##### Table of Contents



U.S. SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-QSB
  þ
    
    QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended September 30, 2005
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
 For the transition period from  to
 Commission file number
 FLORIDA CHOICE BANKSHARES, INC.
 (Exact Name of Small Business Issuer as Specified in Its Charter)
 Florida
    
    20-1990219(State or Other Jurisdiction
    
    (I.R.S. Employerof Incorporation or Organization)
    
    Identification No.)18055 U.S. Highway 441, Mt. Dora, Florida
    
    32757(Address of Principal Executive Offices)
    
    (Zip Code)
 Registrants Telephone Number, Including Area Code (352) 735-6161
 
 Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report.
 þ o
 o þ
  Common stock, par value $5 per share
    
    2,565,615 shares outstanding at November 1, 2005
 o þ




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FLORIDA CHOICE BANKSHARES, INC.
  PagePart I. FINANCIAL INFORMATIONItem 1. Financial StatementsCondensed Consolidated Balance Sheets  at September 30, 2005 (Unaudited) and at December 31, 2004
    
    
    2Condensed Consolidated Statements of Earnings (Unaudited)  Three and Nine months ended September 30, 2005 and 2004
    
    
    3Condensed Consolidated Statements of Stockholders Equity (Unaudited)  Nine months ended September 30, 2005 and 2004
    
    
    4Condensed Consolidated Statements of Cash Flows (Unaudited)  Nine months ended September 30, 2005 and 2004
    
    
    5Notes to Condensed Consolidated Financial Statements (Unaudited)
    
    
    6-10Review by Independent Registered Public Accounting Firm
    
    
    11Report of Independent Registered Public Accounting Firm
    
    
    12Item 2. Managements Discussion and Analysis
    
    
    13-20Item 3. Controls and Procedures
    
    
    21Part II. OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    21Item 2. Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities
    
    
    21Item 3. Defaults upon Senior Securities
    
    
    21Item 4. Submission of Matters to a Vote of Security Holders
    
    
    21Item 5. Other Information
    
    
    21Item 6. Exhibits
    
    
    22SIGNATURES
    
    
    23Ex-31.1: Section 302 Certification  of Chairman and CEOEx-31.2: Section 302 Certification of CFOEx-32.1: Section 906 Certification of Chairman and CEOEx-32.2: Section 906 Certification of CFO
  1




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##### Table of Contents



FLORIDA CHOICE BANKSHARES, INC.
 
 Part I. FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 
 Condensed Consolidated Balance Sheets
 ($ in thousands, except per share amounts)
 At
    
    
    AtSeptember 30,
    
    
    December 31,2005
    
    
    2004(unaudited)AssetsCash and due from banks
    
    $
    11,557
    
    
    
    2,816Interest-earning deposits
    
    
    29
    
    
    
    75Federal funds sold
    
    
    
    
    
    
    2,146Cash and cash equivalents
    
    
    11,586
    
    
    
    5,037Securities available for sale
    
    
    27,295
    
    
    
    8,146Securities held to maturity
    
    
    
    
    
    
    13,295Loans, net of allowance for loan losses of $3,110 and $1,741
    
    
    277,443
    
    
    
    153,158Premises and equipment, net
    
    
    8,541
    
    
    
    5,261Federal Home Loan Bank stock
    
    
    2,222
    
    
    
    1,108Bank-owned life insurance
    
    
    3,958
    
    
    
    1,371Deferred tax asset
    
    
    703
    
    
    
    479Other assets
    
    
    1,554
    
    
    
    781Total assets
    
    $
    333,302
    
    
    
    188,636Liabilities and Stockholders EquityLiabilities:Noninterest-bearing demand deposits
    
    
    59,542
    
    
    
    24,075Savings, NOW and money-market deposits
    
    
    111,449
    
    
    
    50,282Time deposits
    
    
    76,820
    
    
    
    78,075Total deposits
    
    
    247,811
    
    
    
    152,432Federal Home Loan Bank advances
    
    
    41,000
    
    
    
    18,000Other borrowings
    
    
    4,126
    
    
    
    580Other liabilities
    
    
    1,556
    
    
    
    623Total liabilities
    
    
    294,493
    
    
    
    171,635Stockholders equity:Preferred stock, $.01 par value, 1,000,000 shares authorized,
no shares issued or outstanding
    
    
    
    
    
    
    Common stock, $5 par value, 5,000,000 shares authorized,
2,565,615 and 1,303,233 shares issued and outstanding
    
    
    12,828
    
    
    
    6,516Additional paid-in capital
    
    
    22,165
    
    
    
    8,335Retained earnings
    
    
    4,186
    
    
    
    2,214Accumulated other comprehensive loss
    
    
    (370
    )
    
    
    (64
    )Total stockholders equity
    
    
    38,809
    
    
    
    17,001Total liabilities and stockholders equity
    
    $
    333,302
    
    
    
    188,636
 
 2




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##### Table of Contents



FLORIDA CHOICE BANKSHARES, INC.
 
