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

Certain statements in this quarterly Report on Form 10-Q may contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, which statements generally can be identified by the use of forward-looking terminology, such as "may," "will," "expect," "estimate," "anticipate," "believe," "target," "plan," "project," or "continue" or the negatives thereof or other variations thereon or similar terminology. Such statements are made on the basis of management's plans and current analyses of Bank of Florida Corporation, its business and the industry as a whole. These forward-looking statements are subject to risks and uncertainties, including, but not limited to, economic conditions, competition, interest rate sensitivity and exposure to regulatory and legislative changes. The above factors, in some cases, have affected, and in the future could affect Bank of Florida Corporation's financial performance and could cause actual results for fiscal 2009 and beyond to differ materially from those expressed or implied in such forward-looking statements. Bank of Florida Corporation does not undertake to publicly update or revise its forward-looking statements even if experience or future changes make it clear that any projected results expressed or implied therein will not be realized.

OVERVIEW

Bank of Florida Corporation, incorporated in Florida in September 1998, is a $1.5 billion financial services company and a registered bank holding company. Our subsidiary banks are separately chartered independent community banks with local boards that provide full-service commercial banking in a private banking environment. Our trust company offers investment management, trust administration, estate planning, and financial planning services largely to the Banks' commercial borrowers and other high net worth individuals. The Company's overall focus is to develop a total financial services relationship with its client base, which is primarily businesses, professionals, and entrepreneurs with commercial real estate borrowing needs. The Banks also provide technology-based cash management and other depository services. The holding company structure provides flexibility for expansion of the Company's banking business, including possible acquisitions of other financial institutions, and support of banking-related services to its subsidiary banks.

The primary market areas of the Company continue to show growth in population, but at a nominal pace in comparison to the past ten years. Those markets include Collier and Lee Counties on the southwest coast of Florida (served by Bank of Florida - Southwest), Broward, Miami-Dade, and Palm Beach Counties on the southeast coast (served by Bank of Florida - Southeast), and Hillsborough and Pinellas Counties in the Tampa Bay area (served by Bank of Florida - Tampa Bay). The continued population growth and income demographics of the counties in which the Company operates support its plans to grow loans, deposits, and wealth management revenues with limited, highly selective, full-service locations. These counties together constitute nearly 50% of the deposit market share in the state of Florida.

CRITICAL ACCOUNTING POLICIES

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

Goodwill

Goodwill represents the excess of the cost of an acquisition over the fair value of the net assets acquired. Goodwill impairment testing is performed annually or more frequently if events or circumstances indicate possible impairment. The evaluation of goodwill for impairment uses both the income and market approaches to value the Company. The income approach consists of discounting projected long-term future cash flows, which are derived from internal forecasts and economic expectations for the Company. The discount rate is determined utilizing the Company's cost of capital, estimated from various commonly used capital asset pricing model approaches. Under the market approach, a value is calculated from an analysis of comparable acquisition transactions based on earnings, book value, and assets from the sale of similar financial institutions. Another market valuation approach utilizes the current stock price adjusted by an appropriate control premium as an indicator of fair market value. Given the substantial declines in the Company's common stock price, declining operating results, asset quality trends, market comparables and the economic outlook for the financial services industry, the Company's fair value has decreased significantly compared with previous assessments. The goodwill testing for the third quarter of 2009 indicated that the Company's fair value does not support the goodwill recorded. Therefore, the Company recorded a $62.0 million goodwill impairment charge to write off the entire amount of goodwill as of September 2009.

Because goodwill is an intangible asset that cannot be sold separately or otherwise disposed of, it is not recognized in determining capital adequacy for regulatory purposes. Therefore the goodwill impairment charge had no effect on the Company's regulatory capital ratios.

