10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended September 30, 2012

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

                    For the transition period from ____________ to ____________

Commission File Number: 000-53589

FLORIDIAN FINANCIAL GROUP, INC.

(Exact name of registrant as specified in its charter)

Florida	20-4539279
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
175 Timacuan Boulevard, Lake Mary, Florida	32746
(Address of principal executive office)	(Zip Code)
(407) 321-3233
(Registrant’s telephone number, including area code)

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 o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer”, “accelerated filer”, and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o	Accelerated filer o	Non-accelerated filer o	Smaller reporting company x
		(Do not check if smaller reporting company)

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

At October 31, 2012, 6,177,842 shares of the Registrant’s Common Stock, $5.00 par value, were outstanding.

1

FLORIDIAN FINANCIAL GROUP, INC.
QUARTERLY REPORT ON FORM 10-Q
FOR THE PERIOD ENDED SEPTEMBER 30, 2012

TABLE OF CONTENTS

PART I – Financial Information		Page
Item 1.	Condensed Consolidated Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets – September 30, 2012 and December 31, 2011	5
	Condensed Consolidated Statements of Operations – Three and Nine Months Ended September 30, 2012 and 2011	6
	Condensed Consolidated Statements of Shareholders’ Equity – Nine months Ended September 30, 2012 and 2011	7
	Condensed Consolidated Statements of Cash Flows –Nine months Ended September 30, 2012 and 2011	8
	Notes to Condensed Consolidated Financial Statements (Unaudited)	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	34
Item 3.	Quantitative and Qualitative Disclosure About Market Risk	45
Item 4.	Controls and Procedures	45
PART II – Other Information
Item 1.	Legal Proceedings	46
Item 1A.	Risk Factors	46
Item 6.	Exhibits	46
Signatures		47

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INTRODUCTORY NOTE

Caution Concerning Forward-Looking Statements

          The SEC encourages companies to disclose forward-looking information so investors can better understand a company’s future prospects and make informed investment decisions. This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, among others, statements about our beliefs, plans, objectives, goals, expectations, estimates and intentions that are subject to significant risks and uncertainties and are subject to change based on various factors, many of which are beyond our control. The words “may,” “could,” “should,” “would,” “believe,” “anticipate,” “estimate,” “expect,” “intend,” “plan,” “target,” “goal,” and similar expressions are intended to identify forward-looking statements.

          All forward-looking statements, by their nature, are subject to risks and uncertainties. Our actual future results may differ materially from those set forth in our forward-looking statements.

          Our ability to achieve our financial objectives could be adversely affected by the factors discussed in detail in Part I, Item 2., “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, and Part II, Item 1A., “Risk Factors” in this Quarterly Report on Form 10-Q, the following sections of our Annual Report on Form 10-K for the year ended December 31, 2011 (the “Annual Report”): (a) “Introductory Note” in Part I, Item 1. “Business,” (b) “Risk Factors” in Part I, Item 1A. as updated in our subsequent quarterly reports on Form 10-Q; and (c) “Introduction” in Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in Part II, Item 7, as well as:

§	Our ability to comply with the board resolution and memorandum of understanding as required to be adopted by our regulators, including the heightened capital ratios;
§	our ability to lower our expenses;
§	the effects of our decision to deregister our common stock from the Securities Exchange Act of 1934, as amended, and “go dark”;
§	our need and our ability to incur additional debt or equity financing;
§	the accuracy of our financial statement estimates and assumptions, including our allowance for loan losses;
§	our ability to comply with increased capital requirements imposed by our regulators, including the effects of Basel III;
§	the loss of our key personnel;
§	the effects of our lack of a diversified loan portfolio, including the risk of geographic concentration;
§	legislative or regulatory changes, including the Dodd-Frank Wall Street Reform and Consumer Protection Act;
§	the strength of the United States economy in general and the strength of the local economies in which we conduct operations;
§	the frequency and magnitude of foreclosure of our loans;
§	our ability to successfully manage liquidity risk;
§	the effects of the health and soundness of other financial institutions, including the FDIC’s need to increase Deposit Insurance Fund assessments;
§	our ability to comply with the extensive laws and regulations to which we are subject;
§	inflation, interest rate, market and monetary fluctuations;
§	our customers’ willingness and ability to make timely payments on their loans;
§	increased competition and its effect on pricing, including the effect of the repeal of the prohibition on paying interest on demand deposits, on our net interest margin;
§	fluctuations in collateral values;
§	effect of changes in the stock market and other capital markets;
§	the effects of harsh weather conditions, including hurricanes;
§	the effects of man-made disasters;
§	our ability to support our overhead expenses;
§	changes in the securities and real estate markets;
§	technological changes;

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§	changes in monetary and fiscal policies of the U.S. Government;
§	the effects of security breaches and computer viruses that may affect our computer systems;
§	changes in consumer spending and saving habits;
§	changes in accounting principles, policies, practices or guidelines;
§	anti-takeover provisions under federal and state law as well as our Articles of Incorporation and our bylaws;
§	other risks described from time to time in our filings with the SEC; and
§	our ability to manage the risks involved in the foregoing.

          However, other factors besides those listed above and in the section captioned “Risk Factors” or discussed elsewhere in this Report also could adversely affect our results, and you should not consider any such list of factors to be a complete set of all potential risks or uncertainties. These forward-looking statements are not guarantees of future performance, but reflect the present expectations of future events by our management and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Any forward-looking statements made by us speak only as of the date they are made. We do not undertake to update any forward-looking statement, except as required by applicable law.

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FINANCIAL INFORMATION

Item 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

Floridian Financial Group, Inc., and Subsidiaries

Condensed Consolidated Balance Sheets
September 30, 2012 and December 31, 2011 (Unaudited)
(Dollars in Thousands)

	September 30, 2012			December 31, 2011
Assets
Cash and due from banks	$	4,909		$	8,930
Federal funds sold		2,525			3,550
Interest bearing deposits		24,016			20,367
Total cash and cash equivalents		31,450			32,847
Securities available for sale		60,219			73,136
Securities held to maturity (Fair value of $1,013 at December 31, 2011)		—			1,002
Other investments		52			100
Loans, net of allowance for loan losses of $7,830 and $6,566 at September 30, 2012 and December 31, 2011, respectively		278,008			305,088
Property and equipment, net		14,055			14,670
Bank owned life insurance		8,843			11,411
Intangible assets, net		1,057			1,201
Other real estate owned		3,614			5,129
Other assets		2,664			4,975
Total assets	$	399,962		$	449,559
Liabilities and Shareholders’ Equity
Liabilities
Deposits:
Noninterest bearing demand	$	97,887		$	83,909
Savings, NOW and money market		150,639			149,945
Time deposits under $100		52,637			87,090
Time deposits of $100 or more		50,969			72,782
Total deposits		352,132			393,726
Other borrowings		5,102			13,955
Other liabilities		2,245			2,101
Total liabilities		359,479			409,782
Shareholders’ Equity
Preferred stock, $5 par value, 1,000,000 shares authorized; none outstanding		—			—
Common stock, $5 par value, 100,000,000 shares authorized; 6,180,842 and 6,179,240 shares issued and outstanding as of September 30, 2012 and December 31, 2011, respectively		30,904			30,896
Additional paid-in capital		38,535			38,397
Retained deficit		(28,767	)		(29,966	)
Accumulated other comprehensive income (loss)		(189	)		450
Total shareholders’ equity		40,483			39,777
Total liabilities and shareholders’ equity	$	399,962		$	449,559

See Notes to Unaudited Condensed Consolidated Financial Statements.

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Floridian Financial Group, Inc. and Subsidiaries

Consolidated Statements of Operations and Other Comprehensive Income (Unaudited)
For the Three and Nine Month Periods Ended September 30, 2012 and 2011
(Dollars in Thousands)

	For the three months ended September 30,						For the nine months ended September 30,
	2012			2011			2012			2011
Interest income:
Interest and fees on loans	$	3,522		$	3,980		$	10,989		$	11,734
Interest on securities		42			275			581			980
Interest on federal funds sold		2			50			6			7
Other interest		8			4			38			107
Total interest income		3,574			4,309			11,614			12,828
Interest expense:
Interest on deposits		479			948			1,822			2,951
Other interest		35			56			93			186
Total interest expense		514			1,004			1,915			3,137
Net interest income		3,060			3,305			9,699			9,691
Provision for loan losses		104			550			1,520			1,747
Net interest income after provision for loan losses		2,956			2,755			8,179			7,944
Noninterest income:
Other noninterest income		193			313			892			947
Gain on sale of securities		371			—			1,280			—
Gain (loss) on sale of other assets		(143	)		(145	)		(126	)		(93	)
Total noninterest income		421			168			2,046			854
Noninterest expense:
Salaries and employee benefits		1,378			1,716			3,608			5,031
Occupancy and equipment expenses		734			629			2,090			2,035
FDIC insurance		159			43			498			472
Data processing		460			343			1,245			1,077
Other real estate expense		64			186			400			403
Professional fees		240			256			679			751
Credit and collection expense		29			47			74			220
Core deposit intangible amortization		48			48			144			144
Other operating expenses		109			120			288			313
Total noninterest expense		3,221			3,388			9,026			10,446
Income (loss) before income taxes		156			(465	)		1,199			(1,648	)
Income tax		—			25			—			200
Net income (loss)	$	156		$	(490	)	$	1,199		$	(1,848	)
Basic and diluted net income (loss) per share	$	0.03		$	(0.08	)	$	0.20		$	(0.30	)
Average basic and diluted shares outstanding		6,180,842			6,201,609			6,180,842			6,201,609
Other comprehensive income:
Net income (loss)	$	156		$	(490	)	$	1,199		$	(1,848	)
Change in unrealized holding gains
on securities available for sale, net of income tax		(250	)		659			(639	)		2,017
Comprehensive income		(94	)		169			560			169

See Notes to Unaudited Condensed Consolidated Financial Statements

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Floridian Financial Group, Inc. and Subsidiaries

Condensed Consolidated Statements of Shareholders’ Equity
For the Nine Months Ended September 30, 2012 and 2011 (Unaudited)
(Dollars in Thousands)

	Common Stock Par Value			Additional Paid-in Capital			Retained Deficit			Accumulated Other Comprehensive Income (Loss)			Total Shareholders’ Equity
Balance at December 31, 2010	$	30,999		$	38,148		$	(27,839	)	$	(1,205	)	$	40,103
Net loss		—			—			(1,848	)		—			(1,848	)
Change in unrealized gains on securities available for sale, net of income tax		—			—			—			2,017			2,017
Sale of 3,522 shares of common stock to employee benefit plan and 1,319 shares for employee stock purchase plan		25			13			—			—			38
Issuance of 3,280 shares of common stock in lieu of director fees		16			14			—			—			30
Retirement of 19,000 shares of common stock		(98	)		(10	)		—			—			(108	)
Share-based compensation		—			190			—			—			190
Balance at September 30, 2011	$	30,942		$	38,355		$	(29,687	)	$	812		$	40,422
Balance at December 31, 2011	$	30,896		$	38,397		$	(29,966	)	$	450		$	39,777
Net income		—			—			1,199			—			1,199
Change in unrealized gains on securities available for sale, net of income tax		—			—			—			(639	)		(639	)
Sale of a net 691 shares of common stock to employee benefit plan and 911 shares to employee stock purchase plan		8			1			—			—			9
Share-based compensation		—			137			—			—			137
Balance at September 30, 2012	$	30,904		$	38,535		$	(28,767	)	$	(189	)	$	40,483

See Notes to Unaudited Condensed Consolidated Financial Statements.

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Floridian Financial Group, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows (Unaudited)
For the Nine Months Ended September 30, 2012 and 2011
(Dollars in Thousands)

	For the nine months ended
	September 30, 2012			September 30, 2011
Cash Flows From Operating Activities
Net income (loss)	$	1,199		$	(1,848	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Provision for loan losses		1,520			1,747
Impairment of other real estate owned, net		243			387
Depreciation expense		703			752
Amortization expense		144			144
Net accretion of securities		1,232			(723	)
Share-based compensation and director fees		137			220
Realized gain on sales of available for sale securities		(1,280	)		—
Realized loss on sales of other assets		126			93
Increase in cash surrender value		(249	)		(237	)
Decrease in deferred tax assets		—			200
Decrease in accrued interest receivable		53			192
Increase (decrease) in accrued interest payable		(44	)		(28	)
Decrease (increase) other		466			(275	)
Net cash provided by operating activities		4,250			624
Cash Flows From Investing Activities
Purchases of securities available for sale		(59,642	)		(28,493	)
Sales, maturities and calls on securities available for sale		72,016			14,647
Sales, maturities and calls on securities held to maturity		1,002			9,000
Net decrease (increase) in loans		26,564			(5,561	)
Purchases of property and equipment, net		(88	)		(2,535	)
Proceeds from redemption of bank owned life insurance		2,817			—
Proceeds from sale of other real estate owned		2,122			4,636
Proceeds from sale of premises		—			966
Proceeds from sale of furniture and fixtures		—			208
Net cash provided by (used in) investing activities		44,791			(7,182	)
Cash Flows From Financing Activities
Net increase (decrease) in deposits		(41,594	)		5,603
Net increase (decrease) in borrowings		(8,853	)		4,192
Retirement of stock		—			(108	)
Proceeds from sale of stock		9			38
Net cash provided by (used in) financing activities		(50,438	)		9,725
Net increase (decrease) in cash and cash equivalents		(1,397	)		3,217
Cash and cash equivalents
Beginning of period		32,847			61,872
End of period	$	31,450		$	65,089

Supplemental Disclosures of Cash Flow Information and noncash transactions

	For the nine months ended
	September 30, 2012		September 30, 2011
Interest paid	$	1,959	$	3,166
Income taxes paid	$	—	$	—
Loans transferred to other real estate owned	$	850	$	7,454

See Notes to Unaudited Condensed Consolidated Financial Statements.

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Floridian Financial Group, Inc. and Subsidiaries

Note 1. Nature of Business and Summary of Significant Accounting Policies

Nature of business: Floridian Financial Group, Inc. (the “Company”) is a registered bank holding company formed to organize and own 100% of its subsidiary banks, Floridian Bank and Orange Bank of Florida (collectively referred to as the “Banks”). The Company was incorporated in 2005, and became operational as a bank holding company once Floridian Bank opened. Floridian Bank is a state-chartered, federally-insured full-service commercial banking institution and presently conducts business from its headquarters in Daytona Beach and branch offices in Ormond Beach, Palm Coast and Port Orange, Florida. Orange Bank of Florida is a state-chartered, federally-insured full-service commercial banking institution with its headquarters in Orlando, Florida. The Company operates from its main office and branch offices in Orange, Seminole, Lake and Citrus Counties, Florida.

Basis of Financial Statement Presentation: The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its Banks. Significant intercompany accounts and transactions have been eliminated in consolidation. The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America and general practices within the financial services industry. The accompanying interim period adjustments, which are necessary for a fair presentation of the consolidated financial statements, have been included. The results of operations for the nine months ended September 30, 2012 are not necessarily indicative of the results which may be expected for the year as a whole or any interim period. The interim period consolidated financial statements and financial information included in this quarterly report on Form 10-Q should be read in conjunction with the notes to the consolidated financial statements included in the Company’s annual report on Form 10-K.

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

A summary of the Company’s significant accounting policies follows:

Comprehensive income (loss): Comprehensive income or loss is comprised of the net income or loss from the consolidated statement of operations and any items of “other comprehensive income.” The only item of other comprehensive income for the Banks is the unrealized gain or loss on the available for sale investment securities portfolio, net of tax.

Cash and cash equivalents: For purposes of reporting cash flows, cash and cash equivalents include cash on hand, amounts due from banks (including cash items in process of clearing) and federal funds sold. Cash flows from loans originated by the Company and deposits are reported net. The Company maintains amounts due from banks, which at times may exceed federal deposit insurance limits. The Company has not experienced any losses in such accounts.

Securities: Certain securities which management has the positive intent and ability to hold until their maturity are classified as held to maturity. Such securities are carried at cost, adjusted for related amortization of premium and accretion of discounts through interest income from securities.

Securities available for sale which are used for asset/liability, liquidity and other funds management purposes have indefinite holding periods and are accounted for on a fair value basis with net unrealized gains and losses included in other comprehensive income net of tax. Declines in the fair value of securities available for sale that are deemed to be other than temporary are reflected in earnings as realized losses. In estimating other-than-temporary impairment losses, management considers: (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer including an evaluation of credit ratings, (3) the impact of changes in market interest rates, (4) the intent of the Company to sell a security, and (5) whether it is more likely than not the Company will have to sell the security before recovery of its cost basis. If the Company intends to sell an impaired security, the Company records an other-than-temporary loss in the amount equal to the entire difference between the fair value and amortized cost. If a security is determined to be other-than-temporarily impaired, but the Company does not intend to sell the security, only the credit portion of the estimated loss is recognized in earnings, with the other portion of the loss recognized in other comprehensive income. Amortization and accretion of premiums and discounts are recognized as adjustments to interest income. Realized gains and losses are recognized using the specific identification method.

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Floridian Financial Group, Inc. and Subsidiaries

Note 1. Nature of Business and Summary of Significant Accounting Policies (continued)

Loans: Loans are stated at the amount of unpaid principal balances, reduced by an allowance for loan losses and unearned fees and costs. Interest on loans is calculated by using the simple interest method on daily balances of the principal amounts outstanding unless loans are classified as nonaccrual loans. The accrual of interest is discontinued when future collection of principal or interest in accordance with the contractual terms becomes doubtful. When interest accrual is discontinued, all unpaid accrued interest is reversed against interest income. Accrual of interest is generally resumed when the customer is current on all principal and interest payments and has been paying on a timely basis for at least six months.

Accounting standards require the presentation of certain disclosure information at the portfolio segment level, which represents the level at which the Company determines its allowance for credit losses. The Company has four reportable loan segments: Commercial, Commercial Real Estate, Residential Real Estate, and Consumer. Segments are determined based on the products and services provided and the type of customer served. See Note 4 for a breakdown of loans by segment.

Commercial Loans: All corporate and business purpose loans and lines of credit that are not real estate related are classified as commercial loans. These loans are generally secured by business assets including accounts receivable, inventory, and equipment and may incorporate a personal guarantee. Terms on commercial loans are generally for five years or less with most lines of credit written on an on-demand-basis. The majority of commercial loans have a floating interest rate tied to a published index. As of September 30, 2012, commercial loans represented 14.0% of the loan portfolio.

Commercial Real Estate Loans (“CRE”): CRE represents business purpose loans that are real estate related and secured by real estate. CRE loans are reviewed primarily as cash flow loans and secondarily as loans secured by real estate. CRE loans typically involve higher loan principal amounts and the repayment is generally largely dependent on the successful operations of the real property securing the loan or the business conducted on the property securing the loan. CRE loans may be adversely affected by conditions in the real estate markets or in the general economy than other loan types. As of September 30, 2012, 78.0% of the loan portfolio was concentrated in CRE loans.

Residential Real Estate Loans (“RRE”): RRE represents all consumer purpose loans collateralized by one to four family dwellings. RRE loans generally have terms of less than five years and are written on a fixed rate basis. As of September 30, 2012, 2.7% of the portfolio was classified as RRE.

Consumer Loans: All non-business purpose loans are considered consumer loans. Consumer loans consist of home equity lines of credit, automobile loans, overdraft loans, loans secured by deposits and securities, and unsecured personal loans. Home Equity represents all consumer open end lines of credit secured by one to four family lines of credit. Consumer loans represent any consumer purpose loans or lines of credit not secured by real estate. As of September 30, 2012, consumer loans represented 5.3% of the portfolio.

Within each segment, the Company monitors and assesses the credit risk in the following classes, based on the risk characteristic of each loan segment: Pass, Special Mention, Substandard, Doubtful, and Loss. Within the Commercial and CRE portfolio risk grades are assigned based on an assessment of conditions that affect the borrower’s ability to meet obligations as outlined in the loan agreement. This process includes an in-depth review prior to loan approval and throughout the life of the loan. The analysis of the borrower includes a review of financial information, credit documentation, public information, past experience with the borrower, and other information that may be available specific to each borrower. The review also includes debt service capabilities, actual and projected cash flows, and industry and economic risks. Underwriting of RRE, consumer, and home equity loans and lines of credit include an assessment of the borrower’s credit history and the ability to meet existing debt obligations, as well as payments of principal and interest on the proposed loan. Risk grades are reviewed annually on all large credit relationships or on any credit where management becomes aware of information that may affect the borrower’s ability to fulfill contractual obligations. See Note 4 for a breakdown of loans by class.

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Floridian Financial Group, Inc. and Subsidiaries

Note 1. Nature of Business and Summary of Significant Accounting Policies (continued)

Troubled Debt Restructuring: The Company considers a loan to be a Troubled Debt Restructuring (“TDR”) when the debtor experiences financial difficulties and a concession is provided such that the Company will not collect all principal or interest in accordance with the original terms of the loan agreement. Concessions can relate to the contractual interest rate, maturity date, or payment structure of the note. As part of our workout plan, the Company at times restructures loan terms to assist borrowers facing challenges in the current economic environment. Loans classified as TDRs include loans on nonaccrual, loans moving to nonaccrual, and loans on an accruing status. The Company evaluates each individual borrower’s financial condition and prospects for repayment under the modified terms prior to restructuring. The evaluation includes but is not limited to the borrower’s capacity and willingness to pay, past payment history, and any secondary sources of payment.

As of September 30, 2012, five loans totaling $15.6 million were classified as TDRs with $6.3 million classified as nonperforming. As of December 31, 2011, ten loans totaling $17.5 million were classified as TDRs with $971 thousand classified as nonperforming.

Nonaccrual and Impaired loans: Borrowers who have not made scheduled payments within 30 days of their due date are considered past due. The Company has a formal review process for all past due loans which includes a review of previous performance, collateral and future cash flows. The Company’s policy is to place all loans where interest and principal has been delinquent for 90 days or more on nonaccrual status unless the loan is well secured and in the process of collection. Loans operating on a cash basis because of deterioration in financial condition of the debtor as well as loans where the full collection of recorded interest or principal is not expected are also placed on nonaccrual status regardless of delinquency status. When loans are placed on nonaccrual status, future interest accruals are discontinued and all unpaid accrued interest is reversed against interest income.

Cash collections on nonaccrual loans are credited to the loan receivable balance and no interest income is recognized on those loans until the principal balance is current. Nonaccrual loans, after a reasonable period of sustained repayment performance (generally minimum of six months), are re-evaluated for possible return to an accrual status. See Note 4 for a breakdown of the Company’s loan portfolio based on aging.

Impaired loans are measured for impairment based on the present value of expected future cash flows discounted at the loan’s original effective interest rate or, as a practical expedient, at the loan’s observable market price or the fair value of the collateral, net of selling costs, if the loan is collateral dependent. A loan is impaired when it is probable the creditor will be unable to collect all contractual principal and interest payments due in accordance with the terms of the loan agreement. On at least a quarterly basis, the Company reviews impaired loans for any changes in the borrower’s ability to repay the loan. Based on this review, the Company may consider making modifications to the original loan agreement.

Allowance for loan losses: The allowance for loan losses (“ALL”) is established through a provision for loan losses charged against operations. The allowance includes an unallocated component. The unallocated reserve represents the uncertainty in inherent factors that cannot be practically assigned to individual loan categories including the local economy and the uncertainty related to historical loss rates applied against loan risk-ratings. The Company believes the unallocated amount is warranted. All commercial loans risk rated substandard or doubtful are considered impaired and are reviewed on a quarterly basis to determine if a specific reserve needs to be allocated.

Loans are charged against the allowance for loan losses when management believes that the loss is confirmed. The allowance is an amount that management believes is adequate to absorb losses inherent in the loan portfolio, based on evaluations of the collectability of loans, industry historical loss experience, current economic conditions, portfolio mix, and other factors. During the second quarter of 2012, the Company changed from a rolling 12-month to a rolling 24- month look back period to evaluate and allocate loan losses in regard to the provision.

While management uses the best information available to make its evaluation, future adjustments to the allowance may be necessary if there are significant changes in economic conditions.

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Floridian Financial Group, Inc. and Subsidiaries

Note 1. Nature of Business and Summary of Significant Accounting Policies (continued)

Loan Charge-Offs: All loan segments except Consumer are charged off within 30 days from the date the loan is deemed uncollectible. The recognition of the loss of loans or portions of loans occurs as soon as there is a reasonable probability of loss. When the amount of loss can be readily calculated, then the loss is recognized. In cases where an amount cannot be calculated, a specific allowance for loan losses is estimated and provided for.

Losses on consumer credit card loans are taken as soon as possible and no later than when the loan is 90 days delinquent. All other consumer loan losses are taken as soon as possible and no later than when delinquency exceeds 120 days.

As a policy, the Banks reverse accrued interest on loans placed on nonaccrual. If the accrued interest being reversed was recorded in a previous calendar year and the amount is material, the accrued interest associated with the previous calendar year is charged off.

Credit related financial instruments: In the ordinary course of business, the Banks enter into off-balance-sheet financial instruments consisting of commitments to extend credit and standby letters of credit. Such financial instruments are recorded in the financial statements when they are funded.

Transfers of financial assets: Transfers of financial assets are accounted for as sales only when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (1) the assets have been legally isolated from the Company and any of its affiliates, (2) the transferee has the ability to sell or pledge 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 or maintain effective control through a third-party beneficial interest in the transferred assets, the ability to unilaterally cause the holder to return specific assets, or have an in-the-money option held by a transferor when probable that the transferor will repurchase the assets.

Other Real Estate Owned: Other real estate owned (“OREO”) consists of property acquired through, or in lieu of, loan foreclosures or other proceedings and is initially recorded at the fair value less estimated selling costs at the date of foreclosure, which establishes a new cost basis. Subsequent to foreclosure, the properties are held for sale and are carried at the lower of cost or fair value less estimated costs of disposal. Any write-down to fair value at the time of acquisition is charged to the allowance for loan losses. Properties are evaluated regularly to ensure the recorded amounts are supported by current fair values, and a charge to operations is recorded as necessary to reduce the carrying amount to fair value less estimated costs to dispose.

Income taxes: The Company accounts for income taxes according to the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using the enacted tax rates applicable to taxable income for the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation reserves are established against certain deferred tax assets when it is more likely than not that the deferred tax assets will not be realized. Increases or decreases in the valuation reserve are charged or credited to the income tax provision.

The Company recognizes a benefit from its tax positions only if it is more-likely-than-not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information.

The periods subject to examination for the Company’s federal returns are the tax years subsequent to 2009. The periods subject to examination for the Company’s significant state return, which is Florida, are the tax years subsequent to 2008. The Company believes that its income tax filing positions and deductions will be sustained upon examination and does not anticipate any adjustments that will result in a material change in its financial statements. As a result, no reserve for uncertain income tax positions has been recorded.

The Company’s policy for recording interest and penalties related to uncertain tax positions is to record such items as part of its provision for federal and state income taxes.

12

Floridian Financial Group, Inc. and Subsidiaries

Note 1. Nature of Business and Summary of Significant Accounting Policies (continued)

Earnings per share: Basic earnings per share is calculated by dividing net income (loss) by the weighted average number of shares of common stock outstanding for each period presented. Options outstanding at September 30, 2012 and 2011, to purchase 650 thousand and 645 thousand common shares, respectively, were not included in the computation of diluted earnings per share for the three and nine months ended September 30, 2012 and 2011, because they were antidilutive.

Share-based compensation: The Company has a stock option plan for its employees and for its directors, as more fully described in Note 14 of our financial statements contained in our Annual Report. The Company is required to recognize compensation cost relating to share-based payment transactions, based on the fair value of the equity or liability instruments issued, in its financial statements. Compensation cost has been measured using the fair value of an award on the grant dates and is recognized over the service period, which is usually the vesting period.

Reclassifications: Certain amounts in the 2011 financial statements have been reclassified for comparative purposes to conform with the presentation in the 2012 financial statements. The results of these classifications had no effect on net operations or shareholders’ equity.

New Accounting Pronouncements: In December 2011, the FASB issued ASU No. 2011-12, “Comprehensive Income (Topic 220): Deferral of the Effective Date for the Amendments to the Presentation of Reclassifications of the Items Out of Accumulated Other Comprehensive Income in ASU No. 2011-05”. This guidance delays the effective date of the disclosures for only those changes in ASU No. 2011-05 that relate to the presentation of reclassification adjustments to allow the FASB time to reconsider whether to require presentation of such adjustments on the face of the financial statements to show the effects of reclassifications out of accumulated other comprehensive income on the components of net income and other comprehensive income. ASU 2011-12 allows entities to continue to report reclassifications out of accumulated other comprehensive income consistent with the presentation requirements in effect before ASU No. 2011-05. All other requirements in ASU No. 2011-05 are not affected by ASU No. 2011-12. ASU No. 2011-12 is effective for annual and interim periods beginning on or after December 15, 2011 and is not expected to have a significant impact on our financial statements.

Note 2. Cash and Due From Banks

The Banks are required to maintain vault cash and reserve balances with the Federal Reserve Bank based upon a percentage of deposits. These requirements were $2.0 million at September 30, 2012 and $2.5 million at December 31, 2011.

13

Floridian Financial Group, Inc. and Subsidiaries

Note 3. Securities

The amortized cost and estimated fair value of securities with gross unrealized gains and losses follows:

	As of September 30, 2012
(Dollars in Thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Securities Available for sale
Debt Securities:
States & political subdivisions	$	5,914	$	—	$	87	$	5,827
U.S. Agency REMIC		36,068		72		322		35,818
U.S. Agency MBS		18,426		148		—		18,574
Total securities available for sale	$	60,408	$	220	$	409	$	60,219

	As of December 31, 2011
Securities Available for Sale
Debt Securities:
U.S. Government and federal agencies	$	13,385	$	305	$	—	$	13,690
States & political subdivisions		1,701		94		—		1,795
U.S. Agency REMIC		38,917		338		217		39,038
U.S. Agency MBS		18,683		18		88		18,613
Total securities available for sale	$	72,686	$	755	$	305	$	73,136
Securities Held to Maturity
Debt Securities:
U.S. Government and federal agencies	$	1,002	$	11	$	—	$	1,013
Total securities held to maturity	$	1,002	$	11	$	—	$	1,013

At September 30, 2012 and December 31, 2011, government obligations with a carrying value of $8.3 million and $20.6 million, respectively, were pledged to secure public deposits and for other purposes required or permitted by law. At September 30, 2012 and December 31, 2011, the carrying amount of securities pledged to secure repurchase agreements was $5.2 million and $12.6 million, respectively.

