Great Florida Bank Reports Results for Third Quarter 2009

Great Florida Bank ( NASDAQ:GFLB) today reported financial results for the third quarter ended September 30, 2009. The Bank maintained its strong capital position, reporting Tier 1 Capital of $113.9 million and a Tier 1 Leverage ratio of 6.52%. In addition, the Bank reported tangible equity (total equity net of unrealized gains on securities) of $121.4 million and a tangible equity to total assets ratio of 7.07%. Great Florida Bank continues to be a ‘well-capitalized’ institution as defined by Federal regulatory guidelines.

Third quarter results were similar to the previous two quarters’ and again largely driven by credit costs, including additional provision for loan loss expense, loan charge offs and legal fees associated with loan workout activities. The cause of these elevated credit costs is a lengthy regional, national and global economic downturn (more than twenty-two months old), rising unemployment, and a sustained downward pressure on local real estate values. As a result, the Bank reported a net loss of $13.3 million or ($1.02) per basic and diluted share for third quarter 2009, compared to a net loss of $13.9 million or ($1.06) per basic and diluted share for third quarter 2008. The Bank reported a net loss of $30.9 million or ($2.35) per basic and diluted share for the first nine months of 2009 compared to a net loss of $13.8 million, or ($1.05) per basic and diluted share for the first nine months of 2008.

“The factors contributing to the prolonged and challenging economic environment are hindering not only any meaningful signs of improvement in the economy at large, but our operating performance as well,” stated Mehdi Ghomeshi, Great Florida Bank’s Executive Chairman and CEO.

Mr. Ghomeshi continued, “To mitigate this impact, successfully navigate through this economic turmoil and emerge as a dominant financial services provider in South Florida, we continue to focus on execution of four fundamental objectives. Our number one priority is mitigating credit risk and protecting the portfolio. Second is to improve our net interest margin by aggressively reducing our cost of deposits. Third, is to improve our efficiency ratio by containing operating expenses. Lastly, leverage our Solution Centers by attracting new consumer and small business banking relationships with core deposits and expanding our existing consumer and small business banking relationships. I am pleased to report we are making positive strides toward meeting these goals. However, we are not optimistic about seeing measurable, lasting improvement in the South Florida economy until sometime next year.”

The total of delinquent loans (those loans between 30 and 89 days past due) and nonperforming loans (those loans not accruing interest) remained relatively steady during the past four consecutive quarters. At September 30, 2009, delinquent and non-performing loans totaled $196.4 million, compared to $195.9 million the preceding quarter and $195.7 million at December 31, 2008. Delinquent loans declined to $35.2 million or 2.81% of total gross loans outstanding at quarter end, compared to $36.8 million or 2.77% of total gross loans outstanding in the preceding quarter. Loan delinquencies have trended down from their peak at December 31, 2008, when delinquent loans totaled $97.8 million or 7.42% of total gross loans outstanding.

The total of non-performing loans remained relatively flat at $161.2 million or 12.87% of total gross loans outstanding at the end of third quarter 2009, compared to $159.1 million or 11.98% of total gross loans outstanding at the end of the preceding quarter and $97.9 million or 7.42% of total gross loans outstanding at December 31, 2008. Approximately 5% or $8.3 million of non-performing loans are actually current, and remain classified as non-performing until they have a history of repayment under recently modified loan terms.

As reported in last quarter’s press release, Great Florida Bank continued its Home Retention Program to help first and second mortgage loan homeowners make their monthly mortgage payment, avoid foreclosure and stay in their homes. A team of trained specialists assists Great Florida Bank borrowers facing extreme financial hardship to create a mutually beneficial agreement, which provides an affordable payment, and avoids foreclosure. Year to date, the Bank has modified 58 mortgage loans totaling $19.4 million through the Home Retention Program.

The Bank recorded a provision for loan losses of $15.7 million for third quarter 2009, compared to $5.4 million in the preceding quarter. Net loan charge offs totaled $16.0 million or 1.28% of total gross loans outstanding for the third quarter and $39.1 million or 3.12% of total gross loans outstanding for the first nine months of 2009. The majority of charge offs during the first nine months of 2009 have been due to declines in the value of collateral securing a handful of large non-performing loans. In keeping with the bank’s strategy of prudently managing through this credit cycle, it should be noted that the non-performing loans reported at September 30, 2009 have been written down by $35.1 million, or 17.88% of their outstanding balances.

