10-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

Annual Report Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

For the Fiscal Year Ended December 31, 2007

Commission File Number 000-50091

BANK OF FLORIDA CORPORATION

A Florida Corporation

IRS Employer Identification No. 59-3535315

1185 Immokalee Road

Naples, Florida 34103

(239) 254-2100

Securities Registered Pursuant to Section 12(b)

of the Securities Exchange Act of 1934: NONE

Securities Registered Pursuant to Section 12(g) of the Securities Exchange

Act of 1934: Common Stock, $0.01 par value

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  ¨    No  x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(D) of the Exchange Act.    Yes  ¨    No  x

Note – Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Exchange Act.

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K    ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer  ¨    Accelerated filer  x     Non-accelerated filer  ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    Yes  ¨    No  x

The aggregate market value of the Registrant’s common stock held by non-affiliates of the Registrant, based upon the closing price of $9.36, as quoted on the NASDAQ National Market, on February 29, 2008 was approximately $108,217,000. For the purposes of this response, directors and officers of the Registrant are considered the affiliates of the Registrant at that date.

The number of shares outstanding of the Registrant’s common stock, as of February 29, 2008: 12,779,020 shares of $.01 par value common stock.

Portions of the Proxy Statement of the Registrant for the Annual Meeting of Shareholders to be held in April 2008, are incorporated by reference into Part III of this report.

BANK OF FLORIDA CORPORATION AND SUBSIDIARIES

Table of Contents

		Page
	PART I
Item 1.	Description of Business	1
	Background and Prior Operating History	1
	Market Area and Competition	2
	Distribution of Assets, Liabilities and Stockholders’ Equity: Interest Rates and Interest Differential	3
	Return on Equity and Assets	3
	Lending Activities	4
	Summary of Loan Loss Experience	5
	Investment Activities	6
	Sources of Funds	7
	Correspondent Banking	7
	Employees	8
	Recent Accounting Pronouncements	8
	Monetary Policies	9
	Supervision and Regulation	9
Item 1A.	Risk Factors	14
Item 1B.	Unresolved Staff Comments	18
Item 2.	Properties	18
Item 3.	Legal Proceedings	19
Item 4.	Submission of Matters to a Vote of Security Holders	19
	PART II
Item 5.	Market for Common Equity and Related Stockholder Matters	19
Item 6.	Selected Financial Data	21
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operation	22
Item 7a.	Quantitative and Qualitative Disclosures about Market Risk	33
Item 8.	Financial Statements and Supplementary Data	34
Item 9.	Changes In and Disagreements with Accountants on Accounting and Financial Disclosure	35
Item 9a.	Controls and Procedures	35
Item 9b.	Other information	36
	PART III
Item 10.	Directors and Executive Officers of the Registrant	36
Item 11.	Executive Compensation	36
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	36
Item 13.	Certain Relationships and Related Transactions	36
Item 14.	Principal Accountant Fees and Services	36
	PART IV
Item 15.	Exhibits and Financial Statement Schedules	37
	Signatures	79

PART I

ITEM 1. DESCRIPTION OF BUSINESS

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

Certain statements in this Annual Report on Form 10-K contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, which statements generally can be identified by the use of forward-looking terminology, such as “may,” “will,” “expect,” “estimate,” “anticipate,” “believe,” “target,” “plan,” “project,” or “continue” or the negatives thereof or other variations thereon or similar terminology, and are made on the basis of management’s plans and current analyses of Bank of Florida Corporation, its business and the industry as a whole. These forward-looking statements are subject to risks and uncertainties, including, but not limited to, economic conditions, competition, interest rate sensitivity and exposure to regulatory and legislative changes. The above factors, in some cases, have affected, and in the future could affect Bank of Florida Corporation’s financial performance. It is possible that our actual results could differ, possibly materially, from those expressed or implied in such forward-looking statements.

We caution our readers that the assumptions which form the basis for forward-looking statements, with respect to or that may impact earnings in future periods, including those factors listed above, are beyond our ability to control or estimate precisely. While Bank of Florida Corporation periodically reassesses material trends and uncertainties affecting our results of operations and financial condition, the Company does not undertake to publicly update or revise its forward-looking statements even if experience or future changes make it clear that any projected results expressed or implied therein will not be realized.

BACKGROUND AND PRIOR OPERATING HISTORY

Bank of Florida Corporation was incorporated in Florida in September 1998 to serve as a holding company for Bank of Florida – Southwest. On December 20, 2006, the shareholders approved changing the name of the Company from Bancshares of Florida, Inc. to Bank of Florida Corporation to further the Company’s brand strategy and name recognition. (Bank of Florida Corporation and its subsidiaries are collectively referred to in this report as the “Company”).

On August 24, 1999, Bank of Florida - Southwest commenced operations in Naples, Florida. On July 16, 2002, Bank of Florida - Southeast opened for business in Ft. Lauderdale, Florida and on November 5, 2004, Bank of Florida – Tampa Bay opened for business in Tampa, Florida. (Bank of Florida – Southwest, Bank of Florida – Southeast and Bank of Florida – Tampa Bay are collectively referred to in this report as the “Banks”).

On April 18, 2000, Bank of Florida Trust Company (the “Trust Company”), was incorporated under the laws of the State of Florida. Bank of Florida Trust Company was approved to engage in fiduciary services and estate planning consultation on August 23, 2000. As a subsidiary of Bank of Florida Corporation, Bank of Florida Trust Company offers non-proprietary, third-party investment consulting services and access to an extensive, nationwide network of independent money managers.

The Banks offer a complete range of interest bearing and non-interest bearing accounts, including commercial and retail checking accounts, money market accounts, individual retirement accounts, regular interest bearing statement savings accounts, and certificates of deposit. Lending products include commercial loans, real estate loans, home equity loans and consumer/installment loans. In addition, they provide such consumer services as U.S. Savings Bonds, traveler’s checks, cashiers checks, safe deposit boxes, bank-by-mail services, direct deposit, on-line banking, and automatic teller services. Specialized services to commercial customers include cash management, expanded on-line banking, lock box, and door-to-door banking.

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

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The Trust Company offers and provides its customers wealth management services, including fiduciary services, as a trustee, personal representative, administrator, guardian, custodian of funds, asset manager (with and without discretion) and investment advisor. It provides all of the Banks with these services, generally having a representative situated in the markets that the Company serves with a link to the centralized administrative and support services in the Trust Company’s home office location in Naples, Florida.

MARKET AREA AND COMPETITION

The primary market areas of the Company are Collier and southern Lee Counties on the southwest coast of Florida (served by Bank of Florida – Southwest), Broward, Palm Beach, and parts of Miami-Dade Counties on the southeast coast of Florida (served by Bank of Florida – Southeast) and Hillsborough and Pinellas Counties on the west central coast of Florida (served by Bank of Florida – Tampa Bay).

With the acquisition of Old Florida Bank during 2007, Bank of Florida – Southwest expanded its presence in Lee County. Bank of Florida – Southwest has three locations in Naples (Collier County), one in Bonita Springs (southern Lee County), one in Fort Myers (Lee County) and two in Cape Coral (Lee County). Bank of Florida – Southeast is headquartered in downtown Fort Lauderdale (Broward County) with two additional branch locations in Ft. Lauderdale (Broward County), one in Boca Raton (Palm Beach County) and a fourth location in Aventura (Miami-Dade County). Bank of Florida – Tampa Bay has one location in the Harbor Island area of Tampa (Hillsborough County) and one location in Clearwater (Pinellas County).

The Trust Company maintains its headquarters in Naples and has offices at all of the affiliate bank locations. In addition to independent investment consulting and wealth management expertise, the Trust Company offers trust and estate planning, full trust powers, custodial services, and private family office fiduciary and advisory services.

Collier and Lee Counties have approximately $21.9 billion in deposits as of June 30, 2007. Collier County is the 10^th largest deposit market in the State of Florida, with 2.9% of all deposits statewide, while Lee County is the 9^th largest with a 3.0% statewide market share. Bank of Florida - Southwest had 3.1% of all deposits in the Naples and Marco Island metropolitan statistical area as of June 30, 2007.

With deposits of $149.7 billion as of June 30, 2007, the Miami-Dade/Broward/Palm Beach County markets are much larger than the Collier/Lee County market. Miami-Dade, Broward and Palm Beach Counties are the number one, two and three deposit markets in the State of Florida, respectively, and combined account for 40.0% of Florida’s deposits. Bank of Florida – Southeast had 0.21% of all deposits in the Miami, Ft. Lauderdale and Miami Beach metropolitan statistical area as of June 30, 2007.

Hillsborough and Pinellas Counties have approximately $38.1 billion in total deposits as of June 30, 2007. Pinellas County is the 5^th largest deposit market in the State of Florida, with 6.28% of all deposits statewide, while Hillsborough County is the 7^th largest with a 4.7% statewide market share. Bank of Florida - Tampa Bay had 0.25% of all deposits in the Tampa, St Petersburg, Clearwater metropolitan statistical area as of June 30, 2007.

The demographics of Miami-Dade, Broward and Palm Beach Counties, Collier and Lee Counties, and Hillsborough and Pinellas Counties support our plans to grow assets and deposits with limited, highly selective, full-service locations. The banking locations that we have targeted have been among the fastest growing deposit markets in the state.

We face substantial competition in all phases of operations from a variety of different competitors, including: (i) large national and super-regional financial institutions that have well-established branches and significant market share in the communities we serve; (ii) finance companies, investment banking and brokerage firms, and insurance companies that offer bank-like products; (iii) credit unions, which can offer highly competitive rates on loans and deposits as they receive tax advantages not available to commercial banks; (iv) other community banks, including start-up banks, that can compete with us for customers who desire a high degree of personal service; (v) technology-based financial institutions, including large national and super-regional banks offering on-line deposit, bill payment, and mortgage loan application services; and (vi) both local and out-of-state trust companies and trust service offices.

Many existing community banks with which we compete directly, as well as several new community bank start-ups, have marketing strategies similar to ours. These community banks may open new branches in the communities we serve and compete directly for customers who want the level of service offered by community banks. In addition, these banks compete directly for the same management personnel in Florida.

Various legislative actions in recent years have led to increased competition among financial institutions. With the enactment of the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 (the “Interstate Banking Act”) and other laws and regulations affecting interstate bank expansion, it is easier for financial institutions located

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outside of the State of Florida to enter the Florida market, including our targeted markets. In addition, recent legislative and regulatory changes and technological advances have enabled customers to conduct banking activities without regard to geographic barriers, through computer and telephone-based banking and similar services. There can be no assurance that the United States Congress, the Florida Legislature, or the applicable bank regulatory agencies will not enact legislation or promulgate rules that may further increase competitive pressures on us.

DISTRIBUTION OF ASSETS, LIABILITIES AND STOCKHOLDERS’ EQUITY; INTEREST RATES AND INTEREST DIFFERENTIAL

The following is a presentation of the average consolidated balance sheets of the Company for the five years ended December 31, 2007. This presentation includes all major categories of interest-earning assets and interest-bearing liabilities (In Thousands):

	YEAR ENDED DECEMBER 31,
	2007		2006		2005		2004		2003
ASSETS
Cash and due from banks	$	17,488	$	20,319	$	16,621	$	15,527	$	8,926
Federal funds sold		8,144		31,263		45,849		17,576		6,682
Investment securities & interest earning deposits		49,490		35,684		18,934		9,079		13,549
Loans		1,033,918		627,440		400,897		260,385		145,113
Total interest-earning assets		1,091,552		694,387		465,680		287,040		165,344
Other assets		74,154		17,884		15,201		7,367		4,291
Total assets	$	1,183,194	$	732,590	$	497,502	$	309,934	$	178,561
LIABILITIES AND STOCKHOLDERS’ EQUITY
Savings deposits	$	7,625	$	3,961	$	5,185	$	2,842	$	1,072
Time deposits		367,992		227,944		168,065		132,514		71,170
Other interest bearing deposits		398,432		270,424		183,835		96,776		64,092
Other borrowings		120,331		34,578		6,594		2,250		2,020
Total interest bearing liabilities		894,380		536,907		363,679		234,382		138,354
Non-interest bearing deposits		103,149		90,345		74,847		41,305		18,107
Other liabilities		7,247		2,614		7,523		1,350		291
Total liabilities		1,004,776		629,866		446,049		277,037		156,752
Stockholders’ equity		178,418		102,724		51,453		32,897		21,809
Total liabilities and stockholders’ equity	$	1,183,194	$	732,590	$	497,502	$	309,934	$	178,561

RETURN ON EQUITY AND ASSETS

Returns on average consolidated assets and average consolidated equity for the three years ended December 31, 2007 were as follows:

	2007		2006		2005
Return on average assets	0.23	%	0.32	%	0.98	%
Return on average common stockholders’ equity	1.54	%	2.26	%	9.79	%
Average equity to average assets ratio	15.08	%	14.02	%	10.34	%
Dividend payout ratio	0.00	%	0.00	%	0.00	%

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LENDING ACTIVITIES

The Company engages in a large complement of lending activities, including commercial, consumer, installment, and real estate loans. The majority of the Company’s lending activities is conducted principally with customers located in the Naples, Ft. Myers, Ft. Lauderdale, Miami-Dade, Palm Beach and Tampa, Florida areas. Construction loans are comprised of commercial real estate, multifamily and residential one to four family loans. Commercial loans are primarily extended to small and mid-sized corporate borrowers in service and manufacturing related industries. Collateral held varies but may include compensating balances, accounts receivable, inventory, property, plant and equipment and income producing commercial properties. Although the Banks’ loan portfolio is diversified, a significant portion of its loans are collateralized by real estate. Therefore, the Banks could be susceptible to economic downturns and natural disasters.

Commercial lending is directed principally towards businesses whose demands for funds fall within the Banks’ legal lending limits and who are potential deposit customers. For presentation purposes, the commercial lending category includes loans made to individual, partnership or corporate borrowers, and obtained for a variety of business purposes. Particular emphasis is placed on loans to small and medium-sized businesses. Real estate loans consist of residential and commercial first mortgage loans, second mortgage financing and construction loans. Lines of credit include home equity, commercial, and consumer lines of credit. Consumer loans consist primarily of installment loans to individuals for personal, family and household purposes.

The following table presents various categories of loans contained in the Company’s loan portfolio and the total amount of all loans as of the dates indicated (In Thousands).

	DECEMBER 31,
	2007			2006			2005			2004			2003
TYPE OF LOAN
Loans held for sale – One-to-four family residential	$	417		$	1,103		$	1,323		$	—		$	—
One-to-four family residential	$	139,986		$	93,298		$	64,805		$	60,124		$	37,294
Commercial real estate		417,982			241,931			180,039			103,597			66,746
Land and construction		397,299			303,950			141,534			65,172			27,779
Multifamily		31,195			26,530			25,255			14,627			3,624
Total real estate loans		986,462			665,709			411,633			243,520			135,443
Commercial loans		93,648			66,087			36,834			42,721			34,217
Lines of credit		43,416			39,127			26,393			23,871			20,748
Consumer loans		22,519			12,835			11,391			15,869			10,082
Total loans held for investment		1,146,045			783,758			486,251			325,981			200,490
Allowance for loan losses		(14,431	)		(7,833	)		(4,603	)		(2,817	)		(1,568	)
Deferred loan fees, net		(1,700	)		(1,251	)		(852	)		(202	)		(115	)
Net loans held for investment	$	1,129,914		$	774,674		$	480,796		$	322,962		$	198,807

The Banks have correspondent relationships with several banks, as well as with each other, whereby they can engage in the sale and purchase of loan participations. Participations purchased, if any, are entered into using the same underwriting criteria that would be applied if we had originated the loan. This includes credit and collateral analyses and maintenance of complete credit files on each participation purchased that is consistent with the credit files that we maintain on our customers.

The Company does not presently have, nor intends to implement, a rollover policy with respect to its loan portfolio. At December 31, 2007, approximately 86.0% of the Company’s loan portfolio is concentrated in real estate loans. All loans are recorded according to original terms, and demand loans, overdrafts and loans having no stated repayment terms or maturity are reported as due in one year or less.

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The following is an analysis of maturities of loans as of December 31, 2007 (In Thousands):

	DUE IN 1 YEAR OR LESS		DUE IN 1 TO 5 YEARS		DUE AFTER 5 YEARS		TOTAL
TYPE OF LOAN
Residential one-to-four family	$	19,868	$	21,088	$	99,030	$	139,986
Commercial real estate		44,394		100,590		272,998		417,982
Land and construction		228,033		102,177		67,089		397,299
Multifamily		18,008		4,120		9,067		31,195
Total real estate loans		310,303		227,975		448,184		986,462
Commercial		50,655		31,133		11,860		93,648
Lines of Credit		4,385		2,203		36,828		43,416
Consumer loans		12,296		7,176		3,047		22,519
Total loans held for investment and sale	$	377,639	$	268,487	$	499,919	$	1,146,045

	DUE IN 1 YEAR OR LESS		DUE IN 1 TO 5 YEARS		DUE AFTER 5 YEARS		TOTAL
TYPE OF LOAN
Fixed rate loans	$	35,206	$	151,947	$	111,720	$	298,873
Floating rate loans		342,433		116,540		388,199		847,172
Total loans held for investment and sale	$	377,639	$	268,487	$	499,919	$	1,146,045

Management has established a policy to discontinue accruing interest (non-accrual status) on a loan after it has become 90 days delinquent as to payment of principal or interest unless the loan is considered to be well collateralized and is actively in the process of collection. In addition, a loan will be placed on non-accrual status before it becomes 90 days delinquent if management believes that the borrower’s financial condition is such that collection of interest or principal is doubtful. Interest previously accrued but uncollected on such loans is reversed and charged against current income when the receivable is determined to be uncollectible. Interest income on non-accrual loans is recognized only as received.

The Company had non-accrual loans totaling $13,752,000 and $213,000 at December 31, 2007 and 2006, respectively. At December 31, 2007, there were four loans totaling $440,000 that were contractually past due 90 days or more as to principal or interest payments and still accruing. At December 31, 2007, there were no loans outstanding that were contractually 90 days or more and still accruing interest. The Company did not have any loans that would be defined as troubled debt restructuring at December 31, 2007 or 2006.

SUMMARY OF LOAN LOSS EXPERIENCE

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

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Although the allowance for loan losses was determined by category of loans, the entire allowance is available to absorb losses from any category. The allowance for loan losses was allocated by category for each of the years indicated as follows (In Thousands):

	2007				2006				2005				2004				2003
	AMOUNT		% LOANS IN EACH CATEGORY		AMOUNT		% LOANS IN EACH CATEGORY		AMOUNT		% LOANS IN EACH CATEGORY		AMOUNT		% LOANS IN EACH CATEGORY		AMOUNT		% LOANS IN EACH CATEGORY
Residential one-to-four family	$	906	6.3	%	$	424	12.0	%	$	286	13.6	%	$	218	18.4	%	$	107	18.6	%
Commercial real estate		3,831	26.5	%		2,080	30.8	%		1,516	36.9	%		541	31.8	%		401	33.3	%
Land and construction		6,940	48.1	%		3,648	38.8	%		1,675	29.0	%		326	20.0	%		139	13.9	%
Multifamily		349	2.4	%		266	3.4	%		248	5.2	%		133	4.5	%		30	1.8	%
Total real estate		12,026	83.3	%		6,418	85.0	%		3,725	84.7	%		1,218	74.7	%		677	67.6	%
Commercial		1,562	10.8	%		872	8.4	%		480	7.6	%		829	13.1	%		468	17.1	%
Lines of credit		509	3.5	%		364	5.0	%		241	5.4	%		463	7.3	%		284	10.3	%
Consumer		334	2.4	%		179	1.6	%		157	2.3	%		307	4.9	%		139	5.0	%
Total		14,431	100.0	%	$	7,833	100.0	%	$	4,603	100.0	%	$	2,817	100.0	%	$	1,568	100.0	%

An analysis of the Company’s allowance for loan losses and loan loss experience (charge-offs) is furnished in the following table for the most recent five years ended December 31, as indicated (In Thousands):

	2007			2006			2005			2004			2003
Type of Loan
Balance at beginning of year	$	7,833		$	4,603		$	2,817		$	1,568		$	907
Charge-offs:
Consumer		(117	)		(99	)		(47	)		(26	)		(20	)
Commercial		(287	)		(100	)		(77	)		(14	)		(153	)
Real estate mortgage		(34	)		(5	)		—			—			(3	)
Recoveries:
Consumer		37			3			7			—			—
Commercial		—			3			—			10			4
Real Estate Loans		—			6			—			—			—
Net charge-offs		(401	)		(192	)		(117	)		(30	)		(172	)
Reserves related to acquisitions		2,745			586			—			—			—
Provision for loan losses charged to operations		4,254			2,836			1,903			1,279			833
Balance at end of year	$	14,431		$	7,833		$	4,603		$	2,817		$	1,568
Asset Quality Ratios
Net charge-offs during the year to average loans outstanding during the year		0.04	%		0.03	%		0.03	%		0.01	%		0.16	%
Allowance for loan losses to total loans		1.26	%		1.00	%		0.94	%		0.86	%		0.78	%
Allowance for loan losses to non-performing assets		101.69	%		1160.26	%		1435.40	%		480.70	%		3336.17	%
Nonperforming loans to total loans		1.24	%		0.09	%		0.07	%		0.18	%		0.02	%
Nonperforming assets to total assets		1.19	%		0.08	%		0.06	%		0.14	%		0.02	%

INVESTMENT ACTIVITIES

The Company invests primarily in obligations of the United States or obligations guaranteed as to principal and interest by the United States and other taxable securities. The Banks enter into Federal Funds transactions with their principal correspondent banks, and primarily act as net sellers of such funds. The sale of Federal Funds amounts to short-term loans from the Banks to other banks.

The Company’s investment activities are governed internally by a written, board-approved policy. The investment policy is carried out by the Corporate Asset/Liability Management Committee (“ALCO”), which meets regularly to review the economic environment and establish investment strategies. The ALCO has much broader responsibilities, which are discussed further in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” under the captions “Capital Resources and Liquidity” and “Interest Sensitivity”.

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For further detailed information as to the amortized cost, fair value, respective maturities and weighted average yields of the Company’s investments, please see “Note 5-Securities” of the “Notes to Consolidated Financial Statements”.

SOURCES OF FUNDS

The Company’s primary funding source for lending, investments and other general business purposes is deposits. The Company offers a wide range of interest bearing and non-interest bearing accounts, including commercial and retail checking accounts, negotiable order of withdrawal (“NOW”) accounts, money market accounts with limited transactions, individual retirement accounts, regular interest-bearing statement savings accounts, certificates of deposit with a range of maturity date options, and accessibility to a customer’s deposit relationship through on-line banking. Commercial customers additionally have cash management, expanded on-line banking, lock box, and door-to-door banking depositor services. The sources of deposits are residents, businesses and employees of businesses within the Banks’ market areas, obtained through the personal solicitation of the Banks’ officers and directors, direct mail solicitation and limited advertisements published in the local media. The Banks pay competitive interest rates on time and savings deposits. In addition, the Banks have implemented a service charge fee schedule competitive with other financial institutions in the Company’s market areas, covering such matters as maintenance fees on checking accounts, per item processing fees on checking accounts, returned check charges, and other similar charges.

In addition to deposits, another principal source of funds is loan repayments. If necessary, additional funding is available to the Banks by borrowing from the Federal Home Loan Bank (“FHLB”). Our FHLB lending capacity provides a line of credit up to 20% of total assets for the Bank of Florida – Southwest and for Bank of Florida – Southeast and 10% of total assets for Bank of Florida – Tampa Bay. Bank of Florida-Southwest and Bank of Florida – Southeast also issued subordinated debt during 2005 to assist in their capital funding needs. See “Note-10 Deposits”, “Note 11-Subordinated Debt” and “Note 12-Federal Home Loan Bank Advances” of the “Notes to Consolidated Financial Statements” for further information.

The following table presents, for the three years ended December 31, 2007, the average amount of and average rate paid on each of the following funding categories:

	AVERAGE AMOUNT (IN THOUSANDS)						AVERAGE RATE PAID
	2007		2006		2005		2007		2006		2005
FUNDING CATEGORY
Non-interest-bearing demand deposits	$	103,149	$	90,345	$	74,847	—		—		—
Savings deposits		7,625		3,961		5,185	0.64	%	1.09	%	1.37	%
Time deposits		367,992		227,944		168,065	5.06	%	4.52	%	3.31	%
Other interest-bearing deposits		398,432		270,424		183,835	3.98	%	3.25	%	1.82	%
Other borrowings		120,331		34,578		6,594	5.33	%	6.06	%	5.79	%
Total Funding	$	997,529	$	627,252	$	438,526	4.10	%	3.38	%	2.57	%

CORRESPONDENT BANKING

Correspondent banking involves the provision of services by one bank to another bank that cannot provide that service for itself from an economic or practical standpoint. The Banks purchase correspondent services offered by larger banks, including check collections, purchase of Federal Funds, security safekeeping, investment services, coin and currency supplies, liquidity loan participations and sales of loans to or participations with correspondent banks.

The Banks are involved in loan participations to correspondent banks as well as each other with respect to loans that exceed the individual Bank’s respective lending limits. Management of the Banks have established primary correspondent relationships with the Independent Bankers’ Bank of Florida, Busey Bank, FSB Florida, Columbus Bank & Trust (a Synovus member bank), and Silverton Bank (Georgia). At December 31, 2007, available lines of credit with correspondent banks amounted to $117,938,000.

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EMPLOYEES

At December 31, 2007, the Company employed 257 full-time-equivalent employees, none of whom were represented by a union or collective bargaining agreement. The Company will hire additional persons as needed on a full-time and part-time basis, including additional tellers and customer service representatives to support its growth objectives.

RECENT ACCOUNTING PRONOUNCEMENTS

In September 2006, FASB issued SFAS No. 157, Fair Value Measurements (“SFAS 157”). SFAS 157 defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principals, and expands disclosures about fair value measurements. This statement is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. Management is in the process of evaluating the impact of SFAS 157 and does not anticipate it will have a material impact on the Company’s consolidated financial condition or results of operations.

In February 2007, FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities-Including an amendment of FASB Statement No. 115 (“SFAS 159”). SFAS 159 provides companies with an option to report selected financial assets and liabilities at fair value. Most of the provisions of this statement apply only to entities that elect the fair value option. However, the amendment to SFAS No. 115, Accounting for Certain Investments in Debt and Equity Securities, applies to all entities with available-for-sale and trading securities. SFAS 159 also establishes presentation and disclosure requirements designed to facilitate comparisons between companies that choose different measurement attributes for similar types of assets and liabilities. This statement is effective as of the beginning of an entity’s first fiscal year that begins after November 15, 2007. Management believes this Statement will not have a material effect on the Company’s consolidated financial statements.

In December 2007, the FASB issued SFAS No.160, Noncontrolling Interests in Consolidated Financial Statements (“SFAS 160”). SFAS 160 requires the Company to establish accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. This Statement shall be effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008. Earlier adoption is prohibited. Management does not anticipate it will have a material effect on the Company’s consolidated financial condition or results of operations.

In December 2007, the FASB issued SFAS No. 141(R), Business Combinations (“SFAS 141(R)”). SFAS 141(R) is effective for fiscal years beginning after December 15, 2008 and early implementation is not permitted. SFAS 141(R) requires the acquiring entity in a business combination to recognize all (and only) the assets acquired and liabilities assumed in the transaction; establishes the acquisition date fair value as the measurement objective for all assets acquired and liabilities assumed; and requires the acquirer to disclose to investors and other users all of the information they need to evaluate and understand the nature and financial effect of the business combination. Acquisition related costs including finder’s fees, advisory, legal, accounting valuation and other professional and consulting fees are required to be expensed as incurred. Management does not anticipate it will have a material impact on the Company’s consolidated financial condition or results of operations.

In March 2007, the EITF reached a final consensus on Issue 06-10, Accounting for Collateral Assignment Split-Dollar Life Insurance Arrangements. EITF 06-10 stipulates that a liability should be recognized for a postretirement benefit obligation associated with a collateral assignment arrangement if, on the basis of the substantive agreement with the employee, the employer has agreed to maintain a life insurance policy during the postretirement period or provide a death benefit. The employer also must recognize and measure the associated asset on the basis of the terms of the collateral assignment arrangement. The consensus is effective for fiscal years beginning after December 15, 2007. Entities will have the option of applying the provisions of EITF 06-10 as a cumulative effect adjustment to the opening balance of retained earnings or retrospectively to all prior periods. EITF 06-10 is not expected to have a material impact on the Company’s consolidated financial statements.

In April 2007, the FASB issued FASB Staff Position (“FSP”) No. FIN 39-1, Amendment of FASB Interpretation No. 39, which expands the scope of FASB Interpretation No. 39, Offsetting of Amounts Related to Certain Contracts (“FIN 39”), to permit netting of the fair value asset recognized for a derivative instrument against the related liability for the obligation to return cash collateral, or netting of the fair value liability recognized for a derivative instrument against the related asset for the right to reclaim cash collateral, in situations where the FIN 39 netting criteria are met. This FSP is effective on January 1, 2008, with early adoption permitted. The effect of adopting this FSP will be recorded as a change in accounting principle through retrospective application to all periods presented. We do not expect that the adoption of this standard will have a material effect on our consolidated financial position or results of operations.

