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As filed with the Securities and Exchange Commission on November 2, 2009

Registration No. 333-161252

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

Pre-effective Amendment Number 1 to

Form S-1

REGISTRATION STATEMENT

under

THE SECURITIES ACT OF 1933

 

 

BANK OF FLORIDA CORPORATION

(Exact name of registrant as specified in its charter)

 

 

 

FLORIDA		6712		59-3535315
(State or other jurisdiction of incorporation or organization)		(Primary Standard Industrial Classification Code Number)		(I.R.S. Employer Identification No.)

1185 Immokalee Road

Naples, Florida 34110

(239) 254-2100

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

 

 

Michael L. McMullan

Chief Executive Officer

Bank of Florida Corporation

1185 Immokalee Road

Naples, Florida 34110

(239) 254-2100

(Name, address, including zip code, and telephone number, including area code, of agent for service)

 

 

Copies to:

 

A. George Igler, Esq. or Richard Pearlman, Esq. Igler & Dougherty, P.A. 2457 Care Drive Tallahassee, Florida 32308 (850) 878-2411		Ralph F. MacDonald, III, Esq. Jones Day 1420 Peachtree Street, NE, Suite 800 Atlanta, Georgia 30309 (404) 581-3939

 

 

Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective.

If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box.  ¨

If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering  ¨

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 the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

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

 

 

CALCULATION OF REGISTRATION FEE

 

Title of each class of securities to be registered		Amount to be registered(1)		Proposed maximum offering price per share(2)		Proposed maximum aggregate offering price(2)		Amount of registration fee
Common Stock, par value $0.01 per share		86,000,000		$1.565		$134,590,000		$7,510.13(3)

(1)	Includes shares which the underwriters have the option to purchase pursuant to the underwriters’ option to purchase additional shares.

(2)	Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(c) under the Securities Act of 1933, based on the average of the high and low prices of the common stock, $1.67 and $1.46, respectively, as reported by the Nasdaq Global Market on October 30, 2009.

(3)	$55.80 of which was previously paid.

 

 

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

 

 

 

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Explanatory Note

This Registration Statement includes two forms of prospectus. The first relates to an underwritten offering of              shares of Bank of Florida Corporation common stock (the “Underwritten Offering Prospectus”). The second relates to an offering of              shares of Bank of Florida Corporation common stock issuable upon the possible conversion of shares of Bank of Florida Corporation Series B Preferred Stock (the “Preferred Conversion Prospectus”). The underwriters named or referenced in the Underwritten Offering Prospectus are not participating in the conversion of the Series B Preferred Stock and are not acting as underwriters, dealers, brokers, or otherwise with respect to that conversion or any redemption of shares of our Series B Preferred Stock.

The Preferred Conversion Prospectus is substantially the same as the Underwritten Offering Prospectus except for the following:

 

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the cover page;

 

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the section entitled “About this Prospectus”;

 

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the first paragraph of the section entitled “Prospectus Summary”;

 

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the section entitled “Prospectus Summary—The Offering”;

 

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the section entitled “Certain United States Federal Income Tax Considerations Applicable to Non-U.S. Holders,” which will be replaced with the section entitled “Certain United States Federal Income Tax Considerations Applicable to Series B Preferred Stock Holders”;

 

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the section entitled “Use of Proceeds”;

 

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the section entitled “Underwriting,” which will be replaced with the section entitled “Plan of Distribution”;

 

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the section entitled “Legal Matters”; and

 

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the back cover page.

The Registrant has provided a set of alternate sections for the Preferred Conversion Prospectus in this Registration Statement to reflect the foregoing differences.

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The information in this prospectus is not complete and may be changed or supplemented. We may not sell these securities until the registration statement that we have filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell the securities and it is not a solicitation of an offer to buy the securities in any jurisdiction where an offer or sale thereof is not permitted.

 

Subject to Completion, dated November 2, 2009

PROSPECTUS

                     Shares

Common Stock

 

 

We are selling             shares of our common stock. Our common stock is listed on the Nasdaq Global Market under the symbol “BOFL.” On November     , 2009, the last reported sale price of our common stock on the Nasdaq Global Market was $             per share.

You should read this prospectus carefully before you invest. Investing in our common stock is speculative and involves a high degree of risk. You could lose up to your entire investment. You should carefully consider the risks which we have described under the heading “Risk Factors” beginning on page 14 before buying shares of our common stock.

 

 

 

		Per Share			Total
Public offering price		$			$
Underwriting discount		$			$
Proceeds, before expenses, to us		$			$

 

 

The underwriters may purchase up to an additional             shares from us at the public offering price less the underwriting discount, within 30 days of the date of this prospectus.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The securities are not deposits and are not insured by the Federal Deposit Insurance Corporation or any other governmental agency.

The underwriters expect to deliver the shares of common stock, through the facilities of the Depository Trust Company against payment, to purchasers on or about November     , 2009.

 

 

RAYMOND JAMES

SANDLER O’NEILL + PARTNERS, L.P.

 

ALLEN & COMPANY LLC

STIFEL NICOLAUS

The date of this prospectus is November     , 2009.

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FORWARD-LOOKING STATEMENTS

Certain statements made herein (or incorporated herein by reference) are “forward-looking statements” within the meaning and protections of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, each as amended. Forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, expectations, anticipations, assumptions, estimates, intentions, and future performance, and involve known and unknown risks, uncertainties and other factors, which may be beyond our control, and which may cause our actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. All statements other than statements of historical fact are statements that could be forward-looking statements.

Words such as “may,” “will,” “could,” “should,” “would,” “believe,” “anticipate,” “estimate,” “expect,” “intend,” “plan,” “project,” “assume,” “indicate,” “continue,” “target,” “goal,” and similar words or expressions of the future are intended to identify forward-looking statements. These forward-looking statements involve risks and uncertainties and a variety of factors could cause our actual results and experience to differ materially from the anticipated results or other expectations expressed in these forward-looking statements.

Forward-looking statements may not be realized due to factors that include, but are not limited to:

 

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the effects of future economic, business and market conditions and changes, domestic and foreign, including seasonality;

 

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governmental monetary and fiscal policies;

 

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legislative and regulatory changes, including changes in banking, securities and tax laws and regulations and their application by our regulators, and changes in the scope and cost of Federal Deposit Insurance Corporation, or FDIC, insurance and other coverages;

 

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changes in regulatory requirements specifically applicable to us, including enforcement actions and the effects of new FDIC policy statements;

 

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changes in accounting policies, rules and practices;

 

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the effects of changes in interest rates on the levels, composition and costs of deposits, loan demand, and the values and liquidity of loan collateral, securities, and other interest sensitive assets and liabilities;

 

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the failure of assumptions and estimates underlying the establishment of reserves for possible loan losses and other estimates;

 

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changes in borrowers’ credit risks and payment behaviors;

 

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changes in the availability and cost of credit and capital in the financial markets;

 

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changes in the prices, values and sales volumes of residential and commercial real estate;

 

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the effects of competition from a wide variety of local, regional, national and other providers of financial, investment and insurance services;

 

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the risks of mergers, acquisitions and divestitures, including, without limitation, the related time and costs of implementing such transactions, integrating operations as part of these transactions and possible failures to achieve expected gains, revenue growth and/or expense savings from such transactions;

 

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changes in technology or products that may be more difficult, costly, or less effective than anticipated;

 

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the effects of war or other conflicts, acts of terrorism or other catastrophic events, including hurricanes, storms and flooding, that may affect general economic conditions;

 

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the failure of assumptions and estimates and differences in and changes to economic, market and credit concentrations, including borrowers’ credit risks and payment behaviors from those used in our reviews of our loan portfolio and our loan portfolio stress test;

 

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the risk that our deferred tax assets could be reduced if estimates of future taxable income from our operations and tax planning strategies are less than currently estimated, and sales of our capital stock in this offering and/or other transfers of our capital stock could trigger a reduction in the amount of net operating loss carryforwards that we may be able to utilize for income tax purposes; and

 

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other factors and risks described under “Risk Factors” herein.

All written and oral forward-looking statements that are made by or are attributable to us are expressly qualified in their entirety by this cautionary notice. We have no obligation and do not undertake to update, revise or correct any of the forward-looking statements after the date of this prospectus, or after the respective dates on which such statements otherwise are made.

ABOUT THIS PROSPECTUS

You should rely only on the information contained in this prospectus (and in the documents incorporated by reference herein). We have not, and the underwriters have not, authorized any other person to provide you with different information. We are not, and the underwriters are not, making an offer to sell our common stock in any jurisdiction in which the offer or sale is not permitted.

Neither we, the underwriters, nor any of our officers, directors, agents or representatives make any representation to you about the legality of an investment in our common stock. You should not interpret the contents of this prospectus to be legal, business, investment or tax advice. You should consult with your own advisors for that type of advice and consult with them about the legal, tax, business, financial and other issues that you should consider before investing in our common stock.

This prospectus does not offer to sell, or solicit offers to buy, any shares of our common stock in any state or jurisdiction where it would not be lawful or where the person making the offer is not qualified to do so.

No action is being taken in any jurisdictions outside the United States to permit a public offering of the common stock or possession or distribution of this prospectus in those jurisdictions. Persons who come into possession of this prospectus in jurisdictions outside the United States are required to inform themselves about, and to observe, any restrictions that apply in those jurisdictions to this offering or the distribution of this prospectus.

As used in this prospectus, the “Company” refers to the Bank of Florida Corporation on a parent-only basis. “Bank of Florida,” “we,” “us,” and “ours” refer to Bank of Florida Corporation and its subsidiaries on a consolidated basis. The “bank,” “banks,” “subsidiary banks” or a “subsidiary bank” refer to our wholly-owned bank subsidiaries, Bank of Florida—Southwest, Bank of Florida—Southeast, and Bank of Florida—Tampa Bay. The “trust company subsidiary” refers to our wholly-owned, non-depository trust company subsidiary, Bank of Florida Trust Company.

 

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WHERE YOU CAN FIND MORE INFORMATION

We file annual, quarterly and current reports, proxy statements and other information required by the Securities Exchange Act of 1934, as amended (the “Exchange Act”) with the Securities and Exchange Commission. You may read and copy any of these filed documents at the Securities and Exchange Commission’s Public Reference Room at 100 F Street, N.E., Room 1580, Washington, DC, 20549. Please call the Securities and Exchange Commission at 1-800-SEC-0330 for further information. Our Securities and Exchange Commission filings are also available to the public from the Securities and Exchange Commission’s website at http://www.sec.gov.

Our Internet address is www.bankofflorida.com. We make available through our website, free of charge, our periodic and current reports, proxy and information statements and other information we file with the Securities and Exchange Commission and amendments thereto as soon as reasonably practicable after the Company files such material with, or furnishes such material to, the Securities and Exchange Commission, as applicable. Neither our website, nor the information on our website, is included or incorporated in or is otherwise a part of this prospectus.

This prospectus is part of a Registration Statement and does not contain all of the information included in the related Registration Statement. Whenever a reference is made in this prospectus to any contract or other document of ours, you should refer to the exhibits that are a part of the Registration Statement for a copy of the referenced contract or document. Statements contained in this prospectus concerning the provisions of any documents are necessarily summaries of those documents, and each statement is qualified in its entirety by reference to the copy of the document filed with the Securities and Exchange Commission. You should review the information and exhibits included in the registration statement for further information about us and the securities we are offering.

 

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RISK FACTORS

Investing in shares of our common stock is speculative and involves a high degree of risk, including the risks described below. You should carefully consider the following information about these risks, together with the other information contained in, and incorporated by reference into, this prospectus before purchasing shares of our common stock. These risks could materially affect our business, results of operations or financial condition and the trading price of our common stock. The risks that we have highlighted here are not the only ones that we face. For example, additional risks presently unknown to us or that we currently consider immaterial or unlikely could be material or could occur. You could lose up to your entire investment.

Risks Related to the Conduct of Our Business

Current levels of market volatility have been significant, and negative conditions and new developments in the financial services industry and the credit markets have and may continue to adversely affect our operations, financial performance and stock price.

The capital and credit markets have been experiencing volatility and disruption for more than a year. The markets have placed downward pressure on stock prices and the availability of capital, credit and liquidity has been adversely affected for many issuers, in some cases, without regard to those issuers’ underlying financial condition or performance. If current levels of market disruption and volatility continue or worsen, we may experience adverse effects, which may be material, on our ability to maintain or access capital and credit, and on our business, financial condition (including liquidity) and results of operations.

Uncertainty about the economy and its direction with the expectation for little or no economic growth, as well as expected high unemployment during the next 12-18 months, have adversely affected the financial markets. Loan portfolio performances have deteriorated at many financial institutions, including ours, resulting from, among other factors, a weak economy and a decline in the value of the collateral supporting loans. The competition for deposits has increased significantly due to liquidity concerns. Stock prices of bank holding companies, like ours, have been negatively affected by the recent and current conditions in the financial markets, as has our ability, if needed, to raise capital, compared to prior years.

Recent legislation and government actions in response to market and economic conditions may significantly affect our operations, financial condition, and earnings.

In response to this financial crisis affecting the banking system and financial markets, the United States Congress enacted the Emergency Economic Stabilization Act of 2008 and the American Recovery and Reinvestment Act of 2009. Under these and other laws and government actions:

 

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the U.S. Department of the Treasury, or “Treasury,” has provided capital to financial institutions and adopted programs to facilitate and finance the purchase of problem assets and finance asset-backed securities via the Troubled Assets Relief Program, or “TARP”;

 

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the FDIC has temporarily increased the limits on federal deposit insurance and has also provided a temporary liquidity guarantee, or “TLG”, of all FDIC-insured institutions and their affiliates’ debt, as well as deposits in noninterest-bearing transaction deposit accounts; and

 

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the federal government has undertaken various forms of economic stimulus, including assistance to homeowners in restructuring mortgage payments on qualifying loans.

TARP and the TLG are winding down, and the effects of this wind-down cannot be predicted.

In addition, the Federal government is considering various proposals for a comprehensive overhauling reform of the financial services industry and markets and coordinating reforms with other countries. There can be no assurance that these various initiatives or any other future legislative or regulatory initiatives will be successful at improving economic conditions globally, nationally or in our markets, or that the measures adopted will not have adverse consequences.

 

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Changes in business and economic conditions, in particular those in the Florida markets in which we operate, could continue to lead to lower revenue, lower asset quality and lower earnings.

Unlike larger national or regional banks that are more geographically diversified, our business and earnings are closely tied to economic conditions in Southwest and Southeast Florida and Tampa Bay, Florida. These local economies are heavily affected by population inflows, real estate, tourism and other service-based industries. Factors that could affect these local economies include declines in local population growth and tourism, higher energy costs, higher unemployment rates, reduced consumer or corporate spending, natural disasters or adverse weather, and the recent significant deterioration in general economic conditions. The current economic recession has been exacerbated by the declines in valuations of commercial and residential real estate in our markets after years of growth. Unemployment has also been significant, with an unemployment rate in excess of 11.0% for all of Florida, as of September 30, 2009. A sustained economic downturn could further adversely affect the quality of our assets, credit losses, and the demand for our products and services, which could lead to lower revenue and lower earnings.

The Florida economy remains weaker than in recent years. We believe population growth has stabilized for the State of Florida, but at a lower level than recent years. Visitor arrivals remained lower than in previous years and unemployment levels increased with similar trends expected for the remainder of 2009 and into 2010. We continually monitor changes in the economy, including population growth, levels of visitor arrivals and spending, changes in housing prices, and unemployment rates. These trends have contributed to an increase in our non-performing loans and reduced asset quality. If market conditions remain at current levels or deteriorate, they may lead to additional valuation adjustments on our loan portfolios and real estate owned as we continue to reassess the market value of our collateral supporting loans, the losses associated with loans, and the net realizable value of other real estate owned.

The real estate market could cause further increases in delinquencies and non-performing assets, including loan charge-offs.

Declines in the housing and commercial real estate markets over the past two years have negatively affected credit performance of many financial institutions’ loans, including ours. Many lenders have reduced and, in some cases, ceased providing funding to borrowers, including other financial institutions engaged in financing real estate. This market turmoil and tightening of credit has led to an increased level of commercial and consumer delinquencies, reduced confidence in the financial sector, and increased volatility in the financial markets all of which have adversely affected our business, financial condition and results of operations.

A significant portion of our loan portfolio consists of mortgages secured by real estate located in Collier and Lee Counties of Florida. We also have been generating a significant amount of real estate-secured loans in Broward, Palm Beach, Miami-Dade, Pinellas and Hillsborough Counties. Real estate values and real estate markets are generally affected by, among other things, changes in national, regional or local economic conditions; fluctuations in interest rates and the availability of loans to potential purchasers; changes in the tax laws and other governmental statutes, regulations and policies; and acts of nature. Over the past two years, real estate prices in each of our markets have significantly declined. This has affected our borrowers’ ability, especially in the case of land, construction and development loans to sell properties to realize sufficient proceeds to repay our loans. If real estate prices continue to decline in any of these markets, the value of the real estate collateral securing our loans could be further reduced. This could increase the number of problem loans and the value of our other real estate owned and adversely affect our financial performance and condition.

As of September 30, 2009, our residential real estate secured loans, including lines of credit secured by real estate, and commercial real estate secured loans comprised 21.4% and 68.6% of our loan portfolio, respectively. Continuation of the downturn could further depress our earnings and our financial condition because:

 

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an increasing number of borrowers may not be able to or may choose not to repay their loans;

 

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the value of the collateral securing our loans to borrowers may decline further;

 

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the quality of our loan portfolio may decline further; and/or

 

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customers may not want or need our products and services.

Any of these could cause further increases in delinquencies and non-performing assets or require us to charge off a higher percentage of our loans and/or increase substantially our provision for loan losses, any of which could result in future losses and reductions in our capital.

We have incurred cumulative losses since we commenced operations and expect to incur losses in the future.

Since commencing operations on August 24, 1999, we have incurred an accumulated deficit of approximately $104 million through September 30, 2009. This deficit is due to the substantial increase in provision for loan losses, the costs of establishing and carrying out our business strategy, which included establishing our subsidiaries and infrastructure, especially before 2008, and loan losses and the continuing expansion of banking activities in our markets.

