OFFERING CIRCULAR GREAT FLORIDA BANK 50,000 Shares of Class A Preferred Stock

Great Florida Bank (“Bank”) is offering up to 50,000 shares of Class A Preferred Stock (“Preferred Stock” and “preferred stock”). The minimum number of shares that may be purchased by each investor is 10 shares ($10,000). The preferred stock may at any time and from time to time, be converted until December 31, 2012 into Class A and Class B common stock based on the offering price of $1,000 per share divided by 75% of the per share book value of the common stock (i.e., total shareholders’ equity (less the then current liquidation value of the preferred stock) divided by the outstanding shares of common stock) as reported in the Bank’s consolidated financial statements as of the end of the calendar quarter prior to conversion. The proportion of common stock will be 90% Class A common stock and 10% Class B common stock, rounded up to the nearest whole share of common stock. All outstanding shares of preferred stock automatically convert to Class A common stock and Class B common stock on January 1, 2013 if not previously converted, and in accordance with the conversion price above. The shares of preferred stock will automatically convert earlier into shares of Class A common stock and Class B common stock upon a change in control of the Bank. For additional information regarding the terms of the preferred stock, see “Description of Capital Stock.” We are authorized to issue Class A common stock and Class B common stock. The Class A common stock does not have any voting rights, and the Class B common stock has one vote per share. There is presently no public trading market for our shares of Class A common stock or Class B common stock. Investing in our preferred stock involves risks. See “Risk Factors” beginning on page 10. The shares of preferred stock are not deposits and are not insured by the FDIC or any other agency, and are subject to investment risk, including the possible loss of investment. The shares of preferred stock are subordinate to the claims of depositors and other creditors. These securities have not been approved or disapproved by the Federal Deposit Insurance Corporation, the Securities and Exchange Commission, any state securities commission, the Florida Office of Financial Regulation, or any other state or governmental agency, nor have they determined if this offering circular is truthful or complete. Any representation to the contrary is a criminal offense. Per Share Total Public offering price $1,000 $50,000,000 Sales commissions (1) $ -0$ -0Proceeds to us, before expenses (1) $1,000 $50,000,000 _______________________ (1) We are offering these shares of preferred stock on a “best efforts” basis through our executive officers and directors, who will receive no commissions on account of such sales effort but will be reimbursed by the Bank for reasonable selling expenses incurred. The Bank reserves the right to hire additional sales agents at its discretion for agreed upon commission and expense payments. No minimum number of shares is required to be sold. The date of this offering circular is August 17, 2010

_____________________ Table of Contents Page SUMMARY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 SELECTED FINANCIAL DATA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 RISK FACTORS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 SPECIAL CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS. . . . . . . . . 16 USE OF PROCEEDS.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 THE OFFERING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 CAPITALIZATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 STOCKHOLDER MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 BUSINESS.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 MANAGEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 MANAGEMENT’S COMMON STOCK OWNERSHIP. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 SUPERVISION AND REGULATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 DESCRIPTION OF CAPITAL STOCK. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 SHARES ELIGIBLE FOR FUTURE SALE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57 WHERE YOU MAY FIND ADDITIONAL INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 ________________________ Forward-Looking Statements Except for purely historical information, the statements in this offering circular are forward-looking statements and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Readers are cautioned that these forward-looking statements are inherently subjective and reflect numerous assumptions, known and unknown risks, uncertainties and other factors that may affect our business and prospects and cause our actual results, performance or achievements to differ materially from those expressed or implied by the forward-looking statements. These factors are difficult or impossible to predict accurately, and many of them are outside of our control. These factors include: the timely receipt of required governmental approvals for various aspects of our business; market demand for and acceptance of our loan and deposit products; actions of our existing and any new competitors; the impact of competitive products and pricing; the adequacy of our loan loss allowance; economic conditions; government monetary policy; acts of war or terrorism; and other factors. Certain risks are described under Risk Factors beginning on page 10. Our forward-looking statements are made as of the date of this offering circular, and except as may be required by law, we undertake no obligation to update our forward-looking statements as a result of any future events or developments.

ii

SUMMARY A brief summary of certain portions of this offering circular is contained in this section. It does not contain all the information you may wish to consider before making an investment decision, and we urge you to read the entire offering circular before making your decision, including Risk Factors beginning on page 10 and our consolidated financial statements and the notes to those statements. GREAT FLORIDA BANK 15050 N.W. 79th Court, Suite 200 Miami Lakes, Florida 33016 (305) 514-6900

T HE O FFERING Shares Offered - We are offering up to 50,000 shares of preferred stock. The Bank may increase this offering by an additional 50,000 shares of preferred stock.

We opened for business as a Floridachartered commercial bank on June 30, 2004. At March 31, 2010 we had twenty-eight full-service banking offices, total assets of $1.8 billion, deposits of $1.4 billion, net loans of $1.2 billion, and stockholders’ equity of $103.9 million.

Price - $1,000 per share. Expiration Dates - This offering will end on November 29, 2010 (or earlier at the discretion of the Bank, subject to one or more extensions by us, without notice, for up to 180 additional days). The time during which this offering is to occur is the “offering period.”

W e are a community bank, focused on meeting the financial services needs of the communities generally located in Miami-Dade, Broward and Palm Beach Counties, Florida and surrounding areas.

Offering Minimum - There is no minimum number of shares that we must sell in this offering.

M ANAGEMENT Purchase Minimum - The minimum required purchase is 10 shares ($10,000).

Our management team includes M. Mehdi Ghomeshi (Chief Executive Officer and President), Gary J. Laurash (Chief Financial Officer) and Luis L. Moncada (Chief Credit Officer). Among them they have more than 90 years of banking experience.

Purchase Limitation - The maximum number of shares any person (together with affiliates and related interests) may own or control is subject to our sole discretion. Each prospective purchaser also is responsible for complying with applicable banking laws and regulations in connection with their purchase.

The seven members of our Board of D irectors co m e fro m d iv erse b u sin ess backgrounds, and are long time residents of their respective communities.

Offering Plan - This offering is being made on a “best efforts” basis through our executive officers and directors. Our executive officers and directors will not be compensated for their efforts, but will be reimbursed for reasonable out-of-pocket expenses. The Bank reserves the right to hire additional sales agents at its discretion for agreed upon commission and expense payments.

All of our directors are involved in various professional and community activities, where they have provided innovation and leadership as socially involved citizens.

Return of Subscription Agreement and Funds Persons who desire to purchase shares must properly complete the accompanying Subscription 1

Agreement, and mail or deliver it to us not later than the appropriate expiration date, along with full payment for the shares to be purchased in the form of a check payable to:

R ISK F ACTORS Certain risk factors connected with an investment in the common stock, including certain factors mentioned in this “Summary” section of this offering circular, are described beginning on page 10 of this offering circular.

“Great Florida Bank” as follows: Great Florida Bank Attn: Gary J. Laurash Chief Financial Officer 15050 N.W. 79th Court, Suite 200 Miami Lakes, Florida 33016 No Revocation - Accepted subscriptions are not withdrawable or revocable. D ETERMINATION OF C ONVERSION P RICE We determined the conversion price of the shares offered in this offering. In determining the conversion price for the preferred stock, we assessed many historical and prospective factors. See “The Offering – Determination of Conversion Price.” M ARKET FOR S TOCK There is no trading market for our Class A common stock or Class B common stock and there is no assurance that an active trading market will develop following this offering for our Class A or Class B common stock or the shares of preferred stock. U SE OF P ROCEEDS The net proceeds of this offering will be used for general corporate purposes, including increasing the capital of the Bank. The Bank has agreed with the bank regulatory agencies to maintain a minimum Tier 1 leverage capital ratio of at least 8% and a total risk-based capital ratio of at least 12%. The Board of Directors believes that the increased capital will be of assistance to the Bank as it continues to operate in a challenging economic environment that has resulted in a deterioration in asset quality.

2

SELECTED FINANCIAL DATA The following table presents selected consolidated financial information and other financial data for the Bank. The data for the three months ended March 31, 2010 are derived from unaudited consolidated financial statements of the Bank and are not necessarily indicative of the results that might be expected for any future calendar quarter or the year ended December 31, 2010. The data for the fiscal years 2005 through 2009, are derived from audited consolidated financial statements of the Bank. The selected financial data should be read in conjunction with, and are qualified in their entirety by, the Consolidated Financial Statements and the Notes thereto and the other information included elsewhere herein. Unaudited As of and for the Three Months Ended March 31, (dollars in thousands except per share data) Interest income Interest expense Net interest income before provision for loan losses Provision for loan losses Net interest income (loss) after provision Noninterest income Noninterest expenses Income (loss) before income tax provision (benefit) Income tax provision (benefit) Net income (loss) Per share data: Basic earnings (loss) per share Book value at end of period Common shares outstanding at end of period Total assets at end of period Cash and cash equivalents Investment securities Loans, net Deposits Borrowings Stockholders’ equity Total loans before allowance for loan losses Allowance for loan losses Nonperforming loans (1) Allowance for loan losses as a percentage of period-end total loans Allowance for loan losses as a percentage of nonperforming loans Total nonperforming loans as a percentage of total loans Total nonperforming loans as a percentage of total assets Total nonperforming loans and real estate owned as a percentage of total assets

(1)

At or For the Years Ended December 31

2010

2009

2008

2007

2006

2005

17,763 9,738

77,811 45,887

97,899 55,199

99,959 55,640

78,400 35,904

29,873 10,522

8,025 5,226 2,799 911 11,240

31,924 47,116 (15,192) 21,710 43,950

42,700 33,764 8,936 2,239 36,589

44,319 3,854 40,465 1,977 41,115

42,496 9,224 33,272 1,349 31,155

19,351 7,967 11,384 391 15,164

(7,530) (119) (7,411)

(37,432) 9,347 (46,779)

(25,414) (6,185) (19,229)

1,327 468 859

3,466 (2,618) 6,084

(3,389) – (3,389)

(0.57) 7.93 13,112,500 1,772,918 150,499 381,602 1,158,541 1,356,579 301,871 103,922 1,192,260 33,719 138,224

(3.57) 8.29 13,112,500 1,772,181 116,287 386,118 1,187,737 1,350,029 304,720 108,663 1,223,397 35,660 149,094

(1.47) 12.07 13,112,500 1,843,867 23,140 486,455 1,282,857 1,353,160 307,396 158,274 1,319,225 36,368 107,295

0.07 13.15 13,112,500 1,809,365 246,626 250,095 1,254,670 993,371 636,005 172,448 1,276,457 21,787 21,481

0.47 12.86 13,112,500 1,535,981 290,563 58,706 1,144,722 998,451 359,856 168,625 1,164,863 20,141 9,913

(0.47) 12.28 12,812,500 1,006,150 224,562 38,792 718,276 540,463 303,289 157,364 729,901 11,625 2,013

2.83%

2.91%

2.76%

1.71%

1.73%

1.59%

24.39%

23.92%

33.90%

101.42%

203.18%

577.50%

11.59%

12.19%

8.13%

1.68%

0.85%

0.28%

7.80%

8.41%

5.82%

1.19%

0.65%

0.20%

8.48%

8.96%

5.86%

1.19%

0.65%

0.20%

Nonperforming loans consist of non-accrual loans and accruing loans contractually past due ninety days or more.

3

MANAGEMENT’S DISCUSSION & ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS General The Bank is a Florida state-chartered commercial bank with deposits that are insured by the FDIC. We opened for business on June 29, 2004, and provide a variety of community banking services to businesses and individuals in Miami-Dade, Broward and Palm Beach counties in Florida. We have adopted a fiscal year ending December 31. At March 31, 2010, we operated 28 solution centers and had total assets of $1.8 billion and total stockholders’ equity of $103.9 million. Managem ent Strategy The Bank seeks to provide solutions to its customer’s financial needs through its innovative banking centers and through a customer service concept that gives each customer one Bank associate to manage all of their account relationships. The Bank has a professional and knowledgeable staff with vast experience in the south Florida market. The Bank’s customer deposit base has grown to $1.4 billion and its loan portfolio reached $1.2 billion during its six years of operation. Results of Operations The Bank’s operating results depend primarily on its net interest income, which is the difference between interest income on interest earning assets and interest expense on interest bearing liabilities, consisting primarily of deposits. Net interest income is determined by the difference between yields earned on interest-earning assets and rates paid on interest bearing liabilities (“interest-rate spread”) and the relative amounts of interest earning assets and interest bearing liabilities. Our interest-rate spread is affected by regulatory, economic, and competitive factors that influence interest rates, loan demand, and deposit flows. In addition, our net earnings are also affected by the level of nonperforming loans and foreclosed real estate, as well as the level of noninterest income, and noninterest expense, such as salaries and employee benefits, occupancy and equipment costs, and income taxes. Comparison of the three m onths ended March 31, 2010 to the three m onths ended March 31, 2009 Results of operations: The Bank reported net loss for the quarter ended March 31, 2010 of $7.4 million compared to net loss for the quarter ended March 31, 2009 of $11.4 million. The basic and diluted loss per share were ($0.57) for the first quarter of 2010 compared to basic and diluted earnings per share of ($0.87) for the first quarter 2009. The annualized return on average assets (“ROA”) was (1.66%) for the quarter ended March 31, 2010, as compared to the annualized ROA for the quarter ended March 31, 2009 of (2.54%). The annualized return on average equity (“ROE”) was (26.88%) for the quarter ended March 31, 2010. The annualized ROE for the quarter ended March 31, 2009 was (28.38%). Net Interest Income: Net interest income, the principal source of the Bank’s earnings, is the amount of income generated by interest-earning assets reduced by the total cost of interest-bearing liabilities. For the first quarter of 2010, net interest income before provision for loan losses was $8.0 million, a 20.2% increase from the $6.7 million of net interest income before provision for loan losses recognized for the first quarter of 2009. The net interest margin for the first quarter of 2010 was 2.00% as compared to the 4

net interest margin for the first quarter of 2009 of 1.63%, an increase of 37 basis points. Causes for the increase in net interest margin are discussed in below. Interest income was $17.8 million for the first quarter of 2010 compared to $20.1 million for the first quarter of 2009, a decrease of $2.4 million or 11.8%. This decrease in the March 31, 2010 quarter was due to lower average rates on loans and loss of income from nonperforming loans. The yield on average earning loans increased from 4.90% for the first quarter of 2009 to 5.18% for the first quarter of 2010, an increase of 28 basis points. The total yield on average earning assets decreased from 4.93% for the first quarter of 2009 to 4.42% for the first quarter of 2010, a decrease of 51 basis points. This decrease was primarily the result of a reduction in the yield of the investment portfolio of 128 basis points due to the sale and reinvestment of the available for sale securities throughout 2009, a $38.5 million reduction in the security portfolio, and a decrease in the performing loan portfolio of $119 million. Interest expense for the quarter ended March 31, 2010 was $9.7 million compared to $13.5 million for the first quarter of 2009, a decrease of $3.8 million or 27.6%. Average interest bearing liabilities for the first quarter of 2010 was $1.6 billion comparable with the $1.5 billion for the first quarter of 2009, an increase of $45.1 million or 2.9%. The average rate paid on interest bearing liabilities decreased to 2.44% for the first quarter of 2010 from 3.47% for the first quarter of 2009 a decrease of 103 basis points. The reduction in interest rates paid on interest bearing liabilities was a result of time deposits repricing at lower rates during the preceding quarters and the Bank’s ability to further reduce interest rates paid on it’s core customers’ interest bearing demand deposits due to an overall decrease in the local market interest rates paid by competitors. Provision for loan losses: The provision for loan losses is charged to operations to bring the total allowance for loan losses to a level deemed appropriate by management and is based upon the experience of management, the volume and type of lending conducted by the Bank, industry standards, the amount of nonperforming loans, general economic conditions, particularly as they relate to the Bank’s market areas, and other factors related to the estimated collectability of the Bank’s loan portfolio. The provision for loan losses for the three months ended March 31, 2010 was $5.2 million compared to $19.0 million for the three months ended March 31, 2009. This decrease is a direct result of the decrease in nonaccrual loans which totaled $138.2 million at March 31, 2010 compared to $152.1 million at March 31, 2009, the decrease in net loan charge-offs which totaled $7.2 million for the quarter ended March 31, 2010 compared to $18 million for the quarter ended March 31, 2009, as well as the result of management’s assessment of market conditions and their effect on credit experience of the Bank, as further described in the discussion of the loan loss reserve. At March 31, 2010, the loan loss reserve as a percentage of the loan portfolio was 2.83% compared to 2.82% at March 31, 2009. In assessing the adequacy of reserves for loan losses, management relies not only on historical loss experiences but also on consistent review and analysis of the loan portfolio in order to detect potential problem loans as early as possible The portfolio review and analysis includes among other factors ongoing review of deviations from original loan terms/conditions, concentration analysis, changes in borrower’s financial condition, and the effect of a reduction in market values on real estate secured loans. The loan loss reserve also contains specific reserves for loans that are deemed to be impaired. On a quarterly basis management assesses the collateral value of certain nonperforming loans. If the impairment is determined to be temporary then a specific reserve is placed against the loans. If the impairment is determined to be permanent then the loan is reduced to current value and no specific reserve is maintained on the loan.

5

At March 31, 2010, the allowance for loan losses contained $11.5 million in specific reserves and the amount of charge-offs taken against existing non-performing loans since they became non-accrual totaled $37.5 million. In addition, management also performs a quarterly economic and market analysis to assist in determining the proper level of reserves at quarter end. The purpose of the allowance for loan losses is to provide for potential losses inherent in the loan portfolio. The allowance is an estimate and although management believes that the balance in the allowance for loan losses of $33.7 million at March 31, 2010 was adequate, the losses the Bank may ultimately incur could differ materially from the amounts assumed in arriving at the allowance for loan losses. Noninterest incom e: Noninterest income for the first quarter of 2010 was $911 thousand compared to $9.1 million for the third quarter of 2009, a decrease of $8.2 million. During the quarter ended March 31, 2009, noninterest income included the gain on sale of investment securities of $8.4 million. This gain was the result of selling mortgage-backed securities which management determined had a high probability of rapid repayment in the current low interest rate environment. No sales of investments took place in the quarter ended March 31, 2010. The Bank continued its strategy of originating and selling conforming residential loans, resulting in a gain of $181 thousand during the quarter ended March 31, 2010 as compared to $167 thousand during the quarter ended March 31, 2009. The remaining noninterest income consisted, mainly, of service charges and fees related to deposit accounts and certain fees on loan accounts. Noninterest expense: Noninterest expense for the first quarter 2010 was $11.2 million compared to $10 million for the first quarter 2009, an increase of $1.2 million or 12%. Below are sections which had the largest decreases as compared to March 31, 2009. FDIC assessments were $1.1 million for the three months ended March 31, 2010 compared to $687 thousand for the three months ended March 31, 2009, an increase of $433 thousand or 63%. The FDIC’s deposit insurance premium is derived from the Bank’s total outstanding deposits. The Bank’s assessment for the first quarter of 2010 is 0.32% compared with 0.17% for the three months ending March 31, 2009. The assessment rate charged by the FDIC has been increasing since the latter part of 2008. This rate increase has substantially increased the amount of assessment paid by the Bank for FDIC insurance. It is anticipated that future assessments will be increased due to the current economic distress in financial institutions, FDIC involvement in those institutions, and changes in FDIC deposits assessments rates that are currently being imposed by the FDIC. Other real estate owned for the three months ended March 31, 2010 was $1.2 million compared to $55 thousand for the three months ended March 31, 2009. The majority of the $1.2 million was due to the recognition of decreased values totaling $828 thousand on properties held by the Bank. Cost to maintain these properties totaled $165 thousand. The remaining $237 thousand were net losses on the disposition of other real estate owned. Comparison of the year ended Decem ber 31, 2009 to the year ended Decem ber 31, 2008. General. Net loss for the year ended December 31, 2009 was ($46.8) million compared to net loss of ($19.2) million for the year ended December 31, 2008.

