The following discussion and analysis presents a review of the consolidated operating results of the Company and the Bank for the nine months ended September 30, 2008 and September 30, 2007, respectively, and the financial condition of the Company at September 30, 2008 and December 31, 2007. This discussion and analysis should be read in conjunction with the Consolidated Financial Statements and Notes thereto included herein and contained in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2007.

FORWARD-LOOKING STATEMENTS

Statements included in this document, or incorporated herein by reference, that do not relate to present or historical conditions are "forward-looking statements" within the meaning of that term in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Additional oral or written forward-looking statements may be made by the Company from time to time, and such statements may be included in documents that are filed with the Securities and Exchange Commission. Such forward-looking statements involve risks and uncertainties that could cause results or outcomes to differ materially from those expressed in the forward-looking statements. Forward-looking statements may include, without limitation, statements relating to the Company's plans, strategies, objectives, expectations and intentions and are intended to be made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Words such as "believes," "forecasts," "intends," "possible," "estimates," "anticipates," "expects", and "plans" and similar expressions are intended to identify forward-looking statements. The Company's ability to predict projected results or the effect of events on the Company's operating results is inherently uncertain. Forward-looking statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from those discussed in this document. Factors that could affect the Company's assumptions and predictions include, but are not limited to, the risk that (i) loan losses would have a material adverse effect on the Company's financial condition and operating results; (ii) a decline in the value of the collateral securing the Company's loans could result in an increase in losses on foreclosure; (iii) the Company's growth strategy may not be successful and risk related to acquisitions and integration of target operations; (iv) the geographical concentration of the Company's business in Florida makes the Company highly susceptible to local economic and business conditions; (v) changes in interest rates may adversely affect the Company's financial condition; (vi) competition from other financial institutions could adversely affect the Company's profitability and growth; (vii) the adequacy of our loan loss allowance; (viii) risks related to compliance with environmental laws and regulations and other government regulations; (ix) litigation risks;
(x) lack of active market for our common stock; (xi) the mortgage and real estate crisis, a decline in general economic conditions, and the possibility of recession could adversely affect our business, and (xii) lack of dividends, dilution and anti-takeover provisions in our Certificate of Incorporation and By-laws; and (xiii) the Company's ability to re-establish compliance with specific loan covenants under its loan agreement with Silverton Bank N.A. You should not place undue reliance on the Company's forward-looking statements. Further, any forward-looking statement speaks only as of the date on which it is made, and the Company undertakes no obligation to update or revise any forward-looking statements.

OVERVIEW

The Company's primary market and service area is Broward, Miami-Dade, Palm Beach, and Martin counties where the Company currently operates fourteen full service banking offices. A full service branch in Miami-Dade County was closed on March 31, 2008. The Company has grown significantly in recent years due to the acquisition of certain assets, and assumption of certain liabilities, of PanAmerican Bank in December 2001, Gulf Bank in February 2004, Beach Bank in December 2006, and more recently the merger with Independent Community Bank completed in March 2007. Coupled with these transactions, the Company has pursued a growth strategy, increasing its level of earning assets, primarily through increases in the loan portfolio by concentrating on the origination of commercial and consumer loan products and by competitively pricing deposit products.

As of September 30, 2008, the Company had total assets of $655.8 million, net loans of $488.5 million, deposits of $456.7 million and stockholders' equity of $93.2 million.

The Company intends to continue to expand its business through internal growth. If opportunities arise that are deemed beneficial to the Company involving mergers and acquisitions, they will be considered. The Company intends to grow internally by adding to the loan portfolio and bringing in new deposits. The Company intends to take steps to improve its capital base to a "well capitalized" level.

The Company's results of operations are primarily dependent upon the results of operations of the Bank. The Bank conducts a commercial banking business which generally consists of attracting deposits from the general public and applying a majority of these funds (typically 75% to 90%) to the origination of commercial loans to small businesses, consumer loans, and secured real estate loans in its local trade area of South Florida. The balance of the bank's portfolio (approximately 10% to 25%) was generally held in cash and invested in government backed investment grade securities.

