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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

Quarterly Report Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

For the Quarterly Period Ended September 30, 2010

Commission File Number 000-50091

BANK OF FLORIDA CORPORATION

A Florida Corporation

IRS Employer Identification No. 59-3535315

850 Park Shore Drive

Suite 204

Naples, Florida 34103

(239) 322-3706

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files) YES ¨ NO ¨ *The registrant has not yet been phased into the interactive data requirements.

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act).

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

The number of shares outstanding of the Registrant’s common stock, as of March 2, 2011 was 12,842,298 shares of $.01 par value common stock.

Transitional Small Business Disclosure Format (check one): YES ¨ NO x

BANK OF FLORIDA CORPORATION AND SUBSIDIARIES

Index


		Page

PART I.	Financial Information

Item 1.	Financial Statements (Unaudited)

	Consolidated Balance Sheets September 30, 2010 and December 31, 2009	1

	Consolidated Statements of Operations - Three and nine-months ended September 30, 2010 and 2009	2

	Consolidated Statement of Stockholders’ Equity - Nine-months ended September 30, 2010	3

	Consolidated Statements of Comprehensive Loss - Three and nine-months ended September 30, 2010 and 2009	3

	Consolidated Statements of Cash Flows - Nine months ended September 30, 2010 and 2009	4

	Notes to the Consolidated Financial Statements	5

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operation

	Overview	14

	Critical Accounting Policies	14

	Analysis of Financial Condition and Results of Operations	14

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	15

Item 4.	Controls and Procedures	15

PART II.	Other Information

Item 1.	Legal Proceedings	16

Item 1A.	Risk Factors	16

Item 3.	Defaults Upon Senior Securities	17

Item 6.	Exhibits	17

Signatures		19

BANK OF FLORIDA CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

September 30, 2010 and December 31, 2009

(In Thousands, except share data)


	September 30, 2010			December 31, 2009
	(Unaudited)			(Audited)
ASSETS
Cash and due from banks	$	209		$	—

Restricted securities, Federal Home Loan Bank stock, at cost		76			76
Premises and equipment		1,117			1,225
Assets of discontinued operations		2,984			1,401,001
Other assets		13			41

TOTAL ASSETS	$	4,399		$	1,402,343


LIABILITIES AND STOCKHOLDERS’ EQUITY

Liabilities of discontinued operations	$	194		$	1,358,296
Accrued expenses and other liabilities		230			211

TOTAL LIABILITIES	$	424		$	1,358,507


Stockholders’ Equity:
Series B Preferred stock, par value $.01 per share, 520 shares designated, 172 shares issued and outstanding at September 30, 2010 and December 31, 2009		3,971			3,971
Common stock, par value $.01 per share, 20,000,000 shares authorized, 12,842,298 and 12,968,898 shares issued and outstanding at September 30, 2010 and December 31, 2009, respectively		130			130
Additional paid-in capital		201,065			201,173
Restricted stock, 168,500 shares at December 31, 2009		—			(436	)
Accumulated deficit		(201,196	)		(162,634	)
Accumulated other comprehensive income		5			1,632

TOTAL STOCKHOLDERS’ EQUITY		3,975			43,836


TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	4,399		$	1,402,343

See accompanying notes to consolidated financial statements.

BANK OF FLORIDA CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

For the Three and Nine-Months Ended September 30, 2010 and 2009

(In Thousands, except share data, unaudited)


	Three-months ended Sept 30,						Nine-months ended Sept 30,
	2010			2009			2010			2009

NONINTEREST EXPENSES
Salaries and employee benefits	$	120		$	428		$	854		$	1,370
Occupancy and equipment		34			123			194			380
Professional fees		233			344			1,067			853
Other		65			172			187			786

TOTAL NONINTEREST EXPENSES		452			1,067			2,302			3,389


LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		(452	)		(1,067	)		(2,302	)		(3,389	)

Income taxes		—			(257	)		—			(1,076	)

LOSS FROM CONTINUING OPERATIONS		(452	)		(810	)		(2,302	)		(2,313	)


DISCONTINUED OPERATIONS
Loss from discontinued operations (Net of gain on disposal of $14,591)		(175	)		(86,517	)		(35,075	)		(101,526	)

Income taxes		—			(9,247	)		1,185			(14,886	)

LOSS ON DISCONTINUED OPERATIONS		(175	)		(77,270	)		(36,260	)		(86,640	)


NET LOSS	$	(627	)	$	(78,080	)	$	(38,562	)	$	(88,953	)


NET LOSS PER SHARE: BASIC AND DILUTED (see footnote 8)	$	(0.05	)	$	(6.10	)	$	(3.01	)	$	(6.96	)

WEIGHTED-AVERAGE SHARES OUTSTANDING: BASIC AND DILUTED		12,842,298			12,795,054			12,824,936			12,784,423

See accompanying notes to consolidated financial statements.

