Heritage Bank (the
Bank) (together, the Company), a full
service, FDIC-insured commercial-banking institution. The
Company provides a variety of financial services to individuals
and commercial customers through its eleven banking offices
located in Orange and Seminole Counties, Florida.

The accompanying consolidated financial
statements include the accounts of the Holding Company and the
Bank. All significant intercompany transactions have been
eliminated in consolidation.

(2) Summary of Significant Accounting Policies

Use of
Estimates.In preparing
consolidated financial statements in conformity with accounting
principles generally accepted in the United States of America,
management is required to make estimates and assumptions that
affect the reported amounts of assets and liabilities as of the
date of the balance sheet and reported amounts of revenues and
expenses during the reporting period. Actual results could
differ from those estimates. Material estimates that are
particularly susceptible to significant change in the near term
relate to the determination of the allowance for loan losses and
the valuation of deferred tax assets.

Cash and Cash
Equivalents.For purposes of the
consolidated statements of cash flows, cash and cash equivalents
include cash and demand balances due from banks,
interest-bearing deposits in other banks and federal funds sold,
all of which mature within ninety days.

The Bank is required under Federal Reserve Board
regulations to maintain reserves, generally consisting of cash
or noninterest-earning accounts, against its transaction deposit
accounts. At December 31, 2005 and 2004, balances
maintained as reserves were approximately $680,000 and
$4.6 million, respectively. During 2005, the Company began
participating in a deposit reclassification program that allowed
the Company to reclassify certain transaction deposit accounts
to nontransaction accounts for Federal Reserve reporting
requirements. This program allowed the Company to reclassify
approximately $113.1 million of transaction accounts for
the reporting period that included December 31, 2005.

Securities.The Company may classify its securities as either trading, held
to maturity or available for sale. Trading securities are held
principally for resale in the near term and recorded at their
fair values. Unrealized gains and losses on trading securities
are included immediately in earnings. Held-to-maturity
securities are those which the Company has the positive intent
and ability to hold to maturity and are reported at amortized
cost. Available-for-sale securities consist of securities not
classified as trading securities nor as held-to-maturity
securities. Unrealized holding gains and losses, net of tax, on
available-for-sale securities are excluded from earnings and
reported in other comprehensive income (loss). Gains and losses
on the sale of available-for-sale securities are recorded on the
trade date and are determined using the specific-identification
method. Purchase premiums and discounts are recognized in
interest income using the interest method over the terms of the
securities.

Declines in the fair value of held-to-maturity
and available-for-sale securities below their cost that are
deemed to be other than temporary are reflected in earnings as
realized losses. In estimating other-than-temporary impairment
losses, management considers (1) the length of time and the
extent to which the fair value has been less than cost,

(continued)


F-7



---



##### 



UNITED HERITAGE BANKSHARES OF FLORIDA, INC. AND SUBSIDIARY


Notes to Consolidated Financial
Statements  (Continued)

(2) Summary of Significant Accounting Policies,
Continued

(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.

Loans.Loans
that management has the intent and the Company has the ability
to hold for the foreseeable future or until maturity or pay-off
are reported at their outstanding principal balance adjusted for
any charge-offs, the allowance for loan losses, and any deferred
fees or costs on originated loans.

Loan origination fees are deferred and certain
direct origination costs are capitalized. Both are recognized as
an adjustment of the yield of the related loan.

The accrual of interest on loans is discontinued
at the time the loan is ninety days delinquent unless the loan
is well collateralized and in process of collection. In all
cases, loans are placed on nonaccrual or charged-off at an
earlier date if collection of principal or interest is
considered doubtful.

Interest receivable on loans that are placed on
nonaccrual or charged-off is reversed against interest income.
Interest collected subsequently on these loans is accounted for
on the cash basis or cost-recovery method, until qualifying for
return to accrual. Loans are returned to accrual status when all
the principal and interest amounts contractually due are brought
current and future payments are reasonably assured.

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 earnings. Loan
losses are charged against the allowance when management
believes the uncollectibility of a loan balance is confirmed.
Subsequent recoveries, if any, are credited to the allowance.

The Company assesses its loan portfolio routinely
through its credit administration function. The Company, as part
of its ongoing risk management, assigns a risk grade to each
loan within the portfolio. The risk grades fall into eight
categories based on certain variables, included but not limited
to, collateral, loan performance, And financial trends of the
borrower. The Company establishes a reserve allocation based
upon the assigned risk grade.

In addition the Company establishes an aggregate
reserve for loan loss threshold based upon the entire portfolio.
The amount of the established allowance in excess of the
allocation based upon risk grade is considered a secondary
reserve to mitigate the concentrations that may exist in the
portfolio from time to time. These concentrations include both
geographic and collateral.

The Company uses various criteria in determining
the aggregate reserve including peer group comparison, local
economic trends and data provided by the primary regulatory
agencies of the Company.

The allowance for loan losses is evaluated on a
regular basis by management and is based upon managements
periodic review of the collectibility of the loans in light of
historical experience, the nature and volume 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.

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. Management determines the significance of payment
delays and payment shortfalls on a case-by-case basis, taking
into consideration all of the circumstances surrounding the loan
and the borrower, including the length of the delay, the reasons
for the delay, the

(continued)


F-8



---



##### 



UNITED HERITAGE BANKSHARES OF FLORIDA, INC. AND SUBSIDIARY


Notes to Consolidated Financial
Statements  (Continued)





(2) Summary of Significant Accounting Policies,
Continued


borrowers prior payment record, and the
amount of the shortfall in relation to the principal and
interest owed. Impairment is measured on a loan by loan basis
for commercial and commercial real estate loans by either the
present value of expected future cash flows discounted at the
loans effective interest rate, the loans obtainable
market price, or the fair value of the collateral if the loan is
collateral dependent.

Large groups of smaller balance homogeneous loans
are collectively evaluated for impairment. Accordingly, the
Company does not separately identify individual consumer and
residential real estate loans for impairment disclosures.

Property and
Equipment.Land is stated at cost.
Other property and equipment are stated at cost, less
accumulated depreciation and amortization computed on the
straight-line and accelerated methods over the estimated useful
lives of the assets. These lives are summarized as follows:

|                        |  |                 |            | 
|----------------------- |  | --------------- | ---------- | 
|Asset                   |  | Estimated Lives |           
|                       
|                       
|Buildings               |  |                 | 40 years   | 
|Land improvements       |  |                 | 15 years   | 
|Leasehold improvements  |  |                 | 5-15 years | 
|Furniture and equipment |  |                 | 5-10 years | 

Maintenance and repairs are charged to income,
and improvements and additions are capitalized.

Goodwill and Other Intangible
Assets.Intangible assets consist
of purchased core deposits and goodwill. The core deposit
intangible is being amortized over its estimated duration of six
years on a straight-line basis. Goodwill is not being amortized,
but is carried at its cost. The Company reviews intangible
assets for possible impairment whenever events or circumstances
indicate that carrying amounts may not be recoverable.

Income Taxes.The Company uses the liability method for accounting for
deferred income taxes. This method requires the recognition of
deferred tax assets and liabilities for the future tax
consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities
and their respective tax bases.

The Company and the Bank file consolidated
federal and state income tax returns. Tax is allocated among the
entities on a separate entity basis.

Transfer of Financial
Assets.Transfers of financial
assets are accounted for as sales when control over the assets
has been surrendered. Control over transferred assets is deemed
to be surrendered when (1) the assets have been isolated
from the Company, (2) the transferee obtains the right
(free of conditions that constrain it from taking advantage of
that right) to pledge or exchange the transferred assets, and
(3) the Company does not maintain effective control over
the transferred assets through an agreement to repurchase them
before their maturity.

Stock Compensation
Plans.Statement of Financial
Accounting Standards (SFAS) No. 123, Accounting for
Stock-Based Compensation, as amended by
SFAS No. 148, Accounting for Stock-Based
Compensation Transition and Disclosure(collectively,
SFAS 123) encourages all entities to adopt a
fair value based method of accounting for employee stock
compensation plans, whereby compensation cost is measured at the
grant date based on the value of the award and is recognized
over the service period, which is usually the vesting period.
However, it also allows an entity to continue to measure
compensation cost for those plans using the intrinsic value
based method of accounting prescribed by Accounting Principles
Board Opinion No. 25, Accounting for Stock Issued to
Employees(APB No. 25),

(continued)


F-9



---



##### 



UNITED HERITAGE BANKSHARES OF FLORIDA, INC. AND SUBSIDIARY


Notes to Consolidated Financial
Statements  (Continued)





(2) Summary of Significant Accounting Policies,
Continued


whereby compensation cost is the excess, if any,
of the quoted market price of the stock at the grant date (or
other measurement date) over the amount an employee must pay to
acquire the stock. The Company accounts for its stock option
plans under the recognition and measurement principles of APB
No. 25. No stock-based employee compensation cost is
reflected in net income as all options granted under those plans
had an exercise price equal to the market value of the
underlying common stock on the date of grant.