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MONETARY POLICIES

The results of operations of the Company are affected by credit policies of monetary authorities, particularly the Board of Governors of the Federal Reserve System (“Federal Reserve”). The instruments of monetary policy employed by the Federal Reserve include open market operations in U.S. government securities, changes in the discount rate on member bank borrowings, changes in reserve requirements against member bank deposits, and limitations on interest rates which member banks may pay on time and savings deposits. In view of changing conditions in the national economy and in the money markets, as well as the effect of action by monetary and fiscal authorities, including the Federal Reserve Board, no accurate prediction can be made as to possible future changes in interest rates, deposit levels, loan demand or the business and earnings of the Company.

SUPERVISION AND REGULATION

Banks and their holding companies, and their affiliates, are extensively regulated under both federal and state law. The following is a brief summary of certain statutes, rules, and regulations affecting the Company, the Banks and the Trust Company. This summary is qualified in its entirety by reference to the particular statutory and regulatory provisions referred to below and is not intended to be an exhaustive description of the statutes or regulations applicable to the business of the Company, the Banks or the Trust Company. Any change in the applicable law or regulation may have a material effect on the business and prospects of the Company, the Banks and the Trust Company. Supervision, regulation, and examination of banks by regulatory agencies are intended primarily for the protection of depositors, rather than shareholders.

Bank Holding Company Regulation. The Company is a bank holding company and a member of the Federal Reserve System under the Bank Holding Company (“BHC”) Act of 1956. As such, the Company is subject to the supervision, examination and reporting requirements of the BHC Act and the regulations of the Federal Reserve. The Company is required to furnish to the Federal Reserve an annual report of its operations at the end of each fiscal year, and such additional information as the Federal Reserve may require pursuant to the BHC Act. The BHC Act requires that a bank holding company obtain the prior approval of the Federal Reserve before: (i) acquiring direct or indirect ownership or control of more than 5% of the voting shares of any bank; (ii) taking any action that causes a bank to become a subsidiary of the bank holding company; (iii) merging or consolidating with any other bank holding company; or (iv) acquiring most other operating subsidiaries.

The BHC Act further provides that the Federal Reserve may not approve any transaction that would result in a monopoly or would be in furtherance of any combination or conspiracy to monopolize or attempt to monopolize the business of banking in any section of the United States, or the effect of which may be to lessen competition or to tend to create a monopoly in any section of the country, or that in any other manner would be in restraint of trade, unless the anti-competitive effects of the proposed transaction are clearly outweighed by the public interest in meeting the convenience and needs of the community to be served. The Federal Reserve is also required to consider the financial and managerial resources and future prospects of the bank holding companies and banks concerned and the convenience and needs of the community to be served. Consideration of financial resources generally focuses on capital adequacy and consideration of convenience and needs issues, including the party’s performance under the Community Reinvestment Act of 1977 (the “CRA”) and anti-money laundering laws, which are both discussed below.

Community Reinvestment Act. Banks are subject to the provisions of the Community Reinvestment Act (“CRA”). Under the terms of the Community Reinvestment Act, the appropriate federal bank regulatory agency is required, in connection with its examination of a bank, to assess such bank’s record in meeting the credit needs of the community served by that bank, including low- and moderate-income neighborhoods. The regulatory agency’s assessment of the bank’s record is made available to the public. Further, such assessment is required of any bank which has applied to: (i) charter a national bank; (ii) obtain deposit insurance coverage for a newly chartered institution; (iii) establish a new branch office that will accept deposits; (iv) relocate an office; or (v) merge or consolidate with, or acquire the assets or assume the liabilities of, a federally regulated financial institution. In the case of a bank holding company applying for approval to acquire a bank or other bank holding company, the Federal Reserve will assess the record of each subsidiary bank of the applicant BHC, and such records may be the basis for denying the application.

Gramm-Leach-Bliley Act. This act permits the creation of new financial services holding companies that can offer a full range of financial products under a regulatory structure based on the principle of functional regulation. The legislation eliminates the legal barriers to affiliations among banks and securities firms, insurance companies, and other financial services companies. The law also provides financial organizations with the opportunity to structure these new financial affiliations through a holding company structure as a financial subsidiary of a national bank. The law reserves the role of the Federal Reserve as the supervisor for bank holding companies. At the same time, the law also provides a system of functional regulation which is designed to utilize the various existing federal

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and state regulatory bodies. The law also sets up a process for coordination between the Federal Reserve and the Secretary of the Treasury regarding the approval of new financial activities for both bank holding companies and national bank financial subsidiaries.

The law also mandates a minimum federal standard of financial privacy. Financial institutions are required to have written privacy policies that must be disclosed to customers. The disclosure of a financial institution’s privacy policy must take place at the time a customer relationship is established and not less than annually during the continuation of the relationship. The act also provides for the functional regulation of bank securities activities. The law repeals the exemption that banks were afforded from the definition of “broker”, and replaces it with a set of limited exemptions that allows the continuation of some historical activities performed by banks. In addition, the act amends the securities laws to include banks within the general definition of dealer. Regarding new bank products, the law provides a procedure for handling products sold by banks that have securities elements. Under the law, financial holding companies and banks that desire to engage in new financial activities are required to have satisfactory or better CRA ratings when they commence the new activity.

Sarbanes-Oxley Act. The purpose of the Sarbanes-Oxley Act is to protect investors by improving the accuracy and reliability of corporate disclosures made pursuant to the securities laws, and for other purposes.

The Sarbanes-Oxley Act amends the Securities Exchange Act of 1934 to prohibit a registered public accounting firm from performing specified nonaudit services contemporaneously with a mandatory audit. The Sarbanes-Oxley Act also vests the audit committee of an issuer with responsibility for the appointment, compensation, and oversight of any registered public accounting firm employed to perform audit services. It requires each committee member to be a member of the board of directors of the issuer, and to be otherwise independent. The Sarbanes-Oxley Act further requires the chief executive officer and chief financial officer of an issuer to make certain certifications as to each annual or quarterly report.

In addition, the Sarbanes-Oxley Act requires officers to forfeit certain bonuses and profits under certain circumstances. Specifically, if an issuer is required to prepare an accounting restatement due to the material noncompliance of the issuer as a result of misconduct with any financial reporting requirement under the securities laws, the chief executive officer and chief financial officer of the issuer shall be required to reimburse the issuer for: (1) any bonus or other incentive-based or equity-based compensation received by that person from the issuer during the 12-month period following the first public issuance or filing with the Securities and Exchange Commission (“SEC”) of the financial document embodying such financial reporting requirement; and (2) any profits realized from the sale of securities of the issuer during that 12-month period.

The Sarbanes-Oxley Act also instructs the SEC to require by rule:

• disclosure of all material off-balance sheet transactions and relationships that may have a material effect upon the financial status of an issuer; and

• the presentation of pro-forma financial information in a manner that is not misleading, and which is reconcilable with the financial condition of the issuer under generally accepted accounting principles.

The Sarbanes-Oxley Act also prohibits insider transactions in the company’s stock held within its pension plans during lock out periods, and any profits on such insider transactions are to be disgorged. In addition, there is a prohibition of company loans to its executives, except in certain circumstances. The SEC also requires the company to issue a code of ethics for senior financial officers of the company. Further, the Sarbanes-Oxley Act adds a criminal penalty of fines and imprisonment of up to 10 years for securities fraud.

Regulation W. Regulation W comprehensively implements Sections 23A and 23B of the Federal Reserve Act. Sections 23A and 23B and Regulation W restrict loans by a depository institution to its affiliates, asset purchases by depository institutions from its affiliates, and other transactions between a depository institution and its affiliates. Regulation W unifies in one public document, the Federal Reserve’s interpretations of sections 23A and 23B.

Bank Regulation. Bank of Florida – Southwest, Bank of Florida – Southeast and Bank of Florida – Tampa Bay are state chartered banks, subject to the supervision and regulation of the Florida Department of Financial Services (the “Department”) and the Federal Deposit Insurance Corporation (“FDIC”). The FDIC serves as the primary federal regulator and the administrator of the fund that insures the deposits of the Banks. The Banks are subject to comprehensive regulation, examination and supervision by the Department and the FDIC and are subject

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to other laws and regulations applicable to banks. Among the statutes and regulations to which the Banks are subject are limitations on loans to a single borrower and to their directors, officers and employees; restrictions on the opening and closing of branch offices; the maintenance of required capital and liquidity ratios; the granting of credit under equal and fair conditions; and the disclosure of the costs and terms of such credit. The Banks are examined periodically by the FDIC and the Department, to which the Banks submit periodic reports regarding their financial condition and other matters. The FDIC and the Department have a broad range of powers to enforce regulations under their jurisdiction, and to take discretionary actions determined to be for the protection, safety and soundness of banks, including the institution of cease and desist orders and the removal of directors and officers. The FDIC and the Department also have the authority to approve or disapprove mergers, consolidations, and similar corporate actions.

Our subsidiary banks are also subject to “cross-guarantee” provisions under federal law that provide if one FDIC-insured depository institution of a multi-bank holding company fails or requires FDIC assistance, the FDIC may assess a “commonly controlled” depository institution for the estimated losses suffered by the FDIC. Such liability could have a material adverse effect on the financial condition of any assessed bank and the holding company. While the FDIC’s claim is junior to the claims of depositors, holders of secured liabilities, general creditors and subordinated creditors, it is superior to the claims of shareholders and affiliates.

Under federal law, federally insured banks are subject, with certain exceptions, to certain restrictions on any extension of credit to their parent holding companies or other affiliates, on investment in the stock or other securities of affiliates, and on the taking of such stock or securities as collateral from any borrower. In addition, banks are prohibited from engaging in certain tie-in arrangements in connection with any extension of credit or the providing of any property or service.

The Financial Institutions Reform, Recovery and Enforcement Act of 1989 (“FIRREA”) contains capital standards for bank holding companies and banks and civil and criminal enforcement provisions. FIRREA also provides that a depository institution insured by the FDIC can be held liable for any loss incurred by, or reasonably expected to be incurred by, the FDIC in connection with (i) the default of a commonly controlled FDIC insured depository institution, or (ii) any assistance provided by the FDIC to a commonly controlled FDIC insured institution in danger of default.

The FDIC Improvement Act of 1991 (“FDICIA”) enacted a number of provisions addressing the safety and soundness of deposit insurance funds, supervision, accounting, prompt regulatory action, and also implemented other regulatory improvements. The cost for conducting an examination of an institution may be assessed to that institution, with special consideration given to affiliates and any penalties imposed for failure to provide information requested. FDICIA also re-codified then current law restricting extensions of credit to insiders under the Federal Reserve Act.

USA Patriot Act. The terrorist attacks in September 2001, have impacted the financial services industry and led to federal legislation that attempts to address certain issues involving financial institutions. On October 26, 2001, President Bush signed into law the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (“USA Patriot Act”).

Part of the USA Patriot Act is the International Money Laundering Abatement and Financial Anti-Terrorism Act of 2001 (“IMLA”). IMLA authorizes the Secretary of the Treasury, in consultation with the heads of other government agencies, to adopt special measures applicable to banks, bank holding companies, and other financial institutions. These measures may include enhanced recordkeeping and reporting requirements for certain financial transactions that are of primary money laundering concern, due diligence requirements concerning the beneficial ownership of certain types of accounts, and restrictions or prohibitions on certain types of accounts with foreign financial institutions.

Among its other provisions, IMLA requires each financial institution to: (i) establish an anti-money laundering program; (ii) establish due diligence policies, procedures and controls with respect to its private banking accounts and correspondent banking accounts involving foreign individuals and certain foreign banks; and (iii) avoid establishing, maintaining, administering, or managing correspondent accounts in the United States for, or on behalf of, a foreign bank that does not have a physical presence in any country. In addition, IMLA contains a provision encouraging cooperation among financial institutions, regulatory authorities and law enforcement authorities with respect to individuals, entities and organizations engaged in, or reasonably suspected of engaging in, terrorist acts or money laundering activities. IMLA expands the circumstances under which funds in a bank account may be forfeited and requires covered financial institutions to respond under certain circumstances to requests for information from federal banking agencies within 120 hours. IMLA also amends the BHC Act and the Bank Merger Act to require the federal banking agencies to consider the effectiveness of a financial institution’s anti-money laundering activities when reviewing an application under these acts. Over the past few years, enforcement, and

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compliance monitoring, of anti-money laundering laws has dramatically increased. Because of this, the Company and the Banks have increased the attention and resources they dedicate to IMLA compliance, including the retention of specialized IMLA officers, dedicated solely to IMLA compliance.

Transactions with Affiliates. In addition to the limitations imposed by Regulation W, there are various legal restrictions on the extent to which the Banks may engage in loan transactions with the Company and its subsidiaries and other affiliates. Subject to certain limited exceptions, the Banks may not extend credit to the Company or any one of the Banks’ affiliates in excess of ten percent of the Bank’s capital stock and surplus, or to all affiliates, in the aggregate, in excess of twenty percent of the Banks’ capital stock and surplus. All extensions of credit by the Banks to an affiliate must be fully collateralized by high quality collateral.

Transactions involving extensions of credit to the Banks’ affiliates are subject to further limitations. These additional limitations are also applicable to: (1) transactions involving the purchase of assets or securities from affiliates; (2) extensions of credit and other transactions by the Banks to or with third persons where there is a benefit to an affiliate; (3) contracts in which the Banks provide services to an affiliate; and (4) transactions in which an affiliate receives a brokerage commission in a transaction involving the Banks. All such transactions must be on terms and under circumstances, including credit standards, that are substantially the same, or at least as favorable to the Banks as those prevailing at the time for comparable transactions with or involving other nonaffiliated companies.

Dividends. The Company’s ability to pay cash dividends will depend almost entirely upon the amount of dividends that the Banks are permitted to pay by statutes or regulations. Additionally, the Florida Business Corporation Act provides that the Company may only pay dividends if the dividend payment would not render it insolvent, or unable to meet its obligations as they come due.

All of the Banks and the Trust Company are Florida state-chartered institutions. The Department limits the Banks’ ability to pay dividends. As state-chartered institutions, the Banks and the Trust Company are subject to regulatory restrictions on the payment of dividends, including a prohibition of payment of dividends from their capital under certain circumstances without the prior approval of the Department. Except with the prior approval of the Department, all dividends of any Florida bank or trust company must be paid out of retained net profits from the current period and the previous two years, after deducting expenses, including losses and bad debts. In addition, state-chartered banks and trust companies in Florida are required to transfer at least 20% of their net income to surplus until their surplus equals the amount of paid-in capital.

The Company does not anticipate that the subsidiary banks will pay dividends in the foreseeable future in so that they can maintain their well capitalized status and retain any earnings to support their growth.

Capital Requirements. The federal bank regulatory authorities have adopted risk-based capital guidelines for banks and bank holding companies that are designed to make regulatory capital requirements more sensitive to differences in risk profiles among banks and bank holding companies. The resulting capital ratios represent qualifying capital as a percentage of total risk-weighted assets and off-balance sheet items. The guidelines are minimums, and the federal regulators have noted that banks and bank holding companies contemplating significant expansion programs should not allow expansion to diminish their capital ratios and should maintain all ratios well in excess of the minimums. The current guidelines require all bank holding companies and federally-regulated banks to maintain a minimum risk-based total capital ratio equal to 8%, of which at least 4% must be Tier 1 capital. Tier 1 capital includes common stockholders’ equity, qualifying perpetual preferred stock, and minority interests in equity accounts of consolidated subsidiaries, but excludes goodwill and most other intangibles and excludes the allowance for loan and lease losses. Tier 2 capital includes the excess of any preferred stock not included in Tier 1 capital, mandatory convertible securities, hybrid capital instruments, subordinated debt and intermediate term-preferred stock, and general reserves for loan and lease losses up to 1.25% of risk-weighted assets.

FDICIA contains “prompt corrective action” provisions pursuant to which banks are to be classified into one of five categories based upon capital adequacy, ranging from “well capitalized” to “critically undercapitalized” and which require (subject to certain exceptions) the appropriate federal banking agency to take prompt corrective action with respect to an institution which becomes “significantly undercapitalized” or “critically undercapitalized”.

In general, the regulations define the five capital categories as follows: (i) an institution is “well capitalized” if it has a total risk-based capital ratio of 10% or greater, has a Tier 1 risk-based capital ratio of 6% or greater, has a leverage ratio of 5% or greater and is not subject to any written capital order or directive to meet and maintain a specific capital level for any capital measures; (ii) an institution is “adequately capitalized” if it has a total risk-based capital ratio of 8% or greater, has a Tier 1 risk-based capital ratio of 4% or greater, and has a leverage ratio of 4% or greater; (iii) an institution is “undercapitalized” if it has a total risk-based capital ratio of less than 8%, has a Tier 1 risk-based capital ratio that is less than 4% or has a leverage ratio that is less than 4%; (iv) an institution is “significantly undercapitalized” if it has a total risk-based capital ratio that is less than 6%, a Tier 1 risk-based

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capital ratio that is less than 3% or a leverage ratio that is less than 3%; and (v) an institution is “critically undercapitalized” if its “tangible equity” is equal to or less than 2% of its total assets. The FDIC also, after an opportunity for a hearing, has authority to downgrade an institution from “well capitalized” to “adequately capitalized” or to subject an “adequately capitalized” or “undercapitalized” institution to the supervisory actions applicable to the next lower category, for supervisory concerns.

The degree of regulatory scrutiny of a financial institution will increase, and the permissible activities of the institution will decrease, as it moves downward through the capital categories. Institutions that fall into one of the three undercapitalized categories may be required to: (i) submit a capital restoration plan; (ii) raise additional capital; (iii) restrict their growth and other activities; (iv) improve their management; (v) eliminate management fees; or (vi) divest themselves of all or part of their operations. Bank holding companies controlling financial institutions can be called upon to boost the institutions’ capital and to partially guarantee the institutions’ performance under their capital restoration plans. These capital guidelines can affect the Company in several ways.

The Company’s capital levels are in excess of those required to be maintained by a “well capitalized” financial institution. However, rapid growth, poor loan portfolio performance, or poor earnings performance, or a combination of these factors, could change the Company’s capital position in a relatively short period of time, making an additional capital infusion necessary.

Enforcement Powers. Congress has provided the federal bank regulatory agencies with an array of powers to enforce laws, rules, regulations and orders. Among other things, the agencies may require that institutions cease and desist from certain activities, may preclude persons from participating in the affairs of insured depository institutions, may suspend or remove deposit insurance, and may impose civil money penalties against institution-affiliated parties for certain violations.

Maximum Legal Interest Rates. Like the laws of many states, Florida law contains provisions on interest rates that may be charged by banks and other lenders on certain types of loans. Numerous exceptions exist to the general interest limitations imposed by Florida law. The relative importance of these interest limitation laws to the financial operations of the Banks will vary from time to time, depending on a number of factors, including conditions in the money markets, the costs and availability of funds, and prevailing interest rates.

Bank Branching. Banks in Florida are permitted to branch statewide. A State bank’s expansion is subject to the Department and FDIC approval. Any such approval would take into consideration several factors, including the banks’ level of capital, the prospects and economics of the proposed branch office, and other conditions deemed relevant for purposes of determining whether approval should be granted to open a branch office. For information regarding legislation on interstate branching in Florida, see “Interstate Banking” below.

Change of Control. Federal law restricts the amount of voting stock of a bank holding company and a bank that a person may acquire without the prior approval of banking regulators. The overall effect of such laws is to make it more difficult to acquire a bank holding company and a bank by tender offer or similar means than it might be to acquire control of another type of corporation. Consequently, shareholders of the Company may be less likely to benefit from the rapid increases in stock prices that may result from tender offers or similar efforts to acquire control of other companies. Under the Change in Bank Control Act and the regulations thereunder, a person or group must give advance notice to the Federal Reserve before acquiring control of any bank holding company. Upon receipt of such notice, the Federal Reserve may approve or disapprove the acquisition. The Change in Bank Control Act creates a rebuttable presumption of control if a member or group acquires a certain percentage or more of a bank holding company’s or bank’s voting stock, or if one or more other control factors set forth in the Change in Bank Control Act are present.

Interstate Banking. The Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 provides for nationwide interstate banking and branching. Under this law, interstate acquisitions of banks or bank holding companies in any state by bank holding companies in any other state are permissible subject to certain limitations. Florida also has a law that allows out-of-state bank holding companies (located in states that allow Florida bank holding companies to acquire banks and bank holding companies in that state) to acquire Florida banks and Florida bank holding companies. The law essentially provides for out-of-state entry by acquisition only (and not by interstate branching) and requires the acquired Florida bank to have been in existence for at least three years. Interstate branching and consolidation of existing bank subsidiaries in different states are permissible. A Florida bank may also establish, maintain, and operate one or more branches in a state other than Florida pursuant to an interstate merger transaction in which the Florida bank is the resulting bank.

Effect of Governmental Policies. The earnings and businesses of the Company and the Banks are affected by the policies of various regulatory authorities of the United States, especially the Federal Reserve. The Federal Reserve, among other things, regulates the supply of credit and deals with general economic conditions

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within the United States. The instruments of monetary policy employed by the Federal Reserve for those purposes influence in various ways the overall level of investments, loans, other extensions of credit, and deposits, and the interest rates paid on liabilities and received on assets.

ITEM 1A. RISK FACTORS

Investing in our common stock involves risk. In addition to the other information set forth elsewhere in this Report, the following factors relating to us and our common stock should be carefully considered in deciding whether to invest in our common stock.

The Company has incurred cumulative losses since it commenced operations and may incur losses in the future.

Since the Company commenced operations on August 24, 1999, it has incurred an accumulated deficit as of December 31, 2007, of approximately $1.8 million. This deficit is primarily due to the costs of establishing its business strategy, which included opening Bank of Florida—Southwest, Bank of Florida Trust Company, Bank of Florida—Southeast, and Bank of Florida—Tampa Bay, and the continuing expansion of banking activities in its markets, as well as the impact of historically low interest rates and other factors. Bank of Florida Corporation may charter additional banks in the future. A newly formed bank is typically expected to incur operating losses in its early periods of operations because of an inability to generate sufficient net interest income to cover operating expenses. Those operating losses can be significant and can occur for longer periods than planned, depending on the new bank’s ability to control operating expenses and generate net interest income. There is a risk that losses at any new subsidiaries of Bancshares of Florida may exceed profits at its existing subsidiaries.

The Company may encounter unexpected financial and operating problems due to its rapid growth.

The Company has grown significantly since it opened its first bank subsidiary, Bank of Florida—Southwest, in 1999. Total assets have grown to approximately $1.3 billion as of December 31, 2007, including approximately $105.5 million in connection with the Bristol Bank acquisition on August 25, 2006 and $332.3 million in connection with the Old Florida Bankshares acquisition on April 24, 2007. This rapid growth may result in unexpected financial and operating problems, including problems in the loan portfolio due to its unseasoned nature, and turnover or rapid increases in members of management and staff, which may affect the value of the Company’s common stock. The recent additions may add additional pressures to internal control systems, and financial and operating success will depend in large part on the success in integrating these operations. In addition, if loan and asset growth continues at its current pace, it may be difficult for the Company and its subsidiaries to retain their “well capitalized” designations with the Federal Deposit Insurance Corporation. If the Company or one of its subsidiary banks falls below being “well capitalized” to “adequately capitalized,” we may sell participations in some loans in order to decrease the amount of its assets. This could result in lower earnings due to retaining a lower level of earning assets.

Our growth strategy may not be successful.

As a strategy, we have sought to increase the size of our franchise through rapid growth and by aggressively pursuing business development opportunities. We can provide no assurance that we will continue to be successful in increasing the volume of loans and deposits at acceptable risk levels and upon acceptable terms and expanding our asset base while managing the costs and implementation risks associated with this growth strategy. There can be no assurance that any further expansion will be profitable or that we will continue to be able to sustain our historical rate of growth, either through internal growth or through other successful expansions of our banking markets, or that we will be able to maintain capital sufficient to support our continued growth.

Losses from loan defaults may exceed the allowance we establish for that purpose, which will have an adverse effect on our business.

If a significant number of loans are not repaid, it would have an adverse effect on our earnings and overall financial condition. Like all financial institutions, we maintain an allowance for loan losses to provide for losses inherent in the loan portfolio. The allowance for loan losses reflects our management’s best estimate of probable losses in the loan portfolio at the relevant balance sheet date. This evaluation is primarily based upon a review of our and the banking industry’s historical loan loss experience, known risks contained in the loan portfolio, composition and growth of the loan portfolio, and economic factors. However, the determination of an appropriate level of loan loss allowance is an inherently difficult process and is based on numerous assumptions. As a result, our allowance for loan losses may not be adequate to cover actual losses, and future provisions for loan losses may adversely affect our earnings.

14

If real estate values in our target markets continue to decline, our loan portfolio would be impaired.

A significant portion of our loan portfolio consists of mortgages secured by real estate located in the Collier/Lee County markets. We have also been generating a significant amount of real estate-secured loans in our Broward/Palm Beach County and Hillsborough County markets. Real estate values and real estate markets are generally affected by, among other things, changes in national, regional or local economic conditions; fluctuations in interest rates and the availability of loans to potential purchasers; changes in the tax laws and other governmental statutes, regulations and policies; and acts of nature. Over the past year, real estate prices in each of our markets have declined and if real estate prices continue to decline in any of these markets, the value of the real estate collateral securing our loans could be reduced. Such a reduction in the value of our collateral could increase the number of non-performing loans and adversely affect our financial performance.

If we lose key employees, our business may suffer.

Our success is largely dependent on the personal contacts of our officers and employees in our market areas. If we lose key employees, temporarily or permanently, our business could be hurt. We could be particularly hurt if our key employees went to work for our competitors. Our future success depends on the continued contributions of our existing senior management personnel, including, but not limited to, our President and Chief Executive Officer Michael L. McMullan and the Presidents and Chief Executive Officers of our subsidiaries. We have entered into employment contracts with certain of our key executive officers which contain standard non-competition provisions to help alleviate some of this risk.

Weakness in the economy and in the real estate market within our geographic footprint may adversely affect us.

If the strength of the local economies in which we conduct operations declines, or continues to decline, this could result in, among other things, a deterioration of credit quality or a reduced demand for credit, including a resultant effect on our loan portfolio and allowance for loan and lease losses. The vast majority of our loan portfolio is secured by real estate or other commercial assets in our Florida markets. Certain markets have been particularly adversely affected by declines in real estate value, declines in home sale volumes, and declines in new home building. These declines may also adversely affect the general economy in our markets. These factors could result in higher delinquencies and greater charge-offs in future periods, which would materially adversely affect our financial condition and results of operations.

If our mortgage-backed securities portfolio fails to perform, our securities may lose value.

A large portion of our securities portfolio is composed of mortgage-backed securities. If the underlying loans comprising those securities fail to perform pursuant to their terms, our securities may not provide their contracted for returns and may lose value. Significant defaults in these securities or severe loss of value may materially adversely affect our financial condition and results of operation.

Rapid and significant changes in market interest rates may adversely affect our performance.

Most of our assets and liabilities are monetary in nature and subject us to significant risks from changes in interest rates. Our profitability depends to a large extent on our net interest income, and changes in interest rates can impact our net interest income as well as the valuation of our assets and liabilities. Changes in market interest rates, or changes in the relationships between short-term and long-term market interest rates, or changes in the relationships between different interest rate indices, can affect the interest rates charged on interest-earning assets differently than the interest rates paid on interest-bearing liabilities. This difference could result in an increase in interest expense relative to interest income, or a decrease in our interest rate spread. Our net interest margin depends on many factors that are partly or completely out of our control, including competition, federal economic monetary and fiscal policies, and general economic conditions. Despite our strategies to manage interest rate risks, changes in interest rates can still have a material adverse impact on our profitability.

Our subsidiary banks face strong competition in their market areas that may limit their asset growth and profitability.

Our primary market areas are the urban areas on the East and West Coasts of South Florida, as well as the Tampa Bay area of Florida. The banking business in these areas is extremely competitive, and the level of competition may increase further, which may limit our asset growth and profitability. Each of our subsidiary banks experiences competition in both lending and attracting funds from other banks, savings institutions, and non-bank financial institutions located within their market area, many of which are significantly larger institutions. Non-bank competitors competing for deposits and deposit type accounts include mortgage bankers and brokers, finance companies, credit unions, securities firms, money market funds, life insurance companies and the mutual funds

15

industry. For loans, we encounter competition from other banks, savings associations, finance companies, mortgage bankers and brokers, insurance companies, small loan and credit card companies, credit unions, pension trusts and securities firms.

If adverse economic conditions in our target markets exist for a prolonged period, our financial results could be adversely affected.

Our success will depend in large part on economic conditions in Southeast and Southwest Florida, as well as the Tampa Bay area. A prolonged economic downturn or recession in these markets could increase our nonperforming assets, which would result in operating losses, impaired liquidity and the erosion of capital. A variety of factors could cause such an economic dislocation or recession, including adverse developments in the industries in these areas such as tourism, or natural disasters such as hurricanes, floods or tornadoes, or terrorist activities.

Bank of Florida Corporation and its subsidiaries operate in an environment highly regulated by state and federal government; changes in federal and state banking laws and regulations could have a negative impact on Bank of Florida Corporation’s business.

As a bank holding company, Bank of Florida Corporation is regulated primarily by the Federal Reserve Board. Our current subsidiaries are regulated primarily by the Florida Office of Financial Regulation and the Federal Deposit Insurance Corporation. Federal and various state laws and regulations govern numerous aspects of the banks’ operations, including:

• Adequate capital and financial condition;

• Permissible types and amounts of extensions of credit and investments;

• Permissible non-banking activities; and

• Restrictions on dividend payments.