 Condensed Consolidated Statements of Earnings (Unaudited)
 (In thousands, except per share amounts)
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004Interest income:Loans
    
    $
    4,776
    
    
    
    2,169
    
    
    
    11,320
    
    
    
    6,074Securities
    
    
    288
    
    
    
    217
    
    
    
    748
    
    
    
    614Other
    
    
    52
    
    
    
    24
    
    
    
    151
    
    
    
    37Total interest income
    
    
    5,116
    
    
    
    2,410
    
    
    
    12,219
    
    
    
    6,725Interest expense:Deposits
    
    
    1,342
    
    
    
    601
    
    
    
    3,219
    
    
    
    1,628Borrowings
    
    
    275
    
    
    
    108
    
    
    
    540
    
    
    
    274Total interest expense
    
    
    1,617
    
    
    
    709
    
    
    
    3,759
    
    
    
    1,902Net interest income
    
    
    3,499
    
    
    
    1,701
    
    
    
    8,460
    
    
    
    4,823Provision for loan losses
    
    
    300
    
    
    
    
    
    
    
    1,360
    
    
    
    202Net interest income after provision
for loan losses
    
    
    3,199
    
    
    
    1,701
    
    
    
    7,100
    
    
    
    4,621Noninterest income:Service charges and fees on deposit accounts
    
    
    181
    
    
    
    130
    
    
    
    469
    
    
    
    396Gain on sale of securities available for sale
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    27Net earnings on bank-owned life insurance
    
    
    41
    
    
    
    15
    
    
    
    87
    
    
    
    44Other
    
    
    76
    
    
    
    40
    
    
    
    198
    
    
    
    264Total noninterest income
    
    
    298
    
    
    
    185
    
    
    
    754
    
    
    
    731Noninterest expense:Salaries and employee benefits
    
    
    957
    
    
    
    615
    
    
    
    2,564
    
    
    
    1,887Occupancy and equipment
    
    
    306
    
    
    
    138
    
    
    
    667
    
    
    
    430Data processing
    
    
    132
    
    
    
    101
    
    
    
    384
    
    
    
    269Marketing and business development
    
    
    168
    
    
    
    51
    
    
    
    304
    
    
    
    189Printing and office supplies
    
    
    93
    
    
    
    30
    
    
    
    224
    
    
    
    135Other
    
    
    305
    
    
    
    150
    
    
    
    776
    
    
    
    487Total noninterest expense
    
    
    1,961
    
    
    
    1,085
    
    
    
    4,919
    
    
    
    3,397Earnings before income taxes
    
    
    1,536
    
    
    
    801
    
    
    
    2,935
    
    
    
    1,955Income taxes
    
    
    518
    
    
    
    284
    
    
    
    963
    
    
    
    695Net earnings
    
    $
    1,018
    
    
    
    517
    
    
    
    1,972
    
    
    
    1,260Earnings per share:Basic
    
    $
    .40
    
    
    
    .40
    
    
    
    .96
    
    
    
    .98Diluted
    
    $
    .39
    
    
    
    .39
    
    
    
    .94
    
    
    
    .95Dividends per share
    
    $
    
    
    
    
    
    
    
    
    
    
    
    
    
  3




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##### Table of Contents



FLORIDA CHOICE BANKSHARES, INC.
 
 Condensed Consolidated Statements of Stockholders Equity (Unaudited)
 Nine Months Ended September 30, 2005 and 2004
($ in thousands)
 AccumulatedOtherCompre-Common Stock
    
    
    Additional
    
    
    
    
    
    
    hensive
    
    
    TotalNumber of
    
    
    
    
    
    
    Paid-In
    
    
    Retained
    
    
    Income
    
    
    StockholdersShares
    
    
    Amount
    
    
    Capital
    
    
    Earnings
    
    
    (Loss)
    
    
    EquityBalance at December 31, 2003
    
    
    1,033,225
    
    
    $
    5,166
    
    
    
    6,090
    
    
    
    407
    
    
    
    (52
    )
    
    
    11,611Comprehensive income:Net earnings (unaudited)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,260
    
    
    
    
    
    
    