14

Floridian Financial Group, Inc. and Subsidiaries

Note 3. Securities (continued)

The carrying amount of debt securities by contractual maturity at September 30, 2012 follows:

	(Dollars in Thousands)		Within 1 year			After 1 year through 5 years			After 5 years Through 10 years			Over 10 years			Total
Available for sale, at fair value
States & political subdivisions		$		—	$		—	$		531	$		5,296	$		5,827
U.S. Agency REMIC				2,806			30,706			2,306			—			35,818
U.S. Agency MBS				—			9,835			6,969			1,770			18,574
Total		$		2,806	$		40,541	$		9,806	$		7,066	$		60,219

For the three months ended September 30, 2012 and 2011, proceeds from sales, maturities, and calls of securities available for sale amounted to $27.9 million and $12.8 million, respectively. Gross realized gains amounted to $419 thousand and $0, respectively. There were no gross realized losses for the three months ended September 30, 2012 and 2011.

For the nine months ended September 30, 2012 and 2011, proceeds from sales, maturities, and calls of securities amounted to $73.0 million and $23.6 million, respectively. Gross realized gains amounted to $1.3 million and $0, respectively. There were no gross realized losses for the nine months ended September 30, 2012 and 2011.

Information pertaining to securities with gross unrealized losses at September 30, 2012 and December 31, 2011 aggregated by investment category and length of time that individual securities have been in a continuous loss position, follows:

	September 30, 2012
	Less Than Twelve Months				Over Twelve Months
(Dollars in Thousands)	Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Total Unrealized Losses
Securities Available for sale
Debt Securities:
States & political subdivisions	$	87	$	5,826	$	—	$	—	$	87
U.S. Agency REMIC		188		21,559		134		6,204		322
Total securities available for sale	$	275	$	27,385	$	134	$	6,204	$	409

15

Floridian Financial Group, Inc. and Subsidiaries

Note 3. Securities (continued)

	December 31, 2011
	Less Than Twelve Months				Over Twelve Months
(Dollars in Thousands)	Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Total Unrealized Losses
Securities Available for sale
Debt Securities:
U.S. Agency REMIC	$	217	$	23,460	$	—	$	—	$	217
U.S. Agency MBS		88		14,536		—		—		88
Total securities available for sale	$	305	$	37,996	$	—	$	—	$	305

As of September 30, 2012, the Company’s security portfolio consisted of 40 securities, 24 of which were in an unrealized loss position. Four of the securities had loss positions in excess of 12 months. The securities were issued by U.S. government-sponsored agencies and are not considered impaired. Approximately $54.4 million, or 90%, of the debt securities held by the Company were issued by U.S. government-sponsored entities and agencies, primarily Fannie Mae, Freddie Mac and Ginnie Mae, institutions which the government has affirmed its commitment to support. Because the decline in fair value is attributable to changes in interest rates and illiquidity, and not credit quality, and because the Company does not have the intent to sell these securities and it is likely it will not be required to sell the securities before their anticipated recovery, the Company does not consider these securities to be other-than-temporarily impaired at September 30, 2012.

Note 4. Loans and Allowance for Loan Losses

Loans were comprised of the following:

(Dollars in Thousands)	September 30, 2012		December 31, 2011
Commercial	$	40,111	$	44,833
Commercial real estate		222,932		241,648
Residential real estate		7,750		8,542
Consumer loans		15,167		16,745
Total loans		285,960		311,768
Less: Allowance for loan losses		7,830		6,566
Less: Unearned fees		122		114
Net loans	$	278,008	$	305,088

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Floridian Financial Group, Inc. and Subsidiaries

Note 4. Loans and Allowance for Loan Losses (continued)

Activity in the allowance for loan losses is as follows:

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
(Dollars in Thousands)	2012			2011			2012			2011
Beginning balance	$	7,678		$	7,715		$	6,566		$	8,010
Loan charge offs:
Commercial		—			183			—			308
Commercial real estate		546			846			986			1,870
Residential real estate		—			37			—			391
Consumer and home equity		—			—			65			243
Total charge-offs		546			1,066			1,051			2,812
Recoveries:
Commercial		1			5			12			96
Commercial real estate		591			6			759			166
Residential real estate		1			—			—			—
Consumer		1			—			24			3
Total recoveries		594			116			795			265
Provision for loan losses:
Commercial		(60	)		76			1			76
Commercial real estate		123			318			1,714			809
Residential real estate		6			141			(27	)		537
Consumer		29			15			56			295
Unallocated		6			—			(224	)		30
Total provision		104			550			1,520			1,747
Ending balance	$	7,830		$	7,210		$	7,830		$	7,210
Allowance / Total Loans		2.7	%		2.3	%		2.7	%		2.3	%
Net Charge-Offs / Average Loans		0.0	%		0.3	%		0.1	%		0.8	%
Allowance / Nonperforming Loans		62.1	%		93.2	%		62.1	%		93.2	%

17

Floridian Financial Group, Inc. and Subsidiaries

Note 4. Loans and Allowance for Loan Losses (continued)

The following presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and is based on impairment method as of September 30, 2012 and December 31, 2011:

	As of September 30, 2012
(Dollars in Thousands)	Commercial		Commercial Real Estate		Residential Real Estate		Home Equity		Consumer		Unallocated		Total
Ending allowance for loan losses:
Individually evaluated for impairment	$	—	$	2,475	$	—	$	—	$	—	$	—	$	2,475
Collectively evaluated for impairment		728		4,177		120		295		25		10		5,355
Total ending allowance balance	$	728	$	6,652	$	120	$	295	$	25	$	10	$	7,830
Loans:
Individually evaluated for impairment	$	22	$	20,077	$	106	$	—	$	—	$	—	$	20,205
Collectively evaluated for impairment		40,089		202,855		7,644		13,335		1,832		—		265,755
Total ending loan balance	$	40,111	$	222,932	$	7,750	$	13,335	$	1,832	$	—	$	285,960
	As of December 31, 2011
(Dollars in Thousands)	Commercial		Commercial Real Estate		Residential Real Estate		Home Equity		Consumer		Unallocated		Total
Ending allowance for loan losses:
Individually evaluated for impairment	$	—	$	255	$	—	$	—	$	—	$	—	$	255
Collectively evaluated for impairment		743		4,896		135		246		57		234		6,311
Total ending allowance balance	$	743	$	5,151	$	135	$	246	$	57	$	234	$	6,566
Loans:
Individually evaluated for impairment	$	—	$	23,622	$	—	$	23	$	—	$	—	$	23,645
Collectively evaluated for impairment		44,833		218,026		8,542		14,210		2,512		—		288,123
Total ending loan balance	$	44,833	$	241,648	$	8,542	$	14,233	$	2,512	$	—	$	311,768

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Floridian Financial Group, Inc. and Subsidiaries

Note 4. Loans and Allowance for Loan Losses (continued)

The following presents loans individually evaluated for impairment by class of loans as of September 30, 2012 and December 31, 2011:

	As of September 30, 2012
(Dollars in Thousands)	Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated		Average Recorded Investment		Interest Income Recognized		Cash Basis InterestIncomeRecognized
With no related allowance recorded:
Commercial	$	22	$	22	$	—	$	24	$	1	$	—
Commercial real estate
Construction and land		5,899		3,121		—		2,912		160		—
Non-owner occupied		803		467		—		1,022		23		—
Owner occupied		1,329		699		—		696		47		—
Residential		106		106		—		102		10		—
Home equity		—		—		—		—		—		—
Consumer		—		—		—		—		—		—
Total		8,159		4,415		—		4,756		241		—
With an allowance recorded:
Commercial		—		—		—		—		—		—
Commercial real estate
Construction and land		—		—		—		—		—		—
Non-owner occupied		7,727		7,728		2,104		7,802		307		—
Owner occupied		8,763		8,062		371		8,025		238		—
Residential		—		—		—		—		—		—
Home equity		—		—		—		—		—		—
Consumer		—		—		—		—		—		—
Total		16,490		15,790		2,475		15,827		545		—
Total	$	24,649	$	20,205	$	2,475	$	20,583	$	786	$	—

19

Floridian Financial Group, Inc. and Subsidiaries

Note 4. Loans and Allowance for Loan Losses (continued)

	As of December 31, 2011
(Dollars in Thousands)	Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated		Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Income Recognized
With no related allowance recorded:
Commercial	$	—	$	—	$	—	$	239	$	—	$	—
Commercial real estate
Construction and land		9,825		4,776		—		9,640		40		—
Non-owner occupied		10,026		8,391		—		9,956		199		—
Owner occupied		3,295		2,079		—		3,265		61		—
Residential		—		—		—		—		—		—
Home equity		59		23		—		23		—		—
Consumer		—		—		—		—		—		—
Total		23,205		15,269		—		23,123		300		—
With an allowance recorded:
Commercial		—		—		—		—		—		—
Commercial real estate
Construction and land		—		—		—		—		—		—
Non-owner occupied		2,177		1,500		10		2,177		158		—
Owner occupied		6,876		6,876		245		6,860		49		—
Residential		—		—		—		—		—		—
Home equity		—		—		—		—		—		—
Consumer		—		—		—		—		—		—
Total		9,053		8,376		255		9,037		207		—
Total	$	32,258	$	23,645	$	255	$	32,160	$	507	$	—

No additional funds are committed to be advanced in connection with impaired loans.

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Floridian Financial Group, Inc. and Subsidiaries

Note 4. Loans and Allowance for Loan Losses (continued)

Impaired loans include TDRs of $15.6 million and $17.5 million at September 30, 2012 and December 31, 2011, respectively. As of September 30, 2012 and December 31, 2011, there were two nonperforming TDRs with outstanding balances of $6.3 million and $971 thousand, respectively.

During the three months ended September 30, 2012, three CRE loans were classified by the Banks as TDRs. Orange Bank on the one loan reduced the interest rate and retained the monthly interest only payments. Floridian Bank, for the other two loans, increased the interest rate from 3.25% to 5.1% and modified the payments from interest only to principal and interest payments sufficient to term out the loans over ten years. Both of Floridian Bank’s loans had been classified as TDRs in 2010.

During the nine months ended September 30, 2012, the Banks classified four CRE loans with an aggregate outstanding balance $4.3 million as TDRs. Charge-offs totaling $1.4 million were taken on the loans. The Banks had no commitments to lend additional funds for loans classified as TDRs at September 30, 2012. No TDRs defaulted within 12 months of being restructured.

The following presents the recorded investment in nonaccrual loans and loans past due over 90 days and still accruing by class of loans as of September 30, 2012 and December 31, 2011:

	September 30, 2012				December 31, 2011
(Dollars in Thousands)	Nonaccrual		Loans Past Due 90 Days and Over Still Accruing		Nonaccrual		Loans Past Due 90 Days and Over Still Accruing
Commercial	$	22	$	—	$	—	$	—
Commercial real estate
Construction and land		3,121		—		4,777		—
Non-owner occupied		6,703		1,912		2,245		471
Owner occupied		699		—		842		—
Residential		106		—		—		—
Home equity		47		—		71		—
Consumer		—		—		—		—
Total	$	10,698	$	1,912	$	7,935	$	471

Nonaccruing loans totaled $10.7 million and $7.9 million at September 30, 2012 and December 31, 2011, respectively. Interest income on nonaccrual loans is recognized on a cash basis when the ultimate collectability is no longer considered doubtful. Cash collected on nonaccrual loans is applied against the principal balance or recognized as interest income based upon management’s expectations as to the ultimate collectability of principal and interest in full. If interest on nonaccruing loans had been recognized on a fully-accruing basis, interest income recorded would have been $163 thousand and $453 thousand higher for the quarter ended September 30, 2012 and the year ended December 31, 2011, respectively. As of September 30, 2012, there was one loan past due 90 days or more and still accruing interest income. The loan was matured and has subsequently been renewed. The one loan past due 90 days or more as of December 31, 2011 represented a matured loan that was renewed.

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Floridian Financial Group, Inc. and Subsidiaries

Note 4. Loans and Allowance for Loan Losses (continued)

The following presents the aging of the recorded investment in past due loans as of September 30, 2012 and December 31, 2011 by class of loans:

	September 30, 2012
(Dollars in Thousands)	30 – 59 Days Past Due		60 – 89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Loans Not Past Due
Commercial	$	755	$	—	$	22	$	777	$	39,334
Commercial real estate
Construction and land		—		303		1,798		2,101		34,995
Non-owner occupied		229		774		2,378		3,381		89,929
Owner occupied		104		511		375		990		91,536
Residential		—		115		106		221		7,529
Home equity		400		300		47		747		12,588
Consumer		—		2		—		2		1,830
Total	$	1,488	$	2,005	$	4,726	$	8,219	$	277,741
	December 31, 2011
(Dollars in Thousands)	30 - 59 Days Past Due		60 - 89 Days Past Due		90 Days Or Greater Past Due		Total Past Due		Loans Not Past Due
Commercial	$	1,500	$	—	$	—	$	1,500	$	43,333
Commercial real estate
Construction and land		—		—		3,283		3,283		39,156
Non-owner occupied		399		—		2,716		3,115		96,185
Owner occupied		—		—		842		842		99,067
Residential		—		501		—		501		8,041
Home equity		—		—		71		71		14,162
Consumer		4		3		—		7		2,505
Total	$	1,903	$	504	$	6,912	$	9,319	$	302,449

The Company assigns a risk rating to all business purpose loans and periodically performs reviews to identify credit risks and to assess the overall collectability of the portfolio. During these internal reviews, management monitors and analyzes the financial condition of borrowers and guarantors, trends in the industries in which borrowers operate and the fair values of collateral securing these loans. These credit quality indicators are used to assign a risk rating to each individual loan. The risk ratings can be grouped into five major categories, defined as follows:

Pass – A pass loan is a strong credit with no existing or known potential weaknesses deserving of management’s close attention.

Special Mention – A special mention loan has potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or in the Company’s credit position at some future date. Special Mention loans are not adversely classified and do not expose the Company to sufficient risk to warrant adverse classification.

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Floridian Financial Group, Inc. and Subsidiaries

Note 4. Loans and Allowance for Loan Losses (continued)

Substandard – A substandard loan is not adequately protected by the current financial condition and paying capacity of the borrower or the value of the collateral pledged, if any. Loans classified as substandard have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. Well-defined weaknesses include a project’s lack of marketability, inadequate cash flow or collateral support, failure to complete construction on time or the project’s failure to fulfill economic expectations. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.

Doubtful – Loans classified doubtful have all the weaknesses inherent in those classified as substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently known facts, conditions and values, highly questionable or improbable.

Loss – Loans classified as loss are considered uncollectible. Once a loan becomes delinquent and repayment becomes questionable, the Company will address collateral shortfalls with the borrower and attempt to obtain additional collateral. If this is not forthcoming and payment in full is unlikely, the Bank will estimate its probable loss and immediately charge-off some or all of the balance.

As of September 30, 2012 and December 31, 2011, and based on the most recent analysis performed, the risk category of loans by class of loans is as follows:

	September 30, 2012
(Dollars in Thousands)	Pass		Special Mention		Substandard		Doubtful		Loss
Commercial	$	37,493	$	2,400	$	218	$	—	$	—
Commercial real estate
Construction and land		33,974		—		3,121		—		—
Non-owner occupied		86,607		—		6,703		—		—
Owner occupied		79,528		5,040		7,959		—		—
Residential		7,644		—		106		—		—
Home equity		13,288		—		47		—		—
Consumer		1,832		—		—		—		—
Total	$	260,366	$	7,440	$	18,154	$	—	$	—
	December 31, 2011
(Dollars in Thousands)	Pass		Special Mention		Substandard		Doubtful		Loss
Commercial	$	44,628	$	—	$	205	$	—	$	—
Commercial real estate
Construction and land		37,663		—		4,776		—
Non-owner occupied		90,909		—		8,391		—		—
Owner occupied		86,663		5,115		8,131		—		—
Residential		8,542		—		—		—		—
Home equity		14,162		—		71		—		—
Consumer		2,512		—		—		—		—
Total	$	285,079	$	5,115	$	21,574	$	—	$	—

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Floridian Financial Group, Inc. and Subsidiaries

Note 4. Loans and Allowance for Loan Losses (continued)

The following presents the recorded investment in residential and consumer loans based on payment activity as of September 30, 2012 and December 31, 2011:

	September 30, 2012
(Dollars in Thousands)	Residential		Home Equity		Consumer
Performing	$	7,644	$	13,288	$	1,832
Nonperforming		106		47		—
Total	$	7,750	$	13,335	$	1,832
	December 31, 2011
(Dollars in Thousands)	Residential		Home Equity		Consumer
Performing	$	8,542	$	14,162	$	2,512
Nonperforming		—		71		—
Total	$	8,542	$	14,233	$	2,512

Note 5. Commitments and Contingencies

Financial instruments with off-balance-sheet risk: The financial statements do not reflect various commitments and contingent liabilities that arise in the normal course of business to meet the financing needs of customers. These include commitments to extend credit and honor stand-by letters of credit. These instruments involve, to varying degrees, elements of credit, interest rate and liquidity risks in excess of amounts reflected in the balance sheets. The extent of the Banks’ involvement in these commitments or contingent liabilities is expressed by the contractual, or notional, amounts of the instruments. Commitments to extend credit, which amount to $50.5 million and $57.2 million at September 30, 2012 and December 31, 2011, respectively, represent agreements to lend to customers with fixed expiration dates or other termination clauses.

Since many commitments are expected to expire without being funded, committed amounts do not necessarily represent future liquidity requirements. The amount of collateral obtained, if any, is based on management’s credit evaluation in the same manner as though an immediate credit extension were to be granted.

Standby letters of credit are conditional commitments issued by the Banks guaranteeing the performance of a customer to a third party. The decision whether to guarantee such performance and the extent of collateral requirements are made considering the same factors as are considered in credit extensions. Stand-by letters of credit totaling $2.5 and $3.2 million were outstanding as of September 30, 2012 and December 31, 2011, respectively.

Lines of credit: At September 30, 2012 and December 31, 2011, the Banks had federal funds lines of credit available from their correspondent banks of $24.0 and $30.3 million, respectively. At these dates, there were no outstanding draws under these lines. The highest single day borrowing under these lines was $8.3 million during the nine months ended September 30, 2012.

We are periodically a party to or otherwise involved in legal proceedings arising in the normal course of business, such as claims to enforce liens, claims involving the making and servicing of real property loans, and other issues incident to our business. Management does not believe that there is any pending or threatened proceeding against us which, if determined adversely, would have a material adverse effect on our financial position, liquidity, or results of operations.

24

Floridian Financial Group, Inc. and Subsidiaries

Note 6. Regulatory Capital Matters

The Company’s Banks are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory - and possibly additional discretionary - actions by regulators that, if undertaken, could have a direct material adverse effect on the Company’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Banks must meet specific capital guidelines that involve quantitative measures of the Banks’ assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. Prompt corrective action provisions are not applicable to bank holding companies.

Quantitative measures established by regulation to ensure capital adequacy require the Banks to maintain minimum amounts and ratios of total and Tier 1 capital (as defined in the regulations), to risk-weighted assets (as defined), and Tier 1 capital (as defined), to average assets (as defined). As of September 30, 2012 and December 31, 2011, the Banks meet all capital adequacy requirements to be classified as “well capitalized” under prompt corrective action provisions and meet all capital adequacy requirements to which they are subject.

	Actual					For Capital Adequacy Purposes					To be Considered Well Capitalized by Prompt Corrective Action
	Amount		Ratio			Amount		Ratio			Amount		Ratio (1)
As of September 30, 2012
Total capital (to risk-weighted assets)
Consolidated	$	43,651		13.7	%	$	25,530		8	%	$	NA		NA
Floridian Bank	$	15,772		14.0	%	$	9,038		8	%	$	11,298		10	%
Orange Bank of Florida	$	24,841		12.7	%	$	15,645		8	%	$	19,557		10	%
Tier 1 capital (to risk-weighted assets)
Consolidated	$	39,615		12.4	%	$	12,765		4	%	$	NA		NA
Floridian Bank	$	14,351		12.7	%	$	4,519		4	%	$	6,767		6	%
Orange Bank of Florida	$	22,356		11.4	%	$	7,823		4	%	$	11,734		6	%
Tier 1 capital (to average assets)
Consolidated	$	39,615		10.0	%	$	15,856		4	%	$	NA		NA
Floridian Bank	$	14,351		10.2	%	$	5,627		4	%	$	7,034		5	%
Orange Bank of Florida	$	22,356		8.8	%	$	10,129		4	%	$	12,662		5	%

(1) As discussed in Note 9, effective September 30, 2012, Orange Bank must meet enhanced Tier 1 Capital and Total Risk-Based Capital ratios. At September 30, 2012, Orange Bank had met all enhanced requirements.

25

Floridian Financial Group, Inc. and Subsidiaries

Note 6. Regulatory Capital Matters (continued)

	Actual					For Capital Adequacy Purposes					To be Considered Well Capitalized by Prompt Corrective Action
	Amount		Ratio			Amount		Ratio			Amount		Ratio
As of December 31, 2011
Total capital (to risk-weighted assets)
Consolidated	$	42,545		12.1	%	$	26,221		8	%	$	NA		NA
Floridian Bank	$	14,991		12.5	%	$	9,560		8	%	$	11,950		10	%
Orange Bank of Florida	$	24,625		10.7	%	$	18,355		8	%	$	22,943		10	%
Tier 1 capital (to risk-weighted assets)
Consolidated	$	38,126		10.9	%	$	13,111		4	%	$	NA		NA
Floridian Bank	$	13,495		11.3	%	$	4,780		4	%	$	7,170		6	%
Orange Bank of Florida	$	21,732		9.5	%	$	9,177		4	%	$	13,766		6	%
Tier 1 capital (to average assets)
Consolidated	$	38,126		8.1	%	$	16,876		4	%	$	NA		NA
Floridian Bank	$	13,495		9.0	%	$	6,032		4	%	$	7,541		5	%
Orange Bank of Florida	$	21,732		6.9	%	$	12,607		4	%	$	16,007		5	%

Pursuant to Orange Bank’s regulatory Memorandum of Understanding (the “MOU”), Orange Bank is required to maintain a minimum Tier 1 capital to average assets ratio of 8% and total capital to risk-weighted assets of 12%. As of September 30, 2012, Orange Bank met the minimum capital requirement as required by the MOU.

The payment of dividends by a Florida state bank is subject to various restrictions set forth in the Florida Financial Institutions Code. Such restrictions generally limit dividends to an amount not exceeding net income for the current and two preceding years, less any dividends paid during that period. Accordingly, management does not expect the payment of dividends at any time in the near future. Since the Company is dependent upon the Bank’s ability to pay dividends, the Company is, in effect, similarly restricted as to its ability to pay dividends. Further, the Boards of Directors of the Banks are restricted from declaring and paying the Company any dividends without the prior approval of our banking regulators. See Note 9.

26

Floridian Financial Group, Inc. and Subsidiaries

Note 7. Fair Values of Financial Instruments

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability. The price in the principal (or most advantageous) market used to measure the fair value of the asset or liability shall not be adjusted for transaction costs. An orderly transaction is a transaction that assumes exposure to the market for a period prior to the measurement date to allow for marketing activities that are usual and customary for transactions involving such assets and liabilities; it is not a forced transaction. Market participants are buyers and sellers in the principal market that are (i) independent, (ii) knowledgeable, (iii) able to transact and (iv) willing to transact.

Estimating fair value requires the use of valuation techniques that are consistent with the market approach, the income approach and/or the cost approach. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets and liabilities. The income approach uses valuation techniques to convert expected future amounts, such as cash flows or earnings, to a single present value amount on a discounted basis. The cost approach is based on the amount that currently would be required to replace the service capacity of an asset (replacement cost). Valuation techniques should be consistently applied. Inputs to valuation techniques refer to the assumptions that market participants would use in pricing the asset or liability. Inputs may be observable, meaning those that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from independent sources, or unobservable, meaning those that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. In that regard, the guidance establishes a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs.

The fair value hierarchy is as follows:

Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.

Level 3: Significant unobservable inputs that reflect a reporting entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

A description of the valuation methodologies used for instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below.

In general, fair value is based upon quoted market prices, where available. If such quoted market prices are not available, fair value is based upon internally developed models that primarily use, as inputs, observable market-based parameters. Valuation adjustments may be made to ensure that financial instruments are recorded at fair value. These adjustments may include amounts to reflect counterparty credit quality, the Company’s creditworthiness, among other things, as well as unobservable parameters. Any such valuation adjustments are applied consistently over time. Our valuation methodologies may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. While management believes the Company’s valuation methodologies are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date.

27

Floridian Financial Group, Inc. and Subsidiaries

Note 7. Fair Values of Financial Instruments (continued)

The following methods and assumptions were used by the Company in estimating the fair value of its financial instruments:

Cash and due from banks, interest bearing demand deposits in other banks, and federal funds sold: Due to the short-term nature of these instruments, fair values approximate their carrying amounts.

Investment Securities: The fair values of investment securities are determined by quoted prices in active markets, when available. If quoted market prices are not available, the fair value is determined by a matrix pricing, which is a mathematical technique, widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted securities. Other investments include non-traded securities in bankers-bank stock which is estimated to approximate its book value.

Loans: For variable-rate loans that re-price frequently and with no significant change in credit risk, fair values are based on carrying values. Fair values for all other loans (for example, commercial, commercial real estate, residential real estate, and consumer loans) are estimated using discounted cash flow analyses, using interest rates currently being offered for loans with similar terms to borrowers of similar credit quality. Fair values for nonperforming loans are estimated using discounted cash flow analyses or underlying collateral values, where applicable.

Impaired Loans: Loans for which it is probable that payment of interest and principal will not be made in accordance with the contractual terms of the loan agreement are considered impaired. Once a loan is identified as individually impaired, management measures impairment in accordance with the FASB guidance “Accounting by Creditors for Impairment of a Loan,” and the fair value of impaired loans is estimated using one of several methods, including collateral value, market value of similar debt, enterprise value, liquidation value and discounted cash flows. Those impaired loans not requiring an allowance represent loans for which the fair value of the expected repayments or collateral exceed the recorded investments in such loans. In accordance with accounting literature, impaired loans where an allowance is established based on the fair value of collateral require classification in the fair value hierarchy. Collateral values are estimated using level 3 inputs based on customized discounting criteria.

Other Real Estate Owned: Other real estate owned consists of property acquired through, or in lieu of, loan foreclosures or other proceedings and is initially recorded at fair value less estimated selling costs at the date of foreclosure, which establishes a new cost basis. Subsequent to foreclosure, the properties are held for sale and are carried at the lower of cost or the net fair value less disposal costs. Properties are evaluated regularly to ensure the recorded amounts are supported by current fair values, and a charge to operations is recorded as necessary to reduce the carrying amount to fair value less estimated costs to dispose.

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

Deposits: The fair value of demand deposits, including non-interest bearing demand deposits, savings accounts, NOW accounts and money market demand accounts, is equal to their carrying value. Fixed rate term deposits are valued using discounted cash flows. The discount rate used is based on interest rates currently being offered on comparable deposits as to amount and term.

Other borrowings: The carrying amounts of borrowings under repurchase agreements amount of $4.3 million and a long-term note payable of $850 thousand approximate their fair values.

Off-balance-sheet instruments: Loan commitments and standby letters of credit are negotiated at current market rates and are relatively short-term in nature. Therefore, their estimated fair value approximates the fees charged and is nominal at September 30, 2012 and December 31, 2011.

28

Floridian Financial Group, Inc. and Subsidiaries

Note 7. Fair Values of Financial Instruments (continued)

Financial Instruments Recorded at Fair Value on a Recurring Basis

The following table sets forth the Company’s assets and liabilities which are carried at fair value on a recurring basis as of September 30, 2012 and December 31, 2011, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value:

	September 30, 2012
(Dollars in Thousands)	Quoted Prices in Active Markets for Identical Assets Level 1		Significant Other Observable Inputs Level 2		Significant Unobservable Inputs Level 3		Total at Fair Value
Securities available for sale Debt securities:
U.S. Government and federal agencies	$	—	$	—	$	—	$	—
States & political subdivisions		—		5,827		—		5,827
U.S. Agency REMIC		—		35,818		—		35,818
U.S. Agency MBS		—		18,574		—		18,574
Total securities available for sale	$	—	$	60,219	$	—	$	60,219

	December 31, 2011
	Quoted Prices in Active Markets for Identical Assets Level 1		Significant Other Observable Inputs Level 2		Significant Unobservable Inputs Level 3		Total at Fair Value
Securities available for sale Debt securities:
U.S. Government and federal agencies	$	—	$	13,690	$	—	$	13,690
States & political subdivisions		—		1,795		—		1,795
U.S. Agency REMIC		—		39,038		—		39,038
U.S. Agency MBS		—		18,613		—		18,613
Total securities available for sale	$	—	$	73,136	$	_—	$	73,136

29

Floridian Financial Group, Inc. and Subsidiaries

Note 7. Fair Values of Financial Instruments (continued)

Financial Instruments Recorded at Fair Value on a Nonrecurring Basis

The Company may be required, from time to time, to measure certain financial assets and financial liabilities at fair value on a nonrecurring basis in accordance with U.S. generally accepted accounting principles. These include assets that are measured at the lower of cost or market that were recognized at fair value below cost at the end of the period.

The fair values of assets measured at fair value on a nonrecurring basis are as follows at September 30, 2012 and December 31, 2011:

	September 30, 2012
(Dollars in Thousands)	Quoted Prices in Active Markets forIdentical AssetsLevel 1		Significant OtherObservableInputsLevel 2		SignificantUnobservableInputsLevel 3
Impaired loans	$	—	$	—	$	3,529
Other real estate owned	$	—	$	—	$	3,614
	December 31, 2011
(Dollars in Thousands)	Quoted Prices in Active Markets forIdentical AssetsLevel 1		Significant OtherObservableInputsLevel 2		SignificantUnobservableInputsLevel 3
Impaired loans	$	—	$	—	$	5,913
Other real estate owned	$	—	$	—	$	5,129

Provisions for loan losses of $1.5 million and $1.7 million were recorded on impaired loans during the nine months ended September 30, 2012 and 2011, respectively.