6

Interest Incom e. Interest income was $77.8 million for the year ended December 31, 2009 compared to $97.9 million for the year ended December 31, 2008. Interest income earned on loans totaled $58.7 million for the year ended December 31, 2009 compared to $76.9 million for the year ended December 31, 2008, a decrease of $18.2 million. This decrease was driven by a decrease in interest rates on the Bank’s variable rate loans especially in the fourth quarter of 2008 as the Federal Reserve aggressively lowered rates and the increase in non-performing loans. The weighted average yield of the loan portfolio fell to 5.11% in 2009 compared to 6.18% in 2008. Interest on securities and other interest earning assets totaled $19.1 million for the year ended December 31, 2009 compared to $21.0 million for the year ended December 31, 2008. The decrease is due to an increase in the average balance of the securities portfolio, which was $399.8 million during 2009 and $367.3 million during 2008, offset by a decrease in the weighted-average yield on the investment portfolio, which was 4.76% during 2009 compared to 5.50% during 2008. Interest Expense. Interest expense totaled $45.9 million for the year ended December 31, 2009 compared to $55.2 million for the year ended December 31, 2008, a decrease of $9.3 million. Interest expense on deposits was $32.4 million for the year ended December 31, 2009 compared to $39.9 million for the year ended December 31, 2008. Average interest-bearing deposits totaled $1.2 billion during 2009 compared to $1.1 billion during 2008, an increase of $146.4 million. Additionally, the weighted average rate paid on deposits fell from 3.78% during 2008 to 2.70% in 2009, a decrease of 108 basis points. Interest on borrowings totaled $13.5 million for the year ended December 31, 2009 compared to $15.3 million for the year ended December 31, 2008, a decrease of $1.8 million. Average borrowings were $341.1 million during 2009 compared to $400.4 million during 2008 and the weighted average rates paid were 3.96% during 2009 compared to 3.83% during 2008. Provision for Loan Losses. The provision for loan losses is charged to earnings to increase the total allowance to a level deemed appropriate by us and is based upon the volume and type of lending, industry standards, the amount of nonperforming loans and total charge-offs and general economic conditions, particularly as they relate to our market area, and other factors related to the potential losses inherent in the portfolio. The provision for loan losses was $47.1 million for the year ended December 31, 2009 compared to $33.8 million for the year ended December 31, 2008. The increase in the provision for 2009 was primarily attributable to net loan charge-offs of $47.8 million and an increase in the level of required reserves of $47.1 million due to the increase in the credit loss estimate of the loan portfolio. The allowance for loans losses was $35.7 million, or 2.91% of total loans, at December 31, 2009, compared to $36.4 million, or 2.76% of total loans, at December 31, 2008. Noninterest Incom e. Noninterest income was $21.7 million for the year ended December 31, 2009 compared to $2.2 million for the year ended 2008, an increase of $19.5 million. During 2009, the Bank sold investment securities and recognized a gain on the sale of $17.6 million. Service fees on loans and deposits totaled $2.0 million in 2009 compared to $1.6 million for the year ended 2008. The Bank recognized $1.3 million in gains on sale of loans in 2009 compared to $148 thousand in 2008 which included the commencement of our Residential Lending Division in July 2008. Other income increased to $861 thousand for 2009 as compared to $463 thousand for the year ended December 31, 2008 due mainly to rental revenue from subleases and rents collected on our owned office building property, totaling $441 thousand. Noninterest Expense. Noninterest expense totaled $44.0 million for the year ended December 31, 2009 compared to $36.6 million for year ended December 31, 2008. Below are sections which had the largest increases as compared to December 31, 2008.

7

Occupancy and depreciation expense totaled $9.9 million for the year ended December 31, 2009 compared to $8.7 million for the year ended December 31, 2008, an increase of $1.2 million. The increase in occupancy and depreciation was mainly attributable to the opening of seven Solution Centers during the second and third quarters of 2008 after receipt of regulatory approval. Two of these new Solution Centers were our first in Palm Beach county, increasing our current footprint to three, south Florida counties. Also increasing the occupancy expense and depreciation are the expenses relating to acquisition during the third quarter of 2009 of an office building through foreclosure which the Bank recognized as a fixed asset. At December 31, 2009, we had a total of 28 solution centers opened in the Florida counties of Miami-Dade, Broward and Palm Beach. Professional fees totaled $2.9 million for the year ended December 31, 2009 compared to $1.8 million for the year ended December 31, 2008, an increase of $1.1 million. This increase for 2009 was the result of the Bank engaging independent, highly specialized, consultants to assist the Bank in its efforts to work out large real estate loans, the Bank paid $547 thousand for their services. The Bank has also increased its legal expense due to the necessary legal representation required in working through the foreclosure process. The Bank is fully committed to working through these loans and is directing as many resources as necessary to reduce its nonperforming loans. Regulatory mandated assessments totaled $3.7 million for the year ended December 31, 2009 compared to $1.2 million for the year ended December 31, 2008, an increasing of $2.5 million. The FDIC’s deposit insurance premium is derived from the total outstanding deposits. The assessment rate charged by the FDIC has been increasing since the latter part of 2008. This rate increase has substantially increased the amount of assessment paid by the Bank for FDIC insurance. During 2009 the FDIC imposed a special assessment, of which the bank paid over $800 thousand. It is anticipated that future assessments will be increased due to the current economic distress in financial institutions, FDIC involvement in those institutions, and changes in FDIC deposits assessments rates that are currently being imposed by the FDIC. See Item 1 Business - Supervision and Regulation for a further discussion of the FDIC assessment. Loan workout expense totaled $2.4 million for the year ended December 31, 2009 as compared to $24 thousand for December 31, 2008. This increase is mainly due to the cost incurred by the Bank in the workout of three large relationships. The first was a $28 million nonperforming commercial real estate loan. The Bank acquired title to the collateral, a commercial office building, on September 30, 2009 through a bankruptcy court approved sale. As part of the court approved transactions the Bank was required to pay $577 thousand in delinquent real estate taxes, $400 thousand to junior lien holders and $277 thousand in legal and other closing expenses. The second relationship was a $3.8 million commercial building in which the Bank ultimately took possession and currently holds as other real estate owned and had expended $198 thousand related to this workout. The third relationship was a residential condo building in which the Bank expensed $593 thousand. The remaining $305 thousand are workout cost on other loans. The Bank does not foresee this amount being indicative of future loan workout cost and should not be used as a gauge of future loan workout costs. Other real estate owned for the period ending December 31, 2009 was $2.3 million as compared to $60 thousand for December 31, 2008. The majority of the $2.3 million was due to the recognition of decreased values totaling $1.7 million on properties held by the Bank. The cost to maintain these properties, net of rental income received, totaled $273 thousand. The remaining $364 thousand were net losses on the disposition of other real estate owned.

8

Comparison of the year ended Decem ber 31, 2008 to the year ended Decem ber 31, 2007. General. Net loss for the year ended December 31, 2008 was ($19.2) million compared to net income of $859 thousand for the year ended December 31, 2007. Interest Incom e. Interest income was $97.9 million for the year ended December 31, 2008 compared to $100.0 million for the year ended December 31, 2007. Interest income earned on loans totaled $76.9 for the year ended December 31, 2008 compared to $89.3 million for the year ended December 31, 2007, a decrease of $12.4 million. This decrease was driven by a decrease in interest rates on the Bank’s variable rate loans especially in the third and fourth quarters of 2008 as the Federal Reserve aggressively lowered rates. The weighted average yield of the loan portfolio fell to 6.18% in 2008 compared to 7.52% in 2007. Interest on securities and other interest earning assets totaled $21.0 million for the year ended December 31, 2008 compared to $10.6 million for the year ended December 31, 2007. The increase is due to an increase in the average balance of the securities portfolio, which was $367.3 million during 2008 and $167.4 million during 2007, offset by a decrease in the weighted-average yield on the investment portfolio, which was 5.50% during 2008 compared to 5.61% during 2007. Interest Expense. Interest expense totaled $55.2 million for the year ended December 31, 2008 compared to $55.6 million for the year ended December 31, 2007, a decrease of $441 thousand. Interest expense on deposits was $39.9 million for the year ended December 31, 2008 compared to $43.7 million for the year ended December 31, 2007. Average interest-bearing deposits totaled $1.1 billion during 2008 compared to $880.3 million during 2007, an increase of $174.5 million. Additionally, the weighted average rate paid on deposits fell from 4.96% during 2007 to 3.78% in 2008, a decrease of 118 basis points. Interest on borrowings totaled $15.3 million for the year ended December 31, 2008 compared to $12.0 million for the year ended December 31, 2007, an increase of $3.4 million. Average borrowings were $400.4 million during 2008 compared to $262.4 million during 2007 and the weighted average rates paid were 3.83% during 2008 compared to 4.56% during 2007. Provision for Loan Losses. The provision for loan losses is charged to earnings to increase the total allowance to a level deemed appropriate by us and is based upon the volume and type of lending, industry standards, the amount of nonperforming loans and total charge-offs and general economic conditions, particularly as they relate to our market area, and other factors related to the potential losses inherent in the portfolio. The provision for loan losses was $33.8 million for the year ended December 31, 2008 compared to $3.9 million for the year ended December 31, 2007. The increase in the provision for 2008 was primarily attributable to net loan charge-offs of $19.2 million and an increase in the level of required reserves of $14.6 million due to the increase in the credit loss estimate of the loan portfolio. The allowance for loans losses was $36.4 million, or 2.76% of total loans, at December 31, 2008, compared to $21.8 million, or 1.71% of total loans, at December 31, 2007. Noninterest Incom e. Noninterest income was $2.2 million for the year ended December 31, 2008 compared to $2.0 million for the year ended 2007 of which service fees on loans and deposits totaled $1.6 million in 2008, the same as in 2007. The Bank recognized $148 thousand in gains on sale of loans in 2008 attributable to the startup of our Residential Lending Division. No loans sales took place in 2007. Other income increased to $463 thousand for 2008 as compared to $336 thousand for the year ended December 31, 2007. Noninterest Expense. Noninterest expense totaled $36.6 million for the year ended December 31, 2008 compared to $41.1 million for year ended December 31, 2007. Below are sections which had the largest decreases as compared to December 31, 2007. 9

Professional fees totaled $1.8 million for the year ended December 31, 2008 compared to $5.1 million for the year ended December 31, 2007, a decrease of $3.3 million. This decrease is a direct result of eliminating the need for third party vendors whose fees incurred during 2007 were to assist the Bank in establishing full compliance with the requirements of the Order issued by the FDIC in November 2006. The Bank recognized an income tax benefit of $6.2 million for the year ended December 31, 2008, compared to a $468 thousand income tax expense for the year ended December 31, 2007. In 2008, due to the uncertain nature of the ultimate realization of the net deferred tax asset, the Bank established a partial valuation allowance of $3.1 million. This valuation allowance was recognized as income tax expense, reducing the ending income tax benefit in 2008 to $6.2 million. RISK FACTORS This section describes the potential risks of an investment in the shares, and should be carefully considered, along with all of the other information in this offering circular before making an investment decision. See also, “Forward-Looking Statements.” The value of the shares could decline due to any of these or other risks, and investors in shares of our common stock and preferred stock may lose part or all of their investment. The order of the items presented below is not intended to indicate the relative importance of any particular risk factor. Investm ent not insured Prospective investors should be aware that an investment in the preferred stock is not a deposit and is not insured by the FDIC or any other governmental agency. We are subject to a regulatory order We have entered into a regulatory order with the bank regulatory agencies which govern certain aspects of our operations. See “Business – Regulatory Order.” Recent developm ents in the financial services industry and the U.S. and global capital m arkets m ay adversely impact our operations and results. Developments in the last two years in the capital markets have resulted in uncertainty in the financial markets in general, with the expectation of the general economic downturn continuing in 2010 and beyond. Loan portfolio performance has deteriorated at many institutions resulting from, among other factors, a weak economy and a decline in the value of collateral. The competition for our deposits has increased significantly due to liquidity concerns at many of these same institutions. Stock prices of banks like ours, have been negatively affected by the current condition of the financial markets, as has our ability, if needed, to raise capital or borrow in the debt markets, compared to prior years. As a result, there is a potential for new federal or state laws and regulations regarding lending and funding practices and capital and liquidity standards, and financial institution regulatory agencies are expected to be very aggressive in responding to concerns and trends identified in examinations, including the expected issuance of many formal enforcement actions. President Obama recently signed the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) which will further increase the regulation and oversight of the financial services industry. The Act addresses, among other things, systemic risk, capital adequacy, deposit insurance assessments, consumer financial protection, interchange fees, derivatives, lending limits, thrift charters and changes among the banking regulatory agencies. Many of the provisions of the Dodd-Frank Act require 10

studies and regulations. Certain provisions will not apply to banking organizations with less than $10 billion of assets. We cannot predict the effects of this legislation and regulations on us, our competitors, customers, counter parties, and on the financial markets and the economy, although it may significantly increase costs and impede efficiency of internal business processes. It also may require us to hold higher levels of regulatory capital and/or liquidity and it may cause us to adjust our business strategy and limit our future business opportunities. See “Supervision and Regulation – Dodd-Frank Act.” Developments in the financial services industry and the impact of any new legislation in response to those developments could negatively impact us by restricting our business operations, including our ability to originate or sell loans, and adversely impact our financial performance. Deterioration in local econom ic and housing m arkets has led to loan losses and reduced earnings and could lead to additional loan losses and reduced earnings. For the past two years, there has been a dramatic decrease in housing and real estate values in Florida, coupled with a significant increase in the rate of unemployment. These trends have contributed to an increase in the Bank’s non-performing loans and reduced asset quality. As of March 31, 2010, the Bank’s non performing loans were approximately $138.2 million, or 11.6% of the loan portfolio. Nonperforming assets were approximately $150.3 million as of this same date, or 8.48% of total assets. In addition, we had approximately $37.5 million in accruing loans that were between 30 and 89 days delinquent at March 31, 2010. If market conditions continue to deteriorate, they may lead to additional valuation adjustments on the Bank’s loan portfolios and real estate owned as the Bank continues to reassess the market value of its loan portfolio, the losses associated with the loans in default and the net realizable value of real estate owned. 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 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. When we take collateral in foreclosures and similar proceedings, we are required to mark the related property to the then-fair market value, which may result in a loss. These loans and other real estate owned also increase our risk profile and the capital our regulators believe is appropriate in light of such risks. In addition, the resolution of nonperforming assets requires significant commitments of time from management and our directors, which can be detrimental to the performance of their other responsibilities. A portion of our loans are to custom ers who have been adversely affected by the hom e building industry. Customers who are builders and developers face greater difficulty in selling their homes in markets where the decrease in housing and real estate values are more pronounced. Consequently, the Bank is facing increased delinquencies and non performing assets as these customers are forced to default on its loans. The Bank does not anticipate that the housing market will improve in the near term, and accordingly, additional downgrades, provisions for loan losses and charge offs relating to its loan portfolios may occur. Our loan portfolio includes com mercial and com m ercial real estate loans that have higher risks. The Bank’s commercial and commercial real estate loans at March 31, 2010 were $589.5 million, or 49.4% of total loans. Commercial and commercial real estate loans generally carry larger loan balances and can involve a greater degree of financial and credit risk than other loans. As a result, banking regulators continue to give greater scrutiny to lenders with a high concentration of commercial real estate loans in their portfolios, and such lenders are expected to implement stricter underwriting, internal controls, risk management policies and portfolio stress testing, as well as higher capital levels and loss allowances. The 11

increased financial and credit risk associated with these types of loans are a result of several factors, including the concentration of principal in a limited number of loans and borrowers, the size of loan balances, the effects of general economic conditions on income producing properties and the increased difficulty of evaluating and monitoring these types of loans. During 2006, the federal bank regulatory agencies released guidance on “Concentrations in Commercial Real Estate Lending” (the “Guidance”). The Guidance defines commercial real estate loans as exposures secured by raw land, land development and construction (including 1-4 family residential construction), multi-family property, and non-farm nonresidential property where the primary or a significant source of repayment is derived from rental income associated with the property (that is, loans for which 50% or more of the source of repayment comes from third party, non-affiliated, rental income) or the proceeds of the sale, refinancing, or permanent financing of the property. The Guidance requires that appropriate processes be in place to identify, monitor and control risks associated with real estate lending concentrations. This could include enhanced strategic planning, underwriting policies, risk management, internal controls, portfolio stress testing and risk exposure limits as well as appropriately designed compensation and incentive programs. Higher allowances for loan losses and capital levels may also be required. The Guidance is triggered when commercial real estate loan concentrations exceed either: •

total reported loans for construction, land development, and other land of 100% or more of a bank’s total capital; or

•

total reported loans secured by multifamily and nonfarm nonresidential properties and loans for construction, land development, and other land of 300% or more of a bank’s total capital.

In addition, when underwriting a commercial or industrial loan, the Bank may take a security interest in commercial real estate, and, in some instances upon a default by the borrower, we may foreclose on and take title to the property, which may lead to potential financial risks for us under applicable environmental laws. If hazardous substances were discovered on any of these properties, we may be liable to governmental agencies or third parties for the costs of remediation of the hazard, as well as for personal injury and property damage. Many environmental laws can impose liability regardless of whether the Bank knew of, or was responsible for, the contamination. Furthermore, the repayment of loans secured by commercial real estate is typically dependent upon the successful operation of the related real estate or commercial project. If the cash flows from the project are reduced, a borrower’s ability to repay the loan may be impaired. This cash flow shortage may result in the failure to make loan payments. In such cases, the Bank may be compelled to modify the terms of the loan. In addition, the nature of these loans is such that they are generally less predictable and more difficult to evaluate and monitor. As a result, repayment of these loans may, to a greater extent than residential loans, be subject to adverse conditions in the real estate market or economy. If the value of real estate in our core southeastern Florida m arkets were to rem ain depressed or decline further, a significant portion of our loan portfolio could becom e under collateralized, which could have a m aterial adverse effect on us. With most of our loans concentrated in South Florida, the decline in local economic conditions has adversely affected the values of our real estate collateral and will likely continue to do so for the foreseeable future. Consequently, a prolonged decline in local economic conditions may have a greater effect on our earnings and capital than on the earnings and capital of larger financial institutions whose real estate loan portfolios are geographically diverse. In addition to relying on the financial strength and cash flow 12

characteristics of the borrower in each case, the Bank often secures loans with real estate collateral. At March 31, 2010, approximately 86.2% of the Bank’s loans have real estate as a primary or secondary component of collateral. The real estate collateral in each case provides an alternate source of repayment in the event of default by the borrower but may deteriorate in value during the time credit is extended. If we are required to liquidate the collateral securing a loan to satisfy the debt during a period of reduced real estate values, our earnings and capital could be adversely affected. Our allowance for loan losses m ay not be sufficient to absorb losses from loan defaults, which could have a m aterial adverse effect on our business. Our ability to maintain profitability, and ultimately our continued success, depends to a significant extent upon the quality of our assets, particularly loans. In originating loans, there is a substantial likelihood that credit losses will be experienced. The risk of loss will vary with, among other things, general economic conditions, the type of loan being made, the creditworthiness of the borrower over the term of the loan, and, in the case of a collateralized loan, the quality of the collateral for the loan. Our loan customers may not repay their loans according to the terms of these loans, and the collateral securing the payment of these loans may be insufficient to assure repayment. As a result, we may experience significant loan losses, which could have a material adverse effect on our operating results. Management makes various assumptions and judgments about the collectability of our loan portfolio, including the creditworthiness of our borrowers and the value of the real estate and other assets serving as collateral for the repayment of many of our loans. We maintain an allowance for loan losses in an attempt to cover any loan losses that may occur. In determining the size of the allowance, we primarily base our evaluation on a review of our loan portfolio and the known risks contained in the loan portfolio, composition and growth of the loan portfolio, Florida real estate values and economic factors. However, the determination of an appropriate level of loan loss allowance is an inherently difficult process and is based on numerous assumptions. If our assumptions are wrong, our current allowance may not be sufficient to cover future loan losses, and adjustments may be necessary to allow for different economic conditions or adverse developments in our loan portfolio. Significant additions to our allowance would materially decrease our net income. There is no assurance that our allowance will be adequate to cover future loan losses given current and future market conditions. In addition, our regulators periodically review our allowance for loan losses and may require us to increase our provisions for loan losses or recognize further loan charge-offs, based on judgments different than those of our management. Any increase in our allowance for loan losses or loan charge-offs as required by these regulatory agencies, or otherwise, would have a negative effect on our operating results. A lack of liquidity could affect our 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, securities sold under repurchase agreements, non-core deposits, and shortand long-term debt. There are other sources of liquidity available to the Bank should it be needed, including our ability to acquire additional non-core deposits, the issuance and sale of debt securities, and the issuance and sale of common securities in public or private transactions. Our access to funding sources in amounts adequate to finance or capitalize our activities or on terms that are acceptable to us could be impaired by factors that affect us specifically or the financial services industry or economy in general. Our ability to borrow could be impaired by factors that are not specific to us, such as further disruption in the financial markets or negative views and expectations about the prospects for the financial services industry in light of the recent turmoil faced by banking organizations and the continued deterioration in credit markets. Further, under the Regulatory Order we are precluded from accepting or renewing brokered deposits.