    1,260Net change in unrealized loss on securities
available for sale, net of tax (unaudited)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    1Comprehensive income (unaudited)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,261Proceeds from exercise of stock options (unaudited)
    
    
    1,800
    
    
    
    9
    
    
    
    11
    
    
    
    
    
    
    
    
    
    
    
    20Proceeds from sale of common stock, net
of offering costs of $45 (unaudited)
    
    
    268,208
    
    
    
    1,341
    
    
    
    2,234
    
    
    
    
    
    
    
    
    
    
    
    3,575Balance at September 30, 2004 (unaudited)
    
    
    1,303,233
    
    
    $
    6,516
    
    
    
    8,335
    
    
    
    1,667
    
    
    
    (51
    )
    
    
    16,467Balance at December 31, 2004
    
    
    1,303,233
    
    
    
    6,516
    
    
    
    8,335
    
    
    
    2,214
    
    
    
    (64
    )
    
    
    17,001Comprehensive income:Net earnings (unaudited)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,972
    
    
    
    
    
    
    
    1,972Net change in unrealized loss on securities
available for sale, net of tax (unaudited)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (306
    )
    
    
    (306
    )Comprehensive income (unaudited)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,666Proceeds from the sale of common stock,
net of offering costs of $56 (unaudited)
    
    
    1,262,382
    
    
    
    6,312
    
    
    
    13,830
    
    
    
    
    
    
    
    
    
    
    
    20,142Balance at September 30, 2005 (unaudited)
    
    
    2,565,615
    
    
    $
    12,828
    
    
    
    22,165
    
    
    
    4,186
    
    
    
    (370
    )
    
    
    38,809
 
 4




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##### Table of Contents



FLORIDA CHOICE BANKSHARES, INC.
 
 Condensed Consolidated Statements of Cash Flows (Unaudited)
 (In thousands)
 Nine Months EndedSeptember 30,2005
    
    
    2004Cash flows from operating activities:Net earnings
    
    $
    1,972
    
    
    
    1,260Adjustments to reconcile net earnings to net cash
provided by operating activities:Provision for loan losses
    
    
    1,360
    
    
    
    202Depreciation and amortization
    
    
    354
    
    
    
    318Deferred income tax benefit
    
    
    (39
    )
    
    
    (48
    )Net amortization of premiums and discounts on securities
    
    
    16
    
    
    
    50Gain on sale of securities available for sale
    
    
    
    
    
    
    (27
    )Gain on sale of SBA loan
    
    
    
    
    
    
    (98
    )Net earnings on bank-owned life insurance
    
    
    (87
    )
    
    
    (44
    )Net increase in other assets
    
    
    (773
    )
    
    
    (135
    )Net increase in other liabilities
    
    
    933
    
    
    
    604Net cash provided by operating activities
    
    
    3,736
    
    
    
    2,082Cash flows from investing activities:Purchase of securities
    
    
    (8,484
    )
    
    
    (11,261
    )Maturities, calls and principal repayments of securities
    
    
    2,123
    
    
    
    2,167Proceeds from sale of securities available for sale
    
    
    
    
    
    
    645Net increase in loans
    
    
    (125,645
    )
    
    
    (19,948
    )Purchase of premises and equipment
    
    
    (3,634
    )
    
    
    (1,114
    )Purchase of Federal Home Loan Bank stock
    
    
    (1,114
    )
    
    
    (450
    )Purchase of bank owned life insurance
    
    
    (2,500
    )
    
    
    Net cash used in investing activities
    
    
    (139,254
    )
    
    
    (29,961
    )Cash flows from financing activities:Net increase in deposits
    
    
    95,379
    
    
    
    22,246Net increase in Federal Home Loan Bank advances
and other borrowings
    
    
    26,546
    
    
    
    8,384Net proceeds from sale of common stock
    
    
    20,142
    
    
    
    3,595Net cash provided by financing activities
    
    
    142,067
    
    
    
    34,225Net increase in cash and cash equivalents
    
    
    6,549
    
    
    
    6,346Cash and cash equivalents at beginning of period
    
    
    5,037
    
    
    
    7,203Cash and cash equivalents at end of period
    
    $
    11,586
    
    
    
    13,549Supplemental disclosures of cash flow information:Cash paid during the period for:Interest
    
    $
    3,706
    
    
    
    1,880Income taxes
    
    $
    1,054
    
    
    
    750Noncash transactions:Accumulated other comprehensive income (loss), net change in
unrealized loss on securities available for sale, net of tax
    
    $
    (306
    )
    
    
    1Reclassify securities held to maturity to securities available for sale
    
    $
    17,071
    
    
    
    
 
 5




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##### Table of Contents



FLORIDA CHOICE BANKSHARES, INC.
 
