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U. S. SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

Form 10-Q

(Mark One)

For the quarterly period ended March 31, 2004

For the transition period from                      to                     

Commission file number 333-95087

CENTERSTATE BANKS OF FLORIDA, INC.

(Exact Name of Registrant as Specified in Its Charter)

1101 First Street South, Suite 202

Winter Haven, Florida 33880

(Address of Principal Executive Offices)

(863) 293-2600

(Issuer’s Telephone Number, Including Area Code)

Check whether the issuer: (1) filed all reports required to be filed by Section 12, 13 or 15 (d) of the Exchange Act during the past 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 ¨

Check whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act):

YES ¨ NO x

State the number of shares outstanding of each of the issuer’s classes of common Equity, as of the latest practicable date:

CENTERSTATE BANKS OF FLORIDA, INC. AND SUBSIDIARIES

INDEX

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Centerstate Banks of Florida, Inc. and Subsidiaries

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)

(in thousands of dollars)

See notes to the accompanying condensed consolidated financial statements

2

Centerstate Banks of Florida, Inc. and Subsidiaries

CONDENSED CONSOLIDATED STATEMENT OF EARNINGS (unaudited)

(in thousands of dollars, except per share data)

See notes to the accompanying condensed consolidated financial statements.

3

Centerstate Banks of Florida, Inc. and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

(in thousands of dollars)

4

Centerstate Banks of Florida, Inc. and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

(in thousands of dollars)

(continued)

See notes to the accompanying condensed consolidated financial statements.

CenterState Banks of Florida, Inc. and Subsidiaries

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

NOTE 1: Holding Company and Subsidiaries Background Information

CenterState Banks of Florida, Inc (the “Company”) is a multi-bank holding company. The Company was formed on June 30, 2000, as part of the merger of First National Bank of Osceola County (“FNB/Osceola”), Community National Bank of Pasco County (“CNB/Pasco”) and First National Bank of Polk County (“FNB/Polk”), which were three previously independent banks in Central Florida. The business combination was accounted for using the pooling-of-interest accounting method. All historical financial information has been restated to reflect the merger.

The Company acquired CenterState Bank of Florida (“CSB”) on December 31, 2002 in a stock and cash transaction. This transaction was accounted for using the purchase method of accounting. The excess of the purchase price over the fair market value of the tangible assets, core deposit intangible ($739,000) and liabilities was approximately $4.7 million. This amount was recognized and recorded as goodwill.

FNB/Osceola is a national bank charted in September 1989. It operates from three full service locations within Osceola County and two full service locations in Orange County, a contiguous county. CNB/Pasco is a national bank charted in November 1989. It operates from seven full service locations within Pasco, Sumter, Hernando and Citrus Counties. FNB/Polk is a national bank charted in February 1992. It operates from four full service locations and two specialty locations within eastern Polk County. CSB is a state bank charted in April 2000. It operates from three full service and two specialty locations within western Polk County. C. S. Processing, Inc. (“CSP”) is a wholly owned subsidiary, equally owned by the Company’s four subsidiary banks. CSP was formed in 2001. It performs item processing and check rendering services for the Company’s four subsidiary banks.

The Company, through its subsidiary banks, provides traditional deposit and lending products and services to its retail and commercial customers.

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NOTE 2: Basis of presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. These statements should be read in conjunction with the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2003. In the opinion of management, all adjustments, consisting primarily of normal recurring adjustments, necessary for a fair presentation of the results for the interim periods have been made. The results of operations for the three months ended March 31, 2004 are not necessarily indicative of the results expected for the full year.

NOTE 3: Common stock outstanding and earnings per share data

Basic earnings per share is based on the weighted average number of common shares outstanding during the periods. Diluted earnings per share includes the weighted average number of common shares outstanding during the periods and the further dilution from stock options using the treasury method. The following is a reconciliation of the numerators and denominators of the basic and diluted earnings per share computations for the periods presented (dollars are in thousands, except per share data).