For purposes of pro forma disclosures, the
estimated fair value is included in expense in the period
vesting occurs. The following table illustrates the assumptions
used in determining the grant-date fair value of options issued
during the periods presented and the effect on net earnings as
if the Company had applied the fair value recognition provisions
of SFAS No. 123 to stock-based employee compensation
($ in thousands, except per share amounts):

|                                                                                                                                               |                                          |                         |       |      |      |   |       |      |   |   |      |      |  
|---------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------- | ----------------------- | ----- | ---- | ---- | - | ----- | ---- | - | - | ---- | ---- | -
|                                                                                                                                               |                                          |                        
|                                                                                                                                               |                                          | Year Ended December 31, |      
|                                                                                                                                               |                                          |                         |      
|                                                                                                                                               |                                          | 2005                    |       |      | 2004 |   |       | 2003 |  
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                              
|Assumptions:                                                                                                                                   |                                          |                         |       |      |      |   |       |      |   |   |      |     
|                                                                                                                                               | Weighted-average risk free interest rate |                         |       | 4.41 | %    |   |       | 4.27 | % |   |      | 4.15 | %
|                                                                                                                                              
|                                                                                                                                               | Estimated option life (in years)         |                         |       | 10   |      |   |       | 10   |   |   |      | 10   |  
|                                                                                                                                              
|                                                                                                                                               | Dividend yield                           |                         |       |     | %    |   |       |     | % |   |      |     | %
|                                                                                                                                              
|                                                                                                                                               | Estimated stock volatility               |                         |       |     |      |   |       |     |   |   |      |     |  
|                                                                                                                                              
|Weighted-average grant-date fair value of options
    issued during the year, per option                                                       |                                          | $                       | 4.97  |      |      | $ | 4.12  |      |   | $ | 3.36 |     
|                                                                                                                                              
|Net income, as reported                                                                                                                        |                                          | $                       | 3,335 |      |      | $ | 2,041 |      |   | $ | 881  |     
|Deduct: Total stock-based employee compensation
    determined under the fair value based method for all awards, net
    of related tax effect |                                          |                         | (380  | )    |      |   | (600  | )    |   |   | (532 | )   
|                                                                                                                                              
|Proforma net income                                                                                                                            |                                          | $                       | 2,955 |      |      | $ | 1,441 |      |   | $ | 349  |     
|                                                                                                                                              
|Basic income per share, as reported                                                                                                            |                                          | $                       | .74   |      |      | $ | .63   |      |   | $ | .28  |     
|                                                                                                                                              
|Proforma basic income per share                                                                                                                |                                          | $                       | .65   |      |      | $ | .44   |      |   | $ | .11  |     
|                                                                                                                                              
|Diluted income per share, as reported                                                                                                          |                                          | $                       | .72   |      |      | $ | .61   |      |   | $ | .27  |     
|                                                                                                                                              
|Proforma diluted income per share                                                                                                              |                                          | $                       | .64   |      |      | $ | .43   |      |   | $ | .11  |     
|                                                                                                                                              

Earnings Per
Share.Basic earnings per share is
computed by dividing net income by the weighted average number
of common shares outstanding during the period. Diluted earnings
per share is computed by adding the dilutive effect of any
unexercised stock options, using the treasury stock method to
determine dilution.

(continued)


F-10



---



##### 



UNITED HERITAGE BANKSHARES OF FLORIDA, INC. AND SUBSIDIARY


Notes to Consolidated Financial
Statements  (Continued)





(2) Summary of Significant Accounting Policies,
Continued


|                                                  |  |                         |           |  |      |  |           |      |  |  |           | 
|------------------------------------------------- |  | ----------------------- | --------- |  | ---- |  | --------- | ---- |  |  | --------- | 
|                                                  |  |                        
|                                                  |  | Year Ended December 31, |          
|                                                  |  |                         |          
|                                                  |  | 2005                    |           |  | 2004 |  |           | 2003 | 
|                                                 
|                                                 
|Weighted-average common shares outstanding        |  |                         | 4,512,372 |  |      |  | 3,258,687 |      |  |  | 3,170,513 | 
|Dilutive shares issuable under stock option plans |  |                         | 113,925   |  |      |  | 101,037   |      |  |  | 61,458    | 
|                                                 
|Weighted-average common shares on a diluted basis |  |                         | 4,626,297 |  |      |  | 3,359,724 |      |  |  | 3,231,971 | 
|                                                 

Off-Balance-Sheet Credit-Related
Instruments.In the ordinary
course of business, the Company has entered into
off-balance-sheet financial instruments consisting of
commitments to extend credit, unused lines of credit, standby
letters of credit and undisbursed construction loans in process.
Such financial instruments are recorded in the consolidated
financial statements when they are funded.

Comprehensive
Income.Accounting principles
generally require that recognized revenue, expenses, gains and
losses be included in net income. Although certain changes in
assets and liabilities, such as unrealized gains and losses on
available-for-sale securities, are reported as a separate
component of the equity section of the consolidated balance
sheets, such items, along with net income, are components of
comprehensive income. The only component of other comprehensive
income (loss) during the years ended December 31, 2005,
2004 and 2003 was the change in unrealized income or loss on
securities available for sale, net of tax and a $5,000
reclassification adjustment in 2003 relating to the gain on sale
securities available for sale.

Recent
Pronouncements.In December 2003,
the American Institute of Certified Public Accountants
(AICPA) issued Statement of Position
(SOP) 03-3, Accounting for Loans or Certain Debt
Securities Acquired in a Transfer. This SOP requires
acquired impaired loans for which it is probable that the
investor will be unable to collect all contractually required
payments receivable to be recorded at the present value of
amounts expected to be received. The SOP also prohibits carrying
over or creation of valuation allowances in the initial
accounting for these loans. The SOP was effective for loans
acquired in fiscal years beginning after December 15, 2004.
The adoption of this SOP did not impact the Companys
financial position or results of operations.

In December 2004, the Financial Accounting
Standards Board (FASB) issued Statement of Financial
Accounting Standards (SFAS) No. 123 (Revised),
Share-Based Payment(SFAS No. 123(R)). This Statement
replaces SFAS No. 123, Accounting for Stock-Based
Compensation(SFAS No. 123), and
supersedes Accounting Practice Bulletin (APB)
Opinion No. 25, Accounting for Stock Issued to Employees(APB No. 25). SFAS No. 123(R)
clarifies and expands SFAS No. 123s guidance in
several areas, including measuring fair value, classifying an
award as equity or as a liability, accounting for
non-substantive vesting provisions, and attributing compensation
cost to reporting periods. Under the provisions of
SFAS No. 123(R), the alternative to use APB
No. 25s intrinsic value method of accounting that was
provided in SFAS No. 123, as originally issued, is
eliminated. Effective January 1, 2006, the Company will
begin expensing the fair value of unvested stock options and any
future grants of stock options. Based on the amount of unvested
stock options as of December 31, 2005, the Company will
record compensation expense of approximately $275,000 and
$245,000 in 2006 and 2007, respectively.

In May 2005, the FASB issued SFAS 154,
Accounting Changes and Error Corrections, which replaces
APB Opinion No. 20, Accounting Changes, and
SFAS 3, Reporting Accounting Changes in Interim
Financial Statements An Amendment of APB Opinion
No. 28. SFAS 154 changes the requirements for the
accounting and reporting of a change

(continued)


F-11



---



##### 



UNITED HERITAGE BANKSHARES OF FLORIDA, INC. AND SUBSIDIARY


Notes to Consolidated Financial
Statements  (Continued)





(2) Summary of Significant Accounting Policies,
Continued


in accounting principle. SFAS 154 is
effective for accounting changes and corrections of errors made
in fiscal years beginning after December 15, 2005.

Reclassification.Certain accounts and captions as presented in the 2004 and 2003
consolidated financial statements have been reclassified to
conform to the classifications in the 2005 consolidated
financial statements.