We had a net loss of $78.1 million for the three months ended September 30, 2009, primarily due to $25.7 million of provisions for loan losses, as well as writing off all $62 million of our goodwill. We expect to incur losses through much of 2010. We cannot provide any assurances that we will not incur additional losses, especially in light of economic conditions that continue to adversely affect our borrowers and our local markets. Further losses in 2010 could require us to access additional capital, which may or may not be available. Losses subsequent to September 30, 2009, will reduce our capital and may require us to write-down or write-off our $13.5 million of deferred tax assets.

We expect further formal regulatory enforcement actions that could have a material adverse effect on our business, operations, financial condition, results of operations or the value of our common stock.

In August 2009, the board of directors of each of our subsidiary banks adopted Corrective Resolutions proposed by the OFR pursuant to which we agreed, among other things, to increase capital levels, decrease commercial real estate loan concentration, improve asset quality by reducing classified assets, and take steps to increase earnings and decrease reliance on brokered deposits and non-core deposits In addition, at the request of the Federal Reserve, our board of directors adopted the Board Resolutions, which prohibit us from incurring debt or reducing our capital through dividends, stock repurchases or other non-routine expenditures (other than redemption of our Series B Preferred Stock in certain offerings including this offering) without prior Federal Reserve approval.

We expect the FDIC to pursue formal enforcement actions through the FDIC Orders. We currently expect the FDIC Orders will focus on matters contained in the current Corrective Resolutions, such as requirements for our subsidiary banks to raise and maintain certain capital ratios; to increase earnings; and to reduce classified assets, non-core funding and commercial real estate loan concentrations. However, there can be no assurance as to the scope or terms of any particular FDIC Order. The FDIC Orders could require more capital than may be available to our subsidiary banks from proceeds of this offering. Other regulatory authorities could take enforcement actions against the Company or the subsidiary banks.

If we are unable to comply with the Corrective Resolutions by raising enough capital, improving our asset quality and commercial real estate loan concentration, reducing core funding usage and increasing earnings, or fail to comply with the Board Resolutions, pending or any other subsequent enforcement actions against us or our subsidiary banks, we could become subject to additional, heightened enforcement actions and orders. The terms of any such enforcement action could have material negative effects on our business, operations, financial condition, results of operations and the value of our common stock.

Liquidity risks could affect operations and jeopardize our financial condition.

Liquidity is essential to our business. An inability to raise funds through deposits, borrowings, the sale of loans and other sources could have a substantial negative effect on our liquidity. Our funding sources include federal funds purchased, brokered and other non-core deposits, and short- and long-term debt. Non-core deposits,

 

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including brokered deposits and certificates of deposit over $100,000, constituted 48% of our total deposits as of June 30, 2009, and 42% of total deposits as of September 30, 2009. As of September 30, 2009, 63% of our non-core deposits were scheduled to mature within one year or less. As a result of being less than well-capitalized as of September 30, 2009, we will not be able to accept, renew or rollover brokered deposits (including deposits through the CDARs program) absent a waiver from the FDIC. We also are limited in the rates we may pay on any deposits. The FDIC also has restricted us from significantly changing our funding sources by increasing brokered deposits or other potentially volatile funding sources.

Our subsidiary banks are also members of the Federal Home Loan Bank of Atlanta, or “FHLB”, and the Reserve Bank, where we can obtain advances collateralized with eligible assets. We also maintain a portfolio of securities that can be used as a secondary source of liquidity. Our access to funding sources, including our ability to acquire additional non-core deposits, the issuance and sale of debt securities, and the issuance and sale of additional preferred or common securities in public or private transactions, may not be available to us when needed, as a result of regulatory actions or otherwise, or on reasonably acceptable terms or conditions.

Since late 2007, and particularly during the second half of 2008 and through 2009, the financial services industry and the credit markets generally have been materially and adversely affected by reduced availability of liquidity. The liquidity issues have been particularly acute for regional and community banks, as many larger correspondent lenders have significantly curtailed their lending to regional and community banks due to the increased levels of losses that they have suffered on such loans. In addition, many of the larger correspondent lenders have reduced or even eliminated Federal Funds lines for their correspondent customers. Furthermore, regional and community banks generally have less access to the capital markets than do the national and super-regional banks because of their smaller size and limited analyst coverage.

Our liquidity, on a parent-only basis, is adversely affected by our current inability to receive dividends from our subsidiary banks. In addition, the Board Resolutions prohibit us from incurring debt at the holding company level, including debt associated with trust preferred securities, without prior approval from the Reserve Bank. Our liquidity, on a consolidated basis, is also adversely affected by our subsidiary banks’ restricted access to additional non-core deposits pursuant to regulatory restrictions. Bank of Florida-Southwest and Bank of Florida-Southeast are required to reduce their respective net non-core funding dependence ratios from 45.96% and 40.68% as of September 30, 2009 to 40% by December 31, 2010. Bank of Florida-Tampa Bay is required to reduce the dependence ratio from 40.08% as of September 30, 2009 to 35% by December 31, 2010. There is no guarantee that our subsidiary banks will be able to achieve such ratios timely, or that we will be able to meet our liquidity needs. Our financial flexibility could be severely constrained if we are unable to renew our wholesale funding or if adequate funding is not available in the future at acceptable rates of interest. We may not have sufficient liquidity to continue to fund new loan originations, and we may need to liquidate loans or other assets unexpectedly in order to repay obligations as they mature.

Non-performing assets take significant time to resolve and adversely affect our results of operations and financial condition.

At September 30, 2009, our non-performing loans were $150.1 million, or 11.98% of our loan portfolio, and our non-performing assets (which include foreclosed real estate) were $160.6 million, or 10.79% of total assets. In addition, at September 30, 2009, we had approximately $62.6 million in accruing loans that were 30 to 89 days delinquent.

Our non-performing assets adversely affect our net income in various ways. Until economic and market conditions improve, we expect to continue to incur additional losses relating to an increase in non-performing

 

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loans. We do not record interest income on non-accrual loans or other real estate owned, thereby adversely affecting our income, and increasing our loan administration costs. We do incur the costs of funding problem assets and other real estate owned, however. When we take collateral in foreclosures and similar proceedings, we are required to mark the collateral to its then fair value less expected selling costs, which, when compared to the principal amount of the loan, may result in a loss. These non-performing loans and other real estate owned also increase our risk profile and the capital our regulators believe is appropriate in light of such risks. Pursuant to the Corrective Resolutions, our subsidiary banks have resolved to reduce classified assets according to a bank-specific schedule, and the pending FDIC Orders, could impose additional requirements. There can be no assurance that: (i) we will be able to reduce our non-performing assets timely; (ii) we will not experience further increases in non-performing loans in the future; or (iii) we can reduce our non-performing assets consistent with the Corrective Resolutions or the pending FDIC Orders. Any of these actions may result in additional future credit losses and additional regulatory enforcement actions.

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

We maintain an ALLL to provide for anticipated losses inherent in our loan portfolio. The ALLL reflects management’s estimates and judgments of probable losses in the loan portfolio at the relevant balance sheet date. We evaluate the collectability of our loan portfolio and provide an ALLL that we believe is adequate based upon various factors including, but not limited to: the risk characteristics of various classifications of loans; previous loan loss experience; specific loans that have loss potential; delinquency trends; the estimated fair market value of the collateral; current economic conditions; the views of our regulators; and geographic and other loan concentrations, including commercial real estate concentrations.

We cannot be certain that our ALLL will be adequate over time to cover credit losses in our portfolio because of unanticipated adverse changes in the economy, market conditions or events adversely affecting specific customers, industries or markets, or borrower behaviors towards repaying their loans. The credit quality of our borrowers and the value of the collateral we hold for loans have deteriorated as a result of the economic downturn in our markets. If the credit quality of our customer base or their debt service behavior materially decreases further, if the risk profile of a market, industry or group of customers declines further or weaknesses in the real estate markets and other markets and the economy persist or worsen, or if our ALLL is not adequate, our business, financial condition, including our liquidity and capital, and results of operations could be materially adversely affected.

As a result of the Corrective Resolutions, our subsidiary banks have amended their ALLL methodology and submitted the revised methodology to the OFR and the FDIC for review and comment. Our subsidiary banks also agreed to review the adequacy of the ALLL prior to the end of each calendar quarter. There is no assurance that we will not be required by our regulators to take additional provisions for loan losses in the future to further supplement the ALLL, or make other changes to our ALLL methodology or our loan impairment recognition practices, particularly if market or economic conditions worsen beyond those that we currently expect. Even if our regulators do not require us to take additional provisions for loan losses, we are projecting an additional provisions to the ALLL are needed and currently expect to add and make approximately $30 million of additional provisions for loan losses in the fourth quarter of 2009. Additions to our ALLL will reduce our earnings or increase loan losses and adversely affect our business, financial condition and results of operations.

Our exposure to credit and regulatory risk is increased by our commercial real estate and commercial and industrial lending.

Commercial real estate and commercial and industrial lending historically have had higher credit risk than single-family residential lending. Such loans typically involve larger loan balances to a single borrower or related borrowers. At June 30, 2009, we had a balance of $650.3 million in commercial real estate loans (including

 

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construction and land development loans and multi-family residential loans), and $112.8 million in commercial and industrial loans. At September 30, 2009, commercial real estate loans (including loans secured by mortgages on multi-family properties) increased to $670.3 million, and commercial and industrial loans increased to $113.2 million.

At June 30, 2009, non-performing commercial real estate (including construction and land development loans and multi-family residential loans) and commercial and industrial loans totaled $107.7 million and represented 8.5% of total loans compared to a balance of $52.6 million at December 31, 2008, which represented 4.1% of total loans. At September 30, 2009, these balances had increased to $122.9 million, or 9.8% of total loans.

Commercial real estate loans can be affected by adverse conditions in local real estate markets and the economy, generally because commercial real estate borrowers’ ability to repay their loans depends on successful development and the sale or leasing of their properties, or any other factors. These loans also involve greater risk because they generally are not fully amortizing over the loan period, but have a balloon payment due at maturity. A borrower’s ability to make a balloon payment typically will depend on being able to either refinance the loan or timely sell the underlying property.

A commercial business loan is typically based on the borrower’s ability to repay the loan from the cash flows of the business. Such loans may involve risk because the availability of funds to repay each loan depends substantially on the success of the business itself. In addition, the collateral securing the loans may depreciate over time, be difficult to appraise and liquidate, or fluctuate in value based on the success of the business. Because commercial real estate, commercial business and construction loans are vulnerable to downturns in the business cycle, further economic weakness could cause more of those loans to become non-performing. The underwriting, review and monitoring performed by our officers and directors cannot eliminate all of the risks related to these loans.

Pursuant to the Corrective Resolutions, the board of directors of each of our subsidiary banks adopted a plan to systematically reduce the amount of concentration of high-risk commercial real estate loans and has submitted such plans to the OFR. Each plan includes quarterly targets of high-risk commercial real estate loans as a percentage of capital or adjusted capital to implement such reduction before December 31, 2010. The plans also include procedures for monitoring compliance with the submitted plan and require our subsidiary banks to submit monthly reports to the OFR demonstrating progress.

Real estate construction, land acquisition and development loans are based upon estimates of costs and values associated with the completed project. These estimates may be inaccurate, and we may be exposed to significant losses on loans for these projects.

At June 30, 2009, we had a balance of $280.5 million in construction, land acquisition and development loans. At September 30, 2009, construction, land acquisition and development loans had decreased to $241.3 million, or approximately 19.2% of our total loan portfolio. Such loans involve additional risks because funds are advanced upon the security of the project, which is of uncertain value prior to its completion, and costs may exceed realizable values, especially in declining real estate markets. Because of the uncertainties inherent in estimating construction costs and the realizable market value of the completed project and the effects of governmental regulation of real property, it is relatively difficult to evaluate accurately the total funds required to complete a project and the related loan-to-value ratio. As a result, construction loans often involve the disbursement of substantial funds with repayment dependent, in part, on the success of the ultimate project and the ability of the borrower to sell or lease the property, rather than the ability of the borrower or guarantor to repay principal and interest. If our appraisal of the value of the completed project proves to be overstated or market values or rental or occupancy rates decline, we may have inadequate security for the repayment of the loan upon completion of construction of the project. If we are forced to foreclose on a project prior to or at completion due to a default, there can be no assurance that we will be able to recover all of the unpaid balance of, and accrued interest on, the loan as well as related foreclosure and holding costs. In addition, we may be required

 

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to fund additional amounts to complete the project and may have to hold the property for an unspecified period of time while we attempt to dispose of it. We may use establish a loan-funded interest reserve upon origination of construction, land acquisition and development loans based on the feasibility of the project, the creditworthiness of the borrower and guarantors, and the protection provided by the real estate and other collateral which allows our subsidiary banks to periodically advance loan funds to pay interest charges on the outstanding balance of the loan. However, such practice must comply with relevant FDIC policies and guidances.

We are exposed to environmental liabilities with respect to properties we operate or to which we take possession.

When we foreclose on commercial or industrial property or are deemed to “operate” collateral, we may become exposed to potential liability under applicable environmental laws. If hazardous substances are discovered on such property, we may be liable to governmental agencies or third parties for the costs of remediating the hazard, as well as for personal injury and property damage. Many environmental laws can impose liability regardless of whether we knew of, or were responsible for, the contamination. If we ever become subject to significant environmental liabilities, our financial condition, results of operations and cash flows could be materially and adversely affected.

Credit risk cannot be eliminated.

There are risks in making any loan, including risks inherent in dealing with individual borrowers, risks of nonpayment, risks resulting from uncertainties as to the future value of collateral and cash flows available to service debt and risks resulting from economic and market conditions. For real estate loans, there are risks that the appraisal we obtain from a third-party appraiser of the value of properties proves to be overstated or market values or rental occupancy rates decline, which may result in inadequate security for the repayment of the loan. We attempt to reduce our credit risk through loan application approval procedures, monitoring the concentration of loans within specific industries and geographic location, the review and monitoring of our third-party appraisers and periodic independent reviews of outstanding loans by our loan review and audit departments as well as external auditors. While these procedures should reduce our risks, such risks can never be eliminated.

The third-party review of our loan portfolio and the stress test are not forecasts or predictions of future results, performance or future capital adequacy.

Based on our internal projection and the third-party review of our loan portfolio and the stress test, we currently expect that an additional provision of $30 million and additional charge-offs of $25 million in the fourth quarter of 2009 will be required. Therefore, we anticipate needing approximately $71 million of additional Tier 1 regulatory capital in our subsidiary banks to be in compliance with the December 31, 2009 capital requirements under the Corrective Resolutions. This assumes, no unanticipated loan losses or deterioration in our credit quality, and no other charges against our earnings, such as write-downs or write-offs of our approximately $13.5 million of deferred tax assets as of September 30, 2009, or disqualification of any portion of the approximately $3.8 million of this asset currently included in our regulatory capital, and no further increases in the capital our regulators require us to hold. This also assumes that we realize our expectations regarding the number of shares of Series B Preferred Stock converted into shares of our common stock and the amount of our expected exposure with respect to our failure to register shares offered under our 401(k) Plan. If our experience is worse, then the amount of capital we will need will be higher. “Prospectus Summary – Conversion or Redemption of Series B Preferred Stock” and —“Recent Developments—Rescission Offer.” However, the outside review of our loan portfolio and stress test are not forecasts and should not be viewed as predictions of future results or performance, the adequacy of our provisions for loan losses or ALLL or future capital adequacy and the amount of capital that we would need under various stress scenarios. These third-party reviews were based upon numerous complex assumptions, estimates and judgments, which may not be realized. The capital we raise in this offering may not be sufficient to cover future losses under the adverse scenario projected in the Promontory loan review.

 

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We are in default under two of our existing repurchase agreements and our counterparty may exercise its rights under the agreement which could materially and adversely affect our financial position, liquidity and earnings.

Two of our subsidiary banks are parties to similar master repurchase agreements and confirmations, or “Repos,” with Citigroup Global Markets, Inc. or “Citi”. Pursuant to the Repos, each such subsidiary bank sold Citi $10 million of securities, subject to their obligation to repurchase such securities at a specific price in 2013. The Repos provide that if either of our subsidiary banks fails to remain “well capitalized” for regulatory purposes, an event of default will be deemed to have occurred under each Repo. We notified Citi that an event of default has occurred and is continuing under each of the Repos, and Citi has reserved all its rights upon an event of default under each Repo.

If Citi exercises its remedies under the Repos, then: (i) our subsidiary banks would be obligated to immediately repurchase all securities sold to Citi under the Repos; (ii) all income paid after the declaration on the securities sold would be retained by Citi and applied to the aggregate unpaid repurchase prices and any other amounts owing by our subsidiary banks; and (iii) our subsidiary banks would have to immediately deliver to Citi any purchased securities subject to the Repos then in their possession or control. We have been informed that Citi would also charge our subsidiary banks an approximately $1.5 million of total penalty for early termination of these Repos. If Citi exercises its right to declare an event of default and exercise its remedies under the Repos, then our financial position, liquidity and earnings may be materially and adversely affected.

Changes in interest rates could continue to have significant adverse effects on our financial condition and results of operations.

Our profitability depends upon net interest income, which is the difference between interest earned on assets, such as the loans and investments in our portfolio, and interest expense on interest-bearing liabilities, such as deposits and borrowings. Net interest income will be adversely affected if market interest rates change such that the interest we pay on deposits and borrowings increases faster than the interest we earn on loans and investments. Market interest rates can change as a result of a number of unpredictable factors, including general economic conditions (domestic and foreign) and fiscal and monetary policies. These factors can be influenced, in turn, by events beyond our control, including inflation, recession, unemployment, changes in the money supply and domestic and international developments. Our net interest income is also adversely affected by our levels of non-performing assets which, while those do not generate increased income, require funding from interest-bearing deposits and other liabilities.

Interest rates are particularly sensitive to policy decisions of the Federal Reserve. From June 2004 to mid-2006, the Federal Reserve raised the Federal Funds rate from 1.0% to 5.25%. Beginning in September 2007, the Federal Reserve decreased the Federal Funds rates by 100 basis points to 4.25% at December 31, 2007, and has since reduced the target Federal Funds rate to a range between zero and 25 basis points. Decreases in interest rates generally increase the market values of fixed-rate, interest-bearing investments and loans held, and increase the values of loan sales and mortgage loan activities. However, the production of mortgages and other loans and the value of collateral securing our loans are dependent on demand within the markets we serve, as well as interest rates. The levels of sales, as well as the values of real estate in our markets, have declined. Declining interest rates reflect efforts by the Federal Reserve to stimulate the economy, but may not be effective, and thus may negatively affect our results of operations and financial condition, liquidity and earnings.