NOTE 4: Comprehensive Income

Under Statement of Financial Accounting Standards No. 130, “Reporting Comprehensive Income,” certain transactions and other economic events are recorded directly in stockholders’ equity and must be displayed as other comprehensive income. The Company’s comprehensive income consists of net earnings and unrealized gains and losses on securities available-for-sale, net of deferred income taxes.

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The table below sets forth the Company’s comprehensive income for the periods indicated below (in thousands of dollars).

NOTE 5: Compensation programs

Substantially all of the Company’s employees are covered under the Company’s employee benefit plan. Certain directors and key employees are covered under the Company’s stock option plans. The expenses of providing these plans are charged to income in the period the expenses are incurred.

The Company applies Accounting Principle Board Opinion No. 25 and related interpretations in accounting for its stock option plans. Accordingly, no compensation cost has been recognized for its stock option plans. Had compensation cost for the Company’s stock-based compensation plan been determined consistent with Statement of Financial Accounting Standards (“SFAS”) No. 123, the Company’s net income would have been reduced to the pro forma amounts indicated below (amounts are in thousands of dollars except for per share data):

NOTE 6: Effect of new pronouncements

In December 2003, the FASB issued FASB Interpretation No. 46 (revised December 2003), Consolidation of Variable Interest Entities, which addresses how a business enterprise should evaluate whether it has a controlling financial interest in an entity through means other than voting rights and accordingly should consolidate the entity. FIN 46R replaces FASB Interpretation No. 46, Consolidation of Variable Interest Entities, which was issued in January 2003. The Company adopted FIN 46R as of December 31, 2003.

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The Company has evaluated the impact of applying FIN 46R to existing VIEs in which it has variable interests and has determined that CenterState Bank of Florida Statutory Trust I “the Trust” should be deconsolidated from the Company. At December 31, 2003, the Company de-recognizing $10 million in trust preferred securities issued during the 3^rd Quarter and recognizing $10 million in corporate debentures that the Trust had purchased from the Company.

The Federal Reserve has issued regulations which allow for the inclusion of a portion of these instruments as Tier 1 capital and the balance as Tier 2 capital (in accordance with the Federal Reserve’s guidelines) regardless of the FIN 46 interpretation, although such a determination could potentially be changed at a later date. Assuming no change in the Federal Reserve regulation, the adoption of FIN 46 did not have a material impact on the Company’s financial condition or operating results.

In April 2003, the FASB issued SFAS No. 149, Amendment of Statement 133 on Derivative Instruments and Hedging Activities. This Statement amends and clarifies financial accounting and reporting for derivative instruments, including certain derivative instruments embedded in other contracts (collectively referred to as derivatives) and for hedging activities under FASB Statement No. 133, Accounting for Derivative Instruments and Hedging Activities. This Statement is effective for contracts entered into or modified after June 30, 2003 and for hedging relationships designated after June 30, 2003. The adoption of this Statement did not have a material effect on the financial statements of the Company.

FASB Statement No. 150, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity, was issued in May 2003. This Statement establishes standards for the classification and measurement of certain financial instruments with characteristics of both liabilities and equity. The Statement also includes required disclosures for financial instruments within its scope. For the Company, the Statement was effective for instruments entered into or modified after May 31, 2003 and otherwise was effective as of January 1, 2004. The adoption of this Statement did not have a material effect on the financial statements of the Company.

Sale of branches

The Company sold its two Lake County (Florida) branches during February 2004, which included approximately $21 million of loans, $24 million of deposits and all of the related fixed assets (book value of approximately $1.6 million) (the “Branch Sale”). The Company recognized a gain on sale of approximately $1,844,000 ($1,150,000, net of income taxes of $694,000).

Rights offering

On April 30, 2004, the Company commenced a rights offering for the sale of up to 675,627 shares of its common stock to shareholders of Record on April 27, 2004, at a price of $18.99 per share. The shareholder rights terminate on June 14, 2004.