(3) Securities

Securities have been classified in accordance
with managements intent. The carrying amounts of
securities and their approximate fair values are as follows (in
thousands):

|                      |                            |           |         |         |            |   |       |            |  |             |        |        |   |   |         |         | 
|--------------------- | -------------------------- | --------- | ------- | ------- | ---------- | - | ----- | ---------- |  | ----------- | ------ | ------ | - | - | ------- | ------- | 
|                      |                            |           |         | Gross   |            |   | Gross |            |  | Approximate |       
|                      |                            | Amortized |         |         | Unrealized |   |       | Unrealized |  |             | Fair   |       
|                      |                            | Cost      |         |         | Gains      |   |       | Losses     |  |             | Value  |       
|                     
|                     
|                     
|                     
|                     
|                     
|At December 31, 2005: |                            |           |         |         |            |   |       |            |  |             |        |        |   |   |         |        
|                     
|                     
|                     
|                     
|Available for Sale:   |                            |           |         |         |            |   |       |            |  |             |        |        |   |   |         |        
|                      | U.S. Agency securities     |           | $       | 15,963  |            |   | $     |           |  |             | $      | (220   | ) |   | $       | 15,743  | 
|                      | Mortgage-backed securities |           |         | 151,231 |            |   |       | 18         |  |             |        | (2,942 | ) |   |         | 148,307 | 
|                     
|                      |                            | $         | 167,194 |         |            | $ | 18    |            |  | $           | (3,162 | )      |   | $ | 164,050 |        
|                     
|Held to Maturity     |                            |           |         |         |            |   |       |            |  |             |        |        |   |   |         |        
|                      | Municipal bonds            |           | $       | 21,119  |            |   | $     | 3          |  |             | $      | (731   | ) |   | $       | 20,391  | 
|                     
|At December 31, 2004: |                            |           |         |         |            |   |       |            |  |             |        |        |   |   |         |        
|                     
|                     
|                     
|                     
|Available for Sale:   |                            |           |         |         |            |   |       |            |  |             |        |        |   |   |         |        
|                      | U.S. Agency securities     |           | $       | 3,518   |            |   | $     | 1          |  |             | $      | (7     | ) |   | $       | 3,512   | 
|                      | Mortgage-backed securities |           |         | 65,550  |            |   |       | 189        |  |             |        | (611   | ) |   |         | 65,128  | 
|                     
|                      |                            | $         | 69,068  |         |            | $ | 190   |            |  | $           | (618   | )      |   | $ | 68,640  |        
|                     

There were no sales of securities available for
sale during 2005. During 2004, one security was sold for
$106,000 which was the carrying value at the time and no gain or
loss was recognized. During 2003, one security was sold for
$243,000 and a gross gain of $5,000 was recorded.

As of December 31, 2005 and 2004, securities
with a carrying value of approximately $51.7 million and
$24.3 million, respectively, were pledged as collateral for
repurchase agreements with customers and to the State of Florida
for public deposits.

(continued)


F-12



---



##### 



UNITED HERITAGE BANKSHARES OF FLORIDA, INC. AND SUBSIDIARY


Notes to Consolidated Financial
Statements  (Continued)





(3) Securities, Continued


Scheduled maturities of securities at
December 31, 2005 are as follows (in thousands):

|                                       |  |                    |         |             |                  |   |         |           |             |   |        |  |  |   |        | 
|-------------------------------------- |  | ------------------ | ------- | ----------- | ---------------- | - | ------- | --------- | ----------- | - | ------ |  |  | - | ------ | 
|                                       |  |                    |         |            
|                                       |  | Available for Sale |         |             | Held to Maturity |  
|                                       |  |                    |         |             |                  |  
|                                       |  |                    |         | Approximate |                  |   |         |           | Approximate |  
|                                       |  | Amortized          |         |             | Fair             |   |         | Amortized |             |   | Fair   | 
|                                       |  | Cost               |         |             | Value            |   |         | Cost      |             |   | Value  | 
|                                      
|                                      
|Due after one year through five years  |  | $                  | 500     |             |                  | $ | 483     |           |             | $ |       |  |  | $ |       | 
|Due after five years through ten years |  |                    | 15,463  |             |                  |   | 15,260  |           |             |   |       |  |  |   |       | 
|Due after ten years                    |  |                    |        |             |                  |   |        |           |             |   | 21,119 |  |  |   | 20,391 | 
|Mortgage-backed securities             |  |                    | 151,231 |             |                  |   | 148,307 |           |             |   |       |  |  |   |       | 
|                                      
|                                       |  | $                  | 167,194 |             |                  | $ | 164,050 |           |             | $ | 21,119 |  |  | $ | 20,391 | 
|                                      

Expected maturities may differ from contractual
maturities because issuers may have the right to call or prepay
obligations with or without prepayment penalties.

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

|                 |                     |                            |                                     |   |                       |       |  |            |         |         |             |   |       |       |  |   |        |        | 
|---------------- | ------------------- | -------------------------- | ----------------------------------- | - | --------------------- | ----- |  | ---------- | ------- | ------- | ----------- | - | ----- | ----- |  | - | ------ | ------ | 
|                 |                     |                            |                                     |  
|                 |                     | Less Than Twelve Months    |                                     |   | Twelve Months or Over |      
|                 |                     |                            |                                     |   |                       |      
|                 |                     | Gross                      |                                     |   | Approximate           |       |  | Gross      |         |         | Approximate |  
|                 |                     | Unrealized                 |                                     |   | Fair                  |       |  | Unrealized |         |         | Fair        |  
|                 |                     | Losses                     |                                     |   | Value                 |       |  | Losses     |         |         | Value       |  
|                
|                
|                
|                
|                
|                
|Debt securities: |                     |                            |                                     |   |                       |       |  |            |         |         |             |   |       |       |  |  
|                
|                
|                
|                
|                 | Available for Sale: |                            |                                     |   |                       |       |  |            |         |         |             |   |       |       |  |   |       
|                 |                     | U.S. Agency securities     |                                     | $ | 17                    |       |  | $          | 483     |         |             | $ | 203   |       |  | $ | 15,260 |       
|                 |                     | Mortgage-backed securities |                                     |   | 1,720                 |       |  |            | 107,632 |         |             |   | 1,222 |       |  |   | 36,962 |       
|                
|                 |                     |                            | Total available for sale securities |   | $                     | 1,737 |  |            | $       | 108,115 |             |   | $     | 1,425 |  |   | $      | 52,222 | 
|                
|                 | Held to maturities: |                            |                                     |   |                       |       |  |            |         |         |             |   |       |       |  |   |       
|                 |                     | Municipal bonds            |                                     | $ | 731                   |       |  | $          | 19,638  |         |             | $ |      |       |  | $ |       |       
|                

At December 31, 2005, the Company has 97
debt securities with unrealized losses. Management believes
these unrealized losses relate to changes in interest rates and
not credit quality. Management also believes the Company has the
ability to hold these securities until maturity, or for the
foreseeable future and therefore no declines are deemed to be
other than temporary.

(continued)


F-13



---



##### 



UNITED HERITAGE BANKSHARES OF FLORIDA, INC. AND SUBSIDIARY


Notes to Consolidated Financial
Statements  (Continued)

(4) Loans

The components of loans are summarized as follows
(in thousands):

|                                       |             |                 |         |         |      |   |         |         | 
|-------------------------------------- | ----------- | --------------- | ------- | ------- | ---- | - | ------- | ------- | 
|                                       |             |                
|                                       |             | At December 31, |        
|                                       |             |                 |        
|                                       |             | 2005            |         |         | 2004 |  
|                                      
|                                      
|Real estate  mortgage                 |             | $               | 179,323 |         |      | $ | 133,257 |        
|Construction and land development      |             |                 | 111,698 |         |      |   | 60,675  |        
|Commercial, financial and agricultural |             |                 | 69,266  |         |      |   | 44,720  |        
|Installment and consumer lines         |             |                 | 5,349   |         |      |   | 5,998   |        
|                                      
|                                       | Total loans |                 |         | 365,636 |      |   |         | 244,650 | 
|Allowance for loan losses              |             |                 | (4,580  | )       |      |   | (3,077  | )      
|Deferred loan fees, net                |             |                 | (631    | )       |      |   | (359    | )      
|                                      
|                                       | Loans, net  |                 | $       | 360,425 |      |   | $       | 241,214 | 
|                                      