EXECUTIVE OVERVIEW

The Company is predominantly a commercial lender in the South Florida market place and is therefore exposed to the current weakened real estate conditions in our South Florida geographic region. The Company's financial results for the first nine months of 2008 when compared to the first nine months of 2007 reflect the impact of higher provisions for loan losses and margin compression, but are partially offset by lower non-interest expenses. The Company is reporting non-performing assets of $19.4 million at September 30, 2008 versus $7.3 million at December 31, 2007, and $9.5 million at September 30, 2007. The Company is working aggressively to resolve issues related to clients who are, or who may in the future, experience loan performance issues. Initiatives include work outs, loan sales and, when required, foreclosures. The Company's policy is to monitor borrower activity closely and to identify potential issues before they amplify. The Company works with its borrowers to provide solutions that are in the best interests of both the borrower and the Company. However, the Company recognizes that during this period of real estate challenges, these types of problems are not resolved quickly and more than likely they will continue throughout 2008.

The allowance for loan losses at September 30, 2008 was $7.6 million, after booking chargeoffs of $5.3 million during the year. This represented 1.53% of total loans. Management will continue to monitor the adequacy of our loan loss provisions in conjunction with the current economic conditions in South Florida and believes that increasing the reserve allowance to the current level was the most prudent and conservative position for the Company to take at this time.

The Bank is in a "Well Capitalized" position at September 30, 2008, with Tier 1 Capital of $50.5 million and a corresponding ratio of Tier 1 capital to risk weighted assets of 9.42%. The Bank's Tier 1 Leverage ratio was 8.55%, and the total capital ratio was 10.68%. Capital preservation is a primary focus for the Bank during this period and it is our intention for the Bank to remain well capitalized.

We continue to undertake a number of initiatives to improve the performance of the Company which include the development of new business. We have shown that we are able to grow the Bank's loan portfolio and the deposit base in a significant manner during the first nine months of the year. In addition, during the first nine months of the year we reduced our operating costs by $1.2 million or 7% compared to the first nine months of 2007.

LIQUIDITY AND CAPITAL RESOURCES

Regulatory agencies require that the Bank maintain sufficient liquidity to operate in a sound and safe manner. The principal sources of liquidity and funding are generated by the operations of the Bank through its diverse deposit base, loan participations and other asset/liability measures. For banks, liquidity represents the ability to meet loan commitments, withdrawals of deposit funds, and operating expenses. The level and maturity of deposits necessary to support the lending and investment activities is determined through monitoring loan demand and through its asset/liability management process. Considerations in managing the liquidity position include scheduled cash flows from existing assets, contingencies and liabilities, as well as projected liquidity conducive to efficient operations all of which are continuously evaluated as part of the asset/liability management process. Historically, the Bank has increased its level of deposits to allow for its planned asset growth. The level of deposits is influenced by general interest rates, economic conditions and competition, among other things. South Florida continues to develop and faces intense competition from other financial service providers. Management has found that adjusting pricing, or introducing new products, produces increased deposit growth. Adjusting the rate paid on money market and NOW accounts can quickly adjust the level of deposits. In the first nine months of 2008, deposits increased $76 million or 20% from the end of 2007.

The Bank is a member of the Federal Home Loan Bank of Atlanta ("FHLB"). At September 30, 2008, the Bank had $60 million of FHLB fixed rate advances to assist in funding its loan portfolio growth. The Bank has pledged a security interest in its real estate loan portfolio to the FHLB as collateral for borrowings obtained from the FHLB. See note 6 to the Company's Consolidated Financial Statements for additional information regarding these advances. Liquidity at September 30, 2008, consisted of $19.8 million in cash and cash equivalents and $200,000 in available-for-sale investments, for a total of $20.0 million, compared to a total of $13.9 million at year-end 2007.