Write-downs of $166 thousand and $387 thousand were recorded on other real estate owned during the nine months ended September 30, 2012 and 2011, respectively. Subsequent to September 30, 2012, Orange Bank sold an OREO property for $1.5 million.

30

Floridian Financial Group, Inc. and Subsidiaries

Note 7. Fair Values of Financial Instruments (continued)

Following is a summary of the carrying amounts and approximate fair values of the Company’s financial instruments at September 30, 2012 and December 31, 2011. The fair value estimates presented are based on pertinent information available to management as of September 30, 2012 and December 31, 2011. Although management is not aware of any factors that would significantly affect the estimated fair values, they have not been comprehensively revalued for purposes of these financial statements since the statement of financial condition date, and therefore, current estimates of fair value may differ significantly from the amounts disclosed.

	September 30, 2012 Fair Value Measurements Using:
(Dollars in Thousands)	Carrying Amount		Quoted Price in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial assets:
Cash and due from banks	$	4,909	$	4,909	$	—	$	—
Federal funds sold and interest bearing deposits		26,541		26,541		—		—
Available for sale securities		60,219		—		60,219		—
Other investments		52		—		—		52
Loans, net		278,008		—		275,999		3,529
Accrued interest receivable		1,127		—		1,127		—
Financial liabilities:
Deposits	$	352,132	$	—	$	352,648	$	—
Other borrowings		5,102		5,102		—		—
Accrued interest payable		43		—		43		—

(Dollars in Thousands)	December 31, 2011 Fair Value Measurements Using:
	Carrying Amount		Quoted Price in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial assets:
Cash and due from banks	$	8,930	$	8,930	$	—	$	—
Federal funds sold and interest bearing deposits		23,917		23,917		—		—
Securities held to maturity		1,002		—		1,013		—
Available for sale securities		73,136		—		73,136		—
Other investments		100		—		—		100
Loans, net		305,088		—		301,549		5,913
Accrued interest receivable		1,180		—		1,180		—
Financial liabilities:
Deposits	$	393,726	$	—	$	394,940	$	—
Other borrowings		13,955		13,955		—		—
Accrued interest payable		87		—		87		—

31

Floridian Financial Group, Inc. and Subsidiaries

Note 7. Fair Values of Financial Instruments (continued)

Assets measured at fair value on a recurring basis and for which the Company has utilized Level 3 inputs to determine fair value were immaterial at September 30, 2012.

The following table presents additional quantitative information about assets measured at fair value on a nonrecurring basis and for which the Company utilized Level 3 inputs to determine fair value:

	September 30, 2012 Quantitative Information about Level 3 Fair Value Measurements
(Dollars in Thousands)	Fair Value Estimate		Valuation Techniques		Unobservable Input		Range (Weighted Average)
Impaired loans	$	3,529		Appraisal of collateral (1)		Appraisal adjustments (2) Estimated selling costs (2)		0% to -50% (-7.9%) 0% to -11% (-3.5%)
Other real estate owned and repossessed assets	$	3,614		Appraisal of collateral (1), (3)		Appraisal adjustments (2) Estimated selling costs (2)		0% to -49% (-15.7%) -10% to -11% (-10.1%)

(1) Fair value is generally determined through independent appraisals of the underlying collateral, which generally include various level 3 inputs which are not identifiable.

(2) Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated selling costs. The range and weighted average of estimated selling costs and other appraisal adjustments are presented as a percent of the appraisal.

(3) Includes qualitative adjustments by management and estimated selling costs.

32

Floridian Financial Group, Inc. and Subsidiaries

Note 8. Related Party

On January 4, 2011, Orange Bank purchased the land, building, and furniture and fixtures associated with the Clermont Branch location from First Team Clermont OB, LLC, a Florida limited liability company (“First Team”). First Team is controlled by W. Warner Peacock, a former director of the Company. First Team holds a note on the land, building, and furniture and fixtures of $1.7 million. The note requires monthly interest payments at 6.5% per annum. The note required a principal reduction of $850 thousand on January 3, 2012, with all outstanding principal and interest due on January 3, 2013.

Note 9. Regulatory Agreement

On July 21, 2011, the board of directors of Floridian Bank agreed to approve the board resolution in consultation with their banking regulators. On September 11, 2012, the regulatory board resolution for Floridian Bank was terminated. On July 21, 2011, the board of directors of Orange Bank agreed to approve a board resolution and subsequently on July 19, 2012, the board of directors of Orange Bank agreed to adopt a MOU issued by its banking regulator. From a regulatory perspective, a MOU is a nonpublic agreement; however, in the interest of full disclosure, we are summarizing the main obligations of Orange Bank’s MOU. The FDIC issues an MOU when it believes a board resolution would not adequately address its concerns.

For Orange Bank, its memorandum of understanding (“MOU”) includes, among other things, (i) seeking approval from the FDIC and Florida Office of Financial Regulation (“OFR”) prior to appointing new directors and executive officers; (ii) enhancing the board of director’s participation in the affairs of Orange Bank; (iii) developing plans to reduce and improve certain loan relationships with adverse classification; (iv) charging off remaining assets classified as “Loss”; (v) prohibiting extensions of credit to certain high-risk borrowers; (vi) submitting of a new business plan and annual budgets and earnings forecasts; (vii) achieving and maintaining, by September 30, 2012, a Tier 1 leverage capital ratio and total risk-based capital ratio of at least 8% and 12%, respectively; and (viii) providing quarterly reports to the FDIC and OFR regarding the steps taken to address the foregoing. Orange Bank must also receive approval from the FDIC and OFR prior to declaring or paying dividends.

The MOU adopted by Orange Bank and the restrictions imposed thereby on Orange Bank will remain in effect unless modified or terminated by the Bank’s regulators. Since entering into the board resolution and MOU, we have been actively pursuing the corrective actions. We intend to continue to take the actions necessary to comply with the requirements of the MOU and implement the submitted plan successfully, although we may be unable to do so. As of September 30, 2012, Orange Bank’s Tier 1 leverage capital ratio and total risk-based capital ratio were approximately 8.8% and 12.7%, respectively; meeting all regulatory requirements.

On October 20, 2011, the Company’s board of directors agreed to adopt certain board resolutions (the “FRB Resolution”) in consultation with the Federal Reserve Bank of Atlanta (the “FRB”). The FRB Resolution require, among other things, that the Company seek approval from the FRB prior to incurring any debt, declaring or paying any dividends, reducing its capital position (e.g., through the purchase of treasury shares), or making distributions on subordinated debentures or trust preferred securities. The FRB Resolution approved by the Company and the restrictions imposed thereby on the Company will remain in effect until terminated by the FRB. We intend to take the actions necessary to comply with the requirements of the FRB Resolution.

Note 10. Branch Sale

On August 17, 2012, Orange Bank, entered into a Purchase and Assumption Agreement (the “Agreement”) to sell the Bank’s Crystal River branch to Old Florida National Bank (“Old Florida”). The Bank has agreed to sell the branch’s real estate and improvements, the deposits associated with the branch and a related portfolio of loans. Old Florida will pay the value of the loans at closing of approximately $4.2 million, assume the deposits of approximately $43.6 million for no premium and pay $1.0 million for the real estate and improvements. The sale has been approved by our regulators and is expected to close in the first quarter of 2013. A loss of $250 thousand was recognized in the third quarter 2012 on the sale of the branch.

33

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

          The following management’s discussion and analysis provides supplemental information, which sets forth the major factors that have affected our financial condition and results of operations during the periods included in the accompanying consolidated financial statements and should be read in conjunction with the Consolidated Financial Statements and related notes. The analysis is divided into subsections entitled “Business Overview,” “Results of Operations,” “Market Risk,” “Financial Condition,” “Liquidity,” “Capital Resources,” “Off-Balance Sheet Arrangements,” and “Critical Accounting Policies.” Throughout this section, Floridian Financial Group, Inc. and subsidiaries, collectively, are referred to as “Company,” “we,” “us,” or “our.”

CAUTION CONCERNING FORWARD-LOOKING STATEMENTS

          This Quarterly Report on Form 10-Q, including this management’s discussion and analysis section, contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, among others, statements about our beliefs, plans, objectives, goals, expectations, estimates and intentions that are subject to significant risks and uncertainties and are subject to change based on various factors, many of which are beyond our control. The words “may,” “could,” “should,” “would,” “believe,” “anticipate,” “estimate,” “expect,” “intend,” “plan,” “target,” “goal,” and similar expressions are intended to identify forward-looking statements.

          All forward-looking statements, by their nature, are subject to risks and uncertainties. Our actual future results may differ materially from those set forth in our forward-looking statements. Please see the Introductory Note and Item 1A. Risk Factors of our Annual Report on Form 10-K, as updated from time to time, and in our other filings made from time to time with the SEC after the date of this report.

          However, other factors besides those listed in our Quarterly Report or in our Annual Report also could adversely affect our results, and you should not consider any such list of factors to be a complete set of all potential risks or uncertainties. Any forward-looking statements made by us or on our behalf speak only as of the date they are made. We do not undertake to update any forward-looking statement, except as required by applicable law.

Business Overview

          About Our Business

          We are a multi-bank holding company headquartered in Lake Mary, Florida, a community situated between Orlando and Daytona Beach, Florida. We were incorporated on September 8, 2005 as the bank holding company of Floridian Bank, a Florida chartered commercial bank. We commenced operations, along with Floridian Bank, on March 20, 2006. From 2006 to 2008, we experienced periods of rapid growth. On June 30, 2008, we closed a merger transaction in which Orange Bank of Florida, a Florida chartered commercial bank, became our wholly-owned subsidiary. The transaction was treated as a merger of equals where each shareholder of Orange Bank received 1.04 shares of our common stock. At the time of the merger, Orange Bank had approximately $196 million in assets, including approximately $121 million in loans, and approximately $176 million in deposits. In 2009, we began a process of slowing our growth and preserving capital.

          Both Floridian Bank and Orange Bank are full-service commercial banks, providing a wide range of business and consumer financial services in our target marketplace, which is comprised primarily of Orange, Seminole, Citrus, Lake, Flagler, and Volusia Counties in Florida. Floridian Bank is headquartered in Daytona Beach, Florida, with a primary service area in Flagler and Volusia Counties. Orange Bank is headquartered in Orlando, Florida, with a primary service area in Orange, Seminole, Lake and Citrus Counties. Collectively, our Banks operate 10 banking offices.

          The Banks offer commercial and retail banking services with an emphasis on commercial and commercial real estate lending, particularly to the medical services industry. As of September 30, 2012, we had total assets of $400.0 million, deposits of $352.1 million, total gross loans of $286.0 million and total shareholders’ equity of $40.5 million.

34

          Our principal executive offices are located at 175 Timacuan Boulevard, Lake Mary, Florida 32746. The telephone number at that office is (407) 321-3233.

          Regulatory Matters

                    As described in Note 9 to our consolidated financial statements, the Company has adopted the FRB Resolution and Orange Bank has adopted the MOU in consultation with their banking regulators. Pursuant to the FRB Resolution and the MOU, we have agreed to preserve capital by agreeing to place restrictions on our ability to declare and pay dividends, issue debt, repurchase shares of stock, or make other distributions. Orange Bank, among other things, has agreed to maintain heightened capital ratios. As of September 30, 2012, Orange Bank was in compliance with the heightened capital ratios. See Note 9 for a further discussion.

Results of Operations

CONDENSED SUMMARY OF EARNINGS

	For the three months ended September 30,						For the nine months ended September 30,
(Dollars in Thousands, except per share data)	2012			2011			2012			2011
Interest income	$	3,574		$	4,309		$	11,614		$	12,828
Interest expense		514			1,004			1,915			3,137
Net interest income		3,060			3,305			9,699			9.691
Provision for loan losses		104			550			1,520			1,747
Noninterest income		421			168			2,046			854
Noninterest expense		3,221			3,388			9,026			10,446
Income before income taxes		156			(465	)		1,199			(1,648	)
Income tax expense		—			25			—			200
Net profit (loss)	$	156		$	(490	)	$	1,199		$	(1,848	)
Basic net profit (loss) per share	$	0.03		$	(0.08	)	$	0.20		$	(0.30	)
Diluted net profit (loss) per share	$	0.03		$	(0.08	)	$	0.20		$	(0.30	)
Selected operating ratios
Return on average assets		0.22	%		(0.40	)%		0.40	%		(0.53	)%
Return on average equity		2.08	%		(4.83	)%		4.12	%		(6.18	)%
Dividend payout ratio		N/A			N/A			N/A			N/A
Equity to assets ratio		10.12	%		8.57	%		10.12	%		8.57	%

          The net profit for the three months ended September 30, 2012 was $156 thousand compared to a net loss of $490 thousand for the same period in 2011. The improvement was principally due to a $371 thousand net gain on the sale of securities and the decrease in the provision for loan losses of $446 thousand offset by a decline in net interest income. During the third quarter Orange Bank recognized a $250 thousand loss on the sale of the Crystal River branch. The sale is expected to close in January 2013.

          For the nine months ended September 30, 2012 net profit was $1.2 million compared to a $1.8 million loss for the same period in 2011. The improvement was principally due to a $1.3 million net gain on the sale of securities and a $1.4 million decrease in salary expense from $5.0 million for the nine months ended September 30, 2011, to $3.6 million for the nine months ended September 30, 2012. The reduction in salary expense was a combination of the consolidation of senior executive positions in 2011 and a $369 thousand adjustment to deferred compensation related to the resignation of Charlie Brinkley, our former President and CEO, in September 2011. As of the resignation date, Mr. Brinkley was 30% vested in the accrued balance of his salary continuation agreement.

          Net Interest Income

          Our profitability is dependent to a large extent on net interest income, which is the difference between the interest received on earning assets (such as loans and securities) and the interest paid on interest bearing liabilities (principally deposits and borrowings). Our principal interest earning assets are loans, investment securities, and federal funds sold. Interest bearing liabilities primarily consist of certificates of deposit, interest bearing checking accounts (“NOW accounts”), savings deposits, and money market accounts. Funds attracted by these interest bearing liabilities, as well as noninterest bearing deposits, are invested in interest-earning assets. Accordingly, net interest income depends upon the volume of average interest-earning assets and average interest bearing liabilities and the interest rates earned or paid on them.

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          Our net interest income is impacted by the market rates of interest as influenced by the Federal Reserve’s monetary policy. We have seen a narrowing of margins over the last several years and with the Federal Reserve’s announcement to keep short-term interest rates at near zero through mid-2015 we expect this trend to continue. We believe our service commitment to our customers, however, will enable us to continue to attract deposits and make loans at rates that will not significantly deteriorate our margins.

          The following table reflects the components of net interest income for the three month periods ended September 30, 2012 and 2011. It sets forth, (1) average assets, liabilities and shareholders’ equity, (2) interest income earned on interest-earning assets and interest paid on interest bearing liabilities, (3) average yields earned on interest-earning assets and average rates paid on interest bearing liabilities, (4) our net interest spread (i.e., the average yield on interest-earning assets less the average rate on interest bearing liabilities) and (5) our net interest margin (i.e., the net yield on interest earning assets):

AVERAGE BALANCES AND INTEREST RATES

	Three months ended September 30,
	2012							2011
(Dollars in Thousands)	Average Balance		Interest		Rate			Average Balance		Interest		Rate
ASSETS
Loans, Net(1)(2)	$	287,768	$	3,522		4.87	%	$	313,452	$	3,980		5.04	%
Investment Securities		65,073		42		0.26			46,076		275		2.39
Federal Funds Sold		11,567		8		0.28			79,877		4		0.20
Deposits at interest with banks		2,060		2		0.39			2,648		50		7.49
Total Earning Assets		366,468		3,574		3.88	%		442,053		4,309		3.87	%
Other Assets		30,996							40,671
Total Assets	$	397,464						$	482,724
LIABILITIES
Savings, NOW and Money Market	$	148,194	$	151		0.41	%	$	165,959	$	268		0.67	%
Time Deposits		102,343		328		1.27			168,428		680		1.80
Total Interest Bearing Deposits		250,537		479		0.76			334,387		948		1.23
Other Borrowings		11,526		35		1.21			8,734		56		2.79
Total Interest Bearing Liabilities		262,063		514		0.78	%		343,121		1,004		1.27	%
Noninterest Bearing Deposits		92,669							96,837
Other Liabilities		2,080							2,494
Total Liabilities		356,812							442,452
Total Shareholders’ Equity		40,652							40,272
Total Liabilities and Equity	$	397,464						$	482,724
Interest Rate Spread						3.10	%						2.60	%
Net Interest Income			$	3,060						$	3,305
Net Interest Margin						3.32	%						2.89	%

(1) Average balances include nonaccrual loans, and are net of unearned loan fees of $157 and $214 at September 30, 2012 and 2011, respectively.

(2) Interest income includes fees on loans of $37 and $12 for the three months ended September 30, 2012 and 2011, respectively.

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          The following table reflects the components of net interest income for the nine month periods ended September 30, 2012 and 2011:

AVERAGE BALANCES AND INTEREST RATES

	Nine months ended September 30,
	2012							2011
(Dollars in Thousands)	Average Balance		Interest		Rate			Average Balance		Interest		Rate
ASSETS
Loans, Net(1)(2)	$	295,152	$	10,989		4.97	%	$	311,744	$	11,734		5.03	%
Investment Securities		70,428		581		1.10			50,582		980		2.58
Federal Funds Sold		17,682		38		0.29			55,587		107		0.26
Deposits at interest with banks		2,376		6		0.34			2,907		7		0.32
Total Earning Assets		385,638		11,614		4.02	%		420,820		12,828		4.08	%
Other Assets		34,173							41,270
Total Assets	$	419,811						$	462,090
LIABILITIES
Savings, NOW and Money Market	$	150,169	$	473		0.42	%	$	164,309	$	967		0.79	%
Time Deposits		124,431		1,349		1.45			151,582		1,983		1.75
Total Interest Bearing Deposits		274,600		1,822		0.89			315,891		2,950		1.25
Other Borrowings		12,771		93		0.97			8,329		186		2.99
Total Interest Bearing Liabilities		287,371		1,915		0.89	%		324,220		3,136		1.29	%
Noninterest Bearing Deposits		89,799							95,328
Other Liabilities		2,149							2,556
Total Liabilities		379,319							422,104
Total Shareholders’ Equity		40,492							39,986
Total Liabilities and Equity	$	419,811						$	462,090
Interest Rate Spread						3.13	%						2.79	%
Net Interest Income			$	9,699						$	9,692
Net Interest Margin						3.36	%						3.08	%

(1)	Average balances include nonaccrual loans, and are net of unearned loan fees of $164 and $242 at September 30, 2012 and 2011, respectively.
(2)	Interest income includes fees on loans of $60 and $38 for the nine months ended September 30, 2012 and 2011, respectively.

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          Net interest income for the nine months ended September 30, 2012 and 2011 was comparable at $9.7 million even though average total earning assets and total assets decreased by approximately $35.2 million, or 8.4% and $42.3 million, or 9.1%, respectively. Interest income decreased 9.5% to $11.6 million for the nine months ended September 30, 2012 compared to $12.8 million for the nine months ended September 30, 2011 offset by a 38.9% decrease in interest expense to $1.9 million from $3.1 million. The average interest rate on other borrowings decreased from 2.99% to 0.97% at September 30, 2011 and 2012, respectively. Average noninterest bearing deposits decreased by 5.8% to $89.8 million at September 30, 2012 compared to $95.3 million at September 30, 2011.

          The following table sets forth certain information regarding changes in our interest income and interest expense for the quarter ended September 30, 2012 compared to the quarter ended September 30, 2011. For each category of interest earning assets and interest bearing liabilities, information is provided on changes attributable to changes in interest rate and changes in the volume. Changes in both volume and rate have been allocated based on the proportionate absolute changes in each category.

RATE VOLUME ANALYSIS

	Three months ended September 30, 2012 and 2011									Nine months ended September 30, 2012 and 2011
	Total Change			Due to average						Total Change			Due to average
(Dollars in Thousands)				Volume			Rate						Volume			Rate			Days
Interest earning assets
Loans, net	$	(458	)	$	(336	)	$	(122	)	$	(745	)	$	(790	)	$	5		$	40
Investment securities		(233	)		113			(346	)		(399	)		384			(783	)		—
Federal funds sold		(48	)		(3	)		7			(69	)		(72	)		4			—
Other		4			(11	)		(37	)		(1	)		(2	)		—			—
Total	$	(735	)		(237	)	$	(498	)	$	(1,214	)	$	(480	)	$	(774	)	$	40
Interest bearing liabilities
Savings, NOW, money market	$	(117	)	$	(29	)	$	(88	)	$	(494	)	$	(84	)	$	(412	)	$	2
Certificates of deposit		(352	)		(268	)		(84	)		(635	)		(359	)		(281	)		5
Short term borrowings		(21	)		18			(39	)		(93	)		99			(192	)		—
Total	$	(490	)	$	(279	)	$	(211	)	$	(1,222	)	$	(344	)	$	(885	)	$	7
Changes in net interest income	$	(245	)	$	42		$	(287	)	$	8		$	(136	)	$	111		$	33

          Provision for Loan Losses

          The allowance for loan losses is a provision for loan losses charged against net interest income. Loans are charged against the allowance for loan losses when management believes that the collectability of the principal is unlikely. The allowance is an amount that management believes is adequate to absorb losses inherent in the loan portfolio, based on evaluations of the collectability of loans, industry historical loss experience, current economic conditions, portfolio mix, and other factors. While management uses the best information available to make its evaluation, future adjustments to the allowance may be necessary if there are significant changes in economic conditions.

          Impaired loans are measured based on the present value of expected future cash flows discounted at the loan’s effective interest rate or, as a practical expedient, at the loan’s observable market price or the fair value of the collateral if the loan is collateral dependent. A loan is impaired when it is probable the creditor will be unable to collect all contractual principal and interest payments due in accordance with the terms of the loan agreement.

          As a direct result of these factors and analyses, the loan loss provision was $104 thousand for the three months ended September 30, 2012, compared to $550 thousand for the same period in 2011. For the nine months ended September 30, 2012 the loan loss provision was $1.5 million compared to $1.7 million for the nine months ended September 30, 2011. Past due loans decreased by 11.8% from $9.3 million at December 31, 2011 to $8.2 million at September 30, 2012. Past due loans included several large loans that had matured, with outstanding matured balances at September 30, 2012 of $5.5 million. The Banks are in the process of reviewing the loans. Loans categorized as substandard decreased 15.9% to $18.2 million at September 30, 2012. As of September 30, 2012, 91.0% of the portfolio was categorized as pass compared to 87.8% at December 31, 2011.

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          Noninterest Income

          Following is a schedule of noninterest income:

	Three months ended September 30,						Nine months ended September 30,
(Dollars in Thousands)	2012			2011			2012			2011
Loan fee income	$	37		$	12		$	60		$	38
Service charges on deposit accounts		149			160			468			482
Cash surrender value – life insurance		93			78			277			247
Other		7			12			87			181
Loss on sale of assets		(236	)		(94	)		(126	)		(94	)
Gain on sale of securities		371			—			1,280			—
Totals	$	421		$	168		$	2,046		$	854

          For the three months ended September 30, 2012, noninterest income increased to $421 thousand from $168 thousand for the same period in 2011. The increase was due to a $371 thousand gain on the sale of securities and the increase in cash surrender value of BOLI. The loss on sale of assets include the recognized loss on the Crystal River branch, which is expected to close in January 2013, of $250 thousand offset by a gain on the surrender of two BOLI policies owned by Floridian Bank and the holding company.

          Total noninterest income of $2.0 million for the nine months ended September 30, 2012, was an increase of $1.1 million or 139.6% from the same period in 2011. The increase was primarily due to a $1.3 million gain on the sale of securities compared to $0 in 2011.

          Noninterest Expense

          Following is a schedule of noninterest expense:

	Three months ended September 30,				Nine months ended September 30,
(Dollars in Thousands)	2012		2011		2012		2011
Salaries and employee benefits	$	1,378	$	1,716	$	3,608	$	5,031
Occupancy and equipment expense		734		629		2,090		2,035
FDIC insurance		159		43		498		472
Data processing		460		343		1,245		1,077
Other real estate expense		64		186		400		403
Professional fees		240		256		679		751
Credit and collection expenses		29		47		74		220
Core deposit intangible amortization		48		48		144		144
Other operating expenses		109		120		288		313
Totals	$	3,221	$	3,388	$	9,026	$	10,446

          For the three months ended September 30, 2012, noninterest expense decreased 4.9% to $3.2 million compared to $3.4 million for the three months ended September 30, 2011. The decrease was due to a $338 thousand decrease in salaries and benefits related to the deduction in staff during 2011 through both the closing of several branches and the elimination of positions. FDIC insurance increased $116 thousand due to a change in the calculation of premiums by the FDIC that resulted in a one-time refund in 2011.

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          Total noninterest expense of $9.0 million for the nine months ended September 30, 2012 decreased $1.4 million, or 13.6%, from the same period in 2011. The decrease was due to the elimination and combining of senior executive positions in 2011 and the reversal of deferred compensation expense, resulting in a 28.6% or $1.4 million reduction in salaries and benefits costs. Credit and collection expenses decreased by $146 thousand primarily due to a decrease in other real estate owned.

          Income Taxes

          We file consolidated tax returns. Having incurred annual operating losses since our inception in 2006, we have accumulated a net tax benefit over the past four years. We have recorded a valuation allowance to offset the deferred tax assets associated with the net operating loss carry forwards generated by our net losses. Management determined no additional valuation allowance was required and based on their evaluation of the deferred tax benefit and losses incurred, elected to eliminate the carrying value of the deferred asset account. The Company, however, retains the tax benefit should it be needed in future periods. We did not recognize an income tax benefit or expense for the quarter ended September 30, 2012.

Market Risk

          Market risk refers to potential losses arising from changes in interest rates, foreign exchange rates, equity prices and commodity prices. We are primarily exposed to interest rate risk inherent in our lending and deposit taking activities as a financial intermediary. To succeed in this capacity, we offer an extensive variety of financial products to meet the diverse needs of our customers. These products sometimes contribute to interest rate risk for us when product groups do not complement one another. For example, depositors may want short-term deposits while borrowers desire long-term loans. Changes in market interest rates may also result in changes in the fair value of our financial instruments, cash flows, and net interest income.

          Interest rate risk is comprised of repricing risk, basis risk, yield curve risk, and options risk. Repricing risk arises from differences in the cash flow or repricing between asset and liability portfolios. Basis risk arises when asset and liability portfolios are related to different market rate indexes, which do not always change by the same amount. Yield curve risk arises when asset and liability portfolios are related to different maturities on a given yield curve; when the yield curve changes shape, the risk position is altered. Options risk arises from “embedded options” within asset and liability products because some borrowers have the option to prepay their loans when rates fall while some depositors can redeem their certificates of deposit early when rates rise.

          We have established an Asset/Liability Committee (“ALCO”) for each Bank, which are responsible for each Bank’s interest rate risk management. We have implemented a sophisticated asset/liability model at both Banks to measure interest rate risk. Interest rate risk measures include earnings simulation, economic value of equity (“EVE”) and gap analysis. We do not use derivative financial instruments for market risk management purposes.

          Gap analysis and EVE are static measures that do not incorporate assumptions regarding future business. Gap analysis, while a helpful diagnostic tool, displays cash flows for only a single rate environment. EVE’s long-term horizon helps identify changes in optionality and longer-term positions. However, EVE’s liquidation perspective does not translate into the earnings-based measures that are the focus of managing and valuing a going concern. Net interest income simulations explicitly measure the exposure to earnings from changes in market rates of interest. Our current financial position is combined with assumptions regarding future business to calculate net interest income under various hypothetical rate scenarios. The Banks’ ALCO review earnings simulations over the ensuing 12 months under various interest rate scenarios. Reviewing these various measures provides us with a reasonably comprehensive view of our interest rate risk profile.

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          The following gap analysis compares the difference between the amount of interest earning assets (“IEA”) and interest bearing liabilities (“IBL”) subject to repricing over a period of time. A ratio of more than one indicates a higher level of repricing assets over repricing liabilities for the time period. Conversely, a ratio of less than one indicates a higher level of repricing liabilities over repricing assets for the time period. As indicated in our Gap Analysis table, our one-year cumulative gap at September 30, 2012, was a negative 6.70% compared to a negative 12.55% at December 31, 2011. The change in our one-year cumulative gap is primarily due to long-term time deposits maturing over the next 12 months.

GAP ANALYSIS

(Dollars in Thousands)	Within 3 Months			4 To 6 Months			7 To 12 Months			Total 1 Year
Interest Earning Assets (IEA)
Loans	$	141,360		$	6,198		$	15,257		$	162,815
Investment Securities		2,408			1,726			2,645			6,779
Federal funds sold		2,525			—			—			2,525
Other investments		23,416			—			100			23,516
Total	$	169,709		$	7,924		$	18,002		$	195,635
Interest Bearing Liabilities (IBL)
Savings, NOW, Money Market	$	150,639		$	—		$	—		$	150,639
Time deposits		19,491			13,190			34,015			66,696
Other borrowings		4,252			—			850			5,102
Total	$	174,382		$	13,190		$	34,865		$	222,437
Period Gap	$	(4,673	)	$	(5,266	)	$	(16,863	)	$	(26,802	)
Cumulative Gap	$	(4,673	)	$	(9,939	)	$	(26,802	)
Cumulative Gap / Total Assets		(1.17	)%		(2.49	)%		(6.70	)%
IEA / IBL (Cumulative)		97	%		95	%		88	%

Financial Condition

          Lending Activity

          The loan portfolio consists principally of loans to individuals and small- and medium-sized businesses within our primary market area of Central Florida. The table below shows our loan portfolio composition:

(Dollars in Thousands)	September 30, 2012		December 31, 2011
Commercial	$	40,111	$	44,833
Commercial real estate		222,932		241,648
Residential real estate		7,750		8,542
Consumer loans		15,167		16,745
Total loans		285,960		311,768
Less: Allowance for loan losses		7,820		6,566
Less: Unearned fees		122		114
Net loans	$	278,018	$	305,088

          Total loans decreased by $25.8 million during the first nine months of 2012 due to the payoff of several large loans. During the quarter, $717 thousand was transferred to other real estate owned, write-downs totaled $596 thousand, and approximately $1.5 million in net pay downs and payoffs. These decreases were offset by new loans of $8.8 million. There were approximately $10.7 million in nonperforming loans at September 30, 2012 compared to $8.4 million at December 31, 2011.