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COMPARISON OF BALANCE SHEETS AT MARCH 31, 2004 AND DECEMBER 31, 2003

Overview

Total assets of the Company were $630.2 million as of March 31, 2004, compared to $608.9 million at December 31, 2003, an increase of $21.3 million or 3.5%. This increase, net of the Branch Sale, was primarily the result of the Company’s internally generated loan growth funded by an increase in deposits.

Federal funds sold and money market

Federal funds sold and money market was $70.8 million at March 31, 2004 as compared to $46.2 million at December 31, 2003, an increase of $24.6 million or 53%. The Company has been holding more of its available funds in federal funds sold and money market instead of securities, primarily due to the relatively low rate of yields offered on short-term U.S. Treasury and government agency securities.

Investment securities

Securities available-for-sale, consisting primarily of U.S. Treasury and government agency securities, were $109.1 million at March 31, 2004 compared to $95.4 million at December 31, 2003, an increase of $13.7 million or 14%. These securities have been recorded at fair value. The Company classifies its securities as “available-for-sale” to provide for greater flexibility to respond to changes in interest rates. Management uses its available-for-sale securities portfolio, as well as its federal funds sold and money market accounts for liquidity management and for investment yields. These accounts, as a group, will fluctuate as a function of loans and deposits outstanding.

Loans

Total gross loans were $398.9 million at March 31, 2004, compared to $414.4 million at December 31, 2003, a decrease of $15.5 million or 3.7%. During the same period, real estate loans decreased by $15.0 million or 10.6%, commercial loans increased by $0.2 million or 0.1%, and all other loans including consumer loans decreased by $0.7 million or 0.6%. Total loans net of unearned fees and allowance for loan losses were $393.2 million at March 31, 2004, compared to $409.0 million at December 31, 2003, a decrease of $15.8 million or 3.9%. As discussed above, the Company closed the Branch Sale on February 20, 2004, which included loans with a net book value of approximately $21.3 million. On a pro forma basis, the Company had an increase in net loans of approximately $5.5 million, or 1.4%, when the sale of the $21.3 million of loans in the Branch Sale is excluded.

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The following table sets forth information concerning the loan portfolio by collateral types as of the dates indicated (dollars are in thousands).

Credit quality and allowance for loan losses

The Company’s allowance for loan losses represents management’s estimate of an amount adequate to provide for probable losses within the existing loan portfolio. Loans are charged against the allowance when management believes collection of the principal is unlikely. The allowance consists of amounts established for specific loans and is also based on historical loan loss experience. The specific reserve element is the result of a regular analysis of all loans and commitments based on credit rating classifications and other factors. Management also weighs general economic conditions based on knowledge of specific factors that may affect the collectibility of loans. At March 31, 2004, the allowance for loan losses was $5.2 million or 1.30% of total loans outstanding, compared to $4.9 million or 1.17%, at December 31, 2003. The following table sets forth information concerning the activity in the allowance for loan losses during the periods indicated (in thousands of dollars).

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Nonperforming assets

Nonperforming assets include (1) non-accrual loans; (2) accruing loans that are 90 days or more delinquent that are deemed by management to be adequately secured and in the process of collection; (3) OREO (i.e. real estate acquired through foreclosure or deed in lieu of foreclosure); and (4) other repossessed assets (not real estate). All delinquent loans are reviewed on a regular basis and are placed on non-accrual status when, in the opinion of management, the possibility of collecting additional interest is deemed insufficient to warrant further accrual. As a matter of policy, interest is not accrued on loans past due 90 days or more unless the loan is both well secured and in the process of collection. When a loan is placed on non-accrual status, interest accruals cease and uncollected accrued interest is reversed and charged against current income. Additional interest income on such loans is recognized only when received.

The following table sets forth information regarding the components of nonperforming assets at the dates indicated (in thousands of dollars).