BANK OF FLORIDA CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

Nine-Months Ended September 30, 2010 (unaudited)

(In Thousands, except share and per share data)


										Additional									Accumulated Other
	Preferred Stock				Common Stock					Paid-In			Restricted			Accumulated			Comprehensive
	Shares		Amount		Shares			Amount		Capital			Stock			Deficit			Income			Total

Balance, December 31, 2009		172	$	3,971		12,968,898		$	130	$	201,173		$	(436	)	$	(162,634	)	$	1,632		$	43,836

Net loss		—		—		—			—		—			—			(38,562	)		—			(38,562	)

Common stock forfeited		—		—		(126,600	)		—		(363	)		363			—			—			—

Stock compensation expense		—		—		—			—		255			73			—			—			328

Changes in fair value of interest rate swap, net of tax		—		—		—			—		—			—			—			(1,964	)		(1,964	)

Changes in fair value on available-for-sale securities, net of tax		—		—		—			—		—			—			—			337			337


Balance, September 30, 2010		172	$	3,971		12,842,298		$	130	$	201,065		$	—		$	(201,196	)	$	5		$	3,975

See accompanying notes to consolidated financial statements.

BANK OF FLORIDA CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(In Thousands, unaudited)


	Three-months ended September 30,						Nine-months ended September 30,
	2010			2009			2010			2009
Net loss	$	(627	)	$	(78,080	)	$	(38,562	)	$	(88,953	)
Other comprehensive loss :
Unrealized gain (losses) on available-for-sale securities:
Unrealized holding gains (losses) arising during the period, net of income tax of ($432), $215, ($217), respectively		—			716			(354	)		361
Reclassification adjustment for (losses) gains realized in net loss:
Reclassification adjustment for (losses) gains realized in net loss, net of income tax of $193, ($418), $701, respectively		—			(318	)		691			(1,163	)
Unrealized losses on interest rate swap:
Unrealized holding losses arising during the period, net of income tax of $122, and $620, respectively		—			(203	)		—			(1,029	)
Reclassification adjustment for losses realized in net loss:
Reclassification adjustment for losses realized in net loss, net of income tax of $1,184		—			—			(1,964	)		—


Comprehensive loss	$	(627	)	$	(77,885	)	$	(40,189	)	$	(90,784	)

See accompanying notes to consolidated financial statements.

BANK OF FLORIDA CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Nine-Months Ended September 30, 2010 and 2009

(In Thousands)


	(unaudited)
	Nine-Months Ended September 30,
	2010			2009
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(38,562	)	$	(88,953	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization		71			176
Loss on write-off of other securities		—			163
Net adjustment to net loss from discontinued operations		51,701			94,759
Deferred income taxes		—			301
Gain on discontinued operations, net		(14,591	)		—
Change in other assets		16			(5,276	)
Stock compensation expense		328			164
Change in accrued expenses and other liabilities		141			196

NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES		(896	)		1,530


CASH FLOWS FROM INVESTING ACTIVITIES
Net investing activity from discontinued operations		(152,909	)		(3,614	)
Disposed (purchase) of premises and equipment, net		37			(19	)

NET CASH USED IN INVESTING ACTIVITIES		(152,872	)		(3,633	)


CASH FLOWS FROM FINANCING ACTIVITIES
Net financing activity from discontinued operations		87,577			24,982
Issuance of Series B preferred stock		—			4,300

NET CASH PROVIDED BY FINANCING ACTIVITIES		87,577			29,282


NET CHANGE IN CASH AND CASH EQUIVALENTS		(66,191	)		27,179

CASH AND CASH EQUIVALENTS:
Beginning of period, including cash and cash equivalents of discontinued operations of $68,667 and $47,938, respectively		68,667			47,938

End of period, including cash and cash equivalents of discontinued operations of $2,267 and $75,117, respectively	$	2,476		$	75,117

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the period for:
Interest	$	12,499		$	26,525

Noncash Transactions:
Change in unrealized holding gains/losses on securities available-for-sale	$	354		$	(361	)

Transfer of loans to other real estate owned	$	13,836		$	11,654

See accompanying notes to consolidated financial statements.

BANK OF FLORIDA CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1—Organization and Basis of Presentation

The consolidated financial statements of Bank of Florida Corporation (the “Company”) include the accounts of the Company and its wholly-owned subsidiary Florida Trust Company (the “Trust Company”). In addition, such financial statements also include the accounts of the Company’s previous three subsidiaries, Bank of Florida – Southwest, Bank of Florida – Southeast, Bank of Florida – Tampa Bay (collectively, the “Banks”), through May 28, 2010, the date on which they were closed by the Florida Office of Financial Regulation (“OFR”) and placed into receivership with the Federal Deposit Insurance Corporation (“FDIC”). All significant intercompany balances and transactions have been eliminated.