 Notes to Condensed Consolidated Financial Statements (Unaudited)
 1. Basis of Presentation.
   Reorganization and Merger.
 Acquisition Agreement.
  6




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##### Table of Contents



FLORIDA CHOICE BANKSHARES, INC.
 Notes to Condensed Consolidated Financial Statements (Unaudited), Continued
 2. Loans .
 At
    
    
    AtSeptember 30,
    
    
    December 31,2005
    
    
    2004Real estate  mortgage
    
    $
    228,522
    
    
    
    130,024Commercial
    
    
    43,525
    
    
    
    18,981Consumer and home equity
    
    
    9,176
    
    
    
    6,188Total loans
    
    
    281,223
    
    
    
    155,193Allowance for loan losses
    
    
    (3,110
    )
    
    
    (1,741
    )Deferred loan fees, net
    
    
    (670
    )
    
    
    (294
    )Loans, net
    
    $
    277,443
    
    
    
    153,158
 3. Loan Impairment and Loan Losses .
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004Balance at beginning of period
    
    $
    2,806
    
    
    
    1,765
    
    
    
    1,741
    
    
    
    1,562Provision for loan losses
    
    
    300
    
    
    
    
    
    
    
    1,360
    
    
    
    202Net recoveries (charge-offs)
    
    
    4
    
    
    
    (27
    )
    
    
    9
    
    
    
    (26
    )Balance at September 30
    
    $
    3,110
    
    
    
    1,738
    
    
    
    3,110
    
    
    
    1,738
   7




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##### Table of Contents



FLORIDA CHOICE BANKSHARES, INC.
 Notes to Condensed Consolidated Financial Statements (Unaudited), Continued
 4. Earnings Per Share.
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004Weighted-average number of common
shares outstanding used to calculate
basic earnings per common share
    
    
    2,565,615
    
    
    
    1,303,233
    
    
    
    2,062,706
    
    
    
    1,285,549Effect of dilutive stock options
    
    
    43,085
    
    
    
    35,521
    
    
    
    43,087
    
    
    
    35,521Weighted-average number of common
shares outstanding used to calculate
diluted earnings per common share
    
    
    2,608,700
    
    
    
    1,338,754
    
    
    
    2,105,793
    
    
    
    1,321,070
 5. Stock Option Plans.
 Number
    
    
    
    
    
    
    Weighted-
    
    
    Aggregateof
    
    
    Range of
    
    
    Average
    
    
    OptionOptions
    
    
    Option Price
    
    
    Price
    
    
    PriceOutstanding at December 31, 2003
    
    
    141,500
    
    
    $
    10.00-13.50
    
    
    
    10.37
    
    
    $
    1,467Options granted
    
    
    7,000
    
    
    
    13.50
    
    
    
    13.50
    
    
    
    95Options exercised
    
    
    (1,800
    )
    
    
    10.00-12.50
    
    
    
    10.42
    
    
    
    (20
    )Options forfeited
    
    
    (8,250
    )
    
    
    10.00-13.50
    
    
    
    12.24
    
    
    
    (101
    )Outstanding at September 30, 2004
    
    
    138,450
    
    
    $
    10.00-13.50
    
    
    $
    10.41
    
    
    $
    1,441Outstanding at December 31, 2004
    
    
    213,535
    
    
    
    10.00-13.50
    
    
    
    11.49
    
    
    
    2,453Options granted
    
    
    188,000
    
    
    
    16.00
    
    
    
    16.00
    
    
    
    3,008Options forfeited
    
    
    (1,850
    )
    
    
    13.50-16.00
    
    
    
    14.59
    
    
    
    (27
    )Outstanding at September 30, 2005
    
    
    399,685
    
    
    $
    10.00-16.00
    
    
    $
    13.60
    
    
    $
    5,434
  8




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##### Table of Contents



FLORIDA CHOICE BANKSHARES, INC.
 Notes to Condensed Consolidated Financial Statements (Unaudited), Continued
 5. Stock Option Plans, Continued. Accounting for Stock-Based Compensation, Accounting for
Stock-Based Compensation Transition and Disclosure, Accounting for Stock Issued to Employees
  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004Net earnings, as reported
    
    $
    1,018
    
    
    
    517
    
    
    
    1,972
    
    
    
    1,260Deduct: Total stock-based employee
compensation determined under
the fair value based method for
all awards, net of related tax benefit
    