13

We are required to m aintain capital to m eet regulatory requirem ents, and if we fail to maintain sufficient capital, whether due to losses, an inability to raise additional capital or otherwise, our financial condition, liquidity and results of operations, as well as our ability to m aintain regulatory compliance, would be adversely affected. The Bank must meet regulatory capital requirements and maintain sufficient liquidity. We have agreed with the bank regulatory agencies to maintain a minimum Tier 1 leverage capital ratio of 8% and a total risk capital ratio of at least 12%. Our ability to meet the elevated capital ratio requirement and to raise additional capital, when and if needed, will depend on conditions in the capital markets, economic conditions and a number of other factors, including investor perceptions regarding the banking industry and market condition, 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 meet these capital and other regulatory requirements, our financial condition, liquidity and results of operations would be materially and adversely affected. Our failure to remain “well capitalized” a for bank regulatory purposes could affect customer confidence, our ability to grow, our costs of funds and FDIC insurance costs, our ability to pay dividends on common and preferred stock, our ability to make acquisitions, and our business, results of operations and financial condition. Under FDIC rules, if a bank ceases to be a “well capitalized” institution for bank regulatory purposes, the interest rates that it pays and its ability to accept brokered deposits may be restricted. While at March 31, 2010, the Bank met the capital ratios required to be maintained by a “well capitalized” institution, it was classified as “adequately capitalized” because it is subject to the Regulatory Order, which requires it to maintain increased capital ratios. See “Business – Regulatory Order.” Based on the Bank’s March 31, 2010 FFIEC Call Report, the amount of capital and the number of shares of preferred stock that would need to be sold by the Bank in order to meet the capital requirements of the Regulatory Order was $43.6 million, or 43,600 shares of preferred stock, respectively. We anticipate that we will be paying higher FDIC insurance prem ium s FDIC insurance premiums increased substantially in 2009 and we expect to pay significantly higher FDIC premiums in the future. Market developments have significantly depleted the insurance fund of the FDIC and reduced the ratio of reserves to insured deposits. The Dodd-Frank Act changes the FDIC deposit insurance assessments and increases the required Deposit Insurance Fund (“DIF”) ratio of DIF’s reserves to insured deposits, and no longer requires that dividends be paid to FDIC members from excess DIF reserves. It is likely that FDIC insurance costs will increase further, although banks with less than $10 billion in assets will have the effects of the higher DIF reserve ratio offset by the FDIC. Econom ic conditions m ay affect our financial perform ance and condition. Although we attempt to diversify our investment and our loan portfolios, our operations are concentrated in Miami-Dade, Broward and Palm Beach counties in Florida. This makes us more vulnerable to prevailing economic conditions in this single area than financial institutions with operations in diverse geographical areas. While risks associated with customers failing to repay loans are inherent in any lending relationship, a continued slowdown in the prevailing economy could further diminish the quality of our loan portfolio and our financial performance. Continued adverse economic developments in our local area, as well as nationally and internationally, can lead to increased loan defaults and the need for additional loan loss reserves, and may negatively affect our earnings and financial condition. Financial institution credit losses 14

have caused institutions to fail, with stockholders losing their entire investment. In addition, the banking industry in general is affected by economic conditions such as rapid changes in interest rates, inflation, recession, unemployment and other factors beyond our control, any of which may have a material adverse effect on our financial condition, results of operations and cash flows. Our conversion price m ay not reflect actual value Our board of directors determined the conversion price of the preferred stock after consideration of various factors the Board members believed to be important. No formal valuation process was used to determine the price, and the conversion price does not necessarily bear any relationship to any established criteria of value, and is not to be construed as an indication of the present or any future value of the shares. See “The Offering – Determination of Conversion Price.” Managem ent has broad discretion concerning the application of net proceeds The net proceeds of this offering will be added to our capital accounts, and used for general corporate purposes, including increasing the capital of the Bank to support its operations. Our management may determine to apply the net proceeds in a manner not to the liking of an investor, as the expected net proceeds are not allocated to any specific purpose. Any failure to apply these funds effectively would harm our business. Need for additional capital Banks need additional capital to grow in asset size, to add branches and to otherwise expand their operations. It is not expected that our retained earnings will provide more than a modest amount of any future additional capital we may need to continue to grow. If raised, most of that additional capital would come from future offerings of securities. Any offering might have the effect of substantially diluting the ownership interests of stockholders at that time. In addition, given varying conditions in the capital markets, there is no assurance additional capital on acceptable terms would be available to us at such time as it might be needed or desired, if at all. We depend on a lim ited num ber of experienced senior officers We are very dependent on M. Mehdi Ghomeshi, our President and Chief Executive Officer and our other officers for leadership and oversight in all areas of our operations. Our board owns a significant percentage of the comm on shares and m ay be hard to oppose Members of our Board currently beneficially own 14.41% of the outstanding shares of Class A common stock and 39.68% of the outstanding shares of Class B common stock. However, since the Class B common stock represents the sole voting shares of the Bank, the holders of such shares will continue to have a significant influence on the election of directors and other actions that may come before stockholders for a vote. This may negatively impact the price any stockholder might obtain on resale of shares of Class A common stock. Various factors may delay or prevent a change in control Certain provisions of banking and corporate statutes and regulations, may have the effect of delaying, preventing, deterring, or delaying a change in control of the Bank. This may adversely affect the price our 15

stockholders might receive for their common stock in a tender offer, proxy contest or other change in control circumstance. No active trading market for shares There is no public trading market for the shares of Class A common stock or Class B common stock and there is no assurance any public trading market will develop for any of the shares of Bank capital stock, including the shares of preferred stock, subsequent to this offering, that purchasers will be able to resell any of their preferred stock at or above the price in this offering, or that purchasers will be able to resell any of their preferred stock without considerable delay, if at all. This may adversely affect the liquidity of an investment in shares and amounts realized in connection with any resale of shares. There is no assurance that an active trading market for our stock will develop following this offering. There is no m inim um num ber of shares that we m ust sell in this offering There is no requirement that we sell a minimum number of shares. Accordingly, once an investor has submitted a subscription for the purchase of shares, the subscription is irrevocable and, upon our acceptance, the proceeds, or the accepted portion thereof, will be delivered to us. We face significant com petition from well established and larger com petitors Our business is highly competitive, we face considerable competition in virtually all aspects of our business, and we expect the level and nature of this competition to increase. This competition comes from other community banks, regional, national and international banks, thrifts, credit unions and other financial institutions, as well as consumer finance companies, securities firms and mutual funds, mortgage brokers and insurance companies. We may be subject to a higher degree of regulation than certain of our competitors. Most of our competitors are larger, have been in business longer, have higher lending limits than us, and offer certain services we do not provide and may be able to price their services more competitively than us. We operate in highly regulated environm ent and m ay be adversely affected by changes in federal, state and local laws and regulations We are subject to extensive regulation, supervision and examination by federal and state banking authorities. Any change in applicable regulations or federal, state or local legislation could have a substantial impact on us and our operations. Additional legislation and regulations that could significantly affect our powers, authority and operations may be enacted or adopted in the future, which could have a material adverse effect on our financial condition and results of operations. Further, regulators have significant discretion and authority to prevent or remedy unsafe and unsound practices or violations of laws by banks in the performance of their supervisory and enforcement duties. The exercise of this authority may have a negative impact on our results of operations and financial condition. Our business and the im plem entation of our business strategy are subject to additional risks Our business and the implementation of our business strategy are subject to risks in addition to the foregoing. For additional information regarding these risk, see “Business – Business Risks.” SPECIAL CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS Certain of the statements made herein or incorporated by reference elsewhere 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, as amended, or the Exchange Act.

16

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 the actual results, performance or achievements of the Bank 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. You can identify these forward-looking statements through our use of words such as “may,” “will,” “anticipate,” “assume,” “should,” “indicate,” “would,” “believe,” “contemplate,” “expect,” “estimate,” “continue,” “plan,” “point to,” “project,” “could,” “intend,” “target” and other similar words and expressions of the future. These forward-looking statements may not be realized due to a variety of factors, including, without limitation: • •

the effects of future economic, business and market conditions, domestic and foreign; governmental monetary and fiscal policies;

•

legislative and regulatory changes, including changes in banking, securities and tax laws and changes in accounting policies, rules and practices;

•

the risks of changes in interest rates on the levels, composition and costs of deposits, and on loans;

•

credit risks of borrowers;

•

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

•

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

•

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

•

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

•

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

•

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

All written or 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 Offering Circular, or after the respective dates on which such statements otherwise are made. USE OF PROCEEDS If all 50,000 shares we are offering are sold, then the net proceeds of this offering will be approximately $50 million, before deducting the expenses of this offering. Actual net proceeds will depend on the number of shares sold. 17

All of the net proceeds of this offering will be added to the capital accounts of the Bank and used for general corporate purposes. The net proceeds will be utilized by the Bank for general corporate purposes in accordance with Management’s determination of its best use to meet the requirements of the Regulatory Order. This could include funding of assets or reduction of liabilities in accordance with the Bank’s overall asset liability and credit risk management needs. The Board of Directors believes that the increased capital will be of assistance to the Bank as it continues to operate in a challenging economic environment that has resulted in a deterioration in asset quality. We anticipate that the proceeds from the sale of the shares of preferred stock will be considered as Tier 1 capital based on current regulatory capital guidelines. THE OFFERING General We are offering to sell up to 50,000 shares of preferred stock at $1,000 per share. The Bank may increase this offering by an additional 50,000 shares of preferred stock. No commitment exists by anyone to purchase any of the shares that are the subject of this offering. There is no minimum number of shares that must be sold in order for us to begin accepting subscription funds. Subscription funds will be held by us pending one or more closings of shares sold pursuant to this offering at the discretion of the Bank. We anticipate that the proceeds from the sale of the shares of preferred stock will be considered as Tier 1 capital based on current regulatory capital guidelines. We are making this offering on a “best efforts” basis through our executive officers and directors, who will receive no commissions on account of such sales effort but will be reimbursed by the Bank for reasonable selling expenses incurred. The Bank reserves the right to hire additional sales agents at its discretion for agreed upon commission and expense payments. We will only offer and sell shares in those jurisdictions where it is lawful for us to make this offering. We may elect not to offer shares to any of our stockholders or to other persons in any jurisdiction where registration or qualification of this offering would, as determined in our sole discretion, involve expenditures that are not commensurate with the potential benefits to us and to our stockholders outside of any such jurisdiction. Certain data concerning this offering, subject to the more detailed information below, follows: • •

• • •

Price of $1,000 per share Convertible into Class A common stock and Class B common stock until December 31, 2012 based on the offering price of $1,000 per share divided by 75% of the per share book value of the common stock (i.e., total shareholders’ equity (less the then current liquidation value of the preferred stock) divided by the outstanding shares of common stock) as reported in the Bank’s consolidated financial statements as of the end of the calendar quarter prior to conversion. The proportion of common stock will be 90% Class A common stock and 10% Class B common stock, rounded up to the nearest whole share of common stock. All outstanding shares of preferred stock automatically convert into common stock effective on January 1, 2013 (if not converted previously), and automatically convert into common stock earlier upon a change in control of the Bank. Any fractional share of common stock resulting from the conversion of the preferred stock will be rounded up to the nearest whole share of common stock. Offering period ends - November 29, 2010, subject to extensions for up to180 additional days. Minimum purchase - 10 shares ($10,000). For assistance in subscribing or with any questions call (305) 514-6900 and ask for Gary J. Laurash, Chief Financial Officer.

18

Determination of Conversion Price The conversion price has been established by the Board of Directors based on factors deemed relevant by the Board and is not based on any trading price of the Class A or Class B common stock. Among the factors considered in establishing the offering price were the Bank’s book value and the Board’s subjective evaluation of general market conditions. The Board did not secure an appraisal or evaluation for the shares of Class A or Class B common stock. There is no assurance that the conversion price is necessarily related to the price at which the shares of Class A or Class B common stock could be resold by purchasers. Sales Expenses Executive officers and directors who assist in conducting this offering will not receive any commission or other compensation based on the sale of shares, but they will be reimbursed for their related expenses, if any. Our executive officers and directors who will be involved in selling shares are expected to be exempt from the requirement to register with the Securities and Exchange Commission as broker-dealer within the meaning of Rule 3a4-1 under the Securities Exchange Act of 1934. How to Subscribe Checks should be made payable to “Great Florida Bank” in the amount of $1,000 for each share of stock. The full purchase price is payable at the time of subscription for the shares. Once accepted by the Bank, a subscription is irrevocable. Persons wishing to purchase shares are required to deliver during the offering period a fully executed and properly completed Subscription Agreement for the whole number of shares desired to be purchased, accompanied by the appropriate purchase price (i.e., number of shares to be purchased x $1,000 = amount of check to accompany Subscription Agreement), to: Great Florida Bank Attn.: Gary J. Laurash Chief Financial Officer 15050 N.W. 79th Court, Suite 200 Miami Lakes, Florida 33016 The method of delivering the Subscription Agreement and related funds is at the election and risk of the subscriber. Subscription funds and the Subscription Agreement must be received before the end of the offering period. We will allow time after the receipt of funds for their clearance. The Florida Banking Code and the Change in Bank Control Act may require regulatory preclearance of certain proposed purchases of shares. A pre-clearance requirement may arise in several circumstances, including when a person subscribes for an amount of shares that, when added to the shares already owned by the subscriber and the related interests or affiliates of the subscriber, would equal or exceed 10% of the outstanding shares following the offering. Although subscribers for shares have the responsibility for complying with these requirements, we will not issue shares to any person who, in our judgment, would be required to obtain prior bank regulatory clearance or approval to own or control our shares, except M. Mehdi Ghomeshi.

19

Acceptance; Rejection; Interpretation We reserve the right, in our sole discretion to accept or to reject, in whole or in part, any subscription for shares. Subscriptions will be accepted or rejected in a timely manner after receipt by us. If a subscription is rejected in whole or in part, or if this offering is withdrawn or terminated for any reason, then subscription funds will be returned promptly to each subscriber, without interest or deduction. We will determine, in our sole discretion, all questions as to the validity, form, eligibility (including time of receipt), and acceptance of all subscriptions. We may also in our sole discretion waive any defect or irregularity relating to subscriptions. We are not under any duty to give notice of any defect or irregularity in subscriptions, and we will not have any liability for failing to give any such notice. Offering Period This offering commenced on the date of this offering circular as shown at the bottom of the cover page, and ends on or before November 29, 2010, subject to one or more extensions of time by us for up to 180 additional days. No notice is required to be given of any such extension. In addition, the offering period will end upon the earlier sale of all 50,000 shares offered. The Bank may increase this offering by an additional 50,000 shares of preferred stock. This offering may be withdrawn or terminated by us at any time. The time period of this offering is referred to as the “offering period.” We must receive all subscription forms and related subscription proceeds at the above address prior to the end of the offering period. We will allow time after the receipt of funds for their clearance. Delivery of Certificates; Refunds Promptly after the acceptance of all subscriptions, we will deliver certificates for the shares to subscribers by hand or by certified first class mail. All refunds to subscribers of amounts tendered in payment of the purchase price of shares rejected by the Bank will be made, without interest or deduction, promptly after rejection. CAPITALIZATION The following table shows our capitalization as of March 31, 2010, and as adjusted on a pro forma basis to give effect to the sale of 25,000 shares in this offering and, alternatively, 50,000 shares in this offering, before the deduction of expenses of this offering.

20

Actual at M arch 31, 2010

As Adjusted For Sale of 25,000 Preferred Shares

As Adjusted for Sale of 50,000 Preferred Shares

(dollars in thousands) Stockholders’ equity: Preferred stock, $5 par value; 5,000,000 shares authorized; none issued or outstanding

$

Class A common stock, $5 par value; 80,000,000 shares of common stock authorized, 10,446,804 shares issued and outstanding at March 31, 2010, and at the completion of this offering

-0-

$ 25,000

$ 50,000

$ 52,234

$ 52,234

$ 52,234

Class B common stock, $5 par value; 30,000,000 shares authorized, 2,665,696 shares issued and outstanding at March 31, 2010 and at completion of this offering Additional paid-in capital Accumulated deficit Accumulated other comprehensive income (net of tax effect) Total stockholders’ equity

$ 13,329 110,524 (77,519)

$ 13,329 110,524 (77,519)

5,354 $103,922

5,354 $128,922

5,354 $153,922

Book value per share of common stock

$

7.93

$

7.93

$

7.93

Net loss per share

$

0.57

$

0.56

$

0.56

$13,329 110,524 (77,519)

STOCKHOLDER MATTERS Market For Stock The shares of Class A common stock were traded on the Nasdaq Select Global Market until May 19, 2010, when the Bank voluntarily withdrew the listing of such shares. Accordingly, there is no public trading market for the shares of Class A common stock or Class B common stock, and it is not likely one will develop in the near future for any of our shares. Our shares are not expected to be a liquid investment. Purchasers should assume they might be required to bear the economic risk of an investment in our shares for an indefinite period of time. The shares will be freely transferable for securities law purposes. There will be no restrictive legends on the certificates representing the common stock. While we do have knowledge of some transactions in outstanding shares of common stock, the transactions of which we are aware are not sufficiently regular to constitute a market or to provide a reliable indicator of sales prices.

21

The following sets forth the trading prices of stock transactions for shares of Class A common stock that have occurred since January 1, 2008 and, through May 19, 2010 as reported on the Nasdaq Select Global Market: Stock High

Low

$1.55 1.54

$ 0.70 0.70

For the Quarter Ended: March 31, 2009 June 30, 2009 September 30, 2009 December 31, 2009

$ 2.45 1.99 1.85 1.80

$ 0.80 1.10 1.20 0.52

For the Quarter Ended: March 31, 2008 June 30, 2008 September 30, 2008 December 31, 2008

$ 10.89 7.20 4.50 4.60

$ 7.20 4.75 2.56 1.25

For the Quarter Ended: March 31, 2010 April 1 through May 19, 2010

Holders At March 31, 2010 there were approximately 680 holders of record of our common stock. Our transfer agent and registrar for the common stock is American Stock Transfer and Trust Company. Dividend Policy Historically, we have retained earnings for the purpose of supporting our operations, and have never paid a cash dividend. We have agreed with the bank regulatory agencies that we will not pay cash dividends without their prior approval. Our future dividend policy is subject to the discretion of our Board of Directors, and any payment in the future of a cash dividend would depend on a number of factors, including the Board’s determination of the existence at the time of a continuing need to retain earnings in support of growth, and increasing our net worth and our reserves. The payment of dividends is also subject to statutory and regulatory constraints. BUSINESS General The Bank commenced operations in June 2004. The Bank is a full service commercial bank, providing a wide range of business and consumer financial services in our target marketplace, which is comprised primarily of South Florida. The Bank is headquartered in Miami Lakes, Florida, and operates 28 branch offices.

22

The Bank’s deposits are insured by the Bank Insurance Fund of the FDIC up to applicable limits. The operations of the Bank are subject to the supervision and regulation of the FDIC and the Florida Office of Financial Regulation. Business Historically, the Bank’s market areas have been served both by large banks headquartered out of state as well as a number of community banks offering a higher level of personal attention, recognition and service. The large banks have generally applied a transactional business approach, based upon volume considerations, to the market while community banks have traditionally offered a more service relationship approach. Recent mergers and acquisitions have created an opportunity for the Bank. The Bank’s strategic focus is to exploit this opportunity by catering to the “displaced bank customer” in this marketplace. The Bank provides a range of consumer and commercial banking services to individuals, businesses and industries. The basic services offered by the Bank include: demand interest bearing and noninterest bearing accounts, money market deposit accounts, NOW accounts, time deposits, credit cards, debit cards, direct deposits, notary services, night depository, cashier’s checks, bank drafts, automated teller services, and the full range of consumer loans, both collateralized and uncollateralized. In addition, the Bank makes secured and unsecured commercial and real estate loans and issues stand-by letters of credit. The Bank provides automated teller machine (ATM) cards and is a member of the Star ATM network thereby permitting customers to utilize the convenience of the Bank’s ATM network and Star member machines both nationwide and internationally. The Bank does not have trust powers and, accordingly, no trust services are provided. The Bank’s target market is consumers, professionals, small businesses, developers and commercial real estate investors. The small business customer (typically a commercial entity with sales of $10 million or less) has the opportunity to generate significant revenue for the Bank yet is generally underserved by large bank competitors. These customers generally can afford profitability opportunities more than the average retail customer. The Bank has actively pursued its targeted markets for deposits, particularly the small businesses and professionals. In today’s environment, the product of every system itself becomes a sales tool. Recognizing that fact, the Bank endeavors to offer leading edge technology to the marketplace. Such technology includes debit cards and voice response account information systems, telephone banking, and on-line banking. The goal is to provide a “high tech - high touch” experience. The revenues of the Bank are primarily derived from interest on, and fees received in connection with, real estate and other loans, from interest and dividends from investment securities, service charge income generated from demand accounts, gain on sale of residential loans, ATM fees, and other services. The principal sources of funds for the Bank’s lending activities are its deposits (primarily consumer deposits), loan repayments, and proceeds from investment securities. The principal expenses of the Bank are the interest paid on deposits, and operating and general administrative expenses. As is the case with banking institutions generally, the Bank’s operations are materially and significantly influenced by general economic conditions and by related monetary and fiscal policies of financial institution regulatory agencies, including the Federal Reserve and the FDIC. Deposit flows and costs of funds are influenced by interest rates on competing investments and general market rates of interest. Lending activities are affected by the demand for financing of real estate and other types of loans, which in turn is affected by the interest rates at which such financing may be offered and other factors affecting local

23

demand and availability of funds. The Bank faces strong competition in the attraction of deposits (the primary source of lendable funds) and in the origination of loans. See “Competition.” Business strategy Our business strategy is to operate as a diversified financial services company providing a variety of banking and other financial services, with an emphasis on commercial business loans to small and mediumsized businesses and consumer and residential mortgage lending. We emphasize comprehensive retail and business products and responsive, decentralized decision-making which reflects our knowledge of our local markets and customers. We offer a wide range of commercial and retail banking and financial services to businesses and individuals. Our marketing strategy is targeted to: •

Capitalize on our personal relationship approach that we believe differentiates us from our larger competitors;

•

Provide customers with access to our local executives who make key credit and other decisions;

•

Pursue commercial lending opportunities with small to mid-sized businesses that are underserved by our larger competitors; and

•

Cross-sell our products and services to our existing customers to leverage our relationships and enhance profitability.