Because we typically rely on short-term deposits to fund long-term loans and other investments, changes in the yield curve or in the maturity profile of our assets and liabilities can also adversely affect our business. When differences between short- and long-term interest rates shrink or disappear, the spread between rates paid on deposits and received on loans could narrow significantly, decreasing our net interest income. Our net interest income may also be reduced if more interest-earning assets than interest-bearing liabilities reprice or mature during a time when interest rates are declining or if more interest-bearing liabilities than interest-earning assets

 

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reprice or mature during a time when interest rates are rising. At September 30, 2009, we had $1.4 billion in interest sensitive assets compared to $1.3 billion in interest sensitive liabilities, resulting in a positive gap position of $89.2 million (or 6.0% of total assets).

We are also exposed to market risk due to the volatility of interest rates. Market risk is the adverse effect on the value of a financial instrument from a change in interest rates or the implied volatility of or expected changes in interest rates. We manage market risk by establishing and monitoring limits on the types and degree of risk undertaken. Additionally, a substantial and sustained increase in interest rates could harm our ability to originate loans because refinancing an existing loan or taking out a subordinate mortgage would be less attractive, and qualifying for a loan may be more difficult. An increase in interest rates may also affect our customers’ ability to make payments on their existing loans, which could in turn increase loan losses. In addition, higher interest rates could also increase our costs of deposits and borrowed funds.

We are required to maintain capital to meet regulatory requirements, and if we fail to maintain sufficient capital, our financial condition, liquidity and results of operations, as well as our ability to maintain regulatory compliance, would be adversely affected.

Our subsidiary banks and the trust company must meet regulatory capital requirements and maintain sufficient liquidity. Our ability to achieve these goals depends on conditions in the capital markets, economic conditions and a number of other factors, including investor perceptions regarding the banking industry and market conditions, and governmental activities, many of which are outside our control, and on our financial condition and performance. Accordingly, we cannot assure you that we will be able to raise additional capital if needed or on terms acceptable to us. If we fail to satisfy these capital ratios and other regulatory requirements, our financial condition, liquidity and results of operations would be materially and adversely affected.

The board of directors of each of our subsidiary banks has adopted Corrective Resolutions, which commit the respective subsidiary banks to remain “well capitalized” at all times and to reach by December 31, 2009 (and thereafter maintain), a Tier 1 leverage capital ratio of at least 8% and a total risk-based capital ratio of at least 11% and to reach, by June 30, 2010 (and thereafter maintain), a total risk-based capital ratio of at least 12%. Based on our current estimation, as of September 30, 2009, Bank of Florida—Southwest’s Tier 1 leverage capital ratio and total risk-based capital ratio were 4.40% and 8.43% respectively; Bank of Florida—Southeast’s Tier 1 leverage capital ratio and total risk-based capital ratio were 5.95% and 9.80% respectively; and Bank of Florida—Tampa Bay’s Tier 1 leverage capital ratio and total risk-based capital ratio were 5.96% and 8.24% respectively. Any further enforcement action taken by our regulators, whether pursuant to the pending FDIC Order or otherwise, could require our subsidiary banks and/or the Company to maintain higher levels of capital.

Our failure to meet our regulatory capital requirements could result in further formal enforcement actions against us or our subsidiary banks and could further affect customer confidence, our ability to grow, our costs of funds and FDIC insurance costs, our ability to pay dividends, our ability to make acquisitions, and our business, results of operations and financial condition.

Our recent loan review indicated potential impairments of $60.9 to $99.7 million over the next twelve to twenty-four month period. Our recent stress test indicated potential impairments of $131 million over the next two years, which would result in a need for a minimum of $72 million in capital. Based on our reviews and judgments, taking into account the outside loan review and stress test, as well as the anticipated charge-offs of approximately $25 million and provisions for loan losses of approximately $30 million in the fourth quarter of 2009, we believe that we will need a minimum of approximately $71 million of additional capital to meet our regulatory capital requirements at December 31, 2009. Additional capital may be required by the FDIC Order, as a result of additional losses that may be incurred, which may be the result of our being required to write-down or write-off our $13.5 million of deferred tax assets as of September 30, 2009, the amount payable to redeem shares of our Series B Preferred Stock, or the recission offer to our 401(k) Plan participants. There is no assurance that we will raise sufficient capital from this offering or otherwise to meet our regulatory capital requirements.

 

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The need to account for assets at market prices may adversely affect our results of operations.

We report certain assets, including available-for-sale and trading securities and assets, at their fair values. Generally, assets required to be carried at fair value are valued based on quoted market prices or on valuation models that use market data inputs. Because we carry these assets on our books at their fair values, we may incur losses even if the assets in question present minimal credit risk. Given the continued disruption in the capital markets, we may be required to recognize other than temporary impairments in future periods with respect to securities in our portfolio. The amount and timing of any impairment recognized will depend on the severity and duration of the decline in fair value of the securities and our estimation of the anticipated recovery period. Other than temporary impairments may adversely affect our results of operations, including our financial condition and capital.

Our ability to realize our deferred tax assets may be reduced if our estimates of future taxable income and tax planning strategies do not support the carrying amount. The value of net operating loss carryforwards may be reduced as a result of the sale of our common stock in this offering.

As of September 30, 2009, we had deferred tax assets of $13.5 million. These and future deferred tax assets may be reduced if our estimates of future taxable income from our operations and tax planning strategies do not support the amount of the deferred tax assets. Furthermore, only a portion of our deferred tax assets, approximately $3.8 million, were allowed to be recognized in our regulatory capital at September 30, 2009.

We can provide no assurance that we will not be required to write-down or charge-off up to all of our deferred tax asset, or that we will not be required to reduce the amount of the deferred tax asset that is includable as capital for regulatory purposes. In the event of such write-downs, charge-offs or reductions, our capital needs will increase and we may not have sufficient capital or be able to raise the capital timely to meet our needs or regulatory requirements. Any capital raised may be dilutive to our existing shareholders and investors in this offering.

There is a significant likelihood that this offering will cause a reduction in the value of our net operating loss (“NOL”) carryforwards realizable for income tax purposes. Section 382 of the Internal Revenue Code imposes restrictions on the use of a corporation’s NOLs, as well as certain recognized built-in losses and other carryforwards, after an “ownership change” occurs. A Section 382 “ownership change” occurs if one or more stockholders or groups of stockholders who own at least 5% of our stock increase their ownership by more than 50 percentage points over their lowest ownership percentage within a rolling three-year period. If an “ownership change” occurs, Section 382 would impose an annual limit on the amount of pre-change NOLs and other losses we can use to reduce our taxable income generally equal to the product of the total value of our outstanding equity immediately prior to the “ownership change” and the applicable federal long-term tax-exempt interest rate for the month of the “ownership change.” The applicable rate for ownership changes occurring in the month of November 2009 is 4.33%.

If the amount or value of our deferred tax assets is reduced, the book value of our common stock and our regulatory capital ratios would decline.

Our cost of funds may increase as a result of general economic conditions, interest rates and competitive pressures.

We have traditionally obtained funds principally through local deposits and we have a base of lower cost transaction deposits. Generally, we believe local deposits are a more stable source of funds than brokered deposits or other borrowings because local accounts typically reflect a mix of transaction and time deposits, whereas brokered deposits typically are higher cost time deposits. Our costs of funds and our profitability and liquidity are likely to be adversely affected, if and to the extent we have to rely upon higher cost borrowings from other institutional lenders or brokers to fund loan demand or liquidity needs, and changes in our deposit mix and

 

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growth could adversely affect our profitability and the ability to expand our loan portfolio. As of September 30, 2009, brokered deposits accounted for approximately $256.2 million, or approximately 20.9%, of our total consolidated deposits. Our subsidiary banks, following the filing of their September 30, 2009 call reports, will not be able to accept, renew or roll over brokered deposits, including CDARs, or pay interest rates more than 75 basis points above prevailing market rates in our local markets or national rates released by the FDIC, and they will have to obtain FDIC’s approval before increasing their brokered deposits or other potentially volatile funding sources. Our subsidiary banks stopped accepting new brokered deposits and are limiting their renewal and roll over activities to reciprocal CDARs deposits as of October 29, 2009.

The costs of FDIC insurance and the TLG guarantees have increased and are expected to continue to adversely affect our results of operations.

FDIC insurance expense has increased substantially, from $748,900 in 2008 to $1.6 million for the first nine months of 2009, which includes a special assessment. We expect to pay significantly higher FDIC premiums in the future, especially until our regulatory capital and risk profile improve. Bank failures have significantly depleted the FDIC’s Deposit Insurance Fund and reduced its ratio of reserves to insured deposits. The FDIC has adopted a revised risk-based deposit insurance assessment schedule which raised deposit insurance premiums, and the FDIC has also implemented a special assessment on all depository institutions. Our aggregate special assessment is $711,659 which was collected on September 30, 2009. Additional special assessments may be imposed by the FDIC for future periods. We participate in the FDIC’s Temporary Liquidity Guarantee Program, or TLG, for noninterest-bearing transaction deposit accounts guarantee program and debt guarantee program. Banks that participate in the TLG’s noninterest-bearing transaction account guarantee pay the FDIC a fee for such guarantee. These actions have significantly increased our noninterest expense in 2009 and are expected to increase our costs for the foreseeable future. The FDIC has recently proposed requiring all FDIC-insured institutions to prepay their estimated quarterly risk-based assessments for the fourth quarter of 2009 and for all of 2010, 2011 and 2012, to be collected on December 30, 2009, which is expected to further increase our noninterest expense in 2009, unless an exemption is granted by the FDIC. Our subsidiary banks’ insurance premiums will also increase as a result of becoming less than “well capitalized.” TLG’s debt guarantee program is expiring on October 31, 2009, unless extended through an emergency guarantee facility by way of an application process. We have not made a decision whether we intend to apply for such extension under the debt guarantee program, which would impose a minimum fee of 300 basis points fee if we choose to participate in the extended program. TLG’s noninterest-bearing transaction account guarantee program is expiring on December 31, 2009 but will be automatically extended to June 30, 2010 unless we opt out from the extended period of the program. Institutions that participate in the extended program are required to pay an annualized fee of 15 to 25 basis points in accordance with its risk category rating assigned by the FDIC. Our management is still assessing whether we will participate in the extended program.

The Corrective Resolutions and the pending FDIC Orders applicable to us will require a deposit funding subject to higher FDIC insurance costs.

We operate in an environment highly regulated by federal and state government; changes in federal and state banking laws and regulations could have a negative impact on our business.

As a bank holding company, we are regulated primarily by the Federal Reserve. Our subsidiary banks are regulated primarily by the OFR and the FDIC. Federal and various state laws and regulations govern numerous aspects of our subsidiary banks’ operations, including:

 

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capital adequacy, funding sources and financial condition;

 

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permissible types and amounts of extensions of credit and investments;

 

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permissible non-banking activities; and

 

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restrictions on dividend payments.

 

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Federal and state regulatory agencies have extensive discretion and power to prevent or remedy unsafe or unsound practices or violations of law by banks and bank holding companies. We also undergo periodic examinations by one or more bank regulatory agencies. The outcome of each examination depends in part on banking regulators’ judgments, based on information available to them at the time of the examination, and may be beyond our control. In addition, the laws and regulations applicable to the banking industry could change at any time, and we cannot predict the effects of these changes on our business and profitability. Existing, pending and other regulatory enforcement actions brought against the Company and our subsidiary banks could also adversely affect our business, results of operations, liquidity, financial condition and capital needs. Our costs of compliance could adversely affect our ability to operate profitably.

We are subject to various reporting requirements that increase compliance costs, and failure to comply timely could adversely affect our reputation and the value of our securities.

We are required to comply with various corporate governance and financial reporting requirements under the Sarbanes-Oxley Act of 2002, as well as rules and regulations adopted by the Securities and Exchange Commission, the Public Company Accounting Oversight Board and Nasdaq. In particular, we are required to include management and independent auditor reports on internal controls as part of our Annual Report on Form 10-K pursuant to Section 404 of the Sarbanes-Oxley Act. We expect to continue to spend significant amounts of time and money on compliance with these rules. In addition, pursuant to the Corrective Resolutions adopted by our subsidiary banks and the Board Resolutions adopted by our board of directors, we are required to prepare and submit various reports to our regulators, and the pending FDIC Orders may impose further reporting obligations. Compliance with various regulatory reporting requires significant commitments of time from management and our directors, which reduces the time available for the performance of their other responsibilities. Our failure to track and comply with the various rules may materially adversely affect our reputation, ability to obtain the necessary certifications to financial statements, lead to additional regulatory enforcement actions, and could adversely affect the value of our securities.

Our trust company subsidiary may be adversely affected by changes in economic and market conditions.

Our trust company subsidiary may be negatively impacted by changes in general economic conditions and conditions in the financial and securities markets, including the values of assets under administration and management for its clients. Our management contracts generally provide for fees payable for services based on the market value of assets under advice. Accordingly, decreases in securities prices will have an adverse effect on our results of operations from this business. In addition, decreases in the value of our customers’ trust accounts, such as accompanied the significant decline in the financial and securities markets since the second half of 2008, can cause us to lose trust customers, including those who are also wealth management customers. These events could reduce our non-interest income from our trust company and adversely affect our results of operations and financial condition.

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

Our primary market areas are the urban areas in Southwest and Southeast Florida and in the Tampa Bay area of Florida. The banking and trust businesses in these markets are extremely competitive, which may limit our markets growth and profitability. Each of our subsidiaries competes for loans and deposits with other national, regional and local banks, savings institutions, trust companies and non-bank financial institutions located or doing business within their market area, many of which are significantly larger institutions. Non-bank competitors include mortgage bankers and brokers, finance companies, credit unions, securities firms, money market funds, life insurance companies and the mutual funds industry. Many of our competitors are well-established, and substantially larger financial institutions with greater financial and personnel resources. While we believe we can and do successfully compete with these other financial institutions in our primary markets, we may face a competitive disadvantage as a result of our smaller size, lack of geographic diversification and

 

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inability to spread our marketing costs across a broader market. In addition, our ability to compete may be further restricted by the Corrective Resolutions, the Board Resolutions, the expected FDIC Order, various regulatory rules and restrictions as a result of our subsidiary banks’ current capital levels and any other regulatory restrictions or actions.

The soundness of other financial institutions could adversely affect us.

Our ability to engage in routine funding and other transactions could be adversely affected by the actions and commercial soundness of other financial institutions. Financial services institutions are interrelated as a result of trading, clearing, counterparty or other relationships. Defaults by, or even rumors or questions about, one or more financial institutions, or the financial services industry generally, may lead to market-wide liquidity problems and losses of depositor, creditor and counterparty confidence and could lead to losses or defaults by us or by other institutions.

Our ability to attract and retain management and key personnel may affect future growth and earnings and may be adversely affected by compensation and employment restrictions to which we may be subject.

Our success is largely dependent on the personal contacts of our officers and employees in our market areas. If we lose key employees, temporarily or permanently, our business could be hurt. We could be particularly hurt if our key employees leave to work for our competitors. Our future success depends on the continued contributions of our existing senior management personnel, including, but not limited to, our Chief Executive Officer and President Michael L. McMullan and the Chief Executive Officers and Presidents of our subsidiaries. Both the Company and our subsidiary banks are currently required to obtain regulatory approval to add new executive officers or directors or to enter into any agreement to provide indemnification or severance payments. The personal and financial disclosures required by the regulators of prospective executives and directors are detailed and invasive. For this reason, we may not be able to attract qualified candidates who are willing to provide the necessary disclosures. The Federal Reserve and the FDIC have indicated they are considering policies to change financial institutions compensation to avoid promoting undue risk taking. The terms of these policies are unknown, and the timing and effects of any such policies on us are unknown, also.

Technological changes affect our business, and we may have fewer resources than many competitors to invest in technological improvements.

The financial services industry is undergoing rapid technological changes, and new technology-driven products and services are frequently being introduced. In addition to serving clients better, the effective use of technology may increase efficiency and may enable financial institutions to reduce costs. Our future success will depend, in part, upon our ability to use technology to provide products and services that provide convenience to customers and create additional efficiencies in operations. We may need to make significant additional capital investments in technology in the future, and we may not be able to effectively implement new technology-driven products and services. Many competitors have substantially greater resources to invest in technological improvements.

Adverse events and severe weather conditions could negatively affect our local economies or disrupt our operations, which would have an adverse effect on our business or results of operations.

The Florida economy relies heavily on tourism and seasonal residents. An act of war and acts of terrorism or other conflicts involving national security could affect general economic conditions in Florida, which would also negatively affect the businesses and customers in our markets which rely on tourism and seasonal residents. Our market areas are also susceptible to hurricanes and tropical storms and related flooding and wind damage. Such weather events can disrupt operations, result in damage to properties and negatively affect the local economies in the markets where they operate. We cannot predict whether or to what extent damage that may be caused by future hurricanes will affect our operations or the economies in our current market areas, but such weather events

 

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could result in a decline in loan originations, a decline in the value or destruction of properties securing our loans and an increase in delinquencies, foreclosures or loan losses. Our business or results of operations may be adversely affected by these and other negative effects of future hurricanes or tropical storms, including flooding and wind damage. Many of our customers have incurred significantly higher property and casualty insurance premiums on their properties located in our markets, which may adversely affect real estate sales and values in our markets.

Risks Related to Our Common Stock.

Our stock price can be volatile.

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

Although publicly traded, our common stock has traded in limited volumes which may adversely affect the liquidity of our stock and the volatility of our share price.

Although our common stock is listed for trading on the Nasdaq Global Market, the average daily trading volume of our common stock for the last three months was less than 30,000 shares, which could affect the liquidity of our shares of common stock, and could increase the volatility. The market price of our common stock may fluctuate in the future, and these fluctuations may be unrelated to our performance. General market price declines or overall market volatility in the future could adversely affect the price of our common stock, and the current market price may not be indicative of future market prices. The market price of shares of our common stock will fluctuate and may not be lower or higher than the offering price at any time.

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

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

In addition, as a bank holding company, our ability to declare and pay dividends is subject to the guidelines of the Federal Reserve regarding capital adequacy and dividends. The Federal Reserve Board guidelines generally require us to review the effects of the payment of cash dividends in light of our earnings, capital adequacy and financial condition. See “Dividend Information.”