The chart below provides a detailed description by loan type of Delinquencies, non-performing loans and charge offs ($ in thousands)

At September 30, 2009
Loan Type		Outstanding Balances		%		Delinquent Balances		%		Non- Performing Balances		%		Charged-off Balances YTD		%
Land & Development		$165,534		13.22%		$212		0.13%		$68,454		41.35%		$15,614		9.43%
Construction		$94,875		7.58%		-		0.00%		$19,697		20.76%		$4,521		4.77%
Residential Real Estate		$595,687		47.56%		$18,991		3.19%		$53,639		9.00%		$8,409		1.41%
Commercial Real Estate		$223,499		17.85%		$5,205		2.33%		$8,745		3.91%		$2,050		0.92%
Commercial & Industrial		$153,306		12.24%		$10,763		7.02%		$8,736		5.70%		$8,296		5.41%
Other Loans		$19,501		1.55%		$25		0.13%		$1,961		10.06%		$189		0.97%
Total		$1,252,402		100%		$35,196		2.81%		$161,232		12.87%		39,079		3.12%

The allowance for loan losses totaled $37.4 million at September 30, 2009, or 2.99% of total gross loans outstanding compared to $37.7 million or 2.84% of total gross loans outstanding the preceding quarter and $36.4 million or 2.76% of total gross loan outstanding at December 31, 2008.

“As previously reported, loan delinquencies (loans 30 to 89 days past due), peaked in the fourth quarter 2008 and have trended down during the first nine months of 2009,” stated Ghomeshi. “We continue working diligently with our borrowers and are taking prudent steps to keep them current during this difficult economic period. We are deeply committed to helping homeowners keep their homes and businesses to remain viable. Unfortunately, for those loans that have moved to non-performing status, our ability to move expediently through the foreclosure process is severely hampered by a challenging legal environment. We are experiencing exceptional delays which are adversely affecting our performance in this area.”

Non-interest expense totaled $12.3 million for third quarter 2009, compared to $10.0 million during the same quarter last year. The $2.3 million increase was concentrated primarily in the following categories; $358 thousand in regulatory fees & assessments due to increases in FDIC insurance premium, $1.4 million in loan workout expenses, including increased legal fees. In addition, the increase also consisted of $816 thousand due to the loss in the carrying value and sale of foreclosed property.

At September 30, 2009, total net loans outstanding were down slightly to $1.2 billion compared to third quarter 2008. Total deposits were $1.3 billion, up 5.9% compared to third quarter 2008. Great Florida Bank has successfully maintained a strong liquidity position primarily through the acquisition of new customer deposits. The year-over-year increase included net growth in new customer deposits of $124.5 million, primarily in money market, savings and time deposit accounts.

ABOUT GREAT FLORIDA BANK

Great Florida Bank (NASDAQ - GFLB), headquartered in Miami Lakes, Florida was established on June 30, 2004 as a state-charted commercial bank. The Bank listed on the NASDAQ Global Market on December 5, 2007 and joined the prestigious American Bankers Association Community Bank Index in June 2008. On September 30, 2009, total assets were $1.7 billion, Tier 1 Capital was $114 million, and the Tier 1 Leverage ratio was 6.5%. The Bank operates twenty-eight (28) Solution Centers and two residential lending offices throughout Miami-Dade, Broward and Palm Beach Counties. Great Florida Bank is committed to providing ideas and solutions to its customers’ financial needs by conveniently delivering personalized, state-of-the-art products and services, such as GFB Mobile Banking for individual consumers and cash management clients and GFB Remote Deposit Capture for business customers, all in a relaxed environment. For more information, visit our website at www.greatfloridabank.com or call 305-514-6900 (toll-free 866).

Member FDIC.

Forward-Looking Statements

This press release may contain forward-looking statements with respect to Great Florida Bank’s financial condition, results of operations and business. These forward-looking statements involve certain risks and uncertainties. When used in this, or future press releases or other public stockholder communications, or in oral statements made with the approval of an authorized executive officer, words or phrases such as: “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimate,” “project,” “believe,” or similar expressions are intended to identify “forward-looking statements”. We caution the reader and users of this information not to place undue reliance on any such forward-looking statements, which speak only as of the date on which they are made. We also advise readers that various factors including regional and national economic conditions, changes in the levels of market rates of interest, credit risk and lending activities, and competitive and regulatory factors could affect Great Florida Bank’s financial performance and could cause actual results for future periods to differ materially from those anticipated or projected.