Business Risks This section describes certain potential risks that could adversely affect our ability to fully execute our business strategy and should be carefully considered along with all of the other information in this offering circular before making a decision to purchase the shares of preferred stock. See also “ForwardLooking Statements.” The value of the shares of preferred stock could decline due to any of these or other risks and investors in our shares of preferred stock may lose part or all of their investment. The order of the items presented below is not intended to indicate the relative importance of any particular risk factor. We cannot predict the effect on our operations of recent legislative and regulatory initiatives that were enacted in response to the ongoing financial crisis . The U.S. federal, state and foreign governments have taken or are considering extraordinary actions in an attempt to deal with the worldwide financial crisis and the severe decline in the global economy. To the extent adopted, many of these actions have been in effect for only a limited time, and have produced limited or no relief to the capital, credit and real estate markets. There is no assurance that these actions or other actions under consideration will ultimately be successful. In the United States, the federal government has adopted the Emergency Economic Stabilization Act of 2008 (enacted on October 3, 2008), or the EESA, and the American Recovery and Reinvestment Act of 2009 (enacted on February 17, 2009), or the ARRA. With authority granted under these laws, the Treasury has proposed a financial stability plan that is intended to:

24

•

provide for the government to invest additional capital into banks and otherwise facilitate bank capital formation;

•

temporarily increase the limits on federal deposit insurance; and

•

provide for various forms of economic stimulus, including to assist homeowners restructure and lower mortgage payments on qualifying loans.

In addition, Congress is considering a comprehensive financial regulatory reform proposal. There can be no assurance that the financial stability plan considered by Congress, any other proposals under consideration or any other legislative or regulatory initiatives will be effective at dealing with the ongoing economic crisis and improving economic conditions globally, nationally or in our markets, or that the measures adopted will not have adverse consequences. Our business is subject to the success of the local economies where we operate Our success significantly depends upon the growth in population, income levels, deposits and housing starts in our primary and secondary markets. Over the past 18 months, the rate of growth of each of these four factors has decreased substantially and in some cases has turned negative. If the communities in which we operate do not grow or if prevailing economic conditions locally or nationally continue to remain challenging, our business may be adversely affected. Our specific market areas have experienced decreased growth, which has affected the ability of our customers to repay their loans to us and has generally affected our financial condition and results of operations. We are less able than a larger institution to spread the risks of unfavorable local economic conditions across a large number of diversified economies. Moreover, we cannot give any assurance we will benefit from any market growth or favorable economic conditions in our primary market areas if they do occur. Changes in interest rates may negatively affect our earnings and the value of our assets Our earnings and cash flows are largely dependent upon our net interest income. Net interest income is the difference between interest income earned on interest earnings assets, such as loans and investment securities, and interest expense paid on interest bearing liabilities, such as deposits and borrowed funds. Interest rates are sensitive to many factors that are beyond our control, including general economic conditions, competition and policies of various governmental and regulatory agencies and, in particular, the policies of the Federal Reserve. Changes in monetary policy, including changes in interest rates, could influence not only the interest our Bank receives on loans and investment securities and the amount of interest they pay on deposits and borrowings, but such changes could also affect (i) the Bank’s ability to originate loans and obtain deposits, (ii) the fair value of our financial assets and liabilities, including the available for sale securities portfolio, and (iii) the average duration of our interest earning assets. Changes in monetary policy could also expose us to the risk that interest earning assets may be more responsive to changes in interest rates than interest bearing liabilities, or vice versa (repricing risk), the risk that the individual interest rates or rates indices underlying various interest earning assets and interest bearing liabilities may not change in the same degree over a given time period (basis risk), and the risk of changing interest rate relationships across the spectrum of interest earning asset and interest bearing liability maturities (yield curve risk), including a prolonged flat or inverted yield curve environment. Any substantial, unexpected, prolonged change in market interest rates could have a material adverse affect on our financial condition and results of operations.

25

Higher FDIC deposit insurance premiums and assessments could adversely affect our financial condition FDIC insurance premiums increased substantially in 2009 and we expect to pay significantly higher FDIC premiums in the future. Market developments have significantly depleted the insurance fund of the FDIC and reduced the ratio of reserves to insured deposits. The FDIC adopted a revised risk based deposit insurance assessment schedule on February 27, 2009, which raised deposit insurance premiums. On May 22, 2009, the FDIC also implemented a five basis point special assessment of each insured depository institution’s assets minus Tier 1 capital as of June 30, 2009, but no more than 10 basis points times the institution’s assessment base for the second quarter of 2009, which was collected on September 30, 2009. The FDIC adopted a rule which required insured institutions to prepay on December 30, 2009, an estimated quarterly risk-based assessment for the fourth quarter of 2009 and for all of 2010, 2011 and 2012. The Bank received notification from the FDIC exempting the Bank from the prepayment rule. Additional special assessments may be imposed by the FDIC for future periods. W e participate in the FDIC’s Transaction Account Guarantee, or TAG, component of the Temporary Liquidity Guarantee Program, or TLG, for noninterest bearing transaction deposit accounts. Banks that participate in the TAG will pay the FDIC an annual assessment of 15 to 25 basis points on the amounts in such accounts above the amounts covered by FDIC deposit insurance. To the extent that these TAG assessments are insufficient to cover any loss or expenses arising from the TAG program, the FDIC is authorized to impose an emergency special assessment on all FDIC insured depository institutions. The FDIC has authority to impose charges for the TAG program upon depository institution holding companies, as well. These changes will cause the premiums and TAG assessments charged by the FDIC to increase. These actions could significantly increase our noninterest expense in 2010 and for the foreseeable future. Our business strategy includes the continuation of growth plans, and our financial condition and results of operations could be negatively affected if we fail to grow or fail to manage our growth effectively We intend to continue pursuing a growth strategy for our business, when deemed prudent. Our prospects must be considered in light of the risks, expenses and difficulties frequently encountered by companies in significant growth stages of development. We cannot assure you that we will be able to expand our market presence in our existing markets or successfully enter new markets or that any such expansion will not adversely affect our results of operations. Failure to manage our growth effectively could have a material adverse effect on our business, future prospects, financial condition or results of operations, and could adversely affect our ability to successfully implement our business strategy. Also, if our growth occurs more slowly than anticipated or declines, our operating results could be materially adversely affected. Our ability to successfully grow will depend on a variety of factors including the continued availability of desirable business opportunities, the local economy, the competitive responses from other financial institutions in our market areas and our ability to manage our growth. While we believe that we have the management resources and internal systems in place to successfully manage our future growth, there can be no assurance that growth opportunities will be available or that growth will be successfully managed. Our branching strategy could cause our expenses to increase faster than revenues Our strategy for building market share in South Florida is based on establishing new branches. At March 31, 2010, the bank has seven Solution Centers where leases have been executed and payments are currently being made. Leasehold improvements on these Solution Centers have been completed. The Bank can not predict with any degree of certainty that the required regulatory approvals will be granted allowing the opening of these Solution Centers. If and when the approvals are granted there are considerable costs involved in opening Solution Centers and new Solution Centers generally do not generate sufficient revenues to offset their costs until they have been in operation for several years. Accordingly, our new Solution Centers 26

can be expected to negatively impact our operating results for some period of time. The Bank will base its decision to open a Solution Center on economic and financial considerations at the time of regulatory approval. Finally, we have no assurance that our new Solution Centers will be successful even after they have been established. Banking services Commercial Banking. The Bank focuses its commercial loan originations on small and mid-sized business (generally up to $25 million in annual sales) and such loans are usually accompanied by significant related deposits. Commercial underwriting is driven by cash flow analysis supported by collateral analysis and review. Commercial loan products include commercial real estate construction and term loans; working capital loans and lines of credit; demand, term and time loans; and equipment, inventory and accounts receivable financing. The Bank offers a range of cash management services and deposit products to commercial customers. Computerized banking is currently available to commercial customers. Retail Banking. The Bank’s retail banking activities emphasize consumer deposit and checking accounts. An extensive range of these services is offered by the Bank to meet the varied needs of its customers from young persons to senior citizens. In addition to traditional products and services, the Bank offers contemporary products and services, such as debit cards, Internet banking and electronic bill payment services. Consumer loan products offered by the Bank include home equity lines of credit, second mortgages, new and used auto loans, new and used boat loans, overdraft protection, and unsecured personal credit lines. Mortgage Banking. The Bank’s mortgage banking business is structured to provide a source of fee income largely from the process of originating product for sale on the secondary market (primarily fixed rate loans), as well as the origination of primarily adjustable rate loans to be held in the Bank’s loan portfolio. Mortgage banking capabilities include conventional and nonconforming mortgage underwriting, and Federal Housing Authority (FHA) financing Liquidity Liquidity management involves the ability to meet the cash flow requirements of customers who may be either depositors wanting to withdraw their funds or borrowers needing assurance that sufficient funds will be available to meet their credit needs. In the ordinary course of business, the Bank’s cash flows are generated from interest and fee income, as well as from loan repayments, the sale or maturity of investments available-for-sale. In addition to cash and due from banks, the Bank considers all securities available-for-sale and federal funds sold as primary sources of asset liquidity. Many factors affect the ability to accomplish these liquidity objectives successfully, including the economic environment, the asset/liability mix within the balance sheet, as well as the Bank’s reputation in the community. The Bank’s principal sources of funds are net increases in deposits, principal and interest payments on loans and proceeds from sales and maturities of investments. The Bank uses its capital resources primarily to fund existing and continuing loan commitments and to purchase investment securities. At March 31, 2010, the Bank had unfunded commitments totaling $43.1 million, and had issued standby letters of credit of $2.7 million. Scheduled maturities of certificates of deposit during the twelve months following March 31, 2010 totaled $677.6 million, of which $93.9 million are considered brokered deposits for regulatory purposes. The Regulatory Order requires the Bank to receive FDIC approval prior to renewing these brokered deposits. Cash and cash equivalents and unencumbered investment securities at March 31, 2010 totaled $302.5 million. Management believes that the Bank had adequate resources to fund all its commitments, that substantially all of its existing commitments will be funded in the subsequent twelve months and, if so desired, that it can adjust the rates on certificates of deposit and other deposit accounts to retain deposits in a changing interest rate environment. 27

Capital Resources The Bank’s shareholders’ equity was $103.9 million at March 31, 2010 and $108.7 million at December 31, 2009. The net decrease in shareholders’ equity during the three months ended March 31, 2010 consisted of an approximate net loss of $7.4 million and $2.4 million increase in the unrealized gain on securities available-for-sale (from an approximate unrealized gain of $3 million at December 31, 2009 to an approximate unrealized gain of $5.4 million at March 31, 2010. The Company’s total shareholders’ equity was 5.86% and 6.13 % of total assets as of March 31, 2010 and December 31, 2009, respectively. The federal banking regulatory authorities have adopted certain “prompt corrective action” rules with respect to depository institutions. The rules establish five capital tiers: “well capitalized,” “adequately capitalized,” “undercapitalized,” “significantly undercapitalized,” and “critically undercapitalized.” The various federal banking regulatory agencies have adopted regulations to implement the capital rules by, among other things, defining the relevant capital measures for the five capital categories. An institution is deemed to be “well capitalized” if it has a total risk-based capital ratio of 10% or greater, a Tier 1 risk-based capital ratio of 6% or greater, and a Tier 1 leverage ratio of 5% or greater and is not subject to a regulatory order, agreement, or directive to meet and maintain a specific capital level. At March 31, 2010, the Bank met the capital ratios of a “well capitalized” financial institution with a total risk-based capital ratio of 10.60%, a Tier 1 risk-based capital ratio of 9.32%, and a Tier 1 leverage ratio of 5.55%. However, under the Regulatory Order, the Bank is required to maintain a Tier 1 leverage ratio of at least 8% and a total risk-based capital ratio of at least 12%. Depository institutions which fall below the “adequately capitalized” category generally are prohibited from making any capital distribution, are subject to growth limitations, and are required to submit a capital restoration plan. There are a number of requirements and restrictions that may be imposed on institutions treated as “significantly undercapitalized” and, if the institution is “critically undercapitalized,” the banking regulatory agencies have the right to appoint a receiver or conservator. The following sets forth the capital ratios of the Bank as of the dates indicated:

Consolidated Capital Ratios

Regulatory Requirement Well-Capitalized (1)

At March 31, 2010 Total capital to risk-weighted assets Tier I capital to risk-weighted assets Tier I capital to total assets - leverage ratio

10.60% 9.32% 5.55%

10.0% 6.0% 5.0%

At December 31, 2009: Total capital to risk-weighted assets Tier I capital to risk-weighted assets Tier I capital to total assets - leverage ratio

11.03% 9.75% 6.08%

10.0% 6.0% 5.0%

12.31% 11.04% 8.25%

10.0% 6.0% 5.0%

At December 31, 2008: Total capital to risk-weighted assets Tier I capital to risk-weighted assets Tier I capital to total assets - leverage ratio _____________________________________

28

(1)

Pursuant to the Regulatory Order dated April 13, 2010, the Bank must, within 120 days of the Order, increase its Tier 1 leverage ratio to at least 8% and its total risk-based capital ratio to at least 12%. The Bank is not in compliance with the regulatory capital requirements.

Lending services Loan Portfolio Composition. At March 31, 2010, the Bank’s loan portfolio totaled $1.2 billion, representing approximately 65% of our total assets of $1.8 billion. The composition of the Bank’s loan portfolio at March 31, 2010, and December 31, 2009 and 2008 is indicated below. At M arch 31

At December 31,

2010

2009

2008

Amount

Amount

Amount

Land, land development and Real estate construction Residential real estate Commercial real estate Commercial and industrial Other Total loans Less: Allowance for loan losses Less: Net deferred cost (fees)

$ 231,905 568,096 227,778 129,822 34,046 $1,191,647 (33,719) 613

$252,462 587,527 218,092 131,873 32,882 $1,222,836 (35,660) 561

$369,261 538,968 220,026 141,090 49,778 $1,319,123 (36,368) 102

Loans, Net

$1,158,541

$1,187,737

$1,282,857

(dollars in thousands)

Real Estate Mortgage Loans. At March 31, 2010, our real estate loan portfolio totaled $1.0 billion. The Bank originates mortgage loans secured by commercial and residential real estate. Commercial Real Estate. At March 31, 2010, the Bank’s commercial real estate loans totaled $227.8 million. Such loans are primarily secured by retail buildings, and general purpose business space. Although terms may vary, the Bank’s commercial mortgages generally are long term in nature, non-owner-occupied, and variable-rate loans. The Bank seeks to reduce the risks associated with commercial mortgage lending by generally lending in its market area and obtaining periodic financial statements and tax returns from borrowers. It is also the Bank’s general policy to obtain personal guarantees from the principals of the borrowers and assignments of all leases related to the collateral. Construction Loans and Land Development. At March 31, 2010, the Bank’s construction and land loan portfolio totaled $231.9 million. The Bank provides interim real estate acquisition, development and construction loans to builders, developers, and persons who will ultimately occupy the building. Real estate development and construction loans to provide interim financing on the property are based on acceptable percentages of the appraised value of the property securing the loan in each case. Real estate development and construction loan funds are disbursed periodically at pre-specified stages of completion. Interest rates on these loans are generally adjustable. The Bank carefully monitors these loans with on-site inspections and control of disbursements.

29

Development and construction loans are secured by the properties under development or construction and personal guarantees are typically obtained. Further, to assure that reliance is not placed solely in the value of the underlying property, the Bank considers the financial condition and reputation of the borrower and any guarantors, the amount of the borrowers equity in the project, independent appraisals, costs estimates and pre-construction sale information Residential Real Estate Loans. At March 31, 2010, the Bank’s residential real estates loans totaled $568.1 million. Such loans are mainly secured by first mortgages on primary residences and investment properties. The Bank offers a variety of loan products that vary in terms. Home equity loans (closed-end and lines of credit) at March 31, 2010 totaled $104.2 million and are included within residential real estate loans and are typically made up of 85% of the appraised value of the property securing the loan, in each case, less the amount of the existing liens on the property. Closed-end loans have terms of up to 15 years and have a fixed interest rate. Lines of credit have a funding period of 10 years followed by a fully amortizing payment period of 10 years. The interest rate on the lines is variable. Commercial Loans. At March 31, 2010, our commercial loan portfolio totaled $129.8 million. The Bank originates secured and unsecured loans for business purposes. Loans are made for acquisition, expansion, and working capital purposes and may be secured by real estate, accounts receivable, inventory, equipment or other assets. The financial condition and cash flow of commercial borrowers are closely monitored by the submission of corporate financial statements, personal financial statements and income tax returns. The frequency of submissions of required financial information depends on the size and complexity of the credit and the collateral that secures the loan. It is our general policy to obtain personal guarantees from the principals of the commercial loan borrowers. Loans to individuals for the construction of their primary or secondary residences are secured by the property under construction. The loan to value ratio of construction loans is based on the lesser of the cost to construct or the appraised value of the completed home. Construction loans have a maturity of 12 months. These construction loans to individuals may be converted to permanent loans upon completion of construction. Other Installment and Consumer Loans. At March 31, 2010, our consumer loan portfolio totaled $34 million. The Bank offers a variety of consumer loans. These loans are typically secured by personal property, including automobiles and boats. Credit Administration The Bank’s lending activities are subject to written policies approved by the board of directors to ensure proper management of credit risk. Loans are subject to a defined credit process that includes credit evaluation of borrowers, risk-rating of credits, establishment of lending limits and application of lending procedures, including the holding of adequate collateral and the maintenance of compensating balances, as well as procedures for on-going identification and management of credit deterioration. Regular portfolio reviews are performed to identify potential underperforming credits, estimate loss exposure, and to ascertain compliance with the Bank’s policies. Management review consists of evaluation of the financial strengths of the borrower and the guarantor, the related collateral and the effects of economic conditions. Annually, the Bank engages a third party to perform a comprehensive loan review that evaluates management’s loan classification system and credit administration.