Management is continually analyzing its loan portfolio in an effort to recognize and resolve its problem assets as quickly and efficiently as possible. As of March 31, 2004, management believes that its allowance for loan losses was adequate. However, management recognizes that many factors can adversely impact various segments of its market. Accordingly, there is no assurance that losses in excess of such reserves will not be incurred.

Bank premises and equipment

Bank premises and equipment was $23.4 million at March 31, 2004 compared to $22.9 million at December 31, 2003, resulting in a net increase of $0.5 million or 2.2%. The increase was the net result of purchases aggregating $2.5 million (includes the purchase of land of $1.26 million and construction in progress on several new branches of approximately $0.9 million), less depreciation of $0.4 million and the sale of land, buildings, furniture and equipment relating to the February 20, 2004 Branch Sale of approximately $1.6 million.

Deposits

Total deposits were $545.4 million at March 31, 2004, compared to $538.2 million at December 31, 2003, an increase of $7.2 million or 1.3%. During the three month period ended March 31, 2004, demand deposits increased by $9.8 million (8.3%), NOW deposits increased by $10.9 million (14.3%), savings and money market accounts increased by $11.8 million (9.4%), and time deposits decreased by $25.3 million (11.6%). As discussed before, the Branch Sale included approximately $24.0 million of

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deposits. On a pro forma basis, the Company’s deposits grew $31.2 million (excluding the sale of the $24 million of deposits), or 5.8%, during the quarter ended March 31, 2004.

Repurchase agreements

The Company’s subsidiary banks enter into borrowing arrangements with their retail business customers by agreements to repurchase (“repurchase agreements”) under which the banks pledge investment securities owned and under their control as collateral against the one-day borrowing arrangement. These short-term borrowings totaled $29.1 million at March 31, 2004 compared to $17.5 million at December 31, 2003, for an increase of $11.6 million, or 66%.

Corporate debenture

The Company formed CenterState Banks of Florida Statutory Trust I (the “Trust”) for the purpose of issuing trust preferred securities. On September 22, 2003, the Company issued a floating rate corporate debenture in the amount of $10 million. The Trust used the proceeds from the issuance of a trust preferred security to acquire the corporate debenture of the Company. The trust preferred security essentially mirrors the corporate debenture, carrying a cumulative preferred dividend at a variable rate equal to the interest rate on the corporate debenture (three month LIBOR plus 305 basis points). The initial rate in effect at the time of issuance was 4.19% and is subject to change quarterly. The corporate debenture and the trust preferred security each have 30-year lives. The trust preferred security and the corporate debenture are callable by the Company or the Trust, at their respective option after five years, and sooner in specific events, subject to prior approval by the Federal Reserve, if then required. Related loan origination costs of $188,000 were capitalized and are being amortized to interest expense over a five year period. The Company has treated the trust preferred security as Tier 1 capital up to the maximum amount allowed under the Federal Reserve guidelines, and the remainder as Tier 2 capital for federal regulatory purposes.

Stockholders’ equity

Shareholders’ equity at March 31, 2004, was $43.8 million, or 7.0% of total assets, compared to $42.0 million, or 6.9% of total assets at December 31, 2003. The increase in stockholders’ equity was due to year-to-date net income ($1,753,000), stock options exercised ($82,000) and a net increase in the market value of securities available for sale, net of deferred taxes ($163,000), less dividends paid ($203,000). The Company paid a dividend of $0.06 per share on March 31, 2004 to shareholders of record as of the close of business on March 15, 2004.

The bank regulatory agencies have established risk-based capital requirements for banks. These guidelines are intended to provide an additional measure of a bank’s capital adequacy by assigning weighted levels of risk to asset categories. Banks are also required to systematically maintain capital against such “off- balance sheet” activities as loans sold with recourse, loan commitments, guarantees and standby letters of credit. These guidelines are intended to strengthen the quality of capital by increasing the emphasis on common equity and restricting the amount of loan loss reserves and other forms of equity such as preferred stock that may be included in capital. As of March 31, 2004, each of the Company’s four subsidiary banks exceeded the minimum capital levels to be considered “Well Capitalized” under the terms of the guidelines.