An analysis of the changes in the allowance for
loan losses follows (in thousands):

|                                    |  |                         |       |   |      |   |       |      |  |   |       |  
|----------------------------------- |  | ----------------------- | ----- | - | ---- | - | ----- | ---- |  | - | ----- | -
|                                    |  |                        
|                                    |  | Year Ended December 31, |      
|                                    |  |                         |      
|                                    |  | 2005                    |       |   | 2004 |   |       | 2003 | 
|                                   
|                                   
|Balance at beginning of year        |  | $                       | 3,077 |   |      | $ | 2,526 |      |  | $ | 1,014 |  
|Provision for loan losses           |  |                         | 1,540 |   |      |   | 617   |      |  |   | 784   |  
|Acquired in purchase transaction    |  |                         |      |   |      |   |      |      |  |   | 887   |  
|Loan charge-offs, net of recoveries |  |                         | (37   | ) |      |   | (66   | )    |  |   | (159  | )
|                                   
|Balance at end of year              |  | $                       | 4,580 |   |      | $ | 3,077 |      |  | $ | 2,526 |  
|                                   

The following summarizes impaired loans (in
thousands):

|                                                 |                          |                 |    |    |      |   |    |    | 
|------------------------------------------------ | ------------------------ | --------------- | -- | -- | ---- | - | -- | -- | 
|                                                 |                          |                
|                                                 |                          | At December 31, |   
|                                                 |                          |                 |   
|                                                 |                          | 2005            |    |    | 2004 |  
|                                                
|                                                
|Impaired loans with a valuation allowance        |                          | $               | 44 |    |      | $ | 83 |   
|Impaired loans without a valuation allowance     |                          |                 |   |    |      |   |   |   
|Less  valuation allowance on impaired
    loans |                          |                 | (4 | )  |      |   | (5 | ) 
|                                                
|                                                 | Total net impaired loans |                 | $  | 40 |      |   | $  | 78 | 
|                                                

(continued)


F-14



---



##### 



UNITED HERITAGE BANKSHARES OF FLORIDA, INC. AND SUBSIDIARY


Notes to Consolidated Financial
Statements  (Continued)





(4) Loans, Continued


The average net investment in impaired loans and
interest income recognized and received on impaired loans (in
thousands):

|                                             |  |                         |    |  |      |   |     |      |  |   |     | 
|-------------------------------------------- |  | ----------------------- | -- |  | ---- | - | --- | ---- |  | - | --- | 
|                                             |  |                        
|                                             |  | Year Ended December 31, |   
|                                             |  |                         |   
|                                             |  | 2005                    |    |  | 2004 |   |     | 2003 | 
|                                            
|                                            
|Average net investment in impaired loans     |  | $                       | 51 |  |      | $ | 349 |      |  | $ | 376 | 
|                                            
|Interest income recognized on impaired loans |  | $                       | 1  |  |      | $ | 3   |      |  | $ |    | 
|                                            
|Interest income received on impaired loans   |  | $                       | 1  |  |      | $ | 3   |      |  | $ |    | 
|                                            

Nonaccrual and accruing loans past due
90 days or more follows (in thousands):

|                                        |       |                 |    |    |      |   |    |    | 
|--------------------------------------- | ----- | --------------- | -- | -- | ---- | - | -- | -- | 
|                                        |       |                
|                                        |       | At December 31, |   
|                                        |       |                 |   
|                                        |       | 2005            |    |    | 2004 |  
|                                       
|                                       
|Nonaccrual loans                        |       | $               | 44 |    |      | $ | 50 |   
|Accruing loans past due 90 days or more |       |                 |   |    |      |   | 44 |   
|                                       
|                                        | Total |                 | $  | 44 |      |   | $  | 94 | 
|                                       

(5) Property and Equipment

The components of property and equipment, and the
aggregate related accumulated depreciation and amortization are
as follows (in thousands)

|                                               |                |                 |        |       |      |   |        |       | 
|---------------------------------------------- | -------------- | --------------- | ------ | ----- | ---- | - | ------ | ----- | 
|                                               |                |                
|                                               |                | At December 31, |       
|                                               |                |                 |       
|                                               |                | 2005            |        |       | 2004 |  
|                                              
|                                              
|Land                                           |                | $               | 994    |       |      | $ | 994    |      
|Buildings                                      |                |                 | 3,921  |       |      |   | 3,416  |      
|Land improvements                              |                |                 | 177    |       |      |   | 157    |      
|Leasehold improvements                         |                |                 | 1,649  |       |      |   | 1,054  |      
|Furniture and equipment                        |                |                 | 2,754  |       |      |   | 1,887  |      
|Construction in process                        |                |                 | 71     |       |      |   | 770    |      
|                                              
|                                               | Total, at cost |                 |        | 9,566 |      |   |        | 8,278 | 
|Less accumulated depreciation and amortization |                |                 | (2,039 | )     |      |   | (1,415 | )    
|                                              
|                                               | Total, net     |                 | $      | 7,527 |      |   | $      | 6,863 | 
|                                              

Depreciation and amortization expense charged to
income was approximately $694,000, $533,000 and $450,000 in
2005, 2004 and 2003, respectively.

(continued)


F-15



---



##### 



UNITED HERITAGE BANKSHARES OF FLORIDA, INC. AND SUBSIDIARY


Notes to Consolidated Financial
Statements  (Continued)

(6) Operating Leases

The Bank leases certain of its facilities and
equipment under non-cancellable operating leases. These leases
require monthly rent payments and common area maintenance
charges and contain escalation clauses and renewal options.
Amounts due under these leases after 2005 are as follows (in
thousands):

|           |  |        |       | 
|---------- |  | ------ | ----- | 
|           |  | Amount |      
|          
|          
|2006       |  | $      | 902   | 
|2007       |  |        | 908   | 
|2008       |  |        | 878   | 
|2009       |  |        | 734   | 
|2010       |  |        | 736   | 
|Thereafter |  |        | 3,165 | 
|          
|Total      |  | $      | 7,323 | 
|          

The total charge to 2005, 2004 and 2003 income
under these leases was approximately $782,000, $377,000 and
$305,000, respectively.

(7) Deposits

The aggregate amount of time deposits with a
minimum denomination of $100,000 is $184.0 million and
$93.7 million at December 31, 2005 and 2004,
respectively. At December 31, 2005, the scheduled
maturities of time deposits are as follows (in thousands):

|                         |  |        |         | 
|------------------------ |  | ------ | ------- | 
|Maturing during the      |  |       
|Year Ending December 31, |  | Amount |        
|                        
|                        
|2006                     |  | $      | 110,912 | 
|2007                     |  |        | 54,876  | 
|2008                     |  |        | 76,826  | 
|2009                     |  |        | 2,845   | 
|2010                     |  |        | 100     | 
|                        
|                         |  | $      | 245,559 | 
|                        

(continued)


F-16



---



##### 



UNITED HERITAGE BANKSHARES OF FLORIDA, INC. AND SUBSIDIARY


Notes to Consolidated Financial
Statements  (Continued)

(8) Borrowings

The Bank has sold securities to certain of its
customers and correspondent Banks under agreements to
repurchase. These borrowings are collateralized by those
securities discussed in Note 3 to these consolidated
financial statements. The following summarizes these borrowings
($ in thousands):

|                                      |  |                          |        |   |      |   |       |  
|------------------------------------- |  | ------------------------ | ------ | - | ---- | - | ----- | -
|                                      |  |                         
|                                      |  | At or For the Year Ended |       
|                                      |  | December 31,             |       
|                                      |  |                          |       
|                                      |  | 2005                     |        |   | 2004 |  
|                                     
|                                     
|Balance at year-end                   |  | $                        | 31,884 |   |      | $ | 2,009 |  
|Average balance during the year       |  | $                        | 6,707  |   |      | $ | 3,019 |  
|Interest expense during the year      |  | $                        | 212    |   |      | $ | 25    |  
|Average interest rate during the year |  |                          | 3.16   | % |      |   | .83   | %

The Company also has unsecured federal funds
purchased lines of credit with correspondent banks under which
the Company could borrow up to $14.0 million. These lines
are used for liquidity needs and generally are repaid within
seven to fourteen days. The Company did not have any borrowings
outstanding under these agreements at December 31, 2005. At
December 31, 2004, the Company had $4.0 million
outstanding at a rate of 2.63%.