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          Real estate and related activities have slowed significantly in our market area, local unemployment rates remain above the national average, and real estate and other asset prices have declined appreciably. This has resulted in a weak loan demand in 2012 and 2011. Although the Company has seen an increase in loan demand in 2012, it has been offset by pay-downs in the portfolio.

          Investment Activity

          Investment activities serve to enhance the overall yield on interest earning assets while supporting interest rate sensitivity and liquidity positions. Securities purchased with the intent and ability to retain until maturity are categorized as securities held to maturity and carried at amortized cost. All other securities are categorized as securities available for sale and are recorded at fair value. Securities, like loans, are subject to similar interest rate and credit risk. In addition, by their nature, securities classified as available for sale are also subject to market value risks that could negatively affect the level of liquidity available to us, as well as shareholders’ equity. A change in the value of securities held to maturity could also negatively affect the level of shareholders’ equity if there was a decline in the underlying creditworthiness of the issuers and an other-than-temporary impairment is deemed or a change in our intent and ability to hold the securities to maturity.

          As of September 30, 2012, securities totaling $60.2 million were classified as available for sale. During the nine months ended September 30, 2012, securities available for sale decreased by $12.0 million as a result of lower deposit balances, offset with a lower loan portfolio.

          Deposits and Other Borrowings

          As a bank holding company, our primary source of funds is deposits. Typically, deposits are provided by businesses, municipalities, and individuals located within the markets served by our subsidiaries. In addition, we accept a limited amount of brokered deposits.

          Total deposits decreased $41.6 million to $352.1 million at September 30, 2012, compared to $393.7 million at December 31, 2011, due to a decision to reduce brokered deposits and pay lower interest rates on certificates of deposit. Core deposits, which exclude time deposit, increased $14.6 million to $248.5 million at September 30, 2012 from $233.9 million at December 31, 2011. Time deposits decreased to $103.6 million from $159.9 million. The decrease in time deposits is attributable to a $15.9 million reduction in brokered deposits with the remaining decrease attributable to customers moving time deposits to the Banks’ less restrictive core deposit accounts due to minimal differences in interest rates.

          Other borrowings, made up of short- and long-term borrowings, decreased by $8.9 million to $5.1 million at September 30, 2012 compared to a balance of $14.0 million at December 31, 2011 due to a scheduled principal reduction on the Clermont branch loan and a reduction in customer repurchase agreements. As of September 30, 2012, other borrowings were approximately 12.6% of our total shareholders’ equity.

Liquidity

          Our goal in liquidity management is to satisfy the cash flow requirements of depositors and borrowers as well as our operating cash needs with cost-effective funding. Our Board of Directors has established an Asset/Liability Policy in order to achieve and maintain earnings performance consistent with long-term goals while maintaining acceptable levels of interest rate risk, a “well-capitalized” balance sheet, and adequate levels of liquidity. This policy designates each Bank’s ALCO as the body responsible for meeting these objectives. The ALCO, which includes members of executive management, reviews liquidity on a periodic basis and approves significant changes in strategies that affect balance sheet or cash flow positions.

          The primary source of liquidity is deposits provided by commercial and retail customers. The Banks attract these deposits by offering an array of products designed to match customer needs and priced comparable to our competitors. Deposits can be very price sensitive; therefore, we believe that fluctuating deposit offering rates to the top of the market would generate a larger inflow of funds. In addition to local market deposits, the Banks have access to national brokered certificates of deposit markets as well as deposit subscription services. The Banks use these alternative sources of deposits to supplement deposits particularly when the rates are lower than the local market. These sources of deposit are limited by our policies to 25% of assets. Further, access to these brokered deposits is limited by regulation to banks that meet or exceed “well capitalized” definitions. In the event that the Company would fall below “well capitalized” levels, regulators will not permit any additional brokered deposits and would impose deposit rate restrictions not to exceed published national rates. Overall deposit levels are monitored on a constant basis as are liquidity policy levels, which must be maintained at a minimum of 14% of total deposits. Sources of these liquidity levels include cash and due from banks, short-term investments such as federal funds sold, and our investment portfolio, which can also be used as collateral for short-term borrowings. Alternative sources of funds include unsecured federal funds lines of credit through correspondent banks. The Banks have established contingency plans in the event of extraordinary fluctuations in cash resources.

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          Operating Activities

          Cash flows from operating activities primarily include net income (loss), adjusted for items that did not impact cash. Net cash provided by operating activities increased by $6.8 million to $4.3 million for the nine months ended September 30, 2012 compared to $624 thousand for the nine months ended September 30, 2011. The improvement was due to the Company achieving a $1.2 million profit for the nine months ended September 30, 2012 compared to a loss of $1.4 million for the nine months ended September 30, 2011.

          Investing Activities

          Cash used in investing activities reflects the impact of loans and investments acquired for our interest-earning asset portfolios, as well as cash flows from asset sales and the impact of acquisitions. For the nine months ended September 30, 2012, we had net cash flows provided by investing activities of $44.8 million, compared to net cash flows used in investing activities of $7.2 million for the nine months ended September 30, 2011. The change in cash flows from investing activities was due to a decrease in net loans of $26.6 million and a net decrease in investments available for sale of $12.4 million. The Company also had $2.8 million in proceeds from the redemption of its BOLI policies.

          Financing Activities

          Cash flows from financing activities include transactions and events whereby cash is obtained from depositors, creditors or investors. For the nine months ended September 30, 2012, we had net cash flows used in financing activities of $50.4 million, compared to net cash flows provided by financing activities of $9.7 million for the nine months ended September 30, 2011. The change in cash flows from financing activities was primarily due to a $41.6 million decrease in net deposit growth for the nine months ended September 30, 2012 compared to a $5.6 million increase in net deposit growth for the nine months ended September 30, 2011. In 2011, the Company offered a special promotion to increase time deposit balances with no comparable offering during the first three quarters of 2012.

Capital Resources

          The assessment of capital adequacy depends on a number of factors such as asset quality, liquidity, earnings performance, changing competitive conditions and economic forces. We seek to maintain a strong capital base to provide stability to current operations and to promote public confidence. As of September 30, 2012, the Banks exceeded the requirements contained in the applicable regulations, policies and directives pertaining to capital adequacy to be classified as “well capitalized” and are unaware of any material violation or alleged violation of these regulations, policies or directives; however, the poor loan portfolio performance and the related impact on earnings have deteriorated our capital position. Our intent is to strengthen our capital position, and both management and the Board of Directors have had exploratory discussions to determine the availability and cost of additional capital. As of September 30, 2012, Orange Bank’s Tier 1 leverage and total capital to risk weighted assets met the ratios as required by its MOU. Based on these discussions and the need to comply with the MOU, the Company may need to pursue another capital offering within the next 12 months.

          Key to our efforts to maintain existing capital adequacy is the need for the Banks to become profitable by focusing on increasing core earnings and decreasing the levels of adversely classified and nonperforming assets. Management is continuing to pursue a number of strategic alternatives to improve the core earnings of the Banks and to reduce the level of classified assets such as consolidating the Banks’ charters and redefining our credit organization. While we have recently withdrawn our application to merge the Banks, we expect to submit a new application to merge the Banks in 2013. Current market conditions for banking institutions, the overall uncertainty in financial markets and the Banks’ high level of nonperforming assets are impediments to the success of these strategies. If current adverse market factors continue for a prolonged period of time, new adverse market factors emerge, and/or the Banks are unable to successfully execute plans in a sufficient and timely manner, it could have a material adverse effect on the Banks’ business, results of operations and financial position, as well as result in further supervisory actions from our regulators.

43

          We offer a stock purchase plan to our employees and directors to purchase shares of our common stock at fair market value. In 2011, employees purchased 911 shares valued at $5.50 per share, which were issued in March 2012. In 2010, employees purchased 1,319 shares valued at $10.00 per share, which were issued in March 2011.

          In 2012, we filed a Form 15 to deregister our common stock under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We expect that our filing obligations under the Exchange Act will be automatically suspended once we file our annual report on Form 10-K for the current fiscal year. We would expect that “going dark” will not have a material impact on our ability to raise capital because our stock is not listed on an exchange and is relatively illiquid.

          Holders of our common stock are entitled to receive dividends when, as and if declared by our Board of Directors out of funds legally available for that purpose. We have not paid any dividends to our holders of common stock in the past and we currently do not intend to pay dividends on our common stock in the near future. In the event that we decide to pay dividends, there are a number of restrictions on our ability to do so.

          For a foreseeable period of time, our principal source of cash revenues will be dividends paid by the Banks to us with respect to their common stock. There are certain restrictions on the payment of these dividends imposed by federal banking laws, regulations and authorities. See the sections of our Annual Report on Form 10-K captioned “Item 1. Business-Regulatory Considerations – The Banks – Dividends”.

          As described in Note 9, we have adopted a certain board resolution and MOU in consultation with our regulators. Pursuant to the resolution and MOU, we have agreed to preserve capital by agreeing to place restrictions on our ability to declare and pay dividends, issue debt, repurchase shares of stock, or make other distributions. See Note 9 for further discussion.

Off-Balance Sheet Arrangements

          We do not currently engage in the use of derivative instruments to hedge interest rate risks. However, we are a party to financial instruments with off-balance sheet risks in the normal course of business to meet the financing needs of our customers.

          At September 30, 2012, we had approximately $50.5 million in commitments to extend credit and $2.5 million in standby letters of credit. Commitments to extend credit are agreements to lend to a customer so 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. Standby letters of credit are conditional commitments issued by us to guarantee the performance of a customer to a third party. We use the same credit policies in establishing commitments and issuing letters of credit as we do for on-balance sheet instruments.

          If commitments arising from these financial instruments continue to require funding at historical levels, management does not anticipate that such funding will adversely impact our ability to meet on-going obligations. In the event these commitments require funding in excess of historical levels, management believes current liquidity, available lines of credit from the Federal Home Loan Bank, investment security maturities and our revolving credit facility provide a sufficient source of funds to meet these commitments.

Critical Accounting Policies

          Allowance for Loan Losses

          The allowance for loan losses is a valuation allowance for probable incurred credit losses. Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance. Management estimates the allowance balance required using past loan loss experience, the nature and volume of the portfolio, information about specific borrower situations and estimated collateral values, economic conditions, and other factors. Allocations of the allowance may be made for specific loans, but the entire allowance is available for any loan that, in management’s judgment, should be charged-off.

44

          The Banks began increasing its historical net charge off rate from a twelve to a twenty-four month look back period during the second quarter of 2012. Management determined, based on the current market conditions, that a twenty-four month methodology would be a more appropriate indicator. The change, which represented an 18 month historical look back period for the third quarter, had only a minimal impact on the overall allowance calculation since losses have been minimal, to date, in 2012.

          The allowance consists of specific and general components. The specific component relates to loans that are individually classified as impaired or loans otherwise classified as substandard or doubtful. The general component covers non-classified loans and is based on historical loss experience adjusted for current factors.

          A loan is impaired when full payment under the loan terms is not expected. Commercial and commercial real estate loans are individually evaluated for impairment. If a loan is impaired, a portion of the allowance is allocated so that the loan is reported, net, at the present value of estimated future cash flows using the loan’s existing rate or at the fair value of collateral if repayment is expected solely from the collateral. Large groups of smaller balance homogeneous loans, such as consumer and residential real estate loans are collectively evaluated for impairment, and, accordingly, they are not separately identified for impairment disclosures.

          Income Taxes

          The Company accounts for income taxes according to the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using the enacted tax rates applicable to taxable income for the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation reserves are established against certain deferred tax assets when it is more likely than not that the deferred tax assets will not be realized. Increases or decreases in the valuation reserve are charged or credited to the income tax provision.

          The Company recognizes a benefit from its tax positions only if it is more-likely-than-not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information.

          The periods subject to examination for the Company’s federal returns are the tax years subsequent to 2009. The periods subject to examination for the Company’s significant state return, which is Florida, are the tax years subsequent to 2008. The Company believes that its income tax filing positions and deductions will be sustained upon examination and does not anticipate any adjustments that will result in a material change in its financial statements. As a result, no reserve for uncertain income tax positions has been recorded.

          The Company’s policy for recording interest and penalties related to uncertain tax positions is to record such items as part of its provision for federal and state income taxes.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

          See Market Risk in Management’s Discussion and Analysis of Financial Condition and Results of Operations, above, which is incorporated herein by reference. Management has determined that no additional disclosures are necessary to assess changes in information about market risk that have occurred since December 31, 2011.

Item 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

          As of September 30, 2012, the end of the period covered by this Form 10-Q, our management, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934). Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer each concluded that as of September 30, 2012, the end of the period covered by this Form 10-Q, we maintained effective disclosure controls and procedures.

45

Changes in Internal Control

          Our management, including the Chief Executive Officer and Chief Financial Officer, has reviewed our internal control. There have been no significant changes in our internal control during our most recently completed fiscal quarter that could significantly affect our internal control over financial reporting.

PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings

          We are party to lawsuits arising out of the normal course of business. In management’s opinion, there is no known pending litigation, the outcome of which would, individually or in the aggregate, have a material effect on our consolidated results of operations, financial position, or cash flows.

Item 1A. Risk Factors

          In addition to the other information set forth in this Quarterly Report, you should carefully consider the factors discussed in Part I, Item 1A. “Risk Factors” in our 2011 Form 10-K, as updated in our subsequent quarterly reports. The risks described in our Annual Report on Form 10-K are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

Item 6. Exhibits

(A)	Exhibits
2.1	Purchase and Assumption Agreement, dated August 17,2012, by and between Old Florida National Bank and Orange Bank of Florida – incorporated herein by reference to Exhibit 2.1 of the Registrant’s Current Report on Form 8-K (filed 8/22/2012) (No. 000-53589)
31.1	Certification of Thomas H. Dargan, Jr., Chairman and Chief Executive Officer of Floridian Financial Group, Inc., Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934.
31.2	Certification of Jorge F. Sanchez, Executive Vice President and Chief Financial Officer of Floridian Financial Group, Inc., Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934.
32.1	Certification pursuant to 18 U.S.C. Section 1350.

101.INS XBRL Instance Document

101.SCH XBRL Taxonomy Extension Schema Document

101.CAL XBRL Taxonomy Extension Calculation Linkbase Document

101.LAB XBRL Taxonomy Extension Label Linkbase Document

101.PRE XBRL Taxonomy Extension Presentation Linkbase Document

101.DEF XBRL Taxonomy Extension Definition Linkbase Document

46

SIGNATURES

          Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned Chief Financial Officer hereunto duly authorized.

FLORIDIAN FINANCIAL GROUP, INC.
(Registrant)

By:	/s/ Jorge F. Sanchez
	Jorge F. Sanchez
	Executive Vice President and Chief Financial Officer
	(Mr. Sanchez is the Principal Financial Officer and has been duly authorized to sign on behalf of the Registrant)
Date:	November 14, 2012

47

Exhibit Index

2.1	Purchase and Assumption Agreement, dated August 17,2012, by and between Old Florida National Bank and Orange Bank of Florida – incorporated herein by reference to Exhibit 2.1 of the Registrant’s Current Report on Form 8-K (filed 8/22/2012) (No. 000-53589)
31.1	Certification of Thomas H. Dargan, Jr., Chief Executive Officer of Floridian Financial Group, Inc., Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934.
31.2	Certification of Jorge F. Sanchez, Executive Vice President and Chief Financial Officer of Floridian Financial Group, Inc., Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934.
32.1	Certification pursuant to 18 U.S.C. Section 1350.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document

48

EX-31.1

Exhibit 31.1

Certification of CEO Pursuant to Securities Exchange Act
Rule 13a-14(a) / 15d-14(a) as Adopted Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002

I, Thomas H. Dargan, Jr., certify that:
1.	I have reviewed this quarterly report on Form 10-Q of Floridian Financial Group, Inc.;
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 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)) 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)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our 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
	(c)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
	(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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 the 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.

/s/ Thomas H. Dargan, Jr.

Thomas H. Dargan, Jr.

Chief Executive Officer

Date: November 14, 2012

49

EX-31.2

Exhibit 31.2

Certification of CFO Pursuant to Securities Exchange Act
Rule 13a-14(a) / 15d-14(a) as Adopted Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002

I, Jorge F. Sanchez, certify that:
1.	I have reviewed this quarterly report on Form 10-Q of Floridian Financial Group, Inc.;
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 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)) 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)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our 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
	(c)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
	(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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 the 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.

/s/ Jorge F. Sanchez

Jorge F. Sanchez

Executive Vice President and

Chief Financial Officer

Date: November 14, 2012

50

EX-32.1

Exhibit 32.1

Certification Under Section 906 of the Sarbanes-Oxley Act of 2002

          Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, each the undersigned certifies that this periodic report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in this periodic report fairly presents, in all material respects, the financial condition and results of operation of the issuer.

/s/ Thomas H. Dargan, Jr.	/s/ Jorge F. Sanchez
Thomas H. Dargan, Jr.	Jorge F. Sanchez
Chief Executive Officer	Executive Vice President and
	Chief Financial Officer
Date: November 14, 2012

          A signed original of this written statement required by Section 906, or other document authenticating, acknowledging or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

51

XML

Commitments and Contingencies (Detail Textuals) (USD $) In Millions, unless otherwise specified	9 Months Ended
	Sep. 30, 2012	Dec. 31, 2011
Commitments to extend credit
Line of Credit Facility [Line Items]
Commitments to extend credit amount	$ 50.5	$ 57.2
Standby letters of credit
Line of Credit Facility [Line Items]
Stand-by letters of credit outstanding amount	2.5	3.2
Line of credit
Line of Credit Facility [Line Items]
Available amount lines of credit facility	24.0	30.3
Highest single day borrowing under lines of credit	$ 8.3

XML

Regulatory Agreement (Detail Textuals)	Sep. 30, 2012	Dec. 31, 2011
Floridian Bank
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Tier 1 leverage capital ratio	10.20%	9.00%
Total risk-based capital ratio	14.00%	12.50%
Orange Bank of Florida
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Minimum- Tier 1 leverage capital ratio		8.00%
Minimum- Total risk-based capital ratio		12.00%
Tier 1 leverage capital ratio	8.80%	6.90%
Total risk-based capital ratio	12.70%	10.70%

XML

Fair Values of Financial Instruments (Detail Textuals) (USD $)	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Fair Value Disclosures [Abstract]
Carrying amounts of borrowings under repurchase agreements	$ 4,300,000
Long-term note payable	850,000
Provisions for loan losses on impaired loans	1,500,000	1,700,000
Write down on other real estate owned	166,000	387,000
Sale of OREO property	$ 1,500,000

XML

Loans and Allowance for Loan Losses - Loans individually evaluated for impairment by class of loans (Details 3) (USD $) In Thousands, unless otherwise specified									9 Months Ended	12 Months Ended	9 Months Ended	12 Months Ended	9 Months Ended	12 Months Ended	9 Months Ended	12 Months Ended	9 Months Ended	12 Months Ended	9 Months Ended	12 Months Ended	9 Months Ended	12 Months Ended	9 Months Ended	12 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012 Residential Real Estate	Dec. 31, 2011 Residential Real Estate	Sep. 30, 2012 Home Equity	Dec. 31, 2011 Home Equity	Sep. 30, 2012 Consumer loans	Dec. 31, 2011 Consumer loans	Sep. 30, 2012 Loans Receivable	Dec. 31, 2011 Loans Receivable	Sep. 30, 2012 Loans Receivable Commercial	Dec. 31, 2011 Loans Receivable Commercial	Sep. 30, 2012 Loans Receivable Commercial real estate - Construction And Land	Dec. 31, 2011 Loans Receivable Commercial real estate - Construction And Land	Sep. 30, 2012 Loans Receivable Commercial real estate - Non-owner occupied	Dec. 31, 2011 Loans Receivable Commercial real estate - Non-owner occupied	Sep. 30, 2012 Loans Receivable Commercial real estate - Owner occupied	Dec. 31, 2011 Loans Receivable Commercial real estate - Owner occupied	Sep. 30, 2012 Loans Receivable Residential Real Estate	Dec. 31, 2011 Loans Receivable Residential Real Estate	Sep. 30, 2012 Loans Receivable Home Equity	Dec. 31, 2011 Loans Receivable Home Equity	Sep. 30, 2012 Loans Receivable Consumer loans	Dec. 31, 2011 Loans Receivable Consumer loans
Financing Receivable By Credit Quality Indicator [Line Items]
Unpaid Principal Balance Without Allowance									$ 8,159	$ 23,205	$ 22		$ 5,899	$ 9,825	$ 803	$ 10,026	$ 1,329	$ 3,295	$ 106			$ 59
Recorded Investment Without Allowance									4,415	15,269	22		3,121	4,776	467	8,391	699	2,079	106			23
Allowance For Loan Losses Allocated Without Allowance
Average Recorded Investment Without Allowance									4,756	23,123	24	239	2,912	9,640	1,022	9,956	696	3,265	102			23
Interest Income Recognized Without Allowance									241	300	1		160	40	23	199	47	61	10
Cash Basis Interest Income Recognized Without Allowance
Unpaid Principal Balance With Allowance									16,490	9,053					7,727	2,177	8,763	6,876
Recorded Investment With Allowance									15,790	8,376					7,728	1,500	8,062	6,876
Allowance for Loan Losses Allocated With Allowance									2,475	255					2,104	10	371	245
Average Recorded Investment With Allowance									15,827	9,037					7,802	2,177	8,025	6,860
Interest Income Recognized With Allowance									545	207					307	158	238	49
Cash Basis Interest Income Recognized With Allowance
Unpaid Principal Balance Total									24,649	32,258
Recorded Investment Total			7,750	8,542	13,335	14,233	1,832	2,512	20,205	23,645
Allowance for Loan Losses Allocated Total	1,500	1,700							2,475	255
Average Recorded Investment Total									20,583	32,160
Interest Income Recognized Total									786	507
Cash Basis Interest Income Recognized Total

XML

Securities - Amortized cost and estimated fair value of securities with gross unrealized gains and losses (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Securities Available for sale
Securities available for sale- amortized cost	$ 60,408	$ 72,686
Securities available for sale- gross unrealized gains	220	755
Securities available for sale- gross unrealized losses	409	305
Available for sale, fair value	60,219	73,136
Held-to-maturity Securities, Unclassified [Abstract]
Securities held to maturity- amortized cost		1,002
Securities held to maturity- gross unrealized gains		11
Securities held to maturity- gross unrealized losses
Securities held to maturity- fair value		1,013
U.S. Government and federal agencies
Securities Available for sale
Securities available for sale- amortized cost		13,385
Securities available for sale- gross unrealized gains		305
Securities available for sale- gross unrealized losses
Available for sale, fair value		13,690
Held-to-maturity Securities, Unclassified [Abstract]
Securities held to maturity- amortized cost		1,002
Securities held to maturity- gross unrealized gains		11
Securities held to maturity- gross unrealized losses
Securities held to maturity- fair value		1,013
States & political subdivisions
Securities Available for sale
Securities available for sale- amortized cost	5,914	1,701
Securities available for sale- gross unrealized gains		94
Securities available for sale- gross unrealized losses	87
Available for sale, fair value	5,827	1,795
U.S. Agency REMIC
Securities Available for sale
Securities available for sale- amortized cost	36,068	38,917
Securities available for sale- gross unrealized gains	72	338
Securities available for sale- gross unrealized losses	322	217
Available for sale, fair value	35,818	39,038
U.S. Agency MBS
Securities Available for sale
Securities available for sale- amortized cost	18,426	18,683
Securities available for sale- gross unrealized gains	148	18
Securities available for sale- gross unrealized losses		88
Available for sale, fair value	$ 18,574	$ 18,613

XML

Fair Values of Financial Instruments - Company's assets and liabilities which are carried at fair value on a recurring basis segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Debt securities:
Available for sale, fair value	$ 60,219	$ 73,136
Financial Instruments Recorded at Fair Value on a Recurring Basis | Total at Fair Value
Debt securities:
Available for sale, fair value	60,219	73,136
Financial Instruments Recorded at Fair Value on a Recurring Basis | Total at Fair Value | U.S. Government and federal agencies
Debt securities:
Available for sale, fair value		13,690
Financial Instruments Recorded at Fair Value on a Recurring Basis | Total at Fair Value | States & political subdivisions
Debt securities:
Available for sale, fair value	5,827	1,795
Financial Instruments Recorded at Fair Value on a Recurring Basis | Total at Fair Value | U.S. Agency REMIC
Debt securities:
Available for sale, fair value	35,818	39,038
Financial Instruments Recorded at Fair Value on a Recurring Basis | Total at Fair Value | U.S. Agency MBS
Debt securities:
Available for sale, fair value	18,574	18,613
Financial Instruments Recorded at Fair Value on a Recurring Basis | Quoted Price in Active Markets for Identical Assets Level 1
Debt securities:
Available for sale, fair value
Financial Instruments Recorded at Fair Value on a Recurring Basis | Quoted Price in Active Markets for Identical Assets Level 1 | U.S. Government and federal agencies
Debt securities:
Available for sale, fair value
Financial Instruments Recorded at Fair Value on a Recurring Basis | Quoted Price in Active Markets for Identical Assets Level 1 | States & political subdivisions
Debt securities:
Available for sale, fair value
Financial Instruments Recorded at Fair Value on a Recurring Basis | Quoted Price in Active Markets for Identical Assets Level 1 | U.S. Agency REMIC
Debt securities:
Available for sale, fair value
Financial Instruments Recorded at Fair Value on a Recurring Basis | Quoted Price in Active Markets for Identical Assets Level 1 | U.S. Agency MBS
Debt securities:
Available for sale, fair value
Financial Instruments Recorded at Fair Value on a Recurring Basis | Significant Other Observable Inputs Level 2
Debt securities:
Available for sale, fair value	60,219	73,136
Financial Instruments Recorded at Fair Value on a Recurring Basis | Significant Other Observable Inputs Level 2 | U.S. Government and federal agencies
Debt securities:
Available for sale, fair value		13,690
Financial Instruments Recorded at Fair Value on a Recurring Basis | Significant Other Observable Inputs Level 2 | States & political subdivisions
Debt securities:
Available for sale, fair value	5,827	1,795
Financial Instruments Recorded at Fair Value on a Recurring Basis | Significant Other Observable Inputs Level 2 | U.S. Agency REMIC
Debt securities:
Available for sale, fair value	35,818	39,038
Financial Instruments Recorded at Fair Value on a Recurring Basis | Significant Other Observable Inputs Level 2 | U.S. Agency MBS
Debt securities:
Available for sale, fair value	18,574	18,613
Financial Instruments Recorded at Fair Value on a Recurring Basis | Significant Unobservable Inputs Level 3
Debt securities:
Available for sale, fair value
Financial Instruments Recorded at Fair Value on a Recurring Basis | Significant Unobservable Inputs Level 3 | U.S. Government and federal agencies
Debt securities:
Available for sale, fair value
Financial Instruments Recorded at Fair Value on a Recurring Basis | Significant Unobservable Inputs Level 3 | States & political subdivisions
Debt securities:
Available for sale, fair value
Financial Instruments Recorded at Fair Value on a Recurring Basis | Significant Unobservable Inputs Level 3 | U.S. Agency REMIC
Debt securities:
Available for sale, fair value
Financial Instruments Recorded at Fair Value on a Recurring Basis | Significant Unobservable Inputs Level 3 | U.S. Agency MBS
Debt securities:
Available for sale, fair value

XML

Loans and Allowance for Loan Losses - Recorded investment in residential and consumer loans based on payment activity (Details 7) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Residential
Financing Receivable By Credit Quality Indicator [Line Items]
Recorded Investment Total	$ 7,750	$ 8,542
Residential | Performing
Financing Receivable By Credit Quality Indicator [Line Items]
Recorded Investment Total	7,644	8,542
Residential | Nonperforming
Financing Receivable By Credit Quality Indicator [Line Items]
Recorded Investment Total	106
Home Equity
Financing Receivable By Credit Quality Indicator [Line Items]
Recorded Investment Total	13,335	14,233
Home Equity | Performing
Financing Receivable By Credit Quality Indicator [Line Items]
Recorded Investment Total	13,288	14,162
Home Equity | Nonperforming
Financing Receivable By Credit Quality Indicator [Line Items]
Recorded Investment Total	47	71
Consumer
Financing Receivable By Credit Quality Indicator [Line Items]
Recorded Investment Total	1,832	2,512
Consumer | Performing
Financing Receivable By Credit Quality Indicator [Line Items]
Recorded Investment Total	1,832	2,512
Consumer | Nonperforming
Financing Receivable By Credit Quality Indicator [Line Items]
Recorded Investment Total

XML

Related Party (Detail Textuals) (First Team Clermont OB, LLC, Notes Payable, USD $)	0 Months Ended
	Jan. 03, 2012	Jan. 04, 2011
First Team Clermont OB, LLC | Notes Payable
Related Party Transaction [Line Items]
Note on the land, building, and furniture and fixtures		$ 1,700,000
Monthly interest payments of Note		6.50%
Principal reduction on note payable	$ 850,000

XML

Cash and Due From Banks

9 Months Ended

Sep. 30, 2012

Cash and Cash Equivalents [Abstract]

Cash and Due From Banks

Note 2. Cash and Due From Banks

The Banks are required to maintain vault cash and reserve balances with the Federal Reserve Bank based upon a percentage of deposits. These requirements were $2.0 million at September 30, 2012 and $2.5 million at December 31, 2011.