If additional liquidity is needed, the Bank has established a correspondent banking relationship with Silverton Bank of Atlanta, Georgia. This relationship provides the Bank with the ability to borrow from an unsecured line-of-credit to supplement liquidity up to the amount of $20.0 million. There were no borrowings under this line of credit at September 30, 2008. Interest is calculated on any outstanding balance at the prevailing market federal funds rate. The Bank also has the ability to sell investments from the portfolio under a repurchase agreement with this correspondent bank. Similarly, the Company maintains a separate secured line-of-credit of $8.0 million with Silverton Bank. The Company has drawn $7.5 million against this line of credit as of September 30, 2008 principally to fund its stock repurchase program and infuse capital into the Bank. See note 7 to the Company's Consolidated Financial Statements for additional information regarding this line of credit.

The capital and credit markets have been experiencing volatility and disruption for more than 12 months. In recent weeks, the volatility and disruption has reached unprecedented levels. In some cases, the markets have produced downward pressure on stock prices and credit availability for certain issuers which effects may or may not be directly related to those issuers' underlying financial strength.

On October 3, 2008, President Bush signed into law the Emergency Economic Stabilization Act of 2008 (the "EESA"). The legislation was the result of a proposal by Treasury Secretary Henry Paulson to the U.S. Congress on September 19, 2008 in response to the financial crises affecting the banking system and financial markets and going concern threats to investment banks and other financial institutions. The U.S. Treasury and banking regulators are implementing a number of programs under this legislation to address capital and liquidity issues in the banking system.

The Company has not experienced any significant disruption of its liquidity availability to date. The Company currently has a number of contingent sources of liquidity that it may draw upon should it be required.

DISCUSSION OF FINANCIAL CONDITION CHANGES FROM JANUARY 1, 2008 TO SEPTEMBER
30, 2008

FINANCIAL CONDITION

Total assets increased by $77.9 million, or 13%, to $655.8 million at September 30, 2008 from $577.9 million at December 31, 2007. The increase was primarily due to increases in net loans, securities held to maturity, and federal funds sold.

Net loans receivable increased by $48.5 million, or 10%, to $488.5 million at September 30, 2008, from $440.0 million at December 31, 2007. The increase was due to organic growth of the Bank's loan portfolio during the first nine months of 2008.

Securities held to maturity increased by $25.7 million to $76 million at September 30, 2008 from $50.3 million at December 31, 2007. The increase was primarily due to the execution of a leveraged investment strategy that added $29.7 million of government sponsored enterprises securities. This was partially offset by securities called or matured and by new securities purchases.

Federal funds sold at September 30, 2008 were $11 million compared to zero at December 31, 2007. Federal funds sold represent available liquidity waiting to be deployed into higher yielding assets or to pay down maturing liabilities.

ASSET QUALITY AND NONPERFORMING ASSETS

In the normal course of business, the Bank has recognized, and will continue to recognize, losses resulting from the inability of certain borrowers to repay loans and the insufficient realizable value of collateral securing such loans. Accordingly, management has established an allowance for loan losses, which totaled $7.6 million at September 30, 2008, and when analyzed by management was deemed to be adequate to absorb estimated credit losses. Management's periodic evaluation of the adequacy of the allowance is based on the Company's past loan loss experience, known and inherent risks in the portfolio, adverse situations that may affect the borrower's ability to repay (including the timing of future payments), the estimated value of any underlying collateral, composition of the loan portfolio, current economic conditions, and other relevant factors. This evaluation is inherently subjective as it requires estimates of material factors including the amounts and timing of future cash flows expected to be received on impaired loans that may be susceptible to significant change.

The Bank has a detailed system of procedures to ensure comprehensive analysis of all factors pertinent to the evaluation of the adequacy of its loan loss allowance. The evaluation process includes analyzing general conditions in the local economy and historical loan losses as well as components within the portfolio itself to include: portfolio composition, concentrations, off-balance sheet risks, delinquencies and non-accrual loans, impaired assets, nonperforming assets and gross and net loan balances. In computing the adequacy of the loan loss allowance, management employs the following methodology:

Non-Specific Allowance: The methodology used in establishing non-specific allowances is based on a broad risk analysis of the portfolio. All significant portfolio segments, including concentrations, are analyzed. The amount of the non-specific allowance is based upon a statistical analysis that derives appropriate formulas, which are adjusted by management's subjective assessment of current and future conditions. The determination includes an analysis of loss and recovery experience in the various portfolio segments over the last three fiscal years. Results of the historical loss analysis are adjusted to reflect current and anticipated conditions.