(9) Income Taxes

The components of income taxes are as follows (in
thousands):

|        |  |         |       |  |          |   |      |       |  |   |         |  |  |          |       |  |       |   |      |         |  |   |          |  |  |       |     |  |  |  |      |   |  |  |     | 
|------- |  | ------- | ----- |  | -------- | - | ---- | ----- |  | - | ------- |  |  | -------- | ----- |  | ----- | - | ---- | ------- |  | - | -------- |  |  | ----- | --- |  |  |  | ---- | - |  |  | --- | 
|        |  |         |       |  |          |  
|        |  | 2005    |       |  | 2004     |   |      | 2003  | 
|        |  |         |       |  |          |   |      |       | 
|        |  | Current |       |  | Deferred |   |      | Total |  |   | Current |  |  | Deferred |       |  | Total |   |      | Current |  |   | Deferred |  |  | Total |    
|       
|       
|Federal |  | $       | 2,120 |  |          | $ | (484 | )     |  | $ | 1,636   |  |  | $        | 1,284 |  |       | $ | (187 | )       |  | $ | 1,097    |  |  | $     | 663 |  |  |  | (177 | ) |  |  | 486 | 
|State   |  |         | 379   |  |          |   | (86  | )     |  |   | 293     |  |  |          | 219   |  |       |   | (31  | )       |  |   | 188      |  |  |       | 112 |  |  |  | (30  | ) |  |  | 82  | 
|       
|        |  | $       | 2,499 |  |          | $ | (570 | )     |  | $ | 1,929   |  |  | $        | 1,503 |  |       | $ | (218 | )       |  | $ | 1,285    |  |  | $     | 775 |  |  |  | (207 | ) |  |  | 568 | 
|       

Deferred taxes represent the deferred tax effect
attributable to the change in the cumulative differences between
the book and tax bases of the Companys assets and
liabilities from the prior year.

The more significant temporary differences and
the related deferred tax amounts are as follows (in thousands):

|                                                 |                        |                 |       |       |      |   |       |       | 
|------------------------------------------------ | ---------------------- | --------------- | ----- | ----- | ---- | - | ----- | ----- | 
|                                                 |                        |                
|                                                 |                        | At December 31, |      
|                                                 |                        |                 |      
|                                                 |                        | 2005            |       |       | 2004 |  
|                                                
|                                                
|Loan loss reserve                                |                        | $               | 1,615 |       |      | $ | 1,035 |      
|Preopening and organizational costs              |                        |                 | 32    |       |      |   | 88    |      
|Unrealized loss on securities available for sale |                        |                 | 1,183 |       |      |   | 162   |      
|Property and equipment basis difference          |                        |                 | 16    |       |      |   | (5    | )    
|Core deposit intangible                          |                        |                 | (75   | )     |      |   | (100  | )    
|                                                
|                                                 | Net deferred tax asset |                 | $     | 2,771 |      |   | $     | 1,180 | 
|                                                

(continued)


F-17



---



##### 



UNITED HERITAGE BANKSHARES OF FLORIDA, INC. AND SUBSIDIARY


Notes to Consolidated Financial
Statements  (Continued)





(9) Income Taxes, Continued


A reconciliation of the income tax expected at
the 34% Federal income tax rate and the actual income tax
follows ($ in thousands):

|                                              |  |                         |       |   |         |  |      |        |  |   |         |  |  |        |      |   |         |   |     |   |  |  |      |  
|--------------------------------------------- |  | ----------------------- | ----- | - | ------- |  | ---- | ------ |  | - | ------- |  |  | ------ | ---- | - | ------- | - | --- | - |  |  | ---- | -
|                                              |  |                        
|                                              |  | Year Ended December 31, |      
|                                              |  |                         |      
|                                              |  |                         |       |   |         | 
|                                              |  | 2005                    |       |   | 2004    |  |      | 2003   | 
|                                              |  |                         |       |   |         |  |      |        | 
|                                              |  | Amount                  |       |   | Percent |  |      | Amount |  |   | Percent |  |  | Amount |      |   | Percent |  
|                                             
|                                             
|Computed expected income tax expense        |  | $                       | 1,790 |   |         |  | 34.0 | %      |  | $ | 1,131   |  |  |        | 34.0 | % |         | $ | 493 |   |  |  | 34.0 | %
|State income taxes, net of federal income tax |  |                         | 195   |   |         |  | 3.7  |        |  |   | 124     |  |  |        | 3.6  |   |         |   | 51  |   |  |  | 3.5  |  
|Tax-exempt income, municipal bonds            |  |                         | (99   | ) |         |  | (1.9 | )      |  |   |        |  |  |        |     |   |         |   | (16 | ) |  |  | (1.1 | )
|Other                                         |  |                         | 43    |   |         |  | .8   |        |  |   | 30      |  |  |        | 1.0  |   |         |   | 40  |   |  |  | 2.8  |  
|                                             
|                                              |  | $                       | 1,929 |   |         |  | 36.6 | %      |  | $ | 1,285   |  |  |        | 38.6 | % |         | $ | 568 |   |  |  | 39.2 | %
|                                             

(10) Related Party Transactions

In the ordinary course of business, the Bank
grants loans to and accepts deposits from principal
shareholders, executive officers and directors and their
affiliates. These are summarized as follows (in thousands):

|                        |                   |                         |        |        |      |   |        |        |   |   |        |        |  
|----------------------- | ----------------- | ----------------------- | ------ | ------ | ---- | - | ------ | ------ | - | - | ------ | ------ | -
|                        |                   |                        
|                        |                   | Year Ended December 31, |       
|                        |                   |                         |       
|                        |                   | 2005                    |        |        | 2004 |   |        | 2003   |  
|                       
|                       
|                       
|                       
|                       
|                       
|Loans:                  |                   |                         |        |        |      |   |        |        |   |   |        |       
|                        | Beginning balance |                         | $      | 20,287 |      |   | $      | 13,132 |   |   | $      | 10,697 |  
|                        | Additions         |                         |        | 5,841  |      |   |        | 7,955  |   |   |        | 2,580  |  
|                        | Repayments        |                         |        | (7,362 | )    |   |        | (800   | ) |   |        | (145   | )
|                       
|                        | Ending balance    |                         | $      | 18,766 |      |   | $      | 20,287 |   |   | $      | 13,132 |  
|                       
|Deposits at end of year |                   | $                       | 48,437 |        |      | $ | 34,809 |        |   | $ | 17,134 |       
|                       

(11) Off-Balance-Sheet Activities

The Company is a party to credit-related
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 commitments to extend
credit, unused lines of credit, standby letters of credit and
undisbursed construction loans in process.

These financial instruments may involve, to
varying degrees, elements of credit and interest-rate risk in
excess of the amount recognized in the consolidated balance
sheets. The contract amounts of these instruments reflect the
extent of involvement the Company has in these 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 standby letters
of credit 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.

(continued)


F-18



---



##### 



UNITED HERITAGE BANKSHARES OF FLORIDA, INC. AND SUBSIDIARY


Notes to Consolidated Financial
Statements  (Continued)





(11) Off-Balance-Sheet Activities, Continued


Commitments to extend 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 some of the commitments are
expected to expire without being drawn upon, the total
commitment amounts do not necessarily represent future cash
requirements. The Company evaluates each customers credit
worthiness on a case-by-case basis. The amount of collateral
obtained if deemed necessary by the Company upon extension of
credit is based on managements credit evaluation of the
counterparty.

Standby letters of credit are conditional
commitments issued by the Company to guarantee the performance
of a customer to a third party. These letters of credit are
primarily issued to support third-party borrowing arrangements
and generally have expiration dates within one year of issuance.
The credit risk involved in issuing letters of credit is
essentially the same as that involved in extending loans to
customers. The Company generally holds collateral supporting
these commitments.

Commitments to extend credit and standby letters
of credit typically result in loans with a market interest rate
when funded. A summary of the contractual amounts of the
Companys financial instruments with off-balance-sheet risk
follows (in thousands):

|                                                                   |  |                 |        |  |      |   |        | 
|------------------------------------------------------------------ |  | --------------- | ------ |  | ---- | - | ------ | 
|                                                                   |  |                
|                                                                   |  | At December 31, |       
|                                                                   |  |                 |       
|                                                                   |  | 2005            |        |  | 2004 |  
|                                                                  
|                                                                  
|Commitments to extend credit, including unused
    lines of credit |  | $               | 66,177 |  |      | $ | 39,638 | 
|                                                                  
|Standby letters of credit                                          |  | $               | 6,189  |  |      | $ | 2,530  | 
|                                                                  
|Undisbursed construction loans in process                          |  | $               | 66,222 |  |      | $ | 21,629 | 
|                                                                  

The contractual amounts of credit-related
financial instruments such as commitments to extend credit,
unused lines of credit, standby letters of credit and
undisbursed construction loans in process represent the amounts
of potential accounting loss should the contract be fully drawn
upon, the customer default and the value of any existing
collateral become worthless.

(12) Significant Group Concentration of Credit Risk

The Company grants real estate, commercial and
consumer loans to customers primarily in the State of Florida
with the majority of such loans in the Orange and Seminole
Counties area. Therefore, the Companys exposure to credit
risk is significantly affected by changes in the economy of the
Orange and Seminole Counties area.