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Fair Values of Financial Instruments - Fair values of assets measured at fair value on a nonrecurring basis (Details 1) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other real estate owned	$ 3,614	$ 5,129
Fair value on a nonrecurring basis | Quoted Price in Active Markets for Identical Assets Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans
Other real estate owned
Fair value on a nonrecurring basis | Significant Other Observable Inputs Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans
Other real estate owned
Fair value on a nonrecurring basis | Significant Unobservable Inputs Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans	3,529	5,913
Other real estate owned	$ 3,614	$ 5,129

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Securities (Detail Textuals 1) (USD $) In Millions, unless otherwise specified	Sep. 30, 2012 Securities
Available-For-Sale Securities and Held-To-Maturity Securities [Line Items]
Total number of securities in portfolio	40
Total number of securities in portfolio in unrealized loss position	24
Number of securities in portfolio in a loss position in excess of 12 months	4
U.S. Government and federal agencies
Available-For-Sale Securities and Held-To-Maturity Securities [Line Items]
Securities issued by U.S. government-sponsored entities and agencies, total amount	54.4
Securities issued by U.S. government-sponsored entities and agencies, percentage	90.00%

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Securities (Detail Textuals) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Dec. 31, 2011
Investments, Debt and Equity Securities [Abstract]
Government obligations with a carrying value	$ 8,300,000		$ 8,300,000		$ 20,600,000
Carrying amount of securities pledged to secure repurchase agreements	5,200,000		5,200,000		12,600,000
Proceeds from sales, maturities, and calls of securities available for sale	27,900,000	12,800,000	73,000,000	23,600,000
Realized gain on sales of available for sale securities	$ 419,000	$ 0	$ 1,280,000

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Fair Values of Financial Instruments - Summary of the carrying amounts and approximate fair values of the financial instruments (Details 2) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Financial assets:
Securities held to maturity		$ 1,013
Available for sale securities	60,219	73,136
Carrying Amount
Financial assets:
Cash and due from banks	4,909	8,930
Federal funds sold and interest bearing deposits	26,541	23,917
Securities held to maturity		1,002
Available for sale securities	60,219	73,136
Other investments	52	100
Loans, net	278,008	305,088
Accrued interest receivable	1,127	1,180
Financial liabilities:
Deposits	352,132	393,726
Other borrowings	5,102	13,955
Accrued interest payable	43	87
Quoted Price in Active Markets for Identical Assets Level 1
Financial assets:
Cash and due from banks	4,909	8,930
Federal funds sold and interest bearing deposits	26,541	23,917
Securities held to maturity
Available for sale securities
Other investments
Loans, net
Accrued interest receivable
Financial liabilities:
Deposits
Other borrowings	5,102	13,955
Accrued interest payable
Significant Other Observable Inputs Level 2
Financial assets:
Cash and due from banks
Federal funds sold and interest bearing deposits
Securities held to maturity		1,013
Available for sale securities	60,219	73,136
Other investments
Loans, net	275,999	301,549
Accrued interest receivable	1,127	1,180
Financial liabilities:
Deposits	352,648	394,940
Other borrowings
Accrued interest payable	43	87
Significant Unobservable Inputs Level 3
Financial assets:
Cash and due from banks
Federal funds sold and interest bearing deposits
Securities held to maturity
Available for sale securities
Other investments	52	100
Loans, net	3,529	5,913
Accrued interest receivable
Financial liabilities:
Deposits
Other borrowings
Accrued interest payable

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Loans and Allowance for Loan Losses - Loans (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Loans and Financing Receivable Abstract
Commercial	$ 40,111	$ 44,833
Commercial real estate	222,932	241,648
Residential real estate	7,750	8,542
Consumer loans	15,167	16,745
Total loans	285,960	311,768
Less: Allowance for loan losses (in dollars)	7,830	6,566
Less: Unearned fees	122	114
Net loans	$ 278,008	$ 305,088

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Loans and Allowance for Loan Losses - Activity in the allowance for loan losses (Details 1) (USD $) In Thousands, unless otherwise specified			3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended
	Sep. 30, 2012	Dec. 31, 2011	Sep. 30, 2012 Loans Receivable	Sep. 30, 2011 Loans Receivable	Sep. 30, 2012 Loans Receivable	Sep. 30, 2011 Loans Receivable	Sep. 30, 2012 Loans Receivable Commercial	Sep. 30, 2011 Loans Receivable Commercial	Sep. 30, 2012 Loans Receivable Commercial	Sep. 30, 2011 Loans Receivable Commercial	Sep. 30, 2012 Loans Receivable Commercial Real Estate	Sep. 30, 2011 Loans Receivable Commercial Real Estate	Sep. 30, 2012 Loans Receivable Commercial Real Estate	Sep. 30, 2011 Loans Receivable Commercial Real Estate	Sep. 30, 2012 Loans Receivable Residential Real Estate	Sep. 30, 2011 Loans Receivable Residential Real Estate	Sep. 30, 2012 Loans Receivable Residential Real Estate	Sep. 30, 2011 Loans Receivable Residential Real Estate	Sep. 30, 2012 Loans Receivable Consumer and home equity	Sep. 30, 2011 Loans Receivable Consumer and home equity	Sep. 30, 2012 Loans Receivable Consumer and home equity	Sep. 30, 2011 Loans Receivable Consumer and home equity	Sep. 30, 2012 Loans Receivable Unallocated	Sep. 30, 2011 Loans Receivable Unallocated	Sep. 30, 2012 Loans Receivable Unallocated	Sep. 30, 2011 Loans Receivable Unallocated
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	$ 7,830	$ 6,566	$ 7,678	$ 7,715	$ 6,566	$ 8,010			$ 743				$ 5,151				$ 135								$ 234
Loan charge offs			546	1,066	1,051	2,812		183		308	546	846	986	1,870		37		391			65	243
Recoveries			594	116	795	265	1	5	12	96	591	6	759	166	1				1		24	3
Provision for loan losses			104	550	1,520	1,747	(60)	76	1	76	123	318	1,714	809	6	141	(27)	537	29	15	56	295	6		(224)	30
Ending balance	$ 7,830	$ 6,566	$ 7,830	$ 7,210	$ 7,830	$ 7,210	$ 728		$ 728		$ 6,652		$ 6,652		$ 120		$ 120						$ 10		$ 10
Allowance / Total Loans			2.70%	2.30%	2.70%	2.30%
Net Charge-Offs / Average Loans			0.00%	0.30%	0.10%	0.80%
Allowance / Nonperforming Loans			62.10%	93.20%	62.10%	93.20%

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Nature of Business and Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2012

Business Description and Accounting Policies Abstract

Nature of Business and Summary of Significant Accounting Policies

Note 1. Nature of Business and Summary of Significant Accounting Policies

Nature of business: Floridian Financial Group, Inc. (the “Company”) is a registered bank holding company formed to organize and own 100% of its subsidiary banks, Floridian Bank and Orange Bank of Florida (collectively referred to as the “Banks”). The Company was incorporated in 2005, and became operational as a bank holding company once Floridian Bank opened. Floridian Bank is a state-chartered, federally-insured full-service commercial banking institution and presently conducts business from its headquarters in Daytona Beach and branch offices in Ormond Beach, Palm Coast and Port Orange, Florida. Orange Bank of Florida is a state-chartered, federally-insured full-service commercial banking institution with its headquarters in Orlando, Florida. The Company operates from its main office and branch offices in Orange, Seminole, Lake and Citrus Counties, Florida.

Basis of Financial Statement Presentation: The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its Banks. Significant intercompany accounts and transactions have been eliminated in consolidation. The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America and general practices within the financial services industry. The accompanying interim period adjustments, which are necessary for a fair presentation of the consolidated financial statements, have been included. The results of operations for the nine months ended September 30, 2012 are not necessarily indicative of the results which may be expected for the year as a whole or any interim period. The interim period consolidated financial statements and financial information included in this quarterly report on Form 10-Q should be read in conjunction with the notes to the consolidated financial statements included in the Company’s annual report on Form 10-K.

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

A summary of the Company’s significant accounting policies follows:

Comprehensive income (loss): Comprehensive income or loss is comprised of the net income or loss from the consolidated statement of operations and any items of “other comprehensive income.” The only item of other comprehensive income for the Banks is the unrealized gain or loss on the available for sale investment securities portfolio, net of tax.

Cash and cash equivalents: For purposes of reporting cash flows, cash and cash equivalents include cash on hand, amounts due from banks (including cash items in process of clearing) and federal funds sold. Cash flows from loans originated by the Company and deposits are reported net. The Company maintains amounts due from banks, which at times may exceed federal deposit insurance limits. The Company has not experienced any losses in such accounts.

Securities: Certain securities which management has the positive intent and ability to hold until their maturity are classified as held to maturity. Such securities are carried at cost, adjusted for related amortization of premium and accretion of discounts through interest income from securities.

Securities available for sale which are used for asset/liability, liquidity and other funds management purposes have indefinite holding periods and are accounted for on a fair value basis with net unrealized gains and losses included in other comprehensive income net of tax. Declines in the fair value of securities available for sale that are deemed to be other than temporary are reflected in earnings as realized losses. In estimating other-than-temporary impairment losses, management considers: (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer including an evaluation of credit ratings, (3) the impact of changes in market interest rates, (4) the intent of the Company to sell a security, and (5) whether it is more likely than not the Company will have to sell the security before recovery of its cost basis. If the Company intends to sell an impaired security, the Company records an other-than-temporary loss in the amount equal to the entire difference between the fair value and amortized cost. If a security is determined to be other-than-temporarily impaired, but the Company does not intend to sell the security, only the credit portion of the estimated loss is recognized in earnings, with the other portion of the loss recognized in other comprehensive income. Amortization and accretion of premiums and discounts are recognized as adjustments to interest income. Realized gains and losses are recognized using the specific identification method.

Loans: Loans are stated at the amount of unpaid principal balances, reduced by an allowance for loan losses and unearned fees and costs. Interest on loans is calculated by using the simple interest method on daily balances of the principal amounts outstanding unless loans are classified as nonaccrual loans. The accrual of interest is discontinued when future collection of principal or interest in accordance with the contractual terms becomes doubtful. When interest accrual is discontinued, all unpaid accrued interest is reversed against interest income. Accrual of interest is generally resumed when the customer is current on all principal and interest payments and has been paying on a timely basis for at least six months.

Accounting standards require the presentation of certain disclosure information at the portfolio segment level, which represents the level at which the Company determines its allowance for credit losses. The Company has four reportable loan segments: Commercial, Commercial Real Estate, Residential Real Estate, and Consumer. Segments are determined based on the products and services provided and the type of customer served. See Note 4 for a breakdown of loans by segment.

Commercial Loans: All corporate and business purpose loans and lines of credit that are not real estate related are classified as commercial loans. These loans are generally secured by business assets including accounts receivable, inventory, and equipment and may incorporate a personal guarantee. Terms on commercial loans are generally for five years or less with most lines of credit written on an on-demand-basis. The majority of commercial loans have a floating interest rate tied to a published index. As of September 30, 2012, commercial loans represented 14.0% of the loan portfolio.

Commercial Real Estate Loans (“CRE”): CRE represents business purpose loans that are real estate related and secured by real estate. CRE loans are reviewed primarily as cash flow loans and secondarily as loans secured by real estate. CRE loans typically involve higher loan principal amounts and the repayment is generally largely dependent on the successful operations of the real property securing the loan or the business conducted on the property securing the loan. CRE loans may be adversely affected by conditions in the real estate markets or in the general economy than other loan types. As of September 30, 2012, 78.0% of the loan portfolio was concentrated in CRE loans.

Residential Real Estate Loans (“RRE”): RRE represents all consumer purpose loans collateralized by one to four family dwellings. RRE loans generally have terms of less than five years and are written on a fixed rate basis. As of September 30, 2012, 2.7% of the portfolio was classified as RRE.

Consumer Loans: All non-business purpose loans are considered consumer loans. Consumer loans consist of home equity lines of credit, automobile loans, overdraft loans, loans secured by deposits and securities, and unsecured personal loans. Home Equity represents all consumer open end lines of credit secured by one to four family lines of credit. Consumer loans represent any consumer purpose loans or lines of credit not secured by real estate. As of September 30, 2012, consumer loans represented 5.3% of the portfolio.

Within each segment, the Company monitors and assesses the credit risk in the following classes, based on the risk characteristic of each loan segment: Pass, Special Mention, Substandard, Doubtful, and Loss. Within the Commercial and CRE portfolio risk grades are assigned based on an assessment of conditions that affect the borrower’s ability to meet obligations as outlined in the loan agreement. This process includes an in-depth review prior to loan approval and throughout the life of the loan. The analysis of the borrower includes a review of financial information, credit documentation, public information, past experience with the borrower, and other information that may be available specific to each borrower. The review also includes debt service capabilities, actual and projected cash flows, and industry and economic risks. Underwriting of RRE, consumer, and home equity loans and lines of credit include an assessment of the borrower’s credit history and the ability to meet existing debt obligations, as well as payments of principal and interest on the proposed loan. Risk grades are reviewed annually on all large credit relationships or on any credit where management becomes aware of information that may affect the borrower’s ability to fulfill contractual obligations. See Note 4 for a breakdown of loans by class.

Troubled Debt Restructuring: The Company considers a loan to be a Troubled Debt Restructuring (“TDR”) when the debtor experiences financial difficulties and a concession is provided such that the Company will not collect all principal or interest in accordance with the original terms of the loan agreement. Concessions can relate to the contractual interest rate, maturity date, or payment structure of the note. As part of our workout plan, the Company at times restructures loan terms to assist borrowers facing challenges in the current economic environment. Loans classified as TDRs include loans on nonaccrual, loans moving to nonaccrual, and loans on an accruing status. The Company evaluates each individual borrower’s financial condition and prospects for repayment under the modified terms prior to restructuring. The evaluation includes but is not limited to the borrower’s capacity and willingness to pay, past payment history, and any secondary sources of payment.

As of September 30, 2012, five loans totaling $15.6 million were classified as TDRs with $6.3 million classified as nonperforming. As of December 31, 2011, ten loans totaling $17.5 million were classified as TDRs with $971 thousand classified as nonperforming.

Nonaccrual and Impaired loans: Borrowers who have not made scheduled payments within 30 days of their due date are considered past due. The Company has a formal review process for all past due loans which includes a review of previous performance, collateral and future cash flows. The Company’s policy is to place all loans where interest and principal has been delinquent for 90 days or more on nonaccrual status unless the loan is well secured and in the process of collection. Loans operating on a cash basis because of deterioration in financial condition of the debtor as well as loans where the full collection of recorded interest or principal is not expected are also placed on nonaccrual status regardless of delinquency status. When loans are placed on nonaccrual status, future interest accruals are discontinued and all unpaid accrued interest is reversed against interest income.

Cash collections on nonaccrual loans are credited to the loan receivable balance and no interest income is recognized on those loans until the principal balance is current. Nonaccrual loans, after a reasonable period of sustained repayment performance (generally minimum of six months), are re-evaluated for possible return to an accrual status. See Note 4 for a breakdown of the Company’s loan portfolio based on aging.

Impaired loans are measured for impairment based on the present value of expected future cash flows discounted at the loan’s original effective interest rate or, as a practical expedient, at the loan’s observable market price or the fair value of the collateral, net of selling costs, if the loan is collateral dependent. A loan is impaired when it is probable the creditor will be unable to collect all contractual principal and interest payments due in accordance with the terms of the loan agreement. On at least a quarterly basis, the Company reviews impaired loans for any changes in the borrower’s ability to repay the loan. Based on this review, the Company may consider making modifications to the original loan agreement.

Allowance for loan losses: The allowance for loan losses (“ALL”) is established through a provision for loan losses charged against operations. The allowance includes an unallocated component. The unallocated reserve represents the uncertainty in inherent factors that cannot be practically assigned to individual loan categories including the local economy and the uncertainty related to historical loss rates applied against loan risk-ratings. The Company believes the unallocated amount is warranted. All commercial loans risk rated substandard or doubtful are considered impaired and are reviewed on a quarterly basis to determine if a specific reserve needs to be allocated.

Loans are charged against the allowance for loan losses when management believes that the loss is confirmed. The allowance is an amount that management believes is adequate to absorb losses inherent in the loan portfolio, based on evaluations of the collectability of loans, industry historical loss experience, current economic conditions, portfolio mix, and other factors. During the second quarter of 2012, the Company changed from a rolling 12-month to a rolling 24- month look back period to evaluate and allocate loan losses in regard to the provision.

While management uses the best information available to make its evaluation, future adjustments to the allowance may be necessary if there are significant changes in economic conditions.

Loan Charge-Offs: All loan segments except Consumer are charged off within 30 days from the date the loan is deemed uncollectible. The recognition of the loss of loans or portions of loans occurs as soon as there is a reasonable probability of loss. When the amount of loss can be readily calculated, then the loss is recognized. In cases where an amount cannot be calculated, a specific allowance for loan losses is estimated and provided for.

Losses on consumer credit card loans are taken as soon as possible and no later than when the loan is 90 days delinquent. All other consumer loan losses are taken as soon as possible and no later than when delinquency exceeds 120 days.

As a policy, the Banks reverse accrued interest on loans placed on nonaccrual. If the accrued interest being reversed was recorded in a previous calendar year and the amount is material, the accrued interest associated with the previous calendar year is charged off.

Credit related financial instruments: In the ordinary course of business, the Banks enter into off-balance-sheet financial instruments consisting of commitments to extend credit and standby letters of credit. Such financial instruments are recorded in the financial statements when they are funded.

Transfers of financial assets: Transfers of financial assets are accounted for as sales only when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (1) the assets have been legally isolated from the Company and any of its affiliates, (2) the transferee has the ability to sell or pledge 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 or maintain effective control through a third-party beneficial interest in the transferred assets, the ability to unilaterally cause the holder to return specific assets, or have an in-the-money option held by a transferor when probable that the transferor will repurchase the assets.

Other Real Estate Owned: Other real estate owned (“OREO”) consists of property acquired through, or in lieu of, loan foreclosures or other proceedings and is initially recorded at the fair value less estimated selling costs at the date of foreclosure, which establishes a new cost basis. Subsequent to foreclosure, the properties are held for sale and are carried at the lower of cost or fair value less estimated costs of disposal. Any write-down to fair value at the time of acquisition is charged to the allowance for loan losses. Properties are evaluated regularly to ensure the recorded amounts are supported by current fair values, and a charge to operations is recorded as necessary to reduce the carrying amount to fair value less estimated costs to dispose.

Income taxes: The Company accounts for income taxes according to the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using the enacted tax rates applicable to taxable income for the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation reserves are established against certain deferred tax assets when it is more likely than not that the deferred tax assets will not be realized. Increases or decreases in the valuation reserve are charged or credited to the income tax provision.

The Company recognizes a benefit from its tax positions only if it is more-likely-than-not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information.

The periods subject to examination for the Company’s federal returns are the tax years subsequent to 2009. The periods subject to examination for the Company’s significant state return, which is Florida, are the tax years subsequent to 2008. The Company believes that its income tax filing positions and deductions will be sustained upon examination and does not anticipate any adjustments that will result in a material change in its financial statements. As a result, no reserve for uncertain income tax positions has been recorded.

The Company’s policy for recording interest and penalties related to uncertain tax positions is to record such items as part of its provision for federal and state income taxes.

Earnings per share: Basic earnings per share is calculated by dividing net income (loss) by the weighted average number of shares of common stock outstanding for each period presented. Options outstanding at September 30, 2012 and 2011, to purchase 650 thousand and 645 thousand common shares, respectively, were not included in the computation of diluted earnings per share for the three and nine months ended September 30, 2012 and 2011, because they were antidilutive.

Share-based compensation: The Company has a stock option plan for its employees and for its directors, as more fully described in Note 14 of our financial statements contained in our Annual Report. The Company is required to recognize compensation cost relating to share-based payment transactions, based on the fair value of the equity or liability instruments issued, in its financial statements. Compensation cost has been measured using the fair value of an award on the grant dates and is recognized over the service period, which is usually the vesting period.

Reclassifications: Certain amounts in the 2011 financial statements have been reclassified for comparative purposes to conform with the presentation in the 2012 financial statements. The results of these classifications had no effect on net operations or shareholders’ equity.

New Accounting Pronouncements: In December 2011, the FASB issued ASU No. 2011-12, “Comprehensive Income (Topic 220): Deferral of the Effective Date for the Amendments to the Presentation of Reclassifications of the Items Out of Accumulated Other Comprehensive Income in ASU No. 2011-05”. This guidance delays the effective date of the disclosures for only those changes in ASU No. 2011-05 that relate to the presentation of reclassification adjustments to allow the FASB time to reconsider whether to require presentation of such adjustments on the face of the financial statements to show the effects of reclassifications out of accumulated other comprehensive income on the components of net income and other comprehensive income. ASU 2011-12 allows entities to continue to report reclassifications out of accumulated other comprehensive income consistent with the presentation requirements in effect before ASU No. 2011-05. All other requirements in ASU No. 2011-05 are not affected by ASU No. 2011-12. ASU No. 2011-12 is effective for annual and interim periods beginning on or after December 15, 2011 and is not expected to have a significant impact on our financial statements.

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Loans and Allowance for Loan Losses - Balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and is based on impairment method (Details 2) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Jun. 30, 2012	Dec. 31, 2011	Sep. 30, 2011	Jun. 30, 2011	Dec. 31, 2010
Financing Receivable By Credit Quality Indicator [Line Items]
Total ending allowance balance	$ 7,830		$ 6,566
Total ending loan balance	285,960		311,768
Loans Receivable
Financing Receivable By Credit Quality Indicator [Line Items]
Individually evaluated for impairment	2,475		255
Collectively evaluated for impairment	5,355		6,311
Total ending allowance balance	7,830	7,678	6,566	7,210	7,715	8,010
Individually evaluated for impairment	20,205		23,645
Collectively evaluated for impairment	265,755		288,123
Total ending loan balance	285,960		311,768
Loans Receivable | Commercial
Financing Receivable By Credit Quality Indicator [Line Items]
Individually evaluated for impairment
Collectively evaluated for impairment	728		743
Total ending allowance balance	728		743
Individually evaluated for impairment	22
Collectively evaluated for impairment	40,089		44,833
Total ending loan balance	40,111		44,833
Loans Receivable | Commercial Real Estate
Financing Receivable By Credit Quality Indicator [Line Items]
Individually evaluated for impairment	2,475		255
Collectively evaluated for impairment	4,177		4,896
Total ending allowance balance	6,652		5,151
Individually evaluated for impairment	20,077		23,622
Collectively evaluated for impairment	202,855		218,026
Total ending loan balance	222,932		241,648
Loans Receivable | Residential Real Estate
Financing Receivable By Credit Quality Indicator [Line Items]
Individually evaluated for impairment
Collectively evaluated for impairment	120		135
Total ending allowance balance	120		135
Individually evaluated for impairment	106
Collectively evaluated for impairment	7,644		8,542
Total ending loan balance	7,750		8,542
Loans Receivable | Home Equity
Financing Receivable By Credit Quality Indicator [Line Items]
Individually evaluated for impairment
Collectively evaluated for impairment	295		246
Total ending allowance balance	295		246
Individually evaluated for impairment			23
Collectively evaluated for impairment	13,335		14,210
Total ending loan balance	13,335		14,233
Loans Receivable | Consumer
Financing Receivable By Credit Quality Indicator [Line Items]
Individually evaluated for impairment
Collectively evaluated for impairment	25		57
Total ending allowance balance	25		57
Individually evaluated for impairment
Collectively evaluated for impairment	1,832		2,512
Total ending loan balance	1,832		2,512
Loans Receivable | Unallocated
Financing Receivable By Credit Quality Indicator [Line Items]
Individually evaluated for impairment
Collectively evaluated for impairment	10		234
Total ending allowance balance	10		234
Individually evaluated for impairment
Collectively evaluated for impairment
Total ending loan balance

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Regulatory Capital Matters (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012		Dec. 31, 2011
Consolidated
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Actual- Amount	$ 43,651		$ 42,545
Actual- Ratio	13.70%		12.10%
For Capital Adequacy Purposes- Amount	25,530		26,221
For Capital Adequacy Purposes- Ratio	8.00%		8.00%
To be Considered Well Capitalized by Prompt Corrective Action- Amount
To be Considered Well Capitalized by Prompt Corrective Action- Ratio		[1]
Actual- Amount	39,615		38,126
Total risk-based capital ratio	12.40%		10.90%
For Capital Adequacy Purposes- Amount	12,765		13,111
For Capital Adequacy Purposes- Ratio	4.00%		4.00%
To be Considered Well Capitalized by Prompt Corrective Action- Amount
To be Considered Well Capitalized by Prompt Corrective Action- Ratio		[1]
Actual - Amount	39,615		38,126
Actual - Ratio	10.00%		8.10%
For Capital Adequacy Purposes- Amount	15,856		16,876
For Capital Adequacy Purposes- Ratio	4.00%		4.00%
To be Considered Well Capitalized by Prompt Corrective Action- Amount
To be Considered Well Capitalized by Prompt Corrective Action- Ratio		[1]
Floridian Bank
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Actual- Amount	15,772		14,991
Actual- Ratio	14.00%		12.50%
For Capital Adequacy Purposes- Amount	9,038		9,560
For Capital Adequacy Purposes- Ratio	8.00%		8.00%
To be Considered Well Capitalized by Prompt Corrective Action- Amount	11,298		11,950
To be Considered Well Capitalized by Prompt Corrective Action- Ratio	10.00%	[1]	10.00%
Actual- Amount	14,351		13,495
Total risk-based capital ratio	12.70%		11.30%
For Capital Adequacy Purposes- Amount	4,519		4,780
For Capital Adequacy Purposes- Ratio	4.00%		4.00%
To be Considered Well Capitalized by Prompt Corrective Action- Amount	6,767		7,170
To be Considered Well Capitalized by Prompt Corrective Action- Ratio	6.00%	[1]	6.00%
Actual - Amount	14,351		13,495
Actual - Ratio	10.20%		9.00%
For Capital Adequacy Purposes- Amount	5,627		6,032
For Capital Adequacy Purposes- Ratio	4.00%		4.00%
To be Considered Well Capitalized by Prompt Corrective Action- Amount	7,034		7,541
To be Considered Well Capitalized by Prompt Corrective Action- Ratio	5.00%	[1]	5.00%
Orange Bank of Florida
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Actual- Amount	24,841		24,625
Actual- Ratio	12.70%		10.70%
For Capital Adequacy Purposes- Amount	15,645		18,355
For Capital Adequacy Purposes- Ratio	8.00%		8.00%
To be Considered Well Capitalized by Prompt Corrective Action- Amount	19,557		22,943
To be Considered Well Capitalized by Prompt Corrective Action- Ratio	10.00%	[1]	10.00%
Actual- Amount	22,356		21,732
Total risk-based capital ratio	11.40%		9.50%
For Capital Adequacy Purposes- Amount	7,823		9,177
For Capital Adequacy Purposes- Ratio	4.00%		4.00%
To be Considered Well Capitalized by Prompt Corrective Action- Amount	11,734		13,766
To be Considered Well Capitalized by Prompt Corrective Action- Ratio	6.00%	[1]	6.00%
Actual - Amount	22,356		21,732
Actual - Ratio	8.80%		6.90%
For Capital Adequacy Purposes- Amount	10,129		12,607
For Capital Adequacy Purposes- Ratio	4.00%		4.00%
To be Considered Well Capitalized by Prompt Corrective Action- Amount	$ 12,662		$ 16,007
To be Considered Well Capitalized by Prompt Corrective Action- Ratio	5.00%	[1]	5.00%

[1] As discussed in Note 9, effective September 30, 2012, Orange Bank must meet enhanced Tier 1 Capital and Total Risk-Based Capital ratios. At September 30, 2012, Orange Bank had met all enhanced requirements.