We adopted Board Resolutions on October 19, 2009, pursuant to which we generally must seek the approval of the Federal Reserve at least 30 days before declaring or paying dividends on any shares of our capital stock, including accrued dividends on our outstanding Series B Preferred Stock. In addition, we are not able to redeem or repurchase any shares of our capital stock, or otherwise reduce our capital position (except for the redemption of outstanding shares of our Series B Preferred Stock in connection with one or more public offerings of securities with an aggregate offering price of no less than $30 million and payment of normal and routine operating expenses), without the Federal Reserve’s consent.

We are a holding company with no independent sources of revenue and would likely rely upon cash dividends and other payments from our subsidiaries to fund any cash dividends we decided to pay to our shareholders. Our ability to pay dividends is limited by regulatory restrictions and the need to maintain sufficient

 

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consolidated capital. The ability of our subsidiary banks and our trust company subsidiary to pay dividends to us is limited by their obligations to maintain sufficient capital and liquidity and by other general restrictions on dividends that are applicable to them, including the requirement under Florida law that they may not pay dividends if their net income from the current year combined with retained net income from the preceding two years is a loss or which would cause the capital accounts of the bank or trust company to fall below the minimum amount required by law, regulation, order, or any written agreement with the OFR or another federal regulatory agency. Our subsidiary banks are required to achieve and maintain regulatory capitals pursuant to the Corrective Resolutions, have had substantial losses and are prohibited to pay any cash dividend to us without FDIC’s prior approval. Our losses, including the total impairment of goodwill in the quarter ended September 30, 2009, will further decrease funds available for dividends from our banking subsidiaries.

We expect to authorize additional shares of common stock following this offering.

We expect to issue all or substantially all of our available authorized shares of common stock in connection with this offering and the conversion of our outstanding shares of Series B Preferred Stock. Accordingly, we expect to seek shareholder approval at a special meeting of shareholders to increase our authorized shares of common stock. These additional shares of our common stock will be available for future issuances. Currently we have authorized 100 million shares of common stock and 10 million shares of preferred stock.

Future sales of our common stock or other securities will dilute the ownership interests of our existing shareholders and could depress the market price of our common stock.

In addition to the shares offered in this offering, we may need to issue additional common stock in the near future to fund future growth and meet our capital needs and regulatory requirements. We can issue common stock without shareholder approval, up to the number of authorized shares set forth in our Amended and Restated Articles of Incorporation, as amended (the “Articles of Incorporation”). Our Board of Directors may determine from time to time a need to obtain additional capital through the issuance of additional shares of common stock or other securities including securities convertible into or exchangeable for shares of our common stock, subject to limitations imposed by Nasdaq and the Federal Reserve. There can be no assurance that such shares can be issued at prices or on terms better than or equal to the terms obtained by our current shareholders. The issuance of any additional shares of common stock or convertible or exchangeable securities by us in the future may result in a reduction of the book value or market price, if any, of the then-outstanding common stock. Issuance of additional shares of common stock or convertible or exchangeable securities will reduce the proportionate ownership and voting power of our existing shareholders.

In addition, sales of a substantial number of shares of our common stock or convertible or exchangeable securities in the public market by our shareholders, or the perception that such sales are likely to occur, could cause the market price of our common stock to decline. We cannot predict the effect, if any, that future sales of our common stock in the market, or availability of shares of our common stock for sale in the market, will have on the market price of our common stock. We therefore can give no assurance sales of substantial amounts of our common stock in the market, or the potential for large amounts of sales in the market, would not cause the price of our common stock to decline or impair our ability to raise capital through sales of our common stock.

We cannot guarantee whether such financing will be available to us on acceptable terms or at all. If we are unable to obtain future financing, we may not have the capital and financial resources we require for our business or that are necessary to meet regulatory requirements.

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

We have the authority under our Articles of Incorporation to issue additional series of preferred stock and to determine the designations, preferences, rights and qualifications or restrictions of those shares without any

 

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further vote or action of our shareholders. The rights of the holders of our common stock will be subject to, and may be materially adversely affected by, the rights of the holders of any preferred stock that may be issued by us in the future. We presently have 172 shares outstanding of Series B Preferred Stock, which, pursuant to its terms, will be redeemed or converted into common stock following this offering.

Offerings of debt, which could be senior to our common stock upon liquidation, or preferred equity securities, which may be senior to our common stock for purposes of dividend distributions or upon liquidation, may adversely affect the market price of our common stock.

We may attempt to increase our capital resources or, if the Company’s or our subsidiary banks’ capital ratios fall below regulatory requirements following this offering, we could be forced to raise additional capital through other securities offerings, including trust preferred securities, senior or subordinated notes and preferred stock. Holders of our debt securities and other lenders, as well as holders of our preferred securities generally will be entitled to receive distributions of our available assets prior to distributions to the holders of our common stock upon our bankruptcy, dissolution or liquidation. Additional equity offerings may dilute the holdings of our existing stockholders or reduce the market price of our common stock, or both. Holders of our common stock are not entitled to preemptive rights or other protections against dilution.

The outstanding shares of our Series B Preferred Stock will be converted or redeemed following this offering, which may dilute our existing shareholders in the case of conversion and reduce our capital in the case of redemption. In addition, our ability to pay accrued dividends on those shares is restricted.

We are separately offering additional shares of our common stock to equal, in the aggregate to $4.3 million divided by the public offering price per share of our common stock in this offering to holder of the 172 outstanding shares of our Series B Preferred Stock. In the event that a holder of shares of Series B Preferred Stock elects not to convert some or all of such shares into shares of our common stock, we will be obligated to redeem the unconverted shares for $25,000 per share. The maximum amount of cash that we could be required to pay for the redemption of all 172 outstanding shares of our Series B Preferred Stock is $4.3 million. We have received indications from our executive officers and directors that they, in the aggregate, intend to convert 80 shares of Series B Preferred Stock into shares of our common stock, leaving up to $2.3 million shares of Series B Preferred Stock which may be either converted or redeemed. We can make no assurances, however, as to how many shares will be converted or redeemed. Any amounts expended on redemption of the Series B Preferred Stock will reduce our equity capital, which we currently expect to be less than $2.3 million.

We have the obligation to pay accrued dividends on the Series B Preferred Stock to the date set for conversion or redemption of the Series B Preferred Stock to the date set for conversion or redemption of the Series B Preferred Stock. We plan to request the Federal Reserve to allow us to make such dividend payment with respect to any converted or redeemed shares of our Series B Preferred Stock. However, we can offer no assurance that our request will be granted and the timing of such Federal Reserve action.

Our Articles of Incorporation and Bylaws contain provisions that may discourage a takeover.

Generally, our Articles of Incorporation and Bylaws contain certain provisions designed to enhance the ability of the board of directors to deal with attempts to acquire control of us. These provisions may be deemed to have an anti-takeover effect and may discourage takeover attempts that have not been approved by the board of directors (including takeovers that certain shareholders may deem to be in their best interest). These provisions also could discourage or make more difficult a merger, tender offer or proxy contest, even though such transaction may be favorable to the interests of shareholders, and could potentially adversely affect the market price of our common stock.

 

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Risks Related to Our Growth Strategy

Our growth strategy may not be feasible or successful.

Our strategy through 2008 was to increase the size of our franchise through rapid growth and by aggressively pursuing business development opportunities. Our subsidiary banks are currently subject to restrictions which prohibit them from engaging in any transactions that would materially change the composition of their balance sheets without obtaining the FDIC’s approval. Such transactions include any transaction or transactions that would increase a subsidiary bank’s total assets by 5% or more or that would significantly change the subsidiary bank’s funding resources. Our current capital levels will also restrict our growth.

However, subject to regulatory restrictions on growth and adequate capital, when prudent opportunities present themselves, we intend to be in a position to take advantage of the long-term opportunities that we anticipate in our markets and expand our businesses. We can provide no assurance when we will be able to implement this strategy or that we will be successful in increasing the volume of loans, deposits and wealth management business cases at acceptable risk levels and upon acceptable terms and expanding our asset base while managing the costs and risks associated with this growth strategy. There can be no assurance that any further expansion will be feasible, profitable or that we will be able to grow as fast, or sustain, our historical rate of growth, either internally or through other successful expansions of our markets and new business lines, or that we will be able to maintain capital sufficient to support this growth.

Regulatory restrictions could severely limit future expansion plans.

Applications for the establishment of new branches and the acquisition of existing banks require prior state and federal bank regulatory approvals. Further, we are subject to the review of the FDIC under the Statement of Policy on the Acquisition of Failed Insured Depository Institutions if we plan to acquire a failed depository institution, including being well capitalized. Generally, banks subject to formal enforcement actions experience difficulties in obtaining regulatory approvals to add branches, or engage in business combinations.

Our Tampa Bay bank subsidiary is also subject to the “Enhanced Supervisory Procedures for Newly Insured FDIC-Insured Institutions” adopted on August 28, 2009, which extends the enhanced supervision of this bank which was organized in 2004 through November 4, 2011, and requires, among other things, higher FDIC insurance assessments, capital and prior FDIC approval of changes in the business plan, even if the Corrective Resolutions and any pending FDIC Order were not present.

Our subsidiary banks’ ability to implement expansion plans is currently restricted by their prohibitions from engaging in any transactions that would materially change the composition of their balance sheets without obtaining an approval from the FDIC. Such transactions include any transaction or transactions that would increase a subsidiary bank’s total assets by 5% or more or that would significantly change the subsidiary bank’s funding resources.

Until we regain well capitalized status and have our regulatory enforcement actions lifted, our regulators prevent or significantly restrict expansion plans.

Future acquisitions and expansion activities may disrupt our business, dilute existing shareholders and adversely affect our operating results.

We may review potential acquisitions and expansion opportunities. To the extent that we are permitted to grow through acquisitions and new branches, we cannot assure you that we will be able to adequately or profitably manage this growth. Acquiring other banks, branches or businesses, as well as other geographic and product expansion activities, involves various risks including: risks of unknown or contingent liabilities; unanticipated costs and delays; risks that acquired new businesses do not perform consistent with our growth and profitability expectations; risks of entering new markets or product areas where we have limited experience; risks

 

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that growth will strain our infrastructure, staff, internal controls and management, which may require additional personnel, time and expenditures; exposure to potential asset quality issues with acquired institutions; difficulties, expenses and delays of integrating the operations and personnel of acquired financial institutions, and start-up delays and costs of other expansion activities; potential disruptions to our business; possible loss of key employees and customers of acquired institutions; potential short-term decreases in profitability; and diversion of our management’s time and attention from our existing operations and business.

We may encounter unexpected financial and operating problems due to our rapid growth.

Until the end of 2008, we grew rapidly. We seek to resume growth as soon as feasible to meet the opportunities we see in our current markets and nearby markets. Growth, especially rapid growth, in the future may result in unexpected financial and operating problems, including problems in new additions to the loan portfolio due to the unseasoned nature of new credits. Acquisitions may add additional pressures to internal controls and financial and operating systems. We may open additional branches in the future. A newly opened branch is typically expected to incur operating losses in its early periods of operations because of an inability to generate sufficient net interest income to cover operating expenses. Those operating losses can be significant and can occur for longer periods than planned, depending on our ability to control operating expenses and generate net interest income.

Attractive acquisition opportunities may not be available to us in the future.

While we seek continued organic growth, as our earnings and regulatory and capital positions improve, we may consider the acquisition of other businesses. We expect that other banking and financial companies, many of which have significantly greater resources, will compete with us to acquire financial services businesses. This competition could increase prices for potential acquisitions that we believe are attractive. Also, acquisitions are subject to various regulatory approvals. If we fail to receive the appropriate regulatory approvals, we will not be able to consummate an acquisition that we believe is in our best interest. Among other things, our regulators consider our capital, liquidity, profitability, regulatory compliance and levels of goodwill and intangibles when considering acquisition and expansion proposals. Any acquisition could be dilutive to our earnings and shareholders’ equity per share of our common stock.

Our past growth may not be indicative of our future growth.

We may not resume our historical rate of growth or may not be able to grow our business at all. In addition, our prior growth may distort some of our historical financial ratios and statistics. Various factors, such as economic conditions, regulatory and legislative limitations and competition, may also impede or prohibit our ability to expand our market presence.

Our 401(k) Plan was not registered with the Securities and Exchange Commission and we may incur liability to our employees who purchased our common stock in our 401(k) Plan.

In 2005, we added shares of our common stock as an investment option to our 401(k) Plan. Therefore, the offer and sale of 401(k) Plan interests and underlying shares of common stock were required to be registered under the Securities Act of 1933, as amended, and certain disclosures were required to be delivered to our 401(k) Plan participants. We recently discovered that we had inadvertently failed to file the required registration statement with the Securities and Exchange Commission or to deliver the required disclosures to our 401(k) Plan participants. On October 30, 2009, we filed a registration statement covering the 401(k) Plan interests and the underlying shares of common stock.

Due to having not timely filed such a registration statement and not delivering the required disclosures, we may incur liability to the 401(k) Plan participants. As a result, we intend to make a rescission offer to our current and former 401(k) Plan participants who purchased our common stock in the 401(k) Plan, pursuant to which we

 

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will pay for shares properly delivered for rescission, subject to the approval of such payments by the Federal Reserve as required by our Board Resolutions. We intend to commence the rescission offer as soon as practicable after this offering and will use our best efforts to do so by December 15, 2009. If this rescission offer is accepted by all eligible 401(k) Plan participants, we could be required to make aggregate payments to those individuals of up to approximately $2.2 million plus statutory interest. Federal securities laws do not expressly provide that a rescission offer will terminate a purchaser’s right to rescind a sale of stock that was not registered as required. If any or all of the offerees reject the rescission offer, we may continue to be liable under federal securities laws for up to the aggregate amount of approximately $2.2 million plus statutory interest. See “Summary—Recent Developments—Rescission Offer.”

Additionally, we may have been required to file Annual Reports on Form 11-K for the 401(k) Plan for 2005, 2006 and 2007. If we ultimately determine that such filings were required, we will use our best efforts to file such reports within 60 days of the conclusion of this offering. The failure to have filed such reports, if required, may subject us to additional liability.

 

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USE OF PROCEEDS

We expect the net proceeds of this offering to be approximately $             ($             million if the underwriters exercise their option to purchase additional shares in full). We currently intend to use approximately $71 million of the proceeds from this offering to contribute to our subsidiary banks to meet our currently anticipated capital needs as of December 31, 2009, under regulatory and capital requirements and the Corrective Resolutions. Of this amount, we currently intend to contribute capital of approximately $30 million into Bank of Florida—Southwest, $27 million into Bank of Florida—Southeast, and between $13 to $14 million into Bank of Florida—Tampa Bay. This assumes, no unanticipated loan losses or deterioration in our credit quality, and no other charges against our earnings, such as write-downs or write-offs of our approximately $13.5 million of deferred tax assets as of September 30, 2009 or disqualification of any portion of the approximately $3.8 million of this asset currently included in our regulatory capital, and no further increases in the capital our regulators require us to hold.

We also intend to use the proceeds to redeem shares of Series B Preferred Stock not converted into common stock following this offering, as well as for general corporate purposes. Based on our current expectations, up to 92 shares of Series B Preferred Stock may be redeemed for an aggregate redemption price of approximately $2.3 million. We may also use a portion of the proceeds to make payments, if any are required, to the 401(k) Plan participants entitled to receive, and who accept, our rescission offer. See “Prospectus Summary – Conversion or Redemption of Series B Preferred Stock” and --“Recent Developments—Rescission Offer.”

 

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CAPITALIZATION

The following table sets forth our capitalization, book value per share and selected capital ratios, in each case at September 30, 2009, both on a historical basis and as adjusted to give effect to the sale of              shares of common stock in this offering, less the underwriting discounts and commissions and estimated expenses, at an offering price of              per share. The “as adjusted” figures also assume the conversion of all 172 shares of Series B Preferred Stock outstanding as of the date of this prospectus.

This table should be read in conjunction with the consolidated financial statements and notes thereto incorporated by reference into this document from our Annual Report on Form 10-K for the year ended December 31, 2008 and our Quarterly Report on Form 10-Q for the quarter ended September 30, 2009.

 

		September 30, 2009
		Actual				As Adjusted(3)
		(Dollars in thousands, except per share data)
Indebtedness
Subordinated debt		$	16,000
Federal Home Loan Bank advances			118,461
Other borrowings			21,908
Total indebtedness		$	156,369
Stockholders’ equity
Series A Preferred Stock, par value $0.01 per share; 50,000 shares designated, no shares issued or outstanding at September 30, 2009 or as adjusted		$	0
Series B Preferred Stock, par value $0.01 per share; 520 shares designated, 172 shares issued and outstanding at September 30, 2009			4,300
Undesignated Preferred stock, par value $0.01 per share; 9,949,480 shares authorized, no shares issued or outstanding at September 30, 2009; and 9,949,480 shares authorized, no shares issued or outstanding as adjusted			0
Common stock, par value $0.01 per share; 100,000,000 shares authorized; 12,968,898 shares issued and outstanding at September 30, 2009; and 100,000,000 shares authorized              shares issued and outstanding as adjusted(1)			130
Restricted stock(2), 168,500 common shares			(498	)
Additional paid-in capital			200,746
Accumulated deficit			(103,983	)
Accumulated other comprehensive income			3,188
Total stockholders’ equity		$	103,883
Total capitalization		$	260,252
Book value per share		$	7.68
Capital ratios:(4)
Tier 1 leverage ratio			5.60	%
Tier 1 capital to risk-weighted assets			6.73	%
Total capital to risk-weighted assets			9.28	%

 

(1)	This table excludes 737,832 shares of common stock issuable upon exercise of warrants and options outstanding as of September 30, 2009.

(2)

As of September 30, 2009, there were 168,500 non-vested shares of restricted stock outstanding. The restricted stock was issued pursuant to the 2008 Stock Compensation Plan. All shares of restricted stock will be held by the Company until the restrictions are satisfied. The grants are divided into the following three categories: restricted shares vesting in one year (30,000 shares), performance based restricted shares vesting over three years and upon the Company’s achieving certain performance goals (60,500 shares) and restricted

 

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shares vesting over five years (78,000 shares).