(13) Legal Contingencies

Various legal claims arise from time to time in
the normal course of business. In the opinion of management,
none have occurred as of December 31, 2005 that will have a
material effect on the Companys consolidated financial
statements.

(14) Dividend Restrictions

Since the Company depends upon the Bank for cash
flow, the Companys ability to pay dividends is dependent
upon the Banks cash and capital positions. The payment of
dividends is subject to various restrictions set forth in the
State

(continued)


F-19



---



##### 



UNITED HERITAGE BANKSHARES OF FLORIDA, INC. AND SUBSIDIARY


Notes to Consolidated Financial
Statements  (Continued)





(14) Dividend Restrictions, Continued


Banking Code. Such restrictions generally limit
dividends to an amount not exceeding net income for the current
and two preceding years, less any dividends paid during that
period.

(15) Stock Option Plans

The Company has two stock option plans permitting
the granting of stock options for up to 915,956 shares
(after amendment in 2005) of the Companys common stock to
selected officers, employees and directors of the Company.

The maximum term of options granted is ten years.
Options granted to employees vest over a five year period.
Grants to directors vest immediately.

Activity in the plans follows:

|                                                   |  |                   |         |   |                   |   |       |                   |  |  |          |   |  |         |       |  |          |  |         |  |  |   |       | 
|-------------------------------------------------- |  | ----------------- | ------- | - | ----------------- | - | ----- | ----------------- |  |  | -------- | - |  | ------- | ----- |  | -------- |  | ------- |  |  | - | ----- | 
|                                                   |  |                   |         |   |                   |  
|                                                   |  | Year Ended        |         |   | Year Ended        |   |       | Year Ended        | 
|                                                   |  | December 31, 2005 |         |   | December 31, 2004 |   |       | December 31, 2003 | 
|                                                   |  |                   |         |   |                   |   |       |                   | 
|                                                   |  | Number            |         |   | Average           |   |       | Number            |  |  | Average  |   |  | Number  |       |  | Average  | 
|                                                   |  | of                |         |   | Exercise          |   |       | of                |  |  | Exercise |   |  | of      |       |  | Exercise | 
|                                                   |  | Options           |         |   | Price             |   |       | Options           |  |  | Price    |   |  | Options |       |  | Price    | 
|                                                  
|                                                  
|Balance January 1                                  |  |                   | 546,716 |   |                   | $ | 11.41 |                   |  |  | 335,992  |   |  | $       | 10.62 |  |          |  | 140,500 |  |  | $ | 10.00 | 
|Granted                                            |  |                   | 230,374 |   |                   | $ | 14.00 |                   |  |  | 217,242  |   |  | $       | 12.53 |  |          |  | 10,000  |  |  | $ | 12.00 | 
|Issued to employees and directors of acquired bank |  |                   |        |   |                   |   |      |                   |  |  |         |   |  | $       |      |  |          |  | 185,492 |  |  | $ | 11.02 | 
|Exercised                                          |  |                   | (71,280 | ) |                   | $ | 11.63 |                   |  |  | (6,518   | ) |  | $       | 7.82  |  |          |  |        |  |  | $ |      | 
|Forfeited                                          |  |                   | (5,000  | ) |                   | $ | 7.82  |                   |  |  |         |   |  | $       |      |  |          |  |        |  |  | $ |      | 
|                                                  
|Balance December 31                                |  |                   | 700,810 |   |                   | $ | 12.27 |                   |  |  | 546,716  |   |  | $       | 11.41 |  |          |  | 335,992 |  |  | $ | 10.62 | 
|                                                  

At December 31, 2005, 132,348 options remain
available for future grant under the plans. The weighted average
remaining contractual life of all outstanding options at both
December 31, 2005 and 2004 is approximately eight years.

The options outstanding at December 31, 2005
are exercisable as follows:

|                      |  |           |         |  |                  |   |       | 
|--------------------- |  | --------- | ------- |  | ---------------- | - | ----- | 
|During the Year       |  | Number of |         |  | Weighted-Average |  
|Ending December 31,   |  | Options   |         |  | Exercise Price   |  
|                     
|                     
|Currently exercisable |  |           | 466,046 |  |                  | $ | 11.64 | 
|2006                  |  |           | 65,866  |  |                  |   | 12.69 | 
|2007                  |  |           | 47,466  |  |                  |   | 13.74 | 
|2008                  |  |           | 47,166  |  |                  |   | 13.76 | 
|2009                  |  |           | 45,166  |  |                  |   | 13.84 | 
|2010                  |  |           | 29,100  |  |                  |   | 14.00 | 
|                     
|                      |  |           | 700,810 |  |                  | $ | 12.27 | 
|                     

Of those options currently exercisable, 167,238
are held by employees and 298,808 by directors.

(continued)


F-20



---



##### 



UNITED HERITAGE BANKSHARES OF FLORIDA, INC. AND SUBSIDIARY


Notes to Consolidated Financial
Statements  (Continued)

(16) Regulatory Matters

The Company (on a consolidated basis) and the
Bank are subject to various regulatory capital requirements
administered by the federal banking agencies. Failure to meet
minimum capital requirements can initiate certain
mandatory  and possibly additional
discretionary  actions by regulators that, if
undertaken, could have a direct material effect on the
Companys consolidated financial statements. Under capital
adequacy guidelines and the regulatory framework for prompt
corrective action, the Company and the Bank must meet specific
capital guidelines that involve quantitative measures of the
Banks assets, liabilities, and certain off-balance-sheet
items as calculated under regulatory accounting practices. The
capital amounts and classification are also subject to
qualitative judgments by the regulators about components, risk
weightings, and other factors.

Quantitative measures established by regulation
to ensure capital adequacy require the Company and the Bank to
maintain minimum amounts and percentages of total and
Tier 1 capital to risk-weighted assets, and of Tier 1
capital to average assets. If such minimum amounts and
percentages are met, the Company and the Bank are considered
adequately capitalized. If the actual amounts exceed
the requirements of adequately capitalized, and meet
even more stringent minimum standards, they are considered
well capitalized. Management believes as of
December 31, 2005, the Company and the Bank meet all
capital adequacy requirements to which they are subject.

The table below shows the total risk-based,
Tier 1 risk-based, and Tier 1 leverage ratios of the
Company and the Bank at December 31, 2005 and 2004, and the
minimum required amounts and percentages ($ in thousands).

|                         |                                         |              |  |                 |             |  |                   |                   |       |                    |   |   |        |        |  |  |      |   |  |   |        |  |  |  |       |  
|------------------------ | --------------------------------------- | ------------ |  | --------------- | ----------- |  | ----------------- | ----------------- | ----- | ------------------ | - | - | ------ | ------ |  |  | ---- | - |  | - | ------ |  |  |  | ----- | -
|                         |                                         |              |  |                 |             |  |                   |                   |       |                   
|                         |                                         |              |  |                 |             |  |                   |                   |       | Minimum To Be Well |  
|                         |                                         |              |  |                 |             |  |                   | Capitalized Under |      
|                         |                                         |              |  | Minimum Capital |             |  | Prompt Corrective |                  
|                         |                                         | Actual       |  |                 | Requirement |  |                   | Action Provisions |      
|                         |                                         |              |  |                 |             |  |                   |                   |      
|                         |                                         | Amount       |  |                 | %           |  |                   | Amount            |       |                    | % |   |        | Amount |  |  | %    |  
|                        
|                        
|                        
|                        
|                        
|                        
|As of December 31, 2005: |                                         |              |  |                 |             |  |                   |                   |       |                    |   |   |        |        |  |  |      |   |  |   |        |  |  | 
|                        
|                        
|                        
|                        
|                         | Total capital to Risk-Weighted assets:  |              |  |                 |             |  |                   |                   |       |                    |   |   |        |        |  |  |      |   |  |   |        |  |  |  |      
|                         |                                         | Consolidated |  | $               | 63,178      |  |                   |                   | 13.96 | %                  |   | $ | 36,200 |        |  |  | 8.00 | % |  | $ | 45,250 |  |  |  | 10.00 | %
|                         |                                         | Bank         |  | $               | 61,852      |  |                   |                   | 13.59 | %                  |   | $ | 36,416 |        |  |  | 8.00 | % |  | $ | 45,520 |  |  |  | 10.00 | %
|                        
|                        
|                        
|                        
|                         | Tier I Capital to Risk-Weighted Assets: |              |  |                 |             |  |                   |                   |       |                    |   |   |        |        |  |  |      |   |  |   |        |  |  |  |      
|                         |                                         | Consolidated |  | $               | 58,598      |  |                   |                   | 12.95 | %                  |   | $ | 18,100 |        |  |  | 4.00 | % |  | $ | 27,150 |  |  |  | 6.00  | %
|                         |                                         | Bank         |  | $               | 57,272      |  |                   |                   | 12.58 | %                  |   | $ | 18,208 |        |  |  | 4.00 | % |  | $ | 27,312 |  |  |  | 6.00  | %
|                        
|                        
|                        
|                        
|                         | Tier I Capital to Average Assets:       |              |  |                 |             |  |                   |                   |       |                    |   |   |        |        |  |  |      |   |  |   |        |  |  |  |      
|                         |                                         | Consolidated |  | $               | 58,598      |  |                   |                   | 8.97  | %                  |   | $ | 26,140 |        |  |  | 4.00 | % |  | $ | 32,676 |  |  |  | 5.00  | %
|                         |                                         | Bank         |  | $               | 57,272      |  |                   |                   | 8.77  | %                  |   | $ | 26,134 |        |  |  | 4.00 | % |  | $ | 32,668 |  |  |  | 5.00  | %