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Selected consolidated capital ratios at March 31, 2004 and December 31, 2003 are presented in the table below.

COMPARISON OF RESULTS OF OPERATIONS FOR THE THREE MONTH PERIODS ENDED MARCH 31, 2004 AND 2003

Overview

Net income for the three months ended March 31, 2004 was $1,753,000 or $0.52 per share basic and $0.51 per share diluted, compared to $527,000 or $0.16 per share basic and $0.15 per share diluted for the same period in 2003.

As discussed above, the Branch Sale closed by the Company sold during February 2004, included approximately $21 million of loans, $24 million of deposits and all of the related fixed assets (book value of approximately $1.6 million). The Company recognized a gain on sale of approximately $1,844,000 ($1,150,000 net of income taxes of $694,000).

On a pro forma basis, i.e. excluding the gain on sale of branches, the Company’s net income would have been $603,000 or $0.18 per share basic and diluted, compared to $527,000 or $0.16 per share basic and $0.15 per share diluted for the same period in 2003. The Company believes this pro forma basis is useful to the investor when comparing quarterly results.

Reconciliation between Net Income and Pro Forma Net Income (i.e. excluding branch sale)

Net interest income/margin

Net interest income increased $657,000 or 15% to $4.905 million during the three month period ended March 31, 2004 compared to $4.248 million for the same period in 2003. The $657,000 increase was the result of a $569,000 increase in interest income and an $88,000 decrease in interest expense.

Interest earning assets averaged $560.6 million during the three month period ended March 31, 2004 as compared to $461.3 million for the same period in 2003, an increase of $99.3 million, or 21.5%. The yield on average interest earning assets decreased 0.53% to 4.78% during the three month period ended March 31, 2004, compared to 5.31% for the same period in 2003. The combined net effects of the

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$99.3 million increase in average interest earning assets and the 0.53% decrease in yield on average interest earning assets resulted in the $569,000 increase in interest income between the two periods.

Interest bearing liabilities averaged $451.9 million during the three month period ended March 31, 2004 as compared to $381.2 million for the same period in 2003, an increase of $70.7 million, or 18.5%. The cost of average interest bearing liabilities decreased 0.39% to 1.58% during the three month period ended March 31, 2004, compared to 1.97% for the same period in 2003. The combined net effects of the $70.7 million increase in average interest bearing liabilities and the 0.39% decrease in cost of average interest bearing liabilities resulted in the $88,000 decrease in interest expense between the two periods.

The table below summarizes, the analysis of changes in interest income and interest expense for the three month periods ended March 31, 2004 and 2003 (in thousands of dollars).

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Provision for loan losses

The provision for loan losses is charged to earnings to bring the total loan loss allowance to a level deemed appropriate by management and is based upon historical experience, the volume and type of lending conducted by the Company, industry standards, the amount of nonperforming loans, general economic conditions, particularly as they relate to the Company’s market areas, and other factors related to the collectibility of the Company’s loan portfolio. As these factors change, the level of loan loss allowance changes. The allowance for loan loss account is then adjusted by the amount of the provision for loan losses charged to earnings. The provision was $435,000 for the three month period ended March 31, 2004 compared to $302,000 for the same period in 2003.

Non-interest income

Non-interest income for the three months ended March 31, 2004 increased $1,902,000, or 162%, to $3,078,000, compared to $1,176,000 for the same period in 2003. Most of this increase was due to the $1,844,000 gain on the Branch Sale closed by the Company in February 2004. Excluding this gain on sale, non interest income would have increased by approximately $58,000, or 5%, between the two periods. This net increase was primarily the result of an increase in service charges on deposit accounts of $74,000 (10%), a $22,000 increase (14%) in commissions from mortgage broker activities, and a net $38,000 decrease (12%) in all other non interest income items. Non-interest income (annualized), excluding the gain on the sale of the branches, as a percentage of total average assets was 0.80% for the three months ended March 31, 2004, compared to 0.93% for the same period in 2003.