(3)

Before issuance of up to              shares of common stock pursuant to the underwriters’ option. If the underwriters’ option is exercised in full, common stock, additional paid-in capital and total stockholders’ equity would be $            , $             and $            , respectively. In addition, if all of our outstanding shares of Series B Preferred Stock are redeemed for cash, our common stock, additional paid-in capital and total stock holders’ equity would be $            , $             and $            , respectively.

(4)	These ratios as adjusted assume that the net proceeds will be invested initially in cash or cash equivalents by until down-streamed to the subsidiary banks over time.

 

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PRICE RANGE OF OUR COMMON STOCK

Our common stock is listed on the Nasdaq Global Market under the symbol “BOFL.” The table below sets forth for the periods indicated, the high and low sales prices of our common stock as reported by Nasdaq.

 

Calendar Quarter Ended		High			Low
March 31, 2007		$	20.68		$	18.36
June 30, 2007		$	19.49		$	16.48
September 30, 2007		$	17.68		$	14.20
December 31, 2007		$	16.90		$	11.01
March 31, 2008		$	12.12		$	8.91
June 30, 2008		$	11.20		$	7.25
September 30, 2008		$	9.89		$	4.12
December 31, 2008		$	8.60		$	3.81
March 31, 2009		$	4.62		$	1.75
June 30, 2009		$	4.25		$	3.00
September 30, 2009		$	3.59		$	2.14
December 31, 2009 (through October 30, 2009)		$	2.50		$	1.46

On November     , 2009, the closing price of our common stock on Nasdaq was $             per share and there were 12,968,898 shares of our common stock outstanding, held by approximately 673 holders of record.

 

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DIVIDEND INFORMATION

To date, we have not paid any dividends on our common stock since our organization in 1998. There are no current plans to pay cash dividends and we expect to retain any earnings to support our capital adequacy and growth.

At the request of the Federal Reserve, on October 19, 2009, our board of directors adopted the Board Resolutions which prohibit us from making dividend payments on our common stock or preferred stock, including Series B Preferred Stock, without prior approval from the Reserve Bank.

Florida law provides that we may only pay dividends if the dividend payment would not render us insolvent, or unable to meet our obligations as they come due. The Federal Reserve has policies that encourage bank holding companies to pay dividends from current earnings, and have the general authority to limit the dividends paid by bank holding companies, if such payment may be deemed to constitute an unsafe or unsound practice. If, in the particular circumstances, any of our regulators determines that the payment of dividends would constitute an unsafe or unsound banking practice, the Federal Reserve may, among other things, issue a cease and desist order prohibiting the payment of dividends by our subsidiary banks or us, respectively. Under a recently adopted Federal Reserve policy, the board of directors of a bank holding company must consider different factors to ensure that its dividend level is prudent relative to the organization’s financial position and is not based on overly optimistic earnings scenarios such as any potential events that may occur before the payment date that could affect its ability to pay, while still maintaining a strong financial position. As a general matter, the Federal Reserve has indicated that the board of directors of a bank holding company, should consult with the Federal Reserve and eliminate, defer, or significantly reduce the bank holding company’s dividends if:

(i) its net income available to shareholders for the past four quarters, net of dividends previously paid during that period, is not sufficient to fully fund the dividends;

(ii) its prospective rate of earnings retention is not consistent with its capital needs and overall current and prospective financial condition; or

(iii) it will not meet, or is in danger of not meeting, its minimum regulatory capital adequacy ratios.

Additionally, future dividend policy will depend on our subsidiaries’ earnings, capital requirements, financial condition, and other factors. The subsidiary banks and the trust company subsidiary are Florida state-chartered financial institutions. Florida law limits their ability to pay dividends, including a prohibition of payment of dividends from their capital under certain circumstances without the prior approval of the OFR. Except with the prior approval of the OFR, all dividends of any Florida bank or trust company must be paid out of retained net profits from the current period and the previous two years, after deducting charge-offs for bad debts, depreciation and other worthless assets, and making provision for reasonably anticipated future losses. In addition, state-chartered banks and trust companies are required to transfer at least 20% of their net income to surplus until their surplus equals their amount of paid-in capital. After the losses in the quarter ended September 30, 2009, including the write-off of all goodwill, Bank of Florida-Southwest had an accumulated deficit of $64.7 million, Bank of Florida-Southeast had an accumulated deficit of $15.2 million, and Bank of Florida-Tampa Bay had an accumulated deficit of $8.5 million.

We do not anticipate that our subsidiary banks will pay dividends in the foreseeable future so that they can attain and maintain the capital ratios required by the Corrective Resolutions, or as may be required by any future enforcement actions, and so that they can retain any earnings to support their growth. In addition, our subsidiary banks are currently prohibited from paying dividends to us without prior approval from the FDIC. See “Supervision and Regulation” in our Annual Report on Form 10-K for the year ended December 31, 2008 incorporated by reference herein.

 

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DESCRIPTION OF CAPITAL STOCK

We have 110,000,000 shares of authorized capital stock, $0.01 par value per share, of which 100,000,000 are shares of common stock and 10,000,000 are shares of preferred stock.

Common Stock

On September 30, 2009, we had 12,968,898 shares of common stock outstanding. Holders of our common stock are entitled to receive dividends if, as and when declared by our board of directors out of any funds legally available for dividends. Holders of our common stock are also entitled, upon our liquidation, and after claims of creditors and the preferences of any class or series of preferred stock outstanding at the time of liquidation, to receive pro rata our net assets. We may pay dividends on our common stock only if we have paid or provided for all dividends on our outstanding series of preferred stock for the then current period and, in the case of any cumulative preferred stock, all prior periods. We have not paid any cash dividends on our common stock since we were organized in 1998, and do not intend on paying cash dividends on our common stock for the foreseeable future.

Holders of our common stock are entitled to one vote for each share that they hold and are vested with all of the voting power except as our board of directors has provided, or may provide in the future, with respect to any class or series of preferred stock. Shares of our common stock are not redeemable or assessable, and have no subscription, conversion or preemptive rights.

Our common stock is currently listed for trading on the Nasdaq Global Market under the symbol “BOFL.” Holders of our common stock are not subject to any liability of the Company as shareholders.

Series A Preferred Stock

In connection with a private placement offering in 2004, we authorized 50,000 shares of Series A Preferred Stock. Currently, no shares of Series A Preferred Stock are outstanding. The shares are perpetual, have no voting rights, and have a liquidation preference of $100 per share. Dividends on Series A Preferred Stock, if issued and outstanding, are payable in kind when, as and if declared on the first day of each quarter, in arrears, at a quarterly rate of 0.02 shares of Series A Preferred Stock. The shares are redeemable at our discretion at any time. In the first year following issuance, the redemption price would be $105 per share until the first anniversary of issuance, declining $1.00 each year after issuance to a zero redemption price.

Series B Preferred Stock

In connection with a private placement offering in 2009, we authorized 520 shares of Series B Preferred Stock, of which 172 are currently outstanding. The shares are perpetual and nonvoting. Each share has a liquidation preference of $25,000 and pays a cumulative quarterly dividend of $625 per share. If we conduct any offering of any newly issued securities, such as the offering contemplated by this prospectus, the holders of shares of Series B Preferred Stock have the right to convert such shares of Series B Preferred Stock into the newly issued securities following the closing of the offering. In each such case, each share of Series B Preferred Stock can be converted into such number of newly issued securities as can be purchased for $25,000 at the stated offering price for such newly offered securities. If we conduct an offering that results in proceeds of at least $30,000,000 prior to January 1, 2011, and a holder elects to not convert the holder’s shares in the offering, or if a change in control occurs, we will be obligated to redeem such shares at $25,000 per share. If such an offering is not completed by January 1, 2011, we shall have the right to redeem the shares of Series B Preferred Stock at any time thereafter for $25,000 per share.

The shares of Series B Preferred Stock are not considered capital of the Company by the Federal Reserve.

 

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Undesignated Preferred Stock

We currently have 9,949,480 shares of undesignated preferred stock. Our Board of Directors may designate these shares of preferred stock into one or more series and may fix and determine the relative rights and preferences of the shares of any series, including:

(i) the distinctive designation of such series and the number of shares which shall constitute such series;

(ii) the annual rate of dividends payable on shares of such series, whether dividends shall be cumulative and the conditions upon which and the dates upon which such dividends shall accumulate;

(iii) the time or times when and the price or prices at which shares of such series shall be redeemable at our option and the sinking fund provisions, if any, for the purchase or redemption of such shares;

(iv) the amount payable on shares of such series in the event of any liquidation, dissolution or winding up of our affairs, and whether all or a portion thereof is paid before any amount is paid on the common stock;

(v) the rights, if any, of the holders of shares of such series to convert such shares into, or exchange such shares for, shares of common stock or shares of any other series of preferred stock and the terms and conditions of such conversion or exchange; and

(vi) whether the shares of such series have voting rights and the extent of such voting rights, if any.

Our Board of Directors also has the power to reclassify any unissued shares of any series of preferred stock by setting or changing the preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends, qualifications, or terms or conditions of redemption of such shares.

Securities Representing the Right to Acquire Shares of Our Common Stock

In connection with previous offerings of our common and preferred stock, we issued warrants to acquire shares of common stock. As of September 30, 2009, we had outstanding warrants to acquire 213,318 shares of our common stock at a weighted average exercise price of $7.20 per share.

As part of our compensation strategy, we have granted our directors, officers and employees stock options pursuant to our stock option plans. As of September 30, 2009, we had outstanding stock options to acquire 524,514 shares of our common stock at a weighted average exercise price of $14.90 per share.

Potential Changes in Control

The issuance of common stock and preferred stock could have possible anti-takeover effects. Authorized but unissued shares could (within the limits imposed by applicable law and Nasdaq listing rules) be issued in one or more transactions that could make a change of control of more difficult and, therefore, more unlikely. The authorized shares could be used to discourage persons from attempting to gain control of the Company by diluting the voting power of shares then outstanding or increasing the voting power of persons who would support the board of directors in a potential takeover situation, including by preventing or delaying a proposed business combination that is opposed by the board of directors although perceived to be desirable by some shareholders.

Anti-Takeover Effects of Certain Articles of Incorporation Provisions

Our Articles of Incorporation contain certain provisions that make it more difficult to acquire control of us by means of a tender offer, open market purchase, a proxy fight or otherwise. These provisions are designed to encourage persons seeking to acquire control of us to negotiate with our directors. We believe that, as a general rule, the interests of our shareholders would be best served if any change in control results from negotiations with our directors.

 

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Our Articles of Incorporation require the affirmative vote or consent of the holders of not less than two-thirds of the shares of each class of stock of the Company entitled to vote in elections of directors to authorize, adopt or approve a covered transaction as listed below; unless such transaction is approved by three-fourths of the entire membership of the board of directors, in which event the affirmative vote of not less than a majority of the holders of each class of stock of the Company entitled to vote in elections of directors shall be required. Such covered transactions include:

(i) any merger or consolidation of the Company or any subsidiary of the Company with or into any Interested Person (as defined in this Article of Incorporation) (regardless of the identity of the surviving corporation);

(ii) any sale, lease or other disposition of all or any substantial part (assets having an aggregate fair market value of twenty-five percent (25%) of the total assets of the Company) of the assets of the Company or any subsidiary of the Company to any Interested Person for cash, real or personal property, including securities, or any combination thereof;

(iii) any issuance or delivery of securities of the Company or a subsidiary of the Company (which the beneficial owner shall have the right to vote, or to vote upon exercise, conversion or by contract) to an Interested Person in consideration for or in exchange of any securities or other property (including cash); or

(iv) the liquidation of the Company (as defined in our Articles of Incorporation).

If the proposed covered transaction is with an Interested Person, then, in addition to the approval of the board of directors or any shareholder approval required by Florida law, and subject to certain exceptions set forth in our Articles of Incorporation, the affirmative vote or consent of the holders of a majority of the shares of each class of stock of the Company entitled to vote in elections of directors, which are not beneficially owned, directly or indirectly, by such Interested Person, is required for the approval, adoption or authorization of such a proposal with an Interested Person.

Our Articles of Incorporation also contain additional provisions that may make takeover attempts and other acquisitions of interests in us more difficult where the takeover attempt or other acquisition has not been approved by our board of directors. For example, our Articles of Incorporate require the board of directors, when evaluating any offer of another individual, firm, corporation or other entity (“Person”): (i) to make a tender or exchange offer for any equity security of the Company; (ii) to merge or consolidate the Company with such other Person; or (iii) to purchase or otherwise acquire all or substantially all of the properties and assets of the Company (such offers individually referred to as an “Acquisition Proposal”), to give due consideration to all relevant factors, including without limitation,

a. the consideration being offered in the Acquisition Proposal in relation to the then-current market price of the Company’s stock, but also in relation to the then-current value of the Company in a freely negotiated transaction and in relation to the board of directors’ then-estimate of the future value of the Company as an independent entity, and

b. the social and economic effects on the employees, customers, suppliers, and other constituents of the Company and on the communities in which the Company operates or is located and the desirability of maintaining independence from any other business or business entity.

The Articles of Incorporation also include provisions that make it difficult to replace directors. Specifically, subject to the rights of the holders of any series of preferred stock then outstanding, if any vacancy shall occur in our board of directors by reason of newly created directorships or resulting from the resignation, disqualification, retirement or death of a director, such vacancies will be filled by the affirmative vote of the majority of the directors then in office, and if not therefore filled by action of the directors, may then be filled by the shareholders at any meeting held during the existence of such vacancy. If any vacancy shall occur among the

 

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directors by reason of the removal from office of a director, such vacancy can only be filled by the vote of three-fourths of the outstanding shares of each class of stock entitled to vote in elections of directors. Any director whose term of office has expired shall continue to hold office until his successor shall be elected and qualified. Furthermore, the affirmative vote of the holders of at least three-fourths of the total number of votes entitled to be cast by the holders of all of the shares of capital stock is required to amend, alter, change or repeal, or to adopt any provision as part of the Articles of Incorporation inconsistent with Article VI of the current Articles of Incorporation.

We also believe that the power of our Board of Directors to issue additional authorized but unissued shares of our common stock or preferred stock without further action by our shareholders, unless required by applicable law or the rules of any stock exchange or automated quotation system on which our securities may be listed or traded, will provide us with increased flexibility in structuring possible future financings and acquisitions and in meeting other needs that might arise. Our board of directors could authorize and issue a class or series of preferred stock that could, depending upon the terms of such class or series, delay, defer or prevent a transaction or a change in control of us that might involve a premium price for holders of our common stock or that our shareholders otherwise consider to be in their best interest. We have no intent to issue any shares of preferred stock for the purpose of delaying, deferring or preventing a change in control or other transaction.

 

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CERTAIN UNITED STATES FEDERAL INCOME TAX

CONSIDERATIONS APPLICABLE TO NON-U.S. HOLDERS

The following is a summary of certain United States federal income tax considerations related to the ownership and disposition of our common stock that are applicable to a “non-U.S. holder” (defined below) of the common stock. This section does not address tax considerations applicable to U.S. holders. U.S. holders are urged to consult their own tax advisors to determine the specific tax consequences and risks to them of holding and disposing of our common stock.

This summary:

 

•

does not purport to be a complete analysis of all of the potential tax considerations that may be applicable to an investor as a result of the investor’s particular tax situation;

 

•

is based on the Internal Revenue Code of 1986, as amended (“the Code”), United States federal income tax regulations promulgated or proposed under the Code, which we refer to as the “U.S. Treasury Regulations,” judicial authority and published rulings and administrative pronouncements, each as of the date hereof and each of which are subject to change at any time, possibly with retroactive effect;

 

•

is applicable only to beneficial owners of common stock who hold their common stock as a “capital asset,” within the meaning of Section 1221 of the Code;

 

•

does not address all aspects of United States federal income taxation that may be relevant to holders in light of their particular circumstances or who are subject to special treatment under United States federal income tax laws, including but not limited to:

 

•

certain former citizens and long-term residents of the United States;

 

•

“controlled foreign corporations” and “passive foreign investment companies”;

 

•

partnerships, other pass-through entities and investors in these entities;

 

•

investors that expect to receive dividends or realize gain in connection with the investors’ conduct of a United States trade or business, permanent establishment or fixed base; and

 

•

does not discuss any possible applicability of any United States state or local taxes, non-United States taxes or any United States federal tax other than the income tax, including, but not limited to, the federal gift tax and estate tax and the alternative minimum tax.

This summary of certain United States federal income tax considerations constitutes neither tax nor legal advice. Prospective investors are urged to consult their own tax advisors to determine the specific tax consequences and risks to them of purchasing, holding and disposing of our common stock, including the application to their particular situation of any United States federal estate and gift tax, United States alternative minimum tax, United States state and local tax, non-United States tax and other tax laws and of any applicable income tax treaty.

Non-U.S. Holder Defined

For purposes of this discussion, a non-U.S. holder is a beneficial holder of our common stock that is neither a “U.S. person” nor a partnership or entity or arrangement treated as a partnership for United States federal income tax purposes. A “U.S. person” is:

 

•

an individual citizen or resident of the United States;

 

•

a corporation, or other entity treated as an association taxable as a corporation, for United States federal income tax purposes, that is organized in or under the laws of the United States, any state thereof or the District of Columbia;

 

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•

an estate the income of which is subject to United States federal income taxation regardless of its source; or

 

•

a trust if it (1) is subject to the primary supervision of a court within the United States and one or more U.S. persons have the authority to control all substantial decisions of the trust or (2) has a valid election in effect under the U.S. Treasury Regulations to be treated as a U.S. person.

If a partnership (including an entity or arrangement treated as a partnership for United States federal income tax purposes) holds our common stock, then the United States federal income tax treatment of a partner in that partnership generally will depend on the status of the partner and the partnership’s activities. Partners and partnerships should consult their own tax advisors with regard to the United States federal income tax treatment of an investment in our common stock.

Distributions

Distributions, if any, paid to a non-U.S. holder of our common stock, other than certain pro rata distributions of common stock, will constitute “dividends” for United States federal income tax purposes to the extent paid out of our current or accumulated earnings and profits. Any distributions that exceed both our current and accumulated earnings and profits would first constitute a non-taxable return of capital, which would reduce the holder’s basis in our common stock, but not below zero, and thereafter would be treated as gain from the sale of our common stock (see “—Sale or Taxable Disposition of Common Stock” below).