Specific Allowance: All significant commercial and industrial loans classified as either "substandard" or "doubtful" are reviewed at the end of each period to determine if a specific reserve is needed for that credit. The determination of a specific reserve for an impaired asset is evaluated in accordance with Statement of Financial Accounting Standards No. 114, and a specific reserve is very common for significant credits classified as either "substandard" or "doubtful." The establishment of a specific reserve does not necessarily mean that the credit with the specific reserve will definitely incur loss at the reserve level. It is only an estimate of potential loss based upon anticipated events.

At December 31, 2007, the allowance for loan losses was $6.5 million. During the nine months ended September 30, 2008, the Company recorded $6.2 million of provisions for loan losses. Net charge-offs amounted to $5.1 million. After net charge-offs, the allowance for loan losses at September 30, 2008 was $7.6 million. The charge-offs were primarily related to loans financing the development and construction of residential property and home equity lines of credit. While these loans were well collateralized when they were made, the market value of the underlying collateral had declined significantly.

The Bank's impaired assets were $40.8 million at September 30, 2008, or 8.2% of total gross loans, compared to $12.0 million at December 31, 2007, or 2.7% of total gross loans. Assets which are impaired are those deemed by management as inadequately protected by the current sound net worth and paying capacity of the obligor or of the collateral pledged, if any. Assets which are impaired have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected.

Nonperforming assets consist of loans that are past due 90 days or more which are still accruing interest, loans on nonaccrual status, and other real estate owned ("OREO"). The following table sets forth information with respect to nonperforming assets identified by the Bank at September 30, 2008 and December 31, 2007.

The Company's nonperforming assets are as follows:

                                                 September 30,    December 31,
                                                     2008             2007
                                                    (Dollars in thousands)

      Non-accrual loans:
      Commercial                                $             -   $         217
      Commercial real estate                             18,520           6,313
      Residential real estate                                 -             158
      Accrual loans past due 90 days or more:
      Residential real estate                               139               -

      OREO                                                  415             587
      Repossession                                          353               -
      Total nonperforming assets                $        19,427   $       7,275

Total nonperforming assets have increased during the nine months ended September 30, 2008 from December 31, 2007 by $12.1 million. The total of $19.4 million at September 30, 2008, consists of 24 loans in various stages of resolution, two foreclosed properties and one repossession for which management believes such loans are adequately collateralized or otherwise appropriately considered in its determination of the adequacy of the allowance for loan losses. The total of $7.3 million at December 31, 2007, consisted of ten loans and three foreclosed properties. The Company sold $6.8 million of non-performing assets consisting of three loans and four foreclosed properties at a net loss of approximately $347,000. New non-performing assets during the first nine months of 2008 amounted to $18.9 million.

COMMITMENTS TO EXTEND CREDIT

Commitments to extend credit were $80.8 million and $63.3 million and standby letters of credit were $1.0 million and $1.5 million at September 30, 2008, and December 31, 2007, respectively.

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and many require the payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Company evaluates each customer's creditworthiness on a case-by-case basis. The amount of collateral obtained upon extension of credit is based on management's credit evaluation of the customer.

Standby letters of credit are conditional commitments that guarantee the performance of a customer to a third party. The credit risk and collateral policy involved in issuing letters of credit is essentially the same as that involved in extending loan commitments. The amount of collateral obtained is based on management's credit evaluation of the customer.

LIABILITIES

Liabilities increased $82.5 million, or 17%, to $562.6 million at September 30, 2008 from $480.1 million at December 31, 2007 primarily due to an increase in deposits, securities sold under agreements to repurchase, and notes payable, partially offset by a decrease in advances due to the FHLB.

DEPOSITS

Deposit accounts include interest and non-interest checking, money market, savings, and certificates of deposit. Deposits increased to $456.7 million at September 30, 2008 from $380.7 million at December 31, 2007. The increase of 20% during the first nine months of 2008 is due to a focused business development effort to support earning asset growth.