Federal and state regulatory agencies have extensive discretion and power to prevent or remedy unsafe or unsound practices or violations of law by banks and bank holding companies. Bank of Florida Corporation and its subsidiaries also undergo periodic examinations by one or more regulatory agencies. Following such examinations, Bank of Florida Corporation may be required, among other things, to change its asset valuations or the amounts of required loan loss allowances or to restrict its operations. Those actions would result from the banking regulators’ judgments, based on information available to them at the time of their examination.

Regulatory action could severely limit future expansion plans.

To carry out some of our expansion plans, Bank of Florida Corporation is required to obtain permission from the Federal Reserve Board, the FDIC and the Florida Office of Financial Regulation. Applications for the formation of new banks and the acquisition of existing banks are submitted to the state and appropriate federal bank regulatory agencies for their approval. The future climate for regulatory approval is impossible to predict. Regulatory agencies could prohibit or otherwise significantly restrict the expansion plans of the Company, its current subsidiaries and future new start-up banks, which could limit our ability to increase revenue. Furthermore, recent amendments to anti-money laundering laws require the regulatory agencies to evaluate our compliance with such laws when processing certain applications for permission to engage in expansionary activities. In addition, the regulatory agencies have recently increased their monitoring of banks’ compliance with such laws. Therefore, if our anti-money laundering law compliance efforts are not successful, the increased oversight by our regulators in that area could hinder our ability to successfully pursue merger or other expansion activities.

Investors may face dilution resulting from the issuance of common stock in the future.

The Company can issue common stock without shareholder approval, up to the number of authorized shares set forth in our Articles of Incorporation. Our Board of Directors may determine from time to time a need to obtain additional capital through the issuance of additional shares of common stock or other securities, subject to limitations imposed by Nasdaq and the Federal Reserve Board. There can be no assurance that such shares can be issued at prices or on terms better than or equal to the terms obtained by our current shareholders. The issuance of any additional shares of common stock by us in the future may result in a reduction of the book value or market price, if any, of the then-outstanding common stock. Issuance of additional shares of common stock will reduce the proportionate ownership and voting power of our existing shareholders.

16

Shares of our preferred stock may be issued in the future which could materially adversely affect the rights of the holders of our common stock.

Pursuant to our Articles of Incorporation, we have the authority to issue additional series of preferred stock and to determine the designations, preferences, rights and qualifications or restrictions of those shares without any further vote or action of the shareholders. The rights of the holders of our common stock will be subject to, and may be materially adversely affected by, the rights of the holders of any preferred stock that may be issued by us in the future.

Our common stock is not an insured bank deposit and is subject to market risk.

Our shares of common stock are not deposits, savings accounts or other obligations of us, our subsidiaries or any other depository institution, are not guaranteed by us or any other entity, and are not insured by the Federal Deposit Insurance Corporation or any other governmental agency.

We may need additional capital in the future and this capital may not be available when needed or at all.

We may need to incur additional debt or equity financing in the near future to fund future growth and meet our capital needs. We cannot assure you that such financing will be available to us on acceptable terms or at all. If we are unable to obtain future financing, we may not have the resources available to fund our planned growth.

Future sales of our common stock could depress the price of the common stock.

Sales of a substantial number of shares of our common stock in the public market by our shareholders, or the perception that such sales are likely to occur, could cause the market price of our common stock to decline.

We have not paid dividends in the past and we are restricted in our ability to pay dividends to our shareholders.

We have not paid any cash dividends on our common stock to date and do not intend to pay cash dividends on our common stock in the foreseeable future. We intend to retain earnings to finance operations and the expansion of our business. Therefore, any gains from your investment in our common stock must come from an increase in its market price.

In addition, we are a holding company with no independent sources of revenue and would likely rely upon cash dividends and other payments from our subsidiaries to fund any cash dividends we decided to pay to our shareholders. Payment of dividends by our subsidiaries may be prohibited by certain regulatory restrictions.

There are substantial regulatory limitations on ownership of our common stock and changes of control.

With certain limited exceptions, federal regulations prohibit a person or company or a group of persons deemed to be “acting in concert” from, directly or indirectly, acquiring 10% or more (5% if the acquiror is a bank holding company) of any class of our voting stock or obtaining the ability to control in any manner the election of a majority of our directors or otherwise direct our management or our policies without prior notice or application to and the approval of the Federal Reserve Board.

Although publicly traded, our common stock has substantially less liquidity than the average trading market for a stock quoted on the Nasdaq Global Market, and our price may fluctuate in the future.

Although our common stock is listed for trading on the Nasdaq Global Market, the trading market in our common stock has substantially less liquidity than the average trading market for companies quoted on the Nasdaq National Market. The average daily trading volume of Bank of Florida Corporation common stock in 2007 was 22,791 shares. A public trading market having the desired characteristics of depth, liquidity and orderliness depends on the presence in the marketplace of willing buyers and sellers of our common stock at any given time. This presence depends on the individual decisions of investors and general economic and market conditions over which we have no control. The market price of our common stock may fluctuate in the future, and these fluctuations may be unrelated to our performance. General market price declines or overall market volatility in the future could adversely affect the price of our common stock, and the current market price may not be indicative of future market prices.

Our stock price can be volatile.

Our stock price can fluctuate widely in response to a variety of factors including: variations in our quarterly operating results; changes in market valuations of companies in the financial services industry; fluctuations in stock market prices and volumes; issuances of shares of common stock or other securities in the future; the addition or departure of key personnel; seasonal fluctuations; changes in financial estimates or recommendations by securities analysts regarding Bank of Florida Corporation or shares of our common stock; and announcements by us or our competitors of new services or technology, acquisitions, or joint ventures.

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ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2. PROPERTIES

Bank of Florida Corporation’s corporate headquarters and Bank of Florida - Southwest’s main offices are located at Bank of Florida Center, 1185 Immokalee Road, Naples, Collier County, Florida 34110. Bank of Florida Center is a three-story office building which opened in August, 2002. Bank of Florida - Southwest leases one-half of the first floor, consisting of 12,324 square feet, from Citizens Reserve, LLC. The first floor houses a banking center with a Board Room, dining room, conference rooms, a drive-through, and ATM/night deposit access. Private banking offices and a conference room are also located on the ground floor. Bank of Florida Corporation leases 8,246 square feet on the second floor, with offices and work areas for finance, advertising, executive offices, and holding company administrative personnel. The Company leased the third floor of this facility in 2006 to allow for expansion of corporate offices. These leases expire in 2012 with options for two five-year renewals at then market rates. The monthly lease payment as of December 2007 was $92,000. With the acquisition of Old Florida Bank, Bank of Florida Corporation acquired property located at 12298 Matterhorn Road, which is now the location of the Bank of Florida Operations Center. The facility consists of 15,000 square foot of space and is owned by the corporation.

Bank of Florida - Southwest’s former main office at 3401 Tamiami Trail North, Naples, Florida, now serves as a full-service branch office. This branch office, which is owned by Bank of Florida - Southwest, is contained in a two-story modern office building located on approximately one acre of land. The bank also leased a facility in 2006 at 23471 Walden Center, Bonita Springs, Florida, which now serves as the Banks’ third full-service branch office. The monthly lease payment for the Bonita Springs location as of December 31, 2007 was $17,000. Also in connection with the acquisition of Old Florida Bank in April 2007, Bank of Florida - Southwest owns a two story building at 2325 Vanderbilt Beach Road, Naples, Florida which serves as the Banks’ fourth full-service branch. The first floor serves as a full-service branch office and the second floor with 4,100 square feet is sub-leased to a third party. The lease was entered into on July 1, 2001 for 5 years with another 5 year option which extends the lease until 2011. Additionally, Bank of Florida – Southwest acquired property located at 63210 Daniels Parkway in Fort Myers which serves as the Banks fifth full-service branch. Bank of Florida - Southwest also operates a leased banking center at 2301 Del Prado Blvd, Cape Coral, Florida in the Coralwood Shopping Center, which serves as the sixth full service branch. This 2,688 square foot space is leased from GRE Coralwood, LP beginning May 18, 2005 for a term of 5 years. The monthly lease payment as of December 31, 2007 was $7,000. Bank of Florida – Southwest also acquired a parcel of vacant land located on Santa Barbara Boulevard.

Bank of Florida – Southeast operates in approximately 20,790 square feet of seventeenth floor space and 3000 square feet of the first floor of the 200 La Olas Circle office building located at 200 SW First Avenue, Suite 1700 and Suite 100, in downtown Fort Lauderdale. This space is leased from 200 Brickell LTD. The space includes executive offices, 3 conference rooms, and full service branch facilities. The site does not have drive-in facilities, but does contain an ATM facility. The lease is for 10 years with an option for one ten-year renewal at then market rates. The monthly lease payment as of December 2007 was $65,000. In addition, the Bank leased office space located at 5200 N. Federal Highway, Suite 1 in Ft. Lauderdale to operate as a branch office in the second half of 2004. The monthly lease payment for this facility as of December 2007 was $2,900. Beginning in 2007, another full-service branch was opened in Aventura, Florida. As of December 31, 2007 the monthly lease payment for the Aventura location was $8,200.

Bank of Florida - Southeast has also leased office space in Palm Beach County, located at 595 South Federal Highway, in downtown Boca Raton. The space consists of 6,460 square feet on the first floor, 2,500 square feet on the second floor, the garage, all common areas located on the property and the exclusive use of two (2) remote drive-thru lanes for banking purposes, located on the west side of 555 South Federal Highway. The lease is for fifteen years with options for two five-year renewals at then market rates. The monthly lease payment as of December 2007 was $38,000.

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In connection with the acquisition of Bristol Bank in 2006, Bank of Florida – Southeast now operates a fifth-full service branch in Coral Gables, Florida. This facility was leased in 1998 for a three and one-half years term with options for two five-year renewals at then market rates. The monthly lease payment as of December 2007 was $11,000.

Bank of Florida - Tampa Bay leases office space located in the Harbour Island area of downtown Tampa at 777 South Harbour Island Boulevard. The space consists of 2,718 square feet on the ground floor lobby which is operated as the main branch and banking facility. Additional space located on the ground floor serves as the corporate and lending offices of the bank. The monthly lease payment as of December 31, 2007 is $24,000. Bank of Florida – Tampa Bay has subleased space located on the first and ninth floors of the downtown Tampa facility, including space to Medi-Weight Loss Clinics. During 2006, additional space was leased in Winter Park, Florida to serve as a lending production office (“LPO”) for Bank of Florida – Tampa Bay. This space is no longer in use as an LPO and has been subleased for the remaining duration of the original three year lease term. Tampa Bay also opened a second banking center in 2007 located at 26417 U.S. Highway 19 North, Clearwater, Florida with 8,700 square feet leased from K&B Properties with a monthly lease payment as of December 31, 2007 of $21,250. The lease is for 15 years with four five year additional years optional.

Bank of Florida Trust Company maintains offices and personnel at each of the Banks’ main offices, and also meets with prospective clients at Bank of Florida – Southwest’s Tamiami Trail North branch office.

ITEM 3. LEGAL PROCEEDINGS

From time-to-time, we are involved in litigation arising in the ordinary course of our business. As of the date of the filing of this Form 10-K, we are of the opinion that the ultimate aggregate liability represented thereby, if any, will not have a material adverse effect on our consolidated financial condition or results of operations.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matter was submitted to a vote of the Company’s shareholders during the quarter ended December 31, 2007.

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

The Company’s Common Stock was held by approximately 2,680 holders registered or in street name as of December 31, 2007. The Company is listed on the Nasdaq Global Market under the symbol “BOFL”. These over-the-counter market quotations reflect inter-dealer prices, without retail mark-up, markdown, or commission and may not necessarily reflect actual transactions.

The table below shows the high, low and closing bid prices on the NASDAQ National Market for the periods indicated.

Calendar Quarter Ended	High		Low		Closing
December 31, 2005	$	22.70	$	22.15	$	22.70
March 31, 2006	$	22.00	$	21.80	$	21.96
June 30, 2006	$	22.00	$	21.89	$	22.00
September 30, 2006	$	21.42	$	20.67	$	21.08
December 31, 2006	$	20.50	$	20.18	$	20.49
March 31, 2007	$	19.54	$	18.84	$	18.90
June 30, 2007	$	17.44	$	17.29	$	17.43
September 30, 2007	$	16.42	$	16.11	$	16.42
December 31, 2007	$	11.95	$	11.46	$	11.50

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The following graph compares Bank of Florida Corporation’s cumulative stockholder return on our common stock with: (i) SNL Financial LC’s index for Florida Banks with $1 - $5 billion in assets; and (ii) the Russell 3000 Index, which pertains to listed companies representing 98% of the U.S. market for the period from February 11, 2003 (the date of our initial public offering) to December 31, 2007, inclusive. The graph assumes an initial investment of $100 on February 11, 2003.

	Period Ending
Index	02/11/03	12/31/03	12/31/04	12/31/05	12/31/06	12/31/07
Bank of Florida Corporation	100.00	144.71	158.16	222.85	201.16	112.90
Russell 3000	100.00	138.59	155.15	164.64	190.52	200.31
Florida Banks $1-$5 Billion Assets	100.00	138.50	151.40	167.05	178.76	107.70

To date, Bank of Florida Corporation has not paid any dividends on its common stock. There are no current plans to initiate payment of cash dividends, and future dividend policy will depend on the Banks’ earnings, capital requirements, financial condition, and other factors. A description of the regulatory restrictions on Bank of Florida Corporation’s ability to pay dividends is contained on page 13 under the heading “Dividends” in the section on Supervision and Regulation.

The following table sets forth information about the number of shares reserved for issuance under the 1999 Stock Option Plan and the 2006 Stock Compensation Plan as of December 31, 2007.

Number of securities to be issued upon exercise of outstanding options	Number of securities to be issued upon exercise of outstanding options	Weighted average exercise price of outstanding options		Number of securities remaining available for future issuance
Plans approved by security holders	601,128	$	15.60	775,093
Equity compensation plans not approved by security holders (1)	146,731	$	11.53	0
Total	747,859	$	14.80	775,093

(1) Includes warrants issued to the organizing directors of our subsidiary banks.

See “Note 3-Stock-Based Compensation” of the Notes To Consolidated Financial Statements” for information on stock options and warrants outstanding.

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ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA

	December 31,
	2007			2006			2005			2004			2003
	(Dollars In Thousands, except per share data.)
Statement of Operations Data:
Total interest income	$	84,155		$	52,330		$	28,491		$	14,767		$	8,856
Total interest expense		40,931			21,221			9,348			4,962			3,278
Net interest income before provision for loan losses		43,224			31,109			19,143			9,805			5,578
Provision for loan losses		4,254			2,836			1,903			1,279			833
Net interest income after provision for loan losses		38,970			28,273			17,240			8,526			4,745
Noninterest income		5,588			4,242			3,259			2,176			1,335
Noninterest expense		39,980			28,585			19,344			13,582			8,789
Income (loss) before taxes (benefit)		4,578			3,930			1,155	)		(2,880	)		(2,709	)
Income taxes (benefit)		1,835			1,611			(3,728	)		—			—
Net income (loss)	$	2,743		$	2,319		$	4,883		$	(2,880	)	$	(2,709	)
Balance Sheet Data:
Total assets	$	1,310,488		$	883,102		$	569,782		$	420,808		$	222,610
Total cash and cash equivalents		17,388			27,744			50,117			57,897			8,424
Interest-earning assets		1,192,104			838,626			538,255			394,851			209,426
Investment securities		38,008			41,724			18,622			25,945			8,072
Loans, net		1,144,762			783,610			486,722			325,779			200,375
Allowance for loan losses		14,431			7,833			4,603			2,817			1,568
Deposits		937,116			691,180			495,080			376,064			201,154
Other borrowings		171,090			53,500			14,000			2,000			—
Stockholders’ equity		198,931			135,505			59,061			41,954			21,220
Share Data:
Basic income (loss) per share	$	0.23		$	0.29		$	0.82		$	(0.81	)	$	(0.92	)
Diluted income (loss) per share		0.23			0.28			0.79			(0.81	)		(0.92	)
Book value per common share		15.57			14.15			9.94			7.93			6.89
Tangible book value per common share		10.43			12.71			9.78			7.73			6.89
Weighted average shares outstanding - basic		11,768,529			8,026,312			5,595,233			3,811,270			2,948,514
Weighted average shares outstanding - diluted		11,905,196			8,278,210			5,813,230			3,811,270			2,948,514
Total shares outstanding		12,779,020			9,575,153			5,943,783			4,835,632			3,079,199
Performance Ratios:
Return on average assets		0.23	%		0.32	%		0.98	%		(0.93	)%		(1.52	)%
Return on average common stockholders’ equity		1.54			2.26			9.79			(9.57	)		(12.42	)
Interest-rate spread during the period		3.16			3.59			3.55			3.02			2.99
Net interest margin		3.98			4.48			4.11			3.42			3.37
Efficiency ratio1		81.91			80.86			86.35			113.36			127.12
Asset Quality Ratios:
Allowance for loan losses to period end loans		1.26	%		1.00	%		0.94	%		0.86	%		0.78	%
Net charge-offs to average loans		0.04			0.03			0.03			0.02			0.16
Nonperforming assets to period end total assets		1.19			0.08			0.06			0.14			0.02
Capital and Liquidity Ratios:
Average equity to average assets		15.08	%		14.02	%		10.34	%		10.61	%		12.21	%
Leverage (4.00% required minimum)		10.24			13.95			10.28			11.07			10.32
Risk-based capital:
Tier 1		10.14	%		13.97	%		10.48	%		11.85	%		11.66	%
Total		12.59			16.19			13.37			13.24			12.52
Average loans to average deposits		117.31			105.87			92.81			95.23			93.96
Trust Assets Under Advice:
Total assets under advice	$	499,350		$	415,318		$	390,002		$	202,138		$	131,000
Trust fees		3,017			2,589			1,546			1,063			492
Trust fees as a % of average assets under advice		0.60	%		0.64	%		0.52	%		0.64	%		0.48	%

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

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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

Bank of Florida Corporation is a multi-bank holding company with $1.3 billion in assets as of December 31, 2007 and was incorporated in Florida in September 1998. Our subsidiary banks are separately chartered independent community banks with local boards that provide full-service commercial banking in a private banking environment. Our Trust Company offers investment management, trust administration, estate planning, and financial planning services largely to the Banks commercial borrowers and other high net worth individuals. The Company’s overall focus is to develop a total financial services relationship with its client base, which is primarily businesses, professionals, and entrepreneurs with commercial real estate borrowing needs. The Banks also provide technology-based cash management and other depository services. The holding company structure provides flexibility for expansion of the Company’s banking business, including possible acquisitions of other financial institutions, and provision of support and additional banking-related services to its subsidiary banks.

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

CRITICAL ACCOUNTING POLICIES

The Company’s consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America. The financial information contained within these statements is, to a significant extent, based on approximate measures of the financial effects of transactions and events that have already occurred. Critical accounting policies are those that involve the most complex and subjective decisions and assessments, and have the greatest potential impact on the Company’s stated results of operations. The notes to the consolidated financial statements include a summary of the significant accounting policies and methods used in the preparation of our consolidated financial statements. Management believes that, of our significant accounting policies, the following involve a higher degree of judgment and complexity. Our management has discussed these critical accounting assumptions and estimates with the Board of Directors’ Audit Committee.

Allowance for Loan Losses:

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

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

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

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

Income Taxes:

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

Acquisitions:

The Company accounts for business combinations based on the purchase method of accounting. The purchase method of accounting requires us to fair value the tangible net assets and identifiable intangible assets acquired. The fair values are based on available information and current economic conditions at the date of acquisition. Fair value may be obtained from independent appraisers, discounted cash flow present value techniques, management valuation models, quoted prices on national markets or quoted market prices from brokers. These fair value estimates will affect future earnings through the disposition or amortization of the underlying assets and liabilities. While management believes the sources utilized to arrive at the fair value estimates are reliable, different sources or methods could have yielded different fair value estimates. Such different value estimates could affect future earnings through different values being utilized for the disposition or amortization of the underlying assets and liabilities acquired.

Year Ended December 31, 2007 Compared to Year Ended December 31, 2006

FINANCIAL CONDITION

The Company’s balance sheet continued to grow in 2007 with a strong emphasis on credit quality and loan growth, reaching $1.3 billion in total assets, up $427 million or 48.4% over the prior year-end. Total earning assets, which the Company defines as any asset that earns interest, climbed $353 million or 42.1% to $1.2 billion. This compares with $300.4 million or 55.8% growth in 2006. Bank of Florida – Southwest contributed $300.3 million of this growth, including the acquisition of Old Florida, reaching $679.2 million, while Bank of Florida - Southeast contributed $54.3 million, for a total of $455.7 million in assets. Bank of Florida-Tampa Bay, which has been opened for slightly over three years, contributed $65.0 million for a total of $189.8 million in total assets.

Investment Securities and Overnight Investments

Total investment securities and federal funds sold were $38.0 million at December 31, 2007, a decrease of $10.2 million from December 31, 2006. Securities available for sale totaled $34.7 million, a decrease of $7.0 million compared to those held at December 31, 2006. Securities held to maturity totaled $3.3 million, an increase of $3.3 million compared to those held at December 31, 2006. The Company does not currently engage in trading activities and, therefore, did not hold any securities classified as trading at December 31, 2007 and 2006.

Federal Funds sold totaled $0 at December 31, 2007, a decrease of $6.5 million from December 31, 2006. This category of earning assets is normally used as a temporary investment vehicle to support the Company’s daily funding requirements and, as a result, fluctuates with loan demand.

Loan Portfolio

Total gross loans outstanding (including loans held for sale) were $1.1 billion at December 31, 2007. Loans climbed $361.1 million or 46.1% for the year. Bank of Florida - Southwest accounted for $241.8 million (67.0%), (including $186.8 million or 77.3% acquired from Old Florida Bank), of the increase. Bank of Florida – Southeast, accounted for $59.3 million (16.4%) and Bank of Florida - Tampa Bay contributed the remaining $60 million (16.6%).

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Real estate construction loans increased $93.3 million to $397.3 million (34.6% of total loans) at December 31, 2007, while commercial loans secured by real estate increased $176.1 million to $417.9 million (36.4% of total loans). Making up the rest of the loan portfolio were multi-family and residential loans at $171.2 million (14.9% of total loans), up $51.4 million from the end of 2006, followed by commercial business loans at $93.6 million (8.2% of total loans), consumer lines of credit at $43.4 million (3.8% of total loans) and other consumer loans at $22.5 million (2.0% of total loans).

Asset Quality

The Company’s nonperforming loans (nonaccruals and 90+ days past due) totaled $14.2 million at December 31, 2007. Consequently, nonperformers as a percent of loans outstanding increased from 0.09% at December 31, 2006, to 1.24% as of December 31, 2007. Thirty-to-ninety day delinquent loans were $2.7 million or 0.24% of loans outstanding at December 31st. There were $401,000 in net charge-offs during 2007, resulting in net charge-offs to average loans of 0.04%.

Deposits

Total deposits increased $245.9 million or 35.6% in 2007 to end the year at $937.1 million. Deposit growth in the Bank of Florida - Southwest comprised $131.5 million of this increase, up 41.2% to $441.7 million in deposits at December 31, 2007, while deposits at Bank of Florida - Southeast climbed $34.1 million or 10.9% to $347.0 million. Bank of Florida - Tampa Bay ended the year with $148.4 million in deposits, up $48.2 million or 47.9%.

Deposit growth consisted primarily of increases in money market deposits (up $98.0 million), certificates of deposit (up $132.1 million) and demand deposit (DDA) and low-cost NOW accounts (up $26.1 million). As of year end 2007, these accounts comprised 38.9%, 43.0% and 17.4%, respectively, of total deposits.

The average rate paid on total interest bearing deposits 2007 was 4.46%, an increase of 65 basis points compared to 2006. The increase resulted primarily from the higher interest rate environment under which we currently operate and competition in the pricing of deposit products.

Borrowings

While client deposits remain our primary source of funding for asset growth, management uses other borrowings as a funding source for loan growth, regulatory capital needs, and as a tool to manage the Company’s interest rate risk. At December 31, 2007, borrowings totaled $171.1 million, an increase of $117.6 million compared to December 31, 2006. Total borrowings at December 31, 2007, consisted of $16 million in subordinated debt and $155.1 million in Federal Home Loan Bank (“FHLB”) Advances compared to $11 million and $42.5 million, respectively, at the end of 2006. Additionally, there were $300,000 in FHLB Advances obtained through the Old Florida Bank acquisition.

See “Note 11-Subordinated Debt” and “Note 12-Federal Home Loan Bank Advances” of the “Notes to Consolidated Financial Statements” for further information.

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Aggregate Contractual Obligations

Contractual obligations for payments under long-term debt and lease obligations are shown as follows, stratified by remaining term to contractual maturity (In Thousands):

	Less than 1 Year		1 – 3 Years		3 – 5 Years		More than 5 Years		Total
Real estate operating leases	$	3,933	$	7,077	$	6,551	$	17,567	$	35,128
Equipment operating leases		418		777		245		—		1,440
Certificates of Deposit		324,965		68,116		9,876		—		402,957
Subordinated Debt						3,000		13,000		16,000
Federal Home Loan Bank advances		71,800		26,000		47,290		10,000		155,090
Total	$	401,116	$	101,970	$	66,962	$	40,567	$	610,615

Further discussion of the nature of each obligation is included in “Note 10-Deposits”, “Note 11-Subordinated Debt”, Note 12-Federal Home Loan Bank Advances” and “Note 14-Commitments and Contingencies” of the “Notes to Consolidated Financial Statements”.

RESULTS OF OPERATIONS

The Company’s net income for 2007 was $2.7 million or $0.23 per diluted share, $400 thousand more than in 2006. Pretax net income climbed $648 thousand to $4.6 million. The primary factors explaining the improvement was a $13.5 million or 38.1% increase in top-line revenue (a non-GAAP measure), which the Company defines as net interest income plus noninterest income (excluding net securities gains/losses). The Company considers top-line revenue to be useful in explaining financial performance as it combines the Company’s spread income with its fee income, both of which often pertain to the same customer base and can be managed against the underlying noninterest expense to generate those revenue components.

Net Interest Income

Net interest income increased $12.1 million or 38.9% in 2007 to $43.2 million. Net interest spread, the difference between the yield on interest-earning assets and the rate paid on interest-bearing liabilities, was 3.13% on average in 2007, which was a decrease of 46 basis points when compared to 2006, while, the net interest margin, which is net interest income divided by average interest-earning assets, averaged 3.96% in 2007, a 52 basis points decrease over 2006. The margin continues to be pressured as funding costs remain high.

Interest income increased $31.8 million or 60.8% to $84.2 million in 2007, reflective of continued strong loan growth coupled with the impact of a 17 basis point increase in the average yield earned on interest earning assets. Total average interest-earning assets increased $397.2 million during the year that resulted in $31.6 million of the increase in interest income while the average yield on interest-earning assets increased to 7.71%, accounting for the remainder of the improvement. Approximately 75.8% of loans outstanding are floating rate loans.

Interest expense totaled $40.9 million in 2007, an increase of $19.7 million or 92.9%. The overall cost on interest-bearing liabilities was 4.58% compared to 3.95% one year ago. Noninterest-bearing deposits averaged $103.1 million for 2007 compared to $90.3 million last year. Money market rates were 64 basis points higher on average, while the average cost of certificates of deposit increased 54 basis points. During the year, the Company increased its use of FHLB advances as an alternative funding source. The average outstanding amount of FHLB advances for 2007 were $105.9 million at an average cost of 5.0% compared to $23.6 million at an average cost of 5.44% for 2006.

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The following table represents, for the years indicated, certain information related to our average balance sheet and average yields on assets and average costs of liabilities (In Thousands).

	For the Years Ended December 31,
	2007							2006
	Average Balance		Interest and Dividends			Average Yield/Rate		Average Balance		Interest and Dividends			Average Yield/Rate
Assets:
Earning assets:
Loans 2	$	1,033,918	$	81,145		7.85	%	$	627,440	$	48,958		7.80	%
Interest earning deposits		1,291		76		5.44	%		1,457		91		6.25	%
Securities 1		48,199		2,580		5.36	%		34,227		1,699		4.96	%
Federal funds sold		8,144		354		4.35	%		31,263		1,582		5.06	%
Total interest-earning assets		1,091,552		84,155		7.71	%		694,387		52,330		7.54	%
Non interest-earning assets		91,642							38,203
Total Assets	$	1,183,194						$	732,590
Liabilities:
Interest-bearing liabilities:
Interest bearing checking	$	57,058		684		1.20	%	$	48,694		330		0.68	%
Money market accounts		341,374		15,180		4.45	%		221,730		8,441		3.81	%
Savings		7,625		49		0.64	%		3,961		43		1.09	%
Time deposits		367,992		18,609		5.06	%		227,944		10,313		4.52	%
Other borrowings		120,331		6,409		5.33	%		34,578		2,094		6.06	%
Total interest-bearing liabilities	$	894,380		40,931		4.58	%	$	536,907		21,221		3.95	%
Non-interest bearing deposits		103,149							90,345
Other liabilities		7,247							2,614
Stockholders’ equity		178,418							102,724
Total Liabilities & Stockholders’ Equity	$	1,183,194						$	732,590
Net interest income			$	43,224						$	31,109
Interest-rate spread						3.13	%						3.59	%
Net interest margin						3.96	%						4.48	%
Ratio of average interest-bearing liabilities to average earning assets				81.9	%						77.3	%

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

	VOLUME			RATE			CHANGE
Increase (decrease) in interest income:
Loans2	$	31,902		$	285		$	32,187
Other investments1		740			125			865
Federal funds sold		(1,005	)		(222	)		(1,227	)
Total interest income		31,637			188			31,825
Increase (decrease) in interest expense:
NOW and Money Market deposits		5,421			1,673			7,094
Savings deposits		23			(17	)		6
Time deposits		7,082			1,213			8,295
Other borrowings		4,379			(64	)		4,315
Total interest expense		16,905			2,805			19,710
Total change in net interest income	$	14,732		$	(2,617	)	$	12,115

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

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

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Noninterest Income

Noninterest income climbed $1.3 million or 31.7% over 2006, primarily due to increases service charges and other income of $1.2 million (100%) and trust fees of $428,000 (up 16.5%). Service charge income rose approximately $368,000, Late charge income rose $191,000 and Other income rose $589,000, reflective of a gain on the call of certain FHLB advances that were originated in June 2006. The increase in fee income earned by the Trust Company, which totaled $3.0 million in 2007, was primarily the result of growth in the average outstanding of assets under advice during the year.