    
    (50
    )
    
    
    (2
    )
    
    
    (430
    )
    
    
    (8
    )Proforma net earnings
    
    $
    968
    
    
    
    515
    
    
    
    1,542
    
    
    
    1,252Basic earnings per share:As reported
    
    $
    .40
    
    
    
    .40
    
    
    
    .96
    
    
    
    .98Proforma
    
    $
    .38
    
    
    
    .40
    
    
    
    .75
    
    
    
    .98Diluted earnings per share:As reported
    
    $
    .39
    
    
    
    .39
    
    
    
    .94
    
    
    
    .95Proforma
    
    $
    .37
    
    
    
    .39
    
    
    
    .73
    
    
    
    .95
  9




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##### Table of Contents



FLORIDA CHOICE BANKSHARES, INC.
 Notes to Condensed Consolidated Financial Statements (Unaudited), Continued
 5. Stock Option Plans, Continued.
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004Assumptions for grants made during
the period:Weighted-average risk
free rate of return
    
    
    4.45
    %
    
    
    4.88
    %
    
    
    4.28
    %
    
    
    4.88
    %Annualized dividend yield
    
    
    
    %
    
    
    
    
    
    
    
    %
    
    
    
    %Expected life of options
    
    6.5
years
    
    10 years
    
    6.5 years
    
    10 yearsExpected stock price volatility
    
    
    21.0
    %
    
    
    
    
    
    
    21.0
    %
    
    
    
    %Average grant-date fair value per
option of options issued
during the period
    
    $
    5.32
    
    
    
    5.02
    
    
    $
    5.24
    
    
    $
    5.03
 Share-Based Payment
 6. Private Placement Offering .
 7. Securities.
 8. Reclassifications .
 10




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##### Table of Contents



FLORIDA CHOICE BANKSHARES, INC.
 
 Review by Independent Registered Public Accounting Firm
   11




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##### Table of Contents



Report of Independent Registered Public Accounting Firm
 
      
 12




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##### Table of Contents



FLORIDA CHOICE BANKSHARES, INC.
 
 Managements Discussion and Analysis
 General
      13




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##### Table of Contents



FLORIDA CHOICE BANKSHARES, INC.
   Capital Resources, Commitments and Capital Requirements
    Contractual Obligations
    
    TotalTime deposit maturities
    
    $
    76,820Federal Home Loan Bank advances
    
    
    41,000Other borrowings
    
    
    4,126Operating leases
    
    
    3,640Loan commitments
    
    
    77,478Standby letters of credit
    
    
    3,151Undisbursed line of credit loans
    
    
    94,730Total
    
    $
    300,945
  14




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##### Table of Contents



FLORIDA CHOICE BANKSHARES, INC.
 Regulatory Capital Requirements
    MinimumTo Be WellCapitalized UnderMinimum Capital
    
    
    Prompt CorrectiveActual
    
    
    Requirement
    
    
    Action ProvisionsAmount
    
    
    %
    
    
    Amount
    
    
    %
    
    
    Amount
    
    
    %As of September 30, 2005:Total capital to Risk-
Weighted assets:Consolidated
    
    $
    42,289
    
    
    
    13.69
    %
    
    $
    24,708
    
    
    
    8.00
    %
    
    
    N/A
    
    
    
    N/ABank
    
    
    42,366
    
    
    
    13.71
    
    
    
    24,715
    
    
    
    8.00
    
    
    $
    30,894
    
    
    
    10.00
    %Tier I Capital to Risk-
Weighted Assets:Consolidated
    
    
    39,179
    
    
    
    12.69
    
    
    
    12,354
    
    
    
    4.00
    
    
    
    N/A
    
    
    
    N/ABank
    
    
    39,256
    
    
    
    12.71
    
    
    
    12,358
    
    
    
    4.00
    
    
    
    18,537
    
    
    
    6.00Tier I Capital
to Average Assets:Consolidated
    
    
    39,179
    
    
    
    12.51
    
    
    
    12,524
    
    
    
    4.00
    
    
    
    N/A
    
    
    
    N/ABank
    
    
    39,256
    
    
    
    12.53
    
    
    
    12,528
    
    
    
    4.00
    
    
    
    15,660
    
    
    
    5.00As of December 31, 2004:Total capital to Risk-
Weighted assets
    
    
    18,806
    
    
    
    11.40
    
    
    
    13,152
    
    
    
    8.00
    
    
    
    16,439
    
    
    
    10.00Tier I Capital to Risk-
Weighted Assets
    
    
    17,065
    
    
    