Allowance for Loan Losses:

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

The allowance for loan losses is comprised of: (1) a component for individual loan impairment, and (2) a measure of collective loan impairment. The allowance for loan losses is established and maintained at levels deemed adequate to cover losses inherent in the portfolio as of the balance sheet date. This estimate is based upon management's evaluation of the risks in the loan portfolio and changes in the nature and volume of loan activity. Estimates for loan losses are derived by analyzing historical loss experience, current trends in delinquencies and charge-offs, historical bank experience, changes in the size and composition of the loan portfolio, adverse situations that may affect the borrower's ability to repay, estimated value of any underlying collateral and prevailing economic conditions. This evaluation is inherently subjective, as it requires estimates that are susceptible to significant revision as more information becomes available.

A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Larger impaired credits that are measured for impairment have been defined to include loans classified as substandard and on nonaccrual or doubtful risk grades where the borrower relationship is greater than $500,000. For such loans that are considered impaired, an allowance is established when the discounted cash flows (or collateral value or observable market price) of the impaired loan is lower than the carrying value of that loan.

Loans that are not measured individually for impairment are measured collectively and include commercial real estate loans that are performing and large groups of smaller balance homogeneous loans evaluated based on historical loss experience adjusted for qualitative factors.

EXECUTIVE SUMMARY

Total assets were $1.5 billion at September 30, 2009, down $61.0 million, or 3.9%, from December 31, 2008, primarily as a result of the $62.0 million goodwill impairment. These declines were partially offset by an increase in cash and due from banks. Goodwill was written down to zero from $62.0 million in December, loans declined $22.1 million, or 1.7%, during the first nine months of this year and investments securities decreased $13.0 million or 11.0%, and cash and noninterest bearing deposits due from banks increased $27.8 million, or 59.0%, to $74.8 million. Total deposits increased $57.1 million to $1.2 billion. Total core deposits, which exclude wholesale brokered CDs, wholesale CDAR deposits, and CDs with balances in excess of $100 thousand, increased $78.1 million. Book value per share declined to $7.68, down $7.19 over the last nine months.

The Company realized a third quarter net loss of $78.1 million, or ($6.10) per diluted share, versus a net loss of $3.5 million or ($0.27) per diluted share, during the same period in 2008. The net loss was primarily due to a $62.0 million goodwill impairment charge, a $19.5 million increase in provision for loan losses and a $1.4 million, or 11.8%, decrease in top-line revenue, mostly attributable to the decline in interest rates. Top-line revenue is a non-GAAP measure which the Company defines as net interest income plus noninterest income, excluding net securities gains/losses. Net interest margin decreased 31 basis points from the third quarter of 2008 to 3.02%.

Non-accrual Loans and Troubled Debt Restructuring. The following table contains data concerning our collateral dependent and nonaccrual loans as of the dates indicated.

                                                            September 30,       June 30,
                                                                2009              2009
                                                               (Dollars in thousands)
Collateral Dependant and Nonaccrual Loan Summary
Impaired loans without a valuation allowance               $        67,292      $  71,296
Impaired loans with a valuation allowance                           91,636         59,316

Total impaired loans                                       $       158,928      $ 130,612


Valuation allowance related to impaired loans              $        21,818      $  11,436
Total nonaccrual loans                                             146,974        138,669
Total foreclosed real estate                                        10,497          7,994
Total loans ninety days or more past due and still
accruing                                                             3,133          2,282

At September 30, 2009, we had $3.1 million in loans that were contractually past due 90 days or more as to principal or interest payments and still accruing interest compared to $2.3 million at June 30, 2009.

We also had $87.8 million and $87.7 million in loans that would be defined as troubled debt restructuring at September 30, 2009 and June 30, 2009, respectively. Of those amounts, $46.3 million and $54.6 million were accruing as of September 30, 2009 and June 30, 2009, respectively, as they were performing in accordance with their restructured terms.

ANALYSIS OF FINANCIAL CONDITION

Investment securities

Total investment securities available for sale were $102.8 million at September 30, 2009, a decrease of $11.9 million, or 11.6%, over that held at December 31, 2008.