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Condensed Consolidated Balance Sheets (Unaudited) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Assets
Cash and due from banks	$ 4,909	$ 8,930
Federal funds sold	2,525	3,550
Interest bearing deposits	24,016	20,367
Total cash and cash equivalents	31,450	32,847
Securities available for sale	60,219	73,136
Securities held to maturity (Fair value of $1,013 at December 31, 2011)		1,002
Other investments	52	100
Loans, net of allowance for loan losses of $7,830 and $6,566 at September 30, 2012 and December 31, 2011, respectively	278,008	305,088
Property and equipment, net	14,055	14,670
Bank owned life insurance	8,843	11,411
Intangible assets, net	1,057	1,201
Other real estate owned	3,614	5,129
Other assets	2,664	4,975
Total assets	399,962	449,559
Deposits:
Noninterest bearing demand	97,887	83,909
Savings, NOW and money market	150,639	149,945
Time deposits under $100	52,637	87,090
Time deposits of $100 or more	50,969	72,782
Total deposits	352,132	393,726
Other borrowings	5,102	13,955
Other liabilities	2,245	2,101
Total liabilities	359,479	409,782
Shareholders' Equity
Preferred stock, $5 par value, 1,000,000 shares authorized; none outstanding
Common stock, $5 par value, 100,000,000 shares authorized; 6,180,842 and 6,179,240 shares issued and outstanding as of September 30, 2012 and December 31, 2011, respectively	30,904	30,896
Additional paid-in capital	38,535	38,397
Retained deficit	(28,767)	(29,966)
Accumulated other comprehensive income (loss)	(189)	450
Total shareholders' equity	40,483	39,777
Total liabilities and shareholders' equity	$ 399,962	$ 449,559

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Fair Values of Financial Instruments - Additional quantitative information about assets measured at fair value on a nonrecurring basis and for which the Company utilized Level 3 inputs to determine fair value (Details 3) (Fair value on a nonrecurring basis, USD $) In Thousands, unless otherwise specified	Sep. 30, 2012
Impaired Loans
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Assets, fair value disclosure nonrecurring	$ 3,529
Impaired Loans | Minimum
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Range (weighted average) - appraisal adjustments	0.00%
Range (Weighted Average) - estimated selling costs	0.00%
Impaired Loans | Maximum
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Range (weighted average) - appraisal adjustments	(50.00%)
Range (Weighted Average) - estimated selling costs	(11.00%)
Impaired Loans | Weighted Average
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Range (weighted average) - appraisal adjustments	(7.90%)
Range (Weighted Average) - estimated selling costs	(3.50%)
Other real estate owned and repossessed assets
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Assets, fair value disclosure nonrecurring	$ 3,614
Other real estate owned and repossessed assets | Minimum
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Range (weighted average) - appraisal adjustments	0.00%
Range (Weighted Average) - estimated selling costs	(10.00%)
Other real estate owned and repossessed assets | Maximum
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Range (weighted average) - appraisal adjustments	(49.00%)
Range (Weighted Average) - estimated selling costs	(11.00%)
Other real estate owned and repossessed assets | Weighted Average
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Range (weighted average) - appraisal adjustments	(15.70%)
Range (Weighted Average) - estimated selling costs	(10.10%)

XML

Condensed Consolidated Statements of Shareholders' Equity (Unaudited) (Parentheticals)	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Statement Of Stockholders' Equity [Abstract]
Sale of common stock to employee benefit plan	691	3,522
Sale of common shares for employee stock purchase plan	911	1,319
Issuance of common stock in lieu of director fees		3,280
Number of common stock retired		19,000

XML

Loans and Allowance for Loan Losses - Aging of the recorded investment in past due loans by class of loans (Details 5) (Loans Receivable, USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Accounts, Notes, Loans and Financing Receivable [Line Items]
30 - 59 Days Past Due	$ 1,488	$ 1,903
60 - 89 Days Past Due	2,005	504
90 Days or Greater Past Due	4,726	6,912
Total Past Due	8,219	9,319
Loans Not Past Due	277,741	302,449
Commercial
Accounts, Notes, Loans and Financing Receivable [Line Items]
30 - 59 Days Past Due	755	1,500
60 - 89 Days Past Due
90 Days or Greater Past Due	22
Total Past Due	777	1,500
Loans Not Past Due	39,334	43,333
Commercial real estate - Construction And Land
Accounts, Notes, Loans and Financing Receivable [Line Items]
30 - 59 Days Past Due
60 - 89 Days Past Due	303
90 Days or Greater Past Due	1,798	3,283
Total Past Due	2,101	3,283
Loans Not Past Due	34,995	39,156
Commercial real estate - Non-owner occupied
Accounts, Notes, Loans and Financing Receivable [Line Items]
30 - 59 Days Past Due	229	399
60 - 89 Days Past Due	774
90 Days or Greater Past Due	2,378	2,716
Total Past Due	3,381	3,115
Loans Not Past Due	89,929	96,185
Commercial real estate - Owner occupied
Accounts, Notes, Loans and Financing Receivable [Line Items]
30 - 59 Days Past Due	104
60 - 89 Days Past Due	511
90 Days or Greater Past Due	375	842
Total Past Due	990	842
Loans Not Past Due	91,536	99,067
Residential Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
30 - 59 Days Past Due
60 - 89 Days Past Due	115	501
90 Days or Greater Past Due	106
Total Past Due	221	501
Loans Not Past Due	7,529	8,041
Home Equity
Accounts, Notes, Loans and Financing Receivable [Line Items]
30 - 59 Days Past Due	400
60 - 89 Days Past Due	300
90 Days or Greater Past Due	47	71
Total Past Due	747	71
Loans Not Past Due	12,588	14,162
Consumer loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
30 - 59 Days Past Due		4
60 - 89 Days Past Due	2	3
90 Days or Greater Past Due
Total Past Due	2	7
Loans Not Past Due	$ 1,830	$ 2,505

XML

Fair Values of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2012

Fair Value Disclosures [Abstract]

Schedule of company's assets and liabilities carried at fair value on a recurring basis

	September 30, 2012
(Dollars in Thousands)	Quoted Prices in Active Markets for Identical Assets Level 1		Significant Other Observable Inputs Level 2		Significant Unobservable Inputs Level 3		Total at Fair Value
Securities available for sale Debt securities:
U.S. Government and federal agencies	$	—	$	—	$	—	$	—
States & political subdivisions		—		5,827		—		5,827
U.S. Agency REMIC		—		35,818		—		35,818
U.S. Agency MBS		—		18,574		—		18,574
Total securities available for sale	$	—	$	60,219	$	—	$	60,219

	December 31, 2011
	Quoted Prices in Active Markets for Identical Assets Level 1		Significant Other Observable Inputs Level 2		Significant Unobservable Inputs Level 3		Total at Fair Value
Securities available for sale Debt securities:
U.S. Government and federal agencies	$	—	$	13,690	$	—	$	13,690
States & political subdivisions		—		1,795		—		1,795
U.S. Agency REMIC		—		39,038		—		39,038
U.S. Agency MBS		—		18,613		—		18,613
Total securities available for sale	$	—	$	73,136	$	_—	$	73,136

Schedule of fair values of assets measured at fair value on a nonrecurring basis

	September 30, 2012
(Dollars in Thousands)	Quoted Prices in Active Markets for Identical Assets Level 1		Significant Other Observable Inputs Level 2		Significant Unobservable Inputs Level 3
Impaired loans	$	—	$	—	$	3,529
Other real estate owned	$	—	$	—	$	3,614
	December 31, 2011
(Dollars in Thousands)	Quoted Prices in Active Markets for Identical Assets Level 1		Significant Other Observable Inputs Level 2		Significant Unobservable Inputs Level 3
Impaired loans	$	—	$	—	$	5,913
Other real estate owned	$	—	$	—	$	5,129

Schedule of the carrying amounts and approximate fair values of the company's financial instruments

	September 30, 2012 Fair Value Measurements Using:
(Dollars in Thousands)	Carrying Amount		Quoted Price in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial assets:
Cash and due from banks	$	4,909	$	4,909	$	—	$	—
Federal funds sold and interest bearing deposits		26,541		26,541		—		—
Available for sale securities		60,219		—		60,219		—
Other investments		52		—		—		52
Loans, net		278,008		—		275,999		3,529
Accrued interest receivable		1,127		—		1,127		—
Financial liabilities:
Deposits	$	352,132	$	—	$	352,648	$	—
Other borrowings		5,102		5,102		—		—
Accrued interest payable		43		—		43		—

(Dollars in Thousands)	December 31, 2011 Fair Value Measurements Using:
	Carrying Amount		Quoted Price in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial assets:
Cash and due from banks	$	8,930	$	8,930	$	—	$	—
Federal funds sold and interest bearing deposits		23,917		23,917		—		—
Securities held to maturity		1,002		—		1,013		—
Available for sale securities		73,136		—		73,136		—
Other investments		100		—		—		100
Loans, net		305,088		—		301,549		5,913
Accrued interest receivable		1,180		—		1,180		—
Financial liabilities:
Deposits	$	393,726	$	—	$	394,940	$	—
Other borrowings		13,955		13,955		—		—
Accrued interest payable		87		—		87		—

Schedule of quantitative information about assets measured at fair value on a nonrecurring basis

	September 30, 2012 Quantitative Information about Level 3 Fair Value Measurements
(Dollars in Thousands)	Fair Value Estimate		Valuation Techniques		Unobservable Input		Range (Weighted Average)
Impaired loans	$	3,529		Appraisal of collateral (1)		Appraisal adjustments (2) Estimated selling costs (2)		0% to -50% (-7.9%) 0% to -11% (-3.5%)
Other real estate owned and repossessed assets	$	3,614		Appraisal of collateral (1), (3)		Appraisal adjustments (2) Estimated selling costs (2)		0% to -49% (-15.7%) -10% to -11% (-10.1%)

(1) Fair value is generally determined through independent appraisals of the underlying collateral, which generally include various level 3 inputs which are not identifiable.

(2) Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated selling costs. The range and weighted average of estimated selling costs and other appraisal adjustments are presented as a percent of the appraisal.

(3) Includes qualitative adjustments by management and estimated selling costs.

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Loans and Allowance for Loan Losses - Risk category of loans by class of loans (Details 6) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Financing Receivable By Credit Quality Indicator [Line Items]
Total loans- gross	$ 285,960	$ 311,768
Pass
Financing Receivable By Credit Quality Indicator [Line Items]
Total loans- gross	260,366	285,079
Pass | Commercial
Financing Receivable By Credit Quality Indicator [Line Items]
Total loans- gross	37,493	44,628
Pass | Commercial real estate - Construction And Land
Financing Receivable By Credit Quality Indicator [Line Items]
Total loans- gross	33,974	37,663
Pass | Commercial real estate - Non-owner occupied
Financing Receivable By Credit Quality Indicator [Line Items]
Total loans- gross	86,607	90,909
Pass | Commercial real estate - Owner occupied
Financing Receivable By Credit Quality Indicator [Line Items]
Total loans- gross	79,528	86,663
Pass | Residential
Financing Receivable By Credit Quality Indicator [Line Items]
Total loans- gross	7,644	8,542
Pass | Home Equity
Financing Receivable By Credit Quality Indicator [Line Items]
Total loans- gross	13,288	14,162
Pass | Consumer
Financing Receivable By Credit Quality Indicator [Line Items]
Total loans- gross	1,832	2,512
Special Mention
Financing Receivable By Credit Quality Indicator [Line Items]
Total loans- gross	7,440	5,115
Special Mention | Commercial
Financing Receivable By Credit Quality Indicator [Line Items]
Total loans- gross	2,400
Special Mention | Commercial real estate - Construction And Land
Financing Receivable By Credit Quality Indicator [Line Items]
Total loans- gross
Special Mention | Commercial real estate - Non-owner occupied
Financing Receivable By Credit Quality Indicator [Line Items]
Total loans- gross
Special Mention | Commercial real estate - Owner occupied
Financing Receivable By Credit Quality Indicator [Line Items]
Total loans- gross	5,040	5,115
Special Mention | Residential
Financing Receivable By Credit Quality Indicator [Line Items]
Total loans- gross
Special Mention | Home Equity
Financing Receivable By Credit Quality Indicator [Line Items]
Total loans- gross
Special Mention | Consumer
Financing Receivable By Credit Quality Indicator [Line Items]
Total loans- gross
Substandard
Financing Receivable By Credit Quality Indicator [Line Items]
Total loans- gross	18,154	21,574
Substandard | Commercial
Financing Receivable By Credit Quality Indicator [Line Items]
Total loans- gross	218	205
Substandard | Commercial real estate - Construction And Land
Financing Receivable By Credit Quality Indicator [Line Items]
Total loans- gross	3,121	4,776
Substandard | Commercial real estate - Non-owner occupied
Financing Receivable By Credit Quality Indicator [Line Items]
Total loans- gross	6,703	8,391
Substandard | Commercial real estate - Owner occupied
Financing Receivable By Credit Quality Indicator [Line Items]
Total loans- gross	7,959	8,131
Substandard | Residential
Financing Receivable By Credit Quality Indicator [Line Items]
Total loans- gross	106
Substandard | Home Equity
Financing Receivable By Credit Quality Indicator [Line Items]
Total loans- gross	47	71
Substandard | Consumer
Financing Receivable By Credit Quality Indicator [Line Items]
Total loans- gross
Doubtful
Financing Receivable By Credit Quality Indicator [Line Items]
Total loans- gross
Doubtful | Commercial
Financing Receivable By Credit Quality Indicator [Line Items]
Total loans- gross
Doubtful | Commercial real estate - Construction And Land
Financing Receivable By Credit Quality Indicator [Line Items]
Total loans- gross
Doubtful | Commercial real estate - Non-owner occupied
Financing Receivable By Credit Quality Indicator [Line Items]
Total loans- gross
Doubtful | Commercial real estate - Owner occupied
Financing Receivable By Credit Quality Indicator [Line Items]
Total loans- gross
Doubtful | Residential
Financing Receivable By Credit Quality Indicator [Line Items]
Total loans- gross
Doubtful | Home Equity
Financing Receivable By Credit Quality Indicator [Line Items]
Total loans- gross
Doubtful | Consumer
Financing Receivable By Credit Quality Indicator [Line Items]
Total loans- gross
Loss On Recievables
Financing Receivable By Credit Quality Indicator [Line Items]
Total loans- gross
Loss On Recievables | Commercial
Financing Receivable By Credit Quality Indicator [Line Items]
Total loans- gross
Loss On Recievables | Commercial real estate - Construction And Land
Financing Receivable By Credit Quality Indicator [Line Items]
Total loans- gross
Loss On Recievables | Commercial real estate - Non-owner occupied
Financing Receivable By Credit Quality Indicator [Line Items]
Total loans- gross
Loss On Recievables | Commercial real estate - Owner occupied
Financing Receivable By Credit Quality Indicator [Line Items]
Total loans- gross
Loss On Recievables | Residential
Financing Receivable By Credit Quality Indicator [Line Items]
Total loans- gross
Loss On Recievables | Home Equity
Financing Receivable By Credit Quality Indicator [Line Items]
Total loans- gross
Loss On Recievables | Consumer
Financing Receivable By Credit Quality Indicator [Line Items]
Total loans- gross

XML

Cash and Due From Banks (Details) (USD $) In Millions, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Cash and Cash Equivalents [Abstract]
Vault cash and reserve balances requirements	$ 2.0	$ 2.5

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Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Cash Flows From Operating Activities
Net income (loss)	$ 1,199	$ (1,848)
Adjustments to reconcile net loss to net cash provided by operating activities:
Provision for loan losses	1,520	1,747
Impairment of other real estate owned, net	243	387
Depreciation expense	703	752
Amortization expense	144	144
Net accretion of securities	1,232	(723)
Share-based compensation and director fees	137	220
Realized gain on sales of available for sale securities	(1,280)
Realized loss on sales of other assets	126	93
Increase in cash surrender value	(249)	(237)
Decrease in deferred tax assets		200
Decrease in accrued interest receivable	53	192
Increase (decrease) in accrued interest payable	(44)	(28)
Decrease (increase) other	466	(275)
Net cash provided by operating activities	4,250	624
Cash Flows From Investing Activities
Purchases of securities available for sale	(59,642)	(28,493)
Sales, maturities and calls on securities available for sale	72,016	14,647
Sales, maturities and calls on securities held to maturity	1,002	9,000
Net decrease (increase) in loans	26,564	(5,561)
Purchases of property and equipment, net	(88)	(2,535)
Proceeds from redemption of bank owned life insurance	2,817
Proceeds from sale of other real estate owned	2,122	4,636
Proceeds from sale of premises		966
Proceeds from sale of furniture and fixtures		208
Net cash provided by (used in) investing activities	44,791	(7,182)
Cash Flows From Financing Activities
Net increase (decrease) in deposits	(41,594)	5,603
Net increase (decrease) in borrowings	(8,853)	4,192
Retirement of stock		(108)
Proceeds from sale of stock	9	38
Net cash provided by (used in) financing activities	(50,438)	9,725
Net increase (decrease) in cash and cash equivalents	(1,397)	3,217
Cash and cash equivalents
Beginning of period	32,847	61,872
End of period	31,450	65,089
Supplemental Disclosures of Cash Flow Information and noncash transactions
Interest paid	1,959	3,166
Income taxes paid
Loans transferred to other real estate owned	$ 850	$ 7,454

XML

Condensed Consolidated Balance Sheets (Parentheticals) (USD $) In Thousands, except Share data, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Statement Of Financial Position [Abstract]
Securities held to maturity Fair Value (in dollars)		$ 1,013
Less: Allowance for loan losses (in dollars)	$ 7,830	$ 6,566
Preferred stock, par value (in dollars per share)	$ 5	$ 5
Preferred stock, shares authorized	1,000,000	1,000,000
Preferred stock, shares outstanding
Common stock, par value (in dollars per share)	$ 5	$ 5
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	6,180,842	6,179,240
Common stock, shares outstanding	6,180,842	6,179,240

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Branch Sale

9 Months Ended

Sep. 30, 2012

Sale Of Branch [Abstract]

Branch Sale

Note 10. Branch Sale

On August 17, 2012, Orange Bank, entered into a Purchase and Assumption Agreement (the “Agreement”) to sell the Bank’s Crystal River branch to Old Florida National Bank (“Old Florida”). The Bank has agreed to sell the branch’s real estate and improvements, the deposits associated with the branch and a related portfolio of loans. Old Florida will pay the value of the loans at closing of approximately $4.2 million, assume the deposits of approximately $43.6 million for no premium and pay $1.0 million for the real estate and improvements. The sale has been approved by our regulators and is expected to close in the first quarter of 2013. A loss of $250 thousand was recognized in the third quarter 2012 on the sale of the branch.

XML

Document and Entity Information	9 Months Ended
	Sep. 30, 2012	Oct. 31, 2012
Document and Entity Information [Abstract]
Entity Registrant Name	FLORIDIAN FINANCIAL GROUP INC
Entity Central Index Key	0001349593
Trading Symbol	ffg
Entity Current Reporting Status	Yes
Entity Voluntary Filer	No
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		6,177,842
Document Period End Date	Sep. 30, 2012
Document Type	10-Q
Amendment Flag	false
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q3

XML

Nature of Business and Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2012

Accounting Policies [Abstract]

Comprehensive income (loss)

Comprehensive income (loss): Comprehensive income or loss is comprised of the net income or loss from the consolidated statement of operations and any items of “other comprehensive income.” The only item of other comprehensive income for the Banks is the unrealized gain or loss on the available for sale investment securities portfolio, net of tax.

Cash and cash equivalents

Cash and cash equivalents: For purposes of reporting cash flows, cash and cash equivalents include cash on hand, amounts due from banks (including cash items in process of clearing) and federal funds sold. Cash flows from loans originated by the Company and deposits are reported net. The Company maintains amounts due from banks, which at times may exceed federal deposit insurance limits. The Company has not experienced any losses in such accounts.

Securities

Securities: Certain securities which management has the positive intent and ability to hold until their maturity are classified as held to maturity. Such securities are carried at cost, adjusted for related amortization of premium and accretion of discounts through interest income from securities.

Securities available for sale which are used for asset/liability, liquidity and other funds management purposes have indefinite holding periods and are accounted for on a fair value basis with net unrealized gains and losses included in other comprehensive income net of tax. Declines in the fair value of securities available for sale that are deemed to be other than temporary are reflected in earnings as realized losses. In estimating other-than-temporary impairment losses, management considers: (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer including an evaluation of credit ratings, (3) the impact of changes in market interest rates, (4) the intent of the Company to sell a security, and (5) whether it is more likely than not the Company will have to sell the security before recovery of its cost basis. If the Company intends to sell an impaired security, the Company records an other-than-temporary loss in the amount equal to the entire difference between the fair value and amortized cost. If a security is determined to be other-than-temporarily

impaired, but the Company does not intend to sell the security, only the credit portion of the estimated loss is recognized in earnings, with the other portion of the loss recognized in other comprehensive income. Amortization and accretion of premiums and discounts are recognized as adjustments to interest income. Realized gains and losses are recognized using the specific identification method.

Loans

Loans: Loans are stated at the amount of unpaid principal balances, reduced by an allowance for loan losses and unearned fees and costs. Interest on loans is calculated by using the simple interest method on daily balances of the principal amounts outstanding unless loans are classified as nonaccrual loans. The accrual of interest is discontinued when future collection of principal or interest in accordance with the contractual terms becomes doubtful. When interest accrual is discontinued, all unpaid accrued interest is reversed against interest income. Accrual of interest is generally resumed when the customer is current on all principal and interest payments and has been paying on a timely basis for at least six months.

Accounting standards require the presentation of certain disclosure information at the portfolio segment level, which represents the level at which the Company determines its allowance for credit losses. The Company has four reportable loan segments: Commercial, Commercial Real Estate, Residential Real Estate, and Consumer. Segments are determined based on the products and services provided and the type of customer served. See Note 4 for a breakdown of loans by segment.

Commercial Loans

Commercial Loans: All corporate and business purpose loans and lines of credit that are not real estate related are classified as commercial loans. These loans are generally secured by business assets including accounts receivable, inventory, and equipment and may incorporate a personal guarantee. Terms on commercial loans are generally for five years or less with most lines of credit written on an on-demand-basis. The majority of commercial loans have a floating interest rate tied to a published index. As of September 30, 2012, commercial loans represented 14.0% of the loan portfolio.

Commercial Real Estate Loans ("CRE")

Commercial Real Estate Loans (“CRE”): CRE represents business purpose loans that are real estate related and secured by real estate. CRE loans are reviewed primarily as cash flow loans and secondarily as loans secured by real estate. CRE loans typically involve higher loan principal amounts and the repayment is generally largely dependent on the successful operations of the real property securing the loan or the business conducted on the property securing the loan. CRE loans may be adversely affected by conditions in the real estate markets or in the general economy than other loan types. As of September 30, 2012, 78.0% of the loan portfolio was concentrated in CRE loans.

Residential Real Estate Loans ("RRE"):

Residential Real Estate Loans (“RRE”): RRE represents all consumer purpose loans collateralized by one to four family dwellings. RRE loans generally have terms of less than five years and are written on a fixed rate basis. As of September 30, 2012, 2.7% of the portfolio was classified as RRE.

Consumer Loans

Consumer Loans: All non-business purpose loans are considered consumer loans. Consumer loans consist of home equity lines of credit, automobile loans, overdraft loans, loans secured by deposits and securities, and unsecured personal loans. Home Equity represents all consumer open end lines of credit secured by one to four family lines of credit. Consumer loans represent any consumer purpose loans or lines of credit not secured by real estate. As of September 30, 2012, consumer loans represented 5.3% of the portfolio.

Within each segment, the Company monitors and assesses the credit risk in the following classes, based on the risk characteristic of each loan segment: Pass, Special Mention, Substandard, Doubtful, and Loss. Within the Commercial and CRE portfolio risk grades are assigned based on an assessment of conditions that affect the borrower’s ability to meet obligations as outlined in the loan agreement. This process includes an in-depth review prior to loan approval and throughout the life of the loan. The analysis of the borrower includes a review of financial information, credit documentation, public information, past experience with the borrower, and other information that may be available specific to each borrower. The review also includes debt service capabilities, actual and projected cash flows, and industry and economic risks. Underwriting of RRE, consumer, and home equity loans and lines of credit include an assessment of the borrower’s credit history and the ability to meet existing debt obligations, as well as payments of principal and interest on the proposed loan. Risk grades are reviewed annually on all large credit relationships or on any credit where management becomes aware of information that may affect the borrower’s ability to fulfill contractual obligations. See Note 4 for a breakdown of loans by class.

Troubled Debt Restructuring

Troubled Debt Restructuring: The Company considers a loan to be a Troubled Debt Restructuring (“TDR”) when the debtor experiences financial difficulties and a concession is provided such that the Company will not collect all principal or interest in accordance with the original terms of the loan agreement. Concessions can relate to the contractual interest rate, maturity date, or payment structure of the note. As part of our workout plan, the Company at times restructures loan terms to assist borrowers facing challenges in the current economic environment. Loans classified as TDRs include loans on nonaccrual, loans moving to nonaccrual, and loans on an accruing status. The Company evaluates each individual borrower’s financial condition and prospects for repayment under the modified terms prior to restructuring. The evaluation includes but is not limited to the borrower’s capacity and willingness to pay, past payment history, and any secondary sources of payment.

As of September 30, 2012, five loans totaling $15.6 million were classified as TDRs with $6.3 million classified as nonperforming. As of December 31, 2011, ten loans totaling $17.5 million were classified as TDRs with $971 thousand classified as nonperforming.

Nonaccrual and Impaired loans

Nonaccrual and Impaired loans: Borrowers who have not made scheduled payments within 30 days of their due date are considered past due. The Company has a formal review process for all past due loans which includes a review of previous performance, collateral and future cash flows. The Company’s policy is to place all loans where interest and principal has been delinquent for 90 days or more on nonaccrual status unless the loan is well secured and in the process of collection. Loans operating on a cash basis because of deterioration in financial condition of the debtor as well as loans where the full collection of recorded interest or principal is not expected are also placed on nonaccrual status regardless of delinquency status. When loans are placed on nonaccrual status, future interest accruals are discontinued and all unpaid accrued interest is reversed against interest income.

Cash collections on nonaccrual loans are credited to the loan receivable balance and no interest income is recognized on those loans until the principal balance is current. Nonaccrual loans, after a reasonable period of sustained repayment performance (generally minimum of six months), are re-evaluated for possible return to an accrual status. See Note 4 for a breakdown of the Company’s loan portfolio based on aging.

Impaired loans are measured for impairment based on the present value of expected future cash flows discounted at the loan’s original effective interest rate or, as a practical expedient, at the loan’s observable market price or the fair value of the collateral, net of selling costs, if the loan is collateral dependent. A loan is impaired when it is probable the creditor will be unable to collect all contractual principal and interest payments due in accordance with the terms of the loan agreement. On at least a quarterly basis, the Company reviews impaired loans for any changes in the borrower’s ability to repay the loan. Based on this review, the Company may consider making modifications to the original loan agreement.

Allowance for loan losses

Allowance for loan losses: The allowance for loan losses (“ALL”) is established through a provision for loan losses charged against operations. The allowance includes an unallocated component. The unallocated reserve represents the uncertainty in inherent factors that cannot be practically assigned to individual loan categories including the local economy and the uncertainty related to historical loss rates applied against loan risk-ratings. The Company believes the unallocated amount is warranted. All commercial loans risk rated substandard or doubtful are considered impaired and are reviewed on a quarterly basis to determine if a specific reserve needs to be allocated.

Loans are charged against the allowance for loan losses when management believes that the loss is confirmed. The allowance is an amount that management believes is adequate to absorb losses inherent in the loan portfolio, based on evaluations of the collectability of loans, industry historical loss experience, current economic conditions, portfolio mix, and other factors. During the second quarter of 2012, the Company changed from a rolling 12-month to a rolling 24- month look back period to evaluate and allocate loan losses in regard to the provision.

While management uses the best information available to make its evaluation, future adjustments to the allowance may be necessary if there are significant changes in economic conditions.

Loan Charge-Offs

Loan Charge-Offs: All loan segments except Consumer are charged off within 30 days from the date the loan is deemed uncollectible. The recognition of the loss of loans or portions of loans occurs as soon as there is a reasonable probability of loss. When the amount of loss can be readily calculated, then the loss is recognized. In cases where an amount cannot be calculated, a specific allowance for loan losses is estimated and provided for.

Losses on consumer credit card loans are taken as soon as possible and no later than when the loan is 90 days delinquent. All other consumer loan losses are taken as soon as possible and no later than when delinquency exceeds 120 days.

As a policy, the Banks reverse accrued interest on loans placed on nonaccrual. If the accrued interest being reversed was recorded in a previous calendar year and the amount is material, the accrued interest associated with the previous calendar year is charged off.

Credit related financial instruments

Credit related financial instruments: In the ordinary course of business, the Banks enter into off-balance-sheet financial instruments consisting of commitments to extend credit and standby letters of credit. Such financial instruments are recorded in the financial statements when they are funded.

Transfers of financial assets

Transfers of financial assets: Transfers of financial assets are accounted for as sales only when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (1) the assets have been legally isolated from the Company and any of its affiliates, (2) the transferee has the ability to sell or pledge 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 or maintain effective control through a third-party beneficial interest in the transferred assets, the ability to unilaterally cause the holder to return specific assets, or have an in-the-money option held by a transferor when probable that the transferor will repurchase the assets.

Other Real Estate Owned

Other Real Estate Owned: Other real estate owned (“OREO”) consists of property acquired through, or in lieu of, loan foreclosures or other proceedings and is initially recorded at the fair value less estimated selling costs at the date of foreclosure, which establishes a new cost basis. Subsequent to foreclosure, the properties are held for sale and are carried at the lower of cost or fair value less estimated costs of disposal. Any write-down to fair value at the time of acquisition is charged to the allowance for loan losses. Properties are evaluated regularly to ensure the recorded amounts are supported by current fair values, and a charge to operations is recorded as necessary to reduce the carrying amount to fair value less estimated costs to dispose.

Income taxes

Income taxes: The Company accounts for income taxes according to the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using the enacted tax rates applicable to taxable income for the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation reserves are established against certain deferred tax assets when it is more likely than not that the deferred tax assets will not be realized. Increases or decreases in the valuation reserve are charged or credited to the income tax provision.

The Company recognizes a benefit from its tax positions only if it is more-likely-than-not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information.

The periods subject to examination for the Company’s federal returns are the tax years subsequent to 2009. The periods subject to examination for the Company’s significant state return, which is Florida, are the tax years subsequent to 2008. The Company believes that its income tax filing positions and deductions will be sustained upon examination and does not anticipate any adjustments that will result in a material change in its financial statements. As a result, no reserve for uncertain income tax positions has been recorded.

The Company’s policy for recording interest and penalties related to uncertain tax positions is to record such items as part of its provision for federal and state income taxes.

Earnings per share

Earnings per share: Basic earnings per share is calculated by dividing net income (loss) by the weighted average number of shares of common stock outstanding for each period presented. Options outstanding at September 30, 2012 and 2011, to purchase 650 thousand and 645 thousand common shares, respectively, were not included in the computation of diluted earnings per share for the three and nine months ended September 30, 2012 and 2011, because they were antidilutive.

Share-based compensation

Share-based compensation: The Company has a stock option plan for its employees and for its directors, as more fully described in Note 14 of our financial statements contained in our Annual Report. The Company is required to recognize compensation cost relating to share-based payment transactions, based on the fair value of the equity or liability instruments issued, in its financial statements. Compensation cost has been measured using the fair value of an award on the grant dates and is recognized over the service period, which is usually the vesting period.

Reclassifications

Reclassifications: Certain amounts in the 2011 financial statements have been reclassified for comparative purposes to conform with the presentation in the 2012 financial statements. The results of these classifications had no effect on net operations or shareholders’ equity.

New Accounting Pronouncements

New Accounting Pronouncements: In December 2011, the FASB issued ASU No. 2011-12, “Comprehensive Income (Topic 220): Deferral of the Effective Date for the Amendments to the Presentation of Reclassifications of the Items Out of Accumulated Other Comprehensive Income in ASU No. 2011-05”. This guidance delays the effective date of the disclosures for only those changes in ASU No. 2011-05 that relate to the presentation of reclassification adjustments to allow the FASB time to reconsider whether to require presentation of such adjustments on the face of the financial statements to show the effects of reclassifications out of accumulated other comprehensive income on the components of net income and other comprehensive income. ASU 2011-12 allows entities to continue to report reclassifications out of accumulated other comprehensive income consistent with the presentation requirements in effect before ASU No. 2011-05. All other requirements in ASU No. 2011-05 are not affected by ASU No. 2011-12. ASU No. 2011-12 is effective for annual and interim periods beginning on or after December 15, 2011 and is not expected to have a significant impact on our financial statements.