Noninterest Expenses

Noninterest expenses rose $11.4 million or 39.9% over 2006, $2.1 million less than the increase in top-line revenue, indicating positive operating leverage. The efficiency ratio increased over 1 percentage point to 81.91% on average for the year. The increase is primarily comprised of higher personnel expense ($5.3 million or 33.2%), reflecting 57 net additions to staff, management reorganization expense, and higher benefit costs.

Increased costs in other areas, include additional occupancy and equipment expense ($2.5 million or 45.0%), related to Pinellas county expansion, the Southeast headquarters move , and additional parent company headquarters space; higher data processing expense ($494,000 or 24.6%), driven by switch of the Company’s core processer; and professional fees ($847,000 or 122.0%).

Asset Quality and Provision for Loan Losses

Nonperforming loans (90+ days past due and non-accruals) totalled $14.2 million, or 1.24% of loans outstanding. The ratio of net charge-offs to average loans for 2007 grew one basis point to 0.04%. The Company’s asset quality can also be measured by the coverage of the loan loss allowance to nonperforming loans (.93 times). These measures are worse than the Company’s historic norm, but are consistent to national peer bank levels.

The provision for loan losses rose $1.4 million or 50%, as a result of a 46.1% growth in loans. The allowance for loan losses, which is established through a charge to provision expense as losses are estimated, totaled $14.4 million or 1.26% of loans outstanding at December 31, 2007. In comparison, the allowance for loan losses totaled $7.8 million or 1.00% of loans outstanding at December 31, 2006. Actual loan losses are charged against the allowance when management believes the collectibility of a loan balance is unlikely. Subsequent recoveries, if any, are credited to the allowance. The Company recorded net charge-offs during 2007 of $401,000, compared to $192,000 in 2006.

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Quarterly Operating Results

The following table presents condensed information relating to quarterly periods in the years ended December 31, 2007 and 2006 (In Thousands, except per share data).

	Quarter Ended:
	Dec. 31,			Sept. 30,			June 30,			Mar. 31,
2007
Total interest income	$	22,445		$	23,727		$	21,251		$	16,731
Total interest expense		11,441			11,773			10,119			7,599
Net interest income before provision for loan losses		11,004			11,954			11,132			9,132
Provision for loan losses		2,717			336			624			576
Net interest income after provision for loan losses		8,287			11,618			10,508			8,556
Non-interest income		1,765			1,263			1,301			1,260
Non-interest expense		11,662			10,220			9,745			8,354
(Loss) Income before taxes		(1,610	)		2,661			2,064			1,462
Income taxes (benefit)		(640	)		1,054			824			597
Net (loss) income	$	(970	)	$	1,607		$	1,240		$	865
Basic (loss) income per share	$	(0.08	)	$	0.13		$	0.10		$	0.09
Diluted (loss) income per share	$	(0.08	)	$	0.12		$	0.10		$	0.09
Weighted average shares - basic		12,779,020			12,765,269			11,894,312			9,588,972
Weighted average shares - diluted		12,845,424			12,874,038			12,060,332			9,794,468
Return on average assets		(0.30	%)		0.49	%		0.42	%		0.38	%
Return on average common equity		(1.94	%)		3.27	%		2.75	%		2.53	%
Net interest margin		3.69	%		3.96	%		4.10	%		4.25	%
Efficiency ratio		91.33	%		77.32	%		78.38	%		80.39	%
Total assets	$	1,310,488		$	1,323,415		$	1,280,984		$	938,739
Total shares outstanding		12,779,020			12,779,020			12,726,131			9,610,069
Book value per share	$	15.57		$	15.55		$	15.40		$	14.26
2006
Total interest income	$	16,227		$	14,299		$	11,858		$	9,945
Total interest expense		7,005			5,967			4,521			3,727
Net interest income before provision for loan losses		9,222			8,332			7,337			6,218
Provision for loan losses		734			840			656			606
Net interest income after provision for loan losses		8,488			7,492			6,681			5,612
Non-interest income		1,074			1,062			1,006			1,099
Non-interest expense		8,361			7,418			6,764			6,041
Income before taxes		1,201			1,136			923			670
Income taxes		524			447			370			270
Net income	$	677		$	689		$	553		$	400
Basic income per share	$	0.07		$	0.08		$	0.07		$	0.07
Diluted income per share	$	0.07		$	0.07		$	0.07		$	0.06
Weighted average shares - basic		9,569,452			9,149,185			7,390,499			5,943,933
Weighted average shares - diluted		9,804,949			9,397,872			7,648,394			6,213,178
Return on average assets		0.31	%		0.35	%		0.32	%		0.26	%
Return on average common equity		2.01	%		2.20	%		2.48	%		2.77	%
Net interest margin		4.44	%		4.46	%		4.60	%		4.43	%
Efficiency ratio		81.21	%		78.98	%		81.08	%		82.57	%
Total assets	$	883,102		$	850,096		$	756,267		$	620,136
Total shares outstanding		9,575,153			9,563,703			8,871,444			5,944,533
Book value per share	$	14.15		$	14.06		$	13.35		$	10.01

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Year Ended December 31, 2006 Compared to Year Ended December 31, 2005

FINANCIAL CONDITION

The Company’s balance sheet continued to grow in 2006 with a strong emphasis on credit quality and loan growth, reaching $883.1 million in total assets, up $313.3 million or 55.0% over the prior year end. Total earning assets, which the Company defines as any asset that earns interest, climbed $300.4 million or 55.8% to $838.6 million. This compares with $149.0 million or 35.4% growth in 2005. Bank of Florida – Southwest contributed $74.8 million of this growth, reaching $378.9 million, while Bank of Florida—Southeast contributed $182.1 million, including the acquisition of Bristol Bank, for a total of $396.2 million in assets. Bank of Florida-Tampa Bay, which has been opened for slightly over two years, contributed $56.4 million for a total of $124.9 million in total assets.

Investment Securities and Overnight Investments

Total investment securities and federal funds sold were $48.2 million at December 31, 2006, an increase of $846,000 over the levels at December 31, 2005. Securities available for sale totaled $41.7 million, an increase of $23.1 million compared to those held at December 31, 2005. The purchase of additional securities during the third quarter of this year was part of an asset and liability strategy to position the balance sheet for volatility in interest rates. The Company holds one bond for $25,000 that was classified as held to maturity at December 31, 2006 and 2005, respectively. The Company does not currently engage in trading activities and, therefore, did not hold any securities classified as trading at December 31, 2006 and 2005.

Federal Funds sold totaled $6.5 million at December 31, 2006, a decrease of $22.3 million from December 31, 2005. This category of earning assets is normally used as a temporary investment vehicle to support the Company’s daily funding requirements and, as a result, fluctuates with loan demand. The average yield on federal funds for 2006 was 5.06%, up 196 basis points compared to that earned for 2005.

Loan Portfolio

Total gross loans outstanding (including loans held for sale) were $783.6 million at December 31, 2006. Loans climbed $296.9 million or 61.0% for the year. Excluding the Bristol acquisition, loans increased $236.2 million or 48.5%. Bank of Florida – Southwest accounted for $67.0 million (25.3%) of the increase. Bank of Florida – Southeast, excluding the Bristol transaction, accounted for $106.3 million (63.6%) and Bank of Florida – Tampa Bay contributed the remaining $62.9 million (114.7%).

Real estate construction loans increased $162.4 million to $303.9 million (38.8% of total loans) at December 31, 2006, while commercial loans secured by real estate increased $61.9 million to $241.9 million (30.8% of total loans). Making up the rest of the loan portfolio were multi-family and residential loans at $120.9 million (15.4% of total loans), up $29.5 million from the end of 2005, followed by commercial business loans at $66.1 million (8.4% of total loans), consumer lines of credit at $39.1 million (5.0% of total loans) and other consumer loans at $12.8million (1.6% of total loans).

Asset Quality

The Company’s asset quality continues to be strong, with nonperforming loans (nonaccruals and 90+ days past due) totaling $675,000 at December 31, 2006. Of that amount, $450,000 were attributable to two loans acquired in the Bristol Bank transaction. Consequently, nonperformers as a percent of loans outstanding increased from 0.07% at December 31, 2005, to 0.09% as of December 31, 2006. Thirty-to-ninety day delinquent loans were $1.7 million or 0.21% of loans outstanding at December 31st. There were $192,000 in net charge-offs during 2006, resulting in net charge-offs to average loans of 0.03% level with that for 2005.

Deposits

Total deposits increased $196.1 million or 39.6% in 2006 to end the year at $691.2 million. Deposit growth in the Bank of Florida – Southwest comprised $48.9 million of this increase, up 18.0% to $319.2 million in deposits at December 31, 2006, while deposits at Bank of Florida – Southeast climbed $125.3 million (including $74.6 million acquired from Bristol) or 66.6% to $313.3 million. Bank of Florida – Tampa Bay ended the year with $100.7 million in deposits, up $40.7 million or 67.8%.

29

Deposit growth consisted primarily of increases in money market deposits (up $117.1 million), certificates of deposit (up $77.1 million) and demand deposit (DDA) and low-cost NOW accounts (up $3.0 million). As of year end 2006, these accounts comprised 40.4%, 39.2%, and 19.8/%, respectively, of total deposits.

The average rate paid on total interest bearing deposits 2006 was 3.95%, an increase of 138 basis points compared to 2005. The increase resulted primarily from the higher interest rate environment under which we currently operate and in competition in the pricing of deposit products.

Borrowings

While client deposits remain our primary source of funding for asset growth, management uses other borrowings as a funding source for loan growth, regulatory capital needs, and as a tool to manage the Company’s interest rate risk. At December 31, 2006, borrowings totaled $53.5 million, an increase of $39.5 million compared to December 31, 2005. Total borrowings at December 31, 2006, consisted of $11.0 million in subordinated debt and $42.5 million in Federal Home Loan Bank (“FHLB”) Advances compared to $11.0 million and $3.0 million, respectively, at the end of 2005. During 2006, the Company took down $25.0 million in floating rate FHLB advances with an interest rate floor contract and purchased mortgage-backed securities, as a partial hedge against the potential future impact of falling interest rates. Additionally, there were $8.5 million in FHLB Advances obtained through the Bristol Bank acquisition.

See “Note 11-Subordinated Debt” and “Note 12-Federal Home Loan Bank Advances” of the “Notes to Consolidated Financial Statements” for further information

RESULTS OF OPERATIONS

The Company’s net income for 2006 was $2.3 million or $0.29 per diluted share, $2.6 million less than in 2005 due to the $3.7 million income tax benefit from reversing the valuation allowance on its deferred tax assets at December 31, 2005. Pretax net income climbed $2.8 million to $3.9 million, 2.4 times 2005’s results. The primary factors explaining the improvement was a $12.9 million or 57.8% increase in top-line revenue, which the Company defines as net interest income plus noninterest income (excluding net securities gains/losses).

Net Interest Income

Net interest income increased $12.0 million or 62.5% in 2006 to $31.1 million. Net interest spread, the difference between the yield on interest-earning assets and the rate paid on interest-bearing liabilities, was 3.59% on average in 2006, only slightly above that of the prior year, while, the net interest margin, which is net interest income divided by average interest-earning assets, averaged 4.48% in 2006, a 37 basis points increase over 2005. This improvement was primarily the result of a $15.5 million increase in average outstanding noninterest-bearing deposits.

Interest income increased $23.8 million or 83.7% to $52.3 million in 2006, reflective of continued strong loan growth coupled with the impact of a 142 basis point increase in the average yield earned on interest earning assets. Total average interest-earning assets increased $228.7 million during the year that resulted in $17.8 million of the increase in interest income while the average yield on interest-earning assets increased to 7.54%, accounting for the remainder of the improvement. Approximately 80% of loans outstanding are floating rate loans.

Interest expense totaled $21.2 million in 2006, an increase of $11.9 million or 127.0%. The overall cost on interest-bearing liabilities was 3.95% compared to 2.57% one year ago. Noninterest-bearing deposits averaged $90.3 million for 2006 compared to $74.8 million last year. Money market rates were 149 basis points higher on average, while the average cost of certificates of deposit increased 122 basis points. During the year, the Company increased its use of FHLB advances as an alternative funding source. The average outstanding amount of FHLB advances for 2006 were $23.6 million at an average cost of 5.44% compared to $1.9 million at a cost of 4.25% for 2005.

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The following table represents, for the years indicated, certain information related to our average balance sheet and average yields on assets and average costs of liabilities (In Thousands).

	For the Years Ended December 31,
	2006							2005
	Average Balance		Interest and Dividends			Average Yield/Rate		Average Balance		Interest and Dividends			Average Yield/Rate
Assets:
Earning assets:
Loans 2	$	627,440	$	48,958		7.80	%	$	400,897	$	26,370		6.58	%
Interest earning deposits		1,457		91		6.25	%		350		12		3.43	%
Securities 1		34,227		1,699		4.96	%		18,584		689		3.71	%
Federal funds sold		31,263		1,582		5.06	%		45,849		1,420		3.10	%
Total interest-earning assets		694,387		52,330		7.54	%		465,680		28,491		6.12	%
Non interest-earning assets		38,203							31,822
Total Assets	$	732,590						$	497,502
Liabilities:
Interest-bearing liabilities:
Interest bearing checking	$	48,694		330		0.68	%	$	47,551		178		0.37	%
Money market accounts		221,730		8,441		3.81	%		136,284		3,162		2.32	%
Savings		3,961		43		1.09	%		5,185		71		1.37	%
Time deposits		227,944		10,313		4.52	%		168,065		5,555		3.31	%
Other borrowings		34,578		2,094		6.06	%		6,594		382		5.79	%
Total interest-bearing liabilities	$	536,907		21,221		3.95	%	$	363,679		9,348		2.57	%
Non-interest bearing deposits		90,345							74,847
Other liabilities		2,614							7,523
Stockholders’ equity		102,724							51,453
Total Liabilities & Stockholders’ Equity	$	732,590						$	497,502
Net interest income			$	31,109						$	19,143
Interest-rate spread						3.59	%						3.55	%
Net interest margin						4.48	%						4.11	%
Ratio of average interest-bearing liabilities to average earning assets				77.3	%						78.1	%

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

	VOLUME			RATE			CHANGE
Increase (decrease) in interest income:
Loans2	$	17,677		$	4,911		$	22,588
Other investments1		845			244			1,089
Federal funds sold		(738	)		900			162
Total interest income		17,784			6,055			23,839
Increase (decrease) in interest expense:
NOW and Money Market deposits		3,261			2,170			5,431
Savings deposits		(13	)		(15	)		(28	)
Time deposits		2,709			2,049			4,758
Other borrowings		1,644			68			1,712
Total interest expense		7,601			4,272			11,873
Total change in net interest income	$	10,183		$	1,783		$	11,966

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

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

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Noninterest Income

Noninterest income climbed $983,000 or 30.2% over 2005, primarily due to increases in trust fees of $1.0 million (up 67.5%), and, to a lesser extent, mortgage banking fees of $110,000 (up 33.1%). The increase in fee income earned by the Trust Company, which totaled $2.6 million in 2006, was primarily the result of growth in the average outstanding of assets under advice during the year. The improvement in fees from the origination and sale of mortgages in the secondary market from the prior year were attributable to $87.7 million in residential loan production during 2006.

Noninterest Expenses

Noninterest expenses rose $9.2 million or 47.8% over 2005, $3.7 million less than the increase in top-line revenue, indicating positive operating leverage. Consequently, the efficiency ratio decreased over 5 percentage points to 80.9% on average for the year. Approximately 9.2% or $848,000 of this increase in Noninterest expenses, represents the addition of the former Bristol Bank expenses, which have been significantly reduced from pre-acquisition levels, and branch expansion in Miami-Dade county beginning in August 2006. There are now 19 individuals assigned to this new market. The bulk of the balance of the increase ($8.3 million) is comprised of higher personnel expense ($5.3 million or 50.2%), reflecting 31 net additions to staff, management reorganization expense, and higher benefit costs.

Increased costs in other areas, excluding those in the Miami-Dade market, include additional occupancy and equipment expense ($1.2 million or 28.9%), related to Pinellas county expansion, a facility in Orlando used for mortgage origination for a short time, and additional parent company headquarters space; higher data processing expense ($532,000 or 39.5%), driven by upgrade of the Company’s management information and customer cash management systems; and higher seminar, travel, and entertainment expense ($376,000 or 96.4%), including costs related to the May 2006 2.875 million-share equity capital raise. These costs were partially offset by savings in professional fees, including external auditor expense following the initial-year costs of compliance with the Sarbanes-Oxley Act (a $372,000 reduction or 34.4%).

Asset Quality and Provision for Loan Losses

Asset quality continued to be strong in 2006, with nonperforming loans (90+ days past due and non-accruals) at $675,000, or 0.09% of loans outstanding. The ratio of net charge-offs to average loans for 2006 remained at 0.03%. The Company’s asset quality can be further measured by strong coverage of the loan loss allowance to nonperforming loans (11.6 times). These measures are consistent with the Company’s historic norm and very favorable to national peer bank levels.

The provision for loan losses rose $933,000 or 49.0%, as a result of a 60.7% growth in loans. The allowance for loan losses, which is established through a charge to provision expense as losses are estimated, totaled $7.8 million or 1.0% of loans outstanding at December 31, 2005. In comparison, the allowance for loan losses totaled $4.6 million or 0.94% of loans outstanding at December 31, 2005. Actual loan losses are charged against the allowance when management believes the collectibility of a loan balance is unlikely. Subsequent recoveries, if any, are credited to the allowance. The Company recorded net charge-offs during 2006 of $192,000, compared to $117,000 in 2005.

CAPITAL RESOURCES AND LIQUIDITY

Management of the Company has developed a strategic initiative that provides for the expansion of its banking operations into new primary service areas, as well as continued expansion of its market share in its existing market. As of December 31, 2007, there were no material commitments for capital expenditures, though such expenditures may be incurred in 2008 related to the expansion and buildout of new and existing facilities on the East Coast.

While it is anticipated that interest income will increase commensurate with interest expense upon the attraction of deposits, non-interest expenses will generally be disproportionately higher until such time as the volume of deposits and interest-earning assets generate net interest income and service fees sufficient to cover these costs. Management’s philosophy in each instance of expansion is to attract deposit relationships through the offering of competitive rates, terms and service.

As it is the Company’s philosophy to consider the investment portfolio principally as a source of liquidity, deposit growth, except to the extent necessary to maintain such liquidity, is generally utilized to fund the higher yielding loan portfolio, particularly commercial and, to a lesser degree, consumer mortgage lending. In addition, it is management’s practice to maintain the Company’s well-capitalized status in compliance with regulatory guidelines when planning its expansion activities.

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Consistent with the objective of operating a sound financial organization, the Company strives to maintain high capital ratios. Regulatory agencies including the State of Florida Department of Financial Services, the FDIC and the Federal Reserve System have approved guidelines for a risk-based capital framework that makes capital requirements more sensitive to the risks germane to each individual institution. The guidelines require that total capital of 8.0% be held against total risk-adjusted assets. At December 31, 2007, the Company’s Tier 1 risk-based capital ratio was 10.14%, total risk-based capital ratio was 12.57%, and the Tier 1 leverage ratio was 10.24%.

The Company’s ability to satisfy demands for credit, deposit withdrawals and other corporate needs depends on its level of liquidity. The Company utilizes several means to manage its liquidity. One of the tools that the Company uses to measure liquidity is a comparison of total liquid assets (cash, due from banks, federal funds sold, and other investments) to total deposits, calculating it on a daily basis and reviewing it quarterly with the subsidiary bank management and board of directors Asset/Liability Management Committees (ALCO). As of December 31, 2007, consolidated Company liquid assets were $52.1 million or 5.6% of consolidated deposits. It is the policy of the Banks to manage the liquidity ratio above 3%. Traditionally, increases in deposits are sufficient to provide adequate levels of liquidity; however, if needed, the Company has approved extensions of credit available from correspondent banks and the Federal Home Loan Bank amounting to $117.9 million, sources for loan sales, and primarily short-term investments that could be liquidated if necessary. In addition, the Company’s banking subsidiaries are members of the Federal Home Loan Bank and, subject to certain collateral verification requirements, Bank of Florida – Southwest, Bank of Florida - Southeast and Bank of Florida – Tampa Bay may borrow up to 20%, 20% and 10%, respectively, of their outstanding assets.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk is the risk of loss due to adverse changes in market prices and rates. The Company’s market risk arises primarily from interest-rate risk inherent in its lending and deposit gathering activities. The measure of market risk associated with financial instruments is meaningful only when all related and offsetting on and off balance sheet transactions are aggregated, and the resulting net positions are identified.

The Company does not currently engage in trading or hedging activities and has not invested in interest-rate derivatives or entered into interest rate swaps. However, in support of its asset-liability management process the Company may implement derivatives hedging strategies in the future with the intent of reducing interest rate risk. Bank of Florida Corporation’s primary objective in managing interest-rate risk is to minimize the adverse impact of changes in interest rates on the Company’s net interest income and capital, while adjusting its asset-liability structure to obtain the maximum yield-cost spread on that structure. Disclosures about the fair value of financial instruments, which reflects changes in market prices and rates, can be found in “Note 20 – Fair Values of Financial Instruments” in the “Notes to Consolidated Financial Statements”.

ASSET/LIABILITY MANAGEMENT

It is the objective of the Company to manage assets and liabilities to provide a satisfactory, consistent level of profitability within the framework of established cash, loan, investment, borrowing and capital policies. Certain of the officers of the Banks are responsible for monitoring policies and procedures that are designed to ensure acceptable composition of the asset/liability mix, stability and leverage of all sources of funds while adhering to prudent banking practices. It is the overall philosophy of management to support asset growth primarily through growth of core deposits, which include deposits of all categories made by individuals, partnerships and corporations. Management of the Company seeks to invest the largest portion of its assets in commercial, consumer and real estate loans.

The asset/liability mix is monitored on a monthly basis and a monthly report reflecting interest-sensitive assets and interest-sensitive liabilities is prepared and presented to the respective Banks’ Boards of Directors. The objective of this policy is to control interest-sensitive assets and liabilities to minimize the impact of substantial movements in interest rates on the Banks’ earnings.

INTEREST SENSITIVITY

The objective of interest sensitivity management is to minimize the risk associated with the effect of interest rate changes on net interest margins while maintaining net interest income at acceptable levels. Managing this risk involves monthly monitoring of the interest sensitive assets relative to interest sensitive liabilities over specific time intervals. All assets and liabilities are evaluated as maturing at the earlier of re-pricing date or contractual maturity date. While liabilities without specific terms such as money market, NOW and savings accounts are generally considered core deposits for liquidity purposes, 65% are deemed to re-price for purposes of interest rate sensitivity analysis within the first twelve months. Management subjectively sets rates on all accounts.

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The principal measure of our exposure to interest rate risk is the difference between interest sensitive assets and liabilities for the periods being measured, commonly referred to as “gap” for such period. A positive gap position represents a greater amount of interest sensitive assets re-pricing (or maturing). Thus, an increase in rates would positively impact net interest income, as the yield on interest-earning assets would increase prior to the increase in the cost of interest bearing liabilities. Conversely, a negative gap position is indicative of a bank that has a greater amount of interest sensitive liabilities re-pricing (or maturing) than it does interest sensitive assets, in a given time interval. In this instance, the impact on net interest income would be positive in a declining rate environment and negative if rates were rising. The impact on net interest income described above is general, as other factors would additionally maximize or minimize the effect. For example, a change in the prime interest rate could effect an immediate change to rates on prime related assets, whereas a liability which re-prices according to changes in Treasury rates might (1) lag in the timing of the change and (2) change rates in an amount less than the change in the prime interest rate. It is common to focus on the one year gap, which is the difference between the dollar amount of assets and the dollar amount of liabilities maturing or repricing within the next twelve months.

The following is a consolidated maturity and re-pricing analysis of rate sensitive assets and liabilities as of December 31, 2007 (In Thousands).

	0-90 DAYS			91-365 DAYS			1 - 3 YEARS			OVER 3 YEARS			TOTAL
Interest-earning assets:
Federal funds sold	$	—		$	—		$	—		$	—		$	—
Interest-bearing deposits		217												217
Investment securities		3,900			7,728			9,374			17,006			38,008
Restricted securities		9,117												9,117
Loans		549,696			155,893			235,598			203,575			1,144,762
Total interest-earning assets		562,930			163,621			244,972			220,581			1,192,104
Interest-bearing demand deposits		424,351												424,351
Savings		6,124												6,124
Certificates of Deposit		130,021			194,944			68,116			9,876			402,957
Federal funds purchased		250												250
Other borrowings					71,800			26,000			73,290			171,090
Total interest-bearing liabilities		560,746			266,744			94,116			83,166			1,004,772
Interest Sensitivity Gap (rate-sensitive assets less rate-sensitive liabilities):
Interest sensitivity gap	$	2,184		$	(103,123	)	$	150,856		$	137,415		$	187,332
Cumulative interest sensitivity gap		2,184			(100,939	)		49,917			187,332
Interest sensitivity gap ratio as a percent of total assets		0.17	%		(7.87	)%		11.51	%		10.49	%
Cumulative interest sensitivity gap ratio as a percent of total assets		0.17	%		(7.70	)%		3.81	%		14.29	%

At December 31, 2007, the Company had $726.5 million in interest sensitive assets compared to $827.5 million in interest sensitive liabilities that will mature or re-price within a year, resulting in a negative gap position of $100.9 million (or (7.70%, expressed as a percentage of total assets). Management believes that the current balance sheet structure of interest sensitive assets and liabilities does not represent a material risk to earnings or liquidity in the event of a change in market rates.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Certain information required by this item is included in Item 6 of Part II of this report under the heading “Selected Quarterly Financial Data” and is incorporated by reference. All other information required by this item is included in Item15 of Part IV of this report and is incorporated into this item by reference.

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Bank of Florida Corporation did not have any disagreements with accountants on accounting and financial disclosures during 2007, 2006, or 2005.

ITEM 9A. CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures

Bank of Florida Corporation maintains controls and procedures designed to ensure that information required to be disclosed in the reports that Bank of Florida Corporation files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission. Based upon management’s evaluation of those controls and procedures performed within the 90 days preceding the filing of this Report, the Chief Executive Officer and Chief Financial Officer of Bank of Florida Corporation concluded that, subject to the limitations noted below, Bank of Florida Corporation’s disclosure controls and procedures (as defined in Rules 13a-15(e) under the Securities Exchange Act of 1934) are effective to ensure that the information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the U.S. Securities and Exchange Commission’s rules and forms.

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

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Such internal controls over financial reporting were designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

The Company’s management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2007. In making this assessment, the Company used the criteria set forth in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).

Based upon our evaluation under the framework in Internal Control-Integrated Framework, our management concluded that our internal control over financial reporting was effective as of December 31, 2007. We have reviewed the results of management’s assessment with our Audit Committee.

(c) Changes in Internal Controls

Bank of Florida Corporation has made no significant changes in its internal controls over financial reporting during the quarter ended December 31, 2007 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

(d) Limitations on the Effectiveness of Controls

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

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

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ITEM 9B. OTHER INFORMATION

The Company did not fail to file any Form 8-K or to disclose any information required to be disclosed therein during the fourth quarter of 2007.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Information required by this item appears in the Company’s Proxy Statement for the 2008 Annual Meeting of Shareholders under the caption, “Election of Directors”, “Non-Director Executive Officers”, “Report of the Audit Committee” and “Compliance with Section 16(a) of the Securities and Exchange Act of 1934”, and is hereby incorporated by reference.

Bank of Florida Corporation has adopted a Code of Ethics applicable to its Senior Financial Officers. This code is posted on our website at www.bankofflorida.com and a copy will be provided free of charge, upon request to Arlette Yassa, Corporate Secretary, 110 E. Broward Boulevard, Suite 100, Ft. Lauderdale, Florida 33301, (954) 653-2000.