Since the Banks were placed into receivership, our only remaining operations are those of the Trust Company, which cannot be expected to provide significant revenues or profits relative to the potential of our prior operations. At the present time, we are continuing to operate the Trust Company in our traditional markets. We are also currently in the process of evaluating our options relative to the Trust Company, which include continuing to operate it, selling it, merging it into another financial institution and any other reasonable, viable strategic transactions. If we ultimately elect an option other than continuing to operate the Trust Company, it is our intent to wind down our operations following divestiture of the Trust Company.

The Banks provided a broad range of commercial and consumer banking services primarily within the Naples, Ft. Myers, Ft. Lauderdale, Palm Beach, Miami-Dade and Tampa Bay areas of Florida. The Trust Company offers investment management, trust administration, estate planning, and financial planning services. The assets under administration of the Trust Company, as well as the obligations associated with those assets, are not included as part of the consolidated financial statements of the Company.

In the opinion of management, the accompanying unaudited interim consolidated financial statements reflect all adjustments necessary (consisting of normal recurring adjustments) to present fairly our financial position as of September 30, 2010 and December 31, 2009, and the results of operations and cash flows for the nine month period ended September 30, 2010 and 2009. The results of operations for interim periods are not necessarily indicative of the results of operations to be expected for the fiscal year ending December 31, 2010 or any other interim period.

The accounting and reporting policies of the Company are in conformity with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q, Article 10 of Regulation S-X and prevailing practices within the financial services industry. Accordingly, they do not include all of the footnotes and information required by accounting principles generally accepted in the United States of America. The preparation of consolidated financial statements, in conformity with accounting principles generally accepted in the United States of America, requires that we make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of income and expense during the reporting period. Such estimates are subject to change in the future as additional information becomes available or previously existing circumstances are modified. Management has evaluated subsequent events for potential recognition or disclosure in the financial statements through the date upon which the Company’s quarterly report on Form 10-Q was filed with the Securities and Exchange Commission. We did not identify subsequent events that were not reflected in the results herein.

The Company’s significant accounting policies are described in Note 1 of the Notes to Consolidated Financial Statements included in its 2009 Annual Report on Form 10-K filed with the Securities and Exchange Commission. For interim reporting purposes, the Company follows the same basic accounting policies and considers each interim period as an integral part of an annual period.

These unaudited consolidated financial statements included herein should be read in conjunction with the financial statements and related footnotes included in the Company’s 2009 Form 10-K.

BANK OF FLORIDA CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

Reclassifications:

Certain reclassifications have been made to prior period financial statements to conform to the September 30, 2010 financial statement presentation. These reclassifications only changed the reporting categories but did not affect our results of operations or financial position.

NOTE 2—Discontinued Operations and Assets Held for Sale

On May 28, 2010, the Bank subsidiaries were closed and all of their assets and liabilities were transferred into receivership with the FDIC. All balance sheet and operating data for these subsidiaries are reflected as discontinued operations.

The following presents the components of the assets and liabilities of discontinued operations as of September 30, 2010 and December 31, 2009 and revenues, expenses and loss from discontinued operations, excluding the gain resulting from the transfer of the banking subsidiaries to the FDIC receivership of $14.6 million, for the three months and nine months ended September 30, 2010 and 2009 ( in thousands):


	September 30, 2010		December 31, 2009
	(Unaudited)		(Audited)
Cash and cash equivalents	$	2,370	$	68,667
Securities		559		98,674

Loans		—		1,213,033
Less: Allowance for loan loss		—		42,063

Net loans		—		1,170,970
		—
Restricted securities, Federal Home Loan Bank stock, at cost		—		8,567
Premises and equipment		5		26,057
Accrued interest receivable		1		4,805
Cash surrender value of life insurance		—		3,679
Deferred tax asset		—		200
Intangible asset		—		2,471
Foreclosed real estate, net		—		14,357
Other assets		49		2,554

Total assets from discontinued operations	$	2,984	$	1,401,001


Deposits	$		$	1,187,318
Subordinated debt		—		16,000
Other borrowings		—		32,681
Federal home loan bank advances		—		118,457
Accrued interest payable		—		2,045
Accrued expenses and other liabilities		194		1,795

Total liabilities from discontinued operations		194		1,358,296

Net assets of discontinued operations	$	2,790	$	42,705


	Three-months ended September 30,					Nine-months ended September 30,
	2010		2009			2010		2009
Net interest income	$	6	$	9,553		$	12,595	$	28,582
Loan loss provision		—		25,719			43,077		42,176
Noninterest income		398		1,595			3,549		5,426
Noninterest expense		579		71,946			22,733		93,358
Income taxes		—		(9,247	)		1,185		(14,886	)

Loss from discontinued operations	$	175	$	77,270		$	50,851	$	86,640

BANK OF FLORIDA CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

NOTE 3—Going Concern

On May 28, 2010, the Banks were closed by the OFR and placed into receivership with the FDIC. Our failure to comply with the capital requirements of a number of regulatory enforcement actions to which we were subject was the cause of the failure of the Banks. Since then, our only remaining operations are those of the Trust Company, which can not be expected to provide significant revenues or profits relative to the potential of our prior operations. At the present time, we are continuing to operate the Trust Company in our traditional markets. We are also currently in the process of evaluating our options relative to the Trust Company, which include continuing to operate it, selling it, merging it into another financial institution and any other reasonable, viable strategic transactions. If we ultimately elect an option other than continuing to operate the Trust Company, it is our intent to wind down our operations following the divestiture of the Trust Company.