30

The Bank generally does not make commercial or consumer loans outside their market area unless the borrower has an established relationship with the Bank and conducts its principal business operations within the Bank’s market area. Consequently, the Bank and its borrowers are affected by the economic conditions prevailing in its market area. Loan Quality Management seeks to maintain a high quality of loans through sound underwriting and lending practices. As of March 31, 2010, and December 31, 2009 and 2008 approximately 66.8%, 65.9% and 57.5%, respectively, of the total loan portfolio were collateralized by commercial and residential real estate mortgages. The level of nonperforming loans and real estate owned also is relevant to the credit quality of a loan portfolio. As of March 31, 2010, and December 31, 2009 and 2008, we had nonperforming loans (those loans where the interest is no longer accruing or over 90 days or more past due), of $138.2 million, $149.1 million and $107.3 million, respectively. As of the same dates, other real estate owned totaled $12.0 million or 0.68% of total assets, and $9.7 million and $724 thousand, respectively. The commercial real estate mortgage loans in the Bank’s portfolio consist of fixed and adjustableinterest rate loans which were originated at prevailing market interest rates. The Bank’s policy has been to originate commercial real estate mortgage loans predominantly in their primary market areas. Commercial real estate mortgage loans are generally made in amounts up to 75% of the appraised value of the property securing the loan and entail significant additional risks compared to residential mortgage loans. In making commercial real estate loans, the Bank primarily considers the net operating income generated by the real estate to support the debt service, the financial resources and income level and managerial expertise of the borrower, the marketability of the collateral and the Bank’s lending experience with the borrower. Unlike residential mortgage loans, which generally are made on the basis of the borrower’s ability to make repayment from his employment and other income and which are collateralized by real property whose values tend to be more readily ascertainable, commercial loans typically are underwritten on the basis of the borrower’s ability to make repayment from the cash flow of his business and generally are collateralized by business assets, such as accounts receivable, equipment and inventory. As a result, the availability of funds for the repayment of commercial loans may be substantially dependent on the success of the business itself, which is subject to adverse conditions in the economy. Commercial loans also entail certain additional risks since they usually involve large loan balances to single borrowers or a related group of borrowers, resulting in a more concentrated loan portfolio. Further, the collateral underlying the loans may depreciate over time, cannot be appraised with as much precision as residential real estate, and may fluctuate in value based on the success of the business. The Bank makes consumer and personal loans primarily on a collateralized basis. These loans are often collateralized by automobiles and recreational vehicles. The Bank’s policy is not to advance more than 90% of collateral value and that the borrowers have established more than one year of residence and demonstrated an ability to repay a similar debt according to credit bureau reports. Such loans generally have a term of 60 months or less. Loan concentrations are defined as amounts loaned to a number of borrowers engaged in similar activities which would cause them to be similarly impacted by economic or other conditions. The Bank, on a routine basis, monitors these concentrations in order to consider adjustments in its lending practices to reflect economic conditions, loan to deposit ratios, and industry trends. As of March 31, 2010, December 31, 2009 and 2008, loans collateralized with mortgages on real estate represented 86.2%, 86.5% and 85.5%, respectively, of the loan portfolio and were to borrowers in varying activities and businesses. 31

The Loan Committee of the Board of Directors of the Bank concentrates its efforts and resources, and that of senior management and lending officers, on loan review and underwriting procedures. Internal controls include ongoing reviews of loans made to monitor documentation and the existence and valuations of collateral. In addition, management of the Bank has established a review process with the objective of identifying, evaluating, and initiating necessary corrective action for marginal loans. The goal of the loan review process is to address classified and nonperforming loans as early as possible. Classification of Assets and the Allowance for Loan and Lease Losses Generally, interest on loans accrues and is credited to income based upon the principal balance outstanding. It is management’s policy to discontinue the accrual of interest income and classify a loan as non-accrual when principal or interest is past due 90 days or more unless, in the determination of management, the principal and interest on the loan are well collateralized and in the process of collection, or when in the opinion of management, principal or interest is not likely to be paid in accordance with the terms of the obligation. Consumer installment loans are generally charged-off after 120 days of delinquency unless adequately collateralized and in the process of collection. Loans are not returned to accrual status until principal and interest payments are brought current and future payments appear reasonably certain. Interest accrued and unpaid at the time a loan is placed on nonaccrual status is charged against interest income. Real estate acquired by the Bank as a result of foreclosure or by deed in lieu of foreclosure is classified as other real estate owned (“OREO”). OREO properties are recorded at the lower of cost or fair value less estimated selling costs, and the estimated loss, if any, is charged to the allowance for credit losses at the time it is transferred to OREO. Further write-downs in OREO are recorded at the time management believes additional deterioration in value has occurred and are charged to noninterest expense which totaled $829,000 for the quarter ended March 31, 2010. As of March 31, 2010 and December 31, 2009 and 2008, the Bank had other real estate owned of $12.0 million, $9.7 million and $724 thousand, respectively. As of March 31, 2010, December 31, 2009 and 2008, the Bank had impaired loans including troubled debt restructurings of $216.6 million, $221.4 million and $118.9 million, respectively. As such dates, loans on non-accrual status and other real estate owned and certain other related information was as follows: At M arch 31,

As of December 31,

2010

(dollars in thousands)

Amount

2009

% of Total Loans

2008

Amount

% of Total Loans

Amount

% of Total Loans

Total loans on non-accrual status

$138,224

11.59%

$148,516

12.14%

$97,889

7.42%

Total non-performing loans

$138,224

11.59%

$149,094

12.19%

$107,295

8.13%

12,040

1.01%

9,732

0.80%

$150,264

12.60%

$158,826

$ 37,541

3.15%

$ 27,905

Other real estate owned Total non-performing assets

$

724

0.05%

12.98%

$108,019

8.19%

2.28%

$97,841

7.42%

Loans past-due: Total loans past-due 30 to 89 days

32

At M arch 31,

As of December 31,

2010

(dollars in thousands)

Amount

2009

% of Total Loans

Amount

2008

% of Total Loans

Amount

% of Total Loans

As a percentage of total assets: Total non-performing loans

7.80%

8.41%

5.82%

Total non-performing assets

8.48%

8.96%

5.86%

2.83%

2.91%

2.76%

24.39%

23.92%

33.90%

Allowance for credit losses as a percentage of: Total loans, excluding loans held-forsale Non-performing loans

Management continually evaluates the collectibility of nonperforming loans and the adequacy of the allowance for loan losses to absorb the identified and unidentified losses inherent in the loan portfolio. As a result of these evaluations, loans considered uncollectible are charged-off and adjustments to the reserve considered necessary are provided through a provision charged against earnings. These evaluations consider the current economic environment, the real estate market and its impact on underlying collateral values, trends in the level of nonperforming and past-due loans, and changes in the size and composition of the loan portfolio. The provision for loan losses totaled approximately $ 5.2 million for the three months ended March 31, 2010 and $47.1 million and $33.8 million for the years ended December 31, 2009 and 2008, respectively. For such periods, net loans charged-off totaled $7.2 million, $47.8 million and $19.2 million, respectively. At March 31, 2010, and December 31, 2009 and 2008, the Bank had nonperforming loans of $138.2 million, $149.1 million and $107.3 million, respectively. Considering the nature of the Bank’s loan portfolio and management’s evaluation of expected future losses, management believes that the allowance for credit losses at March 31, 2010 was adequate. During the first three months of 2010 and during 2009 and 2008, the activity in the allowance for credit losses was as follows: At March 31, (dollars in thousands)

2010

Allowance at beginning of period Loans charged-off: Real Estate Commercial Consumer and other Total loans charged off

33

Year Ended December 31, 2009

2008

$35,660

$33,368

$21,787

7,339 322 14

38,938 10,019 188

19,802 832 50

$ 7,675

$49,145

$20,684

At March 31, (dollars in thousands)

2010

Year Ended December 31, 2009

2008

Recoveries: Real Estate Commercial Consumer and other Total recoveries

508 – – 508

966 355 – 1,321

1,496 – 5 1,501

Net loans charged-off

7,167

47,824

19,183

5,226

47,116

33,764

Allowance at end of period

33,719

35,660

36,368

Net charges-offs as a percentage of average loans outstanding (annualized for the interim period)

2.36%

3.65%

1.48%

Allowance for credit losses as a percentage of period-end total loans receivable, excluding loans held-forsale

2.83%

2.91%

2.76%

24.39%

23.92%

33.90%

1,215,713

1,310,714

1,299,124

Provision for credit losses charged to expense

Allowance for credit losses as a percentage of non-performing loans Average loans outstanding during the period

The Bank's allowance for loan losses was $33.7 million at March 31, 2010 compared to $35.7 million at December 31, 2009 and $36.4 at December 31, 2008. The Allowance for Loan Losses as a percentage of gross loans was 2.83% at March 31, 2010 and 2.91% at December 31, 2009 and 2.76% at December 31, 2010. Management continues to closely monitor the economic changes in the market and the effect this has had and may continue to have on our outstanding portfolio. We have taken steps to identify and monitor specific loans which, based on our analysis, have the potential to become delinquent. The Bank is not immune to the changes occurring in the local real estate market as evidenced by the totals in past due and nonperforming loans. More specifically, residential real estate continues to be under extreme duress as the volume of foreclosed properties for sale increases. In originating loans, we recognize that credit losses will be experienced and that the risk of loss will vary with, among other things, the type of loan being made, the creditworthiness of the borrower over the term of the loan and, in the case of a collateralized loan, the quality of the collateral for the loan as well as general economic conditions. It is management's policy to attempt to maintain an adequate allowance for loan losses based on, among other things, our historical loan loss experience, evaluation of economic conditions, and regular reviews of any delinquencies and loan portfolio quality. Specific allowances are provided for individual loans when ultimate collection is considered questionable by management after reviewing the current status of loans which are contractually past due and considering the net realizable value of the 34

collateral for the loan. We recognize the greater inherent risks in connection with commercial and consumer lending. A non-consumer loan is placed on non-accrual when it is over 90 days past due. All interest accrued but not collected for loans that are placed on non-accrual or that are charged-off is reversed against interest income. The interest on these loans is accounted for on the cash-basis or cost-recovery method, until qualifying to return to accrual. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. We continue to actively monitor our asset quality and to charge-off loans against the allowance for loan losses when appropriate or to provide specific loss allowances when necessary. Although we believe we use the best information available to make determinations with respect to the allowance for loan losses, future adjustments may be necessary if economic conditions differ from the economic conditions in the assumptions used in making the initial determinations. We believe that the allowance for loan losses was adequate at March 31, 2010, December 31, 2009 and December 31, 2008. Impairment review is done based on either an individual loans basis or as a homogeneous group of loans. Below is the total per year for each category. M arch 31, 2010

December 31, 2009

December 31, 2008

(dollars in thousands)

Loans

Reserves

Loans

Reserves

Loans

Reserves

Loans reviewed under individual basis

$216,554

$ 11,513

$ 221,443

$ 11,207

$ 118,890

$ 5,122

Loans reviewed as a group

$975,093

$ 22,206

$1,001,393

$ 24,453

$1,200,233

$31,246

In addition to the reserves for the loans reviewed on an individual basis, the Bank has taken partial writedowns totaling $37.5 million and $34.3 million at March 31, 2010 and December 31, 2009, respectively. Investment Securities The following table sets forth the book value of the Bank’s investment portfolio as of March 31, 2010, and December 31, 2009 and 2008 (dollars in thousands):

At March 31,

Securities available-for-sale U.S. Government agency obligations U.S. Government mortgage backed securities U.S. Agency mortgage backed securities Other securities

35

At December 31

2010

2009

2008

$238,656 130,014 5,031 7,901

$242,313 130,901 5,140 7,764

$ 17,408 – 461,640 7,407

At March 31,

At December 31

2010

2009

2008

Total securities available-for-sale

$381,602

$386,118

$486,455

Securities held-to-maturity Securities held for trading Total investment securities

– – $381,602

– – $386,118

– – $486,455

Current accounting standards require companies to classify investments securities, including mortgage-backed securities as either held-to-maturity, available-for-sale, or trading securities. Securities classified as held-to-maturity are carried at amortized cost. Securities classified as available-for-sale are reported at fair value, with unrealized gains and losses, net of tax effect, reported as a separate component of stockholders’ equity. Securities classified as trading securities are recorded at fair value, with unrealized gains and losses included in earnings. The Bank expects to continue to hold investment securities classified as available-for-sale, changes in the underlying market values of such securities can have a material adverse effect on the Bank’s capital position. Typically, an increase in interest rates results in a decrease in underlying market value and a decrease in the level of principal repayments on mortgage-backed securities. As a result of changes in market interest rates, the market value of available-for-sale securities reported in stockholders’ equity was $5.4 million at March 31, 2010 and $3.0 million at December 31, 2009. These fluctuations in stockholders’ equity represent the after-tax impact of changes in interest rates on the value of these investments. Deposit Activities Deposits are the major source of the Bank’s funds for lending and other investment purposes. Deposits are attracted principally from within the Bank’s primary market area through the offering of a broad variety of deposit instruments including checking accounts, money market accounts, regular savings accounts, term certificate accounts (including “jumbo” certificates in denominations of $100,000 or more) and retirement savings plans. As of March 31, 2010 and December 31, 2009 and 2008, the distribution by type of the Bank’s deposit accounts was as follows: At March 31, (dollars in thousands)

Non-interest bearing deposits Interest bearing demand deposits Savings & Money Market Certificates of deposit: $100,00 and over less than $100,000 Total certificates of deposit Total Deposits

2010

At December 31, 2009

2008

Amount

Amount

Amount

$ 75,938 16,436 307,573

$ 72,471 30,342 320,372

$ 66,932 19,295 321,496

498,694 457,938

476,733 450,111

407,879 537,558

956,632

926,844

945,437

$1,356,579

$1,350,029

$1,353,160

36

Maturity terms, service fees and withdrawal penalties are established by the Bank on a periodic basis. The determination of rates and terms is predicated on funds acquisition and liquidity requirements, rates paid by competitors, growth goals and federal regulations. FDIC regulations limit the ability of certain insured depository institutions to accept, renew, or rollover deposits by offering rates of interest which are significantly higher than the prevailing rates of interest on deposits offered by other insured depository institutions having the same type of charter in such depository institutions’ normal market area. Under these regulations, “well capitalized” depository institutions may accept, renew, or roll over deposits at such rates without restriction, “adequately capitalized” depository institutions may accept, renew or roll over deposits at such rates with a waiver from the FDIC (subject to certain restrictions on payments of rates), and “undercapitalized” depository institutions may not accept, renew or roll over deposits at such rates. While the Bank met the capital ratios required to be maintained by a “well capitalized” financial institution, it was categorized as an “adequately capitalized” financial institution because it is subject to the Regulatory Order. See “– Regulatory Order”. Time deposits of $100,000 and over, public fund deposits and other large deposit accounts tend to be short-term in nature and more sensitive to changes in interest rates than other types of deposits and, therefore, may be a less stable source of funds. In the event that existing short-term deposits are not renewed, the resulting loss of the deposited funds could adversely affect the Bank’s liquidity. In a rising interest rate market, such short-term deposits may prove to be a costly source of funds because their short-term nature facilitates renewal at increasingly higher interest rates, which may adversely affect the Bank’s earnings. However, the converse is true in a falling interest-rate market where such short-term deposits are more favorable to the Bank. Competition The Bank encounters strong competition both in making loans and in attracting deposits. The deregulation of the banking industry and the widespread enactment of state laws which permit multi-bank holding companies as well as an increasing level of interstate banking has created a highly competitive environment for commercial banking. In one or more aspects of its business, the Bank competes with other commercial banks, savings and loan associations, credit unions, finance companies, mutual funds, insurance companies, brokerage and investment banking companies, and other financial intermediaries. Most of these competitors, some of which are affiliated with bank holding companies, have substantially greater resources and lending limits, and may offer certain services that the Bank does not currently provide. In addition, many of the Bank’s non-bank competitors are not subject to the same extensive federal regulations that govern bank holding companies and federally insured banks. Recent federal and state legislation has heightened the competitive environment in which financial institutions must conduct their business, and the potential for competition among financial institutions of all types has increased significantly. There is no assurance that increased competition from other financial institutions will not have an adverse effect on the Bank’s operations. Employees As of March 31, 2010, the Bank employed 194 full-time employees and 15 part-time employees. The employees are not represented by a collective bargaining unit. The Bank considers relations with employees to be good.

37

Properties The main office of the Bank is located at 15050 NW 79th Court, Suite 200, Miami Lakes, FL 33016, which is leased by the Bank. The Bank also operates and leases a residential lending operations center and 28 banking offices located in Miami-Dade, Broward and Palm Beach counties in Florida and has leases for an additional seven banking offices that are pending regulatory approval. All locations are leased and include renewal options. The Bank owns a commercial office building in West Palm Beach, Florida, which was acquired upon default of a former loan during 2009. The Bank intends to use a portion of the office building as a bank facility for current and future needs. Regulatory Order On April 13, 2010, the Bank entered into a Consent Order (the “Order”) with the FDIC (refer to Form 8K filed on April 19, 2010) and the Florida Office of Financial Regulation, which principally requires the Bank to (i) increase the Board’s participation in the affairs of the Bank; (ii) establish a Directors Committee to oversee the Bank’s compliance with the Order; (iii) continue to maintain qualified management; (iv) within 120 days of the Order, increase its Tier 1 leverage ratio to 8% and its total risk based capital ratio to 12%; (v) charge off certain assets classified as “loss” and “doubtful” in the Bank’s most recent report of examination which has not previously been charged off; (vi) restrict the payment of dividends and bonuses without the prior consent of the regulatory agencies; (vii) continue to ensure the adequacy of the allowance for loan and lease losses (“ALL”); (viii) not accept or renew brokered deposits without the approval of the FDIC; (ix) review and revise, where appropriate, funds management procedures and reduce the Bank’s reliance on noncore funding; (x) reduce loans classified as substandard and doubtful in the most recent examination report to 50% of the Bank’s Tier 1 capital plus the ALL within 24 months from the date of the Order; (xi) restrict additional loans to borrowers with loans currently past due; (xii) develop a plan to reduce credit concentrations; (xiii) develop and implement a written strategic and business plan to improve the Bank’s earnings; (xiv) update the Bank’s written policy for interest rate risk management; (xv) develop a written Other Real Estate policy; and (xvi) notify the Bank regulatory agencies prior to understanding asset growth of 10% or more per annum or initiating material changes in asset or liability composition. At June 30, 2010, the Bank believes that it is in substantial compliance with the Order with the exception of maintaining the elevated capital ratios. Legal proceedings The Bank is periodically a party to or otherwise involved in legal proceedings arising in the normal course of business, such as claims to enforce liens, claims involving the making and servicing of real property loans, and other issues incident to its business. Management does not believe that there is any pending or threatened proceeding against the Bank which, if determined adversely, would have a material adverse effect on the Bank’s financial position, liquidity, or results of operations. MANAGEMENT Board of Directors Our directors serve for terms of one year each. There are presently seven directors of Great Florida Bank. Each of our directors holds office for the term for which elected and until any successor has been elected and qualified, or until resignation, removal from office or death. 38

Kenneth R. Bernstein, 44, is General Counsel for Turnberry Associates, one of the premier real estate development and property management companies in America. Turnberry has developed more than $5 billion in commercial and residential properties. As General Counsel, some of Mr. Bernstein’s responsibilities included: financing matters; negotiating loan commitments; sales and acquisitions; contract negotiations; eminent domain work; and overseeing litigation, insurance, and land use matters. He has negotiated and overseen construction and/or permanent loans for regional malls, hotels, office buildings, self-storage facilities, strip centers, condominiums and residential loans. Mr. Bernstein is a member of The Florida Bar, and a Certified Public Accountant in the State of Florida, as well as a licensed Mortgage Broker. A native Floridian, he earned his juris doctorate from the University of Miami (1992), and a Bachelor of Science in accounting from the University of Florida (1987). He has served as General Counsel for Turnberry since 1994. Prior to joining Turnberry Associates, he served as an accountant with Deloitte, Haskins and Sells in Miami, Florida. He later became an associate with the law firm of Buchanan Ingersoll in Aventura, Florida as an associate. Additionally, he has owned and managed various businesses including a title company and retail store. An active member of the South Florida community, Mr. Bernstein is currently a councilman for the town of Golden Beach. Additionally, he has been involved in numerous charitable and civic activities in the City of Aventura. He has served on the Board of Directors of Aventura Jewish Center, fundraising committees for United Way, and a member of the Dade Advisory Board of Extra Helpings and Daily Bread Food Bank. Mr. Bernstein has been a director of the Bank since December 2004. Mr. Bernstein provides our board valuable help in the field of commercial real estate through his experience in all aspects of property development and management. His position as general counsel of one of the largest commercial property owners in the country provides insightful commentary on current market conditions in our market area. M. Mehdi Ghom eshi, 53, Executive Chairman, President and Chief Executive Officer has the responsibility for the strategic direction of the Bank with the best interests of the shareholders, customers, associates and the communities within which the Bank operates. Throughout his 20 plus-year South Florida banking career, Mr. Ghomeshi has developed and executed upon strategies that have resulted in long-term shareholder value. These strategies have balanced risk management, relationship growth and profitability through multiple business cycles. Mr. Ghomeshi has a range of front-line management and executive leadership experience in business development, risk management, commercial and real estate banking, as well as retail banking, and wealth management. Mr. Ghomeshi began his banking career with Barnett Banks, Inc., the dominant retail and commercial banking franchise in Florida until its sale to NationsBank in 1998. Through the 1980's, he held increasingly senior leadership positions in Special Assets, guiding and negotiating the disposition of more than $2 billion of problem loans and impaired assets. As a member of the Barnett senior leadership team, Mr. Ghomeshi was instrumental in developing risk management and credit policies that covered not only special assets, but lending, operations and other functions. During the early to mid 1990s, Mr. Ghomeshi was responsible for Commercial Real Estate banking at Barnett Bank of South Florida, the largest sub-market within the Barnett franchise. Mr. Ghomeshi was named President and Director of Barnett Bank of South Florida in 1996, the largest bank in the Barnett system at just under $5.5 billion in assets at that time. Under his leadership, the bank moved from middle tier profitability to the most profitable bank in the Barnett system. When NationsBank (now BankAmerica) purchased Barnett in 1998, NationsBank appointed Mr. Ghomeshi the Market President for South Florida, the largest market nationwide for the combined company at that time at 39