Subject to the following paragraphs, dividends on our common stock generally will be subject to United States federal withholding tax at a 30% gross rate, subject to any exemption or lower rate as may be specified by an applicable income tax treaty. We may withhold up to 30% of either (1) the gross amount of the entire distribution, even if the amount of the distribution is greater than the amount constituting a dividend, as described above, or (2) the amount of the distribution we project will be a dividend, based upon a reasonable estimate of both our current and our accumulated earnings and profits for the taxable year in which the distribution is made. If tax is withheld on the amount of a distribution in excess of the amount constituting a dividend, then you may obtain a refund of such excess amounts by timely filing a claim for refund with the Internal Revenue Service.

In order to claim the benefit of a reduced rate of or an exemption from withholding tax under an applicable income tax treaty, a non-U.S. holder will be required (1) to satisfy certain certification requirements, which may be made by providing us or our agent with a properly executed and completed Internal Revenue Service Form W-8BEN (or other applicable form) certifying, under penalty of perjury, that the holder qualifies for treaty benefits and is not a U.S. person or (2) if our common stock is held through certain non-U.S. intermediaries, to satisfy the relevant certification requirements of U.S. Treasury Regulations. Special certification and other requirements apply to certain non-U.S. holders that are pass-through entities.

Dividends that are effectively connected with the conduct of a trade or business by the non-U.S. holder within the United States (and, if required by an applicable income tax treaty, are attributable to a U.S. permanent establishment or, in the case of an individual non-U.S. holder, a fixed base) are not subject to the withholding tax, provided that the non-U.S. holder so certifies, under penalty of perjury, on a properly executed and delivered Internal Revenue Service Form W-8ECI (or other applicable form). Instead, such dividends would be subject to United States federal income tax on a net income basis in the same manner as if the non-U.S. holder were a U.S. person.

Corporate holders who receive effectively connected dividends may also be subject to an additional “branch profits tax” at a gross rate of 30% on their earnings and profits for the taxable year that are effectively connected with the holder’s conduct of a trade or business within the United States, subject to any exemption or reduction provided by an applicable income tax treaty.

 

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Sale or Taxable Disposition of Common Stock

Any gain realized on the sale, exchange or other taxable disposition of our common stock generally will not be subject to United States federal income tax unless:

 

•

the gain is effectively connected with a trade or business of the non-U.S. holder in the United States (and, if required by an applicable income tax treaty, is attributable to a U.S. permanent establishment of the non-U.S. holder or, in the case of an individual, a fixed base);

 

•

the non-U.S. holder is an individual who is present in the United States for 183 days or more in the taxable year of that disposition, and certain other conditions are met; or

 

•

we are or have been a “United States real property holding corporation” (a “USRPHC”) at any time during the shorter of the five-year period preceding such disposition and the non-U.S. holder’s holding period in the common stock.

A non-U.S. holder described in the first bullet point above generally will be subject to United States federal income tax on the net gain derived from the sale or disposition under regular graduated United States federal income tax rates, as if the holder were a U.S. person. If such non-U.S. holder is a corporation, then it may also, under certain circumstances, be subject to an additional “branch profits” tax at a gross rate of 30% on its earnings and profits for the taxable year that are effectively connected with its conduct of its United States trade or business, subject to exemption or reduction provided by any applicable income tax treaty.

An individual non-U.S. holder described in the second bullet point immediately above will be subject to a tax at a 30% gross rate, subject to any reduction or reduced rate under an applicable income tax treaty, on the net gain derived from the sale, which may be offset by United States source capital losses, even though the individual is not considered a resident of the United States.

With respect to third bullet point above, we do not believe that we currently are, or expect to become, a USRPHC.

Information Reporting and Backup Withholding

We must report annually to the Internal Revenue Service and to each non-U.S. holder the amount of dividends paid to such holder and the tax withheld with respect to such dividends, regardless of whether withholding was required. Copies of the information returns reporting such dividends and withholding may also be made available to the tax authorities in the country in which the non-U.S. holder resides under the provisions of an applicable income tax treaty.

A non-U.S. holder will be subject to backup withholding, currently at a 28% rate, for dividends paid to such holder unless such holder certifies under penalty of perjury as to non-U.S. person status, or such holder otherwise establishes an exemption (provided that neither we nor the paying agent has actual knowledge or reason to know that such holder is a U.S. person or that the conditions of any other exemptions are not in fact satisfied).

Information reporting and, depending on the circumstances, backup withholding will apply to the proceeds of a sale of our common stock within the United States or conducted through certain U.S.-related financial intermediaries, unless the beneficial owner certifies under penalty of perjury as to non-U.S. person status, or such owner otherwise establishes an exemption (provided that neither the broker nor intermediary has actual knowledge or reason to know that such owner is a U.S. person or that the conditions of any other exemptions are not in fact satisfied).

Any amounts withheld under the backup withholding rules may be allowed as a refund or a credit against a non-U.S. holder’s U.S. federal income tax liability provided the required information is timely furnished to the Internal Revenue Service.

 

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Recent Legislative Developments

The United States Treasury has recently proposed legislation that would limit the ability of non-U.S. investors to claim relief from U.S. withholding tax in respect of dividends paid on common stock, if such investors hold common stock through a non-U.S. intermediary that is not a “qualified intermediary.” The Administration’s proposals also would limit the ability of certain non-U.S. entities to claim relief from U.S. withholding tax in respect of dividends paid to such non-U.S. entities unless those entities have provided documentation of their beneficial owners to the withholding agent. A third proposal would impose a 20% withholding tax on the gross proceeds of the sale of common stock effected through a non-U.S. intermediary that is not a qualified intermediary and that is not located in a jurisdiction with which the United States has a comprehensive income tax treaty having a satisfactory exchange of information provision. A non-U.S. investor generally would be permitted to claim a refund to the extent any tax withheld exceeded the investor’s actual tax liability. It is unclear whether, or in what form, these proposals may be enacted. Non-U.S. holders are encouraged to consult with their tax advisors regarding the possible implications of the Administration’s proposals on their investment in respect of the common stock.

 

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UNDERWRITING

General

Under the terms and subject to the conditions contained in an underwriting agreement dated                     , 2009, the underwriters named below, for whom Raymond James & Associates, Inc. is acting as representative, have severally agreed to purchase, and we have agreed to sell to them, the number of shares of our common stock set forth opposite their names below:

 

Underwriters		Number of Shares
Raymond James & Associates, Inc.
Sandler O’Neill & Partners, L.P.
Allen & Company LLC
Stifel, Nicolaus & Company, Incorporated
Total

The underwriters are offering the shares of common stock subject to their acceptance of the shares from us and subject to prior sale. The underwriting agreement provides that the obligations of the underwriters to purchase and accept delivery of the common stock offered by this prospectus are subject to various conditions set forth in the underwriting agreement. The underwriters are obligated to purchase and accept delivery of all of the shares of common stock offered by this prospectus, if any are purchased, other than those covered by the option to purchase additional shares described below.

The shares of our common stock issuable upon conversion and redemption of shares of our Series B Preferred Stock are being offered solely by the Company separately from this offering. The underwriters are not participating in any capacity in the conversion and redemption of Series B Preferred Stock and are not entitled to any compensation in connection with the conversion and the redemption.

Director and Officer Participation

Our management, directors, principal stockholders, or their affiliates may acquire shares in this offering. Furthermore, any purchases by management, directors, principal stockholders, or their affiliates must be made on the same terms and conditions as purchases by nonaffiliated investors and with a view toward investment, not resale. Our Company directors and executive officers have all indicated their intent to purchase an aggregate of approximately             shares of our common stock in the offering.

Option to Purchase Additional Shares

We have granted the underwriters an option, exercisable within 30 days after the date of this prospectus, to purchase from time to time up to an aggregate of          additional shares of common stock, at the same price per share as they are paying for the shares shown in the table above. If the underwriters exercise their option to purchase any of the additional          shares, each underwriter, subject to certain conditions, will become obligated to purchase a number of additional shares proportionate to that underwriter’s initial purchase commitment as indicated in the table above. If purchased, these additional shares will be sold by the underwriters on the same terms as those on which the shares offered by this prospectus are being sold.

Commission and Discounts

The underwriters propose to offer the common stock directly to the public at the public offering price indicated on the cover page of this prospectus and to various dealers at that price less a concession not to exceed $             per share. After this offering, the public offering price, concession and reallowance to dealers may be reduced by the underwriters. No reduction will change the amount of proceeds to be received by us as indicated on the cover page of this prospectus. The shares of common stock are offered by the underwriters as stated in this prospectus, subject to receipt and acceptance by them and subject to their right to reject any order in whole or in part.

 

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The following table summarizes the compensation to be paid to the underwriters by us. These amounts assume both no exercise and full exercise of the underwriters’ option to purchase additional shares. We estimate that the total expenses of this offering payable by us, not including the underwriting discounts but including our reimbursement of up to $250,000 in certain expenses of the underwriters, will be approximately $            .

 

		Per Share			Without Option			With Option
Underwriting discount payable by us		$			$			$

Indemnification

We have agreed to indemnify the underwriters against various liabilities, including certain liabilities under the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended, or to contribute to payments the underwriters may be required to make because of any of those liabilities.

Lock-up Agreements

Subject to specified exceptions, each of our directors and our executive officers has agreed for a period of 90 days after the date of this prospectus not to, directly or indirectly: (i) offer, sell, contract to sell, pledge, grant any option to purchase or otherwise dispose of or take any other action, whether through derivative contracts, options or otherwise to reduce their financial risk of holding any of our securities, or any securities convertible into or exercisable or exchangeable for, or any rights to purchase or otherwise acquire, any securities held or deemed to be beneficially owned by the person or entity without the prior written consent of Raymond James & Associates, Inc.; or (ii) exercise or seek to exercise or effectuate in any manner any rights of any nature that such person has or may have hereafter to require us to register under the Securities Act of 1933, as amended, the sale, transfer or other disposition of any of the securities held or deemed to be beneficially owned by the person or entity, or to otherwise participate as a selling securityholder in any manner in any registration by us under the Securities Act of 1933, as amended. The foregoing restrictions shall not apply to: (1) the securities being offered in this prospectus; (2) any grant or exercise of options pursuant to our stock option plans; or (3) the issuance of shares pursuant to certain of our deferral and savings plans.

In addition we have agreed that for 90 days after the date of this prospectus, we will not directly or indirectly without the prior written consent of Raymond James & Associates, Inc., (1) offer for sale, sell, pledge or otherwise dispose of any shares of common stock or securities convertible into or exchangeable for common stock (other than the common stock issued pursuant to employee benefit plans, qualified stock option plans or other employee compensation plans existing on the date hereof or pursuant to currently outstanding options, warrants or rights), or sell or grant options, rights or warrants with respect to any shares of common stock or securities convertible into or exchangeable for common stock (other than the grant of options pursuant to option plans existing on the date hereof), (2) enter into any swap or other derivatives transaction that transfers to another, in whole or in part, any of the economic benefits or risks of ownership of such shares of common stock, (3) file or cause to be filed a registration statement with respect to the registration of any shares of common stock or securities convertible, exercisable or exchangeable into our common stock or any other securities or (4) publicly disclose the intention to do any of the foregoing.

If (1) during the last 17 days of the 90 day lock-up period, we issue an earnings release or material news or a material event relating to us occurs, or (2) prior to the expiration of the lock-up period, we announce that we will release earnings results or become aware that material news or a material event described in the preceeding paragraph will occur during the 16 day period beginning on the last day of the lock-up period, then the lock-up periods shall automatically be extended and the restrictions described above shall continue to apply until the expiration of the 18 day period beginning on the issuance of the earnings release or the occurrence of the material news or material event, as applicable, unless Raymond James & Associates, Inc. waives, in writing, such extension. Raymond James & Associates, Inc. may release any of the securities subject to these lock-up agreements at any time without notice.

 

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Price Stabilization, Short Positions and Penalty Bids

Until this offering is completed, Securities and Exchange Commission rules may limit the ability of the underwriters and certain selling group members to bid for and purchase shares of our common stock. As an exception to these rules, the underwriters may engage in certain transactions that stabilize the price of our common stock. These transactions may include short sales, stabilizing transactions, purchases to cover positions created by short sales and passive market making. A short sale is covered if the short position is no greater than the number of shares available for purchase by the underwriters under the option to purchase additional shares. The underwriters can close out a covered short sale by exercising the option to purchase additional shares or purchasing shares in the open market. In determining the source of shares to close out a covered short sale, the underwriters will consider, among other things, the open market price of shares compared to the price available under the option to purchase additional shares. The underwriters may also sell shares in excess of the option to purchase additional shares, creating a naked short position. The underwriters must close out any naked short position by purchasing shares in the open market. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of the common stock in the open market after pricing that could adversely affect investors who purchase in the offering. As an additional means of facilitating the offering, the underwriters may bid for, and purchase, shares of common stock in the open market to stabilize the price of the common stock. The underwriting syndicate may also reclaim selling concessions allowed to an underwriter or a dealer for distributing the common stock in the offering, if the syndicate repurchases previously distributed common stock to cover syndicate short positions or to stabilize the price of the common stock. These activities may raise or maintain the market price of the common stock above independent market levels or prevent or retard a decline in the market price of the common stock.

In connection with this transaction, the underwriters may engage in passive market making transactions in the common stock on the Nasdaq Global Market, prior to the pricing and completion of this offering. Passive market making is permitted by Securities and Exchange Commission Regulation M and consists of displaying bids on the Nasdaq Global Market no higher than the bid prices of independent market makers and making purchases at prices no higher than these independent bids and effected in response to order flow. Net purchases by a passive market maker on each day are limited to a specified percentage of the passive market maker’s average daily trading volume in the common stock during a specified period and must be discontinued when such limit is reached. Passive market making may cause the price of the common stock to be higher than the price that otherwise would exist in the open market in the absence of such transactions.

The underwriters also may impose a penalty bid. This occurs when a particular underwriter repays to the other underwriter a portion of the underwriting discount received by it because the representatives have repurchased shares sold by or for the account of such underwriter in stabilizing or short covering transactions.

These activities by the underwriters may stabilize, maintain or otherwise affect the market price of our common stock. As a result the price of our common stock may be higher than the price that otherwise might exist in the open market. The underwriters are not required to engage in these activities. If these activities are commenced, they may be discontinued by the underwriters without notice at any time. These transactions may be effected on the Nasdaq Global Market or otherwise.

Electronic Distribution

A prospectus in electronic format may be made available on websites or through other online services maintained by the underwriters of the offering, or by their affiliates. Other than the prospectus in electronic format, the information on the underwriters’ websites and any information contained in any other website maintained by the underwriters is not part of the prospectus or the registration statement of which this prospectus forms a part, has not been approved and/or endorsed by us or the underwriters in their capacity as underwriters and should not be relied upon by investors.

 

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Listing

Our common stock is listed on the Nasdaq Global Market under the symbol “BOFL.”

Notice to Investors

European Economic Area

In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a “Relevant Member State”), with effect from and including the date on which the Prospectus Directive is implemented in that Relevant Member State (the “Relevant Implementation Date”), an offer of shares of our common stock to the public may not be made in that Relevant Member State prior to the publication of a prospectus in relation to our common shares which has been approved by the competent authority in that Relevant Member State or, where appropriate, approved in another Relevant Member State and notified to the competent authority in that Relevant Member State, all in accordance with the Prospectus Directive, except that an offer to the public in that Relevant Member State of any shares of our common stock may be made at any time under the following exemptions under the Prospectus Directive, if they have been implemented in that Relevant Member State:

 

(a)

to legal entities which are authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose is solely to invest in securities;

 

(b)

to any legal entity which has two or more of (1) an average of at least 250 employees during the last financial year; (2) a total balance sheet of more than €43,000,000; and (3) an annual net turnover of more than €50,000,000, as shown in is last annual or consolidated accounts;

 

(c)

to fewer than 100 natural or legal persons per Relevant Member State (other than qualified investors as defined in the Prospectus Directive); or

 

(d)

in any other circumstances falling within Article 3(2) of the Prospectus Directive; provided that no such offer of our common stock shall result in a requirement for the publication by us or any placement agent of a prospectus pursuant to Article 3 of the Prospectus Directive.

For the purposes of this provision, the expression an “offer of shares of our common stock to the public” in relation to any shares of our common stock in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the shares of our common stock to be offered so as to enable an investor to decide to purchase or subscribe for the shares of our common stock, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State; and the expression “Prospectus Directive” means Directive 2003/71/EC and includes any relevant implementing measure in each Relevant Member State.

United Kingdom

Shares of our common stock may not be offered or sold and will not be offered or sold to any persons in the United Kingdom other than to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or as agent) for the purposes of their businesses or otherwise in circumstances which have not resulted or will not result in an offer to the public in the United Kingdom within the meaning of the Financial Services and Markets Act 2000, or the FSMA.

In addition, any invitation or inducement to engage in investment activity (within the meaning of section 21 of the FSMA) in connection with the issue or sale of shares of our common stock may only be communicated or caused to be communicated in circumstances in which Section 21(1) of the FSMA does not apply to us. Without limitation to the other restrictions referred to herein, this prospectus is directed only at (1) persons outside the United Kingdom or (2) persons who:

 

(a)

are qualified investors as defined in section 86(7) of FSMA, being persons falling within the meaning of article 2.1(e)(i), (ii) or (iii) of the Prospectus Directive; and

 

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(b)

are either persons who fall within article 19(1) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended, or Order, or are persons who fall within article 49(2)(a) to (d) (“high net worth companies, unincorporated associations, etc.”) of the Order; or

 

(c)

to whom it may otherwise lawfully be communicated in circumstances in which Section 21(1) of the FSMA does not apply.

Without limitation to the other restrictions referred to herein, any investment or investment activity to which this prospectus relates is available only to, and will be engaged in only with, such persons, and persons within the United Kingdom who receive this communication (other than persons who fall within (b) above) should not rely or act upon this communication.

Affiliations

Each of the underwriters and their affiliates have provided, and may in the future provide, various investment banking, financial advisory and other financial services to us and our affiliates for which they have received, and in the future may receive, advisory or transaction fees, as applicable, plus out-of-pocket expenses of the nature and in amounts customary in the industry for these financial services.

 

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TRANSFER AGENT

The transfer agent for our common stock is Registrar and Transfer Company, 10 Commerce Drive, Cranford, New Jersey 07016-3572, telephone number: (800) 368-5948.