The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the discharge of liabilities in the normal course of business for the foreseeable future.

NOTE 4—Stock-based Compensation

The Company has a stock option plan which provides for the grant of options at the discretion of the Board of Directors or a committee designated by the Board of Directors to administer the Plan. Each stock option granted under the Plan has a maximum term of ten years subject to earlier termination in the event the participant ceases to be an employee. The exercise price of the stock options may not be less than the book value of common stock on the date the option is granted. The committee shall determine the period during which stock options vest at the date of grant. The Plan will terminate on June 8, 2016. At September 30, 2010, there were no shares available for grant under the Plan.

All shares were forfeited as of September 30, 2010. The total fair value of shares vested and recognized as compensation expense for the three and nine months ended September 30, 2010 was $9,000 and $328,000, respectively. The total fair value of shares vested and recognized as compensation expense for the three and nine months ended September 30, 2009 was $192,000 and $387,000, respectively. There was no associated tax benefit recognized in connection with these incentive stock options. As of September 30, 2010, the Company had no options outstanding.

There were no options exercised in the nine months ended September 30, 2010 and 2009. Stock option activity during the period was as follows:

Stock Option Plan


	OPTIONS OUTSTANDING			WEIGHTED AVERAGE OPTION PRICE PER SHARE		REMAINING CONTRACTUAL TERM		AGGREGATE INTRINSIC VALUE (in thousands)
Balance December 31, 2009		539,768		$	14.19
Granted		—			—
Exercised		—			—
Forfeited		(539,768	)		14.19

Balance, September 30, 2010		—		$	—		—	$	—

Exercisable, September 30, 2010		—		$	—		—	$	—

BANK OF FLORIDA CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

NOTE 4—Stock-based Compensation (Cont’d)

The Company granted restricted stock for 176,500 shares to senior officers as of March 16, 2009. The stock was to vest in installments or in total upon satisfaction of the stipulated conditions. If the restrictions are not satisfied, the shares are forfeited and again become available under the 2006 Stock Compensation Plan. All shares of restricted stock were forfeited as of September 30, 2010.

In connection with the issuance of Series B Preferred Stock, a total of 124,852 warrants were granted in 2009. Each warrant permits its holder to purchase 720, 742, or 772 shares of Company common stock at $3.47, $3.37, or $3.24, respectively, per share at any time during the ten year period commencing on issuance. The warrants are nontransferable. At September 30, 2010 and December 31, 2009 warrants to purchase 124,852 common shares at an average exercise price of $3.44 were outstanding.

The Company has also issued warrants to certain members of the Boards of Directors and Advisory Boards of the Company and its subsidiaries in connection with the formations of the Company and its subsidiaries. All of these warrants have been exercised or have expired. Compensation expense totaling $1,000 was recognized during the nine months ended September 30, 2010.

NOTE 5—Recent Accounting Pronouncements

In February 2010, the FASB issued Accounting Standards Update No. 2010-09 (“ASU 2010-09”), Subsequent Events (Topic 855)—Amendments to Certain Recognition and Disclosure Requirements. ASU 2010-09 provides amendments to Subtopic 855-10 as follows: 1) An entity that is an SEC filer or a conduit bond obligor for conduit debt securities traded in a public market is required to evaluate subsequent events through the date the financial statements are issued, 2) An SEC filer is an entity that is required to file or furnish its financial statements with either the SEC or the appropriate entity under Section 12(i) of the Securities Exchange Act of 1934, 3) An entity that is an SEC filer is not required to disclose the date through which subsequent events have been evaluated, 4) The definition of public entity has been removed, and 5) The scope of the reissuance disclosure requirements is refined to include revised financial statements only. All amendments in this Update are effective upon issuance of the final Update, except for the use of the issued date for conduit debt obligors which is effective for interim and annual periods ending after June 15, 2010. The adoption of this guidance did not have a material effect on the Company’s consolidated financial condition or results of operations.