Non-interest expense

Non-interest expense for the three months ended March 31, 2004 increased $470,000, or 11%, to $4,756,000, compared to $4,286,000 for the same period in 2003. The largest portion of the increase was due to a $368,000, or 17%, increase in salaries, wages and employee benefits. Occupancy expenses, including depreciation, decreased $11,000, or 1%. All other operating expenses combined produced a net increase of $113,000, or 10%.

With regard to the $368,000 increase in salaries, wages and employee benefits, the largest percentage increase within this category was employee health insurance, which increased $126,000, or 102%. Actual salary and wages, including bonus and profit sharing, increased $131,000, or 6.5%. Payroll taxes and all other employee related expenses increased by $61,000, or 18%. And lastly, the amount of compensation that was deferred as direct incremental cost of the loan origination process, consistent with Financial Accounting Statement No. 91, was $49,000, or 18%, less in the current quarter compared to the same quarter in 2003. Because this is a credit against the compensation expense, a decrease in this amount results in an increase in overall compensation expense recognized currently.

Provision for income taxes

The income tax provision for the three months ended March 31, 2004 was $1,039,000 (an effective rate of 37.2%) compared to $309,000 (an effective rate of 37.0%) for the same period in 2003.

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Liquidity

Liquidity is defined as the ability to meet anticipated customer demands for funds under credit commitments and deposit withdrawals at a reasonable cost and on a timely basis. Management measures the liquidity position by giving consideration to both on- and off-balance sheet sources of and demands for funds on a daily and weekly basis.

Each of the Company’s subsidiary banks regularly assesses the amount and likelihood of projected funding requirements through a review of factors such as historical deposit volatility and funding patterns, present and forecasted market and economic conditions, individual client funding needs, and existing and planned business activities. Each subsidiary bank’s asset/liability committee (ALCO) provides oversight to the liquidity management process and recommends guidelines, subject to board of director’s approval, and courses of action to address actual and projected liquidity needs.

Short term sources of funding and liquidity include cash and cash equivalents, net of federal requirements to maintain reserves against deposit liabilities; investment securities eligible for pledging to secure borrowings from dealers and customers pursuant to securities sold under repurchase agreements; loan repayments; deposits and certain interest rate-sensitive deposits; and borrowings under overnight federal fund lines available from correspondent banks. In addition to interest rate-sensitive deposits, the primary demand for liquidity is anticipated fundings under credit commitments to customers. The Company does not use off balance sheet financing.

Market risk

Interest rate risk is the most significant market risk impacting the Company. Each subsidiary bank monitors and manages its interest rate risk using interest rate sensitivity “gap” analysis to measure the impact of market interest rate changes on net interest income. See the Company’s 2003 annual report on Form 10-K for disclosure of the quantitative and qualitative information regarding the interest rate risk inherent in interest rate risk sensitive instruments as of December 31, 2003. There have been no changes in the assumptions used in monitoring interest rate risk as of March 31, 2004. The impact of other types of market risk, such as foreign currency exchange risk and equity price risk, is deemed immaterial. The Company does not maintain a portfolio of trading securities and does not intend to engage in such activities in the immediate future.

As of the end of the period covered by this report, an evaluation was carried out under the supervision and with the participation of the Company’s management, including the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in rules 13a-15(e) or 15d-15(e)). Based on that evaluation, the CEO and CFO have concluded that the Company’s disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in reports that it files or submits under the Securities and Exchange Act of 1934 are recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms. There were no changes in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) or 15d-15(f)) during the quarter covered by this report that have materially effected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II. OTHER INFORMATION

None.