LEGAL MATTERS

Certain legal matters relating to the common stock offered by this prospectus have been passed upon for us by Igler & Dougherty, P.A., Tallahassee, Florida. Certain legal matters will be passed upon for the underwriters by Jones Day, Atlanta, Georgia.

EXPERTS

Our consolidated financial statements as of December 31, 2008 and December 31, 2007 and for each of the years in the three-year period ended December 31, 2008, and management’s assessment of the effectiveness of internal control over financial reporting as of December 31, 2008, have been incorporated by reference herein in reliance upon the reports of Hacker, Johnson & Smith, P.A., independent registered public accounting firm, and upon the authority of said firm as an expert in accounting and auditing.

 

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DOCUMENTS INCORPORATED BY REFERENCE

The Securities and Exchange Commission allows us to “incorporate by reference” information we file with it, which means that we can disclose important information to you by referring you to other documents. The information incorporated by reference is considered to be a part of this prospectus. Information contained in this prospectus supersedes information incorporated by reference that we have filed with the Securities and Exchange Commission prior to the date of this prospectus.

We incorporate by reference the documents listed below, except to the extent that any information contained in any such document is deemed “furnished” in accordance with Securities and Exchange Commission rules:

 

•

Our Annual Report on Form 10-K for the year ended December 31, 2008 filed with the Securities and Exchange Commission on March 9, 2009 (File No. 000-50091);

 

•

Our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2009, June 30, 2009 and September 30, 2009, filed with the Securities and Exchange Commission on May 7, 2009, August 7, 2009 and November 2, 2009, respectively (File No. 000-50091);

 

•

Our Current Reports on Form 8-K filed with the Securities and Exchange Commission on November 2, 2009, October 21, 2009, October 15, 2009, July 30, 2009, July 21, 2009, July 13, 2009, July 2, 2009, May 14, 2009, May 4, 2009, May 1, 2009, April 28, 2009, April 20, 2009, April 10, 2009, April 8, 2009, March 26, 2009, March 10, 2009, February 17, 2009, February 13, 2009 and February 4, 2009 (excluding, in each case, information or documents furnished but not filed therewith) (File No. 000-50091);

 

•

Our Definitive Proxy Statement on Schedule 14A filed with the Securities and Exchange Commission on April 2, 2009 (File No. 000-50091); and

 

•

Our Definitive Proxy Statement on Schedule 14A filed with the Securities and Exchange Commission on August 18, 2009 (File No. 000-50091).

On the written or oral request of each person to whom a copy of this prospectus is delivered, we will provide, at no cost, a copy of any or all of the documents incorporated by reference in this prospectus, except the exhibits to those documents, unless the exhibits are specifically incorporated by reference.

Written requests for copies should be directed to Bank of Florida Corporation, 1185 Immokalee Road, Naples, Florida, Attention: Tracy L. Keegan, Chief Financial Officer. Telephone requests for copies should be directed to (239) 254-2100. Such documents are also available through our Internet website: www.bankofflorida.com. The information contained in our website is not a part of, or incorporated by reference into, this prospectus.

You may read and copy any of these documents at the Securities and Exchange Commission’s Public Reference Room at 100 F Street, N.E., Washington, DC, 20549. Please call the Securities and Exchange Commission at 1-800-SEC-0330 for further information. The Securities and Exchange Commission maintains an internet site that contains reports, proxy and other information statements and other information regarding issuers that file electronically with the Securities and Exchange Commission. Our Securities and Exchange Commission filings are also available to the public from the Securities and Exchange Commission’s website at http://www.sec.gov.

You should rely only upon the information provided in this document, or incorporated in this document by reference. We have not authorized anyone to provide you with different information. You should not assume that the information in this document, including any information incorporated by reference, is accurate as of any date other than the date indicated on the front cover or the date given in the applicable document.

 

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The information in this prospectus is not complete and may be changed or supplemented. We may not sell these securities until the registration statement that we have filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell the securities and it is not a solicitation of an offer to buy the securities in any jurisdiction where an offer or sale thereof is not permitted.

 

Subject to Completion, dated November 2, 2009

PROSPECTUS

Up to

            Shares

Common Stock

 

 

We are offering shares of our common stock to be issued upon conversion of our shares of Series B Preferred Stock at a conversion price of $             per share of common stock, the same price at which shares were offered to the public in our concurrent offering of common stock (the “Public Offering”). A holder of shares of Series B Preferred Stock may convert each share of Series B Preferred Stock for shares of common stock. Any shares of Series B Preferred Stock not converted into shares of our common stock will be redeemed by us at a redemption price of $25,000 per share.

You may elect to convert shares of Series B Preferred Stock into shares of our common stock by submitting to us a letter of transmittal and your preferred stock certificate by             , 2009. We will receive no proceeds from this offering.

Our common stock is traded on the Nasdaq Global Market under the symbol “BOFL.” On November     , 2009, the last reported sale price of our common stock on the Nasdaq Global Market was $     per share.

Investing in our common stock is speculative and involves a high degree of risk. You could lose up to your entire investment. You should carefully consider the risks which we have described in “Risk Factors” beginning on page 14 before buying shares of our common stock.

 

 

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The securities are not deposits and are not insured by the Federal Deposit Insurance Corporation or any other governmental agency.

 

 

The date of this prospectus is November     , 2009.

 

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ABOUT THIS PROSPECTUS

You should rely only on the information contained in this prospectus (and in the documents incorporated by reference herein). We have not authorized any other person to provide you with different information. We are not making an offer to sell our common stock in any jurisdiction in which the offer or sale is not permitted.

Neither we nor any of our officers, directors, agents or representatives make any representation to you about the legality of an investment in our common stock. You should not interpret the contents of this prospectus to be legal, business, investment or tax advice. You should consult with your own advisors for that type of advice and consult with them about the legal, tax, business, financial and other issues that you should consider before investing in our common stock.

This prospectus does not offer to sell, or ask for offers to buy, any shares of our common stock in any state or jurisdiction where it would not be lawful or where the person making the offer is not qualified to do so.

No action is being taken in any jurisdictions outside the United States to permit a public offering of the common stock or possession or distribution of this prospectus in those jurisdictions. Persons who come into possession of this prospectus in jurisdictions outside the United States are required to inform themselves about, and to observe, any restrictions that apply in those jurisdictions to this offering or the distribution of this prospectus.

As used in this prospectus, “the Company” refers to Bank of Florida Corporation on a parent-only basis. “Bank of Florida,” “the Company,” “we,” “us,” and “ours” refer to Bank of Florida Corporation and its subsidiaries on a consolidated basis. The “bank,” “banks,” “subsidiary banks” or a “subsidiary bank” refer to our wholly-owned bank subsidiaries, Bank of Florida—Southwest, Bank of Florida—Southeast, and Bank of Florida—Tampa Bay. The “trust company subsidiary” refers to our wholly-owned, non-depository trust company subsidiary, Bank of Florida Trust Company.

 

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PROSPECTUS SUMMARY

This summary highlights information contained elsewhere in this prospectus and may not contain all of the information that may be important to you. You should read this entire prospectus carefully, including the information set forth in “Risk Factors,” before making an investment decision.

 

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The Offering

 

Stock offered:

shares of common stock, par value $0.01 per share.

 

Common stock to be outstanding upon completion of this offering:

shares, if each share of outstanding Series B Preferred Stock is converted in this offering (             if the underwriters in the Public Offering exercise their option to purchase additional shares in full).*

 

Offering terms:

Separately and following the Public Offering, our articles of incorporation require us to offer holders of shares of our Series B Preferred Stock the opportunity to convert each share of our $25,000 stated value Series B Preferred Stock into shares of our common stock at a conversion price equal to the public offering price of each share of common stock in the Public Offering. Any shares of Series B Preferred Stock not converted will be redeemed at a redemption price of $25,000 per share following this offering. Company directors and executive officers hold approximately 80 shares of our outstanding Series B Preferred Stock (46% of the total number of outstanding shares of Series B Preferred Stock) and have indicated their intent to convert their shares of Series B Preferred Stock into shares of our common stock.

 

Process and timing:

To elect to convert shares of Series B Preferred Stock into shares of our common stock, you must complete and submit to us the letter of transmittal enclosed with this prospectus (the “letter of transmittal”), along with your Series B Preferred Stock certificate no later than             , 2009. If we do not receive your completed letter of transmittal and Series B Preferred Stock certificate by such date, we will deem you to have waived your right to convert your Series B Preferred Stock into shares of our common stock and your Series B Preferred Stock will be deemed to have been redeemed by us on             , 2009. However, we will not make any payments with respect to such redemption until we have received your completed letter of transmittal and your accompanying Series B Preferred Stock certificate.

 

Public offering of common stock:

We are also conducting an underwritten public offering of             shares of our common stock at $            per share. In that public offering, we have granted our underwriters an over-allotment option to purchase additional             shares of common stock at that price.

 

Use of proceeds:

We will receive no proceeds from the exchange or conversion of our Series B Preferred Stock.

We expect the net proceeds of the Public Offering to be approximately $             ($             million if the underwriters exercise their option to purchase additional shares in full). We currently intend to use approximately $71 million of the proceeds from the Public Offering to contribute to our subsidiary banks as Tier 1 regulatory capital so that the subsidiary banks can meet their expected capital needs under the Corrective Resolutions as of December 31, 2009. This assumes, no unanticipated loan losses or deterioration in our

 

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credit quality, and no other charges against our earnings, such as write-downs or write-offs of our approximately $13.5 million of deferred tax assets as of September 30, 2009, or disqualification of any portion of the approximately $3.8 million of this asset currently included in our regulatory capital, and no further increases in the capital our regulators require us to hold.

 

We also intend to use the proceeds from the Public Offering to redeem shares of Series B Preferred Stock not converted into common stock in this offering, as well as for general corporate purposes. Based on our current expectations, up to 92 shares of Series B Preferred Stock may be redeemed for an aggregate redemption price of approximately $2.3 million. We may also use a portion of the proceeds from the Public Offering to make payments, if any are required, to the 401(k) Plan participants entitled to receive, and who accept, our rescission offer. See “Prospectus Summary—Conversion or Redemption of Series B Preferred Stock” and—“Recent Developments—Rescission Offer.”

 

From our proceeds of the Public Offering, we expect to contribute as capital $30 million to Bank of Florida – Southwest, $27 million to Bank of Florida – Southeast and $13 to $14 million to Bank of Florida – Tampa Bay. See “Use of Proceeds.”

 

Position of Bank of Florida Corporation:

We are not taking a position as to whether you should convert your shares of Series B Preferred Stock into shares of common stock and you should consult your own advisors.

 

Risk factors:

See “Risk Factors” beginning on page 14 and other information included in this prospectus for a discussion of factors you should consider before deciding to invest in our common stock.

 

Nasdaq Global Market symbol:

BOFL

 

(*)	The number of shares outstanding does not include 737,832 shares reserved for issuance pursuant to outstanding options or warrants as of September 30, 2009.

 

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USE OF PROCEEDS

We will receive no proceeds upon the conversion of shares of our Series B Preferred Stock.

We expect the net proceeds of the Public Offering to be approximately $             ($             million if the underwriters exercise their option to purchase additional shares in full). We currently intend to use approximately $71 million of the proceeds from this offering to contribute to our subsidiary banks as tier 1 regulatory capital so that the subsidiary banks can meet their expected capital needs under the Corrective Resolutions as of December 31, 2009. This assumes, no unanticipated loan losses or deterioration in our credit quality, and no other charges against our earnings, such as write-downs or write-offs of our approximately $13.5 million of deferred tax assets as of September 30, 2009, or disqualification of any portion of the approximately $3.8 million of this asset currently included in our regulatory capital, and no further increases in the capital our regulators require us to hold.

From our net proceeds of the Public Offering, we expect to contribute $30 million to Bank of Florida-Southwest, $27 million to Bank of Florida-Southeast and $13 to $14 million to Bank of Florida-Tampa Bay as additional capital.

We also intend to use the proceeds from the Public Offering to redeem shares of Series B Preferred Stock not converted into common stock in this offering, as well as for general corporate purposes. Based on our current expectations, up to 92 shares of Series B Preferred Stock may be redeemed for an aggregate redemption price of approximately $2.3 million. We may also use a portion of the proceeds from the Public Offering to make payments, if any are required, to the 401(k) Plan participants entitled to receive, and who accept, our rescission offer. See “Prospectus Summary – Conversion or Redemption of Series B Preferred Stock” and—“Recent Developments—Rescission Offer.”

 

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CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS APPLICABLE TO SERIES B PREFERRED STOCK HOLDERS

The following is a summary of certain United States federal income tax considerations related to the conversion or exchange of our Series B Preferred Stock for shares of our common stock. This section does not address tax considerations applicable to United States holders who acquire our common stock other than by exchange or conversion from our Series B Preferred Stock, or tax considerations relevant to the purchasing or holding our Series B Preferred Stock. Such holders are urged to consult their own tax advisors to determine the specific tax consequences and risks to them of purchasing, holding and disposing of our common stock, or of purchasing and holding our Series B Preferred Stock.

This summary:

 

•

does not purport to be a complete analysis of all of the potential tax considerations that may be applicable to an investor as a result of the investor’s particular tax situation;

 

•

is based on the Internal Revenue Code of 1986, as amended (the “Code”), United States federal income tax regulations promulgated or proposed under the Code, which we refer to as the “United States Treasury Regulations,” judicial authority and published rulings and administrative pronouncements, each as of the date hereof and each of which are subject to change at any time, possibly with retroactive effect;

 

•

is applicable only to beneficial owners Series B Preferred Stock who hold their Series B Preferred Stock, or any common stock into which that preferred stock may be converted or exchanged, as a “capital asset,” within the meaning of Section 1221 of the Code;

 

•

does not address all aspects of United States federal income taxation that may be relevant to holders in light of their particular circumstances or who are subject to special treatment under United States federal income tax laws, including but not limited to:

 

•

certain former citizens and long-term residents of the United States;

 

•

“controlled foreign corporations” and “passive foreign investment companies”;

 

•

partnerships, other pass-through entities and investors in these entities; and

 

•

investors that expect to receive dividends or realize gain in connection with the investors’ conduct of a United States trade or business, permanent establishment or fixed base.

 

•

does not discuss any possible applicability of any United States state or local taxes, non-United States taxes or any United States federal tax other than the income tax, including, but not limited to, the federal gift tax and estate tax and the alternative minimum tax.

This summary of certain United States federal income tax considerations constitutes neither tax nor legal advice. Prospective investors and current holders of our Series B Preferred Stock are urged to consult their own tax advisors to determine the specific tax consequences and risks to them of the conversion, exchange or redemption of our Series B Preferred Stock, or of purchasing, holding or disposing of our common stock, including the application to their particular situation of any United States federal estate and gift, United States alternative minimum tax, United States state and local, non-United States and other tax laws and of any applicable income tax treaty.

U.S. Holder Defined

For purposes of this discussion, a “U.S. holder” means a beneficial owner of our common stock or Series B Preferred Stock that is, for United States federal income tax purposes:

 

•

an individual citizen or resident of the United States;

 

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•

a corporation, or other entity treated as an association taxable as a corporation for United States federal income tax purposes, that is organized in or under the laws of the United States, any state thereof or the District of Columbia;

 

•

an estate the income of which is subject to United States federal income taxation regardless of its source; or

 

•

a trust if it (1) is subject to the primary supervision of a court within the United States and one or more United States persons have the authority to control all substantial decisions of the trust or (2) has a valid election in effect under applicable United States Treasury Regulations to be treated as a United States person.

If a partnership (including an entity or arrangement treated as a partnership for United States federal income tax purposes) holds our common stock or Series B Preferred Stock, then the United States federal income tax treatment of a partner in that partnership generally will depend on the status of the partner and the partnership’s activities. Partners and partnerships should consult their own tax advisors with regard to the United States federal income tax treatment of an investment in our common stock or Series B Preferred Stock.

U.S. Holders of Series B Preferred Stock

Conversion of Series B Preferred Stock into Common Stock

A U.S. holder of Series B Preferred Stock who converts that preferred stock into our common stock generally will not recognize gain or loss.

A U.S. holder’s tax basis in our common shares received upon the surrender of Series B Preferred Stock for conversion will equal such holder’s tax basis in its converted Series B Preferred Stock as of the time of the conversion.

A U.S. holder’s holding period in its common shares received upon conversion will generally include its holding period in respect of the converted Series B Preferred Stock.

Redemption of Series B Preferred Stock Solely for Cash

Our redemption of shares of our Series B Preferred Stock solely for cash, including pursuant to a U.S. holder’s election not to convert or exchange its shares or if a change of control occurs, will be a taxable event. A redemption of the Series B Preferred Stock for cash will be treated as a distribution taxable as a dividend to the redeeming holders to the extent of our current or accumulated earnings and profits unless:

 

•

the redemption is “not essentially equivalent to a dividend”;

 

•

the redemption results in a “complete termination” of the holder’s interest in our stock (both preferred and common); or

 

•

the redemption is “substantially disproportionate” with respect to the holder.

In determining whether or not any of the above requirements apply, shares considered to be owned by the holder of Series B Preferred Stock by reason of certain attribution rules described in the Code, as well as shares actually owned by such holder, must be taken into account. It may be more difficult for a holder that owns any of our common shares before or after the redemption, actually or constructively by operation of the attribution rules, to satisfy any of the above requirements. If the redemption satisfies any of these three tests, then it will be treated as a sale or exchange transaction that gives rise to capital gain or loss generally equal to the difference between the amount of cash received by the holder of Series B Preferred Stock and such holder’s tax basis in such redeemed preferred stock. This capital gain or loss will be long term if the holding period for the Series B Preferred Stock is more than one year. Deductions for capital losses may be subject to certain limitations.

If the redemption does not satisfy any of the three tests described above, then the entire amount received (i.e., without any offset for the holder’s tax basis in the redeemed Series B Preferred Stock) will be taxable as a distribution, which will generally be treated as a dividend to the extent paid out of our current or accumulated earnings and profits as of the end of the taxable year of the distribution. To the extent that a U.S. holder receives a distribution with respect to our Series B Preferred Stock that would have constituted a dividend had it not exceeded

 

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our current and accumulated earnings and profits, the distribution will first be treated as a non-taxable return of capital, which will reduce the holder’s tax basis in its shares of our Series B Preferred Stock and, thereafter, will be treated as capital gain. In case that the amount received is treated as a distribution, the U.S. holder’s tax basis in the redeemed Series B Preferred Stock will be allocated to such holder’s remaining stock in us, if any. If the holder does not retain any direct stock ownership in us, then such basis may be either lost completely or transferred to the basis of the shares of a related party that constructively caused the redemption not to result in a “complete termination” of such holder’s interest in us.