approximately $10.0 billion in combined assets. Mr. Ghomeshi was responsible for developing the customer retention and integration strategy, and for execution of the merger in South Florida. As a result of his efforts, customer retention in South Florida was the highest among all markets within the NationsBank Florida franchise. In December 1998, Mr. Ghomeshi became President and a Director of BankUnited, FSB, and served in that capacity until April 15, 2001 when he became Executive Vice Chairman. Mr. Ghomeshi left BankUnited in November 2002. As an active member of the South Florida community, Mr. Ghomeshi maintains many leadership positions within the community. He served on the Board of Directors of the United Way, leading their fundraising campaign for the financing unit in 1998. He served on the Board of Governors and Executive Committee for the Greater Miami Chamber of Commerce and was involved in the Chairman’s Circle of 100. He was a member of the Board of Directors of the Boy Scouts of America, Barry University, Miami Art Museum, and Orange Bowl Committee, American Heart Association and currently serves on the Board of Baptist Health Systems Foundation and Enterprise Florida. His community involvement has also included over the years active involvement with community development organizations such as the Miami office of the Local Initiative Support Corporation. Mr. Ghomeshi was awarded a Masters Degree in Marketing and Finance from the University of Miami in 1981. He graduated with honors and in the top one percent of his class. He also has a Bachelor of Science degree in Economics from the University of Miami. Mr. Ghomeshi is married and has two children. He has lived in Florida since 1975. Daryl Jones, 54, is the President of EquiVest Law, P. A., a real estate litigation firm. After graduating with honors from the United States Air Force Academy with his Bachelor of Science in Math in 1977, Lt. Jones served seven years on active duty in the U.S. Air Force flying the F-4 Phantom II. Mr. Jones obtained his juris doctor, cum laude, from the University of Miami School of Law in 1987, has been a practicing attorney for 23 years, and served as an investment banker for nine years. Captain Jones flew the A-7D Corsair II in the Puerto Rico Air National Guard, and the F-16 Falcon in the U.S. Air Force Reserve. In 1990, Mr. Jones was elected to the Florida House of Representatives, and in 1992 to the Florida Senate where he served until 2002. Colonel Jones retired in 2007 from the Air Force Reserve. Senator Jones is currently a member of the following organizations: the Great Florida Bank Board of Directors, the Orange Bowl Committee, and the AvMed Miami-Dade Community Advisory Board. He was a Presidential appointee to the United States Air Force Academy Board of Visitors (1995-2002), and was President Clinton’s nominee for Secretary of the Air Force (1998). He also served on the Governor’s Select Task Force on Election Procedures, Standards and Technology (2000-2001), the American Bankers Insurance Group Board of Directors (1995-1999), the Governor’s Commission for a Sustainable South Florida (1995-1997), and the Martin Luther King, Jr. Institute for Nonviolence Advisory Board (1994-2000). The recipient of numerous awards and recognitions, Daryl lives in Miami-Dade County with his wife, Myoushi and their three children. Mr. Jones’ political, legal, and community background provides the board with knowledgeable input in the areas of corporate governance, governmental affairs, and community service. He has been instrumental to our successful efforts in complying with the requirements of the Community Reinvestment Act (CRA) through his chairmanship of the CRA Committee.

40

Leslie V. Pantin, Jr., 61, is president of Pantín/Beber Silverstein/Public Relations. He is public relations counsel to some of the nation’s foremost corporations and brand names, among them McDonald’s, American Airlines, and Merrill Lynch. His special expertise encompasses diversity business issues, Hispanic affairs, community relations, education, and special events. His professional and civic contributions reach beyond South Florida, to Tallahassee and internationally. In 1988, The Miami Herald identified Mr. Pantín as one of 18 private citizens who have shaped Miami; in 1993, as one of the 100 people to shape South Florida’s history; and in 1998, the paper honored him with its “Spirit of Excellence” award. A native of Havana, Cuba, Mr. Pantín began his career with his family’s insurance company, Amerinsurance (formerly Pantín Insurance). His unique introduction to the world of public relations and special events came in 1977, when he and some friends created Calle Ocho, the world’s largest block party. This event has evolved into the 10-day festival known as Carnaval Miami, organized by the Kiwanis Club of Little Havana, for which Pantín was the founding president. He also served as the chairman of the Kiwanis International Convention in Miami in 2000 with 14,000 delegates. In 1999 Mr. Pantín conceived CubaNostalgia, an expo of the Cuba of yesteryears. The weekend event attracts 30,000 people each year, as well as prestigious sponsors. In its coverage of the event, Pulitzer Prize winner Liz Balmaseda of the Miami Herald called Pantin, “Miami’s marketer extraordinaire.” In 2003 Mr. Pantín created Merrill Lynch arteaméricas – the premier fair of art from Latin America. He has held leadership positions for national and international events such as the Summit of the Americas, Super Bowl XXIII, the Miss Universe pageant, the 1987 Papal visit, and The Breeders Cup. In 1997, he was president of the Orange Bowl Committee, and was chair of The Orange Bowl Foundation. He was a member of the Miami Business Forum. Mr. Pantín has served on the board of directors and executive committee of Barnett Bank, South Florida and on the advisory board of NationsBank Dade and Monroe Counties. He now serves on the advisory board of AvMed Health Plans. He was on the board of directors and executive committee of the Greater Miami Chamber of Commerce, where he is a past vice-chair, and he serves on its Board of Directors. He was an executive committee member of the Florida Chamber of Commerce and is currently on its Board of governors. In 1999, the Chief Justice of the Florida Supreme Court appointed him to the Florida Judicial Management Council. Governor Jeb Bush appointed him in 2007 to the Board of Trustees of Florida State University, the institution’s governing entity, and he served on the Board of Directors of Florida State University’s Alumni Association, Foundation, and Seminole Boosters. Mr. Pantín was Chairman of the board of trustees of Barry University, Miami, Florida. He is a member of the Trust for Public Land’s South Florida Advisory Council and the Dade Heritage Trust’s Board of Advisors. His Board memberships include Ronald McDonald’s Charities of South Florida, Goodwill Industries of South Florida, CAMACOL (the Latin American Chamber of Commerce) where he is also public relations advisor. He graduated from Oklahoma’s St. Gregory College and from the business school at Florida State University. Mr. Pantín lives in Coral Gables with his wife Martha, and his two children. Through his public relations firm Mr. Pantin provides the board with well founded advice in the areas of public and investor relationships. Mr. Pantin’s previous experience as a board member of one of the largest financial institutions in Florida has proven very useful in corporate governance and board procedural matters. Neal A. Roth, 57, is co-founder of the firm of Grossman and Roth, P.A. Mr. Roth is a lawyer with 30 years experience in all aspects of civil litigation. Mr. Roth is a member of the Florida Justice Association. In 2003, FJA bestowed on Mr. Roth the Perry Nichols Award which recognizes a career dedicated to the Association, its members, and the citizens of Florida.

41

Serving FJA in many capacities, he has been on the Board of Directors; became an officer 1996 1999; and its President in 1999 - 2000. As President of the organization, Neal guided the FJA activities into the new millennium. He co-chaired the Association’s Medical Liability Committee. Mr. Roth has used his extensive legal background in chairing the board’s Compliance Committee which is responsible for overseeing all regulatory matters of our Bank. His operational experience as managing partner of a successful law firm has allowed him to be extremely effective in his role as chairperson of the nominating and compensation committees. Donald D. Slesnick, II, 66, graduated from Miami Senior High, received a B.A. from the University of Virginia, a J.D. from the University of Florida and a M.P.A. from Florida International University. Mr. Slesnick is currently serving his fourth term as Mayor of the City of Coral Gables and is on the Executive Board of the Dade League of Cities. Mr. Slesnick is an attorney with Slesnick & Casey, LLP and has been in private practice since 1978 representing public section employee organizations. Prior to this he held management positions with Dade County Public Schools and Dade County Police Department. Mr. Slesnick was admitted to the Florida Bar in 1972 and the U.S. Supreme Court in 1985. Mr. Slesnick is active in civic and business organizations including the Greater Miami Chamber of Commerce, the Trust for Public Lands, the Orange Bowl Committee, the United Way and The ABA Labor and Employment Section’s governing Council. He is past chairman of the Coral Gables Community Foundation and the Miami-Dade Cultural Affairs Council, Dade Cultural Alliance. He is past President of the Dade Heritage Trust, Junior Orange Bowl Committee, Rotary Club of Coral Gables and Florida Trust for Historic Preservation. In addition, Mr. Slesnick has been the recipient of numerous awards, honors and recognition. He is a Vietnam Veteran and retired from the Army Reserve at the rank of Lt. Colonel. Mr. Slesnick resides with his wife, Jeannett, in Coral Gables, Florida. As an elected official of one of Miami-Dade County’s largest cities and as a legal expert in employee relations, Mr. Slesnick has been a valuable resource to our Bank in the areas of local governmental and human resource matters. His experience in dealing with all financial aspects of a large municipality has benefitted the Bank through his role as a member of the audit committee. John M. Stein, 42, is President, Chief Operating Officer and founder of FSI and Elbrook Holdings, Inc. He is a founder and Managing Director of Trapeza Capital Management, LLC. From 2007 through 2008, he was Executive Chairman of FSI Realty Trust. From 2005 through 2007, Mr. Stein was a director of Civitas BankGroup, Inc., a Franklin, Tennessee-based bank holding company. From 1998 through 2003, Mr. Stein was a director of Superior Financial Corp., a $1.6 billion thrift headquartered in Fort Smith, Arkansas. Prior to founding FSI, he served as Vice President and Manager of the Market Risk Analytics Group of Bankers Trust Company from 1993-1995. Prior to joining Bankers Trust, he was a commercial and investment banking consultant in the Financial Services Strategy Practice of The MAC Group/Gemini Consulting. He received a B.A. in Public Policy from the University of Chicago in 1988 and has been a Chartered Financial Analyst since 1997. Mr. Stein has been a director of the Bank since December 2005. Mr. Stein has extensive background in the banking industry through his successful career as an executive of one of the country’s foremost financial services investment advisory firms. His detailed knowledge of the banking industry and in particular community banking has been invaluable to our Bank in the strategic business planning process. Mr. Stein serves as the financial expert on our audit committee.

42

Executive Officers Gary J. Laurash, 54, serves as Chief Financial Officer and Treasurer. Mr. Laurash has 26 years of banking and financial management experience. He has held the position of Treasurer with BankUnited Financial Corporation, Home Federal Savings in Douglaston, NY, and American Savings of Florida. He has held senior financial management positions with MBNA America, Citibank, N.A. and Landmark First National Bank of Fort Lauderdale. Mr. Laurash is a graduate of the University of Cincinnati with a degree in Finance. M. Masood Ghom eshi, 49, serves as the Director of Operations for the Bank. He is responsible for the day to day operations of the Bank overseeing Retail Banking, Loan Operations, Deposit Operations, Information Technology, Facilities, and Human Resources. He has been with the Bank since July 2004 . Mr. Ghomeshi has over 20 years of experience in the high-tech bio medical industry as an executive in two of the largest biomedical companies: Beckman-Coulter and Baxter. As Director of Product Development he was responsible for design, manufacturing, and release of products to customers. During his tenure at these two companies he was also responsible for the acquisitions of other high tech companies and the creation of new and innovative products. Mr. Ghomeshi is trained in Six Sigma and possesses a strong financial discipline. Mr. Ghomeshi brings a fresh look to banking with an entrepreneurship style focused on delivering excellent service and products to customers. Mr. Ghomeshi received a Bachelor’s in Computer Engineering from Florida International University and an M.B.A with a concentration in Finance from Nova Southeastern University. Mr. Ghomeshi resides in Weston, Florida with his wife and his three children. Luis L. Moncada, 54, serves as Chief Credit Officer. With 25 years of banking experience, Mr. Moncada provides leadership for Commercial Loan Administration, Commercial Loan Underwriting, Portfolio Management and Credit File Maintenance areas of the bank. He Chairs the Loan Committee and Portfolio Management and Strategic Portfolio Management meetings. In this current economic environment, his involvement and expertise has been critical in resolving various credit matters for the Bank. Mr. Moncada worked for Mercantil Commercebank as their Credit Risk Manager which encompassed Credit Policy, Loan Review, Loan Loss Reserves and the Portfolio Management departments. He supervised 13 officers in two countries. He also developed and implemented new Credit Policy to manage risk on a safe and sound basis; developed new methodology to calculate Allowance for Loan Loss Reserves to comply with regulatory requirements and received a “Best in Class” remark from the OCC. He was a member of the Corporate Credit and Commercial Credit Committees and was a permanent guest to the Board of Director’s Risk Committee. Previous to Mercantil, Mr. Moncada was the Credit Portfolio Manager of Southern Europe for Bank of America. He managed a $6.8 billion portfolio supervising five officers in Italy and Spain. His 23 years at Bank of America also included various Credit positions in Miami, Los Angeles, London as well as Milan, Italy. His experience in these capacities covers a vast number of industries including oil & gas, construction, airlines and manufacturing. He managed the continuous evaluation of the loan portfolio and credit processes over the years covering Chile, Brazil, Argentina, and domestically in Los Angeles, San Francisco, Houston and Chicago. His educational background includes the graduate program at Wharton School at the University of Pennsylvania and undergrad at the Universidad Centro Americana in Managua, Nicaragua. 43

Stock Option Plans The Bank has a stock option plan for officers and employees (the “Employee Plan”) and a stock option plan for directors (the “Director Plan”). The Employee Plan authorizes the issuance of options for 2,335,981 shares to Bank officers and employees and the Director Plan authorizes the issuance of options for 226,519 shares to Bank Directors. As of March 31, 2010, options for an aggregate of 22,500 shares of Common Stock, of which 9,000 were exercisable, were outstanding under the Director Plan and held by directors, and options for an aggregate of 1,609,975 shares of Common Stock, of which 434,330 were exercisable, were outstanding under the Employee Plan and held by certain officers and employees. Options outstanding under the Plans have exercise prices of $10.00 to $16.00 per share. The options terminate beginning in 2014 and through 2019. Outstanding Equity Aw ards at M arch 31, 2010 O ption Aw ards N um ber of S ecurities U nderlying O ptions (#) E xercisable

N am e

M. Mehdi Ghomeshi

N um ber of S ecurities U nderlying U nexercised O ptions (#) U nexercisable

O ption E xercise P rice ($)

O ption E xpiration D ate

120,000 30,000

80,000 Class A 20,000 Class B

$10.00 $10.00

11/30/2014 (1) 11/30/2014 (1)

Gary J. Laurash

14,400 3,600 16,000 4,000

9,600 Class A 2,400 Class B 64,000 Class A 16,000 Class B 40,000 Class B

$10.00 $10.00 $16.00 $16.00 $10.00

11/30/2014 11/30/2014 12/1/2016 12/1/2016 6/2/2018

(1) (1) (2) (2) (4)

M. Masood Ghomeshi

14,400 3,600 16,000 4,000

9,600 Class A 2,400 Class B 64,000 Class A 16,000 Class B 40,000 Class B 14,400 Class A 3,600 Class B

$10.00 $10.00 $16.00 $16.00 $10.00 $10.00 $10.00

11/30/2014 11/30/2014 12/1/2016 12/1/2016 6/2/2018 4/7/2015 4/7/2015

(1) (1) (2) (2) (4) (5) (5)

9,600 2,400 (1) (2) (3) (4) (5)

Options Options Options Options Options

vest vest vest vest vest

20% 20% 20% 20% 20%

per per per per per

year year year year year

beginning beginning beginning beginning beginning

on Novem ber 30, 2007. on Decem ber 1, 2009. on April 7, 2008. June 3, 2011. April 8, 2008.

Transactions With Management Our customers include certain of our directors and executive officers, members of their immediate families, and entities with which those persons are associated. In their capacities as customers, those persons and entities had transactions with us in the ordinary course of our business during 2004 and the prior year, and are expected to have similar transactions with us in the future. Loans we make to any of those persons or entities require approval of a majority of the disinterested directors approving the loan. All loans and 44

commitments to lend included in those transactions were made in the ordinary course of business, on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with other persons and, in the opinion of management, have not involved more than the normal risk of collectibility or presented other unfavorable features. As of March 31, 2010, there were loans totaling $25.3 million to our directors and executive officers, members of their immediate families, and entities with which those persons are associated. These individuals and groups were indebted to us for loans totaling $22.5 million at December 31, 2009. We have and may continue to use the services of one or more of our directors or their respective businesses from time-to-time in our business. These services have been, and in the future would be, on terms substantially the same, or at least as favorable to us, as those prevailing at the time for comparable transactions with similarly qualified and situated unaffiliated parties. Indemnification of Directors and Officers Our Bylaws require us to indemnify our directors and officers that are made a party, or are threatened to be made a party, to any action, suit or proceeding, whether civil, criminal, administrative or investigative, in accordance with the limits of our Bylaws and Florida law. Our Bylaws and Florida law also permit us to advance expenses incurred by a director or officer in connection with the defense of a civil or criminal proceeding, upon receipt of an undertaking to repay the amount advanced if it is ultimately determined the individual is not entitled to indemnification. We presently maintain a directors and officers liability insurance policy. Insofar as indemnification for liabilities arising under the United States Securities Act of 1933 may be permitted to our directors and officers under the foregoing or otherwise, we have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in that act and is, therefore, unenforceable. MANAGEMENT’S COMMON STOCK OWNERSHIP As of March 31, 2010, the Bank had outstanding 10,446,804 shares of Class A Common Stock and 2,665,696 shares of Class B Common Stock. The following table lists, as of March 31, 2010, the amount and percentage of common stock held by each of our directors, by each of our named executive officers, by our directors and executive officers as a group, and by any person known to us to beneficially own more than 5% of our outstanding common stock. In each instance, any shares that may be acquired upon exercise of an option within 60 days are included in the computation. Amount and Nature of Beneficial Ownership Number Class A Common Stock (a)

Number Class B Common Stock (a)

Name or Identity of Group

Percent of Class Percent of Class A Common Stock

Percent of Class B Common Stock

Director: Kenneth Bernstein *

22,200

3,800

45

0.21%

0.14%

Amount and Nature of Beneficial Ownership Number Class A Common Stock (a)

Percent of Class

Number Class B Common Stock (a)

Name or Identity of Group M. Mehdi Ghomeshi

Percent of Class A Common Stock

Percent of Class B Common Stock

201,700

915,088

1.93%

34.33%

2,800

700

0.03%

0.03%

25,275

2,525

0.24%

0.09%

149,292

24,080

1.43%

0.90%

1,600

1,500

0.02%

0.06%

1,103,000

110,000

10.56%

4.13%

201,700

915,088

1.93%

34.33%

Gary J. Laurash

30,400

24,600

0.29%

0.92%

M. Masood Ghomeshi

42,000

10,500

0.40%

0.39%

1,578,267

1,092,793

15.10%

40.99%

Elliott Management Corp. 712 Fifth Avenue 35 th Floor New York, NY 10019

1,575,000 (b)

175,000 (b)

15.08%

6.56%

W ellington Management Company, LLP 75 State Street Boston, MA 02109

645,600 (c)

–

6.18%

–

Daryl L. Jones Leslie V. Pantin, Jr. Neal A. Roth ** Donald D. Slesnick, II John M. Stein *** Named Executive Officers: M. Mehdi Ghomeshi

All Directors and Executive Officers as a group (10 persons) Other 5% Shareholders:

* ** *** (a)

Excludes shares owned by Turnbery Associates Pension Plan and shares owned by brother, spouse and brotherin-law. Includes shares owned by Grossman & Roth, P.A. Includes shares owned by Financial Stocks Capital Partners IV LP. Under recognized rules for the determination of “beneficial ownership,” shares are considered to be “beneficially owned” where a person has, either alone or together with others, the power to vote or to direct the vote of shares, or the power to dispose or to direct the disposition of shares, or where a person has the right to acquire any of those powers within 60 days after the date for the determination of beneficial ownership. Shares a beneficial owner has the right to acquire within 60 days upon exercise of an option are considered as

46

(b) (c)

outstanding for computing the percentage ownership of that person, but not for the beneficial ownership of any other person. Includes shares owned by Elliott Associates L.P. and Elliott International L.P. Information is as of December 31, 2007 as reported by W ellington Management Company, LLP on its SEC Form 13G filing.