(continued)


F-21



---



##### 



UNITED HERITAGE BANKSHARES OF FLORIDA, INC. AND SUBSIDIARY


Notes to Consolidated Financial
Statements  (Continued)





(16) Regulatory Matters, Continued


|                         |                                         |              |  |                 |             |  |                   |                   |       |                    |   |   |        |        |  |  |      |   |  |   |        |  |  |  |       |  
|------------------------ | --------------------------------------- | ------------ |  | --------------- | ----------- |  | ----------------- | ----------------- | ----- | ------------------ | - | - | ------ | ------ |  |  | ---- | - |  | - | ------ |  |  |  | ----- | -
|                         |                                         |              |  |                 |             |  |                   |                   |       |                   
|                         |                                         |              |  |                 |             |  |                   |                   |       | Minimum To Be Well |  
|                         |                                         |              |  |                 |             |  |                   | Capitalized Under |      
|                         |                                         |              |  | Minimum Capital |             |  | Prompt Corrective |                  
|                         |                                         | Actual       |  |                 | Requirement |  |                   | Action Provisions |      
|                         |                                         |              |  |                 |             |  |                   |                   |      
|                         |                                         | Amount       |  |                 | %           |  |                   | Amount            |       |                    | % |   |        | Amount |  |  | %    |  
|                        
|                        
|                        
|                        
|                        
|                        
|As of December 31, 2004: |                                         |              |  |                 |             |  |                   |                   |       |                    |   |   |        |        |  |  |      |   |  |   |        |  |  | 
|                        
|                        
|                        
|                        
|                         | Total capital to Risk-Weighted assets:  |              |  |                 |             |  |                   |                   |       |                    |   |   |        |        |  |  |      |   |  |   |        |  |  |  |      
|                         |                                         | Consolidated |  | $               | 34,746      |  |                   |                   | 12.00 | %                  |   | $ | 23,159 |        |  |  | 8.00 | % |  | $ | 28,949 |  |  |  | 10.00 | %
|                         |                                         | Bank         |  | $               | 34,393      |  |                   |                   | 11.83 | %                  |   | $ | 23,258 |        |  |  | 8.00 | % |  | $ | 29,072 |  |  |  | 10.00 | %
|                        
|                        
|                        
|                        
|                         | Tier I Capital to Risk-Weighted Assets: |              |  |                 |             |  |                   |                   |       |                    |   |   |        |        |  |  |      |   |  |   |        |  |  |  |      
|                         |                                         | Consolidated |  | $               | 31,669      |  |                   |                   | 10.94 | %                  |   | $ | 11,580 |        |  |  | 4.00 | % |  | $ | 17,369 |  |  |  | 6.00  | %
|                         |                                         | Bank         |  | $               | 31,316      |  |                   |                   | 10.77 | %                  |   | $ | 11,629 |        |  |  | 4.00 | % |  | $ | 17,443 |  |  |  | 6.00  | %
|                        
|                        
|                        
|                        
|                         | Tier I Capital to Average Assets:       |              |  |                 |             |  |                   |                   |       |                    |   |   |        |        |  |  |      |   |  |   |        |  |  |  |      
|                         |                                         | Consolidated |  | $               | 31,669      |  |                   |                   | 8.12  | %                  |   | $ | 15,592 |        |  |  | 4.00 | % |  | $ | 19,490 |  |  |  | 5.00  | %
|                         |                                         | Bank         |  | $               | 31,316      |  |                   |                   | 8.04  | %                  |   | $ | 15,586 |        |  |  | 4.00 | % |  | $ | 19,482 |  |  |  | 5.00  | %

(17) Private Placement Offering

On March 2, 2005, the Company sold
1,537,222 shares of its common stock in a private placement
transaction at $14.00 per share. The Company raised
$21.5 million after deducting related offering costs.

(18) Fair Value of Financial Instruments

The fair value of a financial instrument is the
current amount that would be exchanged between willing parties,
other than in a forced liquidation. Fair value is best
determined based upon quoted market prices. However, in many
instances, there are no quoted market prices for the
Companys various financial instruments. In cases where
quoted market prices are not available, fair values are based on
estimates using present value or other valuation techniques.
Those techniques are significantly affected by the assumptions
used, including the discount rate and estimates of future cash
flows. Accordingly, the fair value estimates may not be realized
in an immediate settlement of the instrument. SFAS 107
excludes certain financial instruments and all nonfinancial
instruments from its disclosure requirements. Accordingly, the
aggregate fair value amounts presented may not necessarily
represent the underlying fair value of the Company. The
following methods and assumptions were used by the Company in
estimating fair values of financial instruments:

Cash and Cash
Equivalents.The carrying amounts
of cash and cash equivalents approximate their fair value.

Securities.Fair values for securities are based on quoted market prices,
where available. If quoted market prices are not available, fair
values are based on quoted market prices of comparable
instruments.

Loans.For
variable-rate loans that reprice frequently and have no
significant change in credit risk, fair values are based on
carrying values. Fair values for certain fixed-rate mortgage
(e.g. one-to-four family residential), commercial

(continued)


F-22



---



##### 



UNITED HERITAGE BANKSHARES OF FLORIDA, INC. AND SUBSIDIARY


Notes to Consolidated Financial
Statements  (Continued)





(18) Fair Value of Financial Instruments, Continued


real estate and commercial loans are estimated
using discounted cash flow analyses, using interest rates
currently being offered for loans with similar terms to
borrowers of similar credit quality.

Deposits.The
fair values disclosed for demand deposits, savings, money-market
and NOW accounts are, by definition, equal to the amount payable
on demand at the reporting date (that is, their carrying
amounts). Fair values for fixed-rate time deposits are estimated
using a discounted cash flow calculation that applies interest
rates currently being offered on time deposits to a schedule of
aggregated expected monthly maturities of time deposits.

Borrowings.The carrying amounts of borrowings under customer repurchase
agreements and unsecured federal funds purchased lines of credit
approximate their fair values.

Off-Balance-Sheet
Instruments.Fair values for
off-balance-sheet lending commitments are based on fees
currently charged to enter into similar agreements, taking into
account the remaining terms of the agreements and the
counterparties credit standing.

The estimated fair values of the Companys
financial instruments are as follows (in thousands):

|                              |                               |                      |   |         |                      |  |   |          |  |  |       |         |  |  |   |         | 
|----------------------------- | ----------------------------- | -------------------- | - | ------- | -------------------- |  | - | -------- |  |  | ----- | ------- |  |  | - | ------- | 
|                              |                               |                      |   |        
|                              |                               | At December 31, 2005 |   |         | At December 31, 2004 | 
|                              |                               |                      |   |         |                      | 
|                              |                               | Carrying             |   |         | Fair                 |  |   | Carrying |  |  | Fair  |        
|                              |                               | Amount               |   |         | Value                |  |   | Amount   |  |  | Value |        
|                             
|                             
|                             
|                             
|                             
|                             
|Financial assets:             |                               |                      |   |         |                      |  |   |          |  |  |       |         |  |  |   |        
|                              | Cash and cash equivalents     |                      | $ | 147,723 |                      |  | $ | 147,723  |  |  | $     | 85,971  |  |  | $ | 85,971  | 
|                              | Securities available for sale |                      |   | 164,050 |                      |  |   | 164,050  |  |  |       | 68,640  |  |  |   | 68,640  | 
|                              | Securities held to maturity   |                      |   | 21,119  |                      |  |   | 20,391   |  |  |       |        |  |  |   |        | 
|                              | Net loans                     |                      |   | 360,425 |                      |  |   | 357,643  |  |  |       | 241,185 |  |  |   | 240,403 | 
|                             
|                             
|                             
|                             
|Financial liabilities:        |                               |                      |   |         |                      |  |   |          |  |  |       |         |  |  |   |        
|                              | Demand and savings deposits   |                      |   | 370,977 |                      |  |   | 370,977  |  |  |       | 219,223 |  |  |   | 219,223 | 
|                              | Time deposits                 |                      |   | 245,559 |                      |  |   | 245,475  |  |  |       | 146,419 |  |  |   | 148,473 | 
|                              | Borrowings                    |                      |   | 31,884  |                      |  |   | 31,884   |  |  |       | 6,009   |  |  |   | 6,009   | 
|Off-balance sheet instruments |                               |                      |  |         |                      |  |  |          |  |  |      |         |  |  |  |        

Nonfinancial instruments typically not recognized
in the consolidated financial statements nevertheless may have
value but are not included in the above disclosures. These
include, among other items, the estimated earnings power of core
deposit accounts, the earnings potential of loan servicing
rights, customer goodwill, and similar items.