Series B Preferred Stock holders are urged to consult their own tax advisors as to the U.S. federal income tax consequences of a redemption of our Series B Preferred Stock.

Backup Withholding and Information Reporting

Certain non-exempt U.S. holders may be subject to information reporting in connection with payments that we make, including the proceeds from the sale, exchange, conversion, redemption or other disposition of the Series B Preferred Stock.

In addition, backup withholding may apply (currently at a rate of 28%), if the recipient of the payment (i) fails to supply a taxpayer identification number and other information, certified under penalties of perjury, (ii) fails to establish, in the manner prescribed by applicable law, an exemption from backup withholding, or (iii) otherwise fails to comply with the applicable backup withholding rules. Amounts withheld under backup withholding are allowable as a credit against the U.S. holder’s federal income tax upon furnishing the required information to the IRS.

Contingent Obligation to Pay Accrued Dividends

At the time of the conversion or redemption of Series B Preferred Stock, the U.S. Holder will receive our contingent obligation to pay any accrued but unpaid dividends. The obligation will be contingent upon regulatory approval. It is unclear when or if such approval would be given. The tax treatment of the receipt of this contingent obligation is unclear. It is likely that the accrued dividends will not be considered received until regulatory approval has been granted, in which case a Holder would recognize ordinary income only when the approval has been granted. Alternatively, however, it is possible that the creation of the contingent obligation could be considered to cause immediate receipt of the dividends, currently taxable as ordinary income to U.S. Holders; and a subsequent determination that the dividends could not be paid would result recognition of a tax loss upon the worthlessness of the obligation.

Series B Preferred Stock holders are urged to consult their own tax advisors as to the U.S. federal income tax consequences of the contingent obligation to pay accrued dividends.

 

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PLAN OF DISTRIBUTION

We have 172 shares of Series B Preferred Stock outstanding, the terms of which are described under the heading “Description of Capital Stock”. Separately and following the Public Offering, our articles of incorporation require us to offer holders of shares of our Series B Preferred Stock the opportunity to convert each share of our $25,000 stated value Series B Preferred Stock into shares of our common stock at a conversion price equal to the public offering price of each share of common stock in the Public Offering. Any shares of Series B Preferred Stock not converted will be redeemed at a redemption price of $25,000 per share following this offering. Company directors and executive officers hold approximately 80 shares of our outstanding shares of our outstanding Series B Preferred Stock (46% of the total number of outstanding shares of Series B Preferred Stock) and have indicated their intent to convert their shares of Series B Preferred Stock into shares of our common stock.

Based on the conversion price of $             per share of common stock, each share of Series B Preferred Stock may be converted into              shares of our common stock. The outstanding 172 shares of Series B Preferred Stock could, therefore, be converted into an aggregate of              shares in this offering, if all of the holders elect to convert their Series B Preferred Stock into shares of our common stock. We will not convert fractional shares of Series B Preferred Stock.

Holders not converting will receive the redemption value of $25,000 per share in cash.

The letter of transmittal contains detailed instructions on delivery of the completed, dated and signed letter of transmittal and the Series B Preferred Stock certificates.

If a holder of Series B Preferred Stock does not return a completed letter of transmittal and the holder’s Series B Preferred Stock certificate by                     , 2009, we will deem such holder to have declined that holder’s option to convert such shares of Series B Preferred Stock for our common stock. At that time, such holder will have only the right to receive the cash payment of the redemption value of the holder’s shares of Series B Preferred Stock. While such shares of the Series B Preferred Stock will be deemed to have been redeemed, payment will not be made, however, until and unless the holder of the Series B Preferred Stock returns a completed letter of transmittal and the holder’s Series B Preferred Stock certificate.

If a holder of Series B Preferred Stock chooses to convert shares of Preferred Stock, in lieu of any fractional share of our common stock, we will pay the holder or the person who otherwise would be entitled to receive a fractional share of our common stock an amount in cash equal to the fraction of a share of our common stock to which the holder would otherwise be entitled upon the conversion, multiplied by the offering price of common stock in the Public Offering.

Dividends on the Series B Preferred Stock will stop accruing on                     , 2009 and the Company expects to declare a final dividend payment on the Series B Preferred Stock immediately prior to the redemption and conversion of the Series B Preferred Stock. Payment of the final dividend will require regulatory approval and interest will not accrue on the unpaid dividend following redemption and conversion. There is no assurance that the Company will be permitted to make such dividend payments.

We will not be liable to any holder of Series B Preferred Stock for any amount properly delivered to a public official pursuant to applicable abandoned property, escheat or similar laws. If a Series B Preferred Stock certificate has been lost, stolen or destroyed, we will issue common stock in exchange or conversion therefor or pay the redemption value only upon receipt of a lost certificate affidavit and indemnity agreement.

All costs of distribution, which we estimate to be less than $5,000, shall be borne by us. We shall pay no compensation to any of our employees or officers involved in the distribution.

 

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LEGAL MATTERS

Certain legal matters relating to the common stock offered by this prospectus have been passed upon for us by Igler & Dougherty, P.A., Tallahassee, Florida.

 

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PART II—INFORMATION NOT REQUIRED IN PROSPECTUS

 

ITEM 13.

OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The following table sets forth the various expenses payable in connection with the sale and distribution of the securities being registered, other than underwriting discounts and commissions. All of such expenses will be paid by us. All of the amounts shown are estimates, except for the Securities and Exchange Commission registration fee.

 

Securities Exchange Commission registration fee		$	7,510.13
FINRA filing fee			13,959
Nasdaq listing fee			*
Accounting fees and expenses			200,000
Issuer’s legal fees and expenses			*
Underwriters’ legal fees and expenses			*
Blue sky fees and expenses			*
Printing and shipping			150,000
Transfer agent and registrar expenses			*
Miscellaneous			*
Total		$	*

 

*	To be completed by amendment.

 

ITEM 14.

INDEMNIFICATION OF DIRECTORS AND OFFICERS

Florida law permits, under certain circumstances, the indemnification of any person with respect to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, to which such person was or is a party or is threatened to be made a party, by reason of his or her being an officer, director, employee or agent of the corporation or is or was serving at the request of such corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against liability incurred in connection with such proceeding, including appeals thereof; provided, however, that the officer, director, employee or agent acted in good faith and in a manner that he or she reasonably believed to be in, or not opposed to, the best interests of the corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. The termination of any such third-party action by judgment, order, settlement, or conviction or upon a plea of nolo contendere or its equivalent does not, of itself, create a presumption that the person (i) did not act in good faith and in a manner which he or she reasonably believed to be in, or not opposed to, the best interests of the corporation or (ii) with respect to any criminal action or proceeding, had reasonable cause to believe that his or her conduct was unlawful.

In the case of proceedings by or in the right of the corporation, Florida law permits indemnification of any person by reason of the fact that such person is or was a director, officer, employee or agent of the corporation or is or was serving at the request of such corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against liability incurred in connection with such proceeding, including appeals thereof; provided, however, that the officer, director, employee or agent acted in good faith and in a manner that he or she reasonably believed to be in, or not opposed to, the best interests of the corporation, except that no indemnification is made where such person is adjudged liable, unless a court of competent jurisdiction determines that, despite the adjudication of liability but in view of all circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which such court shall deem proper.

To the extent that such person is successful on the merits or otherwise in defending against any such proceeding, Florida law provides that he or she shall be indemnified against expenses actually and reasonably incurred by him or her in connection therewith.

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an undertaking by or on behalf of such director or officer to repay such amount if he or she is ultimately found not to be entitled to indemnification by the corporation pursuant to this section. Expenses incurred by other employees and agents may be paid in advance upon such terms or conditions that the board of directors deems appropriate.

Article IX of Bank of Florida’s Bylaws provides that we shall indemnify our officers, directors, and employees, but not our agents unless specifically approved in writing by the board of directors, to the fullest extent authorized by Section 607.0850 of the Florida Business Corporation Act, or the FBCA, as it existed when the Bylaws were adopted or as it may hereafter be amended, but, in the case of any such amendment, only to the extent that such amendment permits us to provide broader indemnification rights than were permitted prior to such amendment. Such indemnification shall continue as to a person who has ceased to be a director, officer, employee, or agent; provided, however, that we shall indemnify any such person seeking indemnity in connection with an action, suit, or proceeding (or part thereof) initiated by such person only if such action, suit, or proceeding (or part thereof) was authorized by the our board of directors.

The Bylaws also provide that such rights of indemnification shall be a contract right and shall include the right to be paid by us for all reasonable expenses incurred in defending any such proceeding in advance of final disposition; provided, however, that the payment of such expenses incurred by a director or officer in his or her capacity as a director or officer in advance of the final disposition of such proceeding shall be made only upon delivery to us of an undertaking, by or on behalf of such director or officer, to repay amounts so advanced if it should be determined ultimately that such director or officer is not entitled to be indemnified under the Bylaws or otherwise.

Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended, may be permitted to our directors and officers, or to persons controlling us, pursuant to our Bylaws or Florida law, we have been informed that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

In addition to the authority granted to us by Florida law to indemnify our directors, certain other provisions of the Florida Act have the effect of further limiting the personal liability of our directors. Pursuant to Florida law, a director of a Florida corporation cannot be held personally liable for monetary damages to the corporation or any other person for any act or failure to act regarding corporate management or policy except in the case of certain qualifying breaches of the director’s duties.

We have purchased certain liability insurance for our officers and directors.

 

ITEM 15.

RECENT SALES OF UNREGISTERED SECURITIES

On June 29, July 2, and July 20, 2009, the Company sold and issued a total of 172 units (“Units”) at $25,000 per Unit, yielding $4,300,000 in proceeds, which were downstreamed to Bank of Florida’s subsidiary banks as capital. Each Unit consists of one share of Series B Preferred Stock (“Preferred Stock”) and one warrant to purchase shares of common stock (“Warrants”).

The Preferred Stock contained in the Units is cumulative, perpetual and nonvoting. Each share has a liquidation preference of $25,000 and pays a quarterly dividend of $625 per share. The shares are perpetual and nonvoting. Each share has a liquidation preference of $25,000 and pays a cumulative quarterly dividend of $625 per share. If we conduct any offering of any newly issued securities, such as the offering contemplated by this prospectus, the holders of shares of Series B Preferred Stock have the right to convert shares of Series B Preferred Stock into the newly issued securities following the closing of the offering. In each such case, each share of Series B Preferred Stock can be converted into such number of newly issued securities as can be purchased for $25,000 at the stated offering price for such newly offered securities. If we conduct an offering that results in proceeds of at least $30,000,000 prior to January 1, 2011 and a holder elects to not convert the holder’s shares in the offering, or if a change in control occurs, we will be obligated to redeem such shares at $25,000 per share. If such an offering is not completed by January 1, 2011, we shall have the right to redeem the shares of Series B Preferred Stock at any time thereafter for $25,000 per share.

 

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Each Warrant contained in the Units permits its holder to purchase 720, 742, or 772 shares of Bank of Florida common stock at $3.47, $3.37, or $3.24, respectively, per share at any time during the ten year period commencing on issuance. The Warrants are nontransferable.

The securities sold in the offering were sold to accredited investors only and issued in reliance upon exemptions from registration available under Rule 506 of Regulation D and Section 4(2) of the Securities Act of 1933, as amended, and are “restricted securities.” No underwriter or sales agent was utilized, and no commissions were paid or discounts granted, in the offering.

 

ITEM 16.

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

The following exhibits are filed with the Securities and Exchange Commission and are incorporated by reference into this Form S-1. The exhibits which are denominated by an (a.) were previously filed as a part of Form 10-K filed with the Securities and Exchange Commission on March 9, 2009. The exhibits which are denominated by a (b.) were previously filed as a part of Amendment No. 1 to Form SB-2, filed with the Securities and Exchange Commission on May 7, 1999. The exhibits which are denominated by a (c.) were previously filed as a part of Form 10-KSB filed with the Securities and Exchange Commission on March 30, 2000. The exhibits which are denominated by a (d.) were previously filed as a part of Form S-4 filed with the Securities and Exchange Commission on October 3, 2006. The exhibits which are denominated by an (e.) were previously filed as a part of Form 10-Q filed with the Securities and Exchange Commission on November 5, 2008. The exhibits which are denominated by an (f.) were previously filed as part of Form 10-QSB/A filed on September 10, 2002. The exhibits which are denominated by a (g.) were previously filed as part of Form 8-K filed on July 2, 2009. The exhibits which are denominated by an (h.) were previously filed as part of Form 8-K filed on October 19, 2009. The exhibits which are denominated by an (i.) were previously filed as part of a Registration Statement on Form SB-2 filed with the Securities and Exchange Commission on June 24, 2004, File No. 333-116833. The exhibits that are denominated by a (j.) were previously filed as part of Form 10-Q filed with the Securities and Exchange Commission on August 4, 2005. The exhibits that are denominated by a (k.) were previously filed as part of Form 10-Q filed with the Securities and Exchange Commission on November 3, 2005. The exhibits that are denominated by an (l.) were previously filed as part of Form 10-K filed with the Securities and Exchange Commission on March 5, 2008. The exhibits that are denominated by an (m.) were previously filed as part of Schedule DEF 14A filed with the Securities and Exchange Commission on April 21, 2006. The exhibits that are denominated by an (n.) were previously filed as part of Form 10-K filed with the Securities and Exchange Commission on March 8, 2007. The exhibits that are denominated by an (o.) were previously filed as part of Form 10-Q filed with the Securities and Exchange Commission on August 7, 2008. The exhibit denominated by a (p.) was previously filed as part of Form S-8 filed with the Securities and Exchange Commission on October 30, 2009. The exhibit numbers correspond to the exhibit numbers in the referenced document. The exhibit denominated by a (*) will be filed by amendment.

 

Exhibit Number		Description of Exhibit
*1.1		Form of Underwriting Agreement
j.3.1		Amended and Restated Articles of Incorporation
o.3.2		Third Amended and Restated Bylaws dated April 24, 2008
n.3.3		Article of Amendment to Restated Articles of Incorporation dated December 20, 2006
g.3.4		Articles of Amendment to Restated Articles of Incorporation dated June 26, 2009
h.3.5		Articles of Amendment to Restated Articles of Incorporation dated August 27, 2009
b.4.1		Specimen Common Stock Certificate
m.4.2		2006 Stock Compensation Plan
g.4.4		Specimen Series B Preferred Stock Certificate

 

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Exhibit Number		Description of Exhibit
i.4.5		Form of Stock Purchase Warrant A—2004 Offering
i.4.6		Form of Stock Purchase Warrant B—2004 Offering
g.4.7		Form of Stock Purchase Warrant—2009 Offering
5.1		Opinion of Igler & Dougherty, P.A.
k.10.1		Amended and Restated Employment Agreement of Michael L. McMullan dated February 1, 2005
a.10.2		Change in Control Agreement of Roy N. Hellwege effective January 1, 2009
a.10.3		Change in Control Agreement of Charles K. Cross effective January 1, 2009
c.10.4		1999 Stock Option Plan
c.10.5		Form of Incentive Stock Option Agreement
a.10.6		Deferred Compensation Plan of Bank of Florida dated November 19, 2008
a.10.7		Change in Control Agreement of Julie W. Husler effective January 1, 2009
f.10.8		Lease between Citizens Reserve, LLC and Citizens National Bank of Southwest Florida
a.10.9		Change in Control Agreement of Christopher Willman effective January 1, 2009
a.10.10		Change in Control Agreement of John B. James effective January 1, 2009
l.10.11		Change in Control Agreement of John S. Chaperon dated January 1, 2008
e.10.12		Change in Control Agreement of John Klumpp dated August 1, 2008
e.10.13		Change in Control Agreement of Wayne Gilmore dated August 1, 2008
a.10.14		Change in Control Agreement of Roberto Pelaez effective January 1, 2009
e.10.15		Change in Control Agreement of Charles Tipton dated August 1, 2008
l.10.16		Change in Control Agreement of Tracy L. Keegan dated January 1, 2008
a.10.17		Amendment to Amended and Restated Employment Agreement of Michael L. McMullan dated December 15, 2008
a.10.18		Deferred Compensation Agreement of Tracy L. Keegan dated December 21, 2008
a.10.19		Deferred Compensation Agreement of John S. Chaperon dated December 21, 2008
a.10.20		Deferred Compensation Agreement of Roy N. Hellwege dated December 21, 2008
p.10.21		401(k) Plan
o.21.1		Subsidiaries of the Registrant
23.1		Consent of Igler & Dougherty, P.A. (contained in Exhibit 5.1)
23.2		Consent of Hacker, Johnson & Smith, P.A.
99.1		Report of Promontory Financial Group, LLC

 

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ITEM 17.

UNDERTAKINGS

(a) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b) (1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.

(b) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

 

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Naples, State of Florida on November 2, 2009.

 

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following person in the capacities indicated on November 2, 2009.

 

Signature		Title		Date
* Donald R. Barber		Director		November 2, 2009
* Joe B. Cox		Director		November 2, 2009
* Bradford Douglas		Director		November 2, 2009
* John B. James		Director		November 2, 2009
* LaVonne Johnson		Director		November 2, 2009
* Edward Kaloust		Director		November 2, 2009
/S/    TRACY L. KEEGAN         Tracy L. Keegan		Executive Vice President, Chief Financial Officer, Principal Financial Officer, Principal Accounting Officer		November 2, 2009
/S/    MICHAEL L. MCMULLAN         Michael L. McMullan		Chief Executive Officer, President, Principal Executive Officer, Director		November 2, 2009
* Edward A. Morton		Director		November 2, 2009
* Pierce T. Neese		Director		November 2, 2009
* Michael T. Putziger		Director		November 2, 2009

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Signature		Title		Date
* Ramon A. Rodriguez		Director		November 2, 2009
* Terry W. Stiles		Director		November 2, 2009

 

*By:		/s/    MICHAEL L. MCMULLAN
		Michael L. McMullan Attorney-in-Fact