    10.40
    
    
    
    6,576
    
    
    
    4.00
    
    
    
    9,864
    
    
    
    6.00Tier I Capital
to Adjusted Total Assets
    
    
    17,065
    
    
    
    9.20
    
    
    
    7,451
    
    
    
    4.00
    
    
    
    9,314
    
    
    
    5.00
 15




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##### Table of Contents



FLORIDA CHOICE BANKSHARES, INC.
  Nine Months
    
    
    
    Nine MonthsEnded
    
    Year Ended
    
    EndedSeptember 30,
    
    December 31,
    
    September 30,2005
    
    2004
    
    2004Average equity as a percentage
of average assets
    
    11.38%
    
    9.00%
    
    9.01%Total equity to total assets at end of period
    
    11.64%
    
    9.00%
    
    8.89%Return on average assets (1)
    
    .99%
    
    1.05%
    
    1.15%Return on average equity (1)
    
    8.70%
    
    11.60%
    
    12.80%Noninterest expense to average assets (1)
    
    2.47%
    
    2.73%
    
    2.42%Nonperforming loans to total loans at
end of period (2)
    
    .02%
    
    %
    
    %
 
 (1)
    
    Annualized for the nine months ended September 30, 2005 and 2004.(2)
    
    Nonperforming loans consist of nonaccrual loans and accruing loans contractually past due
ninety days or more.  Nine Months
    
    
    
    Nine MonthsEnded
    
    Year Ended
    
    EndedSeptember 30,
    
    December 31,
    
    September 30,2005
    
    2004
    
    2004Loans
    
    6.93%
    
    6.31%
    
    6.12%Securities
    
    3.96%
    
    3.69%
    
    3.66%Other interest-earning assets
    
    3.24%
    
    1.75%
    
    1.22%All interest-earning assets
    
    6.54%
    
    5.80%
    
    5.65%Interest-bearing deposits
    
    2.65%
    
    1.95%
    
    1.91%Borrowings
    
    2.65%
    
    1.97%
    
    1.89%All interest-bearing liabilities
    
    2.65%
    
    1.96%
    
    1.91%Interest-rate spread
    
    3.89%
    
    3.84%
    
    3.74%
 Changes in Financial Condition
 
 16




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##### Table of Contents



FLORIDA CHOICE BANKSHARES, INC.
 Results of Operations
  Three Months Ended September 30,2005
    
    
    2004Interest
    
    
    Average
    
    
    
    
    
    
    Interest
    
    
    AverageAverage
    
    
    and
    
    
    Yield/
    
    
    Average
    
    
    and
    
    
    Yield/Balance
    
    
    Dividends
    
    
    Rate
    
    
    Balance
    
    
    Dividends
    
    
    Rate($ in thousands)Interest-earning assets:Loans
    
    $
    260,302
    
    
    
    4,776
    
    
    
    7.34
    %
    
    $
    138,941
    
    
    
    2,169
    
    
    
    6.24
    %Securities
    
    
    28,239
    
    
    
    288
    
    
    
    4.08
    
    
    
    23,544
    
    
    
    217
    
    
    
    3.69Other (1)
    
    
    5,098
    
    
    
    52
    
    
    
    4.08
    
    
    
    6,612
    
    
    
    24
    
    
    
    1.45Total interest-earning assets
    
    
    293,639
    
    
    
    5,116
    
    
    
    6.97
    
    
    
    169,097
    
    
    
    2,410
    
    
    
    5.70Noninterest-earning assets
    
    
    20,407
    
    
    
    
    
    
    
    
    
    
    
    10,331Total assets
    
    $
    314,046
    
    
    
    
    
    
    
    
    
    
    $
    179,428Interest-bearing liabilities:Deposits
    
    
    182,210
    
    
    
    1,342
    
    
    
    2.95
    
    
    
    121,172
    
    
    
    601
    
    
    
    1.98Borrowings
    
    
    37,893
    
    
    
    275
    
    
    
    2.90
    
    
    
    20,752
    
    
    
    108
    
    
    
    2.08Total interest-bearing
liabilities
    
    
    220,103
    
    
    
    1,617
    
    
    
    2.94
    
    
    
    141,924
    
    
    
    709
    
    
    
    2.00Noninterest-bearing deposits
    
    
    53,226
    
    
    
    
    
    
    
    
    
    
    
    20,449Noninterest-bearing liabilities
    
    
    2,266
    
    
    
    
    
    
    
    
    
    
    
    897Stockholders equity
    
    
    38,451
    
    
    
    
    
    
    

    
    
    
    
