Earnings Per Share Rises 71% at Bank of Florida Corp

Business Wire, Oct 23, 2007

Loan Growth Continues at a Pace with Previous Quarters; Integration of Old Florida Acquisition Complete

NAPLES, Fla. -- Bank of Florida Corporation (Nasdaq:BOFL), a $1.3 billion-asset multi-bank holding company based in Naples, Florida, today reported net income of $1.6 million for third quarter 2007, up 133% over the same period last year. Earnings per diluted share were $0.12, a 71% increase over third quarter 2006 on approximately 3.5 million more in average shares outstanding. The increase in shares outstanding reflects the issuance of common shares for acquisitions in the past 14 months (Old Florida Bankshares, Inc. in April 2007 and Bristol Bank in August 2006).

For the first nine months of 2007, net income reached $3.7 million or $0.32 per diluted share, up 126% and 52%, respectively, over the same 2006 period. Compared to second quarter 2007, third quarter net income increased 30%, with diluted earnings per share rising $0.02 or 20%. Growth in top-line revenue (a non-GAAP measure which the Company defines as net interest income plus noninterest income, excluding net securities gains/losses) exceeded the growth in noninterest expense for both the third quarter as well as year-to-date, signifying continued positive operating leverage.

Michael L. McMullan, Bank of Florida Corporation's CEO and President, stated, "This was another quarter of significant accomplishments for Bank of Florida Corporation. We completed the integration of our recent $283 million-asset Old Florida acquisition into Bank of Florida-Southwest, including steps to consolidate our two operations centers, close a duplicate branch in Bonita Springs, and integrate four new branches into our business model for the delivery of premier financial services. Our Company-wide conversion to the Jack Henry `Silverlake' operating system was also completed this quarter, which has already allowed us to improve upon the product suite we offer our customers. We also expect improvement in fee income as well as in our operating costs, as the new system will allow us to reduce redundant and manual operational processes.

"The integration and conversion activities in the third quarter didn't slow us down, however. We continued with strong loan growth, increasing $46 million during the quarter bringing our total growth for the year to $167 million, excluding the impact of the Old Florida acquisition. With Old Florida, our loans have climbed 58% to over $1.2 billion since September 30, 2006. The historically excellent asset quality in our legacy markets (Southeast Florida, Collier County, and Tampa Bay) has held strong during this period, while we continue to monitor our entire portfolio with an enhanced credit review function serving all of our markets. We did see a slight increase in total nonperforming loans during the third quarter; however, this increase was primarily related to the loans at Old Florida that we had identified prior to the close of that acquisition, and we believe that there will be no financial impact related to these loans. Additionally, in keeping with our business model, we do not have any exposure whatsoever in the Sub Prime market."

McMullan concluded, "We are proud of our ability to have continued our loan and earning growth trends, along with maintaining strong credit quality, during this period while many of our competitors are experiencing declines in each of these areas. We have an incredible team here at Bank of Florida who have spent many hours to contribute to this achievement and to position our Company for continued momentum. It is a challenging time for financial institutions, but we feel our focused efforts have protected us from some of the challenges our competitors are currently experiencing. On those things that we can control, such as the markets we are in and the customers we serve, we are right on track. We have seen compression in our margin beyond what we anticipated, and expect for that to continue into 2009, but believe it's a fair price to pay for our approach to managing risk in our loan portfolio by targeting customers with strong credit histories, balance sheets, and cash flow coverage."

Specific performance factors for third quarter 2007 are below.

* Loans totaled $1.2 billion at September 30, 2007, increasing $46 million during the third quarter, with nearly half this growth in the Tampa Bay bank. Permanent commercial real estate loans climbed by $70 million ($36 million related to office buildings), residential mortgages rose by $15 million, and commercial and industrial loans increased by $10 million. This growth was partially offset by $31 million less in construction loans outstanding along with lower raw land and development loans and reduced consumer loans; former Old Florida loans comprised $11 million of the reductions in these categories. Excluding Old Florida, which had a net loan reduction of $7 million during the quarter, the Company's loans increased $53 million, compared to the record growth set in the second quarter of $66 million and increases of $48 million and $55 million in first quarter 2007 and fourth quarter 2006, respectively. Over the past 12 months, the loan portfolio has increased $422 million or 58%; excluding the Old Florida acquisition, growth has been $222 million or 30%. As of quarter end, 42% of the Company's loans adjust within 90 days to a change in the prime rate or LIBOR, down from 49% ninety days earlier largely due to construction loan paydowns.