Securities available for sale totaled $102.8 million, a decrease of $11.9 million from the level held at December 31, 2008. The Company had $2.2 million and $3.3 million classified as held to maturity at September 30, 2009 and December 31, 2008, respectively. The Company does not currently engage in trading activities and, therefore, did not hold any securities classified as trading at September 30, 2009 or December 31, 2008. Additional details related to the securities portfolio can be found in Note 4 - Securities.

Loan Portfolio and Asset Quality

As of September 30, 2009, we had total loans of $1.3 billion. Real estate loans totaled $1.1 billion (84.6% of our total loans), and consisted of $640.7 million in commercial real estate loans, $241.3 million in construction and land development loans, $171.8 million in one-to-four family residential mortgage loans and $29.6 million in multi-family mortgage loans. Non-real estate loans comprised 13.6% of our total loans and included $113.2 million in commercial and industrial loans and $57.8 million in consumer and other loans. Our exposure to land and construction loans for residential purposes continues to decrease, and we expect it to diminish further through the remainder of 2009 as part of our proactive effort to reduce risks within our loan portfolio. As of September 30, 2009, the balances for land and construction loans for residential purposes accounted for approximately 7.1% of total loans, compared to 8.9% as of September 30, 2008.

Real estate values in our markets deteriorated at an accelerated pace over recent quarters, resulting in increased credit losses. Our non-performing assets have increased since the beginning of the economic downturn in 2007 as management continues to aggressively recognize impaired loans based on our ongoing process of identifying early signs of stress in our loan portfolio. Additionally, we continue to track every loan from pre-watch identification through disposition, using our history of trend analysis by loan type, industry, market and vintage, which further supports progress in projecting impairment on a loan by loan basis. In the third quarter of 2009, we utilized a third-party loan review firm to review 46% of our loans.

Our Special Assets Division, which was established in 2007 in anticipation of elevated stress levels in the Florida economy, continues to monitor and aggressively manage our most problematic loans and other real estate owned. This division has grown to include five professionals with extensive experience in managing non-performing loans. This division reports to our Senior Executive Vice President who has extensive experience in managing special assets divisions, as well as reporting to the Special Assets Committee, a subcommittee of our Board of Directors, which meets monthly and oversees the management, marketing, and overall dissolution of these assets.

At September 30, 2009, non-performing loans totaled $150.1 million, or 11.98% of total loans, up $35.1 million from $115.0 million or 8.93% of total loans in the first quarter. The increase in non-performing loans was primarily related to commercial real estate loans totaling $20.2 million. Non-performing assets were $160.6 million, or 10.79% of total assets, an increase of $40.1 million from $120.5 million, or 7.67% of total assets, in the first quarter.

We had $87.8 million in loans that were defined as troubled debt restructuring as of September 30, 2009. Of those amounts, $46.3 million were accruing as they were performing in accordance with their restructured terms. The majority of the restructurings involve extending the interest-only period, reducing the interest rate to give the borrower relief, or other modifications of terms that deviate from the original contract.

In the third quarter of 2009, net charge-offs were $12.7 million, or 4.52% of average loans on an annualized basis, an increase of $3.2 million from $9.5 million, or 3.29% of average loans in the second quarter of 2009. Net charge-offs during the third quarter of 2009 were primarily related to valuation adjustments.

For the quarter ended September 30, 2009, the provision for loan losses totaled $25.7 million, up from $9.8 million in the second quarter and $6.2 million in the third quarter of 2008. The allowance for loan and lease losses, or ALLL, increased to $38.0 million or 3.03% of total loans, compared to $24.8 million or 1.96% of total loans in the second quarter. General economic conditions, as well as factors specific to our Florida markets, have caused increases in reserve factors used to determine the losses inherent within the portfolio.