ITEM 11. EXECUTIVE COMPENSATION

Information required by this item appears in the Company’s Proxy Statement for the 2008 Annual Meeting of Shareholders under the caption, “Executive Compensation” and “Compensation Committee Report”, and is hereby incorporated by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Information required by this item appears in the Company’s Proxy Statement for the 2008 Annual Meeting of Shareholders under the caption, “Stock Ownership” and “Beneficial Stock Ownership of Directors and Executive Officers”, and is hereby incorporated by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Information required by this item appears in the Company’s Proxy Statement for the 2008 Annual Meeting of Shareholders under the caption, “Certain Transactions”, and is hereby incorporated by reference.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Audit Fees. The aggregate fees which will be billed for professional services by Hacker Johnson & Smith P.A. in connection with the audit of the annual financial statements and internal controls over financial reporting for the fiscal years ended December 31, 2007 and 2006 and the reviews of the financial statements included in the Company’s 2007 quarterly filings and the 2006 quarterly filings with the Securities and Exchange Commission was $246,000 and $196,000, respectively. Hacker, Johnson & Smith P.A. also billed the Company $8,000 in connection with the annual audit of the Company’s 401K plan in 2007. The aggregate fees billed for professional services by KPMG LLP in 2005 and 2004 in connection with the audit of the 2004 annual financial statements and the reviews of the financial statements related to the quarterly filings ended March 31, 2005 and June 30, 2005 and all of 2004 quarterly filings with the Securities and Exchange Commission for the fiscal years ended December 31, 2005 and 2004 were $136,000 and $95,000, respectively.

Audit-Related and Other Fees: In 2007, Hacker, Johnson & Smith P. A. billed Bank of Florida Corporation approximately $10,000 related to vendor contracts in connection with the acquisition of Old Florida Bank Corporation. In 2005, KPMG LLP also billed Bank of Florida Corporation approximately $9,000, and Hill, Barth & King, LLC billed $9,800, for fees related to the common stock offering and conversion of preferred stock into common stock in the quarter ended June 30, 2005.

Tax Fees: The fees billed by Hacker, Johnson & Smith P.A. for tax compliance and advice, including the preparation of Bank of Florida Corporation’s 2007 and 2006 corporate consolidated tax returns and the final 2007 corporate tax return for Old Florida Bank is $23,000 and $16,000, respectively. In 2005, KPMG LLP also billed

36

Bank of Florida Corporation $15,450 for tax compliance and advice, including the preparation of Bank of Florida Corporation’s corporate tax returns. In 2004, KPMG LLP also billed Bank of Florida Corporation $14,000 for tax compliance and advice, including the preparation of Bank of Florida Corporation’s corporate tax returns.

In all instances, Hacker, Johnson, & Smith P.A.’s, KPMG LLP’s or Hill, Barth & King, LLC’s performance of those services was pre-approved by Bank of Florida Corporation’s Audit Committee.

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

The following documents are filed as part of this report at pages 43 through 81.

• Consolidated Financial Statements of Bank of Florida Corporation (including all required schedules):

1. Independent Auditor’s Report;

2. Consolidated Balance Sheets at December 31, 2007 and 2006;

3. Consolidated Statements of Operations, Stockholders’ Equity, Comprehensive Income (Loss), and Statements of Cash Flows for years ended December 31, 2007, 2006 and 2005.

4. Notes to Consolidated Financial Statements

• Exhibits

The following exhibits are filed with the Securities and Exchange Commission and are incorporated by reference into this Form 10-Q. The exhibits which are denominated by an (a.) were previously filed as a part of a Registration Statement on Form SB-2 for Bancshares of Florida with the SEC on March 24, 1999, File No. 333-74997. The exhibits which are denominated by a (b.) were previously filed as a part of Amendment No. 1 to Form SB-2, filed with the SEC on May 7, 1999. The exhibits which are denominated by a (c.) were previously filed as a part of Form 10-KSB filed with the SEC on March 30, 2000. The exhibits which are denominated by a (d.) were previously filed as a part of Form S-4 filed with the SEC on October 3, 2006. The exhibits which are denominated by an (e.) were previously filed as a part of a Registration Statement on Form SB-2 for Bancshares of Florida with the SEC on December 28, 2001, File No. 333-76094. The exhibits which are denominated by an (f.) were previously filed as part of a Form 10-QSB/A filed on September 10, 2002. The exhibits which are denominated by a (g) were previously filed as part of a Form 10-Q filed on November 1, 2006. The exhibits which are denominated by a (h) were previously filed as part of a Form 10-Q filed on November 9, 2007. The exhibits which are denominated by an (i.) were previously filed as part of a Registration Statement on Form SB-2 filed with the SEC on September 24, 2004, File No. 333-116833. The exhibits that are denominated by an (j.) were previously filed as part of Form 10-Q filed with the SEC on August 4, 2005. The exhibits that are denominated by an (k.) were previously filed as part of Form 10-Q filed with the SEC on November 3, 2005. The exhibits that are denominated by a (m.) were previously filed as part of Schedule DEF 14A filed with the SEC on April 21, 2006. The exhibits that are denominated by a (n.) were previously filed as part of Form 10-K filed with the SEC on March 8, 2007. The exhibit numbers correspond to the exhibit numbers in the referenced document.

Exhibit Number	Description of Exhibit
j.3.1	Amended and Restated Articles of Incorporation
a.3.2	Bylaws
n.3.3	Article of Amendment to Restated Articles of Incorporation dated December 20, 2006
h.3.4	Amendment to Bylaws dated October 19, 2007
b.4.1	Specimen Common Stock Certificate
m.4.2	2006 Stock Compensation Plan
b.4.3	Form of Stock Purchase Warrant–1999 Offering
e.4.4	Form of Stock Purchase Warrant–2002 Offering
i.4.5	Form of Stock Purchase Warrant A–2004 Offering
i.4.6	Form of Stock Purchase Warrant B–2004 Offering
k.10.1	Amended and Restated Employment Agreement of Michael L. McMullan dated February 1, 2005
g.10.2	Change in Control Agreement of Roy N. Hellwege dated September 19, 2006
g.10.3	Change in Control Agreement of Charles K. Cross dated September 19, 2005

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c.10.4	1999 Stock Option Plan
c.10.5	Form of Incentive Stock Option Agreement
d.10.6	Employment Agreement of Craig D. Sherman dated May 3, 1999
f.10.6.1	Amendment to Employment Agreement of Craig Sherman dated July 30, 2001
h.10.7	Change in Control Agreement of R. Moyle Fritz, Jr. dated September 20, 2007
h.10.8	Change in Control Agreement of Julie W. Husler dated September 20, 2007
f.10.9	Lease between Citizens Reserve, LLC and Citizens National Bank of Southwest Florida
h.10.10	Change in Control Agreement of Christopher Willman dated September 24, 2007
h.10.11	Change in Control Agreement of John B. James dated September 17, 2007
10.12	Change in Control Agreement of John S. Chaperon
n.10.15	Change in Control Agreement of Roberto Pelaez dated January 2007
10.18	Change in Control Agreement of Tracy L. Keegan
h.14.1	Code of Ethical Conduct (for Principal Executive and Financial Officer) approved on September 20, 2007
h.14.2	Code of Ethics approved on September 20, 2007
21.1	Subsidiaries of the Registrant
31.1	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002–President and Chief Executive Officer
31.2	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002– Chief Financial Officer
32.1	Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002–President and Chief Executive Officer
32.2	Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002–Chief Financial Officer

38

Reports of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders

Bank of Florida Corporation

Naples, Florida:

We have audited the Bank of Florida Corporation and Subsidiaries’ (the “Company”) internal control over financial reporting as of December 31, 2007, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying management assessment report. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting, may not prevent or detect misstatements. Also, projections of any evaluation effectiveness to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2007, based on the criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of the Company as of December 31, 2007 and 2006 and the related consolidated statements of operations, stockholders’ equity, comprehensive income and cash flows for each of the years in the three-year period ended December 31, 2007 and our report dated February 28, 2008 expressed an unqualified opinion on those financial statements.

HACKER, JOHNSON & SMITH PA

Fort Lauderdale, Florida

February 28, 2008

39

The Board of Directors and Stockholders

Bank of Florida Corporation

Naples, Florida:

We have audited the accompanying consolidated balance sheets of Bank of Florida Corporation and Subsidiaries (the “Company”) as of December 31, 2007 and 2006, and the related consolidated statements of operations, stockholders’ equity, comprehensive income and cash flows for each of the years in the three-year period ended December 31, 2007. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company at December 31, 2007 and 2006, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2007, in conformity with U.S. generally accepted accounting principles.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company’s internal control over financial reporting as of December 31, 2007, based on the criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 28, 2008 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

HACKER, JOHNSON & SMITH PA

Fort Lauderdale, Florida

February 28, 2008

40

BANK OF FLORIDA CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

December 31, 2007 and 2006

(In Thousands, except share and per share data)

	2007			2006
ASSETS
Cash and due from banks	$	17,171		$	17,770
Interest-bearing deposits due from other banks		217			3,491
Federal funds sold		—			6,483
TOTAL CASH AND CASH EQUIVALENTS		17,388			27,744
Securities held to maturity		3,314			25
Securities available for sale		34,694			41,699
Loans held for sale		417			1,103
Loans held for investment		1,144,345			782,507
Less - Allowance for loan losses		14,431			7,833
Net loans held for investment		1,129,914			774,674
Federal Home Loan Bank (“FHLB”) and Federal Reserve stock, at cost		9,117			3,319
Premises and equipment, net		29,782			7,304
Accrued interest receivable		5,564			4,416
Cash Surrender Value of Life Insurance		3,383			3,249
Deferred Tax Asset		5,607			3,589
Goodwill		62,202			11,325
Intangible assets, net		3,395			2,506
Other assets		5,711			2,149
TOTAL ASSETS	$	1,310,488		$	883,102
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits	$	937,116		$	691,180
Federal funds purchased		250			—
Subordinated debt		16,000			11,000
FHLB Advances		155,090			42,500
Accrued interest payable		1,761			972
Accrued expenses and other liabilities		1,340			1,945
TOTAL LIABILITIES		1,111,557			747,597
Stockholders’ Equity
Series A Preferred stock, par value $.01 per share, no shares designated, authorized, issued or outstanding at December 31, 2007 or 2006, respectively.		—			—
Undesignated Preferred stock, par value $.01 per share, 1,000,000 shares authorized, no shares issued and outstanding at December 31, 2007 and 2006, respectively		—			—
Common stock, par value $.01 per share, 20,000,000 shares authorized, 12,779,020 and 9,575,153 shares issued and outstanding at December 31, 2007 and 2006, respectively		128			96
Additional paid-in capital		199,576			139,854
Accumulated deficit		(1,808	)		(4,551	)
Accumulated other comprehensive income		1,035			106
TOTAL STOCKHOLDERS’ EQUITY		198,931			135,505
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	1,310,488		$	883,102

See accompanying notes to consolidated financial statements

41

BANK OF FLORIDA CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

Years ended December 31, 2007, 2006 and 2005

(In Thousands, except share and per share data)

	2007		2006		2005
INTEREST INCOME
Interest and fees on loans	$	81,145	$	48,958	$	26,370
Interest on securities and other		2,656		1,790		701
Interest on federal funds sold		354		1,582		1,420
TOTAL INTEREST INCOME		84,155		52,330		28,491
INTEREST EXPENSE
Interest on deposits		34,522		19,127		8,966
Interest on subordinated debt		1,972		812		302
Interest on other borrowings		4,437		1,282		80
TOTAL INTEREST EXPENSE		40,931		21,221		9,348
NET INTEREST INCOME BEFORE PROVISION FOR LOAN LOSSES		43,224		31,109		19,143
PROVISION FOR LOAN LOSSES		4,254		2,836		1,903
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES		38,970		28,273		17,240
NONINTEREST INCOME
Service charges and fees		2,423		1,210		1,380
Trust fees		3,017		2,589		1,546
Gain on sale of loans, net		148		443		333
TOTAL NONINTEREST INCOME		5,588		4,242		3,259
NONINTEREST EXPENSES
Salaries and employee benefits		21,356		16,037		10,513
Occupancy		5,691		4,008		2,910
Equipment, depreciation and maintenance		2,399		1,573		1,216
Data processing		2,501		2,007		1,349
Stationary, postage and office supplies		925		667		532
Professional fees		1,541		694		1,081
Advertising, marketing and public relations		856		713		497
Other		4,711		2,886		1,246
TOTAL NONINTEREST EXPENSES		39,980		28,585		19,344
INCOME BEFORE INCOME TAXES (BENEFIT)		4,578		3,930		1,155
Income taxes (benefit)		1,835		1,611		(3,728	)
NET INCOME	$	2,743	$	2,319	$	4,883
NET INCOME PER SHARE: BASIC	$	0.23	$	0.29	$	0.82
NET INCOME PER SHARE: DILUTED	$	0.23	$	0.28	$	0.79
WEIGHTED-AVERAGE SHARES OUTSTANDING: BASIC		11,768,529		8,026,312		5,595,233
WEIGHTED-AVERAGE SHARES OUTSTANDING: DILUTED		11,905,196		8,278,210		5,813,230

See accompanying notes to consolidated financial statements

42

BANK OF FLORIDA CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Years Ended December 31, 2007, 2006 and 2005

(In Thousands, except share and per share data)

	Preferred Stock					Common Stock			Additional Paid-In Capital		Accumulated Deficit			Accumulated Other Comprehensive Income (Loss)			Total
	Shares		Amount			Shares	Amount
Balance, December 31, 2004	36,097		$	3,610		4,835,632	$	48	$	49,817	$	(11,479	)	$	(42	)	$	41,954
Net income												4,883						4,883
Exercise of stock options, warrants and other	—			—		27,797		—		384		—			—			384
Paid-in-capital from stock compensation expense	—			—		—		—		280		—			—			280
Common stock issued, net of offering costs of $739	—			—		915,000		9		12,978		—			—			12,987
Preferred stock dividends paid at a quarterly rate of 0.02 shares of preferred stock	1,251			125		—		—		—		(125	)		—			—
Preferred stock converted to common at $15.78 per share	(25,090	)		(2,509	)	165,354		2		2,607		(100	)		—			—
Redemption of preferred stock at $104.00 per share	(12,258	)		(1,226	)	—		—		—		(49	)		—			(1,275	)
Changes in fair value on available-for-sale securities, net of tax benefit	—			—		—		—		—		—			(152	)		(152	)
Balance, December 31, 2005	—		$	—		5,943,783	$	59	$	66,066	$	(6,870	)	$	(194	)	$	59,061
Net income	—			—								2,319						2,319
Exercise of stock options, warrants and other	—			—		68,152		1		803		—			—			804
Paid-in-capital from stock compensation expense	—			—		—		—		291		—			—			291
Tax benefit from stock options exercised	—			—		—		—		191		—			—			191
Common stock issued, net of offering costs of $3,970	—			—		2,875,000		29		57,814		—			—			57,843
Common stock issued in acquisition	—			—		688,218		7		14,689		—			—			14,696
Changes in fair value on available-for-sale securities, net of tax	—			—		—		—		—		—			300			300
Balance, December 31, 2006	—		$	—		9,575,153	$	96	$	139,854	$	(4,551	)	$	106		$	135,505
Net income												2,743			—			2,743
Exercise of stock options, warrants and other	—			—		160,585		2		1,837		—			—			1,839
Paid-in-capital from stock compensation expense	—			—		—		—		350		—			—			350
Tax benefit from stock options exercised	—			—		—		—		397		—			—			397
Common stock issued in acquisition	—			—		3,043,282		30		57,138		—			—			57,168
Changes in fair value of interest rate swap, net of tax	—			—		—		—		—		—			870			870
Changes in fair value on available-for-sale securities and, net of tax	—			—		—		—		—		—			59			59
Balance, December 31, 2007			$	—		12,779,020	$	128	$	199,576	$	(1,808	)	$	1,035		$	198,931

See accompanying notes to condensed consolidated financial statements.

43

BANK OF FLORIDA CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Years ended December 31, 2007, 2006 and 2005

(In Thousands)

	Years ended December 31,
(In Thousands)	2007		2006		2005
Net income	$	2,743	$	2,319	$	4,883
Other comprehensive income (loss):
Unrealized gains (losses) on available-for-sale securities:
Unrealized holding gains (losses) arising during the year, net of income taxes (benefit) of $38, $181 and $(117) in 2007, 2006, and 2005, respectively		59		300		(152	)
Unrealized gains on interest rate swap:
Unrealized holding gains arising during the year, net of income taxes of $523 in 2007		870		—		—
Net unrealized gains (losses)		929		300		(152	)
Comprehensive income	$	3,672	$	2,619	$	4,731

See accompanying notes to condensed consolidated financial statements.

44

BANK OF FLORIDA CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

Years ended December 31, 2007, 2006 and 2005

(In Thousands)

	2007			2006			2005
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	2,743		$	2,319		$	4,883
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		2,161			1,442			1,227
Provision for loan losses		4,254			2,836			1,903
Accretion of deferred loan fees and costs, net		(1,276	)		(990	)		(419	)
Accretion of premiums and discounts on investments, net		(79	)		(36	)		(42	)
Gain on sale of loans held for sale, net		(148	)		(443	)		(333	)
Originations of loans held for sale		76,459			(87,707	)		(80,999	)
Proceeds from sale of loans held for sale		(75,625	)		88,370			80,009
Amortization of intangible assets		511			151			39
Increase in accrued interest receivable		(113	)		(1,470	)		(1,077	)
Deferred income taxes (benefit)		(647	)		1,089			(3,728	)
Increase in cash surrender value of bank-owned life insurance		(134	)		(121	)		(107	)
Increase in other assets		(567	)		(987	)		(57	)
Stock compensation expense		350			291			280
Increase in accrued interest payable		292			620			165
(Decrease) increase in accrued expenses and other liabilities		(5,511	)		(139	)		686
NET CASH PROVIDED BY OPERATING ACTIVITIES		2,670			5,225			2,430
CASH FLOWS FROM INVESTING ACTIVITIES
Net increase in loans held for investment		(150,541	)		(235,708	)		(159,318	)
Acquisition of net assets, net of cash acquired		12,022			21			—
Proceeds from the sale of securities available for sale		16,142			22,299			—
Proceeds from maturing securities and principal payments on available-for-sale securities		9,747			1,797			333,175
Proceeds from sale of other real estate		1,500			—			—
Purchase of securities available for sale		(263	)		(23,690	)		(326,079	)
(Purchase) repayment of restricted securities and bank-owned life insurance, net		(5,267	)		(1,836	)		121
Purchase of premises and equipment, net		(8,367	)		(1,780	)		(1,115	)
NET CASH USED IN INVESTING ACTIVITIES		(125,027	)		(238,897	)		(153,216	)
CASH FLOWS FROM FINANCING ACTIVITIES
Net (decrease) increase in deposits		(2,775	)		121,461			119,016
Proceeds from FHLB Advances		740, 199			89,000			20,000
Repayment of FHLB Advances		(627,659	)		(58,000	)		(17,000	)
Proceeds from issuance of subordinated debt, net		—			—			9,000
Redemption of Series A preferred stock		—			—			(1,275	)
Tax benefit from exercise of common stock options and warrants		397			191			—
Net proceeds from issuance or exercise of common stock		1,839			58,647			13,265
NET CASH PROVIDED BY FINANCING ACTIVITIES		112,001			211,299			143,006
NET DECREASE IN CASH AND CASH EQUIVALENTS		(10.356	)		(22,373	)		(7,780	)
CASH AND CASH EQUIVALENTS
Beginning of year		27,744			50,117			57,897
End of year	$	17,388		$	27,744		$	50,117

45

BANK OF FLORIDA CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (Cont’d)

Years ended December 31, 2007, 2006 and 2005

(In Thousands)

	2007		2006		2005
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the year for -
Interest	$	40,142	$	20,601	$	9,183
Taxes	$	2,660	$	200	$	—
Noncash Transactions:
Unrealized holding gain (loss) on securities available for sale, net of taxes (benefit)	$	59	$	300	$	(152	)
Unrealized holding gain on interest rate swap, net of taxes	$	870	$	—	$	—
Increase in preferred stock for dividends paid	$	—	$	—	$	125
Preferred stock exchanged for common stock	$	—	$	—	$	2,609
Tax benefit from exercise of common stock options and warrants	$	—	$	—	$	106
Transfer of loans to other real estate	$	2,850	$	—	$	—
Acquisition of Financial Institutions:
Fair value of investment securities available for sale acquired	$	21,734	$	23,556	$	—
Fair value of premises and equipment acquired	$	16,272	$	250	$	—
Fair value of loans acquired, net	$	210,527	$	60,016	$	—
Core deposit intangible	$	1,400	$	1,732	$	—
Goodwill	$	50,796	$	11,325	$	—
Fair value of deferred tax assets acquired	$	2,001	$	908	$	—
Fair value of other assets acquired	$	1,829	$	822	$	—
Fair value of deposit liabilities assumed	$	248,711	$	74,639	$	—
Fair value of FHLB advances and subordinated debentures assumed	$	5,300	$	8,500	$	—
Fair value of accrued expenses and other liabilities assumed	$	4,906	$	795	$	—
Common stock issued	$	57,168	$	14,696	$	—

See accompanying notes to consolidated financial statements

46

BANK OF FLORIDA CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2007, 2006 and 2005

NOTE 1—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization and Consolidation:

The consolidated financial statements of Bank of Florida Corporation (the “Company”) include the accounts of the Company and its wholly-owned subsidiaries, Bank of Florida – Southwest, Bank of Florida – Southeast, and Bank of Florida – Tampa Bay (collectively, the Banks), and Bank of Florida Trust Company. All significant intercompany balances and transactions have been eliminated.

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

Nature of Operations:

The Company’s primary source of income is from the Banks, which provide a full range of commercial and consumer banking services primarily within the Naples, Ft. Lauderdale, Palm Beach and Tampa Bay areas of Florida. The Banks are subject to regulation of both the Florida Department of Financial Services and the Federal Deposit Insurance Corporation.

Bank of Florida Trust Company (the “Trust Company”) was incorporated under the laws of the State of Florida as a wholly-owned subsidiary of Bank of Florida – Southwest. Bank of Florida Trust Company offers investment management, trust administration, estate planning, and financial planning services.

Use of Estimates:

The accompanying consolidated financial statements are prepared 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 and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Changes in such estimates and assumptions might be required because of rapidly changing economic conditions, changing economic prospects of borrowers and other factors. Material estimates that are particularly susceptible to significant changes in the near term are related to the determination of the allowance for loan losses and the deferred tax asset. Actual results could differ from those estimates.

Cash and Cash Equivalents:

Cash and cash equivalents include cash, demand balances due from banks, interest-bearing deposits due from other banks, and federal funds sold. These assets have original maturities of three months or less.

Loans held for sale:

Loans held for sale, which are composed of residential mortgage loans, are reported at the lower of cost or fair value on an aggregate loan portfolio basis. Gains or losses realized on the sale of loans held for sale are recognized at the time of sale and are determined by the difference between the net sales proceeds and the carrying value of the loans sold including any deferred origination fees and costs, adjusted for any servicing asset or liability retained. Net unrealized losses, if any, are recognized through a market adjustment by charges to operations. Gains and losses on sales of residential mortgage loans are included in gain on sale of loans in the consolidated statements of operations.

47

BANK OF FLORIDA CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

December 31, 2007, 2006 and 2005

NOTE 1—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Loans held for investment:

Loans held for investment are stated at the principal amount outstanding, net of unearned income, any net deferred fees and costs on originated loans, and an allowance for loan losses. Loan origination and commitment fees and certain direct costs associated with originating or acquiring loans are deferred and amortized as an adjustment to interest income using a method that approximates the interest method, generally over the contractual life of the loan. Interest income on all loans is accrued based on the outstanding daily balances.

Management has established a policy to discontinue accruing interest (nonaccrual status) on a loan after it has become 90 days delinquent as to payment of principal or interest unless the loan is considered to be well collateralized and the Company is actively in the process of collection. In addition, a loan will be placed on non-accrual status before it becomes 90 days delinquent if management believes that the borrower’s financial condition is such that collection of interest or principal is doubtful. Interest previously accrued but uncollected on such loans is reversed and charged against current income when the receivable is estimated to be uncollectible. Interest income on nonaccrual loans is recognized only as received.

Accounting for Certain Loans or Debt Securities Acquired in a Transfer:

On January 1, 2005, Statement of Position (SOP) 03-3, Accounting for Certain Loans or Debt Securities Acquired in a Transfer, was adopted for loan acquisitions. SOP 03-3 requires acquired loans to be recorded at fair value and prohibits carrying over valuation allowances in the initial accounting for acquired impaired loans. Loans carried at fair value, mortgage loans held for sale, and loans to borrowers in good standing under revolving credit agreements are excluded from the scope of SOP 03-3. SOP 03-3 limits the yield that may be accreted to the excess of the undiscounted expected cash flows over the investor’s initial investment in the loan. The excess of the contractual cash flows over the expected cash flows may not be recognized as an adjustment of yield. Subsequent increases in cash flows expected to be collected are recognized prospectively through an adjustment of the loan’s yield over its remaining life. Decreases in expected cash flows are recognized as impairments.

Allowance for Loan Losses:

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

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

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

48

BANK OF FLORIDA CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

December 31, 2007, 2006 and 2005

NOTE 1—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Allowance for Loan Losses (continued):

experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Larger impaired credits that are measured according to SFAS No. 114 have been defined to include loans which are classified as doubtful, substandard or special mention risk grades where the borrower relationship is greater than $250,000. For such loans that are considered impaired, an allowance is established when the discounted cash flows (or collateral value or observable market price) of the impaired loan is lower than the carrying value of that loan.

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

Foreclosed Assets:

Assets acquired through, or in lieu of, loan foreclosure are held for sale and are initially recorded at fair value less cost to sell at the date of foreclosure, establishing a new cost basis. Subsequent to foreclosure, valuations are periodically performed by management and the assets are carried at the lower of carrying amount or fair value less cost to sell. Revenue and expenses from operations and changes in the valuation allowance are included in net expenses from foreclosed assets.

Premises and Equipment:

Premises and equipment are stated at cost, less accumulated depreciation and amortization. Gains and losses on routine dispositions, if any, are reflected in current operations. Depreciation is computed on the straight-line method over the estimated useful lives of the depreciable assets, ranging from three to thirty years. Leasehold improvements are amortized over the lives of the respective leases or the service lives of the improvements, whichever is less. The useful lives used in computing depreciation and amortizations are as follows:

Buildings and improvements	30 years
Furniture and equipment	3 - 7 years
Leasehold improvements	5 - 20 years

Transfers 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.

Valuation of Long-Lived Assets:

The Company periodically evaluates the carrying value of long-lived assets to be held and used, including intangible assets, when events or circumstances warrant such a review. The carrying value of a long-lived asset is considered impaired when the anticipated separately identifiable undiscounted cash flows from such asset are less than the carrying value of the asset. In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair value of the long-lived asset. Fair value is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risk involved. Impairment losses on long-lived assets held for sale are determined in a similar manner, except that fair values are reduced for the cost to dispose of the assets.

49

BANK OF FLORIDA CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

December 31, 2007, 2006 and 2005

NOTE 1—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Stock-Based Compensation:

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

In addition, prior to the adoption of SFAS 123R, the tax benefits of stock option exercises were classified as operating cash flows. Since the adoption of SFAS 123R, tax benefits resulting from tax deductions in excess of the compensation cost recognized for options are classified as financing cash flows. As the Company adopted the modified prospective transition method, the 2005 cash flow statement was not adjusted to reflect current period presentation.

Advertising Costs:

Advertising costs are expensed as incurred.

Income Taxes:

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

Income Per Common and Common Equivalent Share:

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

50

BANK OF FLORIDA CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

December 31, 2007, 2006 and 2005

NOTE 1—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Goodwill and Intangible Assets:

The Company tests goodwill for impairment annually. The test requires us to determine the fair value of our reporting unit and compare the reporting unit’s fair value to its carrying value. The fair value of the reporting unit is estimated using management valuation models. While management believes the sources utilized to arrive at the fair value estimates are reliable, different sources or methods could have yielded different fair value estimates. These fair value estimates require a significant amount of judgment. Changes in management’s valuation of its reporting unit may affect future earnings through the recognition of a goodwill impairment charge. At December 31, 2007, (the goodwill impairment testing date) the fair value of our reporting unit was greater than its carrying value. Therefore, goodwill is not impaired. If the fair value of the reporting unit declines below the carrying amount, the Company would have to perform the second step of the impairment test. This step requires the Company to fair value all assets (recognized and unrecognized) and liabilities in a manner similar to purchase price allocation.

The Company reviews core deposit and other intangible assets for possible impairment whenever events or changes in circumstances indicate that carrying amounts may not be recoverable.

Acquisitions:

The Company accounts for business combinations using the purchase method of accounting. The purchase method of accounting requires us to fair value the tangible net assets and identifiable intangible assets acquired. The fair values are based on available information and current economic conditions at the date of acquisition. Fair value may be obtained from independent appraisers, discounted cash flow present value techniques, management valuation models, quoted prices on national markets or quoted market prices from brokers. These fair value estimates will affect future earnings through the disposition or amortization of the underlying assets and liabilities. While management believes the sources utilized to arrive at the fair value estimates are reliable, different sources or methods could have yielded different fair value estimates. Such different value estimates could affect future earnings through different values being utilized for the disposition or amortization of the underlying assets and liabilities acquired.

Off-Balance-Sheet Financial instruments:

In the ordinary course of business the Company has entered into off-balance sheet financial instruments consisting of commitments to extend credit, standby letters of credit and unfunded commitments under lines of credit. Such financial instruments are recorded in the consolidated financial statements when they are funded.