Great Florida Bank does not undertake and specifically disclaims any obligation to publicly release the results of any revisions, which may be made to any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements.

Great Florida Bank
Selected Financial Highlights (unaudited)
September 30, 2009
(In Thousands except share/per share information)
At and for the nine months ended September 30,										Increase/
Results of Operations:		2009				2008				(Decrease)
	Interest Income on Loans		44,712				58,763				(14,051	)
	Interest Income on Investment and Other Assets		15,094				14,919				175
	Total Interest Income	$	59,806			$	73,682			$	(13,876	)
	Interest Expense on Deposits		25,493				28,472				(2,979	)
	Interest Expense on Borrowings		10,108				12,093				(1,985	)
	Total Interest Expense	$	35,601			$	40,565			$	(4,964	)
	Net Interest Income before Provision		24,205				33,117				(8,912	)
	Provision for loan losses		40,093				28,549				11,544
	Net Interest (Loss) Income after Provision	$	(15,888	)		$	4,568			$	(20,456	)
	Gain on Sale of Securities		17,618				-				17,618
	Other Noninterest Income		2,800				1,597				1,203
	Noninterest Income	$	20,418			$	1,597			$	18,821
	Employee Compensation		13,994				14,797				(803	)
	Occupancy Expense		6,976				6,419				557
	Professional and Consulting		1,980				1,224				756
	Other Expenses		9,962				5,386				4,576
	Noninterest Expense	$	32,912			$	27,826			$	5,086
	Pretax Loss		(28,382	)			(21,661	)			(6,721	)
	Provision for income tax expense (benefit)		2,468				(7,910	)			10,378
	Net Loss	$	(30,850	)		$	(13,751	)		$	(17,099	)
	Net loss per common share - basic	$	(2.35	)		$	(1.05	)		$	(1.30	)
	Net loss per common share - diluted	$	(2.35	)		$	(1.05	)		$	(1.30	)
Period End Data:
	Total Assets	$	1,716,557			$	1,736,983			$	(20,426	)
	Total Securities		297,388				413,005				(115,617	)
	Land and Construction Loans		260,409				381,140				(120,731	)
	Commercial Real Estate Secured Loans		223,499				223,284				215
	Commercial Loans		153,306				112,974				40,332
	Residential Real Estate Secured Loans		595,687				522,283				73,404
	Non Accrual Loans		161,232				96,341				64,891
	Loans before Allowance for Loan Losses		1,252,402				1,286,232				(33,830	)
	Allowance for loan losses		37,382				42,343				(4,961	)
	Loans, Net		1,215,020				1,243,889				(28,869	)
	Noninterest bearing demand deposits		74,319				77,685				(3,366	)
	Interest bearing demand deposits		17,500				17,072				428
	Money Market, Savings and Time Deposits		1,046,340				918,874				127,466
	Brokered Deposits		118,718				173,447				(54,729	)
	Total Deposits		1,256,877				1,187,078				69,799
	Advances from FHLB		220,000				270,000				(50,000	)
	Other borrowings		108,279				112,585				(4,306	)
	Tangible equity		121,434				156,921				(35,487	)
	Shareholders' equity		122,325				159,322				(36,997	)
	Shares outstanding		13,112,500				13,112,500				-
	Book value per share		9.33				12.15				(2.82	)
Key Ratios:
	Return on average assets		-2.32	%			-1.09	%			-1.23	%
	Return on average equity		-27.81	%			-10.58	%			-17.23	%
	Net interest margin		2.01	%			2.72	%			-0.71	%
	Nonaccruing loans/total gross loans		12.88	%			7.49	%			5.39	%
	Allowance for loan losses/period end loans		2.99	%			3.29	%			-0.30	%
	Shareholders' equity to period end total assets		7.13	%			9.17	%			-2.04	%
	Tangible Equity to period end total assets		7.07	%			9.03	%			-1.96	%
Risk Based Capital Ratios:
		Actual				Minimum to be Well Capitalized				% above Federal Definition of Well Capitalized
	Total Risk Based Capital (to risk weighted assets)		11.14	%			10.00	%			11	%
	Tier 1 Capital (to risk weighted assets)		9.85	%			6.00	%			64	%
	Tier 1 Capital (to average total assets)		6.52	%			5.00	%			30	%