The Bank continues to further develop its niche serving the small and medium size businesses, condominium associations, and individuals within its trade area in the South Florida markets. These markets include Miami-Dade County, Broward County, Palm Beach County, and Martin County. Given the diverse population of these markets and geographic expanse, the Bank employs different strategies in meeting the deposit and credit needs of its communities. In addition, management continues to implement a strategy to change the mix of the deposit portfolio by focusing more heavily on core deposits, particularly checking accounts, an important component of the deposit mix which the Bank has historically maintained satisfactory levels of this type of deposit because of its policy of relationship banking. The Bank is developing new deposit products to retain existing customers and attract new deposit clients.

The following is a summary of the distribution of deposits:

                                                 September 30,     December 31,
    Deposits                                         2008              2007
                                                         (In thousands)
    NOW accounts                                $        39,313   $       76,030
    Money market accounts                                36,026           59,711
    Savings accounts                                     33,650           24,670
    Certificates of deposit under $100,000              150,088           79,559
    Certificates of deposit $100,000 and more           145,360           90,638
    Total interest-bearing deposits                     404,437          330,608
    Non-interest bearing deposits                        52,260           50,099
    Total deposits                              $       456,697   $      380,707

Declines in money market and NOW accounts reflect management's strategy not to compete with higher rate paying competitors. The Bank was able to more than offset this decline as well as supporting asset growth during the period by raising core certificate of deposit balances which were more cost effective than non-maturity deposits. Brokered deposits are included in the certificate of deposit under $100,000 category. Brokered deposits were $23.6 million and $24.1 million at September 30, 2008 and December 31, 2007, respectively.

SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE

Securities sold under agreements to repurchase at September 30, 2008 were $34.8 million compared to $15.0 million at December 31, 2007, an increase of $19.8 million or 132%. These repurchase agreements are secured by securities held by the bank. The increase was primarily due to the execution of a $30 million leveraged investment strategy.

FEDERAL HOME LOAN BANK BORROWINGS

FHLB borrowings totaled $60.0 million at September 30, 2008, compared to $78.0 million at December 31, 2007. See Note # 6 to Consolidated Financial Statements.

NOTES PAYABLE

Notes payable at September 30, 2008 were $7.5 million compared to $2.7 million at December 31, 2007, an increase of $4.8 million or 179%. The increase in notes payable was mostly used to fund the stock repurchase program and to infuse capital into the Bank.

CAPITAL

The Company's total stockholders' equity was $93.2 million at September 30, 2008, a decrease of $4.6 million, or 4.8%, from $97.8 million at December 31, 2007. This decrease was mostly due to the net loss of $3.8 million during the first nine months of 2008 and to repurchases of common shares by the Company of approximately $1.6 million. The decrease was partially offset by the proceeds received from subscriptions to purchase 93,750 units comprised of Series A Preferred Stock in the third quarter of 2008 for $375,000.

The Company and the Bank are subject to various regulatory capital requirements administered by the regulatory banking agencies. Failure to meet minimum capital requirements can result in certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company's financial statements. The regulations require the Company and the Bank to meet specific capital adequacy guidelines that includes quantitative measures of their assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices. The Company's and the Bank's capital classification is also subject to qualitative judgment by the regulators about interest rate risk, concentration of credit risk and other factors.

In accordance with risk-based capital guidelines issued by the Federal Reserve Board, the Bank is required to maintain a minimum ratio of total capital to risk-weighted assets as well as maintain minimum leverage ratios (set forth in the table below). Member banks operating at or near the minimum ratio levels are expected to have well diversified risks, including no undue interest rate risk exposure, excellent control systems, good earnings, high asset quality, high liquidity, and well managed on- and off-balance sheet activities, and in general be considered strong organizations with a composite 1 rating under the CAMEL rating system for banks. For all but the most highly rated banks meeting the above conditions, the minimum leverage ratio may require an additional 100 to 200 basis points.

. . .