In March 2010, the FASB issued Accounting Standards Update No. 2010-11 (“ASU 2010-11”), Derivatives and Hedging (Topic 815) – Scope Exception Related to Embedded Credit Derivatives. ASU 2010-11 provides amendments to Subtopic 855-15 as follows: 1) Subtopic 815-15 clarifies the scope exception for embedded credit derivative features related to the transfer of credit risk in the form of subordination of one financial instrument to another. The amendments address how to determine which embedded credit derivative features are considered to be embedded derivatives that should not be analyzed for potential bifurcation and separate accounting, 2) The embedded credit derivative feature related to the transfer of credit risk that is only in the form of subordination of one financial instrument to another is not subject to Section 815-15-25, 3) Other embedded credit derivative features are considered embedded derivatives subject to the application of Section 815-15-25 provided the overall contract is not a derivative in its entirety under Section 815-10-15, 4) The economic characteristics and risks of an embedded credit derivative feature should be considered to be not clearly and closely related to the economic characteristics and risks of the host contract and thus to meet the criterion in paragraph 815-15-25-1(a), and 5) An entity may elect the fair value option for any investment in a beneficial interest in a securitized financial asset in its entirety. The amendments in this Update are effective for each reporting entity at the beginning of its first fiscal quarter beginning after June 15, 2010 with early adoption permitted. The adoption of this guidance will not have a material effect on the Company’s consolidated financial condition or results of operations.

BANK OF FLORIDA CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

NOTE 6—Securities

The Company had $559,000 in securities included with assets of discontinued operations as of September 30, 2010 and all remaining securities were transferred to the FDIC as receiver as of May 28, 2010.

The amortized cost, gross unrealized gains and losses and estimated fair value of securities available for sale shown in the consolidated balance sheets as of December 31, 2009 were as follows (In thousands):


	Amortized		Gross Unrealized					Estimated
	Cost		Gains		Losses			Fair Value

Available for sale securities:
Mortgage-backed securities	$	87,547	$	41	$	(548	)	$	87,040
U.S. Treasury and government agency securities		10,598		12		(39	)		10,571
Equity securities		508		1		—			509

Total securities available for sale	$	98,653	$	54	$	(587	)	$	98,120


Securities held to maturity- other bonds	$	554	$	—	$	(18	)	$	536

There were no sales of securities available for sale for the nine months ended September 30, 2010.

NOTE 7—Loans

The company had no loans outstanding at September 30, 2010 as all loans were transferred to the FDIC as receiver for the Bank subsidiaries as of May 28, 2010.

The composition of the loan portfolio at December 31, 2009 is as follows (In thousands):


	December 31, 2009

Real estate:
Commercial real estate	$	625,703
Land and construction		216,565
One-to-four family residential		167,015
Multi-family		35,522

Total real estate loans	$	1,044,805
Commercial and industrial loans		112,385
Lines of credit		45,247
Consumer loans		11,925

Total gross loans held for investment		1,214,362
Less: allowance for loan losses		(42,063	)
Less: deferred loan fees, net		(1,329	)

Total loans held for investment, net	$	1,170,970

BANK OF FLORIDA CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

NOTE 7—Loans (cont’d)

The following is a summary of information pertaining to collateral dependant impaired and nonaccrual loans (In thousands):


	December 31, 2009

Impaired loans without a valuation allowance	$	72,343
Impaired loans with a valuation allowance		141,037

Total impaired loans	$	213,380


Valuation allowance related to impaired loans	$	27,707

Total nonaccrual loans	$	164,474
Loans defined as Troubled Debt Restructuring – accruing	$	48,899
Total loans ninety days or more past due and still accruing	$	7

Total impaired loans	$	213,380


Total other real estate owned	$	14,357
Loans defined as Troubled Debt Restructuring	$	90,592

The Company had $90.6 million in loans that were defined as troubled debt restructuring at December 31, 2009.

The activity in the allowance for loan losses for September 30, 2010 and the year ended December 31, 2009 is as follows (In thousands):


	September 30, 2010			December 31, 2009
Balance at beginning of period	$	42,063		$	29,533
Provision charged to operations		43,077			73,670
Charge-offs		(42,219	)		(61,334	)
Recoveries		2,895			194
Eliminated due to FDIC receivership of subsidiaries		(45,816	)		—

Balance at end of period	$	—		$	42,063

BANK OF FLORIDA CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

NOTE 8—Loss Per Common Share

Basic loss per share represents net loss divided by the weighted-average number of common shares outstanding during the period. Dilutive loss per share is computed based on the weighted-average number of common shares outstanding plus the effect of stock options and warrants outstanding computed using the treasury stock method.

Components used in computing loss per share for the three months ended September 30, 2010 and 2009 are summarized as follows (in thousands, except share data):


	For the three months ended September 30,
	2010								2009
	Net Loss			Weighted- Average Shares Outstanding		Loss Per Share			Net Loss			Weighted- Average Shares Outstanding		Loss Per Share
Loss available to common shareholders from continuing operations	$	(452	)		12,842,298	$	(0.04	)	$	(810	)		12,795,054	$	(0.06	)
Loss available to common shareholders from discontinued operations		(175	)		12,842,298		(0.01	)		(77,270	)		12,795,054		(6.04	)

Loss available to common shareholders	$	(627	)		12,842,298	$	(0.05	)	$	(78,080	)		12,795,054	$	(6.10	)

Components used in computing income per share for the nine months ended September 30, 2010 and 2009 are summarized as follows (in thousands, except share data):