SUPERVISION AND REGULATION Introduction Virtually all aspects of our business and operations, as well as that of other commercial banks and thrift institutions and their respective holding companies, are subject to extensive supervision, regulation and oversight under both federal and state law. These include various features of deposits, loans, interest rates, mortgages, capital, reserves, liquidity, employment relationships, securities issuances and repurchases, dividend payments and establishment of branches. Supervision, regulation and examination by bank regulatory agencies are intended primarily to protect depositors, the insurance fund of the FDIC and borrowers, rather than our stockholders. Certain of the major statutes and regulations affecting us are briefly summarized in the following materials. This summary is not intended as an exhaustive description of the statutes or regulations applicable to our business, and is qualified in its entirety by this reference to those Statutes and regulations, including the particular statutory and regulatory provisions referenced in the following text. Some of the laws having a significant impact on our day-to-day business and operations that are not further discussed include those that may have particular relevance for financial institutions, including laws regulating the interest we charge, the Truth-in-Lending Act, the Equal Credit Opportunity Act, the Fair Credit Reporting Act, the Home Mortgage Disclosure Act, the Electronic Funds Transfer Act and the Fair Debt Collection Practices Act, and those more generally applicable to businesses and employers, including the Equal Employment Opportunity Act and the Occupational Safety and Health Act. In addition, new laws are proposed from time-to-time that would have a significant impact on our business, and existing laws may be changed in a manner that would be more burdensome to us. No prediction is made as to the likelihood of the adoption of any such new laws or of such changes to existing laws. As a Florida-chartered commercial bank, we are supervised and regulated by the Florida Office, and the FDIC serves as our primary federal regulator. The FDIC is also the administrator of the Bank Insurance Fund of which we are a member, and deposits with us are insured by the FDIC to the maximum extent permitted by law. We file detailed quarterly reports, including financial statements and schedules, with the Florida Office and the FDIC. Regular examinations of our business operations, including our compliance with laws and regulations, the quality of loans and investments, the sufficiency of our interest-rate risk management, the adequacy of our loan loss reserves, and the propriety of management practices, are conducted by the Florida Office and the FDIC. They have wide-ranging authority to enforce the statutes and regulations with which they are concerned, including the ability to impose monetary penalties, initiate legal proceedings, require the removal of officers or directors, and require additional capital to be raised. Recent Legislation On July 21, 2010, President Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act, or the Dodd-Frank Act, into law. The Dodd-Frank Act will have a broad impact on the financial services industry, including potentially significant regulatory and compliance changes including, among other things, (1) enhanced resolution authority of troubled and failing banks and their holding 47

companies; (2) potential changes to capital and liquidity requirements; (3) changes to regulatory examination fees; (4) changes to assessments to be paid to the FDIC for federal deposit insurance; and (5) numerous other provisions designed to improve supervision and oversight of, and strengthening safety and soundness for, the financial services sector. Additionally, the Dodd-Frank Act establishes a new framework for systemic risk oversight within the financial system to be distributed among new and existing federal regulatory agencies, including the Financial Stability Oversight Council, the Board of Governors of the Federal Reserve System, or the Federal Reserve, the Office of the Comptroller of the Currency, or the OCC, and the Federal Deposit Insurance Corporation, or the FDIC. Many of the requirements called for in the Dodd-Frank Act will be implemented over time and most will be subject to implementing regulations over the course of several years. Given the uncertainty associated with the manner in which the provisions of the Dodd-Frank Act will be implemented by the various regulatory agencies and through regulations, the full extent of the impact such requirements will have on our operations is unclear. The changes resulting from the Dodd-Frank Act may impact the profitability of our business activities, require changes to certain of our business practices, impose upon us more stringent capital, liquidity and leverage ratio requirements or otherwise adversely affect our business. These changes may also require us to invest significant management attention and resources to evaluate and make necessary changes in order to comply with new statutory and regulatory requirements. Failure to comply with any such laws, regulations, or principles or changes thereto, may negatively impact our results of operations and financial condition. While we cannot predict what effect any presently contemplated or future changes in the laws or regulations or their interpretations would have on us, these changes could be materially adverse to our investors and shareholders. The following items provide a brief description of the impact of the Dodd-Frank Act on our operations and activities, both currently and prospectively. •

Increased Capital Standards and Enhanced Supervision. The federal banking agencies are required to establish minimum leverage and risk-based capital requirements for banks and bank holding companies. These new standards will be no lower than existing regulatory capital and leverage standards applicable to insured depository institutions and may, in fact, be higher when established by the agencies. Compliance with heightened capital standards may reduce our ability to generate or originate revenue-producing assets and thereby restrict revenue generation from banking and non-banking operations. The Dodd-Frank Act also increases regulatory oversight, supervision and examination of banks, bank holding companies and their respective subsidiaries by the appropriate regulatory agency. Compliance with new regulatory requirements and expanded examination processes could increase our cost of operations.

•

The Consumer Financial Protection Bureau. The Dodd-Frank Act creates a new, independent Consumer Financial Protection Bureau, or the Bureau, within the Federal Reserve. The Bureau is tasked with establishing and implementing rules and regulations under certain federal consumer protection laws with respect to the conduct of providers of certain consumer financial products and services. The Bureau has rulemaking authority over many of the statutes governing products and services offered to bank consumers. Generally, we will not be directly subject to the rules and regulations of the Bureau. However, the Dodd-Frank Act permits states to adopt consumer protection laws and regulations that are stricter than those regulations promulgated by the Bureau and state attorneys general are permitted to enforce consumer protection rules adopted by the Bureau against certain statechartered institutions. Although our bank subsidiaries do not currently offer many of these consumer products or services, compliance with any such new regulations would increase

48

our cost of operations and, as a result, could limit our ability to expand into these products and services. •

Deposit Insurance. The Dodd-Frank Act makes permanent the $250,000 deposit insurance limit for insured deposits. Amendments to the Federal Deposit Insurance Act also revise the assessment base against which an insured depository institution’s deposit insurance premiums paid to the FDIC’s Deposit Insurance Fund, or the DIF, will be calculated. Under the amendments, the assessment base will no longer be the institution’s deposit base, but rather its average consolidated total assets less its average tangible equity. Additionally, the Dodd-Frank Act makes changes to the minimum designated reserve ratio of the DIF, increasing the minimum from 1.15 percent to 1.35 percent of the estimated amount of total insured deposits, and eliminating the requirement that the FDIC pay dividends to depository institutions when the reserve ratio exceeds certain thresholds. Several of these provisions could increase the FDIC deposit insurance premiums paid by us. The Dodd-Frank Act also provides that, effective one year after the date of enactment, depository institutions may pay interest on demand deposits.

•

Transactions with Affiliates. The Dodd-Frank Act enhances the requirements for certain transactions with affiliates under Section 23A and 23B of the Federal Reserve Act, including an expansion of the definition of “covered transactions” and increasing the amount of time for which collateral requirements regarding covered transactions must be maintained.

•

Transactions with Insiders. Insider transaction limitations are expanded through the strengthening on loan restrictions to insiders and the expansion of the types of transactions subject to the, various limits.

•

Enhanced Lending Limits. The Dodd-Frank Act strengthens the existing limits on a depository institution’s credit exposure to one borrower. Current banking law limits a depository institution’s ability to extend credit to one person (or group of related persons) in an amount exceeding certain thresholds. The Dodd-Frank Act expands the scope of these restrictions to include credit exposure arising from derivative transactions, repurchase agreements, and securities lending and borrowing transactions.

Capital Adequacy; Prompt Corrective Action We are required to and do comply with the FDIC’s capital adequacy regulations. These regulations have aspects requiring a risk-weighting for each asset of a financial institution and requiring a defined leverage ratio of common stockholders’ equity (less certain intangible assets) to total assets (excluding goodwill). These provisions generally result in requiring a financial institution to have more capital as the nature of its assets are determined to become more risky when assigned to risk categories defined in the regulations. Any failure to meet these capital requirements would subject us to a variety of enforcement remedies of the FDIC, including the requirement to raise additional capital, and restrictions on our growth and other aspects of our business. For purposes of determining the severity of corrective action the appropriate federal banking agency may take when a financial institution reaches a given level of undercapitalization, the Federal Deposit Insurance Corporation Improvement Act of 1991 and related regulations establish five capital categories from “well capitalized” to “critically undercapitalized.” As an institution’s capital level deteriorates, the nature and extent of action to be taken by the appropriate federal banking agency increases, as do the restrictions on the 49

operations and transactions of the institution. Pursuant to this act, the federal banking agencies also adopted a series of regulations governing many of the day-to-day aspects of the business of financial institutions (e.g., loan documentation, credit underwriting criteria, interest-rate exposure, and compensation, fees and benefits). Were we to fail to comply with those regulations, or to meet applicable capital requirements under the 1991 act and the federal prompt corrective action regulations, substantial restrictions would be imposed on us. While our capital ratios as of March 31, 2010 were within the “well capitalized” category, we were categorized as “adequately capitalized” because we are subject to the Regulatory Order. See “Management’s Discussion and Analysis - Liquidity and Capital Resources - Regulatory Capital Requirements” for additional information regarding federal capital requirements and our compliance with those requirements. The Florida Office also is continuously concerned with the capital of state-chartered financial institutions, and regulates various activities such as granting permission to organize an institution, the payment of dividends and branching based on the capital adequacy of institutions. Institutional Restructuring and Flexibility The Gramm-Leach-Bliley Act. It removed many of the barriers established in the 1930s to prevent affiliations of many types of financial services companies (e.g., bank holding, securities and insurance companies). For example, a bank holding company that becomes a newly authorized “Financial Holding Company” under this law, would be permitted to conduct many securities, insurance and merchant banking activities, as well as other activities “financial in nature” or incidental or complementary to a financial activity. This legislation may lead to further consolidation in the financial services field, and adds an additional range of competition to stand-alone commercial banks such as us. Another major aspect of this law was the establishment of a minimum federal standard of financial privacy. This requires, among other matters, repetitive disclosures to customers of an institution’s privacy policies, and how information regarding customers is gathered, used and shared. Another significant piece of legislation in this area is the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994. Under defined limits, this act allows bank holding companies located in one state to acquire banks located in any other state, regardless of any contrary state law, and permits national and state-chartered banks to branch across state lines through an acquisition of a bank in another state, unless the State has “opted out” of this branching feature of the act. Florida and the other southeastern states did not “opt out” of this feature within the time permitted by the statute. This act increases the flexibility of financial institutions in one state to enter the Florida market and vice versa. Restrictions on Acquiring Control State and federal law and regulations restrict the amount of our common stock (as well as the voting stock of other banks) that a person, or two or more persons acting as a group, may acquire, directly or indirectly, without the prior approval of banking regulators. A presumption of control may arise when a person or a group acquires 10% or more of an institution’s voting stock. These provisions make it more difficult to acquire control of a bank than a nonfinancial commercial enterprise, and may make it less likely that our stockholders would benefit from rapid increases in stock prices often accompanying tender offers, proxy contests or similar efforts to acquire control of other companies. A change in control of the Bank within the meaning of these laws and regulations would require an application to and the approval of the Florida Office, and would also require notice to and the approval of, or the failure to object by, the FDIC. Several factors in addition to the 10% presumption go into a 50

determination under Florida and federal law of the existence of control of a bank. These include ownership, control or the power to vote 25% of any class of voting stock of the bank; controlling the election of a majority of its directors; and the Florida Office’s determination that there exists the direct or indirect power to exercise a controlling influence over the management or policies of the bank. The responsibility for complying with these and other change in control laws and regulations is on those persons who acquire shares of financial institutions, and not on the financial institutions issuing the shares. Limits on Loans to One Borrower, and Transactions with Affiliates Subject to limited exceptions, we may extend secured credit to any one borrower in an amount equal to 25% of our capital accounts (i.e., unimpaired capital, surplus and undivided profits), and unsecured credit to any one borrower in an amount that does not exceed 15% of our capital accounts. However, when loans to any one borrower consist of both secured and unsecured portions, the aggregate amount may not exceed 25% of our capital accounts, and the unsecured portion may not exceed 15% of our capital accounts. At March 31, 2010, these restrictions would permit us to lend $12.7 million on a secured basis and $7.6 million on an unsecured basis, without participating any portion of the loan to another lender. Sections 23A and 23B of the Federal Reserve Act, among other matters, place multiple restrictions on the amount of loans or other extensions of credit by us to our affiliates, investments by us in any affiliate, and on certain transactions with affiliates. These limitations include dollar amounts based on our capital and surplus, collateral requirements, and that any otherwise permissible transaction be on terms substantially the same, or at least as favorable to us, as those prevailing at the time for comparable transactions with nonaffiliated companies or persons. Regulation of Dividend Payments As a Florida state-chartered commercial bank, we may not pay cash dividends that would cause our capital to fall below the minimum amount required by federal or state law, or at any time when our net income from the current year combined with our retained net income from the preceding two years is a loss. Without permission from the Florida Office, we may only pay a dividend out of the total of current net profits, plus our retained net profits from the preceding two years, but only after transferring to surplus 20% of the net profits of the preceding period covered by the dividend, until the surplus fund equals the amount of issued and outstanding capital stock. The FDIC may take action to stop a bank from paying a dividend if it believes it would be an unsafe or unsound practice (e.g., if the payment would reduce an institution’s capital to an inadequate level). Branch Banking Banks in Florida are permitted to branch statewide. Such branch banking by banks, however, is subject to prior approval by the Florida Office and the FDIC. Any such approval will take into consideration several factors, including the Bank’s level of capital, the prospects and economics of the proposed branch office, the bank’s regulatory profile, and other conditions deemed relevant by the Florida Office and the FDIC for purposes of determining whether approval should be granted to open a branch office.

51

Community Reinvestment We have a continuing and affirmative obligation, consistent with safe and sound operation, to help meet the credit needs of our entire community, including low and moderate-income individuals and neighborhoods, under the Community Reinvestment Act of 1977. This act requires the appropriate federal bank regulatory agency (in our case, the FDIC) to assess a financial institution’s record in meeting the credit needs of the community served by it, including low and moderate-income neighborhoods, in connection with its regular examinations. The agency’s assessment focuses on an evaluation of the institution’s: (i) record of making loans in its service areas; (ii) record of investing in community development projects; and (iii) delivery of services through its branches and other offices. A review of the performance of an institution under this legislation and related regulations is made in connection with many applications the institution might make to its federal regulator, including an application to establish or to acquire a new branch. Money Laundering and Anti-Terrorism Act The International Money Laundering Abatement and Anti-Terrorism Funding Act of 2002 became law in October 2002 as a part of the efforts to combat money laundering by terrorists. The act mandates the issuance of new “know your customer” regulations to require U.S. financial institutions to take actions to verify the identity of account holders opening an account at the institution. Compliance with this act will be among the matters reviewed by bank regulators during examinations and considered by them in connection with requests for various regulatory approvals. Sanctions of up to $1 million may be imposed for violations of the act. USA Patriot Act In 2001, the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (the “USA Patriot Act”) was signed into law. The USA Patriot Act broadened the application of anti-money laundering regulations to apply to additional types of financial institutions, such as broker-dealers, and strengthened the ability of the U.S. Government to detect and prosecute international money laundering and the financing of terrorism. The principal provisions of the Act require that financial institutions (i) establish an anti-money laundering program that includes training and audit components, (ii) comply with regulations regarding the verification of the identity of any person seeking to open an account, (iii) take additional required precautions with non-U.S. owned accounts, and (iv) perform certain verification and certification of money laundering risks for their foreign correspondent banking relationships. The Act also expanded the conditions under which funds in a U.S. interbank account may be subject to forfeiture and increased the penalties for violation of anti-money laundering regulations. Failure of a financial institution to comply with the Act’s requirements could have serious legal and reputational consequences for the institution. Federal Home Loan Bank System As indicated, we are a member of the Federal Home Loan Bank system; which consists of 12 regional Federal Home Loan Banks. The FHLB system is governed and regulated by the Federal Housing Finance Board. The FHLB provides a central credit facility for member institutions. As a member of the FHLB, we are required to acquire and to hold a specified amount of shares of capital stock in the FHLB, generally depending on the principal balance of our residential mortgage loans, or the level of our borrowings from the FHLB. Advances are made by the FHLB according to policies and procedures established by the Federal Housing Finance Board and the board of directors of the FHLB, and are typically secured by a member’s

52

shares of stock in the FHLB and by certain types of mortgage assets. Interest rates charged for advances vary depending on maturity, the cost of funds to the FHLB and the purpose of the borrowing. Monetary Policy Our business and the banking business in general are affected not only by general economic conditions, but also by the monetary policies of the Federal Reserve Board. The Federal Reserve Board has many tools of monetary policy available to it to influence the economy, including changes in the discount rate, changes in the reserve requirements against transaction accounts and the availability of borrowing at the “discount window.” The monetary policies of the Federal Reserve Board are influenced by various factors, including inflation, unemployment, changes in the international balance of trade and the fiscal policies of the U.S. Government. These policies are expected to continue to have a significant, but unpredictable effect on the operating results of commercial banks. Accounting Standards Changes The pronouncements and guidelines on accounting practices of commercial businesses, including financial institutions, issued from time-to-time by the Financial Accounting Standards Board may impact the presentation and reported amounts of assets, liabilities and income in our financial statements. See Note 2 to the consolidated financial statements for additional information. Sarbanes-Oxley Act of 2002 In 2002, the Sarbanes-Oxley Act of 2002 was enacted. The Securities and Exchange Commission (the “SEC”) has promulgated certain regulations pursuant to the Act that will continue to impose additional implementing or clarifying regulations as necessary in furtherance of the Act. The passage of the Act and the regulations implemented by the SEC subject publicly-traded companies, including the Bank, to additional and more extensive reporting regulations and disclosure. Compliance with the Act and corresponding regulations may increase the Bank’s expenses. DESCRIPTION OF CAPITAL STOCK General Our authorized capital stock consists of 80,000,000 shares of Class A common stock, par value $5 per share and 30,000,000 shares of Class B common stock, par value $5 per share. A total of 10,446,804 shares of Class A common Stock and 2,665,696 Class B common stock are presently outstanding, and an additional 930,025 are currently reserved for issuance under our stock option plans. We are also authorized to issue up to 5,000,000 shares of preferred stock. Our common stock represents nonwithdrawable capital, not deposits, and is not insured by the FDIC or any other agency. The outstanding shares will be fully paid and not liable for any call or assessment upon completion of this offering. Voting Provisions Voting Rights Per Share. Each owner of Class B common stock is entitled to one vote per share on all matters submitted to vote of our shareholders. The Class A common stock is not entitled to vote, except as required by law. 53

Director Elections. Directors are elected by a plurality of the votes cast by holders of Class B common stock in the election. That is, those candidates receiving the highest number of votes for the number of positions to be filled are the ones elected. As our stockholders do not have the right to cumulate votes in the election of directors, the holders of a majority of the outstanding shares would be assured of electing persons to fill all positions open for election at each election of our directors. Under our Articles of Incorporation and Bylaws, our authorized directors are elected each year for a term of one year. Entitlement to Dividends Each share of common stock is entitled to share equally in dividends and other distributions we may make if, as, and when declared by our Board of Directors out of assets legally available therefor, subject to the prior preference for shares of preferred stock. We have agreed with the Bank regulatory agencies that we will not pay cash dividends without their prior approval. See “ Business – Regulatory Order.” We do not expect to pay cash dividends in the foreseeable future, and the payment of dividends is subject to statutory and regulatory restrictions. Further Stock Issuances Holders of the shares do not have any preemptive rights to purchase any shares of any class of capital stock of the Bank that may be issued in the future. Other than common stock issued for certain stock dividends or upon exercise of options we grant under our stock option plans, issuances of common stock by us require, directly or indirectly, the prior notice of the Florida Office. We have notified the Florida Office of our intention to sell shares in this offering, but that notification is not an endorsement or approval of the common stock or any determination regarding the adequacy or accuracy of this offering circular. Liquidation and Other Provisions Holders of the common stock would be entitled to share ratably in the distribution of assets remaining after payments due to depositors, creditors and others having a prior right of payment in the event of any liquidation, dissolution or winding up of the Bank, including the holders of shares of preferred stock. The shares are not subject to any redemption or sinking fund provisions, and do not have any conversion privileges. Shares may not be repurchased by us without advance permission from the Florida Office and the FDIC. Preferred Stock General. Under our articles of incorporation, we are authorized to issue up to 5,000,000 shares of Class A Preferred Stock (which are the shares of preferred stock being sold in this offering), and our board of directors has the authority to divide the remaining 4,950,000 authorized shares of our preferred stock into series and to fix the rights and preferences of any series so established. Variations between different series may be created by the board of directors with respect to such matters as voting, if any; the rate of dividend, the priority of payment thereof, and the right to cumulation thereof, if any; redemption terms and conditions; and the right of conversion, if any. The holders of preferred stock have no preemptive right to subscribe to any additional securities which we may issue. The following describes the terms of the Preferred Stock that is being sold in this offering. Fully Paid and Subordinate to Creditors. The Preferred Stock upon issuance against full payment of the purchase price thereof, will be fully paid and non-assessable. The rights of the holders of shares of 54