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Consolidated Statements of Operations and Other Comprehensive Income (Unaudited) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Interest income:
Interest and fees on loans	$ 3,522	$ 3,980	$ 10,989	$ 11,734
Interest on securities	42	275	581	980
Interest on federal funds sold	2	50	6	7
Other interest	8	4	38	107
Total interest income	3,574	4,309	11,614	12,828
Interest expense:
Interest on deposits	479	948	1,822	2,951
Other interest	35	56	93	186
Total interest expense	514	1,004	1,915	3,137
Net interest income	3,060	3,305	9,699	9,691
Provision for loan losses	104	550	1,520	1,747
Net interest income after provision for loan losses	2,956	2,755	8,179	7,944
Noninterest income:
Other noninterest income	193	313	892	947
Gain on sale of securities	371		1,280
Gain (loss) on sale of other assets	(143)	(145)	(126)	(93)
Total noninterest income	421	168	2,046	854
Noninterest expense:
Salaries and employee benefits	1,378	1,716	3,608	5,031
Occupancy and equipment expenses	734	629	2,090	2,035
FDIC insurance	159	43	498	472
Data processing	460	343	1,245	1,077
Other real estate expense	64	186	400	403
Professional fees	240	256	679	751
Credit and collection expense	29	47	74	220
Core deposit intangible amortization	48	48	144	144
Other operating expenses	109	120	288	313
Total noninterest expense	3,221	3,388	9,026	10,446
Income (loss) before income taxes	156	(465)	1,199	(1,648)
Income tax		25		200
Net income (loss)	156	(490)	1,199	(1,848)
Basic and diluted net income (loss) per share (in dollars per share)	$ 0.03	$ (0.08)	$ 0.20	$ (0.30)
Average basic and diluted shares outstanding (in shares)	6,180,842	6,201,609	6,180,842	6,201,609
Other comprehensive income:
Net income (loss)	156	(490)	1,199	(1,848)
Change in unrealized holding gains on securities available for sale, net of income tax	(250)	659	(639)	2,017
Comprehensive income	$ (94)	$ 169	$ 560	$ 169

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2012

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Note 5. Commitments and Contingencies

Financial instruments with off-balance-sheet risk: The financial statements do not reflect various commitments and contingent liabilities that arise in the normal course of business to meet the financing needs of customers. These include commitments to extend credit and honor stand-by letters of credit. These instruments involve, to varying degrees, elements of credit, interest rate and liquidity risks in excess of amounts reflected in the balance sheets. The extent of the Banks’ involvement in these commitments or contingent liabilities is expressed by the contractual, or notional, amounts of the instruments. Commitments to extend credit, which amount to $50.5 million and $57.2 million at September 30, 2012 and December 31, 2011, respectively, represent agreements to lend to customers with fixed expiration dates or other termination clauses.

Since many commitments are expected to expire without being funded, committed amounts do not necessarily represent future liquidity requirements. The amount of collateral obtained, if any, is based on management’s credit evaluation in the same manner as though an immediate credit extension were to be granted.

Standby letters of credit are conditional commitments issued by the Banks guaranteeing the performance of a customer to a third party. The decision whether to guarantee such performance and the extent of collateral requirements are made considering the same factors as are considered in credit extensions. Stand-by letters of credit totaling $2.5 and $3.2 million were outstanding as of September 30, 2012 and December 31, 2011, respectively.

Lines of credit: At September 30, 2012 and December 31, 2011, the Banks had federal funds lines of credit available from their correspondent banks of $24.0 and $30.3 million, respectively. At these dates, there were no outstanding draws under these lines. The highest single day borrowing under these lines was $8.3 million during the nine months ended September 30, 2012.

We are periodically a party to or otherwise involved in legal proceedings arising in the normal course of business, such as claims to enforce liens, claims involving the making and servicing of real property loans, and other issues incident to our business. Management does not believe that there is any pending or threatened proceeding against us which, if determined adversely, would have a material adverse effect on our financial position, liquidity, or results of operations.

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Loans and Allowance for Loan Losses

9 Months Ended

Sep. 30, 2012

Loans and Financing Receivable Abstract

Loans and Allowance for Loan Losses

Note 4. Loans and Allowance for Loan Losses

Loans were comprised of the following:

(Dollars in Thousands)	September 30, 2012		December 31, 2011
Commercial	$	40,111	$	44,833
Commercial real estate		222,932		241,648
Residential real estate		7,750		8,542
Consumer loans		15,167		16,745
Total loans		285,960		311,768
Less: Allowance for loan losses		7,830		6,566
Less: Unearned fees		122		114
Net loans	$	278,008	$	305,088

Activity in the allowance for loan losses is as follows:

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
(Dollars in Thousands)	2012			2011			2012			2011
Beginning balance	$	7,678		$	7,715		$	6,566		$	8,010
Loan charge offs:
Commercial		—			183			—			308
Commercial real estate		546			846			986			1,870
Residential real estate		—			37			—			391
Consumer and home equity		—			—			65			243
Total charge-offs		546			1,066			1,051			2,812
Recoveries:
Commercial		1			5			12			96
Commercial real estate		591			6			759			166
Residential real estate		1			—			—			—
Consumer		1			—			24			3
Total recoveries		594			116			795			265
Provision for loan losses:
Commercial		(60	)		76			1			76
Commercial real estate		123			318			1,714			809
Residential real estate		6			141			(27	)		537
Consumer		29			15			56			295
Unallocated		6			—			(224	)		30
Total provision		104			550			1,520			1,747
Ending balance	$	7,830		$	7,210		$	7,830		$	7,210
Allowance / Total Loans		2.7	%		2.3	%		2.7	%		2.3	%
Net Charge-Offs / Average Loans		0.0	%		0.3	%		0.1	%		0.8	%
Allowance / Nonperforming Loans		62.1	%		93.2	%		62.1	%		93.2	%

The following presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and is based on impairment method as of September 30, 2012 and December 31, 2011:

	As of September 30, 2012
(Dollars in Thousands)	Commercial		Commercial Real Estate		Residential Real Estate		Home Equity		Consumer		Unallocated		Total
Ending allowance for loan losses:
Individually evaluated for impairment	$	—	$	2,475	$	—	$	—	$	—	$	—	$	2,475
Collectively evaluated for impairment		728		4,177		120		295		25		10		5,355
Total ending allowance balance	$	728	$	6,652	$	120	$	295	$	25	$	10	$	7,830
Loans:
Individually evaluated for impairment	$	22	$	20,077	$	106	$	—	$	—	$	—	$	20,205
Collectively evaluated for impairment		40,089		202,855		7,644		13,335		1,832		—		265,755
Total ending loan balance	$	40,111	$	222,932	$	7,750	$	13,335	$	1,832	$	—	$	285,960
	As of December 31, 2011
(Dollars in Thousands)	Commercial		Commercial Real Estate		Residential Real Estate		Home Equity		Consumer		Unallocated		Total
Ending allowance for loan losses:
Individually evaluated for impairment	$	—	$	255	$	—	$	—	$	—	$	—	$	255
Collectively evaluated for impairment		743		4,896		135		246		57		234		6,311
Total ending allowance balance	$	743	$	5,151	$	135	$	246	$	57	$	234	$	6,566
Loans:
Individually evaluated for impairment	$	—	$	23,622	$	—	$	23	$	—	$	—	$	23,645
Collectively evaluated for impairment		44,833		218,026		8,542		14,210		2,512		—		288,123
Total ending loan balance	$	44,833	$	241,648	$	8,542	$	14,233	$	2,512	$	—	$	311,768

The following presents loans individually evaluated for impairment by class of loans as of September 30, 2012 and December 31, 2011:

	As of September 30, 2012
(Dollars in Thousands)	Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated		Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Income Recognized
With no related allowance recorded:
Commercial	$	22	$	22	$	—	$	24	$	1	$	—
Commercial real estate
Construction and land		5,899		3,121		—		2,912		160		—
Non-owner occupied		803		467		—		1,022		23		—
Owner occupied		1,329		699		—		696		47		—
Residential		106		106		—		102		10		—
Home equity		—		—		—		—		—		—
Consumer		—		—		—		—		—		—
Total		8,159		4,415		—		4,756		241		—
With an allowance recorded:
Commercial		—		—		—		—		—		—
Commercial real estate
Construction and land		—		—		—		—		—		—
Non-owner occupied		7,727		7,728		2,104		7,802		307		—
Owner occupied		8,763		8,062		371		8,025		238		—
Residential		—		—		—		—		—		—
Home equity		—		—		—		—		—		—
Consumer		—		—		—		—		—		—
Total		16,490		15,790		2,475		15,827		545		—
Total	$	24,649	$	20,205	$	2,475	$	20,583	$	786	$	—

	As of December 31, 2011
(Dollars in Thousands)	Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated		Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Income Recognized
With no related allowance recorded:
Commercial	$	—	$	—	$	—	$	239	$	—	$	—
Commercial real estate
Construction and land		9,825		4,776		—		9,640		40		—
Non-owner occupied		10,026		8,391		—		9,956		199		—
Owner occupied		3,295		2,079		—		3,265		61		—
Residential		—		—		—		—		—		—
Home equity		59		23		—		23		—		—
Consumer		—		—		—		—		—		—
Total		23,205		15,269		—		23,123		300		—
With an allowance recorded:
Commercial		—		—		—		—		—		—
Commercial real estate
Construction and land		—		—		—		—		—		—
Non-owner occupied		2,177		1,500		10		2,177		158		—
Owner occupied		6,876		6,876		245		6,860		49		—
Residential		—		—		—		—		—		—
Home equity		—		—		—		—		—		—
Consumer		—		—		—		—		—		—
Total		9,053		8,376		255		9,037		207		—
Total	$	32,258	$	23,645	$	255	$	32,160	$	507	$	—

No additional funds are committed to be advanced in connection with impaired loans.

Impaired loans include TDRs of $15.6 million and $17.5 million at September 30, 2012 and December 31, 2011, respectively. As of September 30, 2012 and December 31, 2011, there were two nonperforming TDRs with outstanding balances of $6.3 million and $971 thousand, respectively.

During the three months ended September 30, 2012, three CRE loans were classified by the Banks as TDRs. Orange Bank on the one loan reduced the interest rate and retained the monthly interest only payments. Floridian Bank, for the other two loans, increased the interest rate from 3.25% to 5.1% and modified the payments from interest only to principal and interest payments sufficient to term out the loans over ten years. Both of Floridian Bank’s loans had been classified as TDRs in 2010.

During the nine months ended September 30, 2012, the Banks classified four CRE loans with an aggregate outstanding balance $4.3 million as TDRs. Charge-offs totaling $1.4 million were taken on the loans. The Banks had no commitments to lend additional funds for loans classified as TDRs at September 30, 2012. No TDRs defaulted within 12 months of being restructured.

The following presents the recorded investment in nonaccrual loans and loans past due over 90 days and still accruing by class of loans as of September 30, 2012 and December 31, 2011:

	September 30, 2012				December 31, 2011
(Dollars in Thousands)	Nonaccrual		Loans Past Due 90 Days and Over Still Accruing		Nonaccrual		Loans Past Due 90 Days and Over Still Accruing
Commercial	$	22	$	—	$	—	$	—
Commercial real estate
Construction and land		3,121		—		4,777		—
Non-owner occupied		6,703		1,912		2,245		471
Owner occupied		699		—		842		—
Residential		106		—		—		—
Home equity		47		—		71		—
Consumer		—		—		—		—
Total	$	10,698	$	1,912	$	7,935	$	471

Nonaccruing loans totaled $10.7 million and $7.9 million at September 30, 2012 and December 31, 2011, respectively. Interest income on nonaccrual loans is recognized on a cash basis when the ultimate collectability is no longer considered doubtful. Cash collected on nonaccrual loans is applied against the principal balance or recognized as interest income based upon management’s expectations as to the ultimate collectability of principal and interest in full. If interest on nonaccruing loans had been recognized on a fully-accruing basis, interest income recorded would have been $163 thousand and $453 thousand higher for the quarter ended September 30, 2012 and the year ended December 31, 2011, respectively. As of September 30, 2012, there was one loan past due 90 days or more and still accruing interest income. The loan was matured and has subsequently been renewed. The one loan past due 90 days or more as of December 31, 2011 represented a matured loan that was renewed.

The following presents the aging of the recorded investment in past due loans as of September 30, 2012 and December 31, 2011 by class of loans:

	September 30, 2012
(Dollars in Thousands)	30 – 59 Days Past Due		60 – 89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Loans Not Past Due
Commercial	$	755	$	—	$	22	$	777	$	39,334
Commercial real estate
Construction and land		—		303		1,798		2,101		34,995
Non-owner occupied		229		774		2,378		3,381		89,929
Owner occupied		104		511		375		990		91,536
Residential		—		115		106		221		7,529
Home equity		400		300		47		747		12,588
Consumer		—		2		—		2		1,830
Total	$	1,488	$	2,005	$	4,726	$	8,219	$	277,741
	December 31, 2011
(Dollars in Thousands)	30 - 59 Days Past Due		60 - 89 Days Past Due		90 Days Or Greater Past Due		Total Past Due		Loans Not Past Due
Commercial	$	1,500	$	—	$	—	$	1,500	$	43,333
Commercial real estate
Construction and land		—		—		3,283		3,283		39,156
Non-owner occupied		399		—		2,716		3,115		96,185
Owner occupied		—		—		842		842		99,067
Residential		—		501		—		501		8,041
Home equity		—		—		71		71		14,162
Consumer		4		3		—		7		2,505
Total	$	1,903	$	504	$	6,912	$	9,319	$	302,449

The Company assigns a risk rating to all business purpose loans and periodically performs reviews to identify credit risks and to assess the overall collectability of the portfolio. During these internal reviews, management monitors and analyzes the financial condition of borrowers and guarantors, trends in the industries in which borrowers operate and the fair values of collateral securing these loans. These credit quality indicators are used to assign a risk rating to each individual loan. The risk ratings can be grouped into five major categories, defined as follows:

Pass – A pass loan is a strong credit with no existing or known potential weaknesses deserving of management’s close attention.

Special Mention – A special mention loan has potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or in the Company’s credit position at some future date. Special Mention loans are not adversely classified and do not expose the Company to sufficient risk to warrant adverse classification.

Substandard – A substandard loan is not adequately protected by the current financial condition and paying capacity of the borrower or the value of the collateral pledged, if any. Loans classified as substandard have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. Well-defined weaknesses include a project’s lack of marketability, inadequate cash flow or collateral support, failure to complete construction on time or the project’s failure to fulfill economic expectations. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.

Doubtful – Loans classified doubtful have all the weaknesses inherent in those classified as substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently known facts, conditions and values, highly questionable or improbable.

Loss – Loans classified as loss are considered uncollectible. Once a loan becomes delinquent and repayment becomes questionable, the Company will address collateral shortfalls with the borrower and attempt to obtain additional collateral. If this is not forthcoming and payment in full is unlikely, the Bank will estimate its probable loss and immediately charge-off some or all of the balance.

As of September 30, 2012 and December 31, 2011, and based on the most recent analysis performed, the risk category of loans by class of loans is as follows:

	September 30, 2012
(Dollars in Thousands)	Pass		Special Mention		Substandard		Doubtful		Loss
Commercial	$	37,493	$	2,400	$	218	$	—	$	—
Commercial real estate
Construction and land		33,974		—		3,121		—		—
Non-owner occupied		86,607		—		6,703		—		—
Owner occupied		79,528		5,040		7,959		—		—
Residential		7,644		—		106		—		—
Home equity		13,288		—		47		—		—
Consumer		1,832		—		—		—		—
Total	$	260,366	$	7,440	$	18,154	$	—	$	—
	December 31, 2011
(Dollars in Thousands)	Pass		Special Mention		Substandard		Doubtful		Loss
Commercial	$	44,628	$	—	$	205	$	—	$	—
Commercial real estate
Construction and land		37,663		—		4,776		—
Non-owner occupied		90,909		—		8,391		—		—
Owner occupied		86,663		5,115		8,131		—		—
Residential		8,542		—		—		—		—
Home equity		14,162		—		71		—		—
Consumer		2,512		—		—		—		—
Total	$	285,079	$	5,115	$	21,574	$	—	$	—

The following presents the recorded investment in residential and consumer loans based on payment activity as of September 30, 2012 and December 31, 2011:

	September 30, 2012
(Dollars in Thousands)	Residential		Home Equity		Consumer
Performing	$	7,644	$	13,288	$	1,832
Nonperforming		106		47		—
Total	$	7,750	$	13,335	$	1,832
	December 31, 2011
(Dollars in Thousands)	Residential		Home Equity		Consumer
Performing	$	8,542	$	14,162	$	2,512
Nonperforming		—		71		—
Total	$	8,542	$	14,233	$	2,512

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Nature of Business and Summary of Significant Accounting Policies (Detail Textuals) (USD $)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2012 Loans	Sep. 30, 2011	Sep. 30, 2012 Loans	Sep. 30, 2011	Dec. 31, 2011 Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Percentage of interest in subsidiary	100.00%		100.00%
Number of loans	5		5		10
Troubled debt restructuring classified amount			$ 15,600,000		$ 17,500,000
Troubled debt restructuring, nonperforming	$ 6,300,000		$ 6,300,000		$ 971,000
Common shares not included in the computation of diluted earnings per share	650	645	650	645
Commercial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Percentage of loans to portfolio	14.00%		14.00%
Term of loan			five years or less
Commercial Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Percentage of loans to portfolio	78.00%		78.00%
Residential Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Percentage of loans to portfolio	2.70%		2.70%
Term of loan			less than five years
Consumer loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Percentage of loans to portfolio	5.30%		5.30%

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Securities (Tables)

9 Months Ended

Sep. 30, 2012

Investments, Debt and Equity Securities [Abstract]

Schedule of amortized cost and estimated fair value of securities with gross unrealized gains and losses

	As of September 30, 2012
(Dollars in Thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Securities Available for sale
Debt Securities:
States & political subdivisions	$	5,914	$	—	$	87	$	5,827
U.S. Agency REMIC		36,068		72		322		35,818
U.S. Agency MBS		18,426		148		—		18,574
Total securities available for sale	$	60,408	$	220	$	409	$	60,219

	As of December 31, 2011
Securities Available for Sale
Debt Securities:
U.S. Government and federal agencies	$	13,385	$	305	$	—	$	13,690
States & political subdivisions		1,701		94		—		1,795
U.S. Agency REMIC		38,917		338		217		39,038
U.S. Agency MBS		18,683		18		88		18,613
Total securities available for sale	$	72,686	$	755	$	305	$	73,136
Securities Held to Maturity
Debt Securities:
U.S. Government and federal agencies	$	1,002	$	11	$	—	$	1,013
Total securities held to maturity	$	1,002	$	11	$	—	$	1,013

Schedule of carrying amount of debt securities by contractual maturity

	(Dollars in Thousands)		Within 1 year			After 1 year through 5 years			After 5 years Through 10 years			Over 10 years			Total
Available for sale, at fair value
States & political subdivisions		$		—	$		—	$		531	$		5,296	$		5,827
U.S. Agency REMIC				2,806			30,706			2,306			—			35,818
U.S. Agency MBS				—			9,835			6,969			1,770			18,574
Total		$		2,806	$		40,541	$		9,806	$		7,066	$		60,219

Schedule of securities with gross unrealized losses

	September 30, 2012
	Less Than Twelve Months				Over Twelve Months
(Dollars in Thousands)	Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Total Unrealized Losses
Securities Available for sale
Debt Securities:
States & political subdivisions	$	87	$	5,826	$	—	$	—	$	87
U.S. Agency REMIC		188		21,559		134		6,204		322
Total securities available for sale	$	275	$	27,385	$	134	$	6,204	$	409

	December 31, 2011
	Less Than Twelve Months				Over Twelve Months
(Dollars in Thousands)	Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Total Unrealized Losses
Securities Available for sale
Debt Securities:
U.S. Agency REMIC	$	217	$	23,460	$	—	$	—	$	217
U.S. Agency MBS		88		14,536		—		—		88
Total securities available for sale	$	305	$	37,996	$	—	$	—	$	305

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Related Party

9 Months Ended

Sep. 30, 2012

Related Party Transactions [Abstract]

Related Party

Note 8. Related Party

On January 4, 2011, Orange Bank purchased the land, building, and furniture and fixtures associated with the Clermont Branch location from First Team Clermont OB, LLC, a Florida limited liability company (“First Team”). First Team is controlled by W. Warner Peacock, a former director of the Company. First Team holds a note on the land, building, and furniture and fixtures of $1.7 million. The note requires monthly interest payments at 6.5% per annum. The note required a principal reduction of $850 thousand on January 3, 2012, with all outstanding principal and interest due on January 3, 2013.

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Regulatory Capital Matters

9 Months Ended

Sep. 30, 2012

Regulatory Capital Requirements Under Banking Regulations Abstract

Regulatory Capital Matters

Note 6. Regulatory Capital Matters

The Company’s Banks are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory - and possibly additional discretionary - actions by regulators that, if undertaken, could have a direct material adverse effect on the Company’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Banks must meet specific capital guidelines that involve quantitative measures of the Banks’ assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. Prompt corrective action provisions are not applicable to bank holding companies.

Quantitative measures established by regulation to ensure capital adequacy require the Banks to maintain minimum amounts and ratios of total and Tier 1 capital (as defined in the regulations), to risk-weighted assets (as defined), and Tier 1 capital (as defined), to average assets (as defined). As of September 30, 2012 and December 31, 2011, the Banks meet all capital adequacy requirements to be classified as “well capitalized” under prompt corrective action provisions and meet all capital adequacy requirements to which they are subject.

	Actual					For Capital Adequacy Purposes					To be Considered Well Capitalized by Prompt Corrective Action
	Amount		Ratio			Amount		Ratio			Amount		Ratio (1)
As of September 30, 2012
Total capital (to risk-weighted assets)
Consolidated	$	43,651		13.7	%	$	25,530		8	%	$	NA		NA
Floridian Bank	$	15,772		14.0	%	$	9,038		8	%	$	11,298		10	%
Orange Bank of Florida	$	24,841		12.7	%	$	15,645		8	%	$	19,557		10	%
Tier 1 capital (to risk-weighted assets)
Consolidated	$	39,615		12.4	%	$	12,765		4	%	$	NA		NA
Floridian Bank	$	14,351		12.7	%	$	4,519		4	%	$	6,767		6	%
Orange Bank of Florida	$	22,356		11.4	%	$	7,823		4	%	$	11,734		6	%
Tier 1 capital (to average assets)
Consolidated	$	39,615		10.0	%	$	15,856		4	%	$	NA		NA
Floridian Bank	$	14,351		10.2	%	$	5,627		4	%	$	7,034		5	%
Orange Bank of Florida	$	22,356		8.8	%	$	10,129		4	%	$	12,662		5	%

(1) As discussed in Note 9, effective September 30, 2012, Orange Bank must meet enhanced Tier 1 Capital and Total Risk-Based Capital ratios. At September 30, 2012, Orange Bank had met all enhanced requirements.

	Actual					For Capital Adequacy Purposes					To be Considered Well Capitalized by Prompt Corrective Action
	Amount		Ratio			Amount		Ratio			Amount		Ratio
As of December 31, 2011
Total capital (to risk-weighted assets)
Consolidated	$	42,545		12.1	%	$	26,221		8	%	$	NA		NA
Floridian Bank	$	14,991		12.5	%	$	9,560		8	%	$	11,950		10	%
Orange Bank of Florida	$	24,625		10.7	%	$	18,355		8	%	$	22,943		10	%
Tier 1 capital (to risk-weighted assets)
Consolidated	$	38,126		10.9	%	$	13,111		4	%	$	NA		NA
Floridian Bank	$	13,495		11.3	%	$	4,780		4	%	$	7,170		6	%
Orange Bank of Florida	$	21,732		9.5	%	$	9,177		4	%	$	13,766		6	%
Tier 1 capital (to average assets)
Consolidated	$	38,126		8.1	%	$	16,876		4	%	$	NA		NA
Floridian Bank	$	13,495		9.0	%	$	6,032		4	%	$	7,541		5	%
Orange Bank of Florida	$	21,732		6.9	%	$	12,607		4	%	$	16,007		5	%

Pursuant to Orange Bank’s regulatory Memorandum of Understanding (the “MOU”), Orange Bank is required to maintain a minimum Tier 1 capital to average assets ratio of 8% and total capital to risk-weighted assets of 12%. As of September 30, 2012, Orange Bank met the minimum capital requirement as required by the MOU.

The payment of dividends by a Florida state bank is subject to various restrictions set forth in the Florida Financial Institutions Code. Such restrictions generally limit dividends to an amount not exceeding net income for the current and two preceding years, less any dividends paid during that period. Accordingly, management does not expect the payment of dividends at any time in the near future. Since the Company is dependent upon the Bank’s ability to pay dividends, the Company is, in effect, similarly restricted as to its ability to pay dividends. Further, the Boards of Directors of the Banks are restricted from declaring and paying the Company any dividends without the prior approval of our banking regulators. See Note 9.

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Fair Values of Financial Instruments

9 Months Ended

Sep. 30, 2012

Fair Value Disclosures [Abstract]

Fair Values of Financial Instruments

Note 7. Fair Values of Financial Instruments

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability. The price in the principal (or most advantageous) market used to measure the fair value of the asset or liability shall not be adjusted for transaction costs. An orderly transaction is a transaction that assumes exposure to the market for a period prior to the measurement date to allow for marketing activities that are usual and customary for transactions involving such assets and liabilities; it is not a forced transaction. Market participants are buyers and sellers in the principal market that are (i) independent, (ii) knowledgeable, (iii) able to transact and (iv) willing to transact.

Estimating fair value requires the use of valuation techniques that are consistent with the market approach, the income approach and/or the cost approach. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets and liabilities. The income approach uses valuation techniques to convert expected future amounts, such as cash flows or earnings, to a single present value amount on a discounted basis. The cost approach is based on the amount that currently would be required to replace the service capacity of an asset (replacement cost). Valuation techniques should be consistently applied. Inputs to valuation techniques refer to the assumptions that market participants would use in pricing the asset or liability. Inputs may be observable, meaning those that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from independent sources, or unobservable, meaning those that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. In that regard, the guidance establishes a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs.

The fair value hierarchy is as follows:

Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.

Level 3: Significant unobservable inputs that reflect a reporting entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

A description of the valuation methodologies used for instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below.

In general, fair value is based upon quoted market prices, where available. If such quoted market prices are not available, fair value is based upon internally developed models that primarily use, as inputs, observable market-based parameters. Valuation adjustments may be made to ensure that financial instruments are recorded at fair value. These adjustments may include amounts to reflect counterparty credit quality, the Company’s creditworthiness, among other things, as well as unobservable parameters. Any such valuation adjustments are applied consistently over time. Our valuation methodologies may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. While management believes the Company’s valuation methodologies are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date.

The following methods and assumptions were used by the Company in estimating the fair value of its financial instruments:

Cash and due from banks, interest bearing demand deposits in other banks, and federal funds sold: Due to the short-term nature of these instruments, fair values approximate their carrying amounts.

Investment Securities: The fair values of investment securities are determined by quoted prices in active markets, when available. If quoted market prices are not available, the fair value is determined by a matrix pricing, which is a mathematical technique, widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted securities. Other investments include non-traded securities in bankers-bank stock which is estimated to approximate its book value.

Loans: For variable-rate loans that re-price frequently and with no significant change in credit risk, fair values are based on carrying values. Fair values for all other loans (for example, commercial, commercial real estate, residential real estate, and consumer loans) are estimated using discounted cash flow analyses, using interest rates currently being offered for loans with similar terms to borrowers of similar credit quality. Fair values for nonperforming loans are estimated using discounted cash flow analyses or underlying collateral values, where applicable.

Impaired Loans: Loans for which it is probable that payment of interest and principal will not be made in accordance with the contractual terms of the loan agreement are considered impaired. Once a loan is identified as individually impaired, management measures impairment in accordance with the FASB guidance “Accounting by Creditors for Impairment of a Loan,” and the fair value of impaired loans is estimated using one of several methods, including collateral value, market value of similar debt, enterprise value, liquidation value and discounted cash flows. Those impaired loans not requiring an allowance represent loans for which the fair value of the expected repayments or collateral exceed the recorded investments in such loans. In accordance with accounting literature, impaired loans where an allowance is established based on the fair value of collateral require classification in the fair value hierarchy. Collateral values are estimated using level 3 inputs based on customized discounting criteria.

Other Real Estate Owned: Other real estate owned consists of property acquired through, or in lieu of, loan foreclosures or other proceedings and is initially recorded at fair value less estimated selling costs at the date of foreclosure, which establishes a new cost basis. Subsequent to foreclosure, the properties are held for sale and are carried at the lower of cost or the net fair value less disposal costs. Properties are evaluated regularly to ensure the recorded amounts are supported by current fair values, and a charge to operations is recorded as necessary to reduce the carrying amount to fair value less estimated costs to dispose.

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

Deposits: The fair value of demand deposits, including non-interest bearing demand deposits, savings accounts, NOW accounts and money market demand accounts, is equal to their carrying value. Fixed rate term deposits are valued using discounted cash flows. The discount rate used is based on interest rates currently being offered on comparable deposits as to amount and term.

Other borrowings: The carrying amounts of borrowings under repurchase agreements amount of $4.3 million and a long-term note payable of $850 thousand approximate their fair values.

Off-balance-sheet instruments: Loan commitments and standby letters of credit are negotiated at current market rates and are relatively short-term in nature. Therefore, their estimated fair value approximates the fees charged and is nominal at September 30, 2012 and December 31, 2011.

Financial Instruments Recorded at Fair Value on a Recurring Basis

The following table sets forth the Company’s assets and liabilities which are carried at fair value on a recurring basis as of September 30, 2012 and December 31, 2011, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value:

	September 30, 2012
(Dollars in Thousands)	Quoted Prices in Active Markets for Identical Assets Level 1		Significant Other Observable Inputs Level 2		Significant Unobservable Inputs Level 3		Total at Fair Value
Securities available for sale Debt securities:
U.S. Government and federal agencies	$	—	$	—	$	—	$	—
States & political subdivisions		—		5,827		—		5,827
U.S. Agency REMIC		—		35,818		—		35,818
U.S. Agency MBS		—		18,574		—		18,574
Total securities available for sale	$	—	$	60,219	$	—	$	60,219

	December 31, 2011
	Quoted Prices in Active Markets for Identical Assets Level 1		Significant Other Observable Inputs Level 2		Significant Unobservable Inputs Level 3		Total at Fair Value
Securities available for sale Debt securities:
U.S. Government and federal agencies	$	—	$	13,690	$	—	$	13,690
States & political subdivisions		—		1,795		—		1,795
U.S. Agency REMIC		—		39,038		—		39,038
U.S. Agency MBS		—		18,613		—		18,613
Total securities available for sale	$	—	$	73,136	$	_—	$	73,136

The Company may be required, from time to time, to measure certain financial assets and financial liabilities at fair value on a nonrecurring basis in accordance with U.S. generally accepted accounting principles. These include assets that are measured at the lower of cost or market that were recognized at fair value below cost at the end of the period.