	For the nine months ended September 30,
	2010								2009
	Net Loss			Weighted- Average Shares Outstanding		Loss Per Share			Net Loss			Weighted- Average Shares Outstanding		Loss Per Share
Loss available to common shareholders from continuing operations	$	(2,302	)		12,824,936	$	(0.18	)	$	(2,313	)		12,784,423	$	(0.18	)
Loss available to common shareholders from discontinued operations		(36,260	)		12,824,936		(2.83	)		(86,640	)		12,784,423		(6.78	)

Loss available to common shareholders	$	(38,562	)		12,824,936	$	(3.01	)	$	(88,953	)		12,784,423	$	(6.96	)

During the three and nine months ended September 30, 2010 and 2009, all stock options and warrants were excluded from diluted earnings per share calculations because the Company recorded a loss for those periods or the Company’s stock price was lower than the exercise price for all options and warrants outstanding.

BANK OF FLORIDA CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

NOTE 9—Fair Values of Financial Instruments and Fair Value Measurements

The fair value estimates are presented for financial instruments without attempting to estimate the value of the Company’s long-term relationships with depositors and the benefit that results from low cost funding provided by deposit liabilities. In addition, significant assets which are not considered financial instruments and are, therefore, not a part of the fair value estimates include office properties and equipment.

The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value:

Cash and due from banks: For these short-term instruments, the carrying amount is a reasonable estimate of fair value.

Restricted securities: The carrying value of Federal Home Loan Bank Stock approximates its fair value since it is restricted stock and would only be sold to the Federal Home Loan Bank at cost.

The following tables present the estimates of fair value of financial instruments as of September 30, 2010 and December 31, 2009 (in thousands):


	September 30, 2010
	CARRYING AMOUNT		ESTIMATED FAIR VALUE

Financial assets:
Cash and cash equivalents	$	209		209
Restricted securities		76		76


	December 31, 2009
	CARRYING AMOUNT		ESTIMATED FAIR VALUE
Financial assets:
Restricted securities	$	76		$	76

NOTE 10—Regulatory Matters

General

Prompt Corrective Action Directives

Each of our bank subsidiaries received a Prompt Corrective Action Directive (the “Directives”) from the FDIC, due to their capital status. The Directives required that within 30 days of the effective date of the Directives (by April 17, 2010), the subsidiary banks must: (1) be “adequately capitalized” under regulatory capital guidelines; and/or (2) accept an offer to be acquired by a depository institution holding company or combine with another insured depository institution. By May 28, 2010, we had been unable to successfully complete our $71.8 million stock offering, find an alternative source of capital or arrange to be acquired. As a result, all three Banks were closed and placed into receivership with the FDIC on that date.

Consent Orders

In May 2010, the board of directors of each of the Banks stipulated to the entry of formal enforcement actions with respect to the Banks in the form of consent orders (“FDIC Orders”). Among other requirements, but most significantly, the FDIC Orders required that each “Bank shall have capital at a level sufficient to restore the Bank to an “adequately capitalized” capital category” and, within 30 days, submit to the FDIC a plan to achieve and maintain a Tier 1 leverage capital ratio of at least 8% and a total risk based capital ratio of at least 12%. As described above, it was apparent that we would be unable to comply with these requirements and each Bank was closed on May 28, 2010.

Holding Company Board Resolutions

Prior to the closure of the Banks, the Company was subject to the supervision and regulation of the Board of Governors of the Federal Reserve System (the “Federal Reserve”). At the request of the Federal Reserve Bank of Atlanta our board of directors adopted certain resolutions (“Board Resolutions”) on October 19, 2009. The essential provisions of the Board Resolutions provided that the Company would not, without prior Federal Reserve approval, incur debt or reduce the Company’s capital position other than the payment of normal and routine operating expenses. The Company’s status as a bank holding company and the Federal Reserve’s ability to enforce the Board Resolutions terminated when the Banks were closed on May 28, 2010.

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

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, and 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 2010 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 was incorporated in Florida in September 1998. On May 28, 2010, each of our three subsidiary banks (Bank of Florida – Southwest, Bank of Florida – Southeast and Bank of Florida – Tampa Bay) was closed by the Florida Office of Financial Regulation (“OFR”) and placed into receivership with the Federal Deposit Insurance Corporation (“FDIC”). Since then, our only remaining operations are those of Florida Trust Company (“the Trust Company”), which can not be expected to provide significant revenues or profits relative to the potential of our prior operations. At the present time, we are continuing to operate the Trust Company in our traditional markets. We are also currently in the process of evaluating our options relative to the Trust Company, which include continuing to operate it, selling it, merging it into another financial institution and any other reasonable, viable strategic transaction. If we ultimately elect an option other than continuing to operate the Trust Company, it is our intent to wind down our operations following divestiture of the Trust Company.

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.

ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Total assets decreased to $4.4 million at September 30, 2010 from $1.4 billion at December 31, 2009 as a result of assumption by the FDIC as receiver of all assets and liabilities of the Bank subsidiaries on May 28, 2010 and subsequent losses related to expenses incurred for our continuing operations. The remaining assets of the Company are primarily related to the Trust Company, our only remaining operating subsidiary, which can not be expected to provide significant revenues or profits relative to the potential of our prior operations. At the present time, we are continuing to operate the Trust Company in our traditional markets. We are also currently in the process of evaluating our options relative to the Trust Company, which include continuing to operate it, selling it, merging it into another financial institution and any other reasonable, viable strategic transaction. If we ultimately elect an option other than continuing to operate the Trust Company, it is our intent to wind down our operations following divestiture of the Trust Company.

Consolidated net loss from continuing operations for the third quarter of 2010 was $452,000 compared to $810,000 for the third quarter of 2009. Consolidated net loss from continuing operations for the first nine months of 2010 was $2.3 million compared to $2.3 million for the first nine months of 2009. These operating losses reflect the expenses related to the remaining corporate activities as all of the assets and liabilities of the Bank subsidiaries have been transferred to the FDIC as receiver or are in the process of being divested.

Consolidated net loss from discontinued operations for the third quarter of 2010 was $175,000 compared to a net loss from discontinued operations of $77.3 million for the third quarter of 2009. Consolidated net loss from discontinued operations for the first nine months of 2010 was $36.3 million compared to $86.6 million for the first nine months of 2009. Net loss for 2010 includes a $14.6 million gain on the disposal of the banking subsidiaries as certain estimated net losses and expenses reported in prior periods were not realized on a cash basis prior to transfer of the banking subsidiary assets and liabilities to the FDIC as receiver.

Total stockholders’ equity was $4.0 million at September 30, 2010 compared to $43.8 million at December 31, 2009. Book value per common share was $0.05 at September 30, 2010 while tangible book value was $0.05.

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

On May 28, 2010, each of our three subsidiary banks (Bank of Florida – Southwest, Bank of Florida – Southeast and Bank of Florida – Tampa Bay) was closed by the Florida Office of Financial Regulation (“OFR”) and placed into receivership with the Federal Deposit Insurance Corporation (“FDIC”). Since then, our only remaining operations are those of Bank of Florida Trust Company. The revenues and profits of the Trust Company are greatly influenced by the value of assets held under advice. The value of assets under advice, in turn, is greatly affected by market factors such as stock market performance and interest rate fluctuations.

Item 4.

Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures

Bank of Florida Corporation maintains controls and procedures designed to ensure that information required to be disclosed in the reports that Bank of Florida Corporation files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission. Based upon management’s evaluation of those controls and procedures performed within the 90 days preceding the filing of this Report, the Chief Executive Officer and Chief Financial Officer of Bank of Florida Corporation concluded that, subject to the limitations noted below, Bank of Florida Corporation’s disclosure controls and procedures (as defined in Rules 13a-15(e) under the Securities Exchange Act of 1934) are effective to ensure that the information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the U.S. Securities and Exchange Commission’s rules and forms.

(b) Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Such internal controls over financial reporting were designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Based upon our evaluation under the framework in Internal Control-Integrated Framework, our management concluded that our internal control over financial reporting was effective as of September 30, 2010. Our management’s assessment of the effectiveness of our internal control over financial reporting as of December 31, 2009 has been audited by Porter Keadle Moore, LLP, an independent registered public accounting firm, as stated in their report included in our Form 10-K for the year ended December 31, 2009.

(c) Changes in Internal Controls

Bank of Florida Corporation has made no significant changes in its internal controls over financial reporting during the nine months ended September 30, 2010 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

(d) Limitations on the Effectiveness of Controls

Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and internal controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within Bank of Florida Corporation have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control.

The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

PART II. – OTHER INFORMATION

ITEM 1.

LEGAL PROCEEDINGS

From time-to-time, the Company may be involved in various legal proceedings arising in the ordinary course of business. Management believes that the ultimate aggregate liabilities arising from these proceedings, if any, will not have a material adverse effect on our financial condition or results of operations.

ITEM 1A.

Risk Factors.

Investing in shares of our common stock is speculative and involves a high degree of risk, including the risks described below. These risks are in addition to those Risk Factors described in our Form 10-K for the year ended December 31, 2009. You should carefully consider the following information about these risks, together with the other information contained in this Form 10-Q and the Risk Factors described in our Form 10-K for the year ended December 31, 2009. These risks could materially affect our business, results of operations or financial condition and the trading price of our common stock. The risks that we have highlighted here and in our Form 10-K for the year ended December 31, 2009 are not the only ones that we face. For example, additional risks presently unknown to us or that we currently consider immaterial or unlikely could be material or could occur.

Shares of our common stock likely have no value.

Due to the size, revenues, profit potential and value of our Trust Company operations relative to our preferred stock’s $5.8 million in liquidation preference and accumulated dividends since January 2010, it is likely that the shares of our common stock have no value.

There are substantial doubts as to our ability to continue as a going concern or to continue viable operations.