    16,158Total liabilities and
stockholders equity
    
    $
    314,046
    
    
    
    
    
    
    
    
    
    
    $
    179,428Net interest income
    
    
    
    
    
    $
    3,499
    
    
    
    
    
    
    
    
    
    
    $
    1,701Interest-rate spread
    
    
    
    
    
    
    
    
    
    
    4.03
    %
    
    
    
    
    
    
    
    
    
    
    3.70
    %Net interest margin (2)
    
    
    
    
    
    
    
    
    
    
    4.77
    %
    
    
    
    
    
    
    
    
    
    
    4.02
    %Ratio of interest-earning assets to
interest-bearing liabilities
    
    
    1.33
    
    
    
    
    
    
    
    
    
    
    
    1.19
 
 (1)
    
    Includes interest-earning deposits, federal funds sold and Federal Home Loan Bank stock.(2)
    
    Net interest margin is annualized net interest income divided by average interest-earning
assets. 17




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##### Table of Contents



FLORIDA CHOICE BANKSHARES, INC.
  Nine Months Ended September 30,2005
    
    
    2004Interest
    
    
    Average
    
    
    
    
    
    
    Interest
    
    
    AverageAverage
    
    
    and
    
    
    Yield/
    
    
    Average
    
    
    and
    
    
    Yield/Balance
    
    
    Dividends
    
    
    Rate
    
    
    Balance
    
    
    Dividends
    
    
    Rate($ in thousands)Interest-earning assets:Loans
    
    $
    217,696
    
    
    
    11,320
    
    
    
    6.93
    %
    
    $
    132,323
    
    
    
    6,074
    
    
    
    6.12
    %Securities
    
    
    25,213
    
    
    
    748
    
    
    
    3.96
    
    
    
    22,368
    
    
    
    614
    
    
    
    3.66Other (1)
    
    
    6,208
    
    
    
    151
    
    
    
    3.24
    
    
    
    4,042
    
    
    
    37
    
    
    
    1.22Total interest-earning assets
    
    
    249,117
    
    
    
    12,219
    
    
    
    6.54
    
    
    
    158,733
    
    
    
    6,725
    
    
    
    5.65Noninterest-earning assets
    
    
    16,403
    
    
    
    
    
    
    
    
    
    
    
    9,243Total assets
    
    $
    265,520
    
    
    
    
    
    
    
    
    
    
    $
    167,976Interest-bearing liabilities:Deposits
    
    
    161,726
    
    
    
    3,219
    
    
    
    2.65
    
    
    
    113,494
    
    
    
    1,628
    
    
    
    1.91Borrowings
    
    
    27,155
    
    
    
    540
    
    
    
    2.65
    
    
    
    19,314
    
    
    
    274
    
    
    
    1.89Total interest-bearing
liabilities
    
    
    188,881
    
    
    
    3,759
    
    
    
    2.65
    
    
    
    132,808
    
    
    
    1,902
    
    
    
    1.91Noninterest-bearing deposits
    
    
    45,208
    
    
    
    
    
    
    
    
    
    
    
    19,097Noninterest-bearing liabilities
    
    
    1,225
    
    
    
    
    
    
    
    
    
    
    
    911Stockholders equity
    
    
    30,206
    
    
    
    
    
    
    
    

    
    

    
    15,160Total liabilities and
stockholders equity
    
    $
    265,520
    
    
    
    
    
    
    
    
    
    
    $
    167,976Net interest income
    
    
    
    
    
    $
    8,460
    
    
    
    
    
    
    
    
    
    
    $
    4,823Interest-rate spread
    
    
    
    
    
    
    
    
    
    
    3.89
    %
    
    
    
    
    
    
    
    
    
    
    3.74
    %Net interest margin (2)
    
    
    
    
    
    
    
    
    
    
    4.53
    %
    
    
    
    
    
    
    
    
    
    
    4.05
    %Ratio of interest-earning assets to
interest-bearing liabilities
    
    
    1.32
    
    
    
    
    
    
    
    
    
    
    
    1.20
 
 (1)
    
    Includes interest-earning deposits, federal funds sold and Federal Home Loan Bank stock.(2)
    
    Net interest margin is annualized net interest income divided by average interest-earning
assets. 18




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##### Table of Contents



FLORIDA CHOICE BANKSHARES, INC.
 Comparison of the Three-Month Periods Ended September 30, 2005 and 2004
 General Operating Results.
 Interest Income.
 Interest Expense.
 Provision for Loan Losses.
 Noninterest Income.
 Noninterest Expense.
 Income Taxes.
 19




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##### Table of Contents



FLORIDA CHOICE BANKSHARES, INC.
 Comparison of the Nine-Month Periods Ended September 30, 2005 and 2004
 General Operating Results.
 Interest Income.
 Interest Expense.
 Provision for Loan Losses.
 Noninterest Income.
 Noninterest Expense.
 Income Taxes.
 20




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##### Table of Contents



FLORIDA CHOICE BANKSHARES, INC.
 