Reclassifications:

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

Derivative Financial Instruments:

The Company accounts for its derivatives under SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities,” as amended. The Statement requires recognition of all derivatives as either assets or liabilities in the balance sheet and requires measurement of those instruments at fair value through adjustments to accumulated other comprehensive income and/or current earnings, as appropriate. On the date the Company enters into a derivative contract, the Company designates the derivative instrument as either a fair value hedge, cash flow hedge or as a free-standing derivative instrument. For a fair value hedge, changes in the fair value of the derivative instrument and changes in the fair value of the hedged asset or liability or of an unrecognized firm commitment attributable to the hedged risk are recorded in current period net income. For a cash flow hedge, changes in the fair

51

BANK OF FLORIDA CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

December 31, 2007, 2006 and 2005

NOTE 1—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Derivative Financial Instruments (continued):

value of the derivative instrument, to the extent that it is effective, are recorded in accumulated other comprehensive income and subsequently reclassified to net income in the same period(s) that the hedged transaction impacts net income. For free-standing derivative instruments, changes in fair values are reported in current period net income.

Prior to entering a hedge transaction, the Company formally documents the relationship between hedging instruments and hedged items, as well as the risk management objective and strategy for undertaking various hedge transactions. This process includes linking all derivative instruments that are designated as fair value or cash flow edges to specific assets and liabilities on the balance sheet or to specific forecasted transactions along with a formal assessment at both inception of the hedge and on an ongoing basis as to the effectiveness of the derivative instrument in offsetting changes in fair values or cash flows of the hedged item. If it is determined that the derivative instrument is not highly effective as a hedge, hedge accounting is discontinued and the adjustment to fair value of the derivative instrument is recorded in net income.

Recent Accounting Pronouncements:

In September 2006, FASB issued SFAS No. 157, Fair Value Measurements (“SFAS 157”). SFAS 157 defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principals, and expands disclosures about fair value measurements. This statement is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. Management is in the process of evaluating the impact of SFAS 157 and does not anticipate it will have a material impact on the Company’s consolidated financial condition or results of operations.

In February 2007, FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities-Including an amendment of FASB Statement No. 115 (“SFAS 159”). SFAS 159 provides companies with an option to report selected financial assets and liabilities at fair value. Most of the provisions of this statement apply only to entities that elect the fair value option. However, the amendment to SFAS No. 115, Accounting for Certain Investments in Debt and Equity Securities, applies to all entities with available-for-sale and trading securities. SFAS 159 also establishes presentation and disclosure requirements designed to facilitate comparisons between companies that choose different measurement attributes for similar types of assets and liabilities. This statement is effective as of the beginning of an entity’s first fiscal year that begins after November 15, 2007. Management believes this Statement will not have a material effect on the Company’s consolidated financial statements.

In December 2007, the FASB issued SFAS No.160, Noncontrolling Interests in Consolidated Financial Statements (“SFAS 160”). SFAS 160 requires the Company to establish accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. This Statement shall be effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008. Earlier adoption is prohibited. Management does not anticipate it will have a material effect on the Company’s consolidated financial condition or results of operations.

In December 2007, the FASB issued SFAS No. 141(R), Business Combinations (“SFAS 141(R)”). SFAS 141(R) is effective for fiscal years beginning after December 15, 2008 and early implementation is not permitted. SFAS 141(R) requires the acquiring entity in a business combination to recognize all (and only) the assets acquired and liabilities assumed in the transaction; establishes the acquisition date fair value as the measurement objective for all assets acquired and liabilities assumed; and requires the acquirer to disclose to investors and other users all of the information they need to evaluate and understand the nature and financial effect of the business combination. Acquisition related costs including finder’s fees, advisory, legal, accounting valuation and other professional and consulting fees are required to be expensed as incurred. Management does not anticipate it will have a material impact on the Company’s consolidated financial condition or results of operations.

52

BANK OF FLORIDA CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

December 31, 2007, 2006 and 2005

NOTE 1—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Recent Accounting Pronouncements (continued):

In March 2007, the EITF reached a final consensus on Issue 06-10, Accounting for Collateral Assignment Split-Dollar Life Insurance Arrangements. EITF 06-10 stipulates that a liability should be recognized for a postretirement benefit obligation associated with a collateral assignment arrangement if, on the basis of the substantive agreement with the employee, the employer has agreed to maintain a life insurance policy during the postretirement period or provide a death benefit. The employer also must recognize and measure the associated asset on the basis of the terms of the collateral assignment arrangement. The consensus is effective for fiscal years beginning after December 15, 2007. Entities will have the option of applying the provisions of EITF 06-10 as a cumulative effect adjustment to the opening balance of retained earnings or retrospectively to all prior periods. EITF 06-10 is not expected to have a material impact on the Company’s consolidated financial statements.

In April 2007, the FASB issued FASB Staff Position (“FSP”) No. FIN 39-1, Amendment of FASB Interpretation No. 39, which expands the scope of FASB Interpretation No. 39, Offsetting of Amounts Related to Certain Contracts (“FIN 39”), to permit netting of the fair value asset recognized for a derivative instrument against the related liability for the obligation to return cash collateral, or netting of the fair value liability recognized for a derivative instrument against the related asset for the right to reclaim cash collateral, in situations where the FIN 39 netting criteria are met. This FSP is effective on January 1, 2008, with early adoption permitted. The effect of adopting this FSP will be recorded as a change in accounting principle through retrospective application to all periods presented. We do not expect that the adoption of this standard will have a material effect on the Company’s consolidated financial position or results of operations.

53

BANK OF FLORIDA CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

December 31, 2007, 2006 and 2005

NOTE 2—INCOME PER COMMON AND COMMON EQUIVALENT SHARE

Components used in computing income per share are summarized as follows (In Thousands, except share data):

	For the three Years ended December 31,
	2007					2006					2005
	Net Income		Weighted Average Shares Outstanding	Income Per Share		Net Income		Weighted Average Shares Outstanding	Income Per Share		Net Income			Weighted Average Shares Outstanding	Income Per Share
Net income	$	2,743				$	2,319				$	4,883
Less preferred stock dividends and redemption premium		—					—					(274	)
Income available to common shareholders–basic		2,743	11,768,529	$	0.23		2,319	8,026,312	$	0.29		4,609		5,595,233	$	0.82
Dilutive effect of stock options outstanding			107,927		—			179,506		—				153,933		—
Dilutive effect of warrants outstanding			28,740		—			72,392		—				64,064		—
Income available to common shareholders–diluted	$	2,743	11,905,196	$	0.23	$	2,319	8,278,210	$	0.28	$	4,609		5,813,230	$	0.79

At December 31, 2007, there were 260,185 common stock options that were anti-dilutive and therefore not included in the above calculation.

NOTE 3—STOCK-BASED COMPENSATION

In 2000, the Company adopted the 1999 Stock Option Plan pursuant to which the Company’s Board of Directors may grant stock options to officers and key employees. The Plan, as amended at the 2005 Annual Shareholders meeting, authorized grants of options to purchase no less than 11.5% of outstanding shares. The 2006 Stock Compensation Plan (the Plan) authorized 12% of common shares issued after April 3, 2006 plus 58,154 shares which were available for grant under the prior plan and was approved by shareholders on June 8, 2006.

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

54

BANK OF FLORIDA CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

December 31, 2007, 2006 and 2005

NOTE 3—STOCK-BASED COMPENSATION (Continued)

The exercise price of the stock options may not be less than the fair market value of common stock on the date the option is granted. The Plan provides for the grant of options at the discretion of the Board of Directors or a committee designated by the Board of Directors to administer the Plan. Each stock option granted under the Plan has a maximum term of ten years subject to earlier termination in the event the participant ceases to be an employee. The committee shall determine the period during which stock options vest at the date of grant. The Plan will terminate on June 8, 2016. At December 31, 2007, there were 775,093 shares available for grant under the Plan.

In 2005, the Company’s Board of Directors approved the acceleration of vesting of virtually all outstanding stock options that existed as of December 14, 2005 (the “Acceleration”). Stock options’ totaling 222,064 and stock warrants totaling 83,010, which would otherwise have vested from time to time over the next five years, became immediately exercisable as a result of this action. As of December 31, 2005, only 10,551 stock options were not fully vested. The number of shares, exercise prices and remaining terms of the options and warrants remain unchanged. In accordance with SFAS 123, in 2005 the Company expensed the remaining unrecognized compensation cost associated with the options with accelerated vesting in the pro forma disclosure. These actions were taken in order to avoid expense recognition in future financial statements upon adoption of SFAS 123R.

The total fair value of shares vested and recognized as compensation expense was approximately $350,000 and $165,000 for the years ended December 31, 2007 and 2006, respectively. There was no associated tax benefit recognized in connection with these incentive stock options. The total intrinsic value of options exercised during the years ended December 31, 2007 and 2006 was $296,000 and $171,000, respectively. As of December 31, 2007 and 2006, the Company had 99,023 and 47,100 nonvested options outstanding and there was $935,000 and $498,000 of total unrecognized compensation cost related to these nonvested options, respectively. This cost is expected to be recognized monthly on a straight-line basis, over the vesting periods, through December 31, 2012.

The Company examined its historical pattern of option exercises in an effort to determine if there were any patterns based on certain employee populations. From this analysis, the Company could not identify any patterns in the exercise of options. As such, the Company used the guidance in Staff Accounting Bulletin No. 107 to determine the estimated life of options issued subsequent to the adoption of SFAS 123R. Based on this guidance, the estimated term was deemed to be the midpoint of the vesting term and the contractual term ((vesting term and original contractual term)/2). Expected volatility is based on historical volatility of the Company’s stock. The risk-free interest rates are based on U. S. Treasury notes in effect at the time of the grant. The dividend yield assumption is based on the Company’s history and expectation of dividends payments.

The per share weighted-average fair value of stock options granted during 2007, 2006 and 2005 was $11.18, $11.76, and $10.19, respectively, on the date of grant using the Black Scholes option-pricing model with the following weighted average assumptions:

	2007		2006		2005
Expected dividend yield	0.00	%	0.00	%	0.00	%
Expected volatility	48.03	%	47.61	%	40.00	%
Risk free interest rate	4.67	%	4.87	%	4.20	%
Expected life	7 years		7 years		7 years

55

BANK OF FLORIDA CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

December 31, 2007, 2006 and 2005

NOTE 3—STOCK-BASED COMPENSATION (Continued)

Stock option activity during the periods indicated was as follows (Dollars in Thousands, except per share data):

	OPTIONS OUTSTANDING		WEIGHTED AVERAGE EXERCISE PRICE PER SHARE		REMAINING CONTRACTUAL TERM	AGGREGATE INTRINSIC VALUE
Balance December 31, 2004	446,949		$	12.18
Granted	223,195			19.26
Exercised	(10,131	)		10.87
Forfeited	(4,824	)		12.76
Balance, December 31, 2005	655,189		$	14.61
Granted	39,499			20.92
Exercised	(21,841	)		12.95
Forfeited	(5,650	)		19.83
Balance December 31, 2006	667,197		$	15.40
Granted	90,150			19.22
Exercised	(65,437	)		13.06
Forfeited	(90,782	)		19.80
Balance, December 31, 2007	601,128		$	15.60	6.4 years	$	296
Exercisable, December 31, 2007	502,105		$	14.75	5.8 years	$	296

In connection with its initial offering of common stock, the Company granted to certain organizers of the Company warrants to purchase 113,330 shares of common stock at an exercise price of $10 per share. These warrants were fully vested as of December 31, 2005 and will expire on August 24, 2009.

In connection with the opening of Bank of Florida—Southeast, the Company granted to certain organizers warrants to purchase 78,526 shares of common stock at an exercise price of $10 per share. The warrants were vesting in equal increments of 20% commencing on the first anniversary of the date of grant (July 31, 2002) and on each anniversary date thereafter until fully vested. The vesting period on these warrants was accelerated in December 2005. Warrants may be exercised in whole or in part for $10 per share beginning on the one year anniversary of the date of grant and expired on July 31, 2007.

In connection with the opening of a branch of the Bank of Florida—Southeast, in the Palm Beach area of Florida, the Company granted to Advisory Board members warrants to purchase 40,000 shares of common stock at an exercise price of $12.50 per share. The warrants vest in equal increments of 20% commencing on the date operations commenced (October 4, 2004) and on each anniversary date thereafter until fully vested. Warrants may be exercised in whole or in part for $12.50 per share beginning on the commencement date and expiring October 4, 2009. Compensation expense totaling $38,000, $86,000 and $115,000 was recognized during 2007, 2006 and 2005, respectively, in connection with these warrants. In addition, compensation expense totaling $20,000, $40,000 and, $51,000 was recognized during 2007, 2006 and 2005, respectively, in connection with certain stock options which were also granted to these Advisory Board members during 2004.

As a result of the acquisition of Bank of Florida–Tampa Bay, the Company named certain individuals of an investor group as directors of Bank of Florida–Tampa Bay. These directors were awarded warrants to purchase 85,333 shares of common stock at an exercise price of $12.50. Twenty percent of the warrants became exercisable on the date that the bank opened for business (November 5, 2004), and twenty percent was scheduled to become exercisable on each of the four succeeding anniversaries of that date. The vesting period on these warrants was

56

BANK OF FLORIDA CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

December 31, 2007, 2006 and 2005

NOTE 3—STOCK-BASED COMPENSATION (Continued)

accelerated in December 2005. All of the warrants will expire on November 5, 2009. The Company may call the warrants if it or any of its subsidiaries is the subject of a formal capital call by a governmental agency. Compensation expense totaling $114,000 was recognized during 2005 in connection with these warrants. No compensation expense was incurred on these warrants in 2006.

At December 31, 2007 and December 31, 2006 warrants to purchase 146,731 and 241,879 common shares, respectively, at an average exercise price of $11.53 and $11.06, respectively, were outstanding. Of that amount, 131,531 and 226,679, respectively, were fully vested at December 31, 2007 and 2006, respectively. If, at any time, the holders of these warrants cease to serve as a director of the Company or a Company subsidiary, or an Advisory Board member, the warrants shall immediately expire. The following table summarizes information about the stock warrants outstanding for the periods indicated:

	WARRANTS OUTSTANDING		WEIGHTED AVERAGE EXERCISE PRICE PER SHARE
Balance December 31, 2004	303,856		$	11.03
Exercised	(15,666	)		10.00
Balance, December 31, 2005	288,190		$	11.09
Exercised	(46,311	)		11.24
Balance December 31, 2006	241,879		$	11.06
Exercised	(95,148	)		10.46
Balance December 31, 2007	146,731		$	11.53

NOTE 4—BUSINESS COMBINATIONS

On April 24, 2007, the Company completed the acquisition of Old Florida Bankshares, Inc., (“Old Florida”) in Fort Myers, Florida, by combining the operations of Old Florida’s subsidiary, Old Florida Bank with the Company’s wholly-owned subsidiary, Bank of Florida – Southwest. The acquisition of Old Florida meets one of our strategic objectives to expand into the adjacent Lee County marketplace. Old Florida shareholders were entitled to receive either 1.7915 shares of the Company’s common stock for each share of Old Florida held, $38.50 per share in cash, or a combination of stock and cash. The Company issued a total of 3,043,282 shares of common stock and cash consideration of approximately $16.3 million representing total consideration of $73.4 million. The Company recorded $52.2 million in intangible assets, of which $1.4 million was allocated to the core deposit intangible. This core deposit intangible is being amortized on a double declining balance basis over ten years. The remaining intangible of $50.8 million was allocated to goodwill.

57

BANK OF FLORIDA CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

December 31, 2007, 2006 and 2005

NOTE 4—BUSINESS COMBINATIONS (Continued)

On August 25, 2006, the Company completed the acquisition of Bristol Bank (“Bristol”) in Coral Gables, Florida, by merging Bristol into the Company’s wholly-owned subsidiary, Bank of Florida – Southeast. The acquisition of Bristol Bank provided the Company entry into the dynamic Coral Gables market. The Coral Gables/Miami-Dade County demographics are expected to compliment the Company’s premium private-banking brand and entrepreneurial business model. The Company issued a total of 688,218 shares of common stock and cash consideration of approximately $6.8 million representing total consideration of $21.6 million. The Company recorded $13.1 million in intangible assets, of which $1.7 million was allocated to the core deposit intangible. The principal factors considered when valuing the core deposit intangible related to all acquisitions consists of the following: (1) the rate and maturity structure of the interest bearing liabilities, (2) estimated retention rates for each deposit liability category, (3) the current interest rate environment and (4) estimated noninterest income potential of the acquired relationship. The core deposit intangible created is being amortized on a double declining balance basis over ten years. The remaining intangible of $11.4 million was allocated to goodwill. Subsequent to the initial recording of goodwill, there were $81,000 in adjustments.

The Company recorded acquired net assets of $73.4 million for Old Florida and $21.6 million for Bristol. The following table summarizes the fair values of the assets acquired and liabilities assumed at the date of acquisition, including adjustments (in thousands):

	Old Florida		Bristol Bank
Cash and due from banks	$	4,432	$	2,332
Securities		21,734		23,556
Federal funds sold		23,341		4,522
Net loans		210,527		60,016
Other assets		20,102		1,980
Goodwill		50,796		11,406
Core deposit intangible		1,400		1,732
Total assets acquired	$	332,332	$	105,544
Deposits		248,711		74,639
Federal Home Loan Bank advances		5,300		8,500
Other liabilities		4,905		876
Total liabilities assumed		258,916		84,015
Net assets acquired	$	73,416	$	21,529

58

BANK OF FLORIDA CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

December 31, 2007, 2006 and 2005

NOTE 4—BUSINESS COMBINATIONS (Continued)

A summary of changes in goodwill for the years ended December 31, 2007 and 2006 are as follows (in thousands):

	2007			2006
Beginning Balance	$	11,325		$	—
Acquired Goodwill, net		50,796			11,325
Adjustments to goodwill		81	*		—
Ending Balance	$	62,202		$	11,325

* The adjustments to goodwill recorded during 2007 consists primarily of contract termination costs.

The Company’s results of operations include the operations of Bristol and Old Florida since the acquisition date. The following table presents unaudited proforma results for the years ended December 31, 2007, 2006 and 2005. Since no consideration is given to operational efficiencies and expanded products and services, the proforma summary information does not necessarily reflect the results of operations as they would have been, if the acquisition had occurred on January 1, for the periods presented (In Thousands, except per share amount).

	2007			2006		2005
Total revenue	$	96,183		$	84,379	$	55,976
Net (loss) income	$	(4,747	)	$	4,210	$	7,352
Basic (loss) income per share	$	(0.37	)	$	0.36	$	0.79
Diluted (loss) income per share	$	(0.37	)	$	0.35	$	0.77

59

BANK OF FLORIDA CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

December 31, 2007, 2006 and 2005

NOTE 5—SECURITIES

The amortized cost, gross unrealized gains and losses and estimated fair value of securities available for sale shown in the consolidated balance sheets are as follows (In Thousands):

	Amortized Cost		Gross Unrealized					Estimated Fair Value
			Gains		Losses
At December 31, 2007
Available for sale securities:
Mortgage-backed securities	$	25,386	$	300	$	(56	)	$	25,630
U.S. Treasury securities and other U.S. agency obligations		9,042		32		(10	)		9,064
Total Securities available for sale	$	34,428	$	332	$	(66	)	$	34,694
Securities held to maturity-Other Bonds	$	3,312	$	14	$	(12	)	$	3,314
Total Securities	$	37,740	$	346	$	(78	)	$	38,008
	Amortized Cost		Gross Unrealized					Estimated Fair Value
			Gains		Losses
At December 31, 2006
Available for sale securities:
Mortgage-backed securities	$	27,415	$	378	$	(96	)	$	27,697
U.S. Treasury securities and other U.S. agency obligations		14,038		8		(120	)		13,926
Independent Bankers Bank stock		76		—		—			76
Total Securities available for sale	$	41,529	$	386	$	(216	)	$	41,699
Securities held to maturity-Other Bonds	$	25	$	—	$	—		$	25
Total Securities	$	41,554	$	386	$	(216	)	$	41,724

Proceeds from sales of securities available for sale for the year ended December 31, 2007 and 2006 totaled $16,142,000 and $22,299,000, respectively. There were no gains or losses recognized in connection with these sales. There were no sales of securities available for sale in 2005. There were securities pledged with a market value of $33,944,000 and $22,193,000 as collateral to the Federal Home Loan Bank as of December 31, 2007 and 2006, respectively. The Company did hold tax exempt securities and there were no investments in securities from a single issuer which exceeded ten percent of stockholders’ equity as of December 31, 2007 and 2006, respectively.

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

At December 31, 2007, there were twenty three out of thirty four securities at a loss position. The unrealized losses on investment securities available for sale were caused by interest rate changes. It is expected that the securities would not be settled at a price less than the par value of the investments. Because the decline in fair value is attributable to changes in interest rates and not credit quality, and because the Company has the ability and intent to hold these investments until a market price recovery or maturity, these investments are not considered other-than-temporarily impaired.

60

BANK OF FLORIDA CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

December 31, 2007, 2006 and 2005

NOTE 5—SECURITIES (Continued)

Information pertaining to securities with gross unrealized losses at December 31, 2007, aggregated by investment category and length of time that individual securities have been in a continuous loss position, is as follows (In Thousands):

	Less Than Twelve Months					Over Twelve Months
	Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value
	(In Thousands)
Securities available for sale:
Mortgage-backed securities	$	—		$	—	$	(56	)	$	2,965
U.S. Treasury securities and other U.S. agency obligations		—			—		(10	)		6,507
Total securities available for sale	$	—		$	—	$	(66	)	$	9,472
Securities held to maturity		(12	)		1,296		—			—
Total securities	$	(12	)	$	1,296	$	(66	)	$	9,472

Expected maturities of investment securities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Periodic payments are received of mortgage-backed securities based on the payment patterns of the underlying collateral. As of December 31, 2007, the amortized cost and estimated fair value of investment securities, by contractual maturities, are as follows (In Thousands):

	Amortized Cost		Fair Value		Average Yield
Securities available for sale:
Due less than one year	$	6,042	$	6,032	3.97	%
Due after one through five years		2,500		2,530	5.00	%
Due after five through ten years		475		475	4.74	%
Due after ten years		25		27	5.52	%
Subtotal		9,042		9,064
Mortgage-backed securities		25,386		25,630	5.76	%
Totals	$	34,428	$	34,694
	Amortized Cost		Fair Value		Average Yield
Securities held to maturity:
Due less than one year	$	—	$	—
Due after one through five years		500		500	4.02	%
Due after five through ten years		702		703	4.06	%
Due after ten years		1,798		1,799	4.14	%
Subtotal		3,000		3,002
Independent Bankers Bank and Silverton Bank Stock		312		312	—
Totals	$	3,312	$	3,314

61

BANK OF FLORIDA CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

December 31, 2007, 2006 and 2005

NOTE 6—LOANS HELD FOR INVESTMENT

The composition of the loan portfolio at December 31 is as follows (In Thousands):

	2007			2006
Real estate:
Commercial real estate	$	417,982		$	241,931
Land and construction		397,299			303,950
One-to-four family residential		139,986			93,298
Multi-family		31,195			26,530
Total Real Estate Loans	$	986,462		$	665,709
Commercial Loans		93,648			66,087
Lines of credit		43,416			39,127
Consumer loans		22,519			12,835
Total Gross loans held for investment		1,146,045			783,758
Less: allowance for loan losses		(14,431	)		(7,833	)
Less: deferred loan fees, net		(1,700	)		(1,251	)
Total loans held for investment, net	$	1,129,914		$	774,674

A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement. Specific impairment on loans in this category is calculated based on the present value of expected future cash flows discounted at the loan’s effective interest rate, or for collateral-dependent loans, at the fair value of the collateral. The following is a summary of information pertaining to impaired and non-accrual loans (In Thousands):

	2007		2006
Impaired loans without a valuation allowance	$	14,265	$	3,824
Impaired loans with a valuation allowance		17,202		2,606
Total impaired loans	$	31,467	$	6,430
Valuation allowance related to impaired loans	$	4,701	$	130
Total nonaccrual loans	$	13,752	$	213
Total foreclosed assets	$	1,350	$	—
Total loans ninety days or more past due and still accruing	$	440	$	462

	2007		2006		2005
Average investment in impaired loans	$	13,714	$	2,491	$	260
Interest income recognized on impaired loans	$	916	$	424	$	37
Income that would have been recognized on non-accrual loans in accordance with their original terms	$	840	$	3	$	18

There were no outstanding commitments to extend credit related to those loans in nonaccrual status or 90 days or more past due.

At December 31, 2007 the primary source of repayment with respect to $31.4 million of the impaired loans is sale of the related collateral or the conversion of the existing debt into debt at another financial institution. The majority of these loans are located in Lee and Collier counties Florida.

62

BANK OF FLORIDA CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

December 31, 2007, 2006 and 2005

NOTE 6—LOANS HELD FOR INVESTMENT (Continued)

With the uncertain real estate market in Collier and Lee counties, Florida obtaining refinancing or sale of the collateral may be difficult. It is likely many of these loans will be extended and may be modified. Management is closely monitoring these loans and believes the loan loss allowance related to these loans is adequate at December 31, 2007.

The activity in the allowance for loan losses for the years ended December 31 is as follows (In Thousands):

	2007			2006			2005
Balance at beginning of year	$	7,833		$	4,603		$	2,817
Reserves related to acquisition		2,745			586			—
Provision charged to operations		4,254			2,836			1,903
Charge-offs		(438	)		(204	)		(122	)
Recoveries		37			12			5
Balance at end of year	$	14,431		$	7,833		$	4,603

NOTE 7—PREMISES AND EQUIPMENT

Premises and equipment at December 31 consisted of the following (In Thousands):

	2007			2006
Land	$	6,820		$	545
Building		9,986			1,056
Leasehold improvements		7,443			3,540
Furniture, fixtures and equipment		4,524			3,085
EDP equipment and software		5,600			3,077
Construction in Progress		2,186			219
Total premises and equipment		36,559			11,522
Less: accumulated depreciation and amortization		(6,777	)		(4,218	)
Total premises and equipment, net	$	29,782		$	7,304

63

BANK OF FLORIDA CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

December 31, 2007, 2006 and 2005

NOTE 8—INCOME TAXES

The allocation of federal and state income taxes between current and deferred for the years ending December 31, 2007, 2006 and 2005 are as follows (In Thousands):

	2007			2006		2005
Current income taxes:
Federal	$	2,140		$	447	$	—
State		342			75		—
Total current	$	2,482		$	522	$	—
Deferred income taxes (benefit):
Federal	$	(552	)	$	930	$	(3,350	)
State		(95	)		159		(378	)
Total deferred	$	(647	)	$	1,089	$	(3,728	)
Total income taxes (benefit)	$	1,835		$	1,611		(3,728	)

At December 31, 2005, the Company assessed its earnings history and trend over the past year, its estimate of future earnings, and the expiration dates of the net operating loss carryforwards. Based upon that assessment, the Company reversed its valuation allowance on its deferred tax assets at December 31, 2005.

Income taxes (benefit) differs from the amount of income tax determined by applying the US federal income tax rate to pretax income for the years ended December 31, 2007, 2006 and 2005 due to the following (In Thousands):

	2007					2006					2005
Computed taxes, at statutory rate	$	1,557		34.0	%	$	1,336		34.0	%	$	393		34.0	%
Increase (decrease) in income taxes resulting from:
Valuation allowance on deferred tax asset		—		—	%		—		—	%		(4,157	)	(359.9	)%
State income taxes, net of Federal tax benefit		163		3.6	%		154		3.9			42		3.6	%
FAS 123R stock option expense		45		1.0	%		56		1.4	%		—		—
Non-deductible meals & entertainment		56		1.2	%		54		1.4	%		30		2.6	%
Tax exempt life insurance income		(45	)	(1.0	)%		(41	)	(1.0	)%		(40	)	(3.5	)%
Other disallowed expenses		59		1.3	%		52		1.3	%		4		0.4	%
Total income taxes (benefit)	$	1,835		40.1	%	$	1,611		41.0	%	$	(3,728	)	(322.8	)%

64

BANK OF FLORIDA CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

December 31, 2007, 2006 and 2005

NOTE 8—INCOME TAXES (Continued)

The components of deferred tax assets and deferred tax liabilities at December 31 are as follows (In Thousands):

Deferred tax assets:		2007			2006
Allowance for loan losses	$	5,248		$	2,927
Net operating loss carryforwards		2,393			1,098
Organizational and startup costs		84			91
Stock-based compensation		280			198
Loan Discount		967			—
Deferred Compensation		101			66
Other deferred tax assets		2			10
Alternative minimum tax credits		—			196
Deferred tax assets		9,075			4,586
Deferred tax liabilities:
Premises and equipment		(2,428	)		(143	)
Fair market value adjustments		(386	)		(771	)
Unrealized gain on securities available for sale		(101	)		(64	)
Unrealized gain on interest rate swap		(523	)		—
Other deferred tax liabilities		(30	)		(19	)
Deferred tax liabilities		(3,468	)		(997	)
Deferred tax assets, net	$	5,607		$	3,589

At December 31, 2007, the Company had Federal and State tax net operating loss carryforwards of approximately $6,400,000, which were obtained through the Bristol Bank and Old Florida Bank acquisitions, expiring during 2020 through 2026. These net operating loss carryforwards have an annual limitation of approximately $1.2 million and it is anticipated that they will be utilized in their entirety.

NOTE 9—GOODWILL AND OTHER INTANGIBLE ASSETS

Acquisition of Bristol Bank and Old Florida Bankshares Inc.