On May 28, 2010, our three bank subsidiaries were closed by the Florida Office of Financial Regulation and placed into receivership with the Federal Deposit Insurance Corporation. Florida Trust Company can not be expected to provide significant revenue or profits relative to the potential of our prior operations. Although we are presently continuing to operate the Trust Company we are also currently evaluating our options relative to the Trust Company, which include continuing to operate it, selling it, merging it into another financial and any other reasonable, viable strategic transaction. If we ultimately elect an option other than continuing to operate the Trust Company, it is our intent to wind down our operations following divestiture of the Trust Company. If we do elect to divest of the Trust Company, or if we are not successful in continuing its operations in a profitable manger, we may not be able to continue as a going concern. In which case, share of our common stock will have no value.

Any dividends received from the profitable operation of the Trust Company, or proceeds received from a sale of the Trust Company, will likely be distributed to our Series B Preferred Stockholders and our common shareholders will receive nothing for their shares

If we successfully operate the Trust Company, or are successful in divesting of the Trust Company, it is likely that any dividends or proceeds will be distributed to the holders of our Series B Preferred Stock, which has a $5.8 million aggregate liquidation preference relative to our common stock and accumulated dividends since January 2010. Our common shareholders should expect to receive nothing from the continued operations of the Trust Company or from the sale of the Trust Company (and subsequent dissolution or winding up of the Company).

Shares of our common stock are extremely illiquid.

Following the failure of our three bank subsidiaries, our common stock was delisted from the Nasdaq stock market. Shares of our common stock now trade on the “pink sheets,” which is far less liquid than the Nasdaq. Therefore, you may not be able to sell your stock at a price you find acceptable, or at all.

ITEM 3.

DEFAULT UPON SENIOR SECURITIES

The Company has not declared or paid the dividends due on January 1, 2010, April 1, 2010, July 1, 2010, October 1, 2010 or January 1, 2011 on the outstanding shares of its Series B Preferred Stock. As of September 30, 2010, the aggregate amount of dividends in arrears totaled $322,000 and as of January 1, 2011, totaled $537,500.

ITEM 6.

EXHIBITS

The following exhibits are filed with the Securities and Exchange Commission and are incorporated by reference into this Form 10-K. The exhibits which are denominated by a (b.) were previously filed as a part of Amendment No. 1 to Form SB-2, filed with the SEC on May 7, 1999. The exhibits which are denominated by a (c.) were previously filed as a part of Form 10-KSB filed with the SEC on March 30, 2000. The exhibits which are denominated by a (g.) were previously filed as part of Form 8-K filed on July 2, 2009. The exhibits which are denominated by a (h.) were previously filed as part of Form 10-Q filed on November 9, 2007. The exhibits that are denominated by a (j.) were previously filed as part of Form 10-Q filed with the SEC on August 4, 2005. The exhibits that are denominated by a (m.) were previously filed as part of Schedule DEF 14A filed with the SEC on April 21, 2006. The exhibits that are denominated by a (n.) were previously filed as part of Form 10-K filed with the SEC on March 8, 2007. The exhibits that are denominated by a (o.) were previously filed as part of Form 10-Q filed with the SEC on August 7, 2008. The exhibits that are denominated by a (p.) were previously filed as part of Form S-8 filed with the Securities and Exchange Commission on October 30, 2009. The exhibit that is denominated by a (q.) was previously filed as part of a Form 8-K filed with the SEC on October 21, 2009.


Exhibit Number		Description of Exhibit

	j.3.1	Amended and Restated Articles of Incorporation

	o.3.2	Third Amended and Restated Bylaws dated April 24, 2008

	n.3.3	Article of Amendment to Restated Articles of Incorporation dated December 20, 2006

	g.3.4	Articles of Amendment to Articles of Incorporation dated June 26, 2009

	q.3.5	Articles of Amendment to Restated Articles of Incorporation dated August 27, 2009

	b.4.1	Specimen Common Stock Certificate

	m.4.2	2006 Stock Compensation Plan

	g.4.4	Specimen Series B Preferred Stock Certificate

	c.10.4	1999 Stock Option Plan

	c.10.5	Form of Incentive Stock Option Agreement

	p.10.21	401(k) Plan

	h.14.1	Code of Ethical Conduct (for Principal Executive and Financial Officer) approved on September 20, 2007

	h.14.2	Code of Ethics approved on September 20, 2007

	21.1	Subsidiaries of the Registrant


Exhibit Number		Description of Exhibit

	31.1	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 – Principal Executive Officer

	32.1	Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 – Principal Executive Officer

SIGNATURES

In accordance with the requirements of the Securities Exchange Act of 1934, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	BANK OF FLORIDA CORPORATION

Dated: March 2, 2011	By:	/s/ Joe B. Cox
		Joe B. Cox Chief Executive Officer (Principal Executive Officer) Chief Financial Officer (Principal Financial Officer)

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller Reporting Company

BANK OF FLORIDA CORP 10-Q