The fair values of assets measured at fair value on a nonrecurring basis are as follows at September 30, 2012 and December 31, 2011:

	September 30, 2012
(Dollars in Thousands)	Quoted Prices in Active Markets for Identical Assets Level 1		Significant Other Observable Inputs Level 2		Significant Unobservable Inputs Level 3
Impaired loans	$	—	$	—	$	3,529
Other real estate owned	$	—	$	—	$	3,614
	December 31, 2011
(Dollars in Thousands)	Quoted Prices in Active Markets for Identical Assets Level 1		Significant Other Observable Inputs Level 2		Significant Unobservable Inputs Level 3
Impaired loans	$	—	$	—	$	5,913
Other real estate owned	$	—	$	—	$	5,129

Provisions for loan losses of $1.5 million and $1.7 million were recorded on impaired loans during the nine months ended September 30, 2012 and 2011, respectively.

Write-downs of $166 thousand and $387 thousand were recorded on other real estate owned during the nine months ended September 30, 2012 and 2011, respectively. Subsequent to September 30, 2012, Orange Bank sold an OREO property for $1.5 million.

Following is a summary of the carrying amounts and approximate fair values of the Company’s financial instruments at September 30, 2012 and December 31, 2011. The fair value estimates presented are based on pertinent information available to management as of September 30, 2012 and December 31, 2011. Although management is not aware of any factors that would significantly affect the estimated fair values, they have not been comprehensively revalued for purposes of these financial statements since the statement of financial condition date, and therefore, current estimates of fair value may differ significantly from the amounts disclosed.

	September 30, 2012 Fair Value Measurements Using:
(Dollars in Thousands)	Carrying Amount		Quoted Price in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial assets:
Cash and due from banks	$	4,909	$	4,909	$	—	$	—
Federal funds sold and interest bearing deposits		26,541		26,541		—		—
Available for sale securities		60,219		—		60,219		—
Other investments		52		—		—		52
Loans, net		278,008		—		275,999		3,529
Accrued interest receivable		1,127		—		1,127		—
Financial liabilities:
Deposits	$	352,132	$	—	$	352,648	$	—
Other borrowings		5,102		5,102		—		—
Accrued interest payable		43		—		43		—

(Dollars in Thousands)	December 31, 2011 Fair Value Measurements Using:
	Carrying Amount		Quoted Price in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial assets:
Cash and due from banks	$	8,930	$	8,930	$	—	$	—
Federal funds sold and interest bearing deposits		23,917		23,917		—		—
Securities held to maturity		1,002		—		1,013		—
Available for sale securities		73,136		—		73,136		—
Other investments		100		—		—		100
Loans, net		305,088		—		301,549		5,913
Accrued interest receivable		1,180		—		1,180		—
Financial liabilities:
Deposits	$	393,726	$	—	$	394,940	$	—
Other borrowings		13,955		13,955		—		—
Accrued interest payable		87		—		87		—

Assets measured at fair value on a recurring basis and for which the Company has utilized Level 3 inputs to determine fair value were immaterial at September 30, 2012.

The following table presents additional quantitative information about assets measured at fair value on a nonrecurring basis and for which the Company utilized Level 3 inputs to determine fair value:

	September 30, 2012 Quantitative Information about Level 3 Fair Value Measurements
(Dollars in Thousands)	Fair Value Estimate		Valuation Techniques		Unobservable Input		Range (Weighted Average)
Impaired loans	$	3,529		Appraisal of collateral (1)		Appraisal adjustments (2) Estimated selling costs (2)		0% to -50% (-7.9%) 0% to -11% (-3.5%)
Other real estate owned and repossessed assets	$	3,614		Appraisal of collateral (1), (3)		Appraisal adjustments (2) Estimated selling costs (2)		0% to -49% (-15.7%) -10% to -11% (-10.1%)

(1) Fair value is generally determined through independent appraisals of the underlying collateral, which generally include various level 3 inputs which are not identifiable.

(2) Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated selling costs. The range and weighted average of estimated selling costs and other appraisal adjustments are presented as a percent of the appraisal.

(3) Includes qualitative adjustments by management and estimated selling costs.

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Regulatory Agreement

9 Months Ended

Sep. 30, 2012

Regulatory Agreement Under Banking Regulations Abstract

Regulatory Agreement

Note 9. Regulatory Agreement

On July 21, 2011, the board of directors of Floridian Bank agreed to approve the board resolution in consultation with their banking regulators. On September 11, 2012, the regulatory board resolution for Floridian Bank was terminated. On July 21, 2011, the board of directors of Orange Bank agreed to approve a board resolution and subsequently on July 19, 2012, the board of directors of Orange Bank agreed to adopt a MOU issued by its banking regulator. From a regulatory perspective, a MOU is a nonpublic agreement; however, in the interest of full disclosure, we are summarizing the main obligations of Orange Bank’s MOU. The FDIC issues an MOU when it believes a board resolution would not adequately address its concerns.

For Orange Bank, its memorandum of understanding (“MOU”) includes, among other things, (i) seeking approval from the FDIC and Florida Office of Financial Regulation (“OFR”) prior to appointing new directors and executive officers; (ii) enhancing the board of director’s participation in the affairs of Orange Bank; (iii) developing plans to reduce and improve certain loan relationships with adverse classification; (iv) charging off remaining assets classified as “Loss”; (v) prohibiting extensions of credit to certain high-risk borrowers; (vi) submitting of a new business plan and annual budgets and earnings forecasts; (vii) achieving and maintaining, by September 30, 2012, a Tier 1 leverage capital ratio and total risk-based capital ratio of at least 8% and 12%, respectively; and (viii) providing quarterly reports to the FDIC and OFR regarding the steps taken to address the foregoing. Orange Bank must also receive approval from the FDIC and OFR prior to declaring or paying dividends.

The MOU adopted by Orange Bank and the restrictions imposed thereby on Orange Bank will remain in effect unless modified or terminated by the Bank’s regulators. Since entering into the board resolution and MOU, we have been actively pursuing the corrective actions. We intend to continue to take the actions necessary to comply with the requirements of the MOU and implement the submitted plan successfully, although we may be unable to do so. As of September 30, 2012, Orange Bank’s Tier 1 leverage capital ratio and total risk-based capital ratio were approximately 8.8% and 12.7%, respectively; meeting all regulatory requirements.

On October 20, 2011, the Company’s board of directors agreed to adopt certain board resolutions (the “FRB Resolution”) in consultation with the Federal Reserve Bank of Atlanta (the “FRB”). The FRB Resolution require, among other things, that the Company seek approval from the FRB prior to incurring any debt, declaring or paying any dividends, reducing its capital position (e.g., through the purchase of treasury shares), or making distributions on subordinated debentures or trust preferred securities. The FRB Resolution approved by the Company and the restrictions imposed thereby on the Company will remain in effect until terminated by the FRB. We intend to take the actions necessary to comply with the requirements of the FRB Resolution.

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Loans and Allowance for Loan Losses - Recorded investment in nonaccrual loans and loans past due over 90 days and still accruing by class of loans (Details 4) (Loans Receivable, USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual	$ 10,698	$ 7,935
Loans Past Due Over 90 Days Still Accruing	1,912	471
Commercial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual	22
Loans Past Due Over 90 Days Still Accruing
Commercial real estate - Construction And Land
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual	3,121	4,777
Loans Past Due Over 90 Days Still Accruing
Commercial real estate - Non-owner occupied
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual	6,703	2,245
Loans Past Due Over 90 Days Still Accruing	1,912	471
Commercial real estate - Owner occupied
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual	699	842
Loans Past Due Over 90 Days Still Accruing
Residential
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual	106
Loans Past Due Over 90 Days Still Accruing
Home Equity
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual	47	71
Loans Past Due Over 90 Days Still Accruing
Consumer
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual
Loans Past Due Over 90 Days Still Accruing

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Regulatory Capital Matters (Tables)

9 Months Ended

Sep. 30, 2012

Regulatory Capital Requirements Under Banking Regulations Abstract

Schedule of compliance with regulatory capital requirements under banking regulations

	Actual					For Capital Adequacy Purposes					To be Considered Well Capitalized by Prompt Corrective Action
	Amount		Ratio			Amount		Ratio			Amount		Ratio (1)
As of September 30, 2012
Total capital (to risk-weighted assets)
Consolidated	$	43,651		13.7	%	$	25,530		8	%	$	NA		NA
Floridian Bank	$	15,772		14.0	%	$	9,038		8	%	$	11,298		10	%
Orange Bank of Florida	$	24,841		12.7	%	$	15,645		8	%	$	19,557		10	%
Tier 1 capital (to risk-weighted assets)
Consolidated	$	39,615		12.4	%	$	12,765		4	%	$	NA		NA
Floridian Bank	$	14,351		12.7	%	$	4,519		4	%	$	6,767		6	%
Orange Bank of Florida	$	22,356		11.4	%	$	7,823		4	%	$	11,734		6	%
Tier 1 capital (to average assets)
Consolidated	$	39,615		10.0	%	$	15,856		4	%	$	NA		NA
Floridian Bank	$	14,351		10.2	%	$	5,627		4	%	$	7,034		5	%
Orange Bank of Florida	$	22,356		8.8	%	$	10,129		4	%	$	12,662		5	%

(1) As discussed in Note 9, effective September 30, 2012, Orange Bank must meet enhanced Tier 1 Capital and Total Risk-Based Capital ratios. At September 30, 2012, Orange Bank had met all enhanced requirements.

	Actual					For Capital Adequacy Purposes					To be Considered Well Capitalized by Prompt Corrective Action
	Amount		Ratio			Amount		Ratio			Amount		Ratio
As of December 31, 2011
Total capital (to risk-weighted assets)
Consolidated	$	42,545		12.1	%	$	26,221		8	%	$	NA		NA
Floridian Bank	$	14,991		12.5	%	$	9,560		8	%	$	11,950		10	%
Orange Bank of Florida	$	24,625		10.7	%	$	18,355		8	%	$	22,943		10	%
Tier 1 capital (to risk-weighted assets)
Consolidated	$	38,126		10.9	%	$	13,111		4	%	$	NA		NA
Floridian Bank	$	13,495		11.3	%	$	4,780		4	%	$	7,170		6	%
Orange Bank of Florida	$	21,732		9.5	%	$	9,177		4	%	$	13,766		6	%
Tier 1 capital (to average assets)
Consolidated	$	38,126		8.1	%	$	16,876		4	%	$	NA		NA
Floridian Bank	$	13,495		9.0	%	$	6,032		4	%	$	7,541		5	%
Orange Bank of Florida	$	21,732		6.9	%	$	12,607		4	%	$	16,007		5	%

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Securities - Carrying amount of debt securities by contractual maturity (Details 1) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Available for sale, at fair value
Available for sale, at fair value- within 1 year	$ 2,806
Available for sale, at fair value- after 1 year through 5 years	40,541
Available for sale, at fair value- after 5 years through 10 years	9,806
Available for sale, at fair value- over 10 years	7,066
Available for sale, fair value	60,219	73,136
States & political subdivisions
Available for sale, at fair value
Available for sale, at fair value- within 1 year
Available for sale, at fair value- after 1 year through 5 years
Available for sale, at fair value- after 5 years through 10 years	531
Available for sale, at fair value- over 10 years	5,296
Available for sale, fair value	5,827	1,795
U.S. Agency REMIC
Available for sale, at fair value
Available for sale, at fair value- within 1 year	2,806
Available for sale, at fair value- after 1 year through 5 years	30,706
Available for sale, at fair value- after 5 years through 10 years	2,306
Available for sale, at fair value- over 10 years
Available for sale, fair value	35,818	39,038
U.S. Agency MBS
Available for sale, at fair value
Available for sale, at fair value- within 1 year
Available for sale, at fair value- after 1 year through 5 years	9,835
Available for sale, at fair value- after 5 years through 10 years	6,969
Available for sale, at fair value- over 10 years	1,770
Available for sale, fair value	$ 18,574	$ 18,613

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Branch Sale (Detail Textuals) (USD $)			9 Months Ended
	Sep. 30, 2012	Dec. 31, 2011	Sep. 30, 2012 Orange Bank of Florida Purchase and Assumption Agreement	Aug. 17, 2012 Orange Bank of Florida Purchase and Assumption Agreement
Sale Of Branch [Line Items]
Value of the loans	$ 278,008,000	$ 305,088,000		$ 4,200,000
Deposits associated with the Crystal River branch	352,132,000	393,726,000		43,600,000
Real estate and improvements				1,000,000
Loss on the sale of the branch			$ (250,000)

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Regulatory Capital Matters (Detail Textuals) (Orange Bank of Florida)	Sep. 30, 2012	Dec. 31, 2011
Orange Bank of Florida
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Minimum- Total risk-based capital ratio		12.00%
Tier 1 leverage capital ratio	8.80%	6.90%

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Condensed Consolidated Statements of Shareholders' Equity (Unaudited) (USD $) In Thousands, unless otherwise specified	Common Stock Par Value	Additional Paid-In Capital	Retained Deficit	Accumulated Other Comprehensive Income (Loss)	Total
Balance at Dec. 31, 2010	$ 30,999	$ 38,148	$ (27,839)	$ (1,205)	$ 40,103
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)			(1,848)		(1,848)
Change in unrealized gains on securities available for sale, net of income tax				2,017	2,017
Sale of 691 and 3,522 shares of common stock to employee benefit plan and 911 and 1,319 shares for employee stock purchase plan for the nine months ended September 30, 2012 and 2011 respectively	25	13			38
Issuance of 3,280 shares of common stock in lieu of director fees	16	14			30
Retirement of 19,000 shares of common stock	(98)	(10)			(108)
Share-based compensation		190			190
Balance at Sep. 30, 2011	30,942	38,355	(29,687)	812	40,422
Balance at Dec. 31, 2011	30,896	38,397	(29,966)	450	39,777
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)			1,199		1,199
Change in unrealized gains on securities available for sale, net of income tax				(639)	(639)
Sale of 691 and 3,522 shares of common stock to employee benefit plan and 911 and 1,319 shares for employee stock purchase plan for the nine months ended September 30, 2012 and 2011 respectively	8	1			9
Share-based compensation		137			137
Balance at Sep. 30, 2012	$ 30,904	$ 38,535	$ (28,767)	$ (189)	$ 40,483

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Securities

9 Months Ended

Sep. 30, 2012

Investments, Debt and Equity Securities [Abstract]

Securities

Note 3. Securities

The amortized cost and estimated fair value of securities with gross unrealized gains and losses follows:

	As of September 30, 2012
(Dollars in Thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Securities Available for sale
Debt Securities:
States & political subdivisions	$	5,914	$	—	$	87	$	5,827
U.S. Agency REMIC		36,068		72		322		35,818
U.S. Agency MBS		18,426		148		—		18,574
Total securities available for sale	$	60,408	$	220	$	409	$	60,219

	As of December 31, 2011
Securities Available for Sale
Debt Securities:
U.S. Government and federal agencies	$	13,385	$	305	$	—	$	13,690
States & political subdivisions		1,701		94		—		1,795
U.S. Agency REMIC		38,917		338		217		39,038
U.S. Agency MBS		18,683		18		88		18,613
Total securities available for sale	$	72,686	$	755	$	305	$	73,136
Securities Held to Maturity
Debt Securities:
U.S. Government and federal agencies	$	1,002	$	11	$	—	$	1,013
Total securities held to maturity	$	1,002	$	11	$	—	$	1,013

At September 30, 2012 and December 31, 2011, government obligations with a carrying value of $8.3 million and $20.6 million, respectively, were pledged to secure public deposits and for other purposes required or permitted by law. At September 30, 2012 and December 31, 2011, the carrying amount of securities pledged to secure repurchase agreements was $5.2 million and $12.6 million, respectively.

The carrying amount of debt securities by contractual maturity at September 30, 2012 follows:

	(Dollars in Thousands)		Within 1 year			After 1 year through 5 years			After 5 years Through 10 years			Over 10 years			Total
Available for sale, at fair value
States & political subdivisions		$		—	$		—	$		531	$		5,296	$		5,827
U.S. Agency REMIC				2,806			30,706			2,306			—			35,818
U.S. Agency MBS				—			9,835			6,969			1,770			18,574
Total		$		2,806	$		40,541	$		9,806	$		7,066	$		60,219

For the three months ended September 30, 2012 and 2011, proceeds from sales, maturities, and calls of securities available for sale amounted to $27.9 million and $12.8 million, respectively. Gross realized gains amounted to $419 thousand and $0, respectively. There were no gross realized losses for the three months ended September 30, 2012 and 2011.

For the nine months ended September 30, 2012 and 2011, proceeds from sales, maturities, and calls of securities amounted to $73.0 million and $23.6 million, respectively. Gross realized gains amounted to $1.3 million and $0, respectively. There were no gross realized losses for the nine months ended September 30, 2012 and 2011.

Information pertaining to securities with gross unrealized losses at September 30, 2012 and December 31, 2011 aggregated by investment category and length of time that individual securities have been in a continuous loss position, follows:

	September 30, 2012
	Less Than Twelve Months				Over Twelve Months
(Dollars in Thousands)	Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Total Unrealized Losses
Securities Available for sale
Debt Securities:
States & political subdivisions	$	87	$	5,826	$	—	$	—	$	87
U.S. Agency REMIC		188		21,559		134		6,204		322
Total securities available for sale	$	275	$	27,385	$	134	$	6,204	$	409

	December 31, 2011
	Less Than Twelve Months				Over Twelve Months
(Dollars in Thousands)	Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Total Unrealized Losses
Securities Available for sale
Debt Securities:
U.S. Agency REMIC	$	217	$	23,460	$	—	$	—	$	217
U.S. Agency MBS		88		14,536		—		—		88
Total securities available for sale	$	305	$	37,996	$	—	$	—	$	305

As of September 30, 2012, the Company’s security portfolio consisted of 40 securities, 24 of which were in an unrealized loss position. Four of the securities had loss positions in excess of 12 months. The securities were issued by U.S. government-sponsored agencies and are not considered impaired. Approximately $54.4 million, or 90%, of the debt securities held by the Company were issued by U.S. government-sponsored entities and agencies, primarily Fannie Mae, Freddie Mac and Ginnie Mae, institutions which the government has affirmed its commitment to support. Because the decline in fair value is attributable to changes in interest rates and illiquidity, and not credit quality, and because the Company does not have the intent to sell these securities and it is likely it will not be required to sell the securities before their anticipated recovery, the Company does not consider these securities to be other-than-temporarily impaired at September 30, 2012.

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Securities - Securities with gross unrealized losses aggregated by investment category and length of time in a continuous loss position (Details 2) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Securities Available for sale
Securities available for sale- less than twelve months- gross unrealized losses	$ 275	$ 305
Securities available for sale- less than twelve months- fair value	27,385	37,996
Securities available for sale- over twelve months- gross unrealized losses	134
Securities available for sale- over twelve months- fair value	6,204
Securities available for sale- total unrealized losses	409	305
States & political subdivisions
Securities Available for sale
Securities available for sale- less than twelve months- gross unrealized losses	87
Securities available for sale- less than twelve months- fair value	5,826
Securities available for sale- over twelve months- gross unrealized losses
Securities available for sale- over twelve months- fair value
Securities available for sale- total unrealized losses	87
U.S. Agency REMIC
Securities Available for sale
Securities available for sale- less than twelve months- gross unrealized losses	188	217
Securities available for sale- less than twelve months- fair value	21,559	23,460
Securities available for sale- over twelve months- gross unrealized losses	134
Securities available for sale- over twelve months- fair value	6,204
Securities available for sale- total unrealized losses	322	217
U.S. Agency MBS
Securities Available for sale
Securities available for sale- less than twelve months- gross unrealized losses		88
Securities available for sale- less than twelve months- fair value		14,536
Securities available for sale- over twelve months- gross unrealized losses
Securities available for sale- over twelve months- fair value
Securities available for sale- total unrealized losses		$ 88

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Loans and Allowance for Loan Losses (Detail Textuals) (USD $)	9 Months Ended	12 Months Ended					3 Months Ended	9 Months Ended		12 Months Ended
	Sep. 30, 2012	Dec. 31, 2011	Sep. 30, 2012 Impaired Loans	Dec. 31, 2011 Impaired Loans	Sep. 30, 2012 Impaired Loans Nonperforming Contracts	Dec. 31, 2011 Impaired Loans Nonperforming Contracts	Sep. 30, 2012 Commercial Real Estate Loans	Sep. 30, 2012 Commercial Real Estate Loans Contracts	Sep. 30, 2012 Nonaccruing Loans	Dec. 31, 2011 Nonaccruing Loans
Financing Receivable, Modifications [Line Items]
Troubled debt restructuring			$ 15,600,000	$ 17,500,000	$ 6,300,000	$ 971,000
Financing receivable, non-performing, number of contracts					2	2
Troubled debt restructuring classified amount	15,600,000	17,500,000						4,300,000
Loans charge-offs								1,400,000
Monthly interest rate for two CRE loans							3.25%	3.25%
Increased interest rate for two CRE loans							5.10%
Interest payments term for loans								10 years
Period for defaulted Tdrs to be restructured								12 months
Financing receivables classified as Tdr number of contracts								3
Nonaccruing loans									10,700,000	7,900,000
Maximum interest income unrecognized on nonaccrual loans									$ 163,000	$ 453,000

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Loans and Allowance for Loan Losses (Tables)

9 Months Ended

Sep. 30, 2012

Loans and Financing Receivable Abstract

Schedule of loans

(Dollars in Thousands)	September 30, 2012		December 31, 2011
Commercial	$	40,111	$	44,833
Commercial real estate		222,932		241,648
Residential real estate		7,750		8,542
Consumer loans		15,167		16,745
Total loans		285,960		311,768
Less: Allowance for loan losses		7,830		6,566
Less: Unearned fees		122		114
Net loans	$	278,008	$	305,088

Schedule of activity in the allowance for loan losses

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
(Dollars in Thousands)	2012			2011			2012			2011
Beginning balance	$	7,678		$	7,715		$	6,566		$	8,010
Loan charge offs:
Commercial		—			183			—			308
Commercial real estate		546			846			986			1,870
Residential real estate		—			37			—			391
Consumer and home equity		—			—			65			243
Total charge-offs		546			1,066			1,051			2,812
Recoveries:
Commercial		1			5			12			96
Commercial real estate		591			6			759			166
Residential real estate		1			—			—			—
Consumer		1			—			24			3
Total recoveries		594			116			795			265
Provision for loan losses:
Commercial		(60	)		76			1			76
Commercial real estate		123			318			1,714			809
Residential real estate		6			141			(27	)		537
Consumer		29			15			56			295
Unallocated		6			—			(224	)		30
Total provision		104			550			1,520			1,747
Ending balance	$	7,830		$	7,210		$	7,830		$	7,210
Allowance / Total Loans		2.7	%		2.3	%		2.7	%		2.3	%
Net Charge-Offs / Average Loans		0.0	%		0.3	%		0.1	%		0.8	%
Allowance / Nonperforming Loans		62.1	%		93.2	%		62.1	%		93.2	%

Schedule of balance in the allowance for loan losses and the recorded investment

	As of September 30, 2012
(Dollars in Thousands)	Commercial		Commercial Real Estate		Residential Real Estate		Home Equity		Consumer		Unallocated		Total
Ending allowance for loan losses:
Individually evaluated for impairment	$	—	$	2,475	$	—	$	—	$	—	$	—	$	2,475
Collectively evaluated for impairment		728		4,177		120		295		25		10		5,355
Total ending allowance balance	$	728	$	6,652	$	120	$	295	$	25	$	10	$	7,830
Loans:
Individually evaluated for impairment	$	22	$	20,077	$	106	$	—	$	—	$	—	$	20,205
Collectively evaluated for impairment		40,089		202,855		7,644		13,335		1,832		—		265,755
Total ending loan balance	$	40,111	$	222,932	$	7,750	$	13,335	$	1,832	$	—	$	285,960
	As of December 31, 2011
(Dollars in Thousands)	Commercial		Commercial Real Estate		Residential Real Estate		Home Equity		Consumer		Unallocated		Total
Ending allowance for loan losses:
Individually evaluated for impairment	$	—	$	255	$	—	$	—	$	—	$	—	$	255
Collectively evaluated for impairment		743		4,896		135		246		57		234		6,311
Total ending allowance balance	$	743	$	5,151	$	135	$	246	$	57	$	234	$	6,566
Loans:
Individually evaluated for impairment	$	—	$	23,622	$	—	$	23	$	—	$	—	$	23,645
Collectively evaluated for impairment		44,833		218,026		8,542		14,210		2,512		—		288,123
Total ending loan balance	$	44,833	$	241,648	$	8,542	$	14,233	$	2,512	$	—	$	311,768

Schedule of loans individually evaluated for impairment by class of loans

	As of September 30, 2012
(Dollars in Thousands)	Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated		Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Income Recognized
With no related allowance recorded:
Commercial	$	22	$	22	$	—	$	24	$	1	$	—
Commercial real estate
Construction and land		5,899		3,121		—		2,912		160		—
Non-owner occupied		803		467		—		1,022		23		—
Owner occupied		1,329		699		—		696		47		—
Residential		106		106		—		102		10		—
Home equity		—		—		—		—		—		—
Consumer		—		—		—		—		—		—
Total		8,159		4,415		—		4,756		241		—
With an allowance recorded:
Commercial		—		—		—		—		—		—
Commercial real estate
Construction and land		—		—		—		—		—		—
Non-owner occupied		7,727		7,728		2,104		7,802		307		—
Owner occupied		8,763		8,062		371		8,025		238		—
Residential		—		—		—		—		—		—
Home equity		—		—		—		—		—		—
Consumer		—		—		—		—		—		—
Total		16,490		15,790		2,475		15,827		545		—
Total	$	24,649	$	20,205	$	2,475	$	20,583	$	786	$	—

	As of December 31, 2011
(Dollars in Thousands)	Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated		Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Income Recognized
With no related allowance recorded:
Commercial	$	—	$	—	$	—	$	239	$	—	$	—
Commercial real estate
Construction and land		9,825		4,776		—		9,640		40		—
Non-owner occupied		10,026		8,391		—		9,956		199		—
Owner occupied		3,295		2,079		—		3,265		61		—
Residential		—		—		—		—		—		—
Home equity		59		23		—		23		—		—
Consumer		—		—		—		—		—		—
Total		23,205		15,269		—		23,123		300		—
With an allowance recorded:
Commercial		—		—		—		—		—		—
Commercial real estate
Construction and land		—		—		—		—		—		—
Non-owner occupied		2,177		1,500		10		2,177		158		—
Owner occupied		6,876		6,876		245		6,860		49		—
Residential		—		—		—		—		—		—
Home equity		—		—		—		—		—		—
Consumer		—		—		—		—		—		—
Total		9,053		8,376		255		9,037		207		—
Total	$	32,258	$	23,645	$	255	$	32,160	$	507	$	—

Schedule of recorded investment in nonaccrual loans and loans past due over 90 days and still accruing by class of loans

	September 30, 2012				December 31, 2011
(Dollars in Thousands)	Nonaccrual		Loans Past Due 90 Days and Over Still Accruing		Nonaccrual		Loans Past Due 90 Days and Over Still Accruing
Commercial	$	22	$	—	$	—	$	—
Commercial real estate
Construction and land		3,121		—		4,777		—
Non-owner occupied		6,703		1,912		2,245		471
Owner occupied		699		—		842		—
Residential		106		—		—		—
Home equity		47		—		71		—
Consumer		—		—		—		—
Total	$	10,698	$	1,912	$	7,935	$	471

Schedule of recorded investment in past due loans

	September 30, 2012
(Dollars in Thousands)	30 – 59 Days Past Due		60 – 89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Loans Not Past Due
Commercial	$	755	$	—	$	22	$	777	$	39,334
Commercial real estate
Construction and land		—		303		1,798		2,101		34,995
Non-owner occupied		229		774		2,378		3,381		89,929
Owner occupied		104		511		375		990		91,536
Residential		—		115		106		221		7,529
Home equity		400		300		47		747		12,588
Consumer		—		2		—		2		1,830
Total	$	1,488	$	2,005	$	4,726	$	8,219	$	277,741
	December 31, 2011
(Dollars in Thousands)	30 - 59 Days Past Due		60 - 89 Days Past Due		90 Days Or Greater Past Due		Total Past Due		Loans Not Past Due
Commercial	$	1,500	$	—	$	—	$	1,500	$	43,333
Commercial real estate
Construction and land		—		—		3,283		3,283		39,156
Non-owner occupied		399		—		2,716		3,115		96,185
Owner occupied		—		—		842		842		99,067
Residential		—		501		—		501		8,041
Home equity		—		—		71		71		14,162
Consumer		4		3		—		7		2,505
Total	$	1,903	$	504	$	6,912	$	9,319	$	302,449

Schedule of loans recievable credit quality indicators

	September 30, 2012
(Dollars in Thousands)	Pass		Special Mention		Substandard		Doubtful		Loss
Commercial	$	37,493	$	2,400	$	218	$	—	$	—
Commercial real estate
Construction and land		33,974		—		3,121		—		—
Non-owner occupied		86,607		—		6,703		—		—
Owner occupied		79,528		5,040		7,959		—		—
Residential		7,644		—		106		—		—
Home equity		13,288		—		47		—		—
Consumer		1,832		—		—		—		—
Total	$	260,366	$	7,440	$	18,154	$	—	$	—
	December 31, 2011
(Dollars in Thousands)	Pass		Special Mention		Substandard		Doubtful		Loss
Commercial	$	44,628	$	—	$	205	$	—	$	—
Commercial real estate
Construction and land		37,663		—		4,776		—
Non-owner occupied		90,909		—		8,391		—		—
Owner occupied		86,663		5,115		8,131		—		—
Residential		8,542		—		—		—		—
Home equity		14,162		—		71		—		—
Consumer		2,512		—		—		—		—
Total	$	285,079	$	5,115	$	21,574	$	—	$	—

Schedule of recorded investment in residential and consumer loans based on payment activity

	September 30, 2012
(Dollars in Thousands)	Residential		Home Equity		Consumer
Performing	$	7,644	$	13,288	$	1,832
Nonperforming		106		47		—
Total	$	7,750	$	13,335	$	1,832
	December 31, 2011
(Dollars in Thousands)	Residential		Home Equity		Consumer
Performing	$	8,542	$	14,162	$	2,512
Nonperforming		—		71		—
Total	$	8,542	$	14,233	$	2,512