Deposits

Total deposits rose $57.1 million, or 4.9%, during the first nine months of 2009 to $1.2 billion. Core deposits, which exclude wholesale brokered CDs, wholesale CDAR deposits, and CDs with balances in excess of $100 thousand, increased $78.1 million or 11.0% from December 31, 2008, with the growth in money market accounts, NOW accounts, and CDs less than $100 thousand accounts more than offsetting the decline in non interest bearing deposits and retail CDARs. Non-core deposit accounts decreased $21.0 million or 4.6% in the first nine months of 2009.

The annualized average rate paid on total interest bearing deposits during the first nine months of 2009 was 2.74%, a decrease of 90 basis points compared to the first nine months last year. This decrease resulted primarily from the lower interest rate environment under which we currently operate.

Borrowings

While client deposits remain our primary source of funding for asset growth, management uses other borrowings as a funding source for loan growth, regulatory capital needs, and as a tool to manage the Company's interest rate risk. At September 30, 2009 borrowings totaled $156.4 million, a decrease of $32.1 million compared

to December 31, 2008. Total borrowings at September 30, 2009 consisted of $21.9 million of repurchase agreements, $16.0 million of subordinated debt and $118.5 million of FHLB Advances compared to $20.0 million of repurchase agreements, $16.0 million of subordinated debt and $152.5 million of FHLB advances, respectively, at the end of 2008. The maturities of all borrowings range from March 2010 through July 2017. Note 10 - Other Borrowings provides additional information regarding the Company's outstanding other borrowings.

Stockholders' equity

Total stockholders' equity was $103.9 million at September 30, 2009, an $86.1 million decrease since December 31, 2008. Book value per share was $7.68 at September 30, 2009 while the tangible book value per common share was $7.48. The Company's Tier 1 leverage ratio decreased 226 basis points to 5.60% at September 30, 2009 from 7.86% at December 31, 2008. The minimum Tier 1 leverage ratio for bank holding companies is 4.0%; however, regulators can require bank holding companies to satisfy higher capital requirements. At September 30, 2009, the Company was adequately capitalized. Note 11 - Stockholder's Equity provides additional information regarding the Company's capital position.

ANALYSIS OF RESULTS OF OPERATIONS

Third Quarter 2009 Compared to Third Quarter 2008

Consolidated net loss for the third quarter of 2009 totaled $78.1 million, a decrease in net earnings of $74.6 million, or 2165.5%, compared to third quarter 2008. Top-line revenue (a non-GAAP measure which the Company defines as net interest income plus noninterest income, excluding net securities gains/losses) declined $1.4 million, primarily driven by $1.4 million less net interest income and $51 thousand less non interest income. Management monitors top-line revenue as we believe it is an indication of core earning capacity.

The $1.4 million decrease in top-line revenue against a $61.6 million or 541.1% increase in noninterest expense resulted in an efficiency ratio for the quarter of 686.4%. The increase in noninterest expense primarily relates to the goodwill impairment charge, professional fees, and regulatory assessments. The provision for loan losses increased $19.5 million compared to the same period last year due to additional provisions for loan downgrades.

Net interest income

Net interest income in the third quarter totaled $9.6 million, a decrease of $1.4 million, or 12.5%, from the third quarter of 2008, the result of a 175 basis point reduction in rates over the twelve-month period. The spread between the yield on earning assets and cost of interest-bearing liabilities increased 9 basis points when comparing the third quarter of 2009 to the third quarter of 2008. The yield on earning assets decreased 71 basis points over the same period last year to 5.68%, with continued pressures from a declining rate environment, as the re-pricing of interest bearing liabilities during the quarter resulted in an 80 basis point decrease in the cost of funds to 2.69%. Interest income was negatively impacted by approximately $530,000 in the third quarter of 2009 due to interest that was reversed on loans that were on nonaccrual status.