(continued)


F-23



---



##### 



UNITED HERITAGE BANKSHARES OF FLORIDA, INC. AND SUBSIDIARY


Notes to Consolidated Financial
Statements  (Continued)

(19) Other Noninterest Expense

The components of other noninterest expense were
as follows (in thousands):

|                                   |  |                         |       |  |      |   |       |      |  |   |       | 
|---------------------------------- |  | ----------------------- | ----- |  | ---- | - | ----- | ---- |  | - | ----- | 
|                                   |  |                        
|                                   |  | Year Ended December 31, |      
|                                   |  |                         |      
|                                   |  | 2005                    |       |  | 2004 |   |       | 2003 | 
|                                  
|                                  
|Data processing                    |  | $                       | 922   |  |      | $ | 566   |      |  | $ | 494   | 
|Marketing and business development |  |                         | 388   |  |      |   | 369   |      |  |   | 192   | 
|Professional fees                  |  |                         | 297   |  |      |   | 233   |      |  |   | 315   | 
|Telephone                          |  |                         | 215   |  |      |   | 169   |      |  |   | 153   | 
|Other                              |  |                         | 1,306 |  |      |   | 1,093 |      |  |   | 963   | 
|                                  
|                                   |  | $                       | 3,128 |  |      | $ | 2,430 |      |  | $ | 2,117 | 
|                                  

(20) Holding Company-Only Condensed Financial
Statements

The condensed financial statements of the Holding
Company are as follows (in thousands):

Condensed Balance Sheets

|                              |                                            |                 |        |        |      |   |        |        | 
|----------------------------- | ------------------------------------------ | --------------- | ------ | ------ | ---- | - | ------ | ------ | 
|                              |                                            |                
|                              |                                            | At December 31, |       
|                              |                                            |                 |       
|                              |                                            | 2005            |        |        | 2004 |  
|                             
|                             
|Cash                          |                                            | $               | 1,242  |        |      | $ | 218    |       
|Investment in bank subsidiary |                                            |                 | 55,311 |        |      |   | 32,320 |       
|Goodwill                      |                                            |                 | 950    |        |      |   | 950    |       
|Core deposit intangible, net  |                                            |                 | 200    |        |      |   | 267    |       
|Other assets                  |                                            |                 | 134    |        |      |   | 97     |       
|                             
|                              | Total assets                               |                 | $      | 57,837 |      |   | $      | 33,852 | 
|                             
|Other liabilities             |                                            | $               | 50     |        |      | $ | 62     |       
|Shareholders equity          |                                            |                 | 57,787 |        |      |   | 33,790 |       
|                             
|                              | Total liabilities and shareholders equity |                 | $      | 57,837 |      |   | $      | 33,852 | 
|                             

(continued)


F-24



---



##### 



UNITED HERITAGE BANKSHARES OF FLORIDA, INC. AND SUBSIDIARY


Notes to Consolidated Financial
Statements  (Continued)





(20) Holding Company-Only Condensed Financial
Statements, Continued


Condensed Statements of Income

|                                        |                                       |                         |       |       |      |   |       |       |   |   |       |      |  
|--------------------------------------- | ------------------------------------- | ----------------------- | ----- | ----- | ---- | - | ----- | ----- | - | - | ----- | ---- | -
|                                        |                                       |                        
|                                        |                                       | Year Ended December 31, |      
|                                        |                                       |                         |      
|                                        |                                       | 2005                    |       |       | 2004 |   |       | 2003  |  
|                                       
|                                       
|Professional fees                       |                                       | $                       | 70    |       |      | $ | 86    |       |   | $ | 186   |     
|Amortization of core deposit intangible |                                       |                         | 67    |       |      |   | 66    |       |   |   | 66    |     
|Other expenses                          |                                       |                         | 103   |       |      |   | 44    |       |   |   | 28    |     
|                                       
|                                        | Total expenses                        |                         |       | 240   |      |   |       | 196   |   |   |       | 280  |  
|Income tax benefit                      |                                       |                         | (90   | )     |      |   | (74   | )     |   |   | (114  | )   
|                                       
|                                        | Loss before equity in Banks earnings |                         |       | (150  | )    |   |       | (122  | ) |   |       | (166 | )
|Equity in Banks earnings               |                                       |                         | 3,485 |       |      |   | 2,163 |       |   |   | 1,047 |     
|                                       
|                                        | Net income                            |                         | $     | 3,335 |      |   | $     | 2,041 |   |   | $     | 881  |  
|                                       

Condensed Statements of Cash Flows

|                                      |                                                                                                                               |                                       |       |         |      |   |      |      |      |   |     |        |      |  
|------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------- | ------------------------------------- | ----- | ------- | ---- | - | ---- | ---- | ---- | - | --- | ------ | ---- | -
|                                      |                                                                                                                               |                                      
|                                      |                                                                                                                               | Year Ended December 31,               |      
|                                      |                                                                                                                               |                                       |      
|                                      |                                                                                                                               | 2005                                  |       |         | 2004 |   |      | 2003 |     
|                                     
|                                     
|                                     
|                                     
|                                     
|                                     
|Cash flows from operating activities: |                                                                                                                               |                                       |       |         |      |   |      |      |      |   |     |       
|                                      | Loss before equity in Banks earnings                                                                                         |                                       | $     | (150    | )    |   | $    | (122 | )    |   | $   | (166   | )   
|                                      | Deferred income tax benefit                                                                                                   |                                       |       | (90     | )    |   |      | (13  | )    |   |     | (114   | )   
|                                      | Amortization of core deposit intangible                                                                                       |                                       |       | 67      |      |   |      | 66   |      |   |     | 66     |     
|                                      | Tax benefit from stock options exercised                                                                                      |                                       |       | 49      |      |   |      |     |      |   |     | (84    | )   
|                                      | Change in other assets                                                                                                        |                                       |       | 53      |      |   |      | (13  | )    |   |     | (4     | )   
|                                      | Change in other liabilities                                                                                                   |                                       |       | (12     | )    |   |      | (130 | )    |   |     | 130    |     
|                                     
|                                      |                                                                                                                               | Net cash used in operating activities |       |         | (83  | ) |      |      | (212 | ) |     |        | (172 | )
|                                     
|Cash flows from investment activity  |                                                                                                                               |                                       |       |         |      |   |      |      |      |   |     |       
|                                      | Additional investment in Bank                                                                                                 |                                       |       | (21,200 | )    |   |      |     |      |   |     | (1,700 | )   
|                                     
|Cash flow from financing activity    |                                                                                                                               |                                       |       |         |      |   |      |      |      |   |     |       
|                                      | Net proceeds from sale of common stock                                                                                        |                                       |       | 22,307  |      |   |      | 51   |      |   |     | 2,250  |     
|                                     
|Net increase (decrease) in cash       |                                                                                                                               |                                       | 1,024 |         |      |   | (161 | )    |      |   | 378 |       
|Cash balance at beginning of year     |                                                                                                                               |                                       | 218   |         |      |   | 379  |      |      |   | 1   |       
|                                     
|Cash balance at end of year           |                                                                                                                               | $                                     | 1,242 |         |      | $ | 218  |      |      | $ | 379 |       
|                                     
|Noncash transaction                  |                                                                                                                               |                                       |       |         |      |   |      |      |      |   |     |       
|                                      | Accumulated other comprehensive income (loss),
    change in unrealized loss on securities available for sale, net
    of tax |                                       | $     | (1,694  | )    |   | $    | 22   |      |   | $   | (676   | )   
|                                     

F-25