 Item 3. Controls and Procedures
 a.
    
    Evaluation of disclosure controls and procedures. The Company maintains
controls and procedures designed to ensure that information required to be disclosed in the
reports that the Company files or submits under the Securities Exchange Act of 1934 is
recorded, processed, summarized and reported within the time periods specified in the rules
and forms of the Securities and Exchange Commission. Based upon their evaluation of those
controls and procedures performed within 90 days of the filing date of this report, the
Chief Executive and Chief Financial officers of the Company concluded that the Companys
disclosure controls and procedures were adequate.b.
    
    Changes in internal controls. The Company made no significant changes in its
internal controls or in other factors that could significantly affect these controls
subsequent to the date of the evaluation of those controls by the Chief Executive and Chief
Financial officers.
 
 Part II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 2. Unregistered Sales of Equity Securities, Use of Proceeds and
Issuer Purchases of Equity Securities
  
 Item 3. Defaults upon Senior Securities
  
 Item 4. Submission of Matters to a Vote of Security Holders
  
 Item 5. Other Information
  21




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##### Table of Contents



FLORIDA CHOICE BANKSHARES, INC.
 
 Item 6. Exhibits
  2.1
    
    
    Agreement and Plan of Merger, dated October 27, 2005, between Florida Choice
Bankshares, Inc. and Alabama National BanCorporation.*****3.1
    
    
    Articles of Incorporation of Florida Choice Bankshares, Inc. **3.2
    
    
    Form of Bylaws of Florida Choice Bankshares, Inc. **4.0
    
    
    Form of Common Stock Certificate of Florida Choice Bankshares, Inc. **10.1
    
    
    Employment Agreement, dated February 28, 2005, between Florida Choice Bank and
Kenneth E. LaRoe. **/****10.2
    
    
    Form of Florida Choice Bank Employee Stock Option Plan. * /****10.3
    
    
    Form of Florida Choice Bank Director Stock Option Plan. * /****10.4
    
    
    Employment Agreement, dated February 28, 2005, between Florida Choice Bank and
Robert L. Porter. **/****10.5
    
    
    Employment Agreement, dated February 28, 2005, between Florida Choice Bank and
John R. Warren. **/****10.6
    
    
    Employment Agreement, dated October 18, 2004, between Florida Choice
Bank and Stephen R. Jeuck. **/****10.7
    
    
    Amendment No. 3 to Florida Choice Bankshares, Inc.s Officers and Employees
Stock Option Plan.***10.8
    
    
    Amendment No. 3 to Florida Choice Bankshares, Inc.s Directors Stock Option
Plan.***14.1
    
    
    Code of Ethics **31.1
    
    
    Certification of Chief Executive Officer required by Rule 13a-14(a)/15d-14(a)
under the Exchange Act31.2
    
    
    Certification of Chief Financial Officer required by Rule 13a-14(a)/15d-14(a)
under the Exchange Act32.1
    
    
    Certification of Chief Executive Officer, pursuant to 18 U.S.C. Section 1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2
    
    
    Certification of Chief Financial Officer, pursuant to 18 U.S.C. Section 1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
 *
    
    Incorporated by reference to Florida Choice Banks Registration Statement on Form 10-SB filed
with the FDIC on April 30, 2000.**
    
    Incorporated by reference to the Companys Form 10-KSB filed with the SEC on March 22, 2005.***
    
    Incorporated by reference to the Companys Form 10QSB filed with the SEC on May 10, 2005.****
    
    Constitutes a management contract or compensation arrangement.*****
    
    Incorporated by reference to the Companys Form 8-K filed with the SEC on October 27. 2005. 22




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##### Table of Contents



FLORIDA CHOICE BANKSHARES, INC.
 
 SIGNATURES
   Florida Choice Bankshares, Inc.By:
    
    /s/ Kenneth E. LaRoeName:
    
    Kenneth E. LaRoe, Chairman and
Chief Executive OfficerBy:
    
    /s/ Stephen R. JeuckName:
    
    Stephen R. Jeuck, Chief Financial
Officer (Principal Financial Officer and
Principal Accounting Officer)
 23