In connection with the acquisition of Bristol Bank, the Company recorded $11.4 million in goodwill and $1.7 million of core deposit intangible which is being amortized on a double declining balance basis over ten years. The estimated amortization expense for each of the five succeeding years ending December 31, 2012 is $242,000, $198,000, $162,000, $133,000, and $126,000, respectively. In connection with the acquisition of Old Florida, the Company recorded $50.8 million in goodwill and $1.4 million of core deposit intangible which is being amortized on a double declining balance basis over ten years. The estimated amortization expense for each of the five succeeding years ending December 31, 2012 is $224,000, $183,000, $149,000, $122,000, and $104,000 respectively.

Bank of Florida – Tampa Bay

On July 27, 2004, the Company acquired 100% ownership of Bank of Florida – Tampa Bay that had not yet been incorporated or commenced its planned principal operations. For this acquisition the Company paid $300,000 in cash to an investor group. The acquisition was consummated as a means for Bank of Florida Corporation to expand its business in Florida and provide traditional banking services in the Tampa Bay area.

65

BANK OF FLORIDA CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

December 31, 2007, 2006 and 2005

NOTE 9—GOODWILL AND OTHER INTANGIBLE ASSETS (Continued)

The Company does not believe this acquisition was a business combination pursuant to the provisions of SFAS No. 141, “Accounting for Business Combinations,” but rather an acquisition of net assets. Accordingly, the excess of fair value of the liabilities assumed over the fair value of the assets acquired of $974,000 was allocated to an amortizable identifiable intangible. This intangible is being amortized on a straight-line basis over 25 years. The estimated amortization expense for each of the five succeeding years ending December 31^st is $38,955 per year.

The changes in the carrying amount of other intangible assets for the year ended December 31, 2007 and 2006, respectively, are as follows (In Thousands):

	As of December 31, 2007							As of December 31, 2006
Identifiable intangible assets:	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Core Deposit Intangibles	$	3,132	$	(584	)	$	2,548	$	1,732	$	(112	)	$	1,620
Other Intangibles		974		(127	)		847		974		(88	)		886
Total	$	4,106	$	(711	)	$	3,395	$	2,706	$	(200	)	$	2,506

NOTE 10—DEPOSITS

Deposits at December 31 are comprised of the following (In Thousands):

	2007		2006
Interest-bearing:
Money market	$	364,985	$	279,411
NOW		59,367		46,898
Savings		6,124		4,016
Certificates of deposit:
Less than $100,000		100,642		72,039
$100,000 or more		302,315		198,803
Total interest-bearing deposits		833,433		601,167
Demand (noninterest bearing)		103,683		90,013
Total deposits	$	937,116	$	691,180

The maturities on all certificates of deposit as of December 31, 2007 for each of the five successive years are as follows (In Thousands):

2008	$	324,965
2009		44,953
2010		23,163
2011		5,709
2012		4,167
Total	$	402,957

66

BANK OF FLORIDA CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

December 31, 2007, 2006 and 2005

NOTE 10—DEPOSITS (Continued)

The following table indicates amounts outstanding of time certificates of deposit of $100,000 or more and their respective maturities as of December 31, 2007 (In Thousands):

		TIME CERTIFICATES OF DEPOSIT
Three months or less		$	102,053
Four – six months			74,129
Seven – 12 months			75,732
Over 12 months			50,401
	Total	$	302,315

Included in interest expense was $12,288,000, $3,689,000 and $1,927,000, which relates to interest on certificates of deposit of $100,000 or more for 2007, 2006 and 2005, respectively.

NOTE 11—SUBORDINATED DEBT

On October 7, 2005, Bank of Florida—Southeast, issued $3.0 million in subordinated debt with a maturity of December 15, 2015. Interest is payable quarterly in arrears, commencing December 15, 2005, at a rate of 1.9% over the quarterly adjustable three-month LIBOR rate. The interest rate at December 31, 2007 was 6.89%. Upon the occurrence and continuation of a Tax Event (a “Special Event”), Bank of Florida—Southeast may prepay the debt at its option (and with the approval of its regulators, if necessary), in whole or in part, without penalty, at par through December 15, 2010. After that date, Bank of Florida—Southeast may prepay the debt at its option (and with the approval of its regulators, if necessary), in whole or in part, without penalty, at par, irrespective of the occurrence of a “Special Event”. The subordinated debt issued qualifies as Tier II capital for regulatory risk-based capital guidelines for the Company and its Bank of Florida—Southeast subsidiary.

On September 30, 2005, Bank of Florida—Southeast, issued $3.0 million in subordinated debt with a maturity of December 15, 2011. Interest is payable quarterly in arrears, at a rate of two and one-half percent over the quarterly adjustable three-month LIBOR rate. The interest rate at December 31, 2007 was 7.49%. Bank of Florida—Southeast may prepay the debt at its option (and with the approval of its regulators, if necessary), in whole or in part, without penalty, at par after December 15, 2006. The subordinated debt issued qualifies as Tier II capital for regulatory risk-based capital guidelines for the Company and its Bank of Florida- Southeast subsidiary.

On August 5, 2005, Bank of Florida – Southwest issued $5.0 million in junior subordinated debt with a maturity of October 7, 2015. Interest is payable quarterly in arrears, commencing October 7, 2005, at a rate of two percent over the quarterly adjustable three-month LIBOR rate. The interest rate at December 31, 2007 was 7.24%. Upon the occurrence and continuation of a Tax Event (a “Special Event”), Bank of Florida – Southwest may prepay the debt at its option (and with the approval of its regulators, if necessary) in whole at a redemption price of 105% of par plus accrued interest during the first five years. The Bank will also have the right to repay this debt security at par, anytime on or after October 7, 2010. The subordinated debt issued qualifies as Tier II capital for regulatory risk-based capital guidelines for the Company and its Bank of Florida—Southwest subsidiary.

On April 24, 2007, Bank of Florida – Southwest acquired, from the Old Florida acquisition, $5.0 million in subordinated debt with a maturity of June 30, 2015. Interest is payable quarterly in arrears, beginning June 30, 2005, at a rate of 1.9% over the quarterly adjustable three-month LIBOR rate. The interest rate at December 31, 2007 was 6.73%. After June 30, 2010, the debt may be redeemed at the Bank’s option at any time. The subordinated debt issued qualifies as Tier II capital for regulatory risk-based capital guidelines for the Company and its Bank of Florida—Southwest subsidiary.

67

BANK OF FLORIDA CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

December 31, 2007, 2006 and 2005

NOTE 12—FEDERAL HOME LOAN BANK ADVANCES

Borrowings from the FHLB may be either on a fixed or variable rate basis. These borrowings are collateralized by $200.4 million in assets consisting of $33.9 million of investment securities and a blanket lien on one-to-four family residential loans, helocs/second mortgages, multifamily dwellings and commercial real estate as of December 31, 2007. At December 31, 2007 and 2006, the Company had an unused credit line with the FHLB of $90.7 million and $59.4 million, respectively. The following table provides the amount, interest rate and maturity of outstanding FHLB advances at December 31, 2007 and 2006, respectively (In Thousands):

	At December 31, 2007				At December 31, 2006
	Amount		Rate		Amount		Rate
Variable Rate, Daily maturity	$	54,800	4.56	%	$	3,000	5.49	%
Fixed Rate; Matures 1/22/2008		6,000	4.60			—	—
Fixed Rate; Matures 3/5/2008		5,000	5.05			—	—
Fixed Rate; Matures 6/24/2008		6,000	4.26			6,000	4.26
Variable Rate; Matures 5/14/20102		9,000	4.12			—	—
Variable Rate; Matures 6/1/2010		7,000	4.77			—	—
Variable Rate; Matures 7/19/20103		10,000	4.81			—	—
Fixed Rate; Matures 10/30/2011		290	1.50			—	—
Variable Rate; Matures 6/13/2011		—	—			25,000	5.87
Variable Rate; Matures 3/9/20124		10,000	4.29			—	—
Variable Rate; Matures 3/19/20125		10,000	4.29			—	—
Variable Rate; Matures 5/23/20126		5,000	4.61			—	—
Variable Rate; Matures 6/1/2012		7,000	4.56			—	—
Variable Rate; Matures 7/19/20127		10,000	4.78			—	—
Variable Rate; Matures 7/19/20122		5,000	4.63			—	—
Variable Rate; Matures 7/23/2012		—	—			3,500	4.85
Variable Rate; Matures 7/21/2015		—	—			5,000	4.13
Variable Rate; Matures 5/15/20178		5,000	4.09			—	—
Variable Rate; Matures 7/19/20172		5,000	4.41			—	—
Total FHLB Advances	$	155,090	4.50	%	$	42,500	5.33	%

² Advance includes a one time call option on May 14, 2008

³ Advance includes a one time call option on January 22, 2008

⁴ Advance includes a one time call option on March 10, 2008

⁵ Advance includes a one time call option on March 19, 2008

⁶ Advance includes a one time call option on May 23, 2008

⁷ Advance includes a one time call option on July 21, 2008

⁸ Advance includes a one time call option on February 15, 2008

68

BANK OF FLORIDA CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

December 31, 2007, 2006 and 2005

NOTE 13—DERIVATIVE FINANCIAL INSTRUMENTS

The Company utilizes certain derivative financial instruments. Stand alone derivative financial instruments such as interest-rate swaps, are used to economically hedge interest-rate risk related to the Company’s liabilities. These derivative instruments involve both credit and market risk. The notional amounts are amounts on which calculations, payments, and the value of the derivative are based. Notional amounts do not represent direct credit exposures. Direct credit exposure is limited to the net difference between the calculated amounts to be received and paid, if any. Such difference, which represents the fair value of the derivative instruments, is reflected on the Company’s consolidated balance sheet as either derivative assets, derivative liabilities or trading activities for stand alone derivative financial instruments.

The Company is exposed to credit related losses in the event of nonperformance by the counterparties to those agreements. The Company controls the credit risk of its financial contracts through credit approvals, limits and monitoring procedures, and does not expect any counterparties to fail their obligations.

Derivative instruments are generally either negotiated OTC contracts or standardized contracts executed on a recognized exchange. Negotiated OTC derivative contracts are generally entered into between two counterparties that negotiate specific agreement terms, including the underlying instrument, amount, exercise prices and maturity.

The Company entered into interest rate swaps which provided for the Company to receive payments at a fixed rate in exchange for paying a floating rate on certain loans. Management believes the entering into the interest rate swaps exposed the Company to variability in their fair value due to changes in the level of interest rates. Management believes that it is prudent to limit the variability in the fair value of a portion of its floating rate loan portfolio. It is the Company’s objective to hedge the change in fair value of floating rate loans at coverage levels that are appropriate, given anticipated or existing interest rate levels and other market considerations, as well as the relationship of change in this asset to other assets of the Company. To meet this objective, the Company utilizes interest rate swaps as an asset/liability management strategy to hedge the change in value of the cash flows due to changes in expected interest rate assumptions. These interest rate swap agreements are contracts to make a series of floating rate payments in exchange for receiving a series of fixed rate payments. The information pertaining to outstanding interest rate swap agreements used to hedge floating rate loans is as follows:

	December 31
	2007			2006
Notional amount	$	45,000,000		—
Pay rate (Prime)		7.25	%	—
Receive rate		7.51	%	—
Maturity in years		5
Unrealized gain relating to interest-rate swaps	$	1,393,000		—

These agreements provided for the Company to receive payments at a fixed-rate determined by a specified index (WSJ Prime) in exchange for making payments at a floating rate.

At December 31, 2007, the unrealized gain relating to the use of interest-rate swaps was recorded in derivate assets and liabilities in accordance with SFAS No. 133.

69

BANK OF FLORIDA CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

December 31, 2007, 2006 and 2005

NOTE 14—COMMITMENTS AND CONTINGENCIES

The Company has entered into operating lease agreements for certain bank offices, which expire on various dates through 2022. In addition, the Company has operating leases for office equipment, which expire on various dates through 2011. Certain of these leases require the payment of common area maintenance expenses and may also include renewal options. Rent expense was $3,682,000, $2,743,000 and $2,005,000 for 2007, 2006 and 2005, respectively.

Future minimum lease commitments, as of December 31, 2007 are as follows (In Thousands):

Year ending December 31st:
2008	$	4,351
2009		4,086
2010		3,768
2011		3,572
2012		3,224
Thereafter		17,567
Total minimum payments required	$	36,568

The Company entered into a Master Software License and Maintenance Agreement with Jack Henry and Associates (“Jack Henry”) for data processing services on March 16, 2007. This agreement has a six year term. Data Processing expense paid to Jack Henry was $403,000 for 2007.

The Company entered into a multi-bank service agreement with Computer Services, Inc. (“CSI”) for data processing services on October 15, 2004. This agreement had a five year expiration term with an automatic five year renewal options and was terminated in 3^rd quarter 2007. Data processing expense paid to CSI was $412,000, $475,000 and $345,000 for 2007, 2006 and 2005, respectively.

As of December 31, 2007, the Company had available $117.9 million in lines of credit with financial institutions, all of which are for variable rate borrowing. In addition, the Company’s banking subsidiaries are members of the Federal Home Loan Bank and, subject to certain collateral verification requirements, the Bank of Florida – Southwest may borrow up to 20%, while the Bank of Florida – Southeast and Bank of Florida – Tampa Bay each may borrow up to 10%, of their outstanding assets. Please refer to “Note-12 Federal Home Loan Bank Advances” of the “Notes to the Consolidated Financial Statements” for further information on these borrowings.

From time-to-time, we are involved in litigation arising in the ordinary course of our business. The Company believes that the ultimate aggregate liability represented thereby, if any, will not have a material adverse effect on our consolidated financial condition or results of operations.

NOTE 15—BENEFIT PLANS

The Company maintains a 401(k) Retirement Plan (the Plan) to which eligible employees may contribute a percentage of their pay. Currently the Company makes matching contributions to the Plan on behalf of eligible employees equal to 50% of the first 8% of the employees’ contributions. Employees who have completed at least three months of service and have attained age 21 are generally eligible to participate. The Company contributed to the Plan in the amounts of $454,000, 349,000 and $225,000 during 2007, 2006 and 2005, respectively. Employee contributions are 100% vested as amounts are credited to the employee’s account. Company contributions, if made, become 20% vested when an employee has completed 1 year of service, and vest at a rate of 20% per year thereafter, fully vesting when an employee has completed 5 years of service.

The Company has a supplemental executive retirement plan (the “Plan”) to provide supplemental income for certain key executives after their retirement. The Plan, which is unfunded, is structured such that each participant is scheduled to receive specified levels of salary continuation income after the retirement age of 65 for a

70

BANK OF FLORIDA CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

December 31, 2007, 2006 and 2005

NOTE 15—BENEFIT PLANS (Continued)

certain number of years. In the event a participant leaves the employment of the Company before retirement, only the benefits vested through that date would be paid to the employee. The Plan also provides for 100% vesting in the event of a change in Company ownership. The Company has approximately $268,000 and $176,000 accrued at December 31, 2007 and 2006, respectively, towards this plan, which is included in other liabilities in the accompanying consolidated balance sheets.

The Company also purchased bank-life insurance (“BOLI”) policies on these plan participants. The BOLI is recorded at the amounts to be realized under the insurance contract, which represents the amounts contributed to the cash surrender value of the policies. The Company recognizes revenue from the investment returns from the BOLI and compensation expense for the amounts accrued toward the participants’ retirement fund. Revenue earned from the BOLI amounted to $134,000, $121,000, and $107,000 during the years ended December 31, 2007, 2006, and 2005 respectively. Such revenue is included in other income in the accompanying consolidated statements of operations. The Company recognized net earnings of $41,000, $67,000 and $8,400, consisting of earnings on bank-owned life insurance policies, net of compensation expenses accrued in connection with the Plan during 2007, 2006 and 2005, respectively.

NOTE 16—RELATED PARTY TRANSACTIONS

The Banks have granted loans to executive officers and directors of the Banks, Bank of Florida Trust Company, and the Company and to associates of such executive officers and directors. Such loans were made in the ordinary course of business under normal credit terms and do not represent more than the normal risk of collection. The activity for these loans is as follows (In Thousands):

	2007			2006
Loan balances at beginning of year	$	35,873		$	22,933
New loans		13,955			11,297
Advances (Repayments), net		(8,075	)		1,643
Loan balances at end of year	$	41,753		$	35,873

The Banks also accept deposits from employees, officers and directors of the Banks and the Company and from affiliates of such officers and directors. The deposits are accepted on substantially the same terms as those of other depositors.

The Company engaged Centuric, LLC of Ft. Lauderdale, Florida, to manage the Information Technology functions of the Company and the Banks. This service primarily includes the purchase of computer hardware and software, telephones, network management services and disaster recovery. Ramon A. Rodriguez, a director of Bank of Florida Corporation, is a member of Centuric Group, LLC, the parent company of Centuric, LLC. Centuric, LLC is a consulting and outsourcing firm specializing in system integration, network management and security, disaster recovery and business contingency planning. The Company paid Centuric, LLC approximately $1,861,000, $1,077,000 and $632,000 in 2007, 2006, and 2005, respectively. Of the $1,861,000 and $1,077,000 paid to Centuric, LLC in 2007 and 2006, respectively, $871,800 and $549,000 was for the purchase of computer equipment and software, including set-up fees.

In 2002, the Company entered into a lease for a banking facility and office space located at 1185 Immokalee Road, Naples, Florida owned by Citizens Reserve, LLC. Citizens Reserve, LLC is principally owned by several directors of the Company. Monthly lease payments as of December 31, 2007 were $92,100. Total rent charged to operations under this lease was $1,100,000, $1,100,000 and $720,000 in 2007, 2006 and 2005, respectively. The lease term expires in 2012. Commitments under this lease agreement are included in NOTE 13.

71

BANK OF FLORIDA CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

December 31, 2007, 2006 and 2005

NOTE 16—RELATED PARTY TRANSACTIONS (Continued)

Bank of Florida – Southwest leases a banking facility in Bonita Springs, Florida from Brooks Landing, LLC. Brooks Landing, LLC is owned in part by directors Donald R. Barber, John B. James, and LaVonne Johnson. Monthly lease payments as of December 31, 2007 were $17,000. The lease will expire in 2021.

On September 22, 2006, Bank of Florida, Ft. Lauderdale signed a binding lease agreement for the new office facility in downtown Ft. Lauderdale. The lease commenced in November 2007 with 200 Brickell Associates, Ltd., of which Terry W. Stiles, a director of Bank of Florida Corporation, is a limited partner. The monthly lease payment as of December 2007 was $65,300.

Bank of Florida – Southeast engaged companies that had a relationship with Terry Stiles, Bank of Florida Corporation director, to buildout the new office facility in Downtown Ft. Lauderdale located at 200 SW 1^st Avenue in addition to the new Coral Ridge branch office located at 2521 East Commercial Boulevard. Bank of Florida paid the various companies $1.2 million for their services. These services were approved by the Board of Directors.

The Company engaged Boran, Craig, Barber and Engel Construction Company, Inc. to buildout the 3 ^rd floor of the Colliers Reserve facility located at 1185 Immokalee Road, Naples, Florida. Bank of Florida paid $1.2 million for the design, architecture, and general contracting service. This service was approved by the Board of Directors. Donald R. Barber, a director of Bank of Florida – Southwest, is a principal of the Boran, Craig, Barber and Engel Construction Company, Inc .

On June 1, 2006, Bank of Florida – Tampa Bay signed a sublease agreement with Medi-Weight Loss Clinics, whereby they would sublease space from Bank of Florida – Tampa Bay for a period of three years. The lease commenced on June 1, 2006. Edward Kaloust, a director of Bank of Florida Corporation, is a managing member of Medi-Weight Loss Clinics. The Company received $59,232 in sublease income during 2007.

NOTE 17—STOCKHOLDERS’ EQUITY

On April 26, 2005, the Company completed a private placement offering through Allen & Company LLC, selling 915,000 shares of common stock at $15.00 a share to accredited investors. The shares of the Company’s common stock issued in conjunction with the private placement offering were issued pursuant to exemptions from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), and are “restricted securities”. Such shares may not be offered or sold in the United States absent registration with the Securities and Exchange Commission under the Securities Act or an applicable exception there from. The Company agreed to file a registration statement covering the resale of the Company’s common stock within 60 days from the date of the closing, with the registration statement being declared effective no later than 210 days after the closing date. The Company received approximately $13.0 million in net proceeds. The registration was declared effective on September 13, 2005.

On May 23, 2005, certain holders of preferred stock, issued in March of 2004, elected to exchange the redemption value of their shares for common stock. The Company paid a premium on 25,090 shares of Series A Preferred Stock equal to $4 per share or $100,000. The resulting value, after payment of the premium, was exchanged for 165,354 shares of the Company’s common stock at $15.78 per share.

On June 30, 2005, the Company elected to redeem the remaining 12,258 shares of Series A Preferred Stock. The redemption price for the shares of Series A Preferred Stock was based on a declining premium scale. The redemption price at June 30^th was $104 per share, which included a premium of $49,000.

In May 2006, the Company completed its fifth and largest common stock raise, issuing 2.875 million shares at $21.50 per share, with net proceeds totaling $57.8 million. The Company used the proceeds from the secondary offering to finance the cash portion of our purchase of $93.0 million-asset Bristol Bank in August 2006 and support our continued rapid earning asset growth throughout South Florida and Tampa Bay.

72

BANK OF FLORIDA CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

December 31, 2007, 2006 and 2005

NOTE 18—REGULATORY MATTERS

All of the Banks are Florida-chartered banks and are regulated and supervised by the Florida Department of Financial Services (the “Department”). As Florida-chartered banks, they are also subject to Florida statutes regarding payment of dividends. Under the Florida Financial Institutions Code, the prior approval of the Department is required for dividend payments if the total of all dividends declared by a bank in any calendar year will exceed the sum of a bank’s net retained income (net income less any dividends paid) for that year and its retained income for the preceding two years.

The Company is subject to regulatory capital requirements administered by federal and state banking agencies. Capital adequacy guidelines and prompt corrective action regulations involve quantitative measures of assets, liabilities, and certain off-balance sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators about components, risk weightings, and other factors, and the regulator can lower classifications in certain cases. Failure to meet various capital requirements can initiate regulatory action that could have a direct material effect on the financial statements.

At December 31 actual capital levels and minimum required levels were as follows (In Thousands):

	Actual				Minimum Required For Capital Adequacy Purposes				Minimum Required To Be Well Capitalized Under Prompt Corrective Action Regulations
	Amount		Ratio		Amount		Ratio		Amount		Ratio
2007
Total capital (to risk weighted assets)
Consolidated	$	157,205	12.57	%	$	100,040	8.00	%	$	—	N/A
Bank of Florida – Southwest		70,364	11.37	%		49,506	8.00	%		61,883	10.00	%
Bank of Florida – Southeast		47,138	10.87	%		34,679	8.00	%		43,349	10.00	%
Bank of Florida – Tampa Bay		22,070	10.96	%		16,115	8.00	%		20,144	10.00	%
Tier 1 capital (to risk weighted assets)
Consolidated	$	126,774	10.14	%	$	50,020	4.00	%	$	—	N/A
Bank of Florida – Southwest		52,623	8.50	%		24,753	4.00	%		37,130	6.00	%
Bank of Florida – Southeast		36,743	8.48	%		17,340	4.00	%		26,009	6.00	%
Bank of Florida – Tampa Bay		20,221	10.04	%		8,058	4.00	%		12,086	6.00	%
Tier 1 leverage (to average assets) – leverage ratio
Consolidated	$	126,774	10.24	%	$	49,534	4.00	%	$	—	N/A
Bank of Florida – Southwest		52,623	8.48	%		24,835	4.00	%		31,044	5.00	%
Bank of Florida – Southeast		36,743	8.25	%		17,820	4.00	%		22,275	5.00	%
Bank of Florida – Tampa Bay		20,221	10.77	%		7,510	4.00	%		9,387	5.00	%
2006
Total capital (to risk weighted assets)
Consolidated	$	137,428	16.19	%	$	67,904	8.00	%	$	—	N/A
Bank of Florida – Southwest		39,795	10.60	%		30,026	8.00	%	$	37,533	10.00	%
Bank of Florida		36,485	10.60	%		27,540	8.00	%	$	34,425	10.00	%
Bank of Florida – Tampa Bay		18,881	14.34	%		10,535	8.00	%		13,169	10.00	%
Tier 1 capital (to risk weighted assets)
Consolidated	$	118,596	13.97	%	$	33,952	4.00	%	$	—	N/A
Bank of Florida – Southwest		31,331	8.35	%		15,013	4.00	%		22,520	6.00	%
Bank of Florida		27,342	7.94	%		13,770	4.00	%		20,655	6.00	%
Bank of Florida – Tampa Bay		17,656	13.41	%		5,268	4.00	%		7,901	6.00	%
Tier 1 capital (to average assets) – leverage ratio
Consolidated	$	118,596	13.95	%	$	34,014	4.00	%	$	—	N/A
Bank of Florida – Southwest		31,331	8.26	%		15,168	4.00	%		18,960	5.00	%
Bank of Florida		27,342	7.48	%		14,620	4.00	%		18,276	5.00	%
Bank of Florida – Tampa Bay		17,656	15.27	%		4,625	4.00	%		5,782	5.00	%

73

BANK OF FLORIDA CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

December 31, 2007, 2006 and 2005

NOTE 18—REGULATORY MATTERS (Continued)

The prompt corrective action regulations provide five classifications, including well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized, although these terms are not used to represent overall financial condition. If adequately capitalized, regulatory approval is required to accept brokered deposits. If undercapitalized, capital distributions are limited, as is asset growth and expansion, and plans for capital restoration are required.

The Company was considered well capitalized as of December 31, 2007 and 2006. Management is not aware of any events or circumstances that have occurred since December 31, 2007 that would change the Company’s capital category.

NOTE 19—OFF-BALANCE SHEET FINANCIAL INSTRUMENTS

In the normal course of business, the Company uses various financial instruments with off-balance sheet risk to meet the financing needs of its customers. These instruments include commitments to extend credit through loans approved but not yet funded, lines of credit and standby letters of credit. The credit risks associated with financial instruments are generally managed in conjunction with the Companys’ balance sheet activities and are subject to normal credit policies, financial controls and risk limiting and monitoring procedures.

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 many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. In addition, large portions of the commitments are scheduled to be participated to other financial institutions. The Company evaluates each customer’s creditworthiness 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. Collateral held varies but may include compensating balances, accounts receivable, inventory, property, plant and equipment and income-producing commercial properties.

Standby letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. Those guarantees are primarily issued to support public and private borrowing arrangements, including commercial paper, bond financing and similar transactions. Most guarantees expire within one year. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. Credit losses are incurred when one of the parties fails to perform in accordance with the terms of the contract. At December 31, 2007, these standby letters of credit are secured by real estate with a fair value of $1,100,000, Lines of Credit totaling $122,900 and $868,900 in DDA and Certificates of Deposits maintained by the Company.

The Companys’ exposure to off-balance sheet financial risk is represented by the contractual amount of the commitments to extend credit and standby letters of credit. At December 31, 2007 and 2006, the following financial instruments were outstanding whose contract amounts represent credit risk (In Thousands):

	Contract Amount
	2007		2006
Unfunded commitments under lines of credit	$	224,279	$	215,912
Standby letters of credit		2,845		4,404
Commitments to extend credit		44,587		41,851

74

BANK OF FLORIDA CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

December 31, 2007, 2006 and 2005

NOTE 19—OFF-BALANCE SHEET FINANCIAL INSTRUMENTS (Continued)

The Company does not currently have any financial guarantees which must be disclosed pursuant to the requirements of FASB Interpretation No. 45, Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others.

NOTE 20—FAIR VALUES OF FINANCIAL INSTRUMENTS

The fair value estimates are presented for financial instruments without attempting to estimate the value of the Banks’ long-term relationships with depositors and the benefit that results from low cost funding provided by deposit liabilities. In addition, significant assets which are not considered financial instruments and are, therefore, not a part of the fair value estimates include office properties and equipment.

The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value:

Cash and cash equivalents: For these short-term instruments, the carrying amount is a reasonable estimate of fair value.

Securities: For securities held to maturity, fair value equals the carrying amount. For securities available for sale, fair value equals quoted market price, if available. If a quoted market price is not available, fair value is estimated using quoted market prices for similar securities.

Restricted securities: The carrying value of Federal Home Loan Bank and Federal Reserve Bank Stock approximates its fair value since it is restricted stock and would only be sold to the Federal Home Loan Bank at cost.

Interest Rate Swap: The interest rate swap is recognized on the consolidated balance sheet at fair value. Fair value is based on quoted market prices.

Deposits: The fair value of demand deposits, savings accounts and certain money market deposits is the amount payable on demand at the reporting date. The fair value of fixed-maturity deposits is estimated by discounting future cash flows using rates currently offered for deposits of similar remaining maturities. The fair value estimates do not include the benefits that result from low-cost funding provided by the deposit liabilities compared to the cost of alternate sources of funds.

Subordinated debt: The fair value of this variable rate subordinated debt is estimated by discounting future cash flows using rates currently offered for instruments of similar remaining maturities.

Federal Home Loan Bank Advances: The fair value for Federal Home Loan Bank Advances are estimated by discounting future cash flows using rates currently offered for instruments of similar remaining maturities.

Accrued interest: The carrying amounts of accrued interest receivable and accrued interest payable approximate their fair values.