Preferred Stock are subordinate to the rights of general creditors and there is no sinking fund with respect to the Preferred Stock. The $1,000 liquidation preference per share is not indicative of the price at which the Preferred Stock may actually trade at or after the date of issuance. Rank. The Preferred Stock, with respect to dividend rights and rights upon liquidation, dissolution or winding up of the Bank, ranks senior to the common stock and to all other classes of equity securities of the Bank, other than any classes of equity securities of the Bank subsequently issued ranking on a parity with, or senior to, the Preferred Stock, as to dividend rights and rights upon liquidation, dissolution or winding up of the Bank. The relative rights and preferences of the Preferred Stock may be subordinated to the relative rights and preferences of holders of subsequent issues of other classes of Preferred Stock and equity securities designated by the board of directors. The Preferred Stock is junior to indebtedness issued from time to time by the Bank, including notes and debentures. Dividends. Holders of shares of Preferred Stock entitled to share equally in dividends and other distributions we may make if, as and when declared by our Board of Directors out of assets legally available therefor. We have agreed that we will not pay any cash dividends without the prior approval of the Bank regulatory agencies. Accordingly, we do not expect to pay cash dividends in the foreseeable future on the shares of Preferred Stock. Liquidation Rights. In the event of any voluntary or involuntary liquidation, dissolution, or winding up of the Bank, the holders of shares of Preferred Stock are entitled to receive out of assets of the Bank available for distribution to shareholders, before any payment or distribution of assets is made to holders of common stock or any other class of stock ranking junior to the Preferred Stock and subject to any equity securities subsequently issued senior to the Preferred Stock, upon liquidation, liquidating distributions in the amount of $1,000 per share plus the amount of any declared and unpaid dividends to the date fixed for such liquidation, dissolution or winding up. If upon any voluntary or involuntary liquidation, dissolution or winding up of the Bank, the amounts payable with respect to the Preferred Stock and any other shares of stock of the Bank ranking as to any such distribution on a parity with the Preferred Stock are not paid in full, the holders of the Preferred Stock and such other shares will share ratably in any such distribution of assets of the Bank in proportion to the full respective preferential amounts to which they are entitled, the holders of shares of Preferred Stock will not be entitled to any further participation in any distribution of assets by the Bank. Voting Rights. Each share of Preferred Stock will have one vote. The shares of Preferred Stock and the Class B stock will vote together at each meeting of Bank shareholders. Conversion Rights. Each share of preferred stock is convertible into Class A and Class B common stock until December 31, 2012 based on the offering price of $1,000 per share divided by 75% of the per share book value of the common stock (i.e., total shareholders’ equity (less the then current liquidation value of the preferred stock) divided by the outstanding shares of common stock) as reported in the Bank’s financial statements as of the end of the calendar quarter prior to conversion. The proportion of common stock will be 90% Class A and 10% Class B, rounded up to the nearest whole share of common stock. For example, if such book value per share of outstanding Common Stock is $5.00, then one share of Preferred Stock (i.e., $1,000) is convertible into 200 shares of Common Stock ($1,000 divided by $5.00), with such 200 shares of Common Stock being comprised of 180 shares of Class A common stock and 20 shares of Class B common stock. Using March 31, 2010 as an example, the capital and outstanding shares reported on the FFIEC Call Report results in a book value per share of $7.93, which would be adjusted by 75% to get to a conversion price of $5.95. Therefore, one share of preferred stock would be comprised of 151 shares of common A and 17 shares of common B. The Preferred Stock automatically converts on January 1, 2013 (if not converted 55

previously) at the price set forth above. Also, the Preferred Stock converts into Common Stock earlier upon the change in control of the Bank at the price set forth above. A change of control means (i) a merger or consolidation of the Bank with an unaffiliated entity, but not including a merger or consolidation in which any individual or group of shareholders of the Bank immediately prior to such merger or such consolidation are the beneficial owners of more than 50% of the outstanding shares of the Common Stock of the surviving corporation immediately after such merger or consolidation; (ii) the acquisition by any individual or group of beneficial ownership of more than 50% of the outstanding shares of the Bank’s Common Stock ; or (iii) any other transaction that two-thirds of the directors of the Bank deem to be a change in control. A change of control expressly excludes the formation of a bank holding company for the Bank which is substantially owned by the holders of a majority of the outstanding shares of Common Stock immediately following the consummation of such transaction. Any fractional share of common stock resulting from the conversion of the preferred stock will be rounded up to the nearest whole share of common stock. Redemption Rights. The Preferred Stock may be redeemed by us at any time (subject to the receipt of prior approval from the applicable bank regulatory agencies as and to the extent required) in an amount equal to $1,000 per share plus any declared and unpaid dividends on each such share. Any redemption of the Preferred Stock requires the prior approval of the Bank regulatory agencies as and to the extent required. The Regulatory Order currently precludes the Bank from redeeming any shares of Preferred Stock. We are required to provide at least 30 days prior written notice for redemption of the Preferred Stock. Preemptive Rights. Holders of the Preferred Stock do not have any preemptive or preferential right to subscribe for, purchase, receive or otherwise acquire any new or additional shares of stock of any class, or any bonds, debentures, notes or other securities of the Bank. No Sinking Fund. There is no sinking fund with respect to the Preferred Stock. Business Combinations Unless an exemption is available, the Florida Business Corporation Act prohibits certain “business combinations” (including any merger or similar transaction subject to a statutory stockholder vote and additional transactions involving transfers of assets or securities in specific amounts) between a Florida corporation (including the Bank) and certain “interested stockholders” for a period of five years after the most recent date on which that stockholder became an interested stockholder. For purposes of this prohibition, an “interested stockholder” is: (i) any person who, after the date on which the corporation has 100 or more beneficial owners of its stock, beneficially owns 10% or more of the voting power of the corporation’s shares; and (ii) any affiliate of the corporation who, at any time within the two-year period prior to the date in question and after the date on which the corporation has 100 or more beneficial owners of its stock, was the beneficial owner of 10% or more of the voting power of the then-outstanding voting stock of the corporation, or an affiliate thereof. After that five-year period, any such business combination must be recommended by the board of directors of the corporation and approved by the affirmative vote of at least: (i) 80% of the votes entitled to be cast by holders of outstanding voting shares of the corporation; and (ii) two-thirds of the votes entitled to be cast by holders of outstanding voting shares of the corporation other than shares held by the interested stockholder with whom the business combination is to be effected, unless the corporation’s stockholders receive a minimum price (as described in the Florida Business Corporation Act) for their shares and the consideration is received in cash or in the same form as previously paid by the interested stockholder for its shares. These provisions of Florida law do not apply, however, to business combinations that are approved or exempted by the board of directors prior to the time that the stockholder becomes an interested stockholder, 56

or if our Articles are amended to specifically provide that we are not subject to the foregoing requirements. Under the Florida Business Corporation Act, such an amendment must be approved by an affirmative vote of at least 50% of the votes entitled to be cast by all holders of outstanding shares of voting stock and twothirds of the votes entitled to be cast by holders of outstanding shares of voting stock who are not interested stockholders. Control Share Acquisitions The Florida Business Corporation Act provides that “control shares” of a Florida corporation (including the Bank) acquired in a “control share acquisition” have no voting rights except to the extent approved by a vote of two-thirds of the shares entitled to be voted on the matter, excluding shares of stock owned by the acquirer or by officers or directors who are employees of the corporation. “Control shares” are voting shares of stock which, if aggregated with all other such shares of stock previously acquired by the acquirer, or in respect of which the acquirer is able to exercise or direct the exercise of voting power except solely by virtue of a revocable proxy, would entitle the acquirer to exercise voting power in electing directors within one of the following ranges of voting power: (i) one-tenth or more but less than one-third; (ii) one-third or more but less than a majority; or (iii) a majority of all voting power. Control shares do not include shares the acquiring person is then entitled to vote as a result of having previously obtained stockholder approval. A “control share acquisition” means the acquisition of control shares, subject to certain exceptions. A person who has made or proposes to make a control share acquisition, upon satisfaction of certain conditions (including an undertaking to pay expenses and delivery of an “acquiring person statement”), may compel the corporation’s board of directors to call a special meeting of stockholders to be held within 50 days of demand to consider the voting rights of the shares. If no request for a meeting is made, the corporation may itself present the question at any stockholders’ meeting. Unless the charter or bylaws provide otherwise, if voting rights are not approved at the meeting or if the acquiring person does not deliver an acquiring person statement within 10 days following a control share acquisition then, subject to certain conditions and limitations, the corporation may redeem any or all of the control shares (except those for which voting rights have previously been approved) for fair value determined, without regard to the absence of voting rights for the control shares, as of the date of the last control share acquisition or of any meeting of stockholders at which the voting rights of such shares are considered and not approved. Moreover, unless the charter or bylaws provides otherwise, if voting rights for control shares are approved at a stockholders’ meeting and the acquirer becomes entitled to exercise or direct the exercise of a majority or more of all voting power, other stockholders may exercise appraisal rights. The fair value of the shares as determined for purposes of such appraisal rights may not be less than the highest price per share paid by the acquirer in the control share acquisition. Transfer Agent American Stock Transfer and Trust Company serves as the transfer agent for our common stock and also will serve as transfer agent for the shares of preferred stock.

SHARES ELIGIBLE FOR FUTURE SALE The sale, or availability for sale, of a substantial number of shares of common stock in the public market as a result of or following this offering could adversely affect the prevailing market price of our common stock and could impair our ability to raise additional capital through the sale of equity securities. 57

As of the date of this offering circular, all of the shares of our outstanding common stock were freelytradable. The shares issued in this offering will be freely-tradable by persons who are not affiliates of the Bank. WHERE YOU MAY FIND ADDITIONAL INFORMATION We are subject to the information requirements of the Securities Exchange Act of 1934 (the “Exchange Act”), which means we are required to file annual, quarterly and special reports, proxy statements and other information with the FDIC. Paper copies of Form 10-K annual reports, Form 10-Q quarterly reports, Form 13-D or 13-G, Form 8-K current reports, proxy solicitation statements, and other Exchange Act filings may be obtained by e-mailing the filing desk at [email protected] or by FAX at 202-8988505 or calling 202-898-8908/202-898-8913. Written requests may be sent to: Federal Deposit Insurance Corporation, Accounting and Securities Disclosure Section, 550 17 th Street, N.W. - Room F-6043, Washington, D.C. 20429. Only Forms 3, 4 and 5 are available electronically on line through FdicConnect on the FDIC’s website: http://www2.FDIC.gov/efr. This Offering Circular does not contain all of the information you can find in a registration statement or the exhibits to a registration statement. We have incorporated by reference into this Offering Circular the information we have filed with the FDIC. The information incorporated by reference is an important part of this Offering Circular, and the information that we file subsequently with the FDIC will automatically update this Offering Circular. Absent unusual circumstances, we will have no obligation to amend this Offering Circular, other than filing subsequent information with the FDIC. The historical and future information that is incorporated by reference in this Offering Circular is considered to be part of this Offering Circular and can be obtained at the locations described above. The information included elsewhere in this Offering Circular and the following information incorporated by reference is considered to be part of this Offering Circular: •

Our Annual Report on Form 10-K for the year ended December 31, 2009;

•

Our Definitive Proxy Statement and Schedule 14A for Annual Meeting of Shareholders held on April 29, 2010 and filed with the FDIC;

•

Our quarterly report on Form 10-Q for the quarter ended March 31, 2010 filed with the FDIC; and

•

Our current reports on Form 8-K filed with the FDIC on May 4, 2010, April 30, 2010, April 19, 2010, February 3, 2010 and January 14, 2010.

We maintain an Internet website at www.greatfloridabank.com where the incorporated reports listed above can be accessed. The June 30, 2010 10-Q Report will be filed with the FDIC and available on the website after August 17, 2010. We also incorporate by reference any filings we make with the FDIC under (i) Sections 13(a) of the Exchange Act after March 31, 2010, and (ii) Sections 13(a), 13(c) or 14 of the Exchange Act since the date of this Offering Circular and before the time that all of the securities offered by this Offering Circular are sold. We will provide you a copy of any information that we incorporate by reference into this offering circular at no cost, by writing or telephoning us. Please send your request to: 58

Great Florida Bank Attention: Gary J. Laurash Chief Financial Officer and Treasurer 15050 NW 79th Court Suite 200 Miami Lakes, Florida, 33016 (305) 514-6921 INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS Our historical information has been derived from our audited consolidated financial statements for each of the five years ended December 31, 2005 through 2009. These consolidated financial statements have been audited by Morrison, Brown, Argiz and Farra, LLP, independent registered public accountants, whose reports expressed unqualified opinions. The 2006 and 2007 unqualified opinions included an emphasis paragraph due to the change in the Bank’s method of accounting for stock based compensation. Information subsequent to December 31, 2009 has not been audited.

59

You should rely only on the information in this offering circular. We have not authorized anyone to provide you with different information. This offering circular does not constitute an offer to sell or a solicitation of an offer to buy any of the shares of common stock to any person or in any jurisdiction in which an offer or solicitation is not authorized, or in which the person making an offer or solicitation is not qualified to do so, or to any person to whom it is unlawful to make an offer or solicitation in those jurisdictions. The information in this offering circular, regardless of the time of delivery or of any sale of the shares, is accurate as of the date of this offering circular. ___________ TABLE OF CONTENTS ___________________ Summary.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Selected Financial Data. . . . . . . . . . . . . . . . . . 3 Risk Factors. . . . . . . . . . . . . . . . . . . . . . . . . . 10 Special Cautionary Note Regarding Forward-Looking Statements. . . . . 16 Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . 17 The Offering. . . . . . . . . . . . . . . . . . . . . . . . . . 18 Capitalization. . . . . . . . . . . . . . . . . . . . . . . . . 20 Stockholder Matters.. . . . . . . . . . . . . . . . . . . 21 Business. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Management. . . . . . . . . . . . . . . . . . . . . . . . . . 38 Management’s Common Stock Ownership..45 Supervision and Regulation.. . . . . . . . . . . . . 47 Description of Capital Stock .. . . . . . . . . . . . 53 Shares Eligible for Future Sale. . . . . . . . . . . 57 Where You May Find Additional Information. . . . . . . . . . . . . . . . . . . . 58 Independent Registered Public Accountants. . . . . . . . . . . . . . . . . . . . 59

Up to 50,000 Preferred Shares $1,000 per share

GREAT FLORIDA BANK A F LORIDA C HARTERED B ANK

____________________ O FFERING C IRCULAR ____________________

August 17, 2010

GREAT FLORIDA BANK 15050 NW 79th Court Miami Lakes, Florida 33016 (305) 514-6921

SUBSCRIPTION AGREEMENT PREFERRED STOCK

The undersigned hereby agrees to purchase from Great Florida Bank the amount set forth at the end of this Subscription Agreement of preferred stock (the “Shares”) offered by Great Florida Bank (the “Bank”). Execution of this Subscription Agreement by the undersigned constitutes an offer to purchase the amount of Shares indicated at the end of this Subscription Agreement on the terms and conditions specified herein. The Bank will have the right in its sole and absolute discretion to accept or reject such offer in whole or in part. The undersigned encloses herewith a check or checks payable to “Great Florida Bank” in an amount equal to the principal amount of the Shares subscribed. The amounts payable by check or wire transfer are referred to in this Subscription Agreement as the “Subscription Funds.” The Shares are not deposits and are not insured by the FDIC or any other agency, and are subject to investment risks, including the possible loss of investment. The Shares are subordinate to the claims of depositors and other creditors. If the Bank elects to close on the sale of such Shares, the undersigned understands that the Subscriber’s Subscription Funds will be accepted by Bank in payment of the Subscriber’s required subscription payment. If the offering of Shares terminates for any reason, the Subscription Funds will be refunded without interest or deduction. As soon as practicable after the sale of the Shares, the Shares registered in the name of the undersigned, together with a copy of the Subscription Agreement executed by the Bank, will be delivered to the undersigned at the address set forth at the end of this Subscription Agreement. 1.

Representations and Warranties. The undersigned represents, warrants and agrees as follows

(PLEASE READ CAREFULLY): (a) The undersigned has received, has carefully read and is familiar with the Offering Circular (the “Offering Circular”) of the Bank distributed in connection with the offering of the Shares. The terms of such Offering Circular are made a part hereof as if set forth herein. (b) The undersigned has such knowledge and experience in financial and business matters to enable the undersigned to evaluate the risks and merits of an investment in the Shares, and the tax consequences associated therewith, and to make an informed decision with respect thereto. 2.

General.

(a) The undersigned will not transfer or assign this Subscription Agreement, or any of the undersigned’s interest herein.

Page 1 of 5

(b) This Subscription Agreement is irrevocable (except for withdrawal rights under applicable state securities laws), shall survive the death or disability of the undersigned and shall be binding upon the undersigned’s heirs, executors, administrators, successors and assigns. (c) This Subscription Agreement constitutes the entire agreement among the parties hereto with respect to the subject matter hereof and may be amended only by a writing executed by all parties. (d) This Subscription Agreement shall be enforced, governed and construed in all respects in accordance with the laws of the State of Florida. 3. Indemnification. The undersigned understands the consequences of the agreements, representations and warranties set forth in this Subscription Agreement, and shall indemnify and hold harmless, on demand, the Bank and its respective officers, directors, affiliates, agents, and employees from and against all claims, allegations, damages, losses, costs and expenses (including reasonable attorneys’ fees) which they may incur, directly or indirectly, by reason of the failure of the undersigned to fulfill any of the terms or conditions of this Subscription Agreement, or the misrepresentation or inaccuracy of any of the representations and warranties made by the undersigned herein, or in any document provided by the undersigned to the Bank. 4. Gender. For all purposes of this Subscription Agreement, all pronouns shall be deemed to include the masculine, feminine, and neuter pronoun, as the identity of the undersigned person may require. 5. Counterparts. This Subscription Agreement may be executed in counterparts, all of which shall be deemed to be duplicate originals.

Page 2 of 5

SHARES SUBSCRIBED; PAYMENT STEP ONE: SHARES SUBSCRIBED: The undersigned hereby subscribes for the following number of shares of the Bank’s preferred stock: ____________ shares STEP TW O: AM OUNT OF PAYM ENT: The undersigned encloses herewith a check payable to “Great Florida Bank” or wire transfer in the following amount (number of shares subscribed for multiplied by $1,000 per share equals amount of payment): $__________________ STEP THREE: FORM OF PAYM ENT: The form of payment enclosed is indicated by the box checked below: G

Uncertified Check

G

Certified or Cashier’s Check

G

W ire Transfer

STEP FOUR: TYPE OF OW NERSHIP: The form of ownership of the preferred stock by the Subscriber is indicated by the box checked below: G

Subscribing Individually

G

Subscribing as Joint Tenants with Right of Survivorship (each joint tenant must then sign)

G

Subscribing as Tenants in Common (with no right of Survivorship - each tenant in common must then sign)

G

Subscribing as a Corporation, Partnership or Trust

STEP FIVE: SIGNATURE: IN W ITNESS W HEREOF, the undersigned has executed this Subscription Agreement on this ______ day of _______________, 2010. (Please sign in exact name(s) of Subscriber(s). If subscribing as Joint Tenants with Right of Survivorship or Tenants in Common, all must sign below.) ________________________________________ Printed Name of Subscriber

___________________________________________ Printed Name of Subscriber

________________________________________

___________________________________________

________________________________________ (Address)

___________________________________________ (Address)

By:____________________________________ (Signature)

By: _______________________________________ (Signature)

___________________________________ Daytime Phone Number

_______________________________________ Daytime Phone Number

___________________________________ Social Security Number or Tax Identification Number

_______________________________________ Social Security Number or Tax Identification Number

Page 3 of 5

ACCEPTED: GREAT FLORIDA BANK

By: M. Mehdi Ghomeshi President and Chief Executive Officer Date: _________________, 2010

Page 4 of 5

Great Florida Bank PREFERRED STOCK OFFERING

Subscription Instructions

1.

Read Offering Circular: Read and carefully consider the Offering Circular.

2.

Pay for Shares: Have a check issued payable to “Great Florida Bank” or wire transfer in an amount equal to the number of shares purchased multiplied by $1,000 per share. Wire transfers should be sent to: Great Florida Bank ABA: 066015576 Account Title: GFB Preferred Stock Offering Account Number: 400241238 Attn: David Monter

3.

Complete and Sign Subscription Agreement: Complete and sign the Subscription Agreement.

4.

Overnight Subscription Agreement and Payment to: Great Florida Bank, 15050 NW 79 th Court, Miami Lakes, Florida 33016. Attention: David Monter or fax to (305) 557-4313 Attention: David Monter or scan and email to [email protected].

5.

Questions: If you have questions about how to subscribe for Shares, please call M. Mehdi Ghomeshi at (305) 514-6490 or Gary J. Laurash at (305) 514-6921.

Page 5 of 5