Average Balance Sheet and Rate and Volume Variance Analysis



                                                                              For the Three Months Ended September 30,
                                                                   2009                                                      2008
                                                            Interest                                                  Interest
                                              Average          and                                      Average          and
(dollars in thousands)                        Balance       Dividends        Average Yield/Rate         Balance       Dividends        Average Yield/Rate

Assets:
Earning assets:
Loans1                                      $ 1,124,263    $    16,693                     5.89 %     $ 1,196,927    $    19,654                     6.53 %
Interest earning deposits                           252              1                     1.57 %             557              3                     2.14 %
Securities2                                     109,256          1,231                     4.47 %         102,554          1,299                     5.04 %
Federal funds sold                               19,293              8                     0.16 %           6,025             24                     1.58 %

Total interest-earning assets                 1,253,064         17,933                     5.68 %       1,306,063         20,980                     6.39 %

Non interest-earning assets                     272,469                                                   145,843

Total Assets                                $ 1,525,533                                               $ 1,451,906


Liabilities:
Interest-bearing liabilities:
Interest bearing checking                   $    45,925             20                     0.17 %     $    47,392             49                     0.41 %
Money market accounts                           338,492          1,339                     1.57 %         328,099          2,389                     2.90 %
Savings                                           6,420              6                     0.37 %           6,173              9                     0.58 %
Time deposits                                   678,323          5,521                     3.23 %         581,733          5,913                     4.04 %
Other borrowings                                167,346          1,493                     3.54 %         184,085          1,699                     3.67 %

Total interest-bearing liabilities            1,236,506          8,379                     2.69 %       1,147,482         10,059                     3.49 %
Non-interest bearing deposits                   105,926                                                   101,044
Other liabilities                                 5,565                                                     5,473
Stockholders' equity                            177,536                                                   197,907

Total Liabilities & Stockholders' Equity    $ 1,525,533                                               $ 1,451,906


Net interest income                                        $     9,554                                               $    10,921


Interest-rate spread                                                                       2.99 %                                                    2.90 %
Net interest margin                                                                        3.02 %                                                    3.33 %
Ratio of average interest-bearing
liabilities to average earning assets                             98.7 %                                                    87.9 %

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



                                              VOLUME         RATE        DAYS     CHANGE

  Increase (decrease) in interest income:
  Loans1                                     $ (1,030 )    $ (1,931 )    $  -    $ (2,961 )
  Interest earning deposits                        (1 )          (1 )                  (2 )
  Other investments2                               79          (147 )       -         (68 )
  Federal funds sold                                6           (22 )       -         (16 )

  Total interest income                          (946 )      (2,101 )       -      (3,047 )


  Increase (decrease) in interest expense:
  NOW and Money Market deposits                    50        (1,129 )       -      (1,079 )
  Savings deposits                                  0            (3 )       -          (3 )
  Time deposits                                   796        (1,188 )       -        (392 )
  Other borrowings                               (222 )          16         -        (206 )

  Total interest expense                          624        (2,304 )       -      (1,680 )


  Total change in net interest income        $ (1,570 )    $    203      $  -    $ (1,367 )

1 For purpose of this analysis, non-accruing loans are not included in the average balances.

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

Noninterest income

Noninterest income was $1.6 million in the third quarter, a $433,000, or 37.3% increase, over the third quarter 2008. Gain on sale of assets, including securities gains, increased $14,000 compared to the third quarter of the prior year, primarily as a result of increased gains on sales of securities of $484,000 to $512,000, higher secondary market income ($12,100) and fewer losses on fixed asset dispositions ($1,000) which was offset by losses on loan sales ($240,000) and foreclosed property losses ($243,000). Third quarter 2009 trust fees were $651,000 compared to $679,000 for the third quarter of the prior year due to the decline in market values and the shift from equities into cash and bonds, producing lower income streams. Over the past twelve months, assets under administration have increased $294.5 million, or 66.9%, to $734.5 million at September 30, 2009. Service charges and other fee income increased $447,000, or . . .