Off-balance sheet instruments: The fair values for off-balance sheet, credit-related financial instruments 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 fair value of these financial instruments is not significant.

75

BANK OF FLORIDA CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

December 31, 2007, 2006 and 2005

NOTE 20—FAIR VALUES OF FINANCIAL INSTRUMENTS (Cont’d)

The following tables present the estimates of fair value of financial instruments as of December 31(In Thousands):

	2007
	CARRYING AMOUNT		ESTIMATED FAIR VALUE
Financial assets:
Cash and cash equivalents	$	17,388	$	17,388
Securities held to maturity		3,314		3,314
Securities available for sale		34,694		34,694
Loans held for sale		417		417
Net loans held for investment		1,129,914		1,176,802
Restricted Securities		9,117		9,117
Accrued interest receivable		5,564		5,565
Interest rate swap		1,394		1,394
Financial liabilities:
Deposits		937,116		950,546
Subordinated debt		16,000		16,000
Federal Home Loan Bank advances		155,090		157,436
Accrued interest payable		1,761		1,761
Off-balance sheet financial instruments, other than interest-rate swap		—		—

	2006
	CARRYING AMOUNT		ESTIMATED FAIR VALUE
Financial assets:
Cash and cash equivalents	$	27,744	$	27,744
Securities held to maturity		25		25
Securities available for sale		41,699		41,699
Loans held for sale		1,103		1,103
Net loans held for investment		774,674		772,785
Restricted securities		3,319		3,319
Accrued interest receivable		4,416		4,416
Financial liabilities:
Deposits		691,180		738,725
Subordinated debt		11,000		11,000
Federal Home Loan Bank advances		42,500		42,578
Accrued interest payable		972		972
Off-balance-sheet financial instruments		—		—

76

BANK OF FLORIDA CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

December 31, 2007 and 2006

NOTE 21—CONDENSED FINANCIAL INFORMATION

The condensed financial information of Bank of Florida Corporation (parent company only) as of December 31, 2007 and 2006, and for the years ended December 31, 2007 and 2006, is as follows (In Thousands):

BALANCE SHEETS

	December 31
	2007			2006
Assets:
Investment in and indebtedness of subsidiaries	$	183,908		$	96,096
Cash and due from banks		7,014			38,030
Premises and equipment		6,442			795
Other assets		2,316			1,280
TOTAL ASSETS	$	199,680		$	136,201
Liabilities:
Accrued expenses and other liabilities	$	749		$	696
Stockholders’ equity:
Preferred stock					—
Common stock		128			96
Additional paid-in capital		199,576			139,854
Accumulated deficit		(1,808	)		(4,551	)
Accumulated other comprehensive income		1,035			106
TOTAL STOCKHOLDERS’ EQUITY		198,931			135,505
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	199,680		$	136,201

STATEMENTS OF OPERATIONS AND ACCUMULATED DEFICIT

	2007			2006			2005
Income:
Interest on investment securities and other	$	527		$	736		$	17
Loss on sale of assets		(32	)		—			—
Holding Company service fee income		6,837			5,199			3,183
TOTAL INCOME		7,332			5,935			3,200
Expenses:
Salaries and employee benefits		6,497			5,933			3,926
Occupancy		1,504			1,162			753
General operating		3,104			2,309			1,642
TOTAL EXPENSES		11,105			9,404			6,321
(Loss) from operations before income tax benefit and equity in undistributed net income of subsidiaries		(3,773	)		(3,469	)		(3,121	)
Income tax benefit		(1,348	)		(1,208	)		(974	)
(Loss) before equity in undistributed net income of subsidiaries		(2,425	)		(2,261	)		(2,147	)
Equity in undistributed net income of subsidiaries		5,168			4,580			7,030
NET INCOME		2,743			2,319			4,883
Accumulated deficit:
Preferred stock dividends		—			—			(125	)
Premiums paid on redemption/conversion of Preferred stock		—			—			(149	)
Beginning of year		(4,551	)		(6,870	)		(11,479	)
End of year	$	(1,808	)	$	(4,551	)	$	(6,870	)

77

BANK OF FLORIDA CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

December 31, 2007, 2006 and 2005

NOTE 21—CONDENSED FINANCIAL INFORMATION (continued)

STATEMENTS OF CASH FLOWS

	2007			2006			2005
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	2,743		$	2,319		$	4,883
Adjustments to reconcile net income to net cash used in operating activities:
Equity in undistributed net income of subsidiaries		(5,168	)		(4,580	)		(7,030	)
Depreciation and amortization		510			241			179
Stock compensation expense		350			291			280
(Increase) Decrease in other assets		(91	)		46			(1,055	)
Increase in accrued expenses and other liabilities		53			401			200
NET CASH USED IN OPERATING ACTIVITIES		(1,603	)		(1,282	)		(2,543	)
CASH FLOWS FROM INVESTING ACTIVITIES
Investment in subsidiary banks		(25,168	)		(23,018	)		(6,324	)
Purchase of premises and equipment		(6,157	)		(489	)		(270	)
NET CASH USED IN INVESTING ACTIVITIES		(31,325	)		(23,507	)		(6,594	)
CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from issuance of common stock		—			58,647			13,265
Tax benefit from stock options exercised		397			—			—
Exercise of stock options		1,515			—			—
Redemption of Series A preferred stock		—			—			(1,275	)
NET CASH PROVIDED BY FINANCING ACTIVITIES		1,912			58,647			11,990
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS		(31,016	)		33,858			2,853
Cash and cash equivalents:
Beginning of year		38,030			4,172			1,319
End of year	$	7,014		$	38,030		$	4,172

78

SIGNATURES

Pursuant to the requirements of Section 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	BANK OF FLORIDA CORPORATION
Date: March 3, 2008	By:	/s/ Michael L. McMullan
		Michael L. McMullan
		Principal Executive Officer
Date: March 3, 2008	By:	/s/ Tracy L. Keegan
		Tracy Keegan
		Principal Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this Form 10-K has been signed by the following persons in the capacities and as of the dates indicated:

Signature	Title	Date
/s/ Michael L. McMullan	President, Chief Executive Officer, Director	March 3, 2008
Michael L. McMullan
/s/ Donald R . Barber	Director	March 3, 2008
Donald R. Barber
/s/ Joe B. Cox	Director	March 3, 2008
Joe B. Cox
/s/ H. Wayne Huizenga Jr.	Director	March 3, 2008
H. Wayne Huizenga, Jr.
/s/ John B. James	Director	March 3, 2008
John B. James
/s/ Edward. Kaloust	Director	March 3, 2008
Edward Kaloust
/s/ LaVonne Johnson	Director	March 3, 2008
LaVonne Johnson
/s/ Harry K. Moon	Director	March 3, 2008
Harry K. Moon, MD
/s/ Pierce T. Neese	Director	March 3, 2008
Pierce Neese

79

Signature	Title	Date
/s/ Michael T. Putziger	Director	March 3, 2008
Michael T. Putziger
/s/ Ramon Rodriguez	Director	March 3, 2008
Ramon A. Rodriguez
/s/ Terry W. Stiles	Director	March 3, 2008
Terry W. Stiles

80

EX-10.12

Exhibit 10.12

BANK OF FLORIDA CORPORATION

PLAN B

CHANGE IN CONTROL AGREEMENT

THIS CHANGE IN CONTROL AGREEMENT (“Agreement”) is entered into by and between Bank of Florida Corporation (“Employer”) and John S. Chaperon (“Employee”).

WHEREAS, in recognition of Employee’s prior and continuing contribution to Employer and its subsidiaries, Employer wishes to protect Employee’s position therewith in the manner provided in the Agreement in the event of a Change in Control of the Employer.

NOW, THEREFORE, in consideration of Employee’s management position, contribution, and responsibilities, Employer hereby agrees to provide Employee with certain severance benefits as specifically provided herein.

SECTION 1 – DEFINITIONS

(a) “Change in Control” means an event where any Person (defined herein to mean any natural person, corporation, limited liability company, partnership, or any other similar business entity), other than any Person who on the date hereof is a director or officer of Employer: (i) directly or indirectly, or acting in concert through one or more other persons, owns, controls, or has power to vote 50% or more of any class of the then outstanding voting securities of Employer; or (ii) controls in any manner the election of a majority of the directors of Employer. For purposes of this Agreement, a “Change in Control” shall be deemed not to have occurred in connection with a reorganization, consolidation, or merger of Employer whereby the stockholders of Employer, immediately before the consummation of the transaction, will own over 50% of the total combined voting power of all classes of stock entitled to vote of the surviving entity immediately after the transaction.

(b) Termination for “just cause” means termination because of Employee’s personal dishonesty, incompetence, insubordination, misconduct or conduct which negatively reflects upon the Employer, breach of fiduciary duty, intentional failure to perform stated duties, willful violation of any law, rule, or regulation (other than minor traffic violations or similar offenses), or final cease-and desist order. In determining “incompetence,” the acts or omissions shall be measured against standards generally prevailing in the financial institution industry. No act, or failure to act on Employee’s part, shall be considered “willful” unless done, or omitted to be done, by Employee not in good faith and without reasonable belief that Employee’s action or omission was in the best interest of Employer; provided that any act or omission to act on Employee’s behalf in reliance upon advice or written opinion of Employer’s counsel shall not be deemed to be willful.

(c) “Protected Period” means the term of this Agreement and six months following termination hereof if Employee is employed by Employer at the time Employee first learns of a potential Change in Control, which is in fact later consummated.

1

SECTION 2 – TERM OF AGREEMENT

This Agreement shall remain in effect for two years commencing on January 1, 2008, and terminating on December 31, 2009, unless extended or terminated in accordance with the terms and conditions set forth in Section 8 herein.

SECTION 3 – PAYMENTS TO EMPLOYEE UPON CHANGE IN CONTROL

If Employer terminates Employee’s employment without “just cause,” Employee shall be entitled to receive the termination benefits described in Section 4 herein, if a Change in Control also occurs or has occurred within the Protected Period. Due to Employee’s tenure, performance, and experience with the Employer, Employee shall also be entitled to receive such termination benefits described in Section 4 herein, if within six months of a Change in Control, Employee elects to terminate his or her employment for any reason.

SECTION 4 – TERMINATION BENEFITS

(a) Upon a termination described in Section 3, Employer or its successor(s) shall pay Employee, or in the event of Employee’s subsequent death, Employee’s estate, as severance pay, a sum equal to two and one-half years of Employee’s “highest annual base salary.” For purposes of this Agreement, Employee’s “highest annual base salary” shall mean the Employee’s highest base salary during the three years immediately preceding Employee’s termination. Such payment shall be made in one lump sum payment within ten business days of such a termination of employment.

(b) Upon a termination described in Section 3, Employer or its successor(s) shall continue to provide life, health, and disability coverage (“Coverage”) comparable to the coverage maintained by Employer for Employee prior to Employee’s severance. Such Coverage shall cease upon the earlier of Employee obtaining new employment at which the Employee is entitled to receive comparable Coverage, or six months from the date of Employee’s termination.

SECTION 5 – SUSPENSION OF OBLIGATIONS

(a) If Employee is suspended from office and/or temporarily prohibited from participating in the conduct of Employer’s affairs pursuant to an action brought by the Florida Office of Financial Regulation, Board of Governors of the Federal Reserve, or the Federal Deposit Insurance Corporation, or any other regulatory agency that has supervisory authority over the Employer (any and all referred to herein as “Regulatory Agency”), Employer’s obligations under this Agreement shall be suspended as of the date of such action. The obligations of this Agreement shall be reinstated if the charges of the Regulatory Agency are subsequently dismissed, or if the Employee is otherwise determined to be not guilty of such charges.

(b) If Employee is removed from office and/or permanently prohibited from participating in the conduct or affairs of Employer by a final order resulting from an action brought by a Regulatory Agency, all obligations of Employer under this Agreement shall terminate as of the effective date of such order.

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SECTION 6 – NOTICE OF TERMINATION

Any purported termination by Employer or by Employee shall be communicated by a Notice of Termination to the other party hereto. For purposes of this Agreement, a “Notice of Termination” shall mean a written notice which shall indicate the specific termination provision in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Employee’s employment under the provision so indicated.

SECTION 7 – AGREEMENT NOT TO COMPETE

(a) In consideration of the benefits and protections provided under this Agreement, Employee agrees that while currently employed by Employer, and for a period of twelve months following the termination of Employee’s employment for any reason, other than a termination that would entitle Employee to receive the severance benefits described in Section 4, Employee shall not become employed, directly or indirectly, whether as an employee, independent contractor, consultant, or otherwise, with any federally-insured financial institution, financial holding company, bank holding company, or other financial services provider located in any of the Florida counties in which Employer or one of its subsidiaries has an office that offers similar products or services as those offered by the Employer, or with any person or entity whose intent it is to organize another such company or entity located in any of the Florida counties in which Employer or one of its subsidiaries has an office.

(b) Employee further agrees that for a period of twelve months following the termination of Employee’s employment hereunder for any reason, Employee shall not, directly or indirectly: (i) solicit the business of any then current customer (e.g., borrower or depositor) of the Employer, its successor, or its subsidiaries, regardless of whether or not Employee was responsible for generating such customer’s business; or (ii) solicit any employees of Employer, its successor, or its subsidiaries.

(c) Employee hereby agrees that the durations of the anti-competitive covenants set forth herein are reasonable, and that the geographic scope is not unduly restrictive.

(d) The parties acknowledge and agree that money damages cannot fully compensate Employer in the event of Employee’s violation of the provisions of this Section 7. Thus, in the event of a breach of any of the provisions of this Section 7, Employee agrees that Employer, upon application to a court of competent jurisdiction, shall be entitled to an injunction restraining Employee from any further breach of the terms and provisions of this Section 7. Employee’s sole remedy, in the event of the wrongful entry of such injunction, shall be the dissolution of such injunction and any costs as provided for in Section 10 herein. Employee hereby waives any and all claims for damages by reason of the wrongful issuance of any such injunction.

SECTION 8 – MODIFICATION AND WAIVER

(a) This Agreement may not be modified or amended except as agreed to in writing by the parties hereto.

(b) No term or condition of this Agreement shall be deemed to have been waived, nor shall there be any estoppels against the enforcement of any provision of this Agreement, except

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by written instrument of the party charged with such waiver or estoppel. No such written waiver shall be deemed a continuing waiver unless specifically stated therein, and each such waiver shall operate only as to the specific term or condition waived and shall not constitute a waiver of such term or condition in the future, or as to any act other than that specifically waived.

SECTION 9 – ARBITRATION

The parties agree that, except for the specific remedies for injunctive relief as contained in Section 7, any controversy or claim arising out of or relating to this Agreement or any breach hereof, including, without limitation, any claim that this Agreement or any portion hereof is invalid, illegal, or otherwise voidable, shall be submitted to binding arbitration before and in accordance with the rules of the American Arbitration Association and judgment upon the determination and/or award of such arbitrator(s) may be entered in any court having jurisdiction thereof. Provided, however, that this Section shall not be construed to permit the award of punitive damages to either party. The venue of any arbitration shall be in Collier County, Florida.

SECTION 10 – ATTORNEYS’ FEES

In the event of any proceeding occurring out of or involving this Agreement, the prevailing party shall be entitled to the recovery of reasonable attorneys’ fees, expenses, and costs, including fees and costs to enforce an award.

SECTION 11 – SEVERABILITY

The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect.

SECTION 12– HEADINGS FOR REFERENCE ONLY

The headings of the Sections herein are included solely for convenient reference and shall not control the meaning or the interpretation of any of the provisions of this Agreement.

SECTION 13 – APPLICABLE LAW AND VENUE

This Agreement shall be governed in all respects and shall be interpreted by and under the laws of the State of Florida. Any litigation regarding this Agreement shall be brought in the appropriate court in Collier County, Florida.

SECTION 14 – SUCCESSORS

Employer shall require any successor to the business and/or assets of Employer in connection with a Change in Control to assume and agree to perform its obligations under this Agreement in writing.

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SECTION 15 – NO CONTRACT OF EMPLOYMENT

This Agreement shall not, under any circumstances, be deemed to constitute an employment contract between Employer and Employee or to be in consideration of or an inducement for the continued employment of Employee. Nothing contained in this Agreement shall be deemed to give Employee the right to be retained in the service of Employer, or to interfere with the right of Employer to discharge Employee at any time.

SECTION 16 – LIMITATION OF RIGHTS

Neither this Agreement, nor any amendment hereof, nor the payment of any benefits hereunder shall be construed as giving Employee or any other person any legal or equitable right against Employer except as expressly provided herein.

SECTION 17 – AMENDMENT & RESTATEMENT

This Agreement amends and completely restates any other employment related agreements by and between Employee and Employer. By executing this Agreement, Employee completely releases Employer and all of its subsidiaries from any obligations that may have existed under any such other agreements.

IN WITNESS WHEREOF, Employer has duly executed this Agreement this 1^st day of January, 2008.

EMPLOYEE	BANK OF FLORIDA CORPORATION
/s/ John S. Chaperon	By:	/s/ Harry K. Moon, M.D.
John S. Chaperon		Harry K. Moon, M.D.,
		Chairman of the Compensation Committee

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EX-10.18

Exhibit 10.18

BANK OF FLORIDA CORPORATION

PLAN B

CHANGE IN CONTROL AGREEMENT

THIS CHANGE IN CONTROL AGREEMENT (“Agreement”) is entered into by and between Bank of Florida Corporation (“Employer”) and Tracy L. Keegan (“Employee”).

WHEREAS, in recognition of Employee’s prior and continuing contribution to Employer and its subsidiaries, Employer wishes to protect Employee’s position therewith in the manner provided in the Agreement in the event of a Change in Control of the Employer.

NOW, THEREFORE, in consideration of Employee’s management position, contribution, and responsibilities, Employer hereby agrees to provide Employee with certain severance benefits as specifically provided herein.

SECTION 1 – DEFINITIONS

(a) “Change in Control” means an event where any Person (defined herein to mean any natural person, corporation, limited liability company, partnership, or any other similar business entity), other than any Person who on the date hereof is a director or officer of Employer: (i) directly or indirectly, or acting in concert through one or more other persons, owns, controls, or has power to vote 50% or more of any class of the then outstanding voting securities of Employer; or (ii) controls in any manner the election of a majority of the directors of Employer. For purposes of this Agreement, a “Change in Control” shall be deemed not to have occurred in connection with a reorganization, consolidation, or merger of Employer whereby the stockholders of Employer, immediately before the consummation of the transaction, will own over 50% of the total combined voting power of all classes of stock entitled to vote of the surviving entity immediately after the transaction.

(b) Termination for “just cause” means termination because of Employee’s personal dishonesty, incompetence, insubordination, misconduct or conduct which negatively reflects upon the Employer, breach of fiduciary duty, intentional failure to perform stated duties, willful violation of any law, rule, or regulation (other than minor traffic violations or similar offenses), or final cease-and desist order. In determining “incompetence,” the acts or omissions shall be measured against standards generally prevailing in the financial institution industry. No act, or failure to act on Employee’s part, shall be considered “willful” unless done, or omitted to be done, by Employee not in good faith and without reasonable belief that Employee’s action or omission was in the best interest of Employer; provided that any act or omission to act on Employee’s behalf in reliance upon advice or written opinion of Employer’s counsel shall not be deemed to be willful.

(c) “Protected Period” means the term of this Agreement and six months following termination hereof if Employee is employed by Employer at the time Employee first learns of a potential Change in Control, which is in fact later consummated.

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SECTION 2 – TERM OF AGREEMENT

This Agreement shall remain in effect for two years commencing on January 1, 2008, and terminating on December 31, 2009, unless extended or terminated in accordance with the terms and conditions set forth in Section 8 herein.

SECTION 3 – PAYMENTS TO EMPLOYEE UPON CHANGE IN CONTROL

If Employer terminates Employee’s employment without “just cause,” Employee shall be entitled to receive the termination benefits described in Section 4 herein, if a Change in Control also occurs or has occurred within the Protected Period. Due to Employee’s tenure, performance, and experience with the Employer, Employee shall also be entitled to receive such termination benefits described in Section 4 herein, if within six months of a Change in Control, Employee elects to terminate his or her employment for any reason.

SECTION 4 – TERMINATION BENEFITS

(a) Upon a termination described in Section 3, Employer or its successor(s) shall pay Employee, or in the event of Employee’s subsequent death, Employee’s estate, as severance pay, a sum equal to two and one-half years of Employee’s “highest annual base salary.” For purposes of this Agreement, Employee’s “highest annual base salary” shall mean the Employee’s highest base salary during the three years immediately preceding Employee’s termination. Such payment shall be made in one lump sum payment within ten business days of such a termination of employment.

(b) Upon a termination described in Section 3, Employer or its successor(s) shall continue to provide life, health, and disability coverage (“Coverage”) comparable to the coverage maintained by Employer for Employee prior to Employee’s severance. Such Coverage shall cease upon the earlier of Employee obtaining new employment at which the Employee is entitled to receive comparable Coverage, or six months from the date of Employee’s termination.

SECTION 5 – SUSPENSION OF OBLIGATIONS

(a) If Employee is suspended from office and/or temporarily prohibited from participating in the conduct of Employer’s affairs pursuant to an action brought by the Florida Office of Financial Regulation, Board of Governors of the Federal Reserve, or the Federal Deposit Insurance Corporation, or any other regulatory agency that has supervisory authority over the Employer (any and all referred to herein as “Regulatory Agency”), Employer’s obligations under this Agreement shall be suspended as of the date of such action. The obligations of this Agreement shall be reinstated if the charges of the Regulatory Agency are subsequently dismissed, or if the Employee is otherwise determined to be not guilty of such charges.

(b) If Employee is removed from office and/or permanently prohibited from participating in the conduct or affairs of Employer by a final order resulting from an action brought by a Regulatory Agency, all obligations of Employer under this Agreement shall terminate as of the effective date of such order.

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SECTION 6 – NOTICE OF TERMINATION

Any purported termination by Employer or by Employee shall be communicated by a Notice of Termination to the other party hereto. For purposes of this Agreement, a “Notice of Termination” shall mean a written notice which shall indicate the specific termination provision in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Employee’s employment under the provision so indicated.

SECTION 7 – AGREEMENT NOT TO COMPETE

(a) In consideration of the benefits and protections provided under this Agreement, Employee agrees that while currently employed by Employer, and for a period of twelve months following the termination of Employee’s employment for any reason, other than a termination that would entitle Employee to receive the severance benefits described in Section 4, Employee shall not become employed, directly or indirectly, whether as an employee, independent contractor, consultant, or otherwise, with any federally-insured financial institution, financial holding company, bank holding company, or other financial services provider located in any of the Florida counties in which Employer or one of its subsidiaries has an office that offers similar products or services as those offered by the Employer, or with any person or entity whose intent it is to organize another such company or entity located in any of the Florida counties in which Employer or one of its subsidiaries has an office.

(b) Employee further agrees that for a period of twelve months following the termination of Employee’s employment hereunder for any reason, Employee shall not, directly or indirectly: (i) solicit the business of any then current customer (e.g., borrower or depositor) of the Employer, its successor, or its subsidiaries, regardless of whether or not Employee was responsible for generating such customer’s business; or (ii) solicit any employees of Employer, its successor, or its subsidiaries.

(c) Employee hereby agrees that the durations of the anti-competitive covenants set forth herein are reasonable, and that the geographic scope is not unduly restrictive.

(d) The parties acknowledge and agree that money damages cannot fully compensate Employer in the event of Employee’s violation of the provisions of this Section 7. Thus, in the event of a breach of any of the provisions of this Section 7, Employee agrees that Employer, upon application to a court of competent jurisdiction, shall be entitled to an injunction restraining Employee from any further breach of the terms and provisions of this Section 7. Employee’s sole remedy, in the event of the wrongful entry of such injunction, shall be the dissolution of such injunction and any costs as provided for in Section 10 herein. Employee hereby waives any and all claims for damages by reason of the wrongful issuance of any such injunction.

SECTION 8 – MODIFICATION AND WAIVER

(a) This Agreement may not be modified or amended except as agreed to in writing by the parties hereto.

(b) No term or condition of this Agreement shall be deemed to have been waived, nor shall there be any estoppels against the enforcement of any provision of this Agreement, except

3

by written instrument of the party charged with such waiver or estoppel. No such written waiver shall be deemed a continuing waiver unless specifically stated therein, and each such waiver shall operate only as to the specific term or condition waived and shall not constitute a waiver of such term or condition in the future, or as to any act other than that specifically waived.

SECTION 9 – ARBITRATION

The parties agree that, except for the specific remedies for injunctive relief as contained in Section 7, any controversy or claim arising out of or relating to this Agreement or any breach hereof, including, without limitation, any claim that this Agreement or any portion hereof is invalid, illegal, or otherwise voidable, shall be submitted to binding arbitration before and in accordance with the rules of the American Arbitration Association and judgment upon the determination and/or award of such arbitrator(s) may be entered in any court having jurisdiction thereof. Provided, however, that this Section shall not be construed to permit the award of punitive damages to either party. The venue of any arbitration shall be in Collier County, Florida.

SECTION 10 – ATTORNEYS’ FEES

In the event of any proceeding occurring out of or involving this Agreement, the prevailing party shall be entitled to the recovery of reasonable attorneys’ fees, expenses, and costs, including fees and costs to enforce an award.

SECTION 11 – SEVERABILITY

The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect.

SECTION 12– HEADINGS FOR REFERENCE ONLY

The headings of the Sections herein are included solely for convenient reference and shall not control the meaning or the interpretation of any of the provisions of this Agreement.

SECTION 13 – APPLICABLE LAW AND VENUE

This Agreement shall be governed in all respects and shall be interpreted by and under the laws of the State of Florida. Any litigation regarding this Agreement shall be brought in the appropriate court in Collier County, Florida.

SECTION 14 – SUCCESSORS

Employer shall require any successor to the business and/or assets of Employer in connection with a Change in Control to assume and agree to perform its obligations under this Agreement in writing.

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SECTION 15 – NO CONTRACT OF EMPLOYMENT

This Agreement shall not, under any circumstances, be deemed to constitute an employment contract between Employer and Employee or to be in consideration of or an inducement for the continued employment of Employee. Nothing contained in this Agreement shall be deemed to give Employee the right to be retained in the service of Employer, or to interfere with the right of Employer to discharge Employee at any time.

SECTION 16 – LIMITATION OF RIGHTS

Neither this Agreement, nor any amendment hereof, nor the payment of any benefits hereunder shall be construed as giving Employee or any other person any legal or equitable right against Employer except as expressly provided herein.

SECTION 17 – AMENDMENT & RESTATEMENT

This Agreement amends and completely restates any other employment related agreements by and between Employee and Employer. By executing this Agreement, Employee completely releases Employer and all of its subsidiaries from any obligations that may have existed under any such other agreements.

IN WITNESS WHEREOF, Employer has duly executed this Agreement this 1^st day of January, 2008.

EMPLOYEE	BANK OF FLORIDA CORPORATION
/s/ Tracy L. Keegan	By:	/s/ Harry K. Moon, M.D.
Tracy L. Keegan		Harry K. Moon, M.D.,
		Chairman of the Compensation Committee

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EX-21.1

Exhibit 21.1

Subsidiaries of the Registrant

1. Bank of Florida – Southwest

1185 Immokalee Road

Naples, Fl 34110

FEI # 59-3615345

Ownership = 100%

2. Bank of Florida—Southeast

200 SW 1^st Street, Ste 1700

Ft. Lauderdale, Fl 33301

FEI # 75-3001396

Ownership = 100%

3. Bank of Florida Trust Company

1185 Immokalee Road

Naples, Fl 34110

FEI # 59-658784

Ownership = 100%

4. Bank of Florida – Tampa Bay

777 So. Harbour Island Blvd., Ste 100

Tampa, Fl 33602

FEI # 59-658784

Ownership = 100%

EX-31.1

Exhibit 31.1

CERTIFICATIONS OF CHIEF EXECUTIVE OFFICER

I, Michael L. McMullan, certify that:

1. I have reviewed this annual report on Form 10-K of Bank of Florida Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant, as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report are conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s fourth quarter that has materially affected or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting;

Date: March 3, 2008	By:	/s/ Michael L. McMullan
		Michael L. McMullan,
		Principal Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATIONS OF CHIEF FINANCIAL OFFICER

I, Tracy L. Keegan, certify that:

1. I have reviewed this annual report on Form 10-K of Bank of Florida Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant, as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report are conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s fourth quarter that has materially affected or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting;

Date: March 3, 2008	By:	/s/ Tracy L. Keegan
		Tracy L. Keegan
		Principal Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

In connection with the Annual Report of Bank of Florida Corporation (the “Company”) on Form 10-K for the period ended December 31, 2007 as filed with the Securities and Exchange Commission (the “Report”), I, Michael L. McMullan, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as added by Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. To my knowledge, the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the period covered by the Report.

Date: March 3, 2008	By:	/s/ Michael L. McMullan
		Michael L. McMullan,
		Principal Executive Officer

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

In connection with the Annual Report of Bank of Florida Corporation (the “Company”) on Form 10-K for the period ended December 31, 2007 as filed with the Securities and Exchange Commission (the “Report”), I, Tracy L. Keegan, Executive Vice President, Chief Financial Officer and Principal Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as added by Section 906 of the Sarbanes-Oxley Act of 2002, that:

3. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

4. To my knowledge, the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the period covered by the Report.

Date: March 3, 2008	By:	/s/ Tracy L. Keegan
		Tracy L. Keegan,